Summary of Changes
Below is a summary of the substantive changes.
Liquidity Floor: UPDATED
Stablecoin runway raised from ~$26.7M (2023 actuals) to ~$49.34M (2025 actuals). This formalises a two-layer structure: the Endowment holds the 3-year floor; the DAO timelock holds a separate 6-month buffer funded quarterly by KPK without a governance proposal. The 3-year floor is not reduced by the timelock buffer.
Risk Tolerance: UPDATED
Changed from “very low” (low-risk venues only) to “moderate-to-low” with a formal two-tier framework: minimum 90% low-risk, maximum 10% moderate-risk. Moderate-risk is defined as non-speculative, reversible within 30 days, and must be disclosed monthly with rationale and size.
Benchmark Methodology: UPDATED
Replaced the fixed simple average of four named protocols with a TVL-weighted average APY across the five largest staking vaults/pools (ETH) and five largest stablecoin vault positions (USD), rebalanced bi-weekly on a 30-day trailing average.
Allowed Assets: EXPANDED
Added USDS (primary deployment stablecoin), GHO, EURC (capped at 5% of stablecoin allocation), oETH, and yield-bearing derivatives (aUSDC, sDAI, cUSDC, sUSDS, sGHO). DAI retained as a legacy position.
Real-World Asset Framework: NEW
RWA exposure permitted up to 5% of total Endowment value. Limited to tokenised money market funds and government bonds. Requires onchain custody with full onchain redemption rights, regulated issuer in a FATF-compliant jurisdiction, and liquidity redeemable within 7 business days.
Endowment Revenue Routing: UPDATED
Replaced the 33% ENS Controller cash flow transfer with up to 100% of protocol revenue routing directly to the Endowment via the Registrar Manager contract. This reflects changes made by [Executable] Treasury Flow Automation.
Single Protocol Cap: UPDATED
Raised from 25% to 30%.
Rebalancing Tranche Size: UPDATED
Standard tranche raised from 1,000 ETH to 1,500 ETH. Emergency tranche of up to 3,000 ETH added for situations where the stablecoin floor is breached or at material risk.
DVT Exception: NEW (See Critical Questions Below)
Up to 10% of the total portfolio may be allocated to LSD protocols with majority DVT adoption, provided consensus share does not exceed 25%. Above 25%, no allocation is permitted regardless of DVT status. This is a buffer that was not provisioned in previous verson
Critical Questions
Below is a list of critical questions where DAO feedback is appreciated.
1) Lido/LSD consensus
The IPS currently prohibits allocation to any LSD protocol above 20% of Ethereum validator consensus. Following the rsETH incident, KPK is looking to expand low-risk ETH staking allocations and is proposing a narrow exception for protocols with majority DVT adoption.
• Q1: Should the IPS permit allocation to LSD protocols up to 10% of total portfolio, provided their consensus share does not exceed 25%?
2) Unearned/Earned Income
The Original RFC specifies treating earned and unearned income differently. These funds are now generally co-mingled and only separated on an accounting basis. With the current 60/40 ETH/stables mandate, the unearned liability is contained within the stablecoin leg and remains ETH-neutral. According to Steakhouse reporting, unearned liability is ~8500 ETH or $19.3M USD at current prices.
• Q3: Are you comfortable containing unearned income within the stablecoin leg of the endowment, or should the unearned income requirement be treated as a separate obligation on top of the stablecoin allocation? The latter would stress the 60/40 split.
3) Priorities Further
We have three requirements: a three-year stables runway, unearned income reserves, and a 60/40 ETH/Stablecoin composition target.
• Q3: How should we prioritize among the three-year stables runway, 60/40 split, and unearned income reserves when they conflict?