Hello everyone,
@De-Fi Beats here with an update to the treasury. A couple of weeks ago we were able to transfer 33% of our Eth into stable coins at a cost of over 3,000 USD per ETH. So not bad!
This is what the treasury looks like currently:
| Price in USD | ||
|---|---|---|
| Current Eth | 76.87221436 | $215,242.20 |
| Current USDC | 105,175.60 | $105,174.60 |
| Total | $320,416.80 |
The time has come for us to put some of the treasury to work. This is our first major move into DeFi so we will take it slow and low risk. We will set aside a good portion of our treasury unallocated in order to pay bills and to set aside for potential higher yield. As of right now this is how we want the treasury to look after this move:
| Expected Yield | ||
|---|---|---|
| USD Reserves 10% | $10,517.46 | 0% |
| Eth Reserves 25% | 19.21805359 | 0% |
| USD Yearn Yield Farming 90% | $94,657.14 | 6% |
| ETH Staking AAVE 75% | 57.65416077 | 7% |
| Expected Overall Yield | 5.05% |
Thank you @Kadigan for the following write up on how we will safely gather yield and the risks involved (spoiler alert, they are minimal) ****
For stablecoins the low hanging fruit is yearn usdc vault (https://yearn.finance/#/vault/0xa354F35829Ae975e850e23e9615b11Da1B3dC4DE). Currently a 3.3% APY but includes multiple sophisticated strategies to have the best usdc apy there is at all times.
If we want to get fancier (and maximize the yield), we can deposit USDC to the yearn vault through alchemix (https://www.alchemix.fi/vaults), borrow 50% (non-liquidatable) alUSD against the position for constant 0% rate and then convert the alUSD to usdc and re-deposit to the vault. This can be done 2-3 times to achieve an APY of over 6% (and higher when the stablecoin yields go higher again).
For ETH, at the moment the best option is convert the ETH that is not needed for liquid operations to steth (~4% apy), supply it to aave v2 (https://app.aave.com/markets/), borrow eth at 60% ratio, stake in lido, deposit the acquired steth to Aave v2 and repeat this 2 more times. We'd end up with ~6.5% apy on the (staked) Ethereum.
What are the risks?
ETH:
The risks would be aave platform hacks (we are not worried at all with aave since there is a massive safety module / replacement fund in place) or a depegging event of steth. Given the 60% loan to collateral ratio we are completely comfortable to say the risk of steth depeg that low is pretty much zero.