Inside The Squid DAO Treasury
Ever wondered how the Squid DAO treasury works — currently the home of over 15,000 $ETH? Ever wondered where this massive treasure chest of ETH comes from, and what it’s doing on the bottom of the ocean?
Today we’re going to dive into the Deep Blue and cover the various sources of revenue, how and where the tokens flow, and some of the initial plans for putting all that ETH to work. Let’s jump in!
Revenue Sources
The beauty of Squid DAO is that there are a number of different ways the protocol generates revenue.
NFT Auctions
Inspired by the Nouns DAO model, one fresh Squid NFT ($SQDN) is auctioned off to the highest bidder each day. Bids are placed with ETH, and 100% of the ETH from the winning bid goes directly into the Treasury. Holders of Squid NFTs are referred to as Krakens, and being a Kraken bestows added financial and community benefits. The NFT Auctions have been wildly successful, with the first 75 NFTs raising 7,805 ETH for the treasury.
Bond Sales
Bond sales are already covered by the docs in detail. The treasury sells bonds to raise different types of assets. To date the treasury has issued two types of bonds: WETH-SQUID Sushi LP tokens & WETH. Selling WETH-SQUID LP bonds enables the protocol to own its liquidity, which in turn brings in its own trading fees. Selling WETH bonds enables the protocol to accrue more ETH to stack in the treasury and be put to work earning yield.
Protocol-Owned Liquidity — LP Fees
Protocol-Owned Liquidity means that Squid DAO owns its own pool of liquidity on decentralized exchanges. To start, Squid DAO provides liquidity on Sushi Swap. When users swap in and out of $SQUID, Sushi charges a trading fee of 0.25% that goes to the liquidity providers. As Squid DAO owns the overwhelming majority of liquidity for SQUID, nearly all of these trading fees are collected as revenue back to the treasury.
ETH Investment Strategies
One of the key differentiating factors for Squid DAO is the fact that it is deploying its sizable treasury to earn yield, further increasing the value of SQUID. Squid DAO is attempting to stack as much ETH as possible and using this ETH to deploy to DeFi protocols for generating yield. ETH is ultrasound money, and we prioritize holding ETH and its derivatives.
Squid DAO is partnering with some of the best protocols in DeFi to deliver the best possible risk-adjusted returns. Initial investments are being done in allocations of 100–250 ETH per investment. As the investments generate yield and the team automates more of the processes, the allocations will grow.
Are you a DeFi protocol or have a great idea on how Squid DAO can earn even more yield on its ETH treasury? We want to hear from you. Come pitch us your best ETH yield strategies. All our partnership conversations happen in public on our discord.
Snoop DAO Revenue Sharing
Snoop DAO is a fork of Squid DAO that is focused on stacking as much $DOG as possible, as well as other DOG-meme cultural tokens. As an official fork, Snoop shares 10% of all DOG raised via NFT Auctions as well as 5% of bond fees. That is, for every 1 SNOOP minted from bonds, an additional 0.05 SNOOP is generated as a fee and distributed to the Squid DAO treasury. To date, over 885M DOG has been brought in through the Snoop DAO partnership.
Treasury Wallets
Now that we’ve covered where the revenue comes from, let’s take a look at the actual wallets involved. There are two main wallet addresses used to hold Squid DAO funds:
- 0x61d8a57b3919e9F4777C80b6CF1138962855d2Ca (Primary)
- 0x42e61987a5cba002880b3cc5c800952a5804a1c5 (Multisig)
- Zapper Bundle (for convenience)
The Primary wallet contains all the assets raised from selling bonds — namely the big swell of WETH and LP tokens. Access to move treasury funds is gated by a timelock contract. This introduces a 24-hour delay between a proposed transaction and its execution. At a practical level, this commits Squid DAO to increased transparency with its community. Potential dangerous operations are effectively broadcast 24-hours before being executed, which provides time to cancel the operation before it harms the treasury.
ETH from the NFT auctions get deposited into the Multisig wallet, as does the DOG received from the Snoop DAO revenue sharing agreement. Currently, the Multisig wallet is used to manually deploy ETH for investment in yield earning activities. It is a 3 out of 8 multisig, meaning that 3 of the 8 owners need to sign each transaction in order for the transaction to be executed.
About Squid DAO
Squid DAO’s mission is to be the future of finance, embracing fairness, transparency, meritocracy, partnership, equal access, all with ETH as the unit of account. Squid DAO stacks ETH in a non-dilutive manner, while giving the community full control of the systems, fees, and revenues via NFTs (SQDN) and veSQUID governance.
About SQUID 55
Squid 55 likes the taste of wasabi and the smell given off by a calculator in full effect. Don’t be mistaken though, he might be a good writer, but he can also whoop some paper hands.
