[GP-6] Treasury Management Proposal

General
1

Summary

This proposal aims to initiate the process of Treasury diversification. Currently, no selling or token swaps are proposed.

Context/Background

At present, the DAO possesses a Treasury of approximately 53,700,067 SEAM, valued at more than $350 millions at the price of $6.5 per SEAM. The current composition of the Treasury ensures the sustainability of the protocol and the DAO’s ability to establish partnerships and conduct successful Grants and Rewards Programs. However, strategic thinking is necessary to maintain the protocol’s sustainability in the long term. The DAO must possess sufficient resources to mitigate potential risks, such as:

  1. Market conditions: The volatile nature of the crypto market is well-known. The prices of governance tokens for leading DeFi protocols, including Uniswap, AAVE, and Compound, dropped by more than 90% during the bearish cycle of 2021-2023. There is no guarantee that such a situation won’t recur in the future. In the event of a 90% decrease, the Treasury would be reduced to $35 million or even less.

  2. Risk of a hack: Despite numerous audits and tests, DeFi protocols remain vulnerable to potential drains. The DAO must be capable of exploring insurance for users, backstop solutions or other approaches.

  3. Contributor risks: There’s a possibility that the current core and community contributors, or some of them, developing and maintaining the protocol, could cease to contribute to Seamless. It’s important for the DAO to continue developing and incentivizing a large network of core and community contributors (developers and non-developers alike). In order to do so, the DAO needs sufficient resources, preferably in stablecoins, to engage new / additional contributors. For reference, the current average salary of an experienced developer ranges from $170,000 to $190,000 per year.

Proposal:

Given the aforementioned considerations, it is proposed that the DAO initiates the process of Treasury management. As the first step, it is suggested to establish a partnership with Aera Finance and allocate 5 million SEAM tokens to a specially created vault.

At this stage, the DAO approves only the allocation to an AERA vault. No selling or token swaps will be executed unless the mandate of Aera Vault Guardians (outlined below) is also approved.

Aera Vault Guardians + Mandate

Considering the traditional governance process takes 7+ days for a proposal to pass, it is suggested that the DAO delegates certain powers to Aera Vault Guardians for day-to-day management of the vault, with the following limitations:

  • Guardians can make decisions regarding SEAM tokens equivalent to $2 million per month without DAO approval. Any exceeding amount must be approved by the DAO.

  • Guardians are required to present a monthly report on the vault’s management.

It is suggested that there are 5 Aera Vault Guardians nominated by the DAO. If you are interested in becoming a Guardian please self-nominate yourself in a comment to this post (see a template below).

FAQ

Q: What is Aera Finance?

A: Aera is a noncustodial, autonomous, continuously rebalancing treasury management protocol trusted by Compound, OpenZeppelin, and others.

Q: Is it safe to use Aera?

A: Aera was audited by Spearbit, audit found here. Additionally, Gauntlet Network works closely with Aera finance. .

Q: Why is it suggested to allocate 5 million SEAM?

A: At the current exchange rate, it amounts to around $32 million. Seamless’s current Total Value Locked (TVL) is $42 million, meaning that in the event of a hack, the DAO can have the option to compensate for more than 50% of potential losses. In the case of a bear market or needing to add more core / community contributors, this amount will enable the DAO to engage, at a minimum, 20 contributors for a period of 5+ years and continue partnerships and grants programs.

