Hey, my name is Marc. I am from Index. Excited to be here! Thank you for the thoughtful feedback from all viewpoints.

As you may know Index is behind the DPI component of BED and helps facilitate the Bankless Vision on BED.

Some great points have already been made on the diversification benefits of BED and the marketing potential of the partnership with Bankless. Also, this would further the relationship with the Index Cooperative.

Index and Uniswap already have a great relationship as UNI is the largest holding in DPI and Uniswap V3 is our primary liquidity provider for our strategies. In TVL of Uniswap pools, ETH2x-FLI is 16th and DPI is 37th. Also, most of the rebalancing function of BED and our other tokens like DPI or MVI use Uniswap.

Index is one of the largest and most active communities in the ecosystem. We are excited at the potential prospect of strengthening our ties through BED as well as leveraging our expertise in other treasury areas.

I’ll try to address a couple of your excellent points as best I can. It looks like the main three are: Correlation, implementation (selling/buying), and benefit to the community.

Correlation/Diversification:

A point was made “Diversification…(is) a gargantuan task.”

It's something that as we speak to more and more treasuries, we are learning just how big a task it is. These conversations will be the foundations of building stronger protocols and a healthy environment for all.

Obviously – UNI is highly Correlated to ETH, WBTC and DPI. But that’s a good thing.

We believe, as I think you do, that Web3 is just now hitting its stride. The aim is not to diversify those returns away with true “non-correlating assets.” The goal is to provide the Uniswap treasury with broader diversification, non-native holdings that can be used as needed, and participation in other protocols.

Broader diversification comes from two areas.

1. Exposure to WBTC – Uniswap is heavily dependent on revenue generated from the Ethereum ecosystem. Exposure to an alternative protocol could limit volatility if there was an Ethereum specific negative event.

2. Exposure to ETH and DPI – Like many treasuries Uniswap is largely composed of native tokens. Replacing a small portion of UNI with ETH and DPI could be a benefit in the event of a Uniswap specific downturn. However, if that unlikely event never occurs, the correlation to UNI pays off because you continue to have a growth asset that performs like UNI.
   It was mentioned in one of your responses about purchasing (addressed later) that if the treasury had to:

“SELL 1M worth of UNI tokens. This means that the token itself will lose value - the entire treasury will lose value as a direct result of the action. Despite the treasury being large, the liquidity is not equal. 1-5M purchases can have more price impact than you think.”

This highlights a need for all treasuries. What would be sold if funds were needed quickly? If Uniswap had an issue and needed to sell treasury funds, its likely UNI is already down. A further large sale from the treasury could potentially have a large and likely negative impact.

Think of BED as your UNI proxy token that can be the first thing sold when needed. Its underlying components have deep liquidity that can be accessed with ease.

Lastly, it was brought up if Uniswap would be better off “Run its own VC team using the funds from the treasury and participate in seed rounds of other upcoming protocols” The DPI component allows you to participate in 17 protocols. Some “established” (in crypto time) and some more up and coming, curated by the DeFi authority Defi Pulse.

Implementation:

The concern about price impact to UNI to sell and buy BED is a common one – even if the benefits make sense, how do you limit token price impact? This is also a benefit of partnering with Index. We have accomplished several large buys and have the experience and connections to assist in this process. If we get this process further down the line. We will make sure to have an implementation process that will cause minimal impact.

In the past we have used Bonding Curves, used our market-making partners, direct swaps, paired with outside investors, or have done smaller systematic buys.

What’s most important is to determine if diversification is a good idea, and if so how much would be meaningful to your community to diversify the treasury.

From there, we will work together to find the best way to implement. We would only go ahead once we have a solution to your wanted amount that would have minimal impact on price.

Let me know if I can answer any questions, here to help!! Looking forward to a growing partnership.

Hi, I'm quite late on this one, but will add my thoughts anyway:

While I think diversifying the treasury is essential, I have 2 issues with this proposal:

1. I believe a diversification should include a significant proportion of some stablecoin.

2. I don't understand the point of the BED Index: Why would you want an index that constantly rebalances the weights of multiple assets (e.g. ETH and BTC)? This is the same as having a liquidity position in the Uniswap v2 ETH-BTC pool, but instead of earning trading fees you need to pay them (each time you rebalance). So you get the downside ("impermanent loss") without the upside (fees).

