CoW DAO Treasury Report for April 2023

Treasury
1

We’re pleased to share CoW DAO Treasury Report for April 2023.

Last month, the main operations involved the migration of funds from Compound v2 to Compound v3. This decision was driven by Compound’s plan to conclude the $COMP rewards on v2. The overall strategy remained consistent, anchored by the primary focus on optimising capital efficiency and tapping into attractive yields offered by Aura. These positions continue to deliver robust returns while preserving our risk exposure within acceptable boundaries.

We look forward to another month of growth, innovation, and community engagement. As always, we invite your questions, comments, and suggestions.

2

Thank you for the report. What other additional DeFi platforms alongside Aura are being explored to diversify yield-generating strategies and managing risk exposure?

3

Is Karpatkey allowed to spend USDC and buy ETH/GNO/COW or whatever other crypto?

Keeping 50% of portfolio in USDC and using it for 2.X% yield on Compound doesn’t sound really attractive to me (especially in the long term).

How about slowly DCA-ing into ETH and putting it into Uniswap V3 ETH/USDC pools where it would yield 7-10%?
How about slowly DCA-ing into GNO and putting it into stakewise staking or similar?

Doing this for the next 24-36 months has a very high possibility of being a very good move and also achieving higher yield IMO.

On the other note:

  1. What do you do with earned Aura tokens?
  2. Why lower exposure to Aura WETH/COW pool vs Aura GNO/WETH since the former one has higher yield while both have a similar risk (at least how I see it).
4

We continuously monitor battle-tested protocols for positions that would be a good fit for the Cow treasury. On top of the main protocols in mainnet, like Curve/Convex, Uniswap and Aave, we are also exploring possible strategies tapping into the Gnosis Chain ecosystem, given there are more opportunities for GNO there (liquid staking, lending GNO and safely borrowing other tokens that would expand the treasury’s DeFi possibilities, increase exposure to EUR on Curve, etc…).

6

Hi @sunce86. Thanks for sharing your observations!

The USDC deposited in Compound is KYC funds the project is keen on keeping on low-risk strategies. Hence, as you well noted, it hasn’t been swapped, DCAed, nor allocated to higher yield (higher risk) strategies.

  1. What do you do with earned Aura tokens?

Though we will continuously evaluate the best course of action for the treasury, we have swapped the last round of rewards for DAI given the recent treasury needs for non-KYCed stablecoins.

  1. Why lower exposure to Aura WETH/COW pool vs Aura GNO/WETH since the former one has higher yield while both have a similar risk (at least how I see it).

These strategies have been put in place considering optimizing capital utilization as an additional variable, as well as the impact additional liquidity would have on the existing pools APR given their current size. That said, with a safe recently created in Gnosis Chain, there are new opportunities for GNO, COW, and WETH to consider that should enable a rebalancing of these positions for a new optimal distribution (having your recommendations in mind as well).