Revisiting the community treasure stablecoin allocation

Finance Treasury
1

Dear Index Coop Community Members,

The Index Coop Treasury Pod is hereby announcing a modest re-allocation of the treasury’s assets. The purpose of this allocation is to further diversify and optimise the treasury’s portfolio, while mitigating risk such as the events witnessed in the stablecoin space last week.

Given the current market conditions and the need for a well-balanced investment approach, we propose the following approximate allocations for the treasury:

This is from the current approximate allocation of:

  • 64% USDC
  • 34% DAI
  • (2% Other)

By allocating the majority of our investments into stablecoins like USDC, DAI, and USDT, we ensure a strong and stable foundation for our treasury.

Investing 20% of our treasury into the upcoming launch of MMI, demonstrates the belief in our product and the power of passive income.

Lastly, by allocating 10% of the treasury to LUSD, we further diversify our stablecoin holdings and support an innovative, decentralised stablecoin project from Liquity Protocol.

We will continue to deposit a minority proportion of our stable coin assets across the two most trusted lending protocols Aave and Compound (v2/v2) for additional low risk yield.

Trades will be executed using limit orders through Cowswap to ensure best execution and value.

We believe that this proposed allocation strikes the right balance between long term sustainable capital preservation, risk mitigation, and stablecoin diversity.

Your feedback and support are highly appreciated as we work together to strengthen our treasury and secure the financial future of Index Coop.

Sincerely,

The Index Coop Treasury Pod Team

13 Likes
2

Hi,
wouldn’t it be more than nice if we didn’t also have gtcETH in our Treasure? maybe only 2%. Would also underline the trust in our own product, be a good example for other DAOs, and last but not least, we do something good :slight_smile:

2 Likes
4

How about gitcoin give us $GTC for indexcoop treasusy buy gtcETH? $1800 is a high premium due to 5% fed interest rate.

5

Hey Martin!

It would be a nice gesture of course however it would mean taking on $140k of risk in order to generate <$3k of revenue/donation to gtc at today’s prices. You can read more on why we do not consider having risk assets in the treasury here.

Hopefully in the future IC will be in a financial position to give back to eco system and public goods etc in more significant and meaningful ways but imo we first have to invest in our own growth.

Thanks

5 Likes
6

Hej,
Yes I hope that in the future this would be possible.
But to be really honest. How could it be less risky to hold 2% of ETH than 10% USDT? Holding a corporate coin like USDT or USDC should be against the Coop ethics of true decentralisation. Just my point of view.

2 Likes
7

Fully agree, I’m sure many of us would prefer to hold non-centralised stable coins but there are currently limited options. DAI is still largely backed by USDC and the LUSD peg is a little too soft to handle all of the capital we hold. Hence the reason to diversify into a few. I understand your POV but for now, in this uncertain climate our position is not to swap stable assets to ETH.

2 Likes
8

Are any of Index Coop’s expenses currently denominated in euros?

  • If yes, including Euro stablecoins, such as EUROe, could help with cash management

Using Euro stablecoins could also help isolate effects like those of early March.

1 Like
9

Hi roinevirta,
First, thank you for being active on the forum and sharing your ideas.
I think this is in general a good idea, but I guess that liquidity of those stables are simply to low. Even if Index would not hold millions. I just checked EuroE and it has just a supply of roughly one million.
Like I said before. I do support your idea. But there still no good alternatives out there (liquidity, reliability etc)
All the best.

1 Like
10

Hey Martin,

Could you help me understand the main challenges in choosing an alternative and what metrics or milestones the alternative should fulfil?

For full disclosure, I work at EUROe and I’d be very happy to ensure that we could meet those requirements and be considered as an option for Index Coop’s stablecoin allocation.

11

hi again,
I don’t have any specifics here, maybe we can get an answer from @MrMadila on this topic.

12

Hi, thanks for the suggestion. There are currently no eur denominated costs or plans to diversify away from USD stables. If that changes we will keep EUROe in mind. Thanks

1 Like