c8934f56df3a4a2a1da2e605f0368e912df4109e
Proposal Payment
https://hiveblocks.com/tx/c8934f56df3a4a2a1da2e605f0368e912df4109e
Proposal
According to the treasury report (https://peakd.com/splinterlands/@sps.dao/sps-dao-treasury-report) the DAO currently holds 103,486.5033 BUSD. This proposal aims to take that BUSD and put it in the DEC-DAI Uniswap pool on Ethereum.
Purpose
Due to recent regulatory events the issuer Paxos stopped the new minting of BUSD. https://www.coindesk.com/business/2023/02/13/paxos-to-stop-minting-stablecoin-busd-following-regulatory-action/
To help mitigate the future risk of holding BUSD, this proposal aims to remove BUSD holdings from the DAO Treasury. As mentioned in this tweet below from CZ, Binance will move away from BUSD into other stablecoins over time. In my opinion, so should the DAO.
We have many ways of achieving this. For example, we can simply swap the BUSD to another stablecoin. This would achieve the goal of removing BUSD from the DAO Treasury but wouldn't provide any value to the ecosystem. One way to provide value, is to use the BUSD funds and provide more liquidity into the Ethereum network by putting it into the DEC-DAI Uniswap pool.
Background
The DAO currently operates two important liquidity pools: PancakeSwap and Uniswap V2
| Platform | Pool | Token 1 | Token 2 | Approx. USD Value |
|---|---|---|---|---|
| PancakeSwap | SPS-BNB | 1,321 BNB | 14,870,786 SPS | $828,397 |
| Uniswap V2 | SPS-ETH | 36.41 ETH | 2,145,576 SPS | $118,525 |
Adding liquidity into the Ethereum network has many advantages. Firstly, it would not take up much of the team's working time. We can also provide easy access to one of the richest blockchains currently available. As everyone knows, DEC is the in-game currency used for most financial transactions (such as purchases in the game shop etc.) and therefore it should be clear that it is very easy for other people to have access to DEC.
Implementing this proposal would also require splitting the current BUSD funds into 50% DEC and 50% DAI so that they can be added to the liquidity pool. This would also help to bring DEC back to peg. If this proposal is approved, about $50,000 worth of DEC will be bought up, which will have an impact on the price of DEC, thus helping to re-peg DEC - a nice side effect.
The DEC – DAI pool currently holds 408,056.20$ USD in value provided by the community. This pool can be rated as low-risk, because they are mostly stable assets and DAI is a decentralized stablecoin, which makes it harder to regulate. This is important because the DAO does not lose any value and can use the funds for other purposes in the future. In addition, we are getting rid of the risk of holding BUSD. Furthermore, the DAO would be generating income in form of trading fees (please be aware that SPS LP rewards are currently excluded for the DAO account).
Execution
In terms of execution, the DAO would let the SPL-team decide when the transfer/swap/bridge process should take place to prevent frontrunning etc. And also in which form the acquiring process should happen like periodically to avoid big price impact etc.
These decisions should be under the full control of the SPL-team and they would provide feedback to the community when the process is complete.
Conclusion
This proposal should make the community aware that we are in control of the DAO treasury and we need to react accordingly to market events to protect our value.
To take things into perspective:
If we consider that almost 500 million SPS are staked and we would distribute the 100k BUSD to the SPS stakers, this would result in ~$20 per 100k SPS staked (100000 BUSD / 498909205 Staked SPS = 0.00020043$ per SPS). In comparison to the whole treasury, it has not much value (but it's honest work :D) but we should protect it anyway and not put it at risk because of uncertain regulations.
Sponsorship
The 100,000 DEC fee for this proposal was paid by https://Splex.GG.
If you are interested in having your proposals paid for, please visit SPLEX on their discord at https://discord.gg/Splex to make suggestions and work with their team on formatting and promotion of your proposals.
And maybe as last point it could make sense to not be relaiend on one ecosystem. If something happens to HBD, we/ the DAO would be happy to be a little diversified. (This is my opinion surely some would disagree)
But agree it may not be fast. The assumption is BUSD tanks, then why would Smooth want to hold that excrement called BUSD. Other conversations methods need to be explored but that is a different proposal, and not this one
Haha im sorry i dont know the HIVE insider that well, if thats the case one reason more to be carefull. :P
Maybe you could tell me whats the worst thing that happens if my HIVE reputation stays at 5. i honestly dont know. is this bad? ^^
Not bad at all. You don’t post, so it’s nothing anyways.
Also if you post anything noteworthy I will vote it and reputation will be 50 on a single vote. Don’t worry about that number.
I 100% agree with azircon here.
I still don't understand why we don't have a DEC/HBD LP pool on HIVE.
Yeah. I pretty much agree with this. And the HBD liquidity issue can be resolved.
