Silo Treasury Deployment
Currently, the SILO Treasury has $320,781.20 (at time of writing) sitting idle on Ethereum ($204K) and Arbitrum ($96K). Having so much idle capital does not benefit SILO DAO, and should be deployed as soon as possible.
| Token | Token Amount | Value (as at 2/1) |
|---|---|---|
| crvUSD | 205,978.13 | $204,249.48 |
| CRV | 19,602.46 | 12,555.38 |
| ETH | 3.05 | $7,324.70 |
| YFI | 0.04292 | $357.90 |
| Ethereum Total | $224,487.46 | |
| USDC.e | 68,346.45 | $68,346.45 |
| WETH | 5.8111 | $13,937.28 |
| Pendle | 2,596.6289 | $3,335.89 |
| Grail | 1.6615 | $2,891.89 |
| Magic | 1,171.0164 | $1,369.92 |
| DPX | 14.0285 | $1,295.78 |
| wstETH | 0.4418 | $1,217.64 |
| GNS | 225.5487 | $1,165.20 |
| Others Asset Below $1K | $2,733.69 | |
| Arbitrum Total | $96,293.74 | |
| Treasury Total | $320,781.20 |
Treasury Deployment Ideas
Non-Stable and non-ETH tokens (Mainnet / Arbitrum)
- Market sell all non-stable and non-ETH tokens at daily intervals (i.e., 5% per token, per day for 20 days)
I would expect the intervals to be difference for each Token depending on the liquidity on each chain.
- This would lead to $26,923.29 that the DAO could reinvest proceeds into:
a. SILO buybacks - This is would be add a “13 month” to current buy back programme
b. Deepen liqudity SILO / ETH
Stable Tokens
crvUSD (Mainnet)
Option 1: Deposit into crvUSD Silo
The crvUSD Silo has been performing very well since LLAMA was released, and currently has 58.7M crvUSD deposited earning ~24% APR. This would allow the DAO Treasury to have stable exposure, whilst earning between $20-$40K dollars per year in more crvUSD.
Risks :
Smart Contract Risk
Concentrated risk of all funds in one place
Bad Debt Risk
Option 2: Deposit in to the Pendle crvUSD LP
Pendle is a yield trading protocol that allows users to manage their yields through tokenization. Users can buy PT (principal) or YT (yield) depending on what strategy they want to deploy. To facilitate these trades, Pendle has an AMM were Users can provide liquidity and earn yield, like a normal AMM.
Silo were the first lending market to integrate with Pendle, and the crvUSD LP has been generating a lot of returns for users.
The current unboosted apy on Pendle is 28.15%, this could lead to an extra $56K to the DAO in crvUSD and Pendle. The DAO would have several options for what to do with the Pendle earned :
-
Market sell earned Pendle and use for Buybacks
-
Market sell earned Pendle and reinvest in crvUSD
-
Lock Pendle into vePendle to increase APY on LP, earn bribes, and keep Pendle exposure for DAO
a. Bribes earned for voting could be reinvested into LP, vePendle, or for buybacks
I understand that Penpie / Equilibria can be used to earn higher rewards than stated above, but the smart contract risk does not seem to be worth the trade off.
Risks :
Smart Contract Risk
Concentrated risk of all funds in one place
Bad Debt Risk
USDC.e (Arbitrum)
Option 1: Deposit into USDC.e Silos
There are many Silos currently earning between ~6% and ~30% APR in interest and Arbitrum tokens. Entering a wstETH, wBTC, ARB pool could lead to an extra ~$8-$10K in Arbitrum tokens and interest (annualised).
As Silo is an Arbitrum protocol, the treasury earning and keeping ARB to join in on governance proposals could be a good use of this USDC deposit.
Risks :
Smart Contract Risk
Concentrated risk of all funds in one place
Bad Debt Risk
Option 2: Deposit into Dolomite
Similar to a Silo, Dolomite is a decentralised modular money market where users can deposit a plethora of tokens to earn yield.
To get the best yield, USDC.e would need to be swapped to USDC and deposited into Dolomite. At time of writing, it is currently earning 44% (6% in Lending and 38% in oARB). Depositing into Dolomite would lead to $3.6K in interest and ~$26K in oARB (annualised). The oARB can be vested for 6 months to be unlocked for free.
As Silo is an Arbitrum protocol, the treasury earning and keeping ARB to join in on governance proposals could be a good use of this USDC deposit.
Risks :
Use of another lending protocol
Smart Contract Risk
Concentrated risk of all funds in one place
Bad Debt Risk
Option 3: Deposit into jUSDC
Jones DAO are one of the first protocols on Arbitrum and offer a multitude of different products, that earn yield users. jUSDC is a yield bearing token that facilitates their jGLP leverage product. The current return is around 5.65% but it is currently incentivised with Arbitrum tokens bringing it to 63%. Note, there is a 1% deposit fee to get the Arb rewards.
jUSDC is an isolated lending product, minimising the risk of loss as only jGLP can be leveraged against it. jUSDC is also well integrated in the Arbitrum ecosystem and can be used to leverage against in the future.
Risks :
Smart Contract Risk
Concentrated risk of all funds in one place
Bad Debt Risk
Option 4: Deposit in Orange Finance
Orange Finance is a relatively new protocol on Arbitrum, specialising in automatic liquidity management and hedging Uni v3 pools. They offer several USDC delta neutral strategies offering between ~8% and 68%.
Orange take the USDC and supply liquidity to XXX USDC LP on Camelot v3 whilst hedging on Aave. You can initiate withdrawals at any time.
This is probably too risky for the DAO to invest their treasury in as the product is in beta, but definitely something to look out for in future treasury deployments.
WETH (Arbitrum)
There is currently 5.8111 sitting in the Arbitrum treasury doing nothing. One of the easiest options is swap this to a LST like wstETH or rETH.
Once the swap has been made, it can be deposited into the Silo to earn yield in interest and Arb tokens. As Silo is an Arbitrum protocol, the treasury earning and keeping ARB to join in on governance proposals could be a good use of this WETH deposit.