*Note: The Aera finance team is welcome to add more context and answer further questions as replies to this thread

Template for a self-nomination to a position of a Guardina

Basic Info

Name/Alias:

Discord Handle:

ETH Address (used for potential multisig, should be compatible with Gnosis Safe):

Statement of Intent

My background / qualifications:

My reasons for wanting to serve as an Aera Vault Guardian:

I confirm that:

  • I understand this would be an ongoing role that requires active participation: Agree/Disagree
  • I understand that this is an unpaid position: Agree/Disagree
  • I understand that this work is a significant commitment: Agree/Disagree
  • I testify that I have no formal relation with or receive payments from the Aera Finance team. If any conflict of interest occurs I will immediately notify the DAO: Agree/Disagree

Additional Info

(Optional) Additional Links (Telegram, Twitter, Github, other URLs, etc):

5 Likes
2

This looks awesome @Ras ! Aera seems like a great way to liquidate/diversify portions of the treasury in an automated responsible fashion. Feel that the numbers proposed are reasonable to start with and its great to see that Aera is close with Gauntlet, similar to how Seamless is and how we’ve leaned on them for risk analysis

2 Likes
3

Basic Info

Name/Alias: Jeremy

Discord Handle: @seashell_jf

ETH Address (used for potential multisig, should be compatible with Gnosis Safe): 0x7baFCA489ABC8d118f7364F447804c63bD6048c3

Statement of Intent

My background / qualifications: Hi everyone, my name is Jeremy, I’m a core contributor to Seamless Protocol. I’ve helped nurture our social following, ambassador programs, and growth of the community from the early days of Seamless and it has been exciting to see the protocol become the largest lending and borrowing platform on Base. I am connected with many partner projects and help assist on collaborations/partnerships to further the mission of Seamless Protocol.

My reasons for wanting to serve as an Aera Vault Guardian: I work closely with community members and contributors alike, and feel I have a good grasp on many of the moving parts at Seamless Protocol. This vantage point places me in a position to assist as one of the Area Vault Gaurdians and participant in discussions in general.

I confirm that:

  • I understand this would be an ongoing role that requires active participation: Agree
  • I understand that this is an unpaid position: Agree
  • I understand that this work is a significant commitment: Agree
  • I testify that I have no formal relation with or receive payments from the Aera Finance team. If any conflict of interest occurs I will immediately notify the DAO: Agree

Additional Info

(Optional) Additional Links (Telegram, Twitter, Github, other URLs, etc):
[/quote] Telegram: Contact @jeremyseashell

1 Like
4

GREAT IDEA. Based on the conversations around treasury diversification and aerodrome POL this seems like a no-brainer, but would want to get some more Q&A if possible with aera . it seems to be a high-reputation partner with other blue chip projects trusting them.

2 Likes
5

Longevity of the protocol is paramount. Given the current bull market and the sentiment surrounding it, it makes sense to use this prosperous time to prepare for a potential winter.

I support this initiative fully especially since Aera has a great reputation/track history.

2 Likes
6

Great idea and proposal so far, it would be prudent for the DAO to begin in earnest actions around diversification with an eye towards the long-term! This seems to have already come up in a few spots (treasury diversification discussion and aerodrome POL proposal).

The only suggestion I have to this thorough and great proposal would be as such:
Based on deeper technical due diligence, the privileage/access given to this Aera Guardian Multisig will be a very high trust degree - especially given the size of the notional USD value of the assets involved.

As such, I suggest the following adjustments to the proposal - open to other thoughts or discussions that might arise from this:

  1. Decrease signers to a 2 of 3 multisig and focus on known/active core contributors or community contributors
  2. Slightly adjust the mandate of the Aera Guardian Multi-sig to be a transitory role. I.e. the ultimate goal is to migrate the ownership function back to the DAO once the Aera Vault and associated strategies are sufficiently setup and stable (this requires higher frequency of adjustments in the beginning but over time less-so, which means onchain DAO governance is fit for management in the long-run- especially given the DAO should have ultimate budget control and direct control of the funds).
  3. Explicitly state a target window for migration to DAO ownership, and have this be the default. My suggestion is 3 months from the vault launch date, the Aera Guardian Multisig will transfer ownership back to the DAO governor smart contract. However, if an extension is needed OR it is found a multi-sig council is a better/permanent solution, then a new proposal should be written and discussed with the community prior to the 3 month date, otherwise the default is to migrate ownership to DAO

Interested to hear what others think here

2 Likes
7

Introducing Aera

Aera is a solution for optimizing DAO funds autonomously and on-chain. For most DAOs, treasury funds (e.g., reserves, treasuries, safety modules, backstops) are not responsive to market conditions. For DAOs, this can lead to an inability to maintain runway, cover liabilities, and benefit from growth in the market. Traditional institutions can allocate funds to more nimble managers who make day-to-day decisions, but DAOs face numerous challenges with this model including governance and creating strong incentive alignment with external managers.