Showing the support to BanklessDAO is an important move for Uniswap because they are inspiring more participation in DeFi space which in turn, turns into more Uniswap users. Pie gets bigger. :pie: :chart_with_upwards_trend:

Another stat, according to Forefront... $BANK is the most widely held social token with over 3,955 holders

If the numbers on the marketing stats are not impressive, you have to consider the quality versus quantity. Bankless people are passionate / highly targeted to groups that are engaged with already in DeFi. Uniswap should keep a strong connection with Bankless.

My additional suggestion would be to add to this a commitment that BanklessDAO in collaboration with Uniswap could come up a solid training program on how to use Uniswap V3.

Treasury Diversification can provide more resilience to the protocol. Not that we should pursue diversification mindlessly.

But if we thought about the history of the ethereum foundation. If they diversified their portfolio at the start, (instead of only holding ETH and running out of ETH), they might have been able to achieve their goals earlier.

In any case, indeed the treasury is for the purpose of governance, but not only that. We have shown that the Uni grants can be a force to be reckoned with.

True, UNI is generally correlated with the underlying assets in the BED Index.

But diversifying your treasury is like adding ballast to your ship. You have your propulsion systems -- let's say the nuclear reactor that powers the aircraft carrier -- and you have your ballast that keeps the ship upright. Your propulsion systems are all the creative energy that goes into making UNI great. The ballast in the hull is made up of the admittedly boring strategic governance moves you make to create a bulwork of defenses, such as diversifying the treasury.

If UNI somehow tanks, even for a day, the ballast you've created through a diversified treasury will help keep the ship upright in the storm. This is what I would call the defensive motivation, which is clearlly wise.

Now, BED is still small, so we can't provide you with truly enterprise class ballast systems yet. We're working on that.

Which brings me to point #2. Your supoprt of the BED Index allows it to grow. As BED grows, so does our ability to provide UNI with a much deeper, and potentially more diversified, pool of capital and assets as ballast for your ship. This is what I would call the solidarity motivation, which is also highly valid.

Finally, Airbayer is right about the vlaue we can bring as a trusted marketing and media org. I believe this is a very real near-term value that shouldn't be overlooked.

Back to the correlation question: by choosing the BED as part of its diversification strategy, UNI would be banking some coin against the chance that there may be a disruption in the marketplace in UNI's disfavor. IMO it's a wise call, and in this case a pretty small allocation.

I do believe buying the bed index is a further way of signaling support for bankless and now is the right time to invest in the bed index. Bankless dao's only benefit is a streaming of .125% annualized over a year. As an example lets say uniswap buys 1 million usd worth of bed index, the revenue going to bankless is $1,250 over a span of a year.

Buying the baskets of the index like a balancer pool is a less feasible option. For 2 main reasons:

1. Trading fees
2. Manual rebalancing - the BED Index is rebalanced monthly. An excellent post done by crypto texan from index coop takes an in depth look as to why balancer is less effective compared to the bed Index link:https://twitter.com/Crypto_Texan/status/1442280400559095818?s=20

For the marketing campaign aspect yes, Uniswap is the largest defi protocol out there so we want drive more consumers to the defi community. Community engagement does increase for a protocol if the bed index is purchased. UMA Protocol whom purchase 1m dollars worth of the bed index back in September have mentioned a significant increase in community engagement.

Marketing Campaign detail listed below:

Substack: Subscribers: 6,081 Average total views Rollup: 4,300-4,600 Link click rate: 1-2% average Medium articles: Average views: 300-600 30d average views: 122/day Twitter: Followers: 14,900 Impressions: 5,000-13,000 Additional Stats can also be accessed here as well in the summarized document: it can be accessed through here the stats BED Campaign summary - Google Docs

Newsletter preview is included here:Bankless DAO Weekly Rollup #19 | September 10 - Bankless DAO

Podcast episode: Bankless DAO cannot determine who is available to go on the Bankless HQ podcast however the DAO can have uniswap on our crypto sapiens podcast which is on spotify and twitter spaces!

