After consideration Treasure’s Arbitrum Representative Council (ARC) would like to share the following feedback on the proposal
[Non-Constitutional] Pilot Stage: Treasury Backed Vaults research and development
TreasureDAO’s ARC will vote AGAINST this proposal.
If there is a need to do grants in stablecoin, a good first step for the DAO would be to diversify the Treasury’s assets if the DAO in fact decides that it wants to diversify into stablecoins for these (or other) purposes. This would then also facilitate the DAO with the relevant diversification of assets to more safely be able to cover any potential debt that these vaults create.
Besides the DAO not having any mechanisms for the diversification of assets to cover debts, there are some other concerns in regards to this proposal:
- Having to lock up a significant amount of $ARB to get returns that could in fact fund grants, with no dedicated oversight but the DAO (which collectively doesn’t have the necessary expertise), and no comprehensive plan besides a simple ‘savior module’.
- The debt limit has to be fairly low, given the low on-chain liquidity for $ARB and the higher risk for exploitation that a singular solution (‘savior module’) to liquidation brings.
- The overall costs could be more detailed. The fact that the debt limit has to be fairly low also begs the question if the risk to reward is there to get this off the ground at this point in time.
We were pretty surprised to see this proposal go to Snapshot this fast after being posted on the forum. It probably would have been a good idea to wait and discuss a bit longer. Nevertheless, we are happy to see that the proposal is being worked out more because of feedback by the community.