Sushi Treasury Diversification

General Discussion
1

Hey guys,

Cofounder of SIZE here. SIZE is an on-chain OTC protocol — treasuries can diversify & sell tokens without slippage or market impact. We recently published a blog on treasury management, encouraging DAOs to diversify. This is especially important for longstanding protocols like Sushi that are staples in the ecosystem, with plans of longevity.

Over the last 12 months, Sushi’s treasury has roughly halved (~$50M to ~$26M). While treasury diversification should be an ongoing conversation, it’s increasingly important to prioritize after the recent USDC depeg as well as current uncertainty across global markets.

Currently, Sushi’s treasury holds ~10% in stables. The price of $SUSHI is obviously low compared to ATH’s (~$1.09 today). That said, it is north of the price over the Fall during Sushi’s OTC with Goldentree.

Over the last few quarters, the price of Sushi has moved between ~$.90 and ~$1.50. It’s obviously impossible to time the markets and hedging to avoid downside is paramount. If SUSHI had sold $500k quarterly over the last few quarters, the average sell price would be on par with current price to ~$1.10.

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We’d suggest moving towards 20-25% into stables which means selling ~$2-3M. Selling that amount in 2-3 tranches gives the community a chance to provide feedback on approach as well as obviously DCA’ing the price etc. Curious about the community’s feedback on a more sustainable and proactive treasury approach by moving towards:

  • Adding blue chips into the mix to further hedge treasury, upside exposure.
  • Selling on a quarterly basis versus annually.

Thanks!

Nic + Size Team

2

I support the concept of treasury diversification but not as outlined. There should be quantitative research around what assets and weights the treasury should hold and the management of the assets may require a 3rd party, potentially similar to the set up ENS and Gnosis DAO have.

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3

supporting @MattOnChain. This should be considered wisely. Which tokens we will held? Their proportions and more.

I definetly supporting diversfying the treassuary but not this way. I’m not sure timing is also gud btw. There are plenty things to do on development and treasuarry side.

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Totally agree. An independent 3rd party, or even the DAO figuring it out. Just wanted to get the conversation started! What metrics would you look at? Any ideas on best approach?

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+1 with you and Matt.

Any suggestions or things you’d want to see?

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Agree that diversification is needed, though we are far from the top. As I wrote in the Web3 Treasury Framework the only logical risk-reward strategy in current market conditions are the short-term US T-Bills, and potential small allocations for long-term investments. Laddered strategy with maturities every month or every two would yield about 480k USD per year of risk-free return on 10M USD investment.

For the T-Bills exposure there are a few options (existing stablecoins can be used as well):

  • T-Bills ETFs
  • T-Bills directly
  • On-chain T-Bills solutions such as OpenEden

I can elaborate on this if relevant.

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