# Delegate COMP Yield Strategy tokens to the Compound Foundation
Dear Compound community,
As we have a significant amount of COMP still to be deployed into the strategy as we wait for yield opportunities and volatility to pick up, we believe it prudent to delegate these to the Compound Foundation in the meantime. While the amount will fluctuate as the strategy continues to get deployed, this will help bolster governance participation and utilization, particularly in the short-term.
Since we, Avantgarde, hold no control over the Avatar safe (which is owned by the Compound Timelock contract) where these COMP tokens are held, delegating these requires an on-chain proposal.
There will be no other changes and operational changes to the strategy itself.
[Forum](https://www.comp.xyz/t/extension-of-the-comp-yield-strategy-pilot/7134/10?u=dmitriywoofsoftware)
# Resubmission: Extension of the COMP Yield Strategy
**Resubmission**
Back in May this year, Avantgarde initiated a strategic pilot on behalf of the DAO to start earning yield on a portion of the idle COMP sitting in the treasury (see [proposal thread](https://www.comp.xyz/t/a-treasury-growth-strategy-for-compound/6205) and [latest proposal version](https://www.comp.xyz/t/a-treasury-growth-strategy-for-compound/6205/28)).
This strategy utilized the [MYSO](https://www.myso.finance/) protocol to deliver [16.22%](https://etherscan.io/tx/0xd1103cb34035579046ffc647a067db5e1a826919ec96ca22019942fc0b73c764) and [15.07% ](https://etherscan.io/tx/0x8907f0f60a17ed75205621dfa67bba1d8785d17ce164c14ddbec20d290e3681f)annualized yield on two tranches of 17,600 COMP, generating a total premium of $53,058 USDC (net of fees) subsequently deposited into Compound V3 markets (see [this](https://debank.com/profile/0xeb6332bbb14b1488efb3a395b8ebf6a6904c4241) link).
These tranches expired as of the 11th of August and have not yet been rolled over as we await the outcome of this proposal, and the full COMP amount has been returned to the [Avatar safe](https://app.safe.global/balances?safe=eth:0xeB6332bbB14b1488eFb3A395B8EBF6a6904C4241).
[With OpenZeppelin recently highlighting](https://www.comp.xyz/t/trust-minimized-treasury-management/7086#p-17747-conclusion-7) the infrastructure setup used to execute this strategy as a recommended new standard for trust-minimized fund management for the DAO, we believe this pilot has, in more than one way, been a great success.
We believe extending the pilot of the COMP yield strategy makes a lot of sense at this stage as the DAO rallies behind the new Compound Foundation to “Make Compound Great Again”. This is an exciting time for all of us involved as new investments are being made towards growth, with hopefully plenty more to come—which at the end of the day will all require funding.
## **Reliable Revenue to Support Financially Sustainable Growth**
The COMP yield strategy will help improve capital efficiency on treasury assets and strengthen the DAO’s financial sustainability by providing a reliable source of revenue. The strategy’s use of idle COMP complements the USDC-denominated reserve management of Gauntlet extremely well; not only asset-denomination wise but also by providing upfront premium income that can be used to cover a significant share of the ongoing operational costs if deployed in meaningful size.
This would help reduce gradual depletion of the treasury as growth-initiatives and costs are potentially ramped up, and allow the reserves to remain as reserves for the foreseeable future—ensuring the DAO has ample funds to support growth for many years to come.
This proposal suggests adding another $7.4M worth of COMP to the pilot’s existing ≈$1.6M capital to bring the total amount to $9M, which at a targeted 15% yield would generate $1,350,000M a year for the DAO.
Funds will be split into multiple tranches and in a staggered manner continuously rolled over targeting overall 15% APY within a +/-5% range in the short term as we aim to keep the probability of COMP to USDC conversion as low as possible. USDC premiums will be deposited into Compound’s USDC market until the DAO wishes to spend it or says otherwise.
If the strike is hit on any of the tranches and COMP were to get converted into USDC, these will similarly be deployed into MYSO to buy back the COMP while also earning upfront premium. Once bought back, the COMP will again be cycled back into MYSO to generate yield.
## **Implementation, Execution, and Fee Remains the Same**
As an extension of the initial pilot, the full program would continue to be managed through the same operational setup as outlined in the [pilot proposal](https://www.comp.xyz/t/a-treasury-growth-strategy-for-compound/6205/28#p-16662-implementation-and-execution-13) and detailed in OpenZeppelin’s article [Trust-Minimized Treasury Management](https://www.comp.xyz/t/trust-minimized-treasury-management/7086), using the same [Avatar Safe](https://app.safe.global/settings/setup?safe=eth:0xeB6332bbB14b1488eFb3A395B8EBF6a6904C4241) and managed by the same [Manager Safe](https://app.safe.global/settings/setup?safe=eth:0x4db79ac03f167F1F0377eD5a8909bFe29D49cf9e).
