DBC Treasury Administration - Need for Policies and Roles

Funding & Administration
#1

Hello everyone,

following the call we had yesterday May 24th, I’m kind to share in more details what I do think regarding establishing a policy for managing DBC’s treasury assuring that it’s used to follow and execute DBC’s mission and vision while looking to maximize the possibilities of benefiting from crypto-markets potential grow AND reducing the risks of it’s implied volatility.

This blog entry includes:

  • a Demo Draft for what this policy might look at.
  • a Role Description for a Treasury Management Facilitator.

DBC Treasury Policy - Pre (or better called, DEMO) DRAFT

The Diamante Bridge Collective (DBC) operates under sociocracy principles, emphasizing shared governance and inclusive decision-making. This document outlines the assets held in the DBC treasury, their respective weights, and the rationale behind their selection. It serves as a guide for DBC members to understand our portfolio management principles and strategies.

:warning: This Policy does not represent any proposal, neither represents the autor’s intentions, it’s just a first example of a documented policy/guideline that would help the governors or treasury council still-to-be-decided of the treasury to guide and facilitate their decision making process, it might and shall include further design principles or aspect that the DBC community would like to implement and guarantee.

I. Decision-Making Process and Principles

Our asset selection shall be grounded in market analysis, individual asset performance evaluation, and potential return on investment. Key considerations include current market conditions, risk management strategies, and portfolio diversification. The following principles guide our decision-making process:

  1. Development State: Determining whether DBC is in a development state (expending money) or a waiting state (collecting money) influences our portfolio composition.
  2. Market Condition: Adjusting the portfolio based on whether the market is bullish or bearish.

Decision Matrix:

Market Condition\Project State Developing Waiting
Bullish 70:30 50:50
Bearish 50:50 30:70

Some Notes about these principles

  • The ratios indicate the distribution between blue-chip assets and stablecoins, respectively.
  • The explicit ratios are just an example, the Treasury council shall discuss and agree on them.
  • Blue-chip assets reffer to well established cryptocurrencies, trustworthy but still volatile like ETH, BTC, MATIC, ARB, OP; stablecoins refer to cryptocurrencies pegged and/or backed to/with USD.
  • A bullish :water_buffalo: market means where conditions are benefitioal and prices follow a raising tendency, while a bearish :bear: market means the opposite, prices are low and tendencies show decreases in price.
  • :bulb: Besides Blu-chips and stablecoins, we could also integrate Regen assets (like cryptoassets backed or pegged to eco-logic metrics) or highly speculative assets.

II. Portfolio Storage, Composition, Distribution, and Rationale
DBC Treasury should be stored in a community Multi-sig Wallet ([what is this? just google it, my forum permissions don’t allow me to share more than one link, sorry) with a number, and assignation of signers to be decided by the DBC sociocracy governance. Multi-sig shall be deployed in all relevant chains for DBC and the signers (addresses) shall be the same in each EVM chain, as well as identifiable (we want to know Who’s signing).

Current Portfolio Distribution:

DBC portfolio currently resides on the EOA (what is an EOA? just a regular wallet, google “External Owned Account” for more info) 0x7554f10da3ed7128300577e55abcd8f8835bcee4 that holds the following list of assets:

Chain Token Price Balance Value
Arbitrum ETH $3,737.35 0.8176 $3,055.55
Optimism ETH $3,737.35 0.1246 $465.85
Optimism USDGLO $0.999 319.7 $319.36
Ethereum ETH $3,737.35 0.0763 $285.00
Optimism OP $2.54 66.9423 $170.03
Polygon MATIC $0.723 178.3595 $128.98
Arbitrum ARB $1.19 66.395 $79.01
Polygon EARTH $8.20 25.5 $57.23
BSC KATA $0.00121 37,543.211 $45.51
BSC METAV $0.00521 8,089.406 $42.14
Gnosis XDAI $0.999 23.6335 $23.61
Optimism USDC $1.00 16.55 $16.55
Optimism USDT $1.05 13.5829 $14.21
Optimism DAI $1.00 10.5 $10.50
Optimism USDC $0.998 4.75 $4.74
Gnosis COW $0.33 10 $3.30
BSC GQ $0.000644 3,747.5 $2.41
Polygon DAI $1.00 2 $2.00
Polygon USDC $1.00 1.57 $1.57
Gnosis WETH $3,736.33 0.0004 $1.48
Gnosis FOX $0.0802 12.6254 $1.01
Polygon USDT $1.00 0.9089 $0.91
BSC BNB $601.39 0.0014 $0.82
Gnosis AGVE $63.71 0.01 $0.64
Polygon WETH $3,736.33 0.000095 $0.35
Gnosis BRIGHT $0.0367 3 $0.11
Celo CELO $0.871 0.095 $0.08

Total $ 4.732 USD

  • :hatching_chick: See Zapper Link for an updated list in the Agenda, again, I’m not allowed as a new user, to bring that many external links here.

