Endoament Proposal: ADAM Vault

DAO-Wide General Discussion
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Dear ENS Meta-Governance WG Stewards and ENS DAO members,

By way of introduction, this is Cheney from ADAM Vault (https://www.adamvault.com), a decentralized treasury management platform that is ISO27001 certified and smart contract audited. We would like to submit two proposals with two distinguished institutional crypto fund managers of different investment strategies but potentially achieving the annual drawdown target set by ENS in the RFP.

First one is with MaiBlocks/MaiCapital, a top-performing, award-winning (ranked #1 by Crypto Fund Research for Q2 2021 and consistently top 10) crypto quantitative hedge fund. They would like to present a totally on-chain solution that would leverage ADAM Vault as the non-custodial asset management solution and make quant trades over DEX and DEFI Lending/Staking protocols. They target to achieve 15-20% net return p.a. which would make it able to achieve the annual drawdown target by first year and hopefully can grow the overall ENS treasury to more sustainable level over the years. You may find our joint proposal with MaiBlocks/MaiCapital (57 pages) below:

Second one is with AntAlpha, the asset management division of Bitmain, the biggest crypto mining machine manufacturer, which manages over 1.5billion of its treasury assets. They run an extremely conservative approach as “risk management comes first” is their motto. (For Bitmain, their treasury management philosophy is purely capital preservation) Historically, their treasury management achieved a maximum drawdown of 5% only even during the worst periods in crypto history. Therefore, their proposed solution would be running a multi-strategy hedge fund mandate with tactical cash management via US T-bills and other inflation-hedging investments. Their alpha-generating strategy would also be leveraging the non-custodial capability of ADAM Vault, while off-chain investments like T-bill would be carried out with a tokenization potentially supported by SEBA Bank, the first digital asset bank licensed by FINMA in Switzerland, which i’m sitting as a board director. This would highly referencing the recent MakerDAO proposal on switching its USDC exposure to tokenized t-bills. Their extremely conservative approach would take 3-years to fully ramp-up to achieve the annual drawdown target. You may find our joint proposal with AntAlpha (53 pages) below:

I’m happy to have a joint-presentation with both managers and hopefully present the ENS Stewards and members with the best solutions we have prepared. We also wish to help set the standard for ENS to evaluate the managers with my decade-long experiences in Goldman Sachs and Altive to select the best managers.

Even if the Stewards decide not to go after either of the strategy, I would like to contribute to the process, help select the best manager and ensure the custodial risk could be minimized with the support of ADAM Vault as the decentralized treasury management solution. Please let me know how I could be more helpful to the process.

I could be reached with the forum DM, email via cks@adamvault.com, or telegram @ckscheney.

Looking forward to hearing from the Stewards and I sincerely wish that what we do here would set the industry standard for DAO treasury management in the future. Let’s shape the future of the industry together.

Best Regards,
Cheney
Founder of ADAM Vault and Board Member of SEBA Bank
https://www.linkedin.com/in/cheneycheng/

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Side note on manager selection:
My another role is the managing partner of Altive, an alternative investment platform. We have evaluated over 300 venture capital, private equity and hedge fund managers in the past few years, which include dozens of crypto fund managers. We have worked with the world largest institutional managers such as Carlyle, Nuveen, Warburg Pincus, etc. as some of their products’ exclusive private wealth distributor in Asia Pacific region.

For the ENS mandate, we have re-evaluated over 15 crypto managers and picked the two abovementioned managers by the below criteria which we think would fit the ENS mandate:

  1. Performance Track Record of delivering stable returns
  2. Strategy nature and Liquidity profile (e.g. Equity/Token VC won’t fit the liquidity requirement)
  3. Experienced investment team with both tradfi and crypto experiences (obviously the managers have to be crypto-native enough to find any alpha, but given the short history of the crypto industry – tradfi experience would help transfer some “traditional investment wisdom”, particularly risk management, to this new asset class)
  4. Professional risk management
  5. institutional-grade procedure and control

MaiBlock and AntAlpha have demonstrated two different strategies and investment style – I would say both may work given my professional judgment, but they do definitely present different risk/return profiles. Therefore, I believe my best decision is to present both and let ENS community make a fair selection.

I would strongly recommend the community to evaluate other potential managers with similar criteria (basically bullet points above and all the questions asked in our submitted RFP). My 10years+ experience in manager selection has taught me every question in a RFP is there for a reason – because whatever could go wrong would really go wrong. If Three Arrows got asked the same questions in the RFP, then much less investors would have put their money with 3ac and experienced the total loss.