As explained in the article by OZ:
*"Avantgarde’s trust-minimized solution demonstrates substantial benefits for the Compound DAO by significantly reducing risks associated with third-party operational activities … \[as] it prevents funds from moving beyond DAO visibility, improving transparency and accounting … \[while] the DAO retains recourse to reclaim allocated funds."*
As a reminder, execution of the strategy will be done through the [MYSO v3](https://www.myso.finance/) protocol, and the entire process is decentralized, trustless, and transparent, avoiding counterparty risk whileretaining full asset control.
MYSO is a DeFi protocol specializing in onchain structured products for high-net-worth individuals, treasuries and asset managers, and enables users to earn yield on idle tokens through bespoke covered call and cash secured put strategies. MYSO is actively working with leading treasuries like Aave, Across, Gitcoin, and Obol, to name a few, to provide seamless access to onchain structured products, sourcing the best quotes from multiple OTC desks and settling fully onchain without handing over custody to trading firms.
The protocol contracts are publicly available in the official MYSO V3 repository and have been thoroughly audited (see [Omniscia Audit Report](https://omniscia.io/reports/myso-finance-call-option-system-v3-6737e49a92361c0018163789/) + [public repo](https://github.com/mysofinance/v3)).
The fee also remains the same as a flat 15% fee on the earned premiums and will be distributed automatically by the MYSO protocol.
Once the program is live, we’ll report back to the DAO with details as tranches are executed, including achieved yield and other relevant info for the DAO to actively monitor the strategy.
# Extension of the COMP Yield Strategy
Back in May this year, Avantgarde initiated a strategic pilot on behalf of the DAO to start earning yield on a portion of the idle COMP sitting in the treasury (see [<u>proposal thread</u>](https://www.comp.xyz/t/a-treasury-growth-strategy-for-compound/6205) and [<u>latest proposal version</u>](https://www.comp.xyz/t/a-treasury-growth-strategy-for-compound/6205/28)).
This strategy utilized the [<u>MYSO</u>](https://www.myso.finance/) protocol to deliver [<u>16.22%</u>](https://etherscan.io/tx/0xd1103cb34035579046ffc647a067db5e1a826919ec96ca22019942fc0b73c764) and [<u>15.07% </u>](https://etherscan.io/tx/0x8907f0f60a17ed75205621dfa67bba1d8785d17ce164c14ddbec20d290e3681f)annualized yield on two tranches of 17,600 COMP, generating a total premium of $53,058 USDC (net of fees) subsequently deposited into Compound V3 markets (see [<u>this</u>](https://debank.com/profile/0xeb6332bbb14b1488efb3a395b8ebf6a6904c4241) link).
These tranches expired as of the 11th of August and have not yet been rolled over as we await the outcome of this proposal, and the full COMP amount has been returned to the [<u>Avatar safe</u>](https://app.safe.global/balances?safe=eth:0xeB6332bbB14b1488eFb3A395B8EBF6a6904C4241).
[<u>With OpenZeppelin recently highlighting</u>](https://www.comp.xyz/t/trust-minimized-treasury-management/7086#p-17747-conclusion-7) the infrastructure setup used to execute this strategy as a recommended new standard for trust-minimized fund management for the DAO, we believe this pilot has, in more than one way, been a great success.
We believe extending the pilot of the COMP yield strategy makes a lot of sense at this stage as the DAO rallies behind the new Compound Foundation to “Make Compound Great Again”. This is an exciting time for all of us involved as new investments are being made towards growth, with hopefully plenty more to come—which at the end of the day will all require funding.
## **Reliable Revenue to Support Financially Sustainable Growth**
The COMP yield strategy will help improve capital efficiency on treasury assets and strengthen the DAO’s financial sustainability by providing a reliable source of revenue. The strategy’s use of idle COMP complements the USDC-denominated reserve management of Gauntlet extremely well; not only asset-denomination wise but also by providing upfront premium income that can be used to cover a significant share of the ongoing operational costs if deployed in meaningful size.
This would help reduce gradual depletion of the treasury as growth-initiatives and costs are potentially ramped up, and allow the reserves to remain as reserves for the foreseeable future—ensuring the DAO has ample funds to support growth for many years to come.
This proposal suggests adding another $7.4M worth of COMP to the pilot’s existing ≈$1.6M capital to bring the total amount to $9M, which at a targeted 15% yield would generate $1,350,000M a year for the DAO.
