Olympus DAO establishes a new treasury strategy and framework

Olympus DAO establishes a new treasury strategy and framework

Olympus DAO has ratified a proposal seeking to establish a new framework for its DAO treasury. The recently passed OIP recommends a maximum protocol exposure of 60%, as well as an asset mix of 75% stable and 25 volatile asset combinations.

“OIP-137: Treasury Framework” was approved on Friday, after receiving more than 98% support from the voters. The new framework covers areas such as guiding policy, asset allocation process, strategic assets, and treasury composition.

The guiding policy for the new framework will prioritize conservative deployment instead of active and aggressive investments. It will also favor “organic third-party proposals to ensure the framework is compatible with an on-chained governed future.”

Currently, the DAO’s treasury is made up of about 79% stable assets and 21% volatile assets. Moving forward, the community will increase its exposure to volatile assets such as Ethereum to 25%. Along with this, the DAO will reduce its exposure to centralized stablecoins by more than 10% by increasing the cap for LUSD to 10%. Meanwhile, the treasury will go through rebalancing whenever weights deviate more than 10% from targets.

Still on the subject of treasury composition, the proposal recommended limiting deployments into illiquid venues to 7.5% of the treasury. Illiquid investments in this case are venues that have a maturity or lock-up period of more than 4 months. “In no event shall the treasury deploy into assets with maturity or lock-up greater than 1 year, with the exception of select strategic assets acquired via DAO swap or other similar arrangements, which today include FXS and JONES,” the proposal stated.

The proposal also recommends limiting the DAO’s maximum exposure to any protocol or project to 60% of the treasury.

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