PsyFi Community -
As dedicated members of the PsyFi DAO, we continually seek opportunities to optimize the financial efficacy of our organization and the utility of our assets. In light of this objective, I would like to present a proposal for your consideration.
The proposal recommends utilizing $100,000 from our USDC reserve, currently standing at approximately $650,000, to purchase SOL. Subsequently, this SOL would be staked using a liquid staking platform to generate yield. Below, I have outlined the potential benefits that support this proposal.
1. Staking Yield: By staking SOL, we can turn an otherwise idle asset into a productive one, generating a consistent stream of yield. Staking rewards are a proven way to earn passive income and, depending on network conditions, can provide significant ROI. Given our current capital allocation, this move could improve our yield earnings considerably.
2. Price Speculation: Currently, the crypto market is experiencing a deep bear phase, with SOL down by over 90% from its all-time high. As developers within the SOL ecosystem, aligning our treasury’s success to potentially benefit from any price appreciation of SOL is a strategic move. With the continued growth of applications on Solana, SOL’s demand and value are likely to rise. Owning and staking SOL enables us to capitalize on this prospective growth, independent of PsyFi’s expansion.
3. Community Engagement: Staking SOL via a liquid staking protocol like Marinade or Jito provides an avenue to deepen our engagement with the Solana community, potentially catalyzing new collaborations. A decision on which specific LSD platform to utilize will be determined if proposal is adopted.
4. Diversification: While our USDC holdings provide stability, diversification remains crucial to hedge against potential market volatility. The acquisition and staking of SOL would contribute another layer of diversification to our asset portfolio.
This proposal serves as an opportunity to actively manage our portfolio, bolstering our potential for yield generation and capital appreciation. However, it’s important to recognize the new risk factors introduced by this move, primarily exposure to SOL’s price volatility. Given that this proposed investment is only a fraction of our treasury’s total holdings (even less when including fiat held in banks), I believe these risks are adequately mitigated.
I encourage all members to share their views so we can collectively make an informed decision. Your thoughts are invaluable as we navigate our path forward.