BIP-XXX Balancer DAO Investment Policy Statement

General Chat Karpatkey Updates
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Abstract

Introduction of an Investment Policy Statement (IPS) for Balancer DAO Treasury management.

Introduction

Officially established in November 2022, as per BIP-103, The Balancer DAO Treasury has grown to play a critical role in supporting the protocol’s operations, resilience, and long-term sustainability. As both the DeFi landscape and the DAO’s priorities evolve, it’s important to establish a shared framework for how Treasury assets are managed.

This IPS aligns with the ongoing Treasury Migration Proposal, which consolidates assets into the kpk-managed multisig to enhance execution and asset management, and reinforces our commitment as Treasury Managers.

This post introduces an Investment Policy Statement (IPS), developed by kpk in collaboration with Balancer DAO contributors. The IPS is designed to:

  1. Define and assign the responsibilities of all involved parties.

  2. Establish clear investment goals and objectives for Treasury assets.

  3. Provide guidance and limitations to the Treasury Manager in executing strategy.

  4. Ensure Treasury assets are managed according to prudent and transparent standards.

Overall, the IPS aims to strike a balance: it should provide enough structure to guide day-to-day execution, while remaining flexible enough to adapt to changing DAO needs.

You can read the full proposed Investment Policy Statement here.

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Thank you for the thorough proposal, and happy to have KPK in our corner.

I think 30% cap is a sound threshold. Today, the DAO holds more value in AAVE and GNO tokens than BAL itself, and whereas these been remarkable assets to hold, it’s probably time for us to think about diversification to more ETH exposure and increasing our strategic reserves. We would then trust your expertise on how to diversity accordingly and navigate the political landscape.

Two things I’d like to see in this proposal are: (a) how to address and disclose possible conflicts of interest between different DAO’s managed Treasuries, and how to process opportunities (i.e. can a DAO front run the other?); and (b) would be to have the content of this IPS being approved by governance onchain via Snapshot, and not on a hosted PDF file that can me edited unilaterally or lost for some random security issue.