Ecosystem Treasury: Partial Shift to Stablecoins

Hi Team,

After evaluating the market, Sydney and I are recommending that we shift 5M $RLY within the Treasury into USDC.

Short Term Analysis:

Macro View:
During this time we have been seeing increasing volatility across macro markets. This impacts crypto as Bitcoin/Ethereum have gone back to having strong correlations with traditional markets. Last week, we reached a new high with Bitcoin have a 0.98 correlation with the NASDAQ. The macroeconomic environment continues to be a mess with the bond markets being as chaotic as they are and inflation continuing to run rampant until the impact of the Fed’s continual increased interest rates makes its way around.

Crypto Markets:
From evaluating Bitcoin, which serves as a proxy for the greater crypto market, there is continual growth in fundamental metrics but no momentum to turn those fundamentals into any meaningful price movement for the time being. Are we in a bear market? That is debatable. But we are certainly not in a bull one.

This lack of momentum comes from tighter trade volumes (inflows and outflows) and weaker futures yields, which signal that capital is moving out. From a supply standpoint, it’s likely that this sell-off can lend towards a decoupling as Bitcoin shift hands from TradFi to more crypto natives. Short term bearish but still long term bullish.

Ecosystem Spending:

  • We are proposing to convert 5M in $RLY to USDC as this will not impact the reviewer’s ability to source deals, incubate ideas and disburse funds to grants for the remainder of Q2 as well as Q3.
  • USDC is the preferred stablecoin as we already account for it in our Gnosis Safe.
  • If our budget shifts more towards marketing operations, we will be in a better position for this.
  • We can easily shift this back into RLY for Q3/Q4.


  • This will be done through 1inch.
  • This will be done in several parts over the course of the next month or two so as to minimize the price impact this would have on RLY (and prevent any potential frontrunning).
Do you support this proposal?
  • Yes
  • No

0 voters

A retro here as we seem to have lost a prime opportunity to have done this before the Terra fiasco.

As @sydneylai has mentioned, contributors of this DAO are empowered when they were voted in. Treasury management and attempting to read the market is by no means easy and adding friction on top has hurt the Treasury more than anything else. The goal of the Treasury is to preserve capital so that it can deploy it against projects that will give RLY long term utility.

As such, the lesson to be learned here is that Treasury managers should be empowered to make stablecoin allocations themselves. This will still be a transparent process but should not require community voting. However, decisions to invest into other assets, even ETH, will require a community decision.


Sounds like the treasury is in a difficult position. Ideally, you’d be trimming stablecoin reserves and rebalancing into $RLY after such a severe drawdown, but I take it that’s not a possibility right now. You have to keep the lights on, so to speak.

Pardon my ignorance, but does the treasury not have a regular (quarterly?) rebalancing program in place to ensure that operating expenses can be met? It’s slightly alarming to hear that reviewers may not have the funds to operate for the remainder of Q2, let alone Q3. Or am I reading that wrong?

Ideally, yes after such a drawdown, we would rebalance back into RLY with the expectation that it would rally (pardon the pun).

The DAO has a predetermined amount of USDC for operating expenses and we don’t have any budget concerns at the moment with both the contributor expenses and also future grants/initiatives. So no worries for Q2 into Q4.