Aera provides DAOs with a one-stop solution for managing on-chain treasury, grant, and incentive funds efficiently and transparently. Aera consists of vaults, which are constructed on a per-protocol basis and can hold a combination of stablecoins, native tokens, and other cryptocurrencies. The objective function of the vault is determined by each DAO and is highly customizable ranging from simply keeping fund proportions in line with market caps, to sophisticated liquidity strategies to support your ecosystems growth. Vaults are automatically rebalanced by transactions submitted by Guardians who support the DAOs objective function leveraging off-chain logic to power on-chain rebalancing decisions. This ensures that the vault objective is met across a wide range of market scenarios and time horizons. Below is an image of how Aera works.

image
image2000×893 133 KB

As an Aera guardian, Gauntlet can submit target vault allocations and actions directly through the Aera vault. A few key benefits for Seamless:

  • Aera helps to minimize bureaucracy. The DAO doesn’t need to plan strategies, but rather just pick assets and define its’ objective.
  • The Aera protocol autonomously rebalances Seamless’s Protocol-Owned treasury based on market conditions.
  • Aera will eventually allow for coordination of a decentralized network of actors working together transparently on-chain to optimize the vault.

Several example use cases related to Seamless’s use case would be Aera’s work with Compound and Threshold, who similarly had a need to diversify from tokens in order to sustain normal operations. Aera has been able to deliver strong results by TWAPing the native tokens with guardrails to reduce price impact as well as run strategies on those funds once they have been TWAP’d. To learn more about how Aera thinks about treasury management, we recommend reading our report to Arbitrum: Arbitrum Treasury Management Report by Aera - General - Arbitrum

How It Works

  1. Seamless governance deposits a portion of treasury into an Aera Vault.
  2. Seamless governance works with a Guardian to set the objective and selects a set of assets for the vault. Gauntlet will serve as the initial Guardian with all fees set to zero. Fees cannot be turned on without approval from the multisig.
  3. Guardians continuously rebalance the vault based on the objective and market conditions.
  4. Seamless can view vault performance at any time through the public dashboard and have instant access to funds due to the non-custodial design of Aera.

Next Steps

Aera will focus initially on how to allocate to different strategies in order to target the goals of Seamless. This will be a combination of key Aera strategies, including:

  • Diversification
  • Stablecoin Yield
  • Volatility Targeting
  • Protocol-Owned Liquidity
  • Levered ETH staking

We’ll focus on the key objectives of the treasury manager in order to best achieve the objectives through each of these strategies. Feel free to reach out with any questions!

-Aera Team

4 Likes
8

Happy to answer any questions you have, nubi!

1 Like
9

I support this proposal, thanks @Ras for another great and thorough proposal to the benefit of Seamless. We must be responsible with the treasury to ensure the long term future of Seamless. I also believe that Aera is a great partner to assist the DAO with treasury management operations.

I also fully agree with @richyRNG’s proposed adjustments. I strongly believe that treasury management should be under the DAO’s close supervision and control. But to balance with the need for day to day operations, especially during the initial setup period with Aera, a small, well known group of contributors should oversee and manage this, with the intention of returning full control to the DAO in a reasonably short amount of time.

I think we should clarify the nomenclature around the Guardians here. This is not to be confused with Seamless’ own protocol and governance guardians. Also, not to be confused with the Aera Vault Guardian (ref). The mandate being proposed would be for the " Aera Client (DAO) – Governance/Multisig" role as defined in the Aera docs.

