Steward’s View - coltron.eth
Everything stated here is my personal opinion and an attempt at using my best judgment.
My Framework
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Like many of you, I don’t have a financial background. My decision-making process is subjective and rooted in identifying whether the endowment manager and the suggested allocations have an initial size, risk profile, and underlying ethos that makes sense for our needs. The endowment’s goal is to, "insulate the DAO from economic fluctuations, ensuring it can continue its core operations regardless of the wider economic outlook."
- Note: All options expose the protocol’s future to inherent smart contract risk, regulatory risk, and market volatility. Many of us are comfortable with the Crypto and DeFi environment, but it’s essential to understand and acknowledge where we are operating.
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This proposal is optional. “None of the Above” is also a viable option.
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We need a better-defined plan for our treasury management. An endowment does not solve this alone and should remain separate from our strategy used to manage our operating capital.
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Seperate from the Endowment, the DAO needs to secure a healthy runway in stables that can weather an extended downturn. It will be years until the endowment fund can meet its intended goal of adequately insulating and funding continued core operations.
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The Finalists
All the options presented are qualified, competent, and meet minimum specifications in the initial RFP.
Karpatkey & Steakouse
Karpatkey has been professional and responsive throughout this process. Built on Zodiac, the smart contract risk here is a non-factor for me as I consider it tested. Compared to Avantgarde, their breakeven return and fee structure are similar. The initial size is admittedly high.
They promise to reporting services, which sets them apart from the other finalists. Reporting was not required by the RFP. It was unfair to weigh this during the finalist selection, but in my personal vote, this type of transparency provides obvious value and promotes trust. See Gnosis DAO report.
I am concerned about their track record with Gnosis, which has been pointed out (here). For me this is overshadowed by their commitment to a conservative investment strategy.
They represent one of the safest options and have emphasized their commitment to risk management. Still, I am ultimately concerned that the 52M initial fund size increases exposure and is out of touch.
Professional team, Zodaic, Promises Reporting
Avantgarde
This team has been incredibly professional, responsive, and proactive in their interactions with us. The Melon Protocol, now Enzyme, has been around since 2016. Because of this, I have relatively little fear of smart contract risk. Also, their initial allocation size of ~25M makes sense.
Some of the allocations in this proposal trend towards exceptionally risky investments. Specifically, Goldfinch Junior and Senior tranches are non-collateralized loan platforms with a confusing (to me) management structure. I wouldn’t put my own funds here. A rebuttal to this has been posted, but it seems incredibly risky. I know there may be investor relations with Goldfinch on their end. In light of the endowment’s stated goal and our values, these instruments it should not have been included.
Despite this, the 25M initial fund size leaves less exposed than Karpatkey’s 52M. I do believe we could work Avantgarde to ensure our values stay aligned.
Professional Team, Enzyme, Some high-risk instruments
Llama x Alastor
Their initial fund size was entirely too high and has since been changed. I wouldn’t say I like their fees. We had asked them to reduce their fee to a stomachable level, but we will only hit the proposed 1% floor once the fund size reaches more than 50M. I don’t think their services will be provided at a value to the DAO.
During the proposal process I felt that there were mixed-reviews on past performance. I advocated for them to be on the finalist list because they are qualified, but I do not have enough confidence to rank them highly.
Qualified, Mixed Performance Reviews, Potentially low value
My Vote
Avantgarde is my first choice. I beleive we can have a good working relationship with the team to ensure values stay aligned. They have reporting services through Cryptio. For me, the exposure to risk feels relatively low compared the other options.
| Rank | Choice |
|---|---|
| 1. | Avantgarde |
| 2. | Karpatkey |
| 3. | None of the above |
| 4. | Llama |
Note: If you cast a majority vote becuase you aren’t sure, you’re wrong.