[TEMP CHECK] Aave Treasury Proposal for RWA Allocation

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Khan proposed allocating a portion of Aave Treasury's stablecoin holdings to a low-risk Real World Asset (RWA) investment via Centrifuge Prime, aiming to earn yield on idle stablecoins and build familiarity with the RWA market. The community generally supports the proposal, with suggestions for long-term strategies, partnerships with RWA providers, and creating a legal conduit for the Aave DAO to invest in RWAs.

The discussion revolves around a proposal by Khan to allocate a portion of the Aave Treasury's stablecoin holdings to a low-risk Real World Asset (RWA) investment through Centrifuge Prime. The proposal aims to earn yield on idle stablecoins, establish long-term RWA infrastructure, and build internal familiarity with this market. The initial investment would be 1M USDC into short-duration US treasuries, with a target allocation of up to 20% of stablecoin holdings. The proposal also includes the setup of a legal structure, integrated with DAO governance, capable of investing and holding assets on behalf of the DAO.

The community generally supports the proposal, with users like Fig, MarcZeller, Benhoneill, and Dsshap providing constructive feedback and suggestions. MarcZeller and Benhoneill urge the DAO to think more long-term about strategies and partnerships with RWA providers. Dsshap suggests that Aave should capitalize on the current climate to earn interest on idle assets (stable coins) using US Treasuries, which they described as a nearly risk-free yielding asset.

Hazbobo suggests that the Aave DAO should produce an RFP around RWAs due to the interest from multiple parties in providing RWA allocation services. They proposed a process where the DAO sets aside a specific amount for RWA allocations and allows anyone to apply to manage that money for a certain period.

Eli Cohen, General Counsel to Centrifuge, explains that the foundation company would be set up without a shareholder/member and with a nominee director who can only act upon the direction of the DAO. He also clarifies that Centrifuge is not a GP and the fund will be set up by a third party asset manager as a pool on the Centrifuge platform.

WintermuteGovernance expresses support for the proposal and commends Centrifuge for kickstarting the RWA process for Aave. They suggest creating a GHO facilitator for the DAO's RWA position, allowing the DAO to receive yield on its stables and access GHO liquidity if needed.

Lucasvo explains that the proposal's main part is to create a legal conduit allowing the Aave DAO to create an entity that can invest in RWAs. This process will take a few months and has a legal budget capped at $50,000. The proposal also includes a $1M USDC investment in liquid treasuries, which are safe and liquid, allowing Aave to redeem at any point with a simple governance vote.

OpenEden introduces their TBILL Vault product as a potential candidate for RWA allocation. The TBILL Vault is a smart contract vault managed by a regulated entity offering tokenised short-term U.S. Treasury Bills.

Khan thanked the community for their feedback on the proposal and announced plans to host a community call to discuss the proposal in more detail. The proposal is moving to Snapshot and will go live the next day.

Posted 4 months ago

Last reply 3 months ago

Summary updated 3 months ago

Last updated 06/12 00:43