SDIP-32: USDC allocation proposal

NiftyFifty

Brief Authors: quickrider, NiftyFifty
Project lead: NiftyFifty
Squad: Acquisitions
Creative approval: N/A

Abstract

We propose authorizing the Acquisitions Squad to purchase Squiggles up to a total of $500k through December 31st, 2022. This includes purchasing via the open market in any platform (OpenSea, LooksRare, Archipelago, NFTX, etc.), making collection offers and/or OTC.

The Acquisitions Squad will have discretion over the most effective ways to acquire, which types, and at which prices. When this authorization expires, the Acquisitions Squad will send all funds (and NFTs if any) back to the Treasury.

Motivation

One of the main strategic goals of SquiggleDAO is to build the biggest and best collection of Chromie Squiggles, but since June 2022 the Acquisitions budget has been on hold to be cautious in a period of uncertainty.

Being conservative, we have a run rate of around 3 years with the funds already in the Treasury and that is not including us generating any revenue or exploring other financing options.

Given the current market volatility, there might be owners selling at distressed prices and further decreases in ETH might make the prices attractive (in USD terms). Having the funds available is key to react quickly when an opportunity presents itself.

Success Conditions

We have the funds available to acquire Squiggles at attractive prices
We make collection offers at a price that the Acquisitions Squad deems appropriate

Specification

Funds are transferred to the Treasury multi-sig wallet
The Acquisitions Squad can request funds or instruct the Treasury to purchase directly from the Treasury multi-sig
The Acquisitions Squad will have discretion over the most effective ways to acquire, which types, and at which prices
Once this authorization expires (date specified in the “Abstract”), both the Acquisitions Squad and the Treasury will send all funds (and NFTs if any) back to the main vault (SquiggleDAO.eth)

Launch Details

Project will be launched according to the specifications above, at the timing and discretion of the operators.

Costs

$500k (though some or all of these funds could return back to the treasury depending on the Acquisitions activity).

Rewards

N/A

NiftyFifty

IMPORTANT: the wording that will be posted to snapshot might be different from this forum post

We've gotten some feedback and we are considering re-writing the proposal to include a broader scope (i.e. Treasury Management in general and not just buying Squiggles).

Our goal with this proposal is to maximize the value of the portfolio, take advantage of potential opportunities and hedge some expenses that are going to happen in different currencies.

Having the funds pre-approved will allow us to react more rapidly when an opportunity (or need) arises, e.g. when ETH was around $1k, Squiggles below $10k, etc. Without the pre-approval, it would take days for the full governance process to be completed before we can act.

So we will be modifying the text to include these additional use cases. It is the first time we are posting a proposal to the forum that is not exactly the same that will be posted to snapshot. This will happen again in the future when listening to the feedback once the proposal is on the forum, so we are taking this approach of explaining it here (and share it on Discord) vs re-posting again the modified proposal.

Please let us know if you have any comments or feedback both regarding the proposal and the process for modifying it. We are interested in hearing from you!

glorysk87

Could you go into more detail about what other ways the capital may be used? Treasury Management in general could be exceptionally broad and wide-ranging.

NiftyFifty

glorysk87 Hey glory, thanks for the comment.

Ideas discussed so far:

buying Squiggles using USDC
putting collection offers
buying ETH using USDC
buying Squiggles using ETH

glorysk87

Thanks!

cheesebiz

What is the ETH/USDC mix that is being contemplated as part of the $500k in this proposal?

Most of our expenses are in USDC, yet we have a substantial amount of ETH that we have not allocated for use. I'm not sure it makes sense to spend USDC on more ETH at this time. I understand that ETH price is relatively low compared to the all time highs, and there is opportunity to take advantage market volatility, but considering we already have more ETH than we need it seems we are just speculating on ETH going up.

This is probably a conservative point of view, but I think it's at least worth considering.

0xgregory

There is no planned allocation for this spend. This proposal is to pre-authorize any/all of the above so that we can act more rapidly than having to request each transaction with a Snapshot

cheesebiz

Got it, so the funds will sit w/ the genesis wallet until requested?

0xgregory

cheesebiz

Sorta.. this is the request. If this is approved, and we wanted to buy, say, $200k of ETH we'd execute of that immediately and report back to the DAO during the next budget cycle that part of this SDIP was executed, and that $300k remains

cheesebiz

Got it, thanks for the clarifications!