Funds will be split into multiple tranches and in a staggered manner continuously rolled over targeting overall 15% APY within a +/-5% range in the short term as we aim to keep the probability of COMP to USDC conversion as low as possible. USDC premiums will be deposited into Compound’s USDC market until the DAO wishes to spend it or says otherwise.
If the strike is hit on any of the tranches and COMP were to get converted into USDC, these will similarly be deployed into MYSO to buy back the COMP while also earning upfront premium. Once bought back, the COMP will again be cycled back into MYSO to generate yield.
## **Implementation, Execution, and Fee Remains the Same**
As an extension of the initial pilot, the full program would continue to be managed through the same operational setup as outlined in the [<u>pilot proposal</u>](https://www.comp.xyz/t/a-treasury-growth-strategy-for-compound/6205/28#p-16662-implementation-and-execution-13) and detailed in OpenZeppelin’s article [<u>Trust-Minimized Treasury Management</u>](https://www.comp.xyz/t/trust-minimized-treasury-management/7086), using the same [<u>Avatar Safe</u>](https://app.safe.global/settings/setup?safe=eth:0xeB6332bbB14b1488eFb3A395B8EBF6a6904C4241) and managed by the same [<u>Manager Safe</u>](https://app.safe.global/settings/setup?safe=eth:0x4db79ac03f167F1F0377eD5a8909bFe29D49cf9e).
As explained in the article by OZ:
*"Avantgarde’s trust-minimized solution demonstrates substantial benefits for the Compound DAO by significantly reducing risks associated with third-party operational activities … \[as] it prevents funds from moving beyond DAO visibility, improving transparency and accounting … \[while] the DAO retains recourse to reclaim allocated funds."*
As a reminder, execution of the strategy will be done through the [<u>MYSO v3</u>](https://www.myso.finance/) protocol, and the entire process is decentralized, trustless, and transparent, avoiding counterparty risk whileretaining full asset control.
MYSO is a DeFi protocol specializing in onchain structured products for high-net-worth individuals, treasuries and asset managers, and enables users to earn yield on idle tokens through bespoke covered call and cash secured put strategies. MYSO is actively working with leading treasuries like Aave, Across, Gitcoin, and Obol, to name a few, to provide seamless access to onchain structured products, sourcing the best quotes from multiple OTC desks and settling fully onchain without handing over custody to trading firms.
The protocol contracts are publicly available in the official MYSO V3 repository and have been thoroughly audited (see [<u>Omniscia Audit Report</u>](https://omniscia.io/reports/myso-finance-call-option-system-v3-6737e49a92361c0018163789/) + [<u>public repo</u>](https://github.com/mysofinance/v3)).
The fee also remains the same as a flat 15% fee on the earned premiums and will be distributed automatically by the MYSO protocol.
Once the program is live, we’ll report back to the DAO with details as tranches are executed, including achieved yield and other relevant info for the DAO to actively monitor the strategy.
Uniswap DAO PrinciplesThe delegates agree to recognize the following principles and let them guide their decision-making in Uniswap DAO governance. Processual Principles Scope. The purpose of the Uniswap DAO is to govern the Uniswap protocol [1]. This includes protocol parameters adjustments and fund allocation to foster the growth of the Uniswap protocol [2]. Process. The Uniswap DAO follows the governance process [3] as outlined in the Uniswap Docs and on the Uniswap Governance Forum. Onchain Focus. The operations of the DAO should focus on on-chain assets, and key decisions should be recorded onchain to preserve transparency at both operational and governance levels [4]. This includes maintaining on-chain voting as part of the governance process, as is currently done, and using on-chain transactions to transfer funds. Conduct-Related Principles Disclosure. Conflicts of interest should be disclosed clearly on the delegate description page and, whenever relevant, in forum discussions and in the voting rationale. Severe conflicts of interest that could undermine the integrity of governance must be avoided. If a proposal includes specific actions, such as requiring delegates with conflicts of interest to abstain, these directives must be followed. In cases of doubt, delegates should err on the side of transparency and openness [5]. Security. Given the systemic importance of the Uniswap protocol to DeFi and the size of the DAO treasury, delegates must carefully consider security when making decisions. They should follow established processes to securely and effectively deliver products to the ecosystem, and vote against proposals that expose the protocol or treasury to risks. In ambiguous cases, the proposer must demonstrate the proposal is safe. However, delegates are not accountable for failing to anticipate all indirect consequences of a proposal. Legibility. To maintain the integrity of the governance process, rationales for votes should be published in a manner that is understandable to the broader community. Proposals and their reasoning should be clear to outsiders, even those unfamiliar with the history of DAO votes or without