Would you want to DCA this conversion over a period of time (lets say 3 or 6-months) or do it as one single purchase.
Overall, i think diversification of the treasury is a good idea. By having a diverse balance sheet, you can have strong purchasing power for the funding of AIPs during bear market and black swan events.
thx for the info. so to be clear this isn’t for diversification or derisking, since the treasury isn’t a portfolio. this is to avoid adverse slippage when it’s time to pay out grants.
out of curiosity, what specific pools you are looking at and what are you qualifying as “low liquidity”?
today, the 24hr volume on $ape is $60m, in top 50 highest volume coins. The -2% depth is almost 7 figures. In other words, you could convert 7 figures of $ape to stablecoin with nearly less than 3 cent difference.
Thank you for your ideas [and the ApeCoin DAO community for the insightful discussions].
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I’m a big fan of active treasury management. Without one you are stuck between two poles: Luck (if the price moves in your favour) and stupidity (when it goes against you).
Even at a very basic level there should be expenditure hedging. There are fixed dollar denominated costs absorbed by the foundation and these should be hedged using reputable stables.
More broadly, I agree that a large proportion of the treasury should always remain in the native token but diversification in balances via a defined treasury management policy would be prudent. Re concerns about impact, smart execution of orders using OTC desks and/or (preferably) algos would make executing size quite efficient.
All that said, now is not a particularly good time to convert given $ape’s relative weakness.
This proposal is live for vote on Snapshot. The voting period closes next Wednesday at 9PM EST.
The AIP implementation is administered by the Ape Foundation. Implementation may be immaterially or materially altered to optimize for security, usability, to protect APE holders, and otherwise to effect the intent of the AIP. Any material deviations from an AIP, as initially approved, will be disclosed to the APE holder community.
I support the idea of diversifying the DAO’s asset holdings, but I believe that we should wait to do this since the price of ApeCoin is still near its all time low. This proposal would lead to a significant dump in the price of ApeCoin since we are essentially selling very large amounts of it, and would earn less for the DAO than if we wait for prices to recover during the coming crypto market bullrun.
Hey @hamman247! Thanks for leaving a comment. I’ve had others also indicate that this may not be the best time to do even a small reallocation, which is absolutely fine. When it was first drafted, not long ago even, market conditions were a bit different, and also sentiment was different. Early voting indicates that the DAO may want to wait until a later time! For better or worse, it’ll be fine. I was looking forward to seeing how this would expand responsibilities of the Ape Foundation to manage the OTC selling + custodianship, and I still see benefits in doing it now, but it’s not something I take personally to see the DAO choose not to!
Diversification into Ethereum and USDC is a brilliant move! It not only acts as a buffer against market fluctuations but also allows the DAO to adapt to dynamic circumstances. This proposal emphasizes flexibility and long-term confidence – crucial elements for sustained growth. Let’s support this strategic initiative!