Abstract
The DAO Asset Management Policy (“Policy”) introduces a structured Asset Management Framework to responsibly manage the treasury, ensuring long-term sustainability and transparency, and aligning the SSV DAO with leading DAOs like Arbitrum, Optimism, and Uniswap.
Motivation
The SSV DAO treasury holds substantial SSV and stablecoins but lacks a formal asset management framework. The Primary Goals of this asset management framework are:
- Capital Preservation and Efficiency: Safeguard assets to guarantee operational funding in all market conditions and spend available assets intelligently.
- Diversification: Minimize exposure to any single asset, counterparty, or protocol.
- Yield Generation: Earn sustainable returns on idle assets to extend the DAO’s runway.
- Transparency & Oversight: Ensure accountability through regular reporting to the Oversight Committee (per DIP-43) and the DAO.
Furthermore, the Policy sets out to:
- Revise [DIP-26] ssv.network DAO Four-Year Budget (2024-2028) (“DIP-26”)
- Cease proactive and scheduled minting
- Use of the current SSV in the treasury for operational expenses,
- Revise the reserve-building mechanism per DIP-41.
- Stop selling SSV tokens to cover, and stop selling SSV tokens to cover.
Proposal Particulars
- Proposal Particulars
- Abstract
- Motivation
- Scope of Assets
- Strategy Analysis
- Stable Asset Allocation
- Asset Allocation and Strategy Selection
- Portfolio 1: Assets
- Portfolio 2: Strategic ETH Reserve
- Flexibility for Portfolio Rebalancing
- Mechanics
- Amendments
- DIP-26: Revision (Operational Budget Track)
- Expenses
Scope of Assets
All assets unencumbered or acquired by the SSV DAO or the SSV Foundation are subject to the Policy. This includes all SSV tokens, stablecoins, and any other assets (“Assets”). The current assets can be found here.
Strategy Analysis
The selection of these strategies is driven by this analysis and the primary goals of Capital Preservation and Efficiency, Diversification, and Yield Generation, balanced against the need for liquidity and operational flexibility.
Stable Asset Allocation
The Stable Asset Portfolio is designed to minimize risk while maintaining high liquidity and generating sustainable returns.
- AAVE Lending: A battle-tested, large-cap DeFi protocol. It offers a competitive, secure yield with immediate liquidity, making it suitable for a significant portion of the stable reserve.
- Tokenized Treasuries and Money Market Funds: Tokenized real-world assets (RWAs) like sovereign debt offer diversification away from pure DeFi risk and correlation to traditional financial instruments, enhancing capital preservation with a low-volatility yield
- Cash / Liquid Reserves: Essential for meeting immediate operational needs without needing to liquidate yielding positions.
Asset Allocation and Strategy Selection
As per the analysis above, the DAO will allocate its funds to two different Portfolios as outlined below.
Portfolio 1: Assets
| Instrument | Initial/Target Allocation | Max Allocation | Notes |
|---|---|---|---|
| AAVE Lending | 35% | 60% | Lending USDC in audited, large-cap DeFi protocols |
| Tokenized Treasuries and Money Market Funds | 55% | 60% | Real-world assets, short-term treasuries or repurchase agreements |
| Unallocated (held USDC) | 10% | 25% | Kept in DAO multisig or operational wallet for liquidity |
Portfolio 2: Strategic ETH Reserve
All unencumbered or acquired ETH will be added to the strategic ETH reserve. The DAO will use the SSV network to stake its ETH and set up staking clusters according to the following rules:
- Policy Authority: The Operator Committee (OC) will be granted the policy-making authority to implement and manage the selection process of operators required to stake the DAO’s ETH through the ssv.network at its full discretion, based on a self-imposed Snapshot published framework (“Framework”).
Flexibility for Portfolio Rebalancing
The SSV DAO grants the SSV Foundation, under the oversight of the Financial Oversight Committee (FOC), the flexibility to manage and rebalance Portfolio 1 in response to evolving market conditions, yield dynamics, and liquidity requirements.
