SAIP #52.1 - Abracadabra DAO treasury farming update

Governance Proposals Voted Proposals
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SAIP #52.1 - Abracadabra DAO treasury farming update

Tldr: The Abracadabra treasury holds ~$10M in stablecoins and plans to enhance financial stability and generate ~$2M+ annually through strategic allocations. Proposed changes include moving $4M from Stargate pools (8% yield) to the MIM-3Crv pool via StakeDAO and Convex (40% yield), maintaining $2M in the deUSD/MIM pool for Elixir liquidity, and keeping $1M in USDs as per SAIP #52. An additional $2M will remain unallocated for future opportunities, with reallocations managed dynamically by treasury signers and subject to DAO approval. While this strategy boosts revenue and MIM stability, it carries smart contract and market risks.

Background and New Proposed Composition

The Abracadabra treasury currently holds ~$10 million in stablecoins. To enhance the protocol’s financial stability and generate additional revenue, Abracadabra should deploy portions of these holdings into various platforms:

  1. MIM-3Crv Liquidity Pool via StakeDAO and Convex: Invest $4 million which are currently staked in the Stargate USDT and USDC pools, currently yielding 8%, into the MIM-3Crv liquidity pool through StakeDAO and Convex, where yields are approximately 40%.
  2. MIMSwap’s deUSD/MIM Pool: Maintain around $2 million in the deUSD/MIM pool on MIMSwap to provide liquidity for the Elixir cauldron and which accrue Elixir potion points. In the future, these could potentially be moved to better yielding opportunities.
  3. sDAI Holdings: Leave $1 million in USDS (previously sDAI) exposure as approved by SAIP #52, but stake it to earn SKY rewards.
  4. Pending Allocation: Leave $2 million unallocated to pursue future farming opportunities. These funds can be dynamically reallocated to higher-yielding opportunities at the discretion of the treasury signers. All farming opportunities are subject to immediate revocation through a DAO vote. If the vote is approved, the treasury will promptly withdraw the funds from the specified opportunity.

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Benefits

  • Revenue Generation: Earning fees and rewards from these allocations can increase the protocol’s revenue. At current rates, this would represent $2M+ of surplus to the treasury.
  • MIM Stability: Enhancing liquidity for MIM contributes to its price stability and peg maintenance.
  • Treasury Diversification: Engaging in yield farming diversifies the treasury’s income streams.

Considerations/Risks

  • Smart Contract Risk: Exposure to potential vulnerabilities in smart contracts of platforms like Convex, Curve, StakeDAO, and Aave.
  • Market Risk: Fluctuations in stablecoin pegs could affect the value of the liquidity positions.

Links

Ethereum Multisig: Safe{Wallet} – Assets

Arbitrum Multisig: Safe{Wallet} – Dashboard

Voting

Voting will follow the Speedlane AIP process, it will start at 16:00 CET on the 3rd of December and last 24 hours. If this proposal was to pass, the treasury will be allocated as described above.

Voting can be found here.

Votin passed.