Following on the August 2021 diversification round that resulted in 2 million USDC in the treasury, we are proposing authorizing the Tokenomics Working group to take the following two actions:
Converting $150,000 of USDC to ETH.
Investing $500,000 of the USDC in Treasury into a low risk investment opportunity.
Converting USDC to ETH
Diversifying Forefront’s treasury is a top priority heading into 2022. The first conservative step in this direction is to convert $150,000 (approximately 8.7% of the USDC in Treasury) into ETH. The timing of the conversion is also somewhat fortuitous as ETH is down 30% over the past 30 days (as of Jan 30, 2022). Treasury ownership of ETH also provides upside exposure to the larger value creation of Web3.
The USDC currently sitting in treasury is ‘unproductive’, meaning it is not earning any yield. We are proposing conservatively investing $500,000 of USDC into a low-risk interest-bearing investment opportunity. One example would be depositing the USDC into an Aave savings account (yielding 2.16% as of Jan 30, 2021). This would yield approximately $10,800 over the course of the year.
Successfully swapping $150,000 of USDC to ETH and investing $500,000 of USDC into a low-risk interest-bearing investment opportunity.
Treasury Multi Sig will execute both the swap and investment.
Gas associated with trades. Costs are minimal.