access to side-channel communication between delegates. Concrete data and empirical evidence should be included to back decision-making when available. Good Faith. Delegates should act with honesty and integrity when participating in governance, and vote in accordance with what they believe is in the best interest of the Uniswap protocol. Due Care. Delegates should conduct a professional review of each proposal prior to voting, and are advised to abstain from voting when unable to conduct the necessary diligence to understand a given proposal Public Feedback. Delegates should inform the community if they consider that a proposal is superficial, light, unclear or unsubstantiated and needs to be improved or deepened before it is submitted to a vote. Structural Principles Decentralization. Decision-making in the DAO should remain decentralized in all forms, with the aim of keeping the DAO credibly neutral, censorship-resistant and resilient against capture by any single group of aligned actors, whether internal or external [6]. Delegates must prevent the formation of cartels and ensure that the protocol is protected from any proposals driven by personal motives that do not align with the protocol’s best interests. Representation. Delegates primarily represent UNI token holders, however, delegates should make a reasonable effort to understand the arguments from all potentially affected stakeholders when making decisions and be respectful of differing viewpoints. Accountability. Delegates are accountable to the Uniswap community and should show a willingness to communicate with affected stakeholders, remain open to scrutiny, and, where possible, communicate key rationales to maintain trust through transparent decision-making processes. The terms “should” and “must” in the text are expected to be interpreted following the Internet Engineering Task Force (IETF) guidelines [7]. References [1] Uniswap Overview: Protocol, Interface, Labs. https://docs.uniswap.org/concepts/overview4 [2] Introducing UNI. https://blog.uniswap.org/uni#community-treasury [3] Devin Walsh. Community Governance Process Update [Jan 2023]. https://gov.uniswap.org/t/community-governance-process-update-jan-2023/19976 [4] The Law Commission (United Kingdom). Decentralised Autonomous Organisations (DAOs): A Scoping Paper. Section “Common Philosophical Goals of DAOs.” https://cloud-platform-e218f50a4812967ba1215eaecede923f.s3.amazonaws.com/uploads/sites/30/2024/07/DAOs-scoping-paper-110724.pdf [5] [RFC] Delegate Code of Conduct. https://gov.uniswap.org/t/rfc-delegate-code-of-conduct/20913 [6] J Austgen, A Fábrega, S Allen, K Babel, M Kelkar, A Juels. DAO Decentralization: Voting-Bloc Entropy, Bribery, and Dark DAOs. https://arxiv.org/abs/2311.03530 [7] S. Bradner. Key words for use in RFCs to Indicate Requirement Levels. RFC 2119, IETF. https://datatracker.ietf.org/doc/html/rfc2119# Uniswap DAO Principles
This onchain vote confirms a set of principles (the Principles) for the Uniswap DAO. The draft Principles were written by Atis (independent delegate) and Erik (Avantgarde Finance). We gratefully acknowledge the comments and suggestions from many other Uniswap DAO delegates and community members.
On executing the proposal, the Principles will be published onchain using the `setText` function of ENS Public Resolver contract for the `uniswap.eth` node.
## Uniswap DAO Principles
The delegates agree to recognize the following principles and let them guide their decision-making in Uniswap DAO governance.
### **Processual Principles**
* **Scope.** The purpose of the Uniswap DAO is to govern the Uniswap protocol \[1]. This includes protocol parameters adjustments and fund allocation to foster the growth of the Uniswap protocol \[2].
* **Process.** The Uniswap DAO follows the governance process \[3] as outlined in the Uniswap Docs and on the Uniswap Governance Forum.
* **Onchain Focus.** The operations of the DAO should focus on on-chain assets, and key decisions should be recorded onchain to preserve transparency at both operational and governance levels \[4]. This includes maintaining on-chain voting as part of the governance process, as is currently done, and using on-chain transactions to transfer funds.
### **Conduct-Related Principles**
* **Disclosure.** Conflicts of interest should be disclosed clearly on the delegate description page and, whenever relevant, in forum discussions and in the voting rationale. Severe conflicts of interest that could undermine the integrity of governance must be avoided. If a proposal includes specific actions, such as requiring delegates with conflicts of interest to abstain, these directives must be followed. In cases of doubt, delegates should err on the side of transparency and openness \[5].
* **Security.** Given the systemic importance of the Uniswap protocol to DeFi and the size of the DAO treasury, delegates must carefully consider security when making decisions. They should follow established processes to securely and effectively deliver products to the ecosystem, and vote against proposals that expose the protocol or treasury to risks. In ambiguous cases, the proposer must demonstrate the proposal is safe. However, delegates are not accountable for failing to anticipate all indirect consequences of a proposal.
