[Proposal] Implement Dollar Protocol "Treasury Reserve"

Implement a “reserve rate” that allows a certain percentage of positive rebase USD to be liquidated for a stable backed currency (perhaps yCRV or USDT or DAI) to be stored in an interest bearing treasury.

This reserve will be used in times of contraction to help support the price of Dollar.

This reserve rate can be changed over time.

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As a MakerDAO community member I would advocate the use of DAI as the treasury stablecoin although I have no qualms with using yusd (yycrv) either. What percent of positive rebases do you think would be sufficient? YAM extracts 10% of each rebase for the treasury. I think that would be a fair amount.

i think 10% is a fine starting amount to provide some base stability and reassurance to the protocol

It’s great. There are a lot of proposals. I think we should choose the highest priority proposal and implement it. I prefer the scheme of <Third Token Addition (BOND)>, which will make the game in the system more adequate

We can implement all that the community agrees upon. It seems like @Robert is up to the task. No need to choose only one.

Yes, I mean implementing them in order of importance.

just reviving this a bit - i think adding a treasury is super important.

here is YAM’s implementation of a basic governance owned treasury: https://github.com/yam-finance/yamV3/blob/master/contracts/reserves/YAMReserves.sol

it is embedded into the rebase function and auto converts USD into a base asset. I think we could choose.

I’m biased in choosing ETH as that is our biggest pool at the moment. we can always convert this to a stable currency before a bear market

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just a FYI, treasury management will someday be a community driven event, with strategies to create alpha and also maintain peg stability. Really fascinating stuff. we’re in the early days for sure.

I like idea of treasury

ETH is definitely a decent reserve asset as its the backbone of the ecosystem and will always be important. The one concern is active management of a treasury can be difficult for individuals let alone large decentralized organizations. It will be good to see how these discussions evolve. We are very lucky to have @Sebastien involved in this project. I would recommend you take a look at the work he has been doing over at MakerDAO with strategic reserve proposals.


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treasury (YAM implementation) is live on testnet: https://ropsten.etherscan.io/address/0x274fdc7B0E9fd866e9c0Fd5e1C42a11C605eA9b8

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Wow that was fast. Nice job. What is the reserve asset?

on testnet it is SHARE lol - on mainnet it’ll be ETH or ETH + DAI + yCRV. some combination.

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i’m thinking of also adding functions to help “balance” the reserve. so for example, if we expect ETH to rise, we can increase the exposure to ETH and if ETH drops, we can decrease exposure to ETH and hold stablecoins.

These can be algorithmic and adjusted by a governance vote.

A good proxy could be augur’s prediction market or FUTUREs price of ETH (perhaps 1 month out)

In theory it sounds good, I just worry about governance then acting as gamblers with treasury funds. Humans are terrible at timing markets.

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automatic uniswap sell on rebase: https://ropsten.etherscan.io/tx/0x61e25783ef0e3bf3762cd7ea12d07221f6c97a6d1cd52945f592a01bad46724c

So what is this transaction testing? Just rebased USD into SHARE?

It is a liquidation of usd into an arbitrary asset, given a reserve rate and a max slippage rate

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I’m noticing some interesting human behaviour playing out with YAM in regards to their treasury and going through their first death spiral. Everyone is arguing over how to use the treasury; compensating individuals who want to “ragequit” and get their portion, paying developers based on performance, or buying YAM to create a price floor. I’m hesitant to implement a similar strategy if in the future when the community grows the same problems will arise. We should ultimately strive for minimum viable governance to stay true to being a truly algorithmic protocol in the virtue of Bitcoin and other fully decentralized systems. Some food for thought.

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agreed overall. a potential compromise is merging in the new code but setting the treasury reserve rate at 0% so it does not conduct market sells