Background
There has been a lot of talk about differentiating Pickle Finance amidst an ever-expanding competitor set and a reduction of the TVL pie across many L2 chains. With the recent utilisation of Pickle Finance for Squid DAO’s treasury growth, there is an opportunity to target a new audience who currently aren’t directly catered for.
Messari lists DAO Treasury management as one of the big trends for Web3 in 2022 (https://messari.io/crypto-theses-for-2022. We are starting to see traditional asset managers join DAO’s to help them better manage their vast treasury funds. With an uncertain future for where crypto markets will go, keeping treasury funds safe and growing is an important puzzle DAOs need to stare into in the coming year, Pickle Finance can help facilitate this safe growth. As DAO Asset Management is less fickle, we can assume that DAO’s would provide more stable TVL, versus the constant revolving TVL of retail DeFi users.
Proposal
To specifically target this audience set I propose “Pickle Pro”, a new product that Pickle offers specifically for DAO’s with treasury assets under management.
What is Pickle Pro?
Pickle Pro is a dedicated set of jars that allow DAO’s to get varying levels of yield across chains. The jars would be:
• Stable e.g. Liquity and B.protocol compounded yield on stables, MIM3crv
• Blue Chip e.g. stETH or wBTC
• Native DAO asset e.g we create specific jars for the DAO’s governance tokens so they can get compound returns on their own native asset
Pickle Pros fee structure would be cheaper than regular jars to attract TVL, but also realise that larger TVL from DAOs would offset lower fees. We would provide peace of mind for DAOs by insuring the principle investment they invest each year e.g. Invest 10mm 2022, insure the 10mm. Growth to 11mm in 2023, insure 11mm.
Note: Insurance would be just against smart contract risk, not market risk
Fee Structure
Regular hedge funds and asset managers utilise the 2 and 20 fee structure. 2% asset management fee and a 20% performance fee. To differentiate ourselves we would set up the 1 and 10 fee structure. 1% fee on the assets (we could justify this against the insurance we would potentially have to pay. This also helps us counteract capital fleeing in and out of the jars) and 10% performance fee.
How would we insure treasury assets?
Probably the most important aspect of this proposal is the insurance on the jars. If we can provide DAO’s a guarantee that their money is safe, then they will be more inclined to deposit into these specific jars, rather than just going to a regular yield aggregator. It is also the most dangerous aspect of this proposal, because we must be ultra-certain in the security of our jars. One hack could be crippling.
How we could provide this insurance:
• Option 1: We get Nexus Mutual to list Pickle as a protocol where cover can be bought, and we buy the requisite cover required for each jar deposit
• Option 2: Create a proprietary insurance pool on our site that pays out Pickle emissions. It’s essentially us taking on the Nexus mutual function without them
• Option 3: We set aside capital (like a bank) that cover losses in case they are to occur. This would be a more costly option and leave us unable to utilise our treasury capital efficiently which is a trade-off we would need to understand better
Other Considerations
• This product could be used more generally for high value TVL (e.g. $250k+) deposits. However, I think we should at least market this proposition initially as a DAO treasury asset growth tool.
• We might want to create some sort of direct channel for DAO’s to reach out to the team to answer questions, and provide a more relationship managed feel for such high value clients