I really appreciate your feedback! Airbayer

Hey, my name is Marc. I am from Index. Excited to be here! Thank you for the thoughtful feedback.

As you may know Index is behind the DPI component of BED and helps facilitate the Bankless Vision on BED.

Some great points have already been made on the diversification benefits of BED and the marketing potential of the partnership with Bankless. Also, this would further the relationship with Index.

Index and Uniswap already have a great relationship as UNI is the largest holding in DPI and Uniswap V3 is our primary liquidity provider for our strategies. In TVL of Uniswap pools, ETH2x-FLI is 16th and DPI is 37th.

Index is one of the largest and most active communities in the ecosystem. We are excited at the potential prospect of strengthening our ties through BED as well as leveraging our expertise in other treasury areas.

I’ll try to address a couple of your excellent points as best I can. It looks like the main three are: Correlation, implementation (selling/buying), and benefit to the community.

Correlation/Diversification:

You make a great point that “Diversification…(is) a gargantuous task.”

It's something that as we speak to more and more treasuries, we are learning just how big a task it is. These conversations will be the foundations of building stronger protocols and a healthy environment for all.

Obviously – UNI is highly Correlated to ETH, WBTC and DPI. But that’s a good thing.

We believe, as I think you do, that Web3 is just now hitting its stride. The aim is not to diversify those returns away with true “non-correlating assets.” The goal is to provide the Uniswap treasury with broader diversification, non-native holdings that can be used as needed, and participation in other protocols.

Broader diversification comes from two areas.

1. Exposure to WBTC – Uniswap is heavily dependent on revenue generated from the Ethereum ecosystem. Exposure to an alternative protocol could limit volatility if there was an Ethereum specific negative event.

2. Exposure to ETH and DPI – Like many treasuries Uniswap is largely composed of native tokens. Replacing a small portion of UNI with ETH and DPI could be a benefit in the event of a Uniswap specific downturn. However, if that unlikely event never occurs, the correlation to UNI pays off because you continue to have a growth asset that performs like UNI.
   It was mentioned in one of your responses about purchasing (addressed later) that if the treasury had to:

“SELL 1M worth of UNI tokens. This means that the token itself will lose value - the entire treasury will lose value as a direct result of the action. Despite the treasury being large, the liquidity is not equal. 1-5M purchases can have more price impact than you think.”

This highlights a need for all treasuries. What would be sold if funds were needed quickly? If Uniswap had an issue and needed to sell treasury funds, its likely UNI is already down. A further large sale from the treasury could potentially have a large and likely negative impact.

Think of BED as your UNI proxy token that can be the first thing sold when needed. And feel free to sell when needed! It won’t hurt our feelings, or the price. BED is new and as such currently has limited liquidity, however, like DPI, it can be broken down to its base components which have deep liquidity and can be sold with minimal slippage.

Lastly, it was brought up if Uniswap would be better off “Run its own VC team using the funds from the treasury and participate in seed rounds of other upcoming protocols” The DPI component allows you to participate in 17 protocols. Some “established” (in crypto time) and some more up and coming, all curated by the DeFi authority Defi Pulse.

Implementation:

The concern about price impact to UNI to sell and buy BED is a common one – even if the benefits make sense, how do you limit token price impact? This is also a benefit of partnering with Index. We have accomplished several large buys and have the experience and connections to assist in this process. If we get this process further down the line. We will make sure to have an implementation process that will cause minimal impact.

In the past we have done Bonded Curves (requires Chainlink), used our market-making partners, direct swaps, paired with outside investors, or have done smaller systematic buys.

What I hope the outcome of this dialog is to determine if diversification is wise, and if so, how much would be meaningful to your community?

From there, we will work together to find the best way to implement. We would only go ahead once we have a solution to your wanted amount that would have minimal impact on UNI.

Lets continue to conversation, please let us know how we can help!

