Establish a Treasury Management and Diversification committee under the Tokenomics Workstream

Is this person qualified for the committee? - Daniel W
  • Yes
  • No

0 voters

I would like to nominate myself to join this committee. (@ rotorless at discord)

I am an entrepreneur, lawyer and corporate director.

My strengths are strategic thinking and designing risk management frameworks to help members of boards take a measured approach to evaluate asymmetric opportunities. I have been a board member at a large credit union with a $1B treasury where I was a member of the credit, risk and compensation committees. I am also the chair of a not-for-profit where I designed a risk management framework and the balance sheet increased to the upside by 30% yr over yr. I have been in similar leadership positions for most of my career. I am disciplined, measured and collegial. I have a healthy dose of skepticism but once a decision is made, I move on.

I am knowledgeable about the crypto space. My legal background is in financial crimes, and crypto.

I am active in the DAO movement: at the Bankless DAO I am the ombudsman and a founding member of Bankless DAO legal Guild, I am a core team member at DAOist on the tokenisation team. I am also a member of the LexPunkArmy and LexDAO advancing legal engineering and developing the crypto counter regulatory narrative.

I am active in DeFi: I have skin in the game. Most of net worth is in crypto and I routinely balance acceptable risks with the preservation of capital.

I have been trading derivatives in my personal account for 12 years. I have a reasonable understanding of the influence of intermarket effects on underlying assets and the effects of derivative positions on price directionality in markets. I understand that there is someone on the other side of every trade who is taking the trade for a reason.

Lastly, I have time to give. I can assign up to 4 hrs a week to this task.

  • is this person qualified for the committee?
  • Yes
  • No

0 voters

2 Likes

Just a couple of comments on the Committee framework:

I did not notice a quorum requirement for voting., which should probably be 3 or 4.

Related to this, the proposal deals with committee vacancies by way of community voting but also speaks to the need for the committee to respond and act quickly. There is a foreseeable friction in the very real possibility of not having a quorum if members leave because of the mechanics.

A solution might be for a different committee to appoint an interim acting replacement until the season/epoch is over, and then to re-vote at the start of the next epoch/season.

This an example of how some decisions require all votes, and others should not because the timing friction can increase the downside risk and decrease the upside opportunity.

Lastly, there is no expiry to the terms of membership on the committee. Prudent governance might be to expire and to re-elect a slate after a period, and to also set a maximum duration for members before they have to step aside.

I do realize this is the first draft and we are trying just trying to get it off the ground. Good framework can prevent arbitrary decisions in the future under the dress of necessity.

Not gospel, just thinking out loud :slight_smile:

2 Likes

I would like to nominate myself for this committee as well. That being said, I already am seeing representation from centralized ShapeShift so if we have 5 stronger/more diverse candidates I am happy to just contribute to this committee without being a voting member.

I have been working for centralized ShapeShift for almost 4 years now! I have an intimate understanding of ShapeShift, Defi Protocols, and crypto in general both professionally and in my personal investing. Before ShapeShift I worked in old centralized finance (Yuck!) working for Merrill Lynch and TD Ameritrade managing a book of over $200MM. Outside of crypto, I am also an avid options investor and look forward to bringing various investing strategies to this committee!

Is this person qualified to be on this committee?

  • Yes
  • No
  • This person should be a non-voting contributor to the committee

0 voters

2 Likes

hey rotorless/amicus.eth!

good points, I will add something about quorum for voting. If we do implement a quorum for voting I think that takes care of any issues with vacancies as well, meaning the remaining 4 members of the committee could still vote on things, keep the ball rolling until a replacement is voted in.

  • This proposal would be an initial test of the committee
    • Trial basis for 3 months. November 16th, 2021 - February 16, 2022
    • There is no compensation for these roles for the trial basis
    • A subsequent proposal is required for the committee to continue on

Believe this section addresses timeframe and how to reelect the committee.

2 Likes

Hi all - I’m Kent, and I’d love for you to have me as a member of the Treasury Committee.

Currently I’m creating a proposal to lead a newly-created Tokenomics workstream, of which treasury management (the overall topic, not necessarily the Committee itself) would be a subset. Should that proposal pass, my membership on the Committee would be an apt fit.

With respect to my background/experience that’s relevant to treasury management, here are some datapoints:

  • I’ve been in crypto for multiple bull/bear cycles and am familiar with the insane volatility and unique market conditions inherent in crypto markets.

  • From September 2018 to August 2021 I served as Head of R&D for (centralized) ShapeShift.

Part of my job was to help ensure that ShapeShift was never caught flat-footed in the fast-changing crypto world, and was better-positioned to spot risks and take advantage of emerging opportunities.

To this end, I carried out research around various relevant topics, such as new blockchains, NFT’s, DeFi, Layer 2, and cross-chain bridges. The resulting reports were disseminated for internal use. Several were also repurposed for public-facing “thought leadership” pieces:

Decentralized Insurance

Staking Derivatives

Algorithmic Stablecoins

Metaverse & NFT’s

Cosmos, NEAR, and Polkadot

IMHO this knowledge of the crypto world, in all its various facets, would be invaluable in a treasury management context. A few more relevant datapoints:

  • Previously I worked at ShapeShift as a marketing strategist–a position I started in February 2017.

