Authors
Avantgarde Finance (@Mona_El_Isa, @a7o & @justErik) - https://avantgarde.finance/
Greenfield Capital (@felix_greenfield & @Georg_Greenfield) - https://greenfield.xyz/
Proposal types
State which proposal type this proposal belongs to.
SEP: Constitutional Proposals
SEP: Governance Proposals
Other SEPs
Summary
Following SEP 45’s signalling to establish a Committees and Councils Structure for the SafeDAO, this proposal outlines the creation of a Treasury Management Steering Committee. The Treasury Management Steering Committee will be responsible for shaping and overseeing the treasury management strategy to ensure effective asset allocation, accountability, and strategic foresight towards long-term financial sustainability for the DAO. This includes setting clear goals for treasury management, proposing them for DAO approval, and implementing an RFP process to select and manage treasury managers.
DAO Treasury Challenges
- The SAFE DAO on-chain treasury currently has nearly all of its assets denominated in its native token (SAFE)*.
- There is currently no work openly being done to scope out and establish the needs of the DAO on the treasury side.
- The DAO could benefit from a framework outlining the goals and objectives from a treasury perspective which could better inform voting processes.
- There is currently no structured process by which treasury managers can submit proposals in a way which is best suited to the DAO.
- We believe these should be key attributes when thinking about DAO treasury management, both on the manager and infrastructure level.
*Excluding the portion of treasury which is co-owned by Gnosis and is being used to market-make by Karpatkey
Goals of this Proposal
- Establish a 3-member Treasury Management Steering Committee to oversee operational aspects of allocating to underlying treasury managers.
- Empower this committee to develop overall treasury goals and objectives as well as a holistic and comprehensive portfolio management strategy (for the treasury managers to execute on), to be brought back to the DAO for further discussion and subsequent vote.
- Empower the Committee to create a framework for the selection and removal of treasury managers.
- Kick off the nomination and selection process of treasury managers.
Proposal
- We propose the establishment of a treasury management process, separated into a Treasury Management Steering Committee of three members focused on operational tasks & governance of underlying treasury managers, and treasury managers for day to day implementation of strategies.
- We suggest letting each member apply for 1-3 seasons to ensure knowledge transfer between different constellations of the committee, if none of the initial members should be re-elected.
- We also propose reserving one of the three seats on the Committee to be held by the Safe Ecosystem Foundation, to give input on Foundation-specific requirements, promote strategic clarity and alignment without compromising decentralization or decision-making independence.
- The SafeDAO retains the right to remove any Committee member(s) that do not deliver on the expected performance through a standard Snapshot vote.
Part I (Governed by this proposal)
- The Treasury Management Steering Committee will be responsible for:
- Propose the overall goals and objectives of the treasury management strategy for the SafeDAO and put the outcome to a vote.
- Create an RFP process to search for and appoint treasury managers through an RFP process, screen for and assess candidates looking to run individual treasury management strategies.
- Provide their overall thoughts and expertise for DAO delegates to vote in a more informed and effective way.
- Facilitate the allocation of treasury assets to underlying treasury managers through operation of treasury management infrastructure where relevant.
- Define selection criteria to the assessment process which considers technical approach, provider diversification, operational set up, fees & rewards, legal set up, recourse rights, etc.
- Monitor treasury managers and ensure adherence to agreed mandates, including deliverables of relevant performance reporting.
- Where necessary, initiate the governance process for replacement and/or reallocation from treasury managers who are deemed to be underperforming in relation to their agreed mandate or where there is evidence the managers are not behaving in the DAOs best interests.
- Provide monthly written updates and hold quarterly community calls updating on the progress and performance of managers and giving room for community feedback.
Part 2 (Governed by the Treasury Management Steering Committee)
- The Selected Treasury Managers are to improve the long term sustainability of the SafeDAO. Methods for achieving this with their allocated capital could include:
- Proposing portfolio strategies that help diversify other assets away from purely SAFE and meet the goals and objectives defined in Part 1.
- Strategies that generate an alternative revenue stream to buffer against poor market conditions.
- Improve liquidity of the DAO’s native token such as onboarding MM’s, liquidity providers, token sensitivity analysis, secondary placements to spare token price from selling pressure and assure runway needs.
- Manage price impact of the SAFE token from treasury management operations.
- Implementation of strategies if duly selected by the Treasury Management Steering Committee.
We believe that running an RFP process for individual treasury managers achieves the best outcomes for all stakeholders through an open and competitive process. It also ensures that there is diversification at a manager and infrastructure level which is in line with the decentralised values of the DAO.
Proposed Members for the initial Treasury Management Steering Committee
To expedite the establishment of a robust treasury management framework and provide clear direction from the outset, the initial members of the Treasury Management Steering Committee have been selected. While multiple potential candidates were asked, these members were chosen for their expertise and willingness to commit to 3 seasons of the Committee and the task of defining key objectives and processes for treasury oversight.
The first iteration of the committee will consist of the following members:
- André Geest (Safe Ecosystem Foundation) - x.com
- Felix Machart (Greenfield Capital) - x.com
- R3gen Finance - x.com
Future iterations are open to community nomination and election.
Voting Eligibility & Conflicts of Interest
- Entities who are members of the Treasury Management Steering Committee or have been within the last 2 seasons are ineligible to apply as a treasury manager.
- When the Treasury Management Steering Committee initiates a vote of no confidence in a treasury manager, entities related to any treasury manager who currently has an allocation are not eligible to vote.
Timeline
- A discussion phase starting from the 29th of November, Sprint 3 of Season 4 followed by a voting period between 11th December - 23rd December 2024.
- The Treasury Management Steering Committee should put forward the goals & objectives as well as what amount of SAFE that should be diversified from the treasury and through which strategies. This is to be provided in a follow-up document by February 2025 and kick off the RFP process for Treasury Managers. The DAO Treasury Oversight Committee will initiate the RFP for this, after which the Treasury Oversight Committee will shortlist the managers according to the criteria previously set forward.
- The Treasury Management Steering Committee will be responsible to coordinate the deployment of funds with the managers as indicated by the vote and then monitor/remove managers where necessary.
Budget
- The initial three months of work involved in Part 1 will be compensated pro-rata in SAFE from the DAO at a rate of 17,500 SAFE per Treasury Management Steering Committee member upon receipt of deliverables.
- After that, the Treasury Management Steering Committee members will be paid 50K USDC/year and this will be ideally funded from the treasury management and diversification program out of any performance generated. This payment will be paid on a monthly basis.
Next Steps
- Establish the committee and allow them to propose key objectives and vision for the treasury.
- The Treasury Management Steering Committee is to deliver an initial treasury strategy by February 2025.
Copyright
Copyright and related rights waived via CC0.