As well as a considerable amount of $GIV tokens (in the same EOA?) that are locked and/or available to claim:

695×748 38.3 KB

IV. Risk Management

Risk management is integral to our strategy, employing the following measures:

  1. Diversification: We hold assets across various classes and networks to reduce risk and protect our portfolio from market volatility.
  2. Stablecoin Allocation: A substantial part of our portfolio might be allocated to stablecoins (USDC, DAI, xDAI, BridgeBack…) to hedge against potential downturns in the crypto market.
  3. Understanding Stablecoin Risks: Stablecoins like Celo Dollars (cUSD) are hybrid crypto-collateralized/seigniorage-style stablecoins. Their stability relies on the value of collateral reserves and an algorithm that adjusts supply based on demand. If cUSD demand drops more than the total value of reserves, the protocol may not contract enough supply to meet decreased demand, risking the stablecoin’s stability.

V. Emergency decisions
In the volatile and fast-paced world of crypto markets, there may arise situations where urgent decisions are required to protect the assets and interests of the Diamante Bridge Collective (DBC). This Emergency Decision Protocol will outlines the steps and authority involved in making such decisions when the Treasury Council is unable to convene in a timely manner.

Criterias, authorities and responsibilities, as well as reporting and documentation procedures shall be produced between the Treasury Management Facilitator and the Treasury Cuoncils, still to be decided and deployed.

Role Description: Treasury Management Facilitator

Position Overview:
The Treasury Management Facilitator will oversee the DBC’s treasury, ensuring alignment with our culture, financial principles and goals. This role involves guiding and educating the community about crypto assets and their management, enabling members to make informed proposals for using communal funds for cultural activities, as well as facilitating the governance decision

Key Responsibilities:

  1. Portfolio Management: Monitor and propose adjustments to the treasury portfolio to align with market conditions and DBC project states.
  2. Policy Governance Facilitation: Drive forward with a Treasury Council the Design and governance over the DBC Treasury Policy.
  3. Community Education: Conduct workshops and create educational materials on crypto assets, risk management, and portfolio strategies.
  4. Proposal Facilitation: Assist community members in drafting and evaluating proposals for utilizing communal funds.
  5. Reporting and Transparency: Provide regular updates on the treasury’s status and performance to ensure transparency and informed decision-making within the community.

Skills and Qualifications:

  • Strong understanding of crypto markets and asset management.
  • Experience in portfolio management and risk assessment.
  • Excellent communication and educational skills.
  • Familiarity with sociocratic governance and collective decision-making processes.

Effort Requirements:
This job might require an effort of 2-6 hours per week.

Benefits:
To be discussed.

If you read till this point, thanks A Lot!!! Now it’s your time to input comments, amendments and/or any further idea.

2 Likes
#2

hey Gustavo

WOW!! your knowledge in this area of finance is quite impressive! and i’d like to compliment and acknowledge your excellent presentation and articulation of this subject matter. As well, your presentation was done in a very lean and concise way!
clearly there is a need to responsibly manage this aspect of a holistic matrix.

so i have 1 or 2 question for you, and others who read this: who, besides you, :wink:
in our “network” of willing members of the DBC, who would even qualify for this role you have clearly spelled out?
and if that person currently exists (besides you :wink:) in our network, how do we decide what the reciprocity would be for this person to responsibly take on this role?

otra vez, excellent job on this summation of our funding meeting! :muscle:

3 Likes
#3

thanks for the kind words @DJ-Ayote , really appreciated!

I’m indeed qualified, and with enough experience to cover this role! and yes, I would like to apply for this! If there’s another person around with the same or better qualification AND availability, that I don’t know. This is what I can see now from the meeting’s agenda:

  • ALL - Collaborate to develop funding proposals and allocate funds sociocratically.
  • Peter will coordinate a meeting to discuss the integration of Bridge Bucks Bank with Diamante Bridge Collective’s financial management.
  • Danibelle will support getting proposals up on the forum and systems in place for tracking how funds are distributed or held onto.
  • Arturo Montanaro (not Ara :sweat_smile:) will explore the CLB tool and consider taking on the role of financial tracking and spreadsheets.
  • Travis will consider participating in proposal forming and financial administration support.
  • Randall will coordinate with Danibelle to review and refine existing spreadsheets for financial tracking and administration.

the reciprocity agreement shall be, IMHO, negotiated between the role candidate and what I call the Treasury Council and/or following the DBC sociocracy process, people mentioned above seems to me like good candidates for the council, so I’d start to check with them if they want to be part of that, while then asking @Danibelle (in her quality of APDC president and the person responsible for us having those funds) to validate their participation.

#4

First off, thanks and praise for this comprehensive analysis and report @GoodStuff !

Our call last week was literally a call for support in this realm, and this post is a great response to the ask, providing a clear path forward.

