iip: 101
title: Authorize the Investment Account for Rari Capital Strategies
status: Proposed
author: @Finance.Nest
created: 31/10/2021
Simple Summary
This IIP includes two amendments to Index Coop finances. The first is to transfer DPI held within the Treasury to the Operations Account.
The second is to enable the Operations Account to interact with Rari Capital by authorizing the Finance Nest (FN) to deposit assets held within the Operations Account into Rari Capital.
Treasury: ‘0x9467cfADC9DE245010dF95Ec6a585A506A8ad5FC’
Operations Account: ‘0xFafd604d1CC8b6B3B6CC859cF80Fd902972371C1’
The Treasury holds ~$600K of DPI at the time of writing.
Abstract
IIP-70 authorized depositing $500K of USDC reserves into the Operations Account. Per the Stablecoin Asset Management Guidelines, the FN recommends these funds be made productive. In order to actively manage these reserves, this IIP will authorize the FN to deposit and withdraw assets into Rari Capital freely in line with the stated guidelines.
We expect DPI to become a productive asset with various protocols like Aave V2 and Rari Capital offering incentives. Rari Capital is teasing LM in their discord and Aave V2 liquidity mining rewards are expected to be replenished during November which may, or may not, include DPI.
Having this blanket authority will allow the FN to act nimbly when managing the liquidity of the Operations Account as market conditions or the state of the Index Coop’s operations evolve.
Motivation
The Operations Account presently has the ability to deposit stablecoin held within the Operations Account into Aave, Balancer, Compound, and/or PoolTogether. This proposal seeks to extend this to include DPI, as well as adding the lending protocols Rari Capital to the list of protocols the FN can deposit and withdraw from.
The FN seeks to deploy assets held within the Operations Account productively across a number of protocols in order to earn income for the Index Coop.
Specification
Overview and Rationale
The FN recommends adding Rari Capital to the list of protocols that Index Coop can earn yield on assets from within the Operations Account. The rationale is detailed within each section.
Rari Capital
The Rari Fuse pools are forks of the Compound code base and although they hold around $1B in funds, the contracts at Compound are well battle tested and are also in use by Cream. Rari offers two yield aggregator products, for USDC and DAI, that aggregate yield across the Fuse pools. The current ROI is just beneath 20% and represents the yield of depositing across multiple fuse pools. This becomes increasingly more lucrative if Rari Capital was to offer Liquidity Mining rewards. Index Coop already has an existing relationship with Rari Capital having founded Fuse pool 19 together. The FN may seek to accrue RGT for additional meta-governance power for the INDEX token or sell for current income.
DPI from Treasury to the Operations Account
Transferring DPI to the Operations Account enables the assets to be put to productive use. Currently, DPI is held within the Treasury wallet and is not earning any yield for Index Coop.
Technical Specification
Rari Capital is accessible from Gnosis Safe via Wallet Connect and no technical work is required.
Voting
FOR:
DO authorize the FN to use Rari Capital in the Operations Account and DO transfer all DPI from the Treasury to the Operations Account.
AGAINST:
DO NOT authorise the FN to use Rari Capital in the Operations Account and DO NOT transfer DPI from the Treasury to the Operations Account.
Copyright
Copyright and related rights waived via CC0.
