Honeypot / Treasury strategy

Thats a great question,

I would say that we are all learning. I’m not sure I fully understand the impact of combining NFT’s and Defi. My instinct is to buy and hold, it could be that BBH prefers something more active with their reserves. If you look at TAM, their DAO has migrated from a rebasing token into a more active portfolio management DAO (including liquidity mining of other protocols).

For now, I think that BBH needs an overall strategy that is pretty passive and risk-averse, and then time for the community to develop and get a better idea of their risk preferences.

My mental map is that BBH will end up with a main Honey pot pack who manage the multi sig, but they may need some smaller packs to look after specific parts (whether just research into options or a multisig doing trades). So we may end up with a packs to look at

  • DeFi investments (ETH income / diversification),
  • Metaverse / land investments
  • NFT flipping

I would agree that taking the highest rank for each probably makes no sense, but it does give a signal that should be considered.

What I’m planning to do (probably on Tuesday) is taking all the votes into a google sheet and plotting each from 0 to 90%. Then I’ll and simply if down to give an overall portfolio structure that I think makes sense - This will absolutely be influenced by my biases as to what I think is a good final structure. I suspect I’ll make some choices that go against the sentiment polls - Thats fine, I just have to explain why.

I would :heart: :heart: :heart: LOVE :heart: :heart: :heart: for someone else to look at the same data and produce an alternative struture. Then we can all look at a few different options and see what the bears prefer.

I think this will have two useful outcomes:

  1. We come together and agree on an initial portfolio structure (the bears can change in the future)
  2. We can see WHICH BEARS are interested in working in this area. What they can deliver and where their strengths / biases are.

Regards

OA

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My preference is to put as much to work as possible where some allocations are far more liquid that others. For instance if we have a decent allocation in stETH my understanding is that it’s a relatively safe investment and we could if needed reduce or increase the allocation fairly easily. Caveat here that this is my read of it, maybe it doesn’t hold?

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I agree with you. 2.5% seems to low, especially this early. I voted 10% as reserve and 10% on yield bearing ETH (so roughly 20%). In my eyes they both fulfill the same purpose.

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For the information of those curious: Lido will allow you to mint and redeem ETH:stETH. We won’t even have to lean on a DEX to do this

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OK, We have had 33 votes and can look at the initial results:

A bar chart look like this:

If we went with the most selected option for each we would have a portfolio that looks like this:


and have 20% unallocated (Party fund? :partying_face: )

If we took the average (votes x % / total votes) for each the portfolio would look like this:

Note, one Bear allocated ~300% in total which I think indicates that they like leverage.


There are charts on my spreadsheet here: BBH Honeypot strategy - Google Sheets

The combined chart looks like this (a bit of a mess):

The individual charts look much better (but I’m not going to post all 14…)

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OK, now the interesting bit :grinning:

This is my suggestion of how we could structure the Honeypot. This is based on my personal bias and considering the votes above.

% ETH USD
Income generating ETH 30% 73.5 $242,550
DeFi tokens 10% 24.5 $ 80,850
DAO / Partner project tokens 10% 24.5 $ 80,850
NFT Flipping fund 20% 49.0 $161,700
NFT long term fund 10% 24.5 $ 80,850
Metaverse Tokens and Land 15% 36.8 $121,275
Spending reserve (as ETH) 5% 12.2 $ 40,425
Total 100% 245 $808,500

Comments on variation from the votes:

  • Income generating ETH increase because I think it’s a good foundation.
  • BTC / other L1’s because DeFi and NFTs are built on ETH and I don’t see anything else is a better option. Allocated zero.
  • Zero stable coins - if ETH / DeFi crashes we won’t have USD reserves, but 10% / $80,000 USD is not going to make much of a difference to how BBH community grows in a downturn. Allocated zero.
  • DeFi large and small combined into a single 10% pot.
  • Social DAOs / Partner projects combined into a single pot and allocated 10% - I currently have no idea where this would be invested, so held as ETH until the bears decide.
  • NFT flipping fund at 20% + 10% spent on long term NFT holds. - basically the popular votes.
  • Metaverse tokens and Land combined into a single 15% allocation. The balance between them to be decided later / following research.
  • Spending reserve - only 5% which is low. I would assume that all royalties goto this pot (0.04 ETH floor x 50 volume x 2% = 0.04 ETH per day ~ $4,000 per month).

So, who wants to create an alternative strategy for our honeypot :thinking:

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Thank you for taking the time to do all this. I think this is a great way to start honing in on what we would want our Honeypot to look like.

I wish I had gotten around to throwing my vote in but if I had, I think it would of looked pretty close to this structure. I am going to take some time to digest this and mull it over. I will reply with any thoughts.

Well done!

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Thanks @OverAnalyser! Not only going to all the effort of doing this but also explaining it so clearly. Think the breakdown looks solid

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You’re simply amazing OA thank you! I loved seeing your analysis and very happy with your suggestions. I vote yes……also I’m putting my hand up I may have got super excited and didn’t calculate my vote numbers before entering them sorry!!!

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Great analysis and breakdown, appreciate all your work!
Unfortunately my vote was too late as well but it looked pretty much identical to what you ended up with.
Definitely a well thought out strategy, personally I wouldn’t have any problems with this being our guidelines to begin with.
Although if someone does have another approach im all ears.
Great work again.

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Great job on the poll and your analysis :clap:

Can you explain why we would want such a large allocation in fungible tokens?

My personal preference is heavily weighted to NFT, short term, long term and metaverse lands. My reasoning is that I can gain the same exposure to any fungible token and staking protocol myself, the DAO has no advantage here and my returns % remains the same. Whilst with non-fungibles we can make advantage of the DAOs spending power and the technology it has available to purchase a number of assets that on my own I can not fund.

As a simplified example, if I have 1 ETH worth of fiat available to invest I can allocate 30% to 0.33 ETH and stake, that would return me the same % gain as buying 1 ETH worth of Bears and the DAO investing 30% into ETH and staking. There is no advantage, unless I’m missing something obvious?

If I have 1 ETH worth of fiat to invest, while I can allocate 0.33 ETH (30%) to aquire NFTs because of the nature of NFTs I am limited to what I can purchase by my budget, I definately can not get exposure to a collection of Fidenza and I can not go sweep the floor of a slept on factory release. The DAO with its buying power and technology can. The DAO advantage here is huge.

Like I said, maybe I have missed something obvious here that you can point out to me, to which I would be grateful. Otherwise, I would hope that the bears strongly consider the greatest advantages the BB DAO has, this is where we should focus a major portion of funds to maxamise the potential of the DAO.

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You raise a very good point.

To me, in DeFi the only advantage of a larger position is reduced % spent on gas.

While in NFT’s being able to spend more on single pieces opens up more options.

I think my caution comes from the fact that I know nothing about NFT trading. But that doesn’t mean that we shouldn’t allocate more to active and/or long term NFT positions.

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I am surprised that so many are opposed to spending some tiny % of the pot on buying floor bears. If these bears are held by treasury or fractionalized the benefits go back into the DAO. With the investment proposal and perhaps future payouts based on bear holdings, these bears would allow the DAO to take a bet on itself in a way. I am not in favor of burning bears, I think a reasonably sized bet on the future outcome of the tokens we all hold is in our best interest.

I agree that we should be focused on investments out of reach to the average bear with the bulk of the funds. Looking forward to seeing how BIP-001 pans out

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Really promising that we’re approaching this cautiously, and deciding our objectives early ! :slight_smile:

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What’s up OA. someone shilled this NFT on my TT channel, so I checked out the forums. Fancy seeing you in here.

Just got myself