CIP-39 Treasury Management Phase 2

Hi All,

Below is attached a strategic plan for the CityDAO treasury for the coming months.

The goal is to DCA into stables over time.

This DCA is based on time and price of ETH.

Please view the full strategy here and provide your thoughts and feedback.

1 Like

Do the “sell by price” and “sell by date” strategies occur at the same time?

In general I think it’s good and I like de-risking. 20% in USDC (approx $1mil at the value in the document). We’d need to update the ‘sell by date’ timeline.

There’s probably a few places to place the limit orders, but we should avoid 1inch and others that geofence US IP addresses since we’re a US LLC.

Have you doing a tax analysis of this plan? Incurring tax for CityDAO or CityDAO LLC should be minimized.

What’s your experience managing a treasury?

Thanks @lyons800

I second both @MaxRealEstate and @alexthims questions above. The plan assumes the price is going to be volatile enough by end of April 2022 to be able to able to sell at all those different levels, an unlikely scenario. We could sell some based on time and some based on price, but both at once puts the feasibility of this proposal in question.

Regarding taxes, selling the eth is a taxable event. The “cost basis” for the eth we hold I assume is calculated as the USD equivalent at the time each eth was acquired. Selling lower would be considered a capital loss and selling higher would be a gain. We should have a firm understanding of the tax implications and they should be outlined in this proposal before we proceed.

Regarding estimating taxes. Although it would be ideal to have an understanding of this, getting the cost basis for the trades I think would need a comprehensive look at the entire year so far and takes quite a bit of effort. I’m not saying because it’s hard we shouldn’t do it.

For trades from eth > usdc I’m not sure what tax optimization we can do. We’re trying to maximize the amount of usdc you get from eth. The more we maximize the more tax we’ll have to pay. I’m not sure tax loss harvesting is a strategy here. Is there an alternative strategy or if you knew the taxes owed on these trades would it make a difference in how you execute?