I would like to nominate myself as one of the representatives of Seamless while engaging with Aera for these treasury operations.

Basic Info

Name/Alias: Wes

Discord Handle: @wesfred

ETH Address (used for potential multisig, should be compatible with Gnosis Safe): wesfred.eth

Statement of Intent

My background / qualifications: I am a core code contributor to Seamless. I am intimately familiar with the inner workings of Seamless and its governance processes.

My reasons for wanting to serve as an Aera Vault Guardian: I would like to serve to represent the best interests of the Seamless community and DAO. I also believe that we should have someone with a deep knowledge of the protocol and a technical background to help setup the Aera partnership safely and securely.

I confirm that:

  • I understand this would be an ongoing role that requires active participation: Agree
  • I understand that this is an unpaid position: Agree
  • I understand that this work is a significant commitment: Agree
  • I testify that I have no formal relation with or receive payments from the Aera Finance team. If any conflict of interest occurs I will immediately notify the DAO: Agree

Additional Info

(Optional) Additional Links (Telegram, Twitter, Github, other URLs, etc):

https://twitter.com/wesfred4

1 Like
10

I also would like to self-nominate to be one of the representatives of Seamless while engaging with Aera for these treasury operations. (Also naturally, I support this proposal with the adjustments outlined above previously)

Basic Info

Name/Alias: Richy

Discord Handle: richyhayek

ETH Address (used for potential multisig, should be compatible with Gnosis Safe): 0x256a54a3B17781C4d2cc60C537C03c6460Dcb7e5

Statement of Intent

My background / qualifications: I am active DAO member across multiple communities, such as Ampleforth (FORTH DAO). I have been an avid DeFi user/participant since 2020. I have a mix of understanding the user and DAO side - and am also a core contributor to Seamless.

Previously, I have also dealt with treasury management operations and also spent some time at a crypto hedge fund. As such, I think I can bring a blend of DeFi-nativeness, DAO/governane experience and crypto market experience in helping setup the Aera Vault for an efficient and prudent approach of treasury management for the DAO.

My reasons for wanting to serve as an Aera Vault Guardian: I would like to continue to contribute to the Seamless Protocol and community. I believe being an Aera Vault multsig holder is a serious responsibility. I hope to be a good steward of the DAO and wish to see the DAO effectively take over control of these operations once a base-level robustness is setup in the strategies. I believe this initial foray into Aera Vault strategies will represent a pathway forward to the long-term self-sustainability of the DAO and wider Seamless ecosystem. This likely will represent the first step in a decades-long journey of the DAO’s treasury management and broader growth. As such, I’d like to be a part of this initial baby step and help support a smooth setup and smooth transition to the DAO.

I confirm that:

  • I understand this would be an ongoing role that requires active participation: Agree
  • I understand that this is an unpaid position: Agree
  • I understand that this work is a significant commitment: Agree
  • I testify that I have no formal relation with or receive payments from the Aera Finance team. If any conflict of interest occurs I will immediately notify the DAO: Agree

Additional Info

(Optional) Additional Links (Telegram, Twitter, Github, other URLs, etc):
Twitter

Note: post was edited to include a multisig wallet address

1 Like
11

I support this proposal - thanks for laying out a clear list of benefits and considerations @Ras! Seamless Protocol has a long-term vision, and proper treasury management is a critical element of long-term success.

Aera looks like a great solution to noncustodial and automated treasury management. Aera’s close relationship to Gauntlet Network is an added benefit, given Seamless’s recent onboarding of Gauntlet’s services.

I also agree with @richyRNG’s suggestion of a smaller number / tighter group of active core or community contributors on the multisig (a 2 of 3 threshold of signers would be my preference). The Aera Vault Guardian is an important responsibility, so the delegation of signers should not be taken lightly.

