January 24, 2023
Agenda
A) MetaGov Working Group Funding Request
B) Proposal to sell 10k ETH
C) Endowment proposal from Karpatkey
D) Reserved for Open Discussion
See you at 2pm ET on January 24!
Minutes for Weekly Meta-Gov Meeting, Jan 24th, 2023 @ 7PM GMT
Attendance:
184.eth, 5pence, accessor, Coltron, Dan Wu, Daylon, elbagococina, Greg Skriloff, Joaquin, Katherine Wu, Makoto Inoue, Marcus Martinez, Nick Johnson, santinomics - Karpatkey, Sebastien Derivaux, Simona Pop, Tomas Galizia, Vincent / zadok7
Minutes and call notes transcribed by @daylon.eth
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Notes
A) MetaGov Working Group Funding Request
For this term, the MetaGov working group is requesting 364,000 USDC, 125 ETH, and 3,500 $ENS from the ENS DAO for Q1/Q2 2023.
See: MetaGov Funding Request Proposal
Funding will be used to support the governance process and to manage and build infrastructure which supports the DAO.
Allocations include:
- Compensation for working group stewards
- DAO sponsorships
- DAO tooling, including DAO voting on the home page
- DAO discretionary funds
The Snapshot vote will be up by the end of today or tomorrow.
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B) Proposal to sell 10k ETH
Not discussed extensively due to time constraints. Briefly mentioned as a separate initiative to the Endowment.
See: Sell ETH into USDC
C) Endowment proposal from Karpatkey
See Forum Post and discussion here: Endowment initiation
Q: (Katherine) My first concern here is over the speed of deployment and performance fee. Namely, Karpatkey is proposing to move 100% of the endowment over a three-month period and deploy that all at once.That’s aggressive and not enough time to measure performance. Can we extend the deployment time to, say, 12 months?
A: (elbagococina) The original proposal was for six installments, but after consideration we changed it to three installments.
A: (Nick) My concern was the overhead required for so many DAO votes.
A: (Santi) We want to deploy funds to start earning yield as soon as possible. We are not against a different approach and we can align the proposal to the community’s opinion. In our opinion it is better to start getting yield right away. The funds will always remain under custody of the DAO, and will be deployed in risk-averse strategies. If the community feels differently, we can do every two months instead. This is open to discussion.
Q: (Katherine) I have some additional concerns over the strategy that is being proposed- for example, I’m worried about the lack of hedge for the Stakewise strategy. There was an infamous stEth deg last year, which to me shows that stETH isnt as stable as it seems. What happens if stETH de-pegs again? Any hedge for situations like that?
A: (elbagococina) We can act fast with our tools. We have daily alerts and a tech team that monitors prices in real time. We have a lot of tools we can use to react, including bots and alerts.
Q: (Marcus) Is there a contingency plan?
A: Yes, and we can share it after execution. You can check the actions we have taken in the past.
(Katherine) It would be helpful to have a section to communicate the contingency plan now, rather than later.
Q: (Katherine) Regarding the performance fee- the proposal is for 10% of the yield obtained in the previous week, per week. I would to see better ways to structure your performance fee- for comparion, low risk index funds in the tradfi world charges 0%, or other hedge funds have a benchmark. How do you feel about adjusting the language to indicate it is more performance-based?
A: (Nick) This is intended to be a low-risk fund. We don’t want to use language that may encourage taking higher risks in order to collect a higher performance fee.
A: (Santi) We are market agnostic. We are only trying to get yield on top of the supplied assets. If the market goes down, the endowment will be at a loss, regardless of what we do. In the winning proposal, we suggested the fees as part of the proposal. In the end, Karpatkey won according to the proposed fee structure. 10% per week means 10% of the obtained yield, no matter how often it is collected.
A: (elbagococino) We adopted a different fee structure for each DAO. We designed a fee structure specifically for this type of work for ENS DAO.
Q: (Katherine) What is the cadence of financial reporting? I think monthly would make sense, along with taking performance fee on that monthly basis based on P&L for the month.
A: It was originally proposed as a weekly report. Maybe it makes more sense to do it monthly. This is open to discussion with the community.
Q: In the forum comments under the Karpatkey there was a lot of discussion around the USDC conversion-- naming, how Karpatney plans to ‘time’ the market. Have you though about more creative strategies such as putting ETH into Compound, why can’t we just take USDC from that?
A: (Sebastien) That was not a strategy of Karpatkey/Steakhouse. It was a strategy put forward by ENS.
A: (Santi) The DAO’s exposure to ETH is around 95%. That is too high. What happens if we sell ETH too early? I think the DAO can live with that problem. But what happens if we sell too slowly and the price goes down? Selling too late could be a mistake that might kill the DAO. We can’t predict the price, and we can’t afford to make a mistake. We need ENS DAO to survive for 20 or 50 years. We need to reduce ETH dependence to the greatest possible extent. It is important to make clear that the endowment goal is to take risk-averse strategies and to obtain enough yield to sustain the DAO in the long-term.
A: (elbagococina) The objective of the treasury is to support the DAO. If we hold ETH, it is too risky, so we are going to find the best way to convert the ETH.
A: (Santi) We are not inflexible and we can adapt to what the DAO decides.
Q: (Accessor) When do you think is the most appropriate time to sell ETH as outlined in the proposal?
A: (Santi) The moment we receive ETH, we can sell it. Our original idea was to sell it over the period of one week. We do not want to try to time the market for best price.
Q: (Coltron) If the proposal to sell ETH for USDC were to pass, would that effect the endowment?
A: (Nick) That would function separately from the endowment.
D) Reserved for Open Discussion
Q: (Daylon) Has there been any discussion around accepting stablecoins for registration?
A: (Nick) It is doable, but the high gas cost of accepting ERC-20 payments has turned us off from implementing it thus far.
ENS Delegation for OP + Multisig creation
OP Gnosis multisig is created with the following address Safe - Safe{Wallet}
The current signer is 1/2 of matoken.eth and secretary.coltron.eth to keep it lightweight, but other Meta gov stewards can be added if more signers are required.
See relevant forum post here: