Performance attribution can best be explained and seen by looking at the current ETH-denominated allocations here (pictured below) and by looking at the monthly updates. All yields displayed and referenced in both are net yields, with the exception of gas and bridging costs, which at this scale are considered de minimis and excluded.
We acknowledge that the current positions’ blended performance figures are below the staking return rate of simply holding wstETH. However, as detailed in the governance post defining the goals and justification for those allocations, simply staking all of our ETH and not providing or bootstrapping any liquidity to native or migrating blue-chip protocols to spur ecosystem economic growth was at odds with the intent of the deployment.
It’s also worth noting that although some of the allocations are providing lower yield than a simple staked ETH LST strategy, this was not an unintended consequence of past allocation decisions, but expected. In the governance post regarding the deployment of these funds, we anticipated that the Fluid ETH deployment would provide “1-2% native ETH yield,” and so far, performance is in line with expectations. Fluid’s growth on Arbitrum has been impressive, and this is a key example of return on investment that is slightly less tangible when looking at treasury return figures, but highly beneficial for the broader Arbitrum DeFi ecosystem.
To answer some of the general questions raised by @Jonezee @JoJo @karpatkey @jameskbh
- We are not requesting the entirety of the ETH accumulated in the treasury to be transferred over as we believe it is responsible to leave a “buffer quantity” of ETH for any unexpected DAO needs or any future treasury management proposals with differing goals from this one.
- As mentioned in the proposal, no open RFP process will occur for this tranche so expectations are properly managed regarding goals and intent of the deployed capital. The committee will primarily focus on and account for factors such as yield sustainability, protocol and economic risk, ecosystem impact, liquidity, etc. when evaluating allocations.
- The proposed high-level strategy and goal enables the committee to deploy ETH outside of just lending/DEX LP opportunities. We agree all viable strategies should be considered and our list of potential categories was not collectively exhaustive.