… so it’s not 35% of the DAO’s ETH that will be sold in the immediate future, but rather 58%? Is that correct?
Strategy
Why would you not adopt a DCA strategy here? Can you please explain why there is such a rush to sell the ETH into USDC, other than it being part of your strategy?
December Sell Scenario
Had this proposal gone to a vote in December (which was discussed), the average sale price of ETH would have been ~$1,200. If 4,442 ETH had been sold at that time, it would have generated 5,330,800 USDC. With a rate of return of 2.04% on USDC, that would yield ~$108,748 over the following year.
January Sell Scenario
If that same proposal is put to a vote now, the average sale price might be closer to ~$1600. So, 4,442 ETH sold at $1,600 would generate 7,107,200 USDC.
The difference in a single month, on the FIRST installment is $1.7m. Had the first sale price of $1,200 been realised, it would take well over a decade of interest to cover those losses.
Operating Expenses Covered
In my mind, the benefit of passing James’ proposal in some form now is that Karpatkey would be in a position to DCA out of ETH over the next 12-24 months or otherwise sell ETH if there is a spike in the price at any point.
Endowment Management
The inflexibility of Karpatkey’s current strategy here is worrying.
At a bare minimum, I would expect an endowment manager to care about the price of ETH and have a clear strategy in place for disposing ETH, rather than market selling with no consideration of the price.