I would like to nominate myself as a multisig signer.

Basic Info

Name/Alias: Daryl

Discord Handle: seashell_dh

ETH Address (used for potential multisig, should be compatible with Gnosis Safe): 0xE647F02f1cfF58955050353eb1fEb257f8085FEF

Statement of Intent

My background / qualifications:
My professional career in web3 began in 2018, when I spent over 3 years helping build a blockchain cybersecurity company. I’ve been a DeFi user for several years, and I am a core contributor to Seamless. I am familiar with utilizing Gnosis Safe for treasury management and understand the importance of secure key management.

My reasons for wanting to serve as an Aera Vault Guardian:
I would like to serve as an Aera Vault Guardian because I believe that I would be a reliable and trustworthy steward. This is an important initiative for the future of Seamless, and I would like to help set up the strategies for success. I am excited about the decentralized network of actors who will be able to transparently optimize the vault onchain and am looking forward to helping push this forward.

I confirm that:

  • I understand this would be an ongoing role that requires active participation: Agree
  • I understand that this is an unpaid position: Agree
  • I understand that this work is a significant commitment: Agree
  • I testify that I have no formal relation with or receive payments from the Aera Finance team. If any conflict of interest occurs I will immediately notify the DAO: Agree

Additional Info

(Optional) Additional Links (Telegram, Twitter, Github, other URLs, etc): N/A

1 Like
12

Thank you very much everyone for your support.

In accordance with the DAO rules, the initial proposal will be reposted tomorrow with amendments suggested by @richyRNG @wes_fred and @daryl and a 2-days cool down period will start.

I would also like to inform you that AVMC elections will start tomorrow as well. So far we have 4 candidates @jeremy @wes_fred @richyRNG @daryl. The DAO will be invited to elect 3 AVMC members.

1 Like
13

[GP-6] Treasury Management Proposal

Summary

This proposal aims to initiate the process of Treasury diversification. Currently, no selling or token swaps are proposed.

Context/Background

At present, the DAO possesses a Treasury of approximately 53,700,067 SEAM, valued at more than $350 millions at the price of $6.5 per SEAM. The current composition of the Treasury ensures the sustainability of the protocol and the DAO’s ability to establish partnerships and conduct successful Grants and Rewards Programs. However, strategic thinking is necessary to maintain the protocol’s sustainability in the long term. The DAO must possess sufficient resources to mitigate potential risks, such as:

  1. Market conditions: The volatile nature of the crypto market is well-known. The prices of governance tokens for leading DeFi protocols, including Uniswap, AAVE, and Compound, dropped by more than 90% during the bearish cycle of 2021-2023. There is no guarantee that such a situation won’t recur in the future. In the event of a 90% decrease, the Treasury would be reduced to $35 million or even less.

  2. Risk of a hack: Despite numerous audits and tests, DeFi protocols remain vulnerable to potential drains. The DAO must be capable of exploring insurance for users, backstop solutions or other approaches.

  3. Contributor risks: There’s a possibility that the current core and community contributors, or some of them, developing and maintaining the protocol, could cease to contribute to Seamless. It’s important for the DAO to continue developing and incentivizing a large network of core and community contributors (developers and non-developers alike). In order to do so, the DAO needs sufficient resources, preferably in stablecoins, to engage new / additional contributors. For reference, the current average salary of an experienced developer ranges from $170,000 to $190,000 per year.

Proposal:

Given the aforementioned considerations, it is proposed that the DAO initiates the process of Treasury management. As the first step, it is suggested to establish a partnership with Aera Finance and allocate 5 million SEAM tokens to a specially created vault.

At this stage, the DAO approves only the allocation to an AERA vault. No selling or token swaps will be executed unless the mandate of the Aera Vault Management Council (outlined below) is also approved.

