We’ve been doing lots of work behind the scenes in hiring a new Master of Coin and organizing working capital for our market maker. As part of this, we’ve been looking to provide more transparency and see what the optimal usage of our Treasury is. We’d like to determine how to optimise yield on our Treasury holdings while ensuring the community remains informed of our holdings.
If you’d like to see an excellent example of how one of DeFi’s blue chips handle their Treasury transparency and diversification, please take a look at Yearn’s latest quarterly report
I’m busy building out some public facing reports which will allow even more transparency and an easier to understand presentation. Unfortunately PowerBI requires you to have a Microsoft Account. I’ll upgrade this in the future so it’s easier to access for all.
Please see the first version here:
A few things to note from the above graphic:
- As part of Pangolin receiving 2 million AVAX from the Avalanche Rush, we submitted a portion for the single side staking. This is currently returning 61%. The nice thing to take note of, is due to AVAX’s price appreciation, we now still have 2 million USD (at today’s prices) to issue to PNG holders
- We are earning approximately $43,804 per day in Swap Fees. This means that we may be able to fund our Market Maker exclusively from our swap fee’s revenue
- Our Treasury is very weighted towards PNG holdings. Almost 95% of our Treasury is in PNG
So what are the next steps?
I’d like us to start opening the conversation around diversifying our treasury. Our competitors have VC capital and this has allowed them to diversify into Stables, which allow them easier access to USD.
So how do other projects get funding. Most projects get VC funding, so let’s talk a bit about how it normally works. VC’s will approach a project and negotiate the terms. These terms are normally fairly simple. They consist of a lockup period for a discount. So let’s say we wanted $5 million in USD funding, at today’s PNG price ($2.28). They’d then negotiate, say a 20% discount for the allocation.
So let’s look at an example:
We would sell 2,631,578.95 PNG at $2.28 which works out to $6 million USD. However we’d offer a 20% discount in order for a 1 year lockup. This means that Pangolin would receive 5 million USD, whereas the investors would receive PNG at a 20% discount that are locked up for a year.
Now this can be a very controversial topic. So I’d love to hear from the community about what they think about in terms of attracting investment and OTC trades?
Please note There is potential that this investment/OTC trade can also be performed by a smart contract, thereby ensuring a more equitable opportunity.
The benefits of investment that I see are:
- Pangolin diversifies it’s treasury
- It ensures that Pangolin has access to stables in order to fund the long term day to day operations of Pangolin
- Puts us on an equal footing with our competitors
- Allows us to diversify our Treasury without having an impact on the price of PNG. This is due to the fact that we sell OTC so there is no negative impact on PNG’s price
As always we’d love to hear from the community. Please let us know what you’re thinking?