* **Legibility.** To maintain the integrity of the governance process, rationales for votes should be published in a manner that is understandable to the broader community. Proposals and their reasoning should be clear to outsiders, even those unfamiliar with the history of DAO votes or without access to side-channel communication between delegates. Concrete data and empirical evidence should be included to back decision-making when available.
* **Good Faith.** Delegates should act with honesty and integrity when participating in governance, and vote in accordance with what they believe is in the best interest of the Uniswap protocol.
* **Due Care.** Delegates should conduct a professional review of each proposal prior to voting, and are advised to abstain from voting when unable to conduct the necessary diligence to understand a given proposal
* **Public Feedback.** Delegates should inform the community if they consider that a proposal is superficial, light, unclear or unsubstantiated and needs to be improved or deepened before it is submitted to a vote.
### **Structural Principles**
* **Decentralization.** Decision-making in the DAO should remain decentralized in all forms, with the aim of keeping the DAO credibly neutral, censorship-resistant and resilient against capture by any single group of aligned actors, whether internal or external \[6]. Delegates must prevent the formation of cartels and ensure that the protocol is protected from any proposals driven by personal motives that do not align with the protocol’s best interests.
* **Representation.** Delegates primarily represent UNI token holders, however, delegates should make a reasonable effort to understand the arguments from all potentially affected stakeholders when making decisions and be respectful of differing viewpoints.
* **Accountability.** Delegates are accountable to the Uniswap community and should show a willingness to communicate with affected stakeholders, remain open to scrutiny, and, where possible, communicate key rationales to maintain trust through transparent decision-making processes.
The terms “should” and “must” in the text are expected to be interpreted following the Internet Engineering Task Force (IETF) guidelines \[7].
### **References**
\[1] Uniswap Overview: Protocol, Interface, Labs. [https://docs.uniswap.org/concepts/overview](https://docs.uniswap.org/concepts/overview4)
\[2] Introducing UNI. [https://blog.uniswap.org/uni#community-treasury](https://blog.uniswap.org/uni#community-treasury)
\[3] Devin Walsh. Community Governance Process Update \[Jan 2023]. [https://gov.uniswap.org/t/community-governance-process-update-jan-2023/19976](https://gov.uniswap.org/t/community-governance-process-update-jan-2023/19976)
\[4] The Law Commission (United Kingdom). Decentralised Autonomous Organisations (DAOs): A Scoping Paper. Section “Common Philosophical Goals of DAOs.” [https://cloud-platform-e218f50a4812967ba1215eaecede923f.s3.amazonaws.com/uploads/sites/30/2024/07/DAOs-scoping-paper-110724.pdf](https://cloud-platform-e218f50a4812967ba1215eaecede923f.s3.amazonaws.com/uploads/sites/30/2024/07/DAOs-scoping-paper-110724.pdf)
\[5] \[RFC] Delegate Code of Conduct. [https://gov.uniswap.org/t/rfc-delegate-code-of-conduct/20913](https://gov.uniswap.org/t/rfc-delegate-code-of-conduct/20913)
\[6] J Austgen, A Fábrega, S Allen, K Babel, M Kelkar, A Juels. DAO Decentralization: Voting-Bloc Entropy, Bribery, and Dark DAOs. [https://arxiv.org/abs/2311.03530](https://arxiv.org/abs/2311.03530)
\[7] S. Bradner. Key words for use in RFCs to Indicate Requirement Levels. RFC 2119, IETF. [https://datatracker.ietf.org/doc/html/rfc2119](https://datatracker.ietf.org/doc/html/rfc2119)
if we can better understand the effectiveness of the Uniswap Revitalization and Growth Program, the proposed analysis can provide valuable insights and help the DAO make more informed decisions going forward
Given Uniswap’s integral presence and strong name across DeFi, it has clearly been a wasted opportunity in not having a dedicated team securing available incentives across the space and managing the marketing around it - thus we see a clear need that this proposal addresses.
if we can better understand the effectiveness of the Uniswap Revitalization and Growth Program, the proposed analysis can provide valuable insights and help the DAO make more informed decisions going forward
While we agree with some of the other delegates that a few minor specifics around the deliverables could’ve been clarified before this went to a vote, these are likely to be ironed out by the time the Accountability Committee signs off on the initiative. The idea itself makes perfect sense: if we can better understand the effectiveness of the Uniswap Revitalization and Growth Program, the proposed analysis can provide valuable insights and help the DAO make more informed decisions going forward.