Proposal: Fyde Treasury <> Rocket Pool
About Fyde:
Earn more. Risk Less. Fyde is an AI driven portfolio management and liquidity optimiser. Team building since 2022 with experiences from NASA, JP Morgan, Bloomberg, Wintermute, Synthetix, Stanford, and more. Traction includes integrations with 25+ crypto protocols, DAOs and Layer 2s onboarded. Investors include Inception Capital, Big Brain Holdings, Arrington Capital, Merit Circle and more.
To date the liquid vault has outperformed with lower volatility across bull and bear. Currently, Fyde is rewarding early adopters with boosted Fyde points up until FYDE token launch in Q2 2024.
TRSY Performance & Volatility
Summary:
Treasuries face challenges in managing their native governance token holdings, which is essential for long-term sustainability and growth. Protocols, founders and whales often hold high concentration positions in governance tokens due to liquidity mismatch between value of what they own and what can be realized. Trading these positions results in high slippage and price impacts - they’re often forced holders until it’s too late and the bear market has begun. Fyde Treasury Protocol provides a solution to mitigate these various issues.
Enabling treasuries, such as Rocket Pool’s, to diversify a portion of their native token holdings through the Fyde Liquid Vault without introducing sell pressure from open market or OTC sales. In doing so token issuers also benefit from increased liquidity pathways for their native token and the creation of yield, while preserving governance of deposited tokens.
Abstract:
This proposal outlines a pilot program for Rocket Pool to deposit a portion of its RPL token holdings into the Fyde Liquid Vault on a trial basis, receiving TRSY in return thus enhancing treasury resilience. Fyde offers features like instant withdrawal and market liquidity, providing a simplified and sustainable approach to treasury management.
Motivation:
Protocols focus on creating liquidity for their native token which can be notoriously difficult. Issues such as impermanent loss can be mitigated in the short-term through liquidity incentives however this does not fix the problem over the long-term. Token liquidity should actually be seen as a by-product of what token treasuries actually need - which is portfolio liquidity and this can be achieved much more efficiently than for an individual token (e.g. ETFs vs individual stocks). Fyde creates an on-chain liquid vault where users can deposit governance tokens, and in return, receive increased liquidity, diversification, and yield - while still being able to retain governance rights.
Fyde Protocol addresses the complexities of crypto treasury management for DAOs and protocols, promoting long-term growth and sustainability. By leveraging Fyde’s Liquid Vault, Rocket Pool intends to enhance treasury resilience, increase liquidity, improve token distribution and optimize operational efficiency.
Specification:
The proposal suggests depositing a percentage of Rocket Pool’s RPL treasury holdings (or core contributor positions) into Fyde’s Liquid Vault as a pilot program. A deposit of between 5 000 to 15 000 RPL (~$100k to $300k as of 01/05/24) is recommended, with an intention of maintaining the deposit for 3-6 months.
This suggestion is aligned with our target concentration of RPL within the vault. Recent deposit sizes from DAO and protocol clients have ranged between $100k to $300k.
| Step | Action | Rocket Pool/ Fyde |
|---|---|---|
| 1 | Proposal review | Rocket Pool |
| 2 | Follow-up call | Rocket Pool/ Fyde |
| 3 | Confirm the proposal & seed deposit amount | Rocket Pool |
| 4 | Fyde to whitelist RPL (Done) | Fyde |
| 5 | Deposit seed | Rocket Pool |
| 6 | Comarketing | Rocket Pool/ Fyde |
| 7 | Explore additional collaboration | Rocket Pool/ Fyde |
Benefits:
- Liquidity: Depositing RPL into Fyde’s Liquid Vault increases liquidity and trading volume across DEXs/CEXs through new pairs.
- Ecosystem liquidations: RPL grant recipients can deposit into Fyde, receiving a less volatile asset which can be liquidated to fund expenditures as needed.
- Diversification: Fyde enables Rocket Pool to diversify its treasury holdings, enhancing overall resilience and allowing the Rocket Pool to better grow across market cycles.
- Distribution: Tokens included in the Fyde Liquid Vault benefit from 35+ new direct trading pairs as tokens can be swapped without routing through WETH/ USDT - our vault becomes the cheapest place to execute swaps at scale
- No Lock-ups: Deposits are non-custodial and can be withdrawn instantly, providing flexibility to Rocket Pool.
Considerations:
- Limited Day 1 Liquidity: Fyde plans to implement LP token buyback programs to facilitate liquidity. Initial liquidity may be limited until these measures are enacted upon the FYDE issuance in Q2 2024.
- Execution Size: Due to Fyde’s recent launch, large deposit sizes will need to be scaled over time.
- Exchange Rate: Withdrawn amounts of RPL are subject to prevailing exchange rates and risk concentration targets within the vault.
- Short-Term Performance: TRSY is designed to capture broad market performance. As a result, there may be times when RPL outperforms TRSY. However, it’s impossible to predict when certain tokens will outperform - as a result, we believe broad market exposure is the best approach to prevent missing out on gains across the crypto ecosystem.
Comarketing:
Marketing options around the Fyde <> Rocket Pool collaboration:
- Twitter thread written by Fyde, reposted by Rocket Pool eg.
Silo: https (remove space) ://x.com/FydeTreasury/status/1750525354358509708?s=20
Alchemix: https (remove space) ://x.com/FydeTreasury/status/1729556049340842476?s=20
-
Create a unique Rocket Pool referral code, allowing Rocket Pool to accrue FYDE points from all deposits and receive FYDE airdrop.
-
Schedule AMA eg. SushiSwap: https (remove space) ://x.com/SushiSwap/status/1752070889456209951?s=20
Fees:
Fyde charges a 1% annual fee for the service, deducted continuously over time, ensuring a fair and transparent cost structure for Rocket Pool.
Feedback and Airdrop:
Rocket Pool core members and stakeholders are encouraged to provide feedback and engage directly with the Fyde team for deposit inquiries or airdrop details. All depositors who stake TRSY before TGE in Q2 24 will receive Fyde points and be eligible for the FYDE airdrop.
Future Collaboration:
Our team is primarily focused on ensuring our upcoming token launch is a success. In Q3 after TGE we have more capacity, we would like to open discussions around fixing a concentration target of rETH long term. This would mean we incentivize deposits as the vault grows, increasing rETH TVL and distribution into our clients’ treasuries.
Links:
Website: https://www.fyde.fi/
Twitter: https://twitter.com/FydeTreasury