Hey, my name is Marc. I am from Index. Excited to be here! Thank you for the thoughtful feedback from all viewpoints.

As you may know Index is behind the DPI component of BED and helps facilitate the Bankless Vision on BED.

Some great points have already been made on the diversification benefits of BED and the marketing potential of the partnership with Bankless. Also, this would further the relationship with the Index Cooperative.

Index and Uniswap already have a great relationship as UNI is the largest holding in DPI and Uniswap V3 is our primary liquidity provider for our strategies. In TVL of Uniswap pools, ETH2x-FLI is 16th and DPI is 37th. Also, most of the rebalancing function of BED and our other tokens like DPI or MVI use Uniswap.

Index is one of the largest and most active communities in the ecosystem. We are excited at the potential prospect of strengthening our ties through BED as well as leveraging our expertise in other treasury areas.

I’ll try to address a couple of your excellent points as best I can. It looks like the main three are: Correlation, implementation (selling/buying), and benefit to the community.

Correlation/Diversification:

A point was made “Diversification…(is) a gargantuan task.”

It's something that as we speak to more and more treasuries, we are learning just how big a task it is. These conversations will be the foundations of building stronger protocols and a healthy environment for all.

Obviously – UNI is highly Correlated to ETH, WBTC and DPI. But that’s a good thing.

We believe, as I think you do, that Web3 is just now hitting its stride. The aim is not to diversify those returns away with true “non-correlating assets.” The goal is to provide the Uniswap treasury with broader diversification, non-native holdings that can be used as needed, and participation in other protocols.

Broader diversification comes from two areas.

1. Exposure to WBTC – Uniswap is heavily dependent on revenue generated from the Ethereum ecosystem. Exposure to an alternative protocol could limit volatility if there was an Ethereum specific negative event.

2. Exposure to ETH and DPI – Like many treasuries Uniswap is largely composed of native tokens. Replacing a small portion of UNI with ETH and DPI could be a benefit in the event of a Uniswap specific downturn. However, if that unlikely event never occurs, the correlation to UNI pays off because you continue to have a growth asset that performs like UNI.
   It was mentioned in one of your responses about purchasing (addressed later) that if the treasury had to:

“SELL 1M worth of UNI tokens. This means that the token itself will lose value - the entire treasury will lose value as a direct result of the action. Despite the treasury being large, the liquidity is not equal. 1-5M purchases can have more price impact than you think.”

This highlights a need for all treasuries. What would be sold if funds were needed quickly? If Uniswap had an issue and needed to sell treasury funds, its likely UNI is already down. A further large sale from the treasury could potentially have a large and likely negative impact.

Think of BED as your UNI proxy token that can be the first thing sold when needed. Its underlying components have deep liquidity that can be accessed with ease.

Lastly, it was brought up if Uniswap would be better off “Run its own VC team using the funds from the treasury and participate in seed rounds of other upcoming protocols” The DPI component allows you to participate in 17 protocols. Some “established” (in crypto time) and some more up and coming, curated by the DeFi authority Defi Pulse.

Implementation:

The concern about price impact to UNI to sell and buy BED is a common one – even if the benefits make sense, how do you limit token price impact? This is also a benefit of partnering with Index. We have accomplished several large buys and have the experience and connections to assist in this process. If we get this process further down the line. We will make sure to have an implementation process that will cause minimal impact.

In the past we have used Bonding Curves, used our market-making partners, direct swaps, paired with outside investors, or have done smaller systematic buys.

What’s most important is to determine if diversification is a good idea, and if so how much would be meaningful to your community to diversify the treasury.

From there, we will work together to find the best way to implement. We would only go ahead once we have a solution to your wanted amount that would have minimal impact on price.

Let me know if I can answer any questions, here to help!! Looking forward to a growing partnership.

Hi, I'm quite late on this one, but will add my thoughts anyway:

While I think diversifying the treasury is essential, I have 2 issues with this proposal:

1. I believe a diversification should include a significant proportion of some stablecoin.

2. I don't understand the point of the BED Index: Why would you want an index that constantly rebalances the weights of multiple assets (e.g. ETH and BTC)? This is the same as having a liquidity position in the Uniswap v2 ETH-BTC pool, but instead of earning trading fees you need to pay them (each time you rebalance). So you get the downside ("impermanent loss") without the upside (fees).

