Hey Fox community!
Below this initial post, I will be including a number of polls related to the the UMA X Shapeshift proposal drafting process. These polls will stay active until the proposal idea either reaches the next step of the process (Ideation in boardroom) or does not move forward. The following is a current draft of ‘Mint & Sell Range Tokens for Treasury Diversification’:
Summary: A proposal for the ShapeShift DAO to mint and sell UMA Range Tokens. The sale would bring in stablecoin to diversify the Treasury and would also help with operational expenses.
Abstract: Forty comments with twelve ‘thumbs up’ shows good engagement surrounding Mint and Sell Range Tokens for Treasury Diversification (Discussion centered around motivation and moved into more specific details relating to UMA Range Tokens. Please follow the link and consume the thread for full context).
Motivation: Being that FOX is the only current asset held by the ShapeShift Treasury, the strength of the Treasury can be compromised by sudden or even gradual downward market trends.
Selling Range Tokens for stablecoin helps protect the TVL of the Treasury.
Stables can also be applied to operational expenses and other DAO necessities that will come along as ShapeShift expands.
After discussion between ShapeShift & UMA core team members, the following Range has been suggested when minting these synthetics:
A total value of 5,000,000 FOX will be authorized by the ShapeShift DAO as collateral to mint the UMA Range Tokens.
Benefits: As Josh words it in the original proposal, “More coins than FOX in the treasury. Diversification. More resilient treasury to handle multiple possible future market conditions. Specifically, stable coins are a hedge against a down crypto market. We have lots of FOX, let’s not keep all our eggs in one basket.” And as mentioned above, selling into stablecoins gives the DAO leverage to hire future developers, pay for one-off jobs, secure legal council, etc., etc.
Drawbacks: Though the proposition would secure ‘said amount’ of UMA Range Tokens. Selling the Tokens isn’t a given. ShapeShift will have to sell these publicly or OTC. A worst case scenario for the Range Token itself is an expiry/maturity at the bottom of the range. Investors would still get the original value of the collateral back upon expiry in such an example.
Vote: A ‘Yes’ vote authorizes the DAO to employ $5,000,000 from the FOX Treasury as collateral to mint UMA Range Tokens and begin sales discovery.
A ‘No’ vote declines this authorization and effectively ends the proposal.
(Big thanks to inalittlewhile for putting together this pre-proposal foundation in order to fill in the blanks with the community via data collection)