[CLOSED] CIP-204 Convert wETH to liquid staking tokens to earn yield on treasury

CLOSED

EDIT: Closing this CIP to be included in CIP-205

Earn income from our ETH treasury

The treasury has 656 wETH that has been sitting idle for over a year.

This CIP proposes swapping 650 wETH to stETH (Lido) and rETH (Rocket Pool) in a 50/50 ratio.

CIP-203 previously proposed to create CityDAO validators and it received overwhelming support from citizens that voted, but failed to reach the 500 citizen quorum. The failure could be partially attributed to the perceived complexity of having a third party node operator run the validators and the lack of custody of funds.

This CIP seeks to simplify the staking process by swapping ETH to liquid staking tokens that can be held in custody of the treasury.

Income

We could be earning 23.7 ETH ($53k) per year on our current treasury (640 x 3.65% APR).

Risk

  • We currently hold ETH and there is no additional ETH exposure risk.
  • The proposal is to split the ETH between two of the largest liquid staking tokens to reduce a single protocol failure risk.
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lido is currently debating whether to be on CCIP or not. If so, I am a fan of staking on lido. Because there is nothing safer than CCIP in this world right now.

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What I would reccommend - and I’ll work on it with you - is to go back and craft a comprehensive treasury management proposal. We need someone to assess our runway and the immediate cash needs vs eth and then scale back in a reverse of the Treasury Management CIP we did earlier.

See CIP-23 Creating the Treasury Management Strategy

See CIP-57 Giving Authority to Treasury Guild to Implement

Hey Fugyeah, I agree that we need a Treasury Management proposal. I think the best way forward is to have two CIPs that go to Snapshot at the same time. As a DAO we can have one big push to get people to vote, but the votes can have independent outcomes.

This CIP (204) proposes that we stake our current ETH to earn yield
CIP-205 proposes that we scale back into yield producing ETH with our USDC.

Both of these CIPs are in draft for discussion.

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