Showing the support to BanklessDAO is an important move for Uniswap because they are inspiring more participation in DeFi space which in turn, turns into more Uniswap users. Pie gets bigger. :pie: :chart_with_upwards_trend:

Another stat, according to Forefront... $BANK is the most widely held social token with over 3,955 holders

If the numbers on the marketing stats are not impressive, you have to consider the quality versus quantity. Bankless people are passionate / highly targeted to groups that are engaged with already in DeFi. Uniswap should keep a strong connection with Bankless.

My additional suggestion would be to add to this a commitment that BanklessDAO in collaboration with Uniswap could come up a solid training program on how to use Uniswap V3.

Treasury Diversification can provide more resilience to the protocol. Not that we should pursue diversification mindlessly.

But if we thought about the history of the ethereum foundation. If they diversified their portfolio at the start, (instead of only holding ETH and running out of ETH), they might have been able to achieve their goals earlier.

In any case, indeed the treasury is for the purpose of governance, but not only that. We have shown that the Uni grants can be a force to be reckoned with.

True, UNI is generally correlated with the underlying assets in the BED Index.

But diversifying your treasury is like adding ballast to your ship. You have your propulsion systems -- let's say the nuclear reactor that powers the aircraft carrier -- and you have your ballast that keeps the ship upright. Your propulsion systems are all the creative energy that goes into making UNI great. The ballast in the hull is made up of the admittedly boring strategic governance moves you make to create a bulwork of defenses, such as diversifying the treasury.

If UNI somehow tanks, even for a day, the ballast you've created through a diversified treasury will help keep the ship upright in the storm. This is what I would call the defensive motivation, which is clearlly wise.

Now, BED is still small, so we can't provide you with truly enterprise class ballast systems yet. We're working on that.

Which brings me to point #2. Your supoprt of the BED Index allows it to grow. As BED grows, so does our ability to provide UNI with a much deeper, and potentially more diversified, pool of capital and assets as ballast for your ship. This is what I would call the solidarity motivation, which is also highly valid.

Finally, Airbayer is right about the vlaue we can bring as a trusted marketing and media org. I believe this is a very real near-term value that shouldn't be overlooked.

Back to the correlation question: by choosing the BED as part of its diversification strategy, UNI would be banking some coin against the chance that there may be a disruption in the marketplace in UNI's disfavor. IMO it's a wise call, and in this case a pretty small allocation.

I do believe buying the bed index is a further way of signaling support for bankless and now is the right time to invest in the bed index. Bankless dao's only benefit is a streaming of .125% annualized over a year. As an example lets say uniswap buys 1 million usd worth of bed index, the revenue going to bankless is $1,250 over a span of a year.

Buying the baskets of the index like a balancer pool is a less feasible option. For 2 main reasons:

1. Trading fees
2. Manual rebalancing - the BED Index is rebalanced monthly. An excellent post done by crypto texan from index coop takes an in depth look as to why balancer is less effective compared to the bed Index link:https://twitter.com/Crypto_Texan/status/1442280400559095818?s=20

For the marketing campaign aspect yes, Uniswap is the largest defi protocol out there so we want drive more consumers to the defi community. Community engagement does increase for a protocol if the bed index is purchased. UMA Protocol whom purchase 1m dollars worth of the bed index back in September have mentioned a significant increase in community engagement.

Marketing Campaign detail listed below:

Substack: Subscribers: 6,081 Average total views Rollup: 4,300-4,600 Link click rate: 1-2% average Medium articles: Average views: 300-600 30d average views: 122/day Twitter: Followers: 14,900 Impressions: 5,000-13,000 Additional Stats can also be accessed here as well in the summarized document: it can be accessed through here the stats BED Campaign summary - Google Docs

Newsletter preview is included here:Bankless DAO Weekly Rollup #19 | September 10 - Bankless DAO

Podcast episode: Bankless DAO cannot determine who is available to go on the Bankless HQ podcast however the DAO can have uniswap on our crypto sapiens podcast which is on spotify and twitter spaces!

