Treasury 2.0 (aka yTreasury)

State of the Treasury

With the hack, the merger and everything that’s up in the air until this “merger” is completed, I would kindly ask to reconsider how Treasury is handling fee income and use / disbursal.

The actual numbers in this proposal are TBD (as we’re pretty much as low in price and poor in fee income as we can be), and they do not really matter as of right now - I’m sorry I cannot make any hard predictions.

Put a cap on yo’ Treas

Let’s assume Treasury CASH reserves shall be capped at an arbitrary amount that’s low enough to cover operations and make the occasional service payment - let’s randomly pick ~250k.

Let’s furthermore agree that Treasury TOTAL reserves shall be capped at an amount that makes it decent enough to cover larger expenses (e.g. strategic investments) but doesn’t create an immense honeypot and lump-risk for bad actors among the multisig - let’s assign ~500k.

All fee income > 750k would be pure “profit after cost” then.
And then you ask,

But boss, what about the PROFITS?

Every week, the surplus is used to either

  • create or increse a stake in one high-yield, high-boost USD Stablecoin Jar
  • buy PICKLE tokens and lock them up for DILL

in a ratio that enables Treasury to lock up the purchased PICKLE for DILL to enable a x2.5 boost on the Treasury investment: If we need more DILL to max boost, we buy PICKLE, if we have haven’t utilized available DILL boost, we add to the Jar.

The intricacies of a potential PICKLE buy-and-stake program would need to be hashed out obviously (timelock, gas fees etc), but if the devs ever get out of banteg’s basement they will have learned enough to implement smartly for reoccurring buys over a period of time (1/7th daily or whatever).

Treasury soft-lock Funds

This should inevitably lead to a state where most if not all of Treasury funds should be vested in one or two Jars/Vaults/Gauges/Pandas (you get the meaning), earning passive income.

Once then the Treasury consists of mostly / only (e.g.) pDAI Vaultgauge tokens, the investment in the Jar will cease, and Treasury will concentrate on buy-and-lock PICKLE.

If there are any costs, the Treasury unwinds part of the investment and pays the cost, leaving new room for investment into the Jar.

A “min cash” requirement could be instated to make sure small-time costs (gas, bug bounties…) can be paid.

Consequences will never be the same!

Treasury will become an actor in the space with their economic incentives aligned with those to yearn farmers, PICKLE bagholders, stablecoin briners and LPs.

Treasury will be able to reap the benefits of the underlying Jar with Boost, and be a little less dependent on Fee revenue.

Wether the DILL locked up for Treasury should be able to vote may be up for discussion - nothing really that speaks against it.

It creates an incentive to spend since there’s a hard cap on total funds in the Treasury.

10 seconds Later…

Thinking two steps ahead, the Treasury’s stake could be wrapped in a Treasury Pickle token (“tPICKLE”) that’s fungible and actually partakes in the boost the stake earns. Services rendered could then be paid in tPICKLES, the recipient being able to decide when to redeem them for the underlying(s), making it unneccesary to unwind the position upon or prior to payment.

In any case, I think it makes sense to involve the Treasury into the product. It also makes sense to create a feedback loop within the product that could trigger positive messaging for PICKLE price (in the least) and confidence in the own code.

What say you?

4 Likes

I say it’s some good and interesting thinking, but where we are at currently [RFC] Smart Treasury Discussion is a solid plan already.

Maybe once the system is actually finalised and running, this idea can be revisited.

I realize my thread goes into the same direction, just trying to shape the discussion.