Transitional Period

For the purpose of the initial setup with Aera, the DAO agrees to nominate an Aera Vault Management Council (AVMC) composed of 3 well known contributors. The AVMC mandate being proposed would be for the " Aera Client (DAO) – Governance/Multisig" role as defined in the Aera docs. Should the proposal pass a 2 of 3 AVMC Multisig will be created.

The following limitations shall be applied to the AVMC:

  • The council can make decisions regarding SEAM tokens equivalent to $2 million per month without DAO approval. Any exceeding amount must be approved by the DAO.

  • The Council is required to present a monthly report on the vault’s management.

The ownership function is to migrate the back to the DAO once the Aera Vault and associated strategies are sufficiently setup and stable. A target window for migration to DAO ownership is 3 months from the vault launch date. This means that the AVMC Multisig will transfer ownership back to the DAO governor smart contract by this deadline unless a new proposal is written and discussed by the community to extend this period / adjust the approach.

FAQ

Q: What is Aera Finance?
A: Aera is a noncustodial, autonomous, continuously rebalancing treasury management protocol trusted by Compound, OpenZeppelin, and others.

Q: Is it safe to use Aera?
A: Aera was audited by Spearbit, audit found here. Additionally, Gauntlet Network works closely with Aera finance. .

Q: Why is it suggested to allocate 5 million SEAM?
A: At the current exchange rate, it amounts to around $25 million. Seamless’s current Total Value Locked (TVL) is $42 million, meaning that in the event of a hack, the DAO can have the option to compensate for more than 50% of potential losses. In the case of a bear market or needing to add more core / community contributors, this amount will enable the DAO to engage, at a minimum, 20 contributors for a period of 5+ years and continue partnerships and grants programs.

14

Elections to the Aera Vault Management Council (AVMC) are live
https://snapshot.org/#/seamlessprotocol.eth/proposal/0x4ff6c0dad0b1b8e69a130747b2143f04f2e2d4d9f1a2bb1e7ab89749d5e124de

PS. The vote has been relaunched due to some technical issues. Please cast your vote again and sorry for any inconvenience it may cause.

1 Like
15

it looks like the vote has concluded?

16

A multisig has been setup at base:0x0ec9a61BD923CBaF519b1bAEF839617f012344E2

Next steps will be determined soon as the Aera Vault is being stood up to prepare to accept SEAM

1 Like
17

Follow-up here:
The Aera vault for Seamless DAO has been created and deployed at: AeraVaultV2 | Address 0x6ad1F34a382bb81C054FbCE66e18bd5229255f04 | BaseScan

The Seamless Aera Vault Management Council (AVMC) multisig is deployed with the 3 nominees from the snapshot vote at: GnosisSafeProxy | Address 0x0ec9a61BD923CBaF519b1bAEF839617f012344E2 | BaseScan

For safety and security reasons, the AVMC multisig is the only address permissioned to deposit and withdraw from the vault, and as discussed, will be set with owner privelages (with the intent to move this to the DAO).

Later today or tomorrow - an on-chain vote will be tee-ed up to fund the AVMC multisig with SEAM from the Seamless DAO, which will then be deposited into the Aera Vault and managed in accordance to the mandate // rules set forth the [GP-6] proposal above.

If someone from @Aera can confirm the address of the Aera Vault linked above that would be great, for public record/notice.

Lastly, if there are additional questions from the community - please feel free to share here, in the discord channel OR if there is enough interest a community office hours can be organized.

1 Like
18

Richy/Seamless Community,

The vault is deployed and can be found here:

As a note, next steps will include the multisig taking ownership of the vault, hooks, and assetregistry, as well as depositing into the vault.

Let us know if you have any questions!

  • Aera
2 Likes
19

Thanks @Aera

As an update to the community: the onchain vote to move Seamless DAO treasury SEAM is in progress:

In 2 days, the voting will begin after the onchain delegation period

2 Likes
20

I like the Treasury proposal 1.8 ETH. can you please send the funds to the bank and send me the confirmation. thank You very much.