The RLY Ecosystem DAO is run by token holders for the purpose of growing a community driven ecosystem for Rally. The DAO receives 20 million $RLY and $2M USDC on an annual basis, to be deployed by a group of 7 reviewers. This is an annual treasury that now needs to be managed for the benefit of the DAO.
This proposal is meant to describe the challenges that have come and go through a potential solution to these concerns.
There are two primary problems with RLY Ecosystem DAO’s existing treasury management.
First is that the $RLY token is the primary cryptoasset used to deploy grants. As this is not a stablecoin, the value of $RLY fluctuates according to market conditions. Reviewers have seen that grant proposals tend to ask for grants in USD, which raises the question of exactly how much $RLY can be deployed for a grant ask given that the price of $RLY may change from the initial proposal to executing the grant.
Second is that the size of the treasury is concentrated in the native token of $RLY. This weakens the Treasury against market volatility and can reduce the reviewers’ ability to deploy the grant funds effectively over the course of each year.
The reviewers can authorize a Treasury Manager to oversee the Treasury, which includes the selection, appointment, and removal of the Manager, as well as deciding on the full scope of the Manager’s responsibilities.
Treasury Manager Responsibilities:
- Oversee the operational management of RLY Ecosystem DAO Treasury funds.
- Develop proposals for changes in how the Treasury is allocated that best suits the reviewers’ goals.
- Perform due diligence on asset recommendations, how assets should be allocated and conservative DeFi protocols that can create additional yield.
- Regularly report to the DAO and overall community on how Treasury funds are performing and being allocated by reviewers.
- Focusing on preservation of capital → average 30 day Treasury performance with minimum 75% of the Treasury in stablecoins.
- Time horizon and liquidity - there should be no liquidity lock up longer than 90 days but investment outlook can be longer term (1-3 years).
- Reporting Uptime - 100%. A key focus of reporting will be risk management, which will encompass an array of factors, including macroeconomic events, on-chain analytics and technical charting.
Initial List of Approved Assets:
- USDC, USDT, UST and DAI
How the Treasury can interact with DeFi protocols will follow in another proposal.
- 1 month to create the processes, provide the necessary documentation and propose the initial Treasury changes,
- 3 months afterwards and then every 4 months, the Treasury Manager is evaluated on communication, asset diligence and reporting to the reviewers.
For every quarter, the Treasury Manager is rewarded a flat 24,000 $RLY with no performance based compensation. This can be changed by the reviewers in the future.
- Current reviewer for RLY DAO
- Currently holds NY CPA and Series 63 licenses
- Manages a family fund that is crypto-centric
- VC and angel syndicate experience
From the reviewers’ call on 2/10, it was decided that grants would be valued within 7 days after the proposal has been approved at the average of $RLY price during that time.