BIP 89: CVX Treasury Policy Amendment
Scope: Append BIP89-BadgerDAO Treasury General Policy to allow the DAO to hold up to 25% [+10% quarterly wiggle room] of non-native treasury assets as CVX or derivatives of (e.g. bveCVX).
TL;DR;
The BadgerDAO General Treasury Policy limits non-native assets aside from BTC, stables and ETH to 5% of the total assets in the treasury to limit the total risk the Treasury Council can manage without explicit approval from governance. This amendment to the General Treasury Policy will allow a CVX position (or derivatives thereof) to make up to 25% of the total non-native assets in the DAO’s treasury. This amount can exceed 25% (up to 35% within a single quarter). This will allow time for the treasury team to execute orders during high price volatility. This will not supersede holding 1 year of stable runway and 1 year of ETH runway which will continue to take priority.
Current State:
- BIP 89 requires the Treasury Council to divest CVX if the position is greater than 5% of the DAO’s non-native assets.
- CVX currently represents ~17% of non-native assets
Proposed State:
- Allow the BadgerDAO Treasury to hold upto 25% (up to 35% within a single quarter) of its non-native assets as CVX or derivatives thereof (e.g. bveCVX)
Considerations:
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CVX is a fundamental component of the BadgerDAO boost ecosystem
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Treasury CVX can be used to support Badger/WBTC liquidity on curveV2
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~80k CVX is worth 9.5% APR to 10m in deposits in Badger/WBTC pool, at ~17% non-native holdings the DAO currently holds ~125k CVX.
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2 standard deviations based on 100 day CVX price would represent a 50% draw down. This would mean at 25% the DAO’s treasury non-native VAR(100) from this position is 12.5%.