I really appreciate your feedback! Airbayer

Hey, my name is Marc. I am from Index. Excited to be here! Thank you for the thoughtful feedback.

As you may know Index is behind the DPI component of BED and helps facilitate the Bankless Vision on BED.

Some great points have already been made on the diversification benefits of BED and the marketing potential of the partnership with Bankless. Also, this would further the relationship with Index.

Index and Uniswap already have a great relationship as UNI is the largest holding in DPI and Uniswap V3 is our primary liquidity provider for our strategies. In TVL of Uniswap pools, ETH2x-FLI is 16th and DPI is 37th.

Index is one of the largest and most active communities in the ecosystem. We are excited at the potential prospect of strengthening our ties through BED as well as leveraging our expertise in other treasury areas.

I’ll try to address a couple of your excellent points as best I can. It looks like the main three are: Correlation, implementation (selling/buying), and benefit to the community.

Correlation/Diversification:

You make a great point that “Diversification…(is) a gargantuous task.”

It's something that as we speak to more and more treasuries, we are learning just how big a task it is. These conversations will be the foundations of building stronger protocols and a healthy environment for all.

Obviously – UNI is highly Correlated to ETH, WBTC and DPI. But that’s a good thing.

We believe, as I think you do, that Web3 is just now hitting its stride. The aim is not to diversify those returns away with true “non-correlating assets.” The goal is to provide the Uniswap treasury with broader diversification, non-native holdings that can be used as needed, and participation in other protocols.

Broader diversification comes from two areas.

1. Exposure to WBTC – Uniswap is heavily dependent on revenue generated from the Ethereum ecosystem. Exposure to an alternative protocol could limit volatility if there was an Ethereum specific negative event.

2. Exposure to ETH and DPI – Like many treasuries Uniswap is largely composed of native tokens. Replacing a small portion of UNI with ETH and DPI could be a benefit in the event of a Uniswap specific downturn. However, if that unlikely event never occurs, the correlation to UNI pays off because you continue to have a growth asset that performs like UNI.
   It was mentioned in one of your responses about purchasing (addressed later) that if the treasury had to:

“SELL 1M worth of UNI tokens. This means that the token itself will lose value - the entire treasury will lose value as a direct result of the action. Despite the treasury being large, the liquidity is not equal. 1-5M purchases can have more price impact than you think.”

This highlights a need for all treasuries. What would be sold if funds were needed quickly? If Uniswap had an issue and needed to sell treasury funds, its likely UNI is already down. A further large sale from the treasury could potentially have a large and likely negative impact.

Think of BED as your UNI proxy token that can be the first thing sold when needed. And feel free to sell when needed! It won’t hurt our feelings, or the price. BED is new and as such currently has limited liquidity, however, like DPI, it can be broken down to its base components which have deep liquidity and can be sold with minimal slippage.

Lastly, it was brought up if Uniswap would be better off “Run its own VC team using the funds from the treasury and participate in seed rounds of other upcoming protocols” The DPI component allows you to participate in 17 protocols. Some “established” (in crypto time) and some more up and coming, all curated by the DeFi authority Defi Pulse.

Implementation:

The concern about price impact to UNI to sell and buy BED is a common one – even if the benefits make sense, how do you limit token price impact? This is also a benefit of partnering with Index. We have accomplished several large buys and have the experience and connections to assist in this process. If we get this process further down the line. We will make sure to have an implementation process that will cause minimal impact.

In the past we have done Bonded Curves (requires Chainlink), used our market-making partners, direct swaps, paired with outside investors, or have done smaller systematic buys.

What I hope the outcome of this dialog is to determine if diversification is wise, and if so, how much would be meaningful to your community?

From there, we will work together to find the best way to implement. We would only go ahead once we have a solution to your wanted amount that would have minimal impact on UNI.

Lets continue to conversation, please let us know how we can help!

