At the current prices and burn rate, and without tapping into BADGER holdings or TCL holdings, Badger Treasury has about two years of runway.
~4 months worth of runway are converted to USDC per TCD 46 policy, and the remainder is in WBTC (55%) and ETH (45%).
Per TCD 95, stablecoin runway funding requirements are met by selling ETH.
This means that, other things being equal, at the end of each month the Treasury would sell ~12% of its current ETH holdings until it runs out of ETH.
With the primary alternative to holding ETH being holding BTC, the implicit market bet the Treasury takes is that on average over the next 8.5 months ETH will outperform BTC by a significant enough margin .
The significant enough margin is an important nuance because ETH, having larger historical drawdowns, is a riskier asset to hold than BTC.
So being neutral on ETH/BTC ratio is not a good enough reason to keep holding ETH for runway funds, the Treasury should be explicitly bullish on that ratio to justify it.
Since I do not share the thesis that the strategy of a monthly DCA out of ETH noticeably outperforms DCAing out of BTC over the next 8 months, my proposal is to convert all stETH and wstETH holdings to BTC and use BTC for funding runway moving forward.
Vote
- Yes, convert stETH holdings to BTC, use BTC for funding stablecoin runway moving forward
- No, there’s a better way