  • In a former life I worked in TradFi as a stock market analyst, employing both technical and fundamental analysis.

To expand a bit more on the approach I would bring to the Treasury Management Committee, I’m more on the conservative side of the degen spectrum. I believe YOLO’ing into DeFi protocols certainly has a place, but am also wary of the various layered risks that exist in this insane new crypto world. In fact, much of my research work at ShapeShift involved highlighting specific risks and, where relevant, finding ways to mitigate them. As such, I’d bring a strong risk management background and perspective to the Committee.

I’ll wrap this up with thoughts on how I think we could proceed with treasury management.

  • Start by bucketing these activities into two categories: diversification and growth.

Diversification is all about making sure we’re hedged against a protracted decline in our wonderful native token, whether that’s a result of token-specific weakness in FOX, or a function of the crypto bear market that is inevitably coming at some point.

Growth encompasses opportunities for the DAO to unleash the latent energy of its FOX holdings for the benefit of FOX holders and ShapeShift users. Specifically, this would entail finding opportunities to generate yield/returns on FOX, then subsequently distributing those rewards to the broader FOX ecosystem. (The mechanics for how those rewards might be distributed are part of a super-interesting broader question that pertains to the proposed Tokenomics workstream).

There’s so much we can do on both the Diversification and Growth sides of the equation, from simple token exchanges to token swaps with other DAO’s, from collateralizing FOX in lending protocols to utilizing novel “DeFi 2.0” protocols that present a double-edged sword of enticing growth possibilities alongside the inherent risk that comes with newer protocols that haven’t been battle-tested in the unforgiving crypto environment. Protocol-level staking and decentralized insurance also offer compelling ways to generate relatively low-risk returns and reliable methods to manage risk, respectively.

With so many opportunities, one of the most important questions to ask is: what shouldn’t we do?

To answer that question, we need to start with broad strategic goals for the treasury. How much of our treasury do we want to diversify away from FOX, and by what date? (Willy has already made some initial stabs at this). What sort of risk tolerance do we have with respect to growing the Treasury, and what type of growth would constitute success? With broad goals defined, we’ll be in good shape to determine our tactical moves.

Regardless of what strategy we adopt, my mantra as a Treasury Committee Member will be unchanging and steadfast: act in the best interests of FOX holders, with an unblinking eye on the fundamental principles of risk management.

Thank you for your consideration!

  • Should this person be a member of the Treasury Committee?
  • Yes
  • No

0 voters

6 Likes

Further thought on that. As a contingency plan, it is probably worthwhile to build some redundancy into the governance structure in treasury function. Ideally there is a reserve pool who are involved in the daily operation of the treasury and can potentially take up any gap when any of the voting committee member cannot perform whatever the reason maybe.

I reckon treasury function is sth involves daily operations that cannot stop and wait for a lengthy procedure. Having a reserve is probably less costly than having interruptions.

1 Like

I’m Al and I would like to nominate myself to be a part of this committee.

I worked at ShapeShift as a financial engineer and manager, building tools for finance, trading, and engineering. Most recently, I was responsible for the active management of $50mm deployed across defi protocols. Prior to joining ShapeShift I co-founded and built Bitfract, a crypto asset allocation exchange built on the original ShapeShift API. ShapeShift acquired and hired our team and we continued to build out the vision for simplified access to crypto assets. I am currently working on several tools for defi, including https://albitrage.com which compiles and ranks DAO revenues and treasury balances.

My career began in tradfi dedicated to the design, implementation, and accounting of asset allocation and management strategies. I researched and constructed strategies for investing across all asset classes until realizing cryptocurrency will inevitably consume all analog financial instruments.

I have thorough experience interacting with defi and asset management, including:

  • Trading and liquidity provision on AMMs (Uniswap, Curve, etc)

  • Minting stablecoin debt positions, from original SAI on MakerDAO to LUSD on Liquity

  • Lending/borrowing on AAVE, Compound, Cream, etc.

  • Minting and funding decentralized set token funds

  • Yield farming and reward incentive collection

  • Trading recommendations that outperformed all other strategies on the ShapeShift trading team.

As a part of this committee I would be able to:

  • Contribute strategies for diversifying treasury assets.

  • Architect, engineer and deploy tools for acquiring and monitoring DAO treasury assets.

I am passionate about enabling individuals and organizations to tap into the world of decentralization. As a previous employee of ShapeShift and believer in its original vision, I would love to continue working to ensure its future success.

Is this person qualified for the committee?
  • Yes
  • No

0 voters

3 Likes
Pick your top 5 candidates for Treasury Management and Diversification Committee
  • Danielle
  • profMcC
  • Amicus.eth / Rotorless
  • WagmiVentures / Daniel W
  • seven7hwave/ Kent
  • albitrage / Al

0 voters

2 Likes

I would ask to each candidate what steps would they look to take initially to mitigate risk to the treasury activities off the bat. And on a personal note what would you say your risk tolerance is on average. Any high level replies by the candidates would be appreciated

3 Likes

Without spending time really digging into strategies, I’d say we first and foremost need to get exposure to stablecoins (in a way that doesn’t adversely impact the price of FOX). I’d suggest that we engage in both simple swaps, and collateralize FOX on various lending platforms.