- Rebalancing: If any asset allocation within exceeds Portfolio 1 Assets table maximum limits, the Foundation is authorized to rebalance the portfolio to bring allocations back within Portfolio 1 Assets table allocations.
- Strategic Adjustment: The Foundation is permitted to adjust target allocations and explore emerging, high-quality investment opportunities (e.g., tokenized private credit, tokenized equities, innovative lending products), provided that all adjustments and new allocations remain strictly within Portfolio 1 Assets table allocations and adhere to the Capital Preservation and Efficiency, Diversification, and Yield Generation.
Mechanics
Upon passing, the SSV Foundation proposes Policy changes to the SSV DAO. The SSV Oversight Committee reviews quarterly reports for policy compliance. The SSV Foundation and the SSV DAO multisig are allowed to adjust operational processes in order to execute the transfers required under the Policy. The following is a non-exhaustive list of potential actions:
-
SSV Foundation
a. Prepare initial allocation recommendations for all portfolios, ensuring compliance with defined exposure limits.
b. Suggest frequent portfolio rebalancing to ensure compliance with defined exposure limits.
c. Reporting (Quarterly): Generate a comprehensive report detailing portfolio balances, yield, liquidity, risk assessment, and any deviations from Policy, detailing portfolio balances, yield, liquidity, risk assessments, and any deviations.
d. Propose beneficial claims (Uniswap, Safe, Staking, IMP, etc.) for the DAO to the multisig when appropriate. -
SSV Oversight Committee
a. Review the quarterly report by day 30 of the new quarter.
b. Ensure the SSV Foundation’s operations are compliant with the Policy.
c. Escalate any material compliance issues to the DAO for resolution. -
SSV DAO Multisig
a. Operational Wallets: Allocate and transfer unencumbered and acquired assets from the main DAO Treasury to designated SSV Foundation Operational Wallets, as needed for lean, secure execution.
b. Execution: Maintaining ultimate control by signing Foundation-recommended transactions or retaining unilateral recall rights over all funds and deploying allocated assets into approved instruments utilizing the SSV Operational Wallets.
c. Review and Amendment (Annual): Conduct a formal review of the Asset Management Policy as part of the Master of Coin report, with all material changes requiring DAO approval, detailing portfolio balances, yield, liquidity, risk assessments, and any deviations.
Ammendments
The following are additional amendments unrelated to the Policy focused on simpler, more effective operations.
DIP-26: Revision (Operational Budget Track)
DIP-26 prescribed that the Operational Budget Track (“OBT”) consists of two types of minting:
- Minting of SSV tokens to be kept in the DAO treasury (discontinued by [DIP-32] Revision of DAO Governance, Committees, and Budget)
- Minting of SSV tokens to be sold by service providers chosen by the SSV Foundation to the market (“Market Minting”).
If this proposal were to pass, the Market Minting would stop. Every calendar year, the Foundation will have the discretion to request from the ssv.network DAO Multi-sig committee to mint 2.000.000 USD worth of SSV tokens. However, the SSV Foundation cannot request more than 1.000.000 SSV tokens every year. Unsold Market Minting SSV tokens currently held by the SSV Foundation or its BVI subsidiary shall be sent back to the DAO.
[DIP-41] ssv.network DAO Four-Year Budget (2024-2028) Revision #1 introduced two mechanisms:
- burning of 50% of the Network fee in each First Scheduled Batch until December 31st, 2026.
- A new Reserve Track bracket
If this proposal were to pass, the burning of the network fee will stop, and a new bracket will be added to the Reserve Track:
| SSV Price | Reserve Track Maximum | Monthly Maximum |
|---|---|---|
| $7-11 | USDC 2.5 million | $0.25 million |
Expenses
If this proposal were to pass, Assets will be used to pay for the Four-Year Budget introduced by DIP-26 and IMP distributions of rewards introduced by the Incentivized Mainnet Program
To perform treasury management, the Foundation requires an additional budget (as per DIP-26) of $12,000 per year, payable in stablecoins or equivalent, for:
- Monitoring yields, risk, and counterparty health.
- Reporting and transparency requirements.
- Legal and operational costs related to financial instruments.
- Occasional third-party audits or consultations.