Its not a good thing that they are all highly correlated. It beats the purpose of diversification. If you diversify into highly correlated assets, your diversification impact is low at best; however, you DID sell your own token it weakening it further. That´s why diversifying into non-correlated assets should be the primary task...Otherwise, its borderline pointless and harmful. We can see it live in this year´s fall of the "balanced portfolio" which went from a negative correlation to a highly positive correlation. The result was that the returns went negative.

Diversification into the majors and the DPI is almost bound to underperform due to the costs of selling your own token, having high correlation, and incurring costs.

Anybody with basic statistics knowledge knows that this is not a good idea.

You said yourself the web3 was just hitting its stride. Why should not the UNI Treasury form a VC team to achieve diversification? Its true, its not correlated, and the returns are highly above what the majors could ever give. The failure rate is higher, but it makes more sense for the alllocation of 1-5M USD.

Its nice that the DPI has some, but of course, this is not enough on its own and could never compete against full blown allocated seed rounds. The opportunity costs of buying majors are just too high mainly this late in the cycle.

The DeFi Fund deal was OTC btw with minimal price impact yet it moved the token down. It´s psychology....people will sell it if they know somebody else is going to sell it before them. Now, there is no way to prevent it from happening if such a highly inefficient proposal ever saw the light of day. Its human behavior.

Overall, this proposal´s spirit is nice, but it works only in a dreamworld. In reality, its bound to do more harm than good. Like I have said, diversification is a major major task. You need to have an edge to achieve the desired results. There is a reason why many funds in both TradFi and Crypto world fail at it. This is just an unnecessary middleman trying to get you to sell your own token and buy into majors for no reason at all. All the shill posts do not help either. It´s almost as if you guys came here solely to troll and ask for money.

I am an open minded person though. Show me the data proving me wrong stating that majors and DPI would meaningfully outperform the alternatives (a Uniswap VC team) and I will change my mind. Until then:

I will vote NO on this proposal.

No, I do not because this is provably not insurance.

Diversification is not an easy task in the crypto world and should not be treated lightly. Its a gargantuous task which requires research to see what is truly worth the opportunity cost. I do not believe the answer is as simple as divesting into the majors + DeFi index.

Let´s take a theoretical scenario in regards to the opportunity cost:

Imagine the UNI treasury has two options to choose from when it comes down to spending 1-5M worth of UNI tokens - either diversify into the majors + DeFi Index

or

Run its own VC team using the funds from the treasury and participate in seed rounds of other upcoming protocols.

Whats better for the UNI token holders, Uniswap protocol, and the other stakeholders?

This is just a trivial example of illustrating opportunity costs. Both represent a divestment from the native token in the treasury into other coins/tokens. Both have price implications for the token itself. Marketing is also included in both of them. Do you see what Im trying to say? It´s not a simple problem to solve.

Now, Im not saying the idea to diversify is wrong. It´s quite needed in fact, but it needs to be true diversification. Something which is not correlated to the UNI token, is worth the price impact, and has a marketing potential as well. Despite the best efforts, and I DO believe Airbayer has honest intentions, this proposal arguably ticks only one of the things on the list.

No, Im referring to the "amount spent" as the purchase amount - purchasing 1M of something means we will have to SELL 1M worth of UNI tokens. This means that the token itself will lose value - the entire treasury will lose value as a direct result of the action.

Despite the treasury being large, the liquidity is not equal. 1-5M purchases can have more price impact than you think.

We have seen it with the DeFi Fund when 15M worth of UNI was sold....There are consequences to such actions. Would it be worth the cost? Most likely not in my opinion.

You have good points, but...Im not convinced its worth the effort truly. If the UNI treasury would diversify, it would make more sense to diversify into tokens which are not correlated at all.

Like @Naught said, the UNI token is a fleeting hull as of now as it is. Selling it further down the line just to achieve little (or next to none) diversification/marketing effect is probably not the most efficient use of 1-5 million USD in UNI tokens.

I remain unconvinced.

If the whole purpose is marketing, then I´d advise doing 100K worth of buying and market it around as much as possible.