My comments to the contents:

Worth noting that right now, our assets have been selected indirectly, through participation in blockchain ecosystems that demonstrate commitment to public goods, community development tools, retroactive rewarding, and, well, specifically we have been following the Giveth Galaxy of projects which has led to our current asset composition being “whatever has been given to us”.

Some of those gifted assets are best held for the utility and benefits they offer long-term, which may mean they are more risky, have an absence of performance to evaluate, or their ROI potential is actually linked to how much we engage with their product / protocol. I think our portfolio shows a preponderance of tokens that would fall into the emerging “REGEN” asset class you describe - the DBC has regenerative values and has been working with orgs that are actively evolving Regenerative Economics for locally focused projects around the world.

This means we must lean into the education of our Treasury Council, and also the distribution of partnership coordination so there is someone researching, for example, what is best to do with the $EARTH received into the DBC wallet from the Gitcoin round project that was written to raise funds for Coliazul on the Commons.

I do agree it’s time to get a Multi-sig Wallet for the DBC. Historically I have been following the choices made by Giveth for ease of alignment and education; as Giveth builds partnerships, they trickle down to what donations we receive there.

So the process of forming a Treasury Council will follow that of forming a DAO, and we have to make decisions like whether to have token-weighted voting or 1 person 1 vote, what chain to do our voting on, a Multi-sig that holds tokens on which chains etc…

And therefore this leads to the question of whether the DAO is just the Treasury Council or includes other stakeholders and how much weight each voice or group’s voice will hold.

I’ve been doing this job, and it is frequently a LOT more than 2-6 hours per week with a quarterly burst that aligns with match funding rounds. @rpiesveloces has also stepped into many of the responsibilities listed both for the DBC and now also for the Coliazul project itself. Sometimes, it takes over 2 hours just to distribute funds in a week, there are so many steps and decisions along the way!

@Ara does this job for his projects with my support and also with help from others with bank accounts to facilitate the sale and transfer of funds for the Recycling Center, for example.

Regarding the benefits, this is where decentralization of the DBC and the circular economic elements come into play. I.e.; how much is needed in liquid assets, how much can be distributed to a land project that can offer housing, car- or food-pooling to reduce the need for liquidity and simultaneously increase a contributors stewardship stake in either that land itself or in a Commons membership association?

— IDEA —

What about an asset distribution policy that creates 3 pools: 1.) RETROACTIVE - looking at the existing contributors, people who have been holding roles in the DBC, or at a participating land node like HOME Farm, Diamante Luz, Luz del Bosque and have created value already that can now be rewarded; 2.) CURRENT - critical function roles both in administration (treasury, policy, records) AND on the ground (Farm Group participation, for example) that receive regular benefit / stipend for performing the responsibilities; and 3.) FUTURE - staking, holding, or otherwise collecting until conditions are met to release those assets.

1 Like
Proposal for hosting of Coliazul Waldorf Community Project and the building of a Cultural Center at DBC
#5

I’d start by this then, since building up a DAO and deploying is surely what our community needs to understand better in order to know what is the best decision in terms of voting configuration (token weight based, 1 person-1 vote, lazy consensus, etc.). There are DAO frameworks that enable us just to take collective decisions on the commons assets, while there are others that enables DAO-made liquidity (e.g. minting DAO tokens) for contributions. This is a way to incentivize contributions to the commons that doesn’t hurt our treasury, we might just need to clarify the token utility itself.

I can hold a session to explain to the DBC community what are the different options in the DAO market for us, so we can start making our choices towards it. @Danibelle and team, please give me a date and I’ll deliver a workshop on this.

this seems :fire: to me, but I’d personally prefer to this retroactive/current/Future rewards shall be done with governance tokens instead that with the liquidity in treasury (with some exemptions of course). Then, if this people/teams want cash, they could ask it through a governance proposal itself. The rationale behind this is that the treasury doesn’t seem abundant enough at this moment, so it might empty the vaults too soon. I’d rather propose to use the cash in treasury for paying for offers and services that can’t be provided by the good will of our community, but by regular market activity, that I understand DBC wants to get rid off.
e.g. I’d be open to receive my payment for this role (under the <6 hours per week approach) even in this Token with no market value under the condition this give me more access/rights and/or governance on the DBC commons.

#6

Great, let’s work on this together to deliver something around the Solstice; perhaps there is a weekend affair with workshops and waterfalls by day, music and fire at night.

Current treasury is definitely not enough to do this, and those funds are pretty much allocated already to the purposes for which they were raised. I’m referring to the asset distribution policy to be developed that will have certain set allocations for funding received going forward.

This is definitely a way to get started, by distributing non-fungible tokens with governance/access rights tokens. I would carry that through though, that at the points where our treasury is overflowing it flow backwards as well as forwards and token holders will receive some sort of ‘bridge’ token distribution that is transferable / redeemable.

Awesome!! I’m excited to develop a training program that will follow the workshop :wink: so we can get to where that’s a reality :grinning: