Proposal to Stake Further Treasury Assets

Overview

Currently, DXdao has 1K ETH staked across multiple providers: 500 with Lido, 300 with StakeWise, and 200 with Rocket Pool. With another ~8.5k ETH still idle within the treasury, it is important for the DAO to consider investing these assets. Liquid ETH staking remains an optimal solution, providing ~4.5% returns with minimal risk vs other solutions, such as Aave, providing only ~0.4% APY.

There are early signs that the ETH staking network is getting congested, with validator queues reaching up to 3 weeks recently. As the demand for staking increases in the run-up to, and after the Merge, network congestion could increase further. It is an optimal time for DXdao to get ahead of the market and deploy further funds into ETH staking.

Whilst diversifying across staking providers is important, this proposal will focus on adding further ETH only to the StakeWise pool. Lido’s TVL has grown significantly since the first staking proposal and there are growing concerns about their size and the amount of leveraged ETH staked within their pool. On the other hand, Rocket Pool are having issues scaling given their current infrastructure model, with their staking pool frequently closed to any new deposits.

StakeWise has recently launched liquid staking on Gnosis chain and is currently the only liquid staking provider on the network. This provides DXdao with an opportunity to put further treasury assets to work in a liquid fashion.

As a reminder, StakeWise uses a dual token model - paying rewards in a separate token, rETH2 (rGNO), mapped to ETH (GNO) earned in the Beacon Chain. sETH2 (sGNO) represents the initial ETH (GNO) deposit into the staking pool and acts as an interest-bearing wrapped ETH (GNO). StakeWise has deep liquidity for both sETH2, rETH2 and sGNO, allowing DXdao to un-stake, with minimum slippage, should the need arise.

Ethereum Gnosis
Token sETH2 sGNO
APY 4.5% 17.5%
Fees 10% 10%
Total ETH staked ~72k (Dune Dashboard) ~35K GNO

Proposal

Deploy a further 2k ETH and 255 GNO to StakeWise. DXdao will rely upon the Multi-Sig 0x9467dcFD4519287e3878C018c02f5670465a9003, which has already handled previous ETH staking proposals. Once the sETH2 and sGNO tokens are acquired, the MS shall return those funds to the mainnet DXdao treasury.

Acquiring the staked assets

Stake natively via the StakeWise UI for both Gnosis and Ethereum.

More info

Website
Docs

Should DXdao stake ETH and GNO funds from the Treasury?

  • Yes
  • No

0 voters

5 Likes

Would love if we can bring over sGNO-GNO pool to Swapr as well. :heart:

5 Likes

Could we think about acquiring more Gno token.
The yield is good and there is no doubt that we have a great interest in the success of the token.

5 Likes

It would be interesting to explore a DAO2DAO token swap with GnosisDAO!

6 Likes

Maybe. but that is a long term play and it comes with the issue of “my token is under valued”.

I think we can do both.

In term of treasury, buying Gno now seems a good opportunity for the treasury and a relative safe move.
In a cooperation perspective, i agree with the long term debate of a token swap.

I guess it is a treasury guild vs Dxdao vote, situation.

1 Like

Signal proposals are now live for ETH and GNO!

2 Likes

Summary

After the successful passing of the proposal by Stakewise to further stake 2k ETH from the DXdao treasury. This post lies out an execution plan to move forward with the proposal.

Details

DXdao will rely upon the Multi-Sig 0x9467dcFD4519287e3878C018c02f5670465a9003, which has already handled previous ETH staking proposals. Once the sETH2 tokens are acquired, the MS shall return those funds to the mainnet DXdao treasury.

The ETH will be staked natively through https://app.stakewise.io/

The 2k ETH will be acquired in 4 tranches of 500 ETH - limiting the amount of funds in any given MS at any given time.

Risks

Transfer of these funds relies on the DXdao MS. Moreover, the staking platform itself presents risks.

2 Likes

Love this proposal, although I have one thought mirroring a discussion in a product strategy chat(?).

The recent depeg fears have caused several pools to become askew, most notably stETH on curve mainnet. Currently if we traded 2000 ETH to stETH directly, we would receive just about 39 (currently ~$75,000) additional stETH (which will, of course, be redeemable for 1 ETH each upon the merge unlock).

Is it feasible to consider making a trade via curve through the multi-sig instead of a direct stake while the opportunity still presents itself?

2 Likes

Just to note: sETH2 (Stakewise ETH) has not lost the peg. Partly attributable to the fact that their rewards are issued as a separate token rETH2. While in Lido rewards are issued as stETH itself through rebasing.

sETH2 is pretty much 1-1 to ETH.

2 Likes

As Dave noted the proposal is for sETH instead of stETH as there is a growing concern in the Ethereum community over centralization of liquid staking derivatives opening the door to governance attacks. The Risks of LSD - HackMD

2 Likes

Sorry folks, should have been more clear. Under the weather here.

Implication was to discuss whether our current ETH staking efforts would support taking advantage of the stETH depeg. Could be this balance, further balances, etc.

2 Likes