The Ethereum Name Service (ENS) is a distributed, open, and extensible naming system based on the Ethereum blockchain. ENS’s job is to map human-readable names to machine-readable identifiers such as Ethereum addresses, other cryptocurrency addresses, content hashes, and metadata.
On August 19, 2022, EP2.2.4 tested the community’s will to issue an RFP for an endowment fund manager and got passed in a Snapshot. This fund would be established from some combination of current treasury and ongoing revenue and would exist to insulate the DAO from market fluctuations, ensuring it can continue its core operations regardless of the wider economic outlook.
In line with the RFP, karpatkey has put forward a proposal in partnership with Steakhouse Financial. Steakhouse Financial will mainly overlook reporting, and karpatkey will take care of risk management, strategy design, and execution.
Aside from assembling a sound financial execution operation, it is of the utmost importance to provide transparency to the community. Under Steakhouse Financial’s seasoned crypto-native supervision, the proposed Finance Core Unit will post a weekly treasury development report and a monthly financial report on the ENS forum. The development of dashboards with live data on the operating performance of the protocol and traditional accounting metrics will increase community engagement and allow us to actively improve upon request.
The main advantage of this proposal vs carrying out transactions with a time lock to allow the DAO to reject them within a timeframe is that it doesn’t expose the treasury to front-running and it allows for dynamic strategy adjustments, improving capital efficiency and risk management.
The delegation posted in Snapshot would hold a broad list of protocol options without granular specification of parameters nor the exact moment when they’d be executed (although the level of detail could be increased according to ENS DAO’s preference). karpatkey would then operate within those boundaries without going through a DAO-wide vote on every trade.
Also, we put together a periodically reviewed emergency withdrawal protocol to be able to quickly de-risk/liquidate/swap all positions in the event of a market crash, hack, or any fortuitous event that requires stopping loss.
karpatkey’s professional treasury development consists of carrying out tailored strategies that vary weekly, adjusting to the constantly changing DeFi market.
After being shortlisted among a group of reputable competitors—karpatkey won one of the most popular voting processes in ENS’ history. Our active approach to non-custodial portfolio management through Safe + Zodiac pre-approved presets, along with our bet on conservative on-chain strategies, proved to be a solid alternative, aligned with ENS DAO’s risk profile.
During the voting discussion, many community members expressed their concerns about the treasury fund size, given its APY upside.
The newly formed ENS Finance Core Unit comprised of members of ENS, karpatkey and Steakhouse Financial quickly addressed the community’s concerns, having since put a proposal for the initial conditions and required steps to kickstart the treasury composition.
