TCD#46. Treasury Policy Amendment: Change Stablecoin Holding Requirement from 1 Year to 1 Quarter
Badger Treasury is running low on Stablecoins. To adhere to the initial policy of maintaining 1 year of operating expenses in Stablecoins, the Treasury will soon need to either:
- Sell assets the Treasury Council is bullish on (BTC, ETH, BADGER), or
- Borrow Stablecoins against BTC and ETH.
Both options are less than ideal:
- Selling assets means missing out on their upside, affecting potential runway extension.
- Borrowing Stablecoins to cover a year’s expenses would require locking up a significant portion of our BTC and ETH, incurring high fees on the borrowed Stablecoins which would then just sit in the Treasury.
- Both locking and selling BTC and ETH would reduce the amount of funds available for the eBTC bootstrap phase.
Therefore, to improve capital efficiency, I propose reducing the Stablecoin holding requirement from one year to one quarter . This proposal aims to continue the Treasury’s strategy of spending Stablecoins on development while preserving as much of its core volatile crypto assets as possible. On the other hand, if we had to rebalance, that would noticeably interfere with eBTC launch plans and limit the Treasury’s growth potential.
Implementation
The revised Stablecoin holdings policy would require maintaining a minimum of three months’ worth of operating expenses at all times. Should spending bring the Treasury below this threshold, it would need to replenish its Stablecoin reserves using the preferred Stablecoin acquisition strategy. To avoid having to use that on every transaction, I suggest adding a buffer of one month’s operating expenses each time a replenishment occurs.
Vote:
In favor: 1500Badger, adcv, Freddy The Filosopher, Po, saj
Against: gosuto, petrovska
