Create a Treasury Management Working Group (TMWG) to manage aspects of the Minswap DAO’s Treasury, specifically around Protocol Owned Assets (POA = all other LP assets) and Protocol Owned Liquidity (POL = MIN/ADA LP), including idle POL.
The Mandate is three-fold
Apart from these Mandates, this Proposal defines a Framework for deploying funds, management of members in the TMWG, rules around the Operations, Compensation, Reporting and Scope of Assets.
The Mandates of the DAO Treasury can be divided into the following 2 primary mandates and 2 secondary mandates:
Primary Mandates
Secondary Mandates
DAO Assets must be handled with extreme care, consideration and conservatism. A general Framework for Risk Management is needed to avoid any disaster. Here are the proposed guidelines:
The TMWG will consist of 5 members, including 2 members of Minswap Labs, 2 members of Minswap’s Kitty Farmers Committee, and 1 member of the Minswap DAO. Due to security concerns, their names have to be omitted, but here is a short description of each one:
The initial members will include….
Members can self-elect to step down from the TMWG. Once a member steps down, remaining members can vote on a new one. There must be at least 5 members in the group.
The TMWG will devise and implement strategies to conform with the mandates above. The TMWG will research and propose a strategy to use any of the assets under the mandate to earn yield. This could include adding or removing LP assets from Minswap, selling assets for other assets, depositing into lending protocols, potentially CEX arbitrage or funding rate strategies, on Cardano or other chains. TMWG members and non-TMWG members can propose strategies as well which must also be voted for by TMWG members.
Once a strategy is proposed, the TMWG will review, request additional data, and then vote on whether the strategy should be implemented. This vote will include the size of the strategy as well as timing. The TMWG is responsible for final sizing.
Once a strategy is approved, the strategy will be implemented with the DAO Treasury funds as approved by the TMWG. Given the current development of multisig DeFi interaction on Cardano, we cannot have multisig implement on-chain strategies. Thus, Minswap Labs will handle the operational part of the strategies on behalf of the TMWG.
For the matter of oversight, the TMWG will maintain and update a total portfolio view with risk metrics that will be made public on a monthly basis, using historical data. Metrics may include return, risk (standard deviation), risk/return (similar to sharpe ratio), beta to ADA, beta to S&P 500, diversification score, simulated drawdowns, historical drawdowns (peak to trough) etc.
Compensation will be 75% base compensation and 25% bonus compensation. The compensation will be set to 300 dollars a month per person in MIN (or 50/50 MIN/ADA). So each person is 225 dollars per month at a minimum. At the end of each month, everyone will vote for 2 other TWMG members who contributed in excess that month. The bonus pool will be prorata divided among the votes for TMWG members.
For example, if there are 5 members at 300 each … 5 (members) times 300 (total comp if everyone gets equal votes) times 0.25 (25% incentive comp) equals 375 total bonus pool. If Member A gets 5 votes, Member B gets 4 votes, and Member C gets 2 votes.
A = 170.45 Bonus
B = 136.36 Bonus
C = 69.18 Bonus
The TMWG will make their assets and portfolio summary file public monthly, on a lagged basis (similar to the way mutual funds report holdings in 13Fs quarterly). In addition, each quarter the TMWG summarises strategies active during the quarter, along with opened and closed strategies and additional reporting around TMWG managed assets and PnL
In essence: 1) A summary file monthly and 2) a quarterly newsletter detailing changes.
The TMWG is solely responsible for managing the POA assets. If the DAO Managing Members decide to give additional DAO-owned assets to the TMWG to manage, the TMWG can accept them if they have capacity. The DAO Managing Members can initiate a full DAO vote to remove members of the TMWG or to dissolve the WG. However, the initial POA assets given to the TMWG cannot be removed from their management by the DAO Managing Members unless they initiates a full DAO vote to dissolve the WG.