[RFC] Restructuring of the BED index investment

[Wunderbernd]

In order to guarantee the longterm success of the protocol and be able to guarantee the expenses of the protocol for the next 2 years, there have been several efforts to diversify the treasury and make it more robust. In an effort to get a diversified treasury and gain additional marketing exposure, the treasury invested in the BED index from Bankless. I think it is fair to say that a majority of the DILLDAO agree with the diversification approach, but especially with the potentially difficult/unclear times ahead in the cryptomarkets where the whole market probably won’t pump like it did before, we reached a point where we need to discuss the involvement/investment in the BED index.

The BED index holds ETH, WBTC and DPI with an equal weight of 33%. The expenses for the index are 0.25% + an additional 0.95% for the DPI index. The overall expenses for the index are pretty high, because you can easily build the same product without the management fees and you can use the assets productively (For example farming defi with ETH, WBTC or DPI).

If we look at the perfomance of the index, you can clearly see that the index slowly bleeds out over time, although the index got some steam in the recent ETH selloff

If we look at individual charts, it doesn’t get better:

1. Loopring
   

   

2. Instadapp

These are just some examples of questionable tokens. It is up to the DAO if we want to:

1. continue the investment in the BED index
2. continue the investment in the assets, but leave the BED index
   → Hold ETH, WBTC + DPI, which would decrease the management fees and give us the possibility to farm DEFI with the assets
3. Sell BED/DPI ->increase the position in ETH or WBTC
4. Sell BED/DPI for stables → farm defi with stables

[why]

I see it positive to sell if possible or at least part of it the index. As @Wunderbernd said maybe id the DAO accepts the contract risks we can invest the eth and btc in other protocols or our own jars.

I’m waiting for this month SCOCC report but would like to go full eth/wbtc or if we need money for the defi winter go with stables

[JimmyJ]

at least 100% please

bootstrapping our own pickle jar token index would be putting treasury funds to good use and would justify swapping bad index investment for a good index investment

[Mad_Mike_Hoare]

There’s no reason we couldn’t mimic the index ourselves if we wanted to invest in these particular assets - we could make our own jars or create a BABL fund so others could invest along with us. There’s no reason to hold this index especially at that expense ratio.