Wonderland Treasury Report
November 2022 — Ruian, Financial Officer
This first report will give a glimpse into the treasury’s current positions, previous ones, and what happened in the market during November. This report will not provide projections or expected earnings from positions. DAOs have a difficult time providing both transparency and protection of their yields as is. Providing a curated list of our most profitable investments is not something we intend to do. This information is (mostly) available by simply checking Wonderland’s treasury wallets on Debank, Zapper or Apeboard. Let’s begin with market and Wonderland treasury related news.
FTX Collapse
FTX experienced a liquidity crisis and subsequent bank run in early November. This began wiping billions from the market. We had no exposure to FTX or subsidiaries. Our main concern was contagion spread to other funds, projects and platforms we may be using. The response from the treasury team with advice from our interim RO was to pull all unsecured lending from Clearpool, Ribbon Lend and TrueFi. We also learned of renBTC’s association with now bankrupt Alameda. We pulled our covered call options at expiry to eliminate risk.
There are a few governance updates that directly affected Wonderland’s treasury operations during the month of November. We held elections for a Risk Officer, enabled community rewards for proposed investments & strategies, and voted on a number of Treasury Management Proposals (TMPs).
Risk Officer Election
Wonderland held an election via snapshot vote to either officially install our interim RO (Sifu), or another candidate. Those running for the position had been advised to consult legal counsel before continuing through the process. Despite this, a community member (Tikkamasalas) won the RO vote and promptly stepped down on advice of counsel within 24 hours of taking on the position. This effectively fired our interim RO and left us with no replacement. Governance has rules that protect the treasury team from liability, but also hinder our ability to act without Treasury Management Proposals (TMPs). We expect to issue more TMPs for the DAO to approve until either an RO is hired or governance is changed.
Reference: Risk Officer Election (WIP #29) Snapshot Vote
Community Rewards Proposals
With the passing of WIP #27, members are now able to suggest strategies to deploy into. Accepted strategies are eligible to earn 3% of the profits of deployed funds! Open a ticket under the Community Proposals header on our Discord server and provide details of your strategy. We have accepted two strategies thus far- $100k into LUSD Chickenbonds and $4mm is being deployed into Wombex Finance’s stable farms.
Reference: Community Rewards Proposal (WIP #27) Governance Information
November TMPs
There were several TMPs in November. The objective, rationale, background and risks are easily viewable on Snapshot, so these details won’t be added here.
TMP 1: Approval to Increase Allocation Limit to UwULend to 16% of Treasury. This TMP did not pass mainly due to one very large holder. The holder sent a message via the snapshot with a question. The Treasury Operators (TOs) determined it was worth holding a new vote that addressed these concerns since the overwhelming majority of users supported the proposal.
TMP 2: Authorize the Treasury Council to Lock UwU-ETH LP Tokens. This TMP also did not pass for the same reason as above. More specifics were wanted from one large holder despite the community overwhelmingly supporting the proposal. The TOs decided to address these concerns in a new TMP.
TMP 1.1: Approval to Increase Exposure to UwULend Part 2. This proposal provided additional clarity on the TO’s intentions and risks for Wonderland. It was very narrowly voted down, largely due to the same holder.
TMP 2.1: Authorize Treasury Council to lock UwU-ETH LP Tokens Part 2. This proposal was meant to address some previously expressed concerns and again failed to pass for the same reason.
TMP 3: Deployment into Wombex Finance. This was our second accepted proposal from the community. This proposal passed voting handily. Wombex is a stable farm on BSC built on top of Wombat (a DEX on BSC).
TMP 4: Participate in the Interport Seed Round. This proposal was intended to invest in the private round (not seed) of Interport Finance. This proposal did not pass, due to the same reason as previous failed TMPs despite overwhelming support from the community. It’s important to note that the TOs, who are not affiliated in any way with Interport, suggested this investment wholly on their own. Some Wonderland team members have small (0.2%) allocations there to help out.
State of the Treasury
Click to view: Wonderland Treasury Spreadsheet
Financial Officer’s Note: ETH starting November before FTX collapse was $1600, BTC was $20,500. On December 1, ETH is sitting around $1280, with BTC at $17,000. That means the overall market retracted around 25% on ETH and 20% on BTC. Some of our positions are tied to ETH.
Total value starting November: $109,363,571
Total value ending November: $108,738,829
wMEMO backing price starting November: $28,655
wMEMO backing price ending November: $28,412
Month over month growth: -0.8%
Full treasury including all vested tokens: $131.88m
Expenses:
Team: 1 wMEMO (4 Officers @ 0.25 each) + 18,500 USDC (of 25,000 USDC budget) Community Allocation
Total: ~$47,000