What’s the trading volume daily/weekly/monthly? I don't think this swap is used often enough to warrant the switch. I am voting no.
I would Vote for:
Swapping to the HIVE stable coin, HBD (currently earns 20% ROI paid monthly) and use interest payments to buy Dec each month.
thanks for your feedback, the trading volume is not to hight your right, but its really dosent matter, its enough if only one wale came along and use it.
This is a hurdle, and we could help that.
Im not complete against using the funds and buying HBD, i just think its a harder thing to get approved my comment on this:
and also we have other stable coin holding in the DAO that could be used for this strategy. --> USDC/T 390,780. i am happy any way as long we get rid of the BUSD holdings.
No confio en busd
Y VEO RAZONABLE buscar mas seguridad para el patrimonio del DAO
VOTARE SI😎
PD;
AGRADECIDO DE TUS PROPUESTAS COMO LA DE TENER SOBRES CHAOS LOS PROXIMOS 6 MESES EN RECOMPENSAS
Regardless of what happens BUSD is busted and should not be held by Anyone! I lost quite a bit when Terra collapsed I see no point in holding onto broken stablecoins. You could turn it into frigging Shib and it would stand a better chance than BUSD right now
BUSD has nothing to do with Terra, it is a stablecoin issued by Paxos with actual USD deposits in US Banks. Nevertheless, this is off-topic ;P
At face value it seems like a good idea, so voted yes. Now just gotta see what the 'other side' says 😂
**changing my vote to yes after some thought and discussion you can read below.
Reasons I'm voting against this:
We don't need DEC pools when the goal is to encourage burning of SPS to get DEC. DEC pools are antithetical to the cause.
We could just buy twice the amount of DEC and hold it to have a larger effect on bringing it back to peg.
Pairing a coin that has a 45% upside with a stable coin means we lose upside value through impermanent loss which will not likely be made up for with trading fees any time soon. Plus we lose 100% of DEC's upside from the other $50k that we use to buy DAI.
What I would vote for:
Use BUSD to buy DEC and hold it
USE BUSD to buy HBD and stake it for 20%
Use BUSD to buy SPS and hold it
Use BUSD to buy SPS and DAI and add that to the existing pool.
Thanks alot for your vote, every vote matter’s. :) to you point no matter if i agree or not, as i discussed it with some community members this is not obvious decision for all members. Some dont want the DAO to hold DEC at all, and some like in you case would love to convert 100% into DEC.
My answer to it is: „its a compromise“ this way bouth groups should be happy some DEC is bought and also the stable value of a stablecoin is held. The important goal is achieved. -> Get rid of BUSD.
There is already a DEC-DAI Pool an Ethereum the important thing is that compared to other pools its still small. I tried to swap 10k USD in DAI and i would lose almost 500 USD because of price impacts.
Also i would like to add, most of the thing's cost DEC to buy ingame and not SPS, thats the reason we should stick to the DEC-DAI pool and not use another because the simplest way to buy stuff (especially expensive stuff) is to buy DEC and move it ingame. Compared to SPS that you would need to swap somehow for DEC (mostly hive-engine) tus adding an additional step.
And for your last point, impermanent los should be that bad, this is a stable pool so way lover risk then other pools paired with volatile assets. And this could also go in our favor. If the DEC price rises we get more DAI in our position.
Thanks for the response. I 100% expect this to pass so I appreciate the effort to talk about it with a lone dissenting voice.
I worked out the math on the impermanent loss and you're right. We'll probably only lose about 3-5%. That makes me feel better about that. I do think it is critical that we get out of BUSD asap.
I wish I understood the objection players have to the DAO holding DEC. Its not like the DAO isn't already holding multiple other coins, but again, you're right. There will be objections to that.
So my last issue is really my first issue, but until DEC hits peg, the whole burning SPS thing doesn't matter anyway. That makes it simply philosophical whereas the DEC pool right now would help some people bring money in (or take it out).
OK, I'm changing my vote. I still don't love it and would rather any of the other options I stated but I do want this money out of BUSD ASAP.
Thanks for doing the math on the impermanent los, i know it should be that bad but i hadn’t the correct numbers on hand.
Yeah same, i just want it out BUSD, and with this i think i could get a fast consens.
Thanks for taking the time :)
love it that someone looks after the DAO holdings and risks assosiated with it. Makes sense to pivot away from BUSD after reading that article.
you got my vote
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Updated At: 2023-02-24 19:34 UTC
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SPS is a BSC token and having a DEC pair on BSC seems important. So i'll likely vote NO because I actually like the binance smart chain (as of right now) ETH still has way too high of fees.
If i understand you correct your talking about the DEC-BUSD pair on the BSC, is this correct?
This proposal has no impact on the DEC pair on BSC. This proposal aims to use the current BUSD holdings in the DAO. Current this assets are just held in the DAO wallet.
