Title: Transfer USDC from Treasury to Investment Account and Deploy Productively
Author: @Finance.Nest - @Ahuja @Matthew_Graham
Gov Review: @sixtykeys
Created: 13th March 2022
We propose transferring the remaining USDC balance from the Treasury to the Investment Account. This capital is to be deployed productivity in line with the Stable Coin Asset Management Guidelines and the Investment Account Strategy. There is currently 3,040,314.00 USDC in the Treasury, with 1,320,416.67 USDC being sent to the Operations Account as part of the season 1 budget. The remaining 1,719,897.33 is to be transferred to the Investment Account.
Treasury Account: ‘0x9467cfADC9DE245010dF95Ec6a585A506A8ad5FC’
Investment Account: ‘0x462A63D4405A6462b157341A78Fd1baBfD3F8065’
Ethereum Operations Account: ‘0xFafd604d1CC8b6B3B6CC859cF80Fd902972371C1’
As outlined in the Investment Account Strategy forum post, the Finance Nest recommends holding a productive stablecoin allocation within the Investment Account, that can be deployed to earn interest this is important to build a safety net for the community. Stablecoins offer the most immediate diversification benefits due to their uncorrelated nature relative to other assets in the treasury, so we intend to keep the transferred stablecoins in stablecoins.
This IIP is to facilitate the transfer of 1,719,897.33 USDC from the Treasury to the Investment Account where it will be deployed to earn yield.
Currently, after taking into consideration the Season 1 stablecoin spend, Index Coop will hold around 1,719,897.33 of USDC in the Treasury, with the remainder being held within the operations account or is already deployed within the Investment account. This USDC is unproductive and there is an opportunity cost for this. Finance nest constantly tried to improve the stablecoin runway for the community, yield generation is essential. At 10% ROI, one years interest on this USDC is equivalent to more than 1 months of Index Coop stablecoin spend. To maintain a runaway of around 24 months and facilitate the current stablecoin burn rate, all funds need to be made productively.
Low vol stable coin assets held within the Investment account will be managed in line with the Stable Coin Asset Management Guidelines as part of a broader portfolio construct outlined by the Investment Account Strategy.
Finance Nest will manage the funds in accordance with the two publications linked above and any transfer of funds will be within the permission granted to Finance Nest by IIP-123. The performance of the portfolio shall be made readily available via monthly updates on the status / performance of the capital.
Capital will be deployed across multiple strategies with a long time horizon in mind. There may exist a more actively managed portion of the fund which is able to react to high yield short term opportunities. This style of investment will be sized appropriately with a consideration of the holistic risk profile and with the overall goal of preserving community capital front of mind.
DO transfer 1,719,897.33 of USDC to the Investment Account.
DO NOT transfer 1,719,897.33 of USDC to the Investment Account.
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