Each stablecoin comes with various risks - for example, USDC doesn’t have much smart contract risk and appears to be 1:1 backed, but is vulnerable to regulatory action since it’s more centralized. Meanwhile, DAI is decentralized but is vulnerable to black swans (like when the market crashed during the onset of COVID). As such we may want to diversify into multiple stablecoins.

My risk tolerance relative to your typical degen is probably more conservative. I’m very wary of all the various risks that lurk in crypto, and have seen time and again people getting burned when they overlook these risks. On the other hand, I think there are smart ways to manage these risks (not putting too much in one protocol, using insurance like Nexus, etc.) in order to take advantage of some of the sexy yields and cool opportunities out there.

One rule of thumb should be to always carefully deliberate over any given opportunity. There’s no rush to YOLO in to XYZ protocol.

5 Likes

I think if we crawl-walk-run and take the time to build out a risk framework which might include what is unacceptable, high, med, low, or remote risk? what is our risk appetite? and what is our risk tolerance? opportunities will self-present themselves.

4 Likes

I think it is an interesting question, obviously we are in crypto, we have a bit higher risk tolerance than most. I like to buy strong assets and hold them. I think it’s important to make strong relationships with other DAO projects and act quickly. I believe also our risk tolerance on the committee can be a bit higher bc we only have access to 40 million FOX. Which is only 12% of the overall available FOX the DAO has today. and only 6% of the total FOX the DAO has and will get from its sablier stream.

Just by setting up the committee in this way where we don’t have large access to the treasury I believe we have already mitigated the risks.

7 Likes

good points, I consider that the committee will need to able to scale up to take over a larger pie eventually, and there is an opportunity to build the risk management system now, while the cost of error is lowest.

There are always upside opportunities

5 Likes

Diversification with the goal to minimize the liquidity-adjusted value-at risk. ensure that any nonlinear dependencies between interlinked factors (asset prices, their time variations, sector-specific or geo-specific market frictions) are accounted for and use out-of-sample data to verify that the strategy can handle both average and tail dependence.

Carve out some chunk (3-20%) that goes to high-risk/high-reward investments. Have that percentage grow over time as assets under management increase.

Risk-averse. Perhaps a recovering risk-averse. Trying to be more risk-seeking lol. I did go to grad school and get a PhD (takes a certain type to make sucha dumb mistake lmao)

6 Likes

Just my two satoshis.

first up I think in general the conventional wisdom in treasury management does not work well in crypto. unfortunately, or fortunately, crypto is fast paced, high system risk and you will never have enough information and you never be able to predict how a new kid in town will perform in 6-month time.

However, the committee is dealing with public money. Needless to say this requires a fine balance between safeguarding the pool and taking necessary risks to capture the best possible upside to increase the firepower of the pool.

What I personally would like to see is a committee that is openminded and proactive in terms of working with/investing in new project (with proper due diligence), but in a measured step (ie. in smaller amount, etc). I certainly hope the committee was not a risk-averse one.

On a side point, crypto is still a small world, we need to build connections. And I think treasury has an important role to playin that. For more established project like Shapeshift, I think there is a responsibility to help other projects succeed.

5 Likes

Thanks for your candidacy. You have some impressive qualifications. Have you been involved in ShapeShift Discord? If so, what is your handle there? Thanks.

3 Likes

My handle is ProfMcCarthy. I have not yet been very active as I am still drinking from the firehose that is catching up with the happenings of the defi world in the last year, but I am here and an open book if you have any questions for me :grin::+1:

2 Likes

Thanks for the response. How did you find out about ShapeShift and choose to seek candidacy with our tokenomics work? Why not some other DAO?

2 Likes

I’m a FOX holder and have been an admirer from afar for a while now. I know Danielle through my girlfriend, and had an amazing conversation with her two Fridays ago soon after Danielle attended a meeting wherein peoples discussed the ideation for the Treasury Management and Diversification Committee. I was excited to get to know Danielle and learn more about Shapeshift and the current state of defi. I am a passionate supporter of the Shapeshift vision and mission, and truly see blockchain and defi changing the world for good. Breaking down financial barriers and access to finance is one way to help the global poor out of insecurity. I’m academically trained, writing papers on how foreign aid and humanitarian assistance can be revolutionized by blockchain and defi. I’ve been an avid crypto-evangelist and have seen several bear and bull runs. I’m extremely excited to be here and can’t wait to see how the committee can synergize and best leverage each member’s unique skillset.

I trust Danielle (otherwise I would be ((rationally)) hesitant to make such a time commitment with no—current–compensation) and I’ve enjoyed the discord discourse that I’ve been apart of and witnessed in the short time that I’ve joined the Shapeshift community. I’ve been unusually terse just because I’m still catching up. I’ve been attending live streams and asking lots of questions (like one between chainlink and QDT on data feeds/predictive analytics today) and look forward to becoming a pest in the discord / these forums very soon!

4 Likes