To argue with you point the DEC-BUSD pool on BSC has almost >60k more liquidity then the DEC-DAI pool. This would even them out. In my opinion this is not a debate wich chain is better, its simply tries to allocate the BUSD holding from the DAO.
OK thanks for the clarification... I'll remove my downvote though i'm not sure what my actual vote would be I'll wait to think about it more.
Is the DEC-BUSD pool actually requiring more liquidity based on pool volumes? I'm thinking that if there is already sufficient liquidity, maybe it might be better to
just withdraw from the DEC-BUSD poolexit the BUSD position asap, but instead of rushing to refill the next closest pool, maybe let the DAO sell the BUSD for DEC or SPS and hang on to the assets until it has a better sense of where they are needed?(edited to correct a mistake)
Maybe this leads to some confusion, the DAO currently don't hold any DEC-BUSD pool position. As i mention in an other comment.
Regarding to use it and just SWAP for DEC or SPS, the community sentiment on this in my experience with talking with some other members, is really split. Some don't really want to hold 100% DEC, some say we have already allocation to SPS, why should we buy more, so just to prep up the price. No matter if i agree or not.
Sorry yeah I made a mistake and kept typing DEC-BUSD everywhere :)
I think if the objective is simply getting rid of BUSD, that's probably the easier decision to pass if it's not grouped with adding a different coin exposure. SPS seems the least controversial - we know the DAO will always need SPS for players etc, so simply withdrawing the BUSD assets and selling/swapping them to SPS would probably meet the least resistance. Increasing exposure to other coins in the DAO portfolio is probably where people are feeling the uncertainty. I'm supportive of getting rid of a questionable token, although I'm not sure where I land on this as a whole.
You've given me more to think about.
Thanks for following the news and catching that risk!
I do not think SPL needs more liquidity on DEC-DAI pool, at least not now as the demand to enter the game is not that high.
We can set up a project to slowly swap BUSD for HBD (well, as fast as liquidity allows it) and stake the HBD for building a stream of income for the DAO.
This revenue once consolidated could be used to contract the SPL company to add features to the game for example for attracting more players.
Thanks for the comment, like to see the thoughts of the members.
Your fist argument could be right. And it surly a debate if its really needed to put more liquidity into the DEC-DAI pool.
The argument to buy HBD came up a couple of time in some discussions. And would be a possible other proposal. I think the argument here is that is harder to sell to the wider community, some would be against into holding more tokens in the same ecosystems. (i would put myself in this camp) and I can't imagine that the HIVE people like it when the DAO begins to sell HBD from the interest gained.
love it that someone looks after the DAO holdings and risks assosiated with it. Makes sense to pivot away from BUSD after reading that article.
you got my vote
no, eth suckt!
I'd rather see the DAO use those stablecoins for exchange listings (rather than spending SPS at or near the bear market lows).
muy a favor !!!!!
alguien a los mandos de esta gran nave!!!😎
Good call, Dai has massive potential.
sorry im gonna vote no. i was okay with initial concept of this proposal until i saw distribute 100k busd to sps stakers. No thanks.
You know that that was just an example to put the value into perspective right?
He never says that he wants to do that lol
sorry, maybe this is unclear this is just an assumption to represent that the 100k BUSD is not mulch in comparison to the whole DAO Holdings. This paragraph should just illustrate that, their would be no distribution to SPS holder in any case..
i see. im okay with everything else and i guess the example threw me off assuming that 100k busd was to airdrop to sps holders
I voted no. It's not that I think it is a bad proposal, but like a lot of people said, It could be a non-issue. The main reason I voted no had more to do with where the funds would be moving, not moving them in the first place. I think there has been some good discussion raised by this proposal. Nice to see the community communing.
Totally against. A LP will just drain the DAO resources and provide liquidity exit for the whales and big stakeholders. If we don't like BUSD we can always move the stash into HBD for a 20% yearly income, or if we want to spread risk we can just park it on USDC or DAI which is going to be around forever, in some boring but safe deposit in AAVE or Maker or something like that.
I repeat: a LP is basically a scheme to provide exit liquidity to the owners of one token vs. the dollar pegged token.
But
I want to say also that I thank you for the idea, I don't want to sound harsh, I don't like the idea but I like you and your initiative! The DAO will only get better with conversations like this.
Best Regards!
I think that the best option BY FAR would be to USE BUSD to buy HBD and stake it for 20%.
It gets us out of BUSD, helps the HIVE community (us again) and makes the DAO a profit (us again).
HBD, would surly be another option. I mentioned this in an other comment:
If this not pass i would be happy if someone would propose use the funds for HBD an stake it or something else and see if we get enough support. but i personally would vote against it because HBD has not that much liquidity, try to cash out 100k without a big price impact. And furthermore, the diversification would be for me the most important point.
That's a pretty ridiculous account name lol.