Its not a good thing that they are all highly correlated. It beats the purpose of diversification. If you diversify into highly correlated assets, your diversification impact is low at best; however, you DID sell your own token it weakening it further. That´s why diversifying into non-correlated assets should be the primary task...Otherwise, its borderline pointless and harmful. We can see it live in this year´s fall of the "balanced portfolio" which went from a negative correlation to a highly positive correlation. The result was that the returns went negative.

Diversification into the majors and the DPI is almost bound to underperform due to the costs of selling your own token, having high correlation, and incurring costs.

Anybody with basic statistics knowledge knows that this is not a good idea.

You said yourself the web3 was just hitting its stride. Why should not the UNI Treasury form a VC team to achieve diversification? Its true, its not correlated, and the returns are highly above what the majors could ever give. The failure rate is higher, but it makes more sense for the alllocation of 1-5M USD.

Its nice that the DPI has some, but of course, this is not enough on its own and could never compete against full blown allocated seed rounds. The opportunity costs of buying majors are just too high mainly this late in the cycle.

The DeFi Fund deal was OTC btw with minimal price impact yet it moved the token down. It´s psychology....people will sell it if they know somebody else is going to sell it before them. Now, there is no way to prevent it from happening if such a highly inefficient proposal ever saw the light of day. Its human behavior.

Overall, this proposal´s spirit is nice, but it works only in a dreamworld. In reality, its bound to do more harm than good. Like I have said, diversification is a major major task. You need to have an edge to achieve the desired results. There is a reason why many funds in both TradFi and Crypto world fail at it. This is just an unnecessary middleman trying to get you to sell your own token and buy into majors for no reason at all. All the shill posts do not help either. It´s almost as if you guys came here solely to troll and ask for money.

I am an open minded person though. Show me the data proving me wrong stating that majors and DPI would meaningfully outperform the alternatives (a Uniswap VC team) and I will change my mind. Until then:

I will vote NO on this proposal.

No, I do not because this is provably not insurance.

Diversification is not an easy task in the crypto world and should not be treated lightly. Its a gargantuous task which requires research to see what is truly worth the opportunity cost. I do not believe the answer is as simple as divesting into the majors + DeFi index.

Let´s take a theoretical scenario in regards to the opportunity cost:

Imagine the UNI treasury has two options to choose from when it comes down to spending 1-5M worth of UNI tokens - either diversify into the majors + DeFi Index

or

Run its own VC team using the funds from the treasury and participate in seed rounds of other upcoming protocols.

Whats better for the UNI token holders, Uniswap protocol, and the other stakeholders?

This is just a trivial example of illustrating opportunity costs. Both represent a divestment from the native token in the treasury into other coins/tokens. Both have price implications for the token itself. Marketing is also included in both of them. Do you see what Im trying to say? It´s not a simple problem to solve.

Now, Im not saying the idea to diversify is wrong. It´s quite needed in fact, but it needs to be true diversification. Something which is not correlated to the UNI token, is worth the price impact, and has a marketing potential as well. Despite the best efforts, and I DO believe Airbayer has honest intentions, this proposal arguably ticks only one of the things on the list.

No, Im referring to the "amount spent" as the purchase amount - purchasing 1M of something means we will have to SELL 1M worth of UNI tokens. This means that the token itself will lose value - the entire treasury will lose value as a direct result of the action.

Despite the treasury being large, the liquidity is not equal. 1-5M purchases can have more price impact than you think.

We have seen it with the DeFi Fund when 15M worth of UNI was sold....There are consequences to such actions. Would it be worth the cost? Most likely not in my opinion.

You have good points, but...Im not convinced its worth the effort truly. If the UNI treasury would diversify, it would make more sense to diversify into tokens which are not correlated at all.

Like @Naught said, the UNI token is a fleeting hull as of now as it is. Selling it further down the line just to achieve little (or next to none) diversification/marketing effect is probably not the most efficient use of 1-5 million USD in UNI tokens.

I remain unconvinced.

If the whole purpose is marketing, then I´d advise doing 100K worth of buying and market it around as much as possible.