AIP-441: Protect Treasury - Lock Up 20% as BTC for 3 years

Let us add some more color to the conversation. One of the main pillars of finance is diversification, as it enables the reduction of risk. Having the majority of the treasury in a single asset leaves the overall risk profile unnecessarily high. And whilst BTC has been less volatile than APE historically, it does not generate revenue for the DAO.

This discussion is evolving around notion of making DAO more sustainable. Part of our report covers sensitivity analysis, in other words how sustainability of DAO would react to implementation of certain financial instruments. Stablecoins have a rather dramatic effect in reducing volatility compared to BTC and can also serve as an additional revenue stream for the DAO through blue chip DeFi protocols.

For example the table bellow illustrates Required Returns vs Stablecoin Yield Index. Numbers in purple, orange, and green correspond to required returns that are in line with current, 2023 average, and long term average levels of yields on stablecoins respectively. Numbers in red represent required returns that are in excess of current yields. In other words, anything in red could be challenging to achieve based on historical data without moving further out on the risk curve.

In this table, with an allocation of $300m, the DAO would require a yield of 3.65% in order to cover all operating expenses, which is an achievable number compared to conservative estimates of yields currently available in the market.

Please have a look at our full report, where we explain what other measures can be taken to ensure sustainability of the DAO.