DAO Endowment Submission Summary

[nick.eth]

@EvanVanNess

At the risk of ruffling some feathers, I would categorize the goal in the RFP of making $4m USDC per year without any loss of principal as very aggressive even if ENS were to risk using the entire treasury at the start. I realize the goal is to eventually get there, but I think the RFP anchors perceptions. Using the entire current capital of ~$55m, that’s almost an 8% return and the elephant in the room is that with any ETH exposure, your return will be extremely correlated with ETH and the general macroeconomic environment.

The intention is certainly not that it would return $4M p.a. with the current size - only that it would eventually grow to a size where that is practical. Many proposals have pegged that around the $100MM mark.

@EvanVanNess

Given that the price of ETH is likely to determine returns and given that I don’t think ENS should try to find managers who can time the ETH market, what if we could choose a fee-minimized option that relies on code and which the DAO can update when it wants to change its investment options? That’s basically Mimic.

The DAO is definitely not intending to time trades, or hire anyone who does! The goal is to average out of ETH exposure as much as possible, modulo our unearned income.

@EvanVanNess

Start funding operations through doman sales by converting domain name sales into USDC immediately. I’m not entirely sure I understand the justification for keeping unearned in ETH and earned in USDC, but it seems obvious to me that the best place to start funding operations is through operations, rather than prematurely asking investment managers to aggressively manage the treasury to meet a specific goal.

There’s a good discussion to be had about whether unearned income should be denominated in USDC or ETH. We could definitely change our accounting basis to USDC, though it runs the risk that we end taking paper losses if the rate changes between a registration happening and the ETH being converted.

@EvanVanNess

My view is that ENS shouldn’t be trying to maximize investment returns; ENS should be maximizing for the probability of sufficient funding far into the future and in a way that is as decentralized and minimizes custodial and regulatory risk as much as possible.

That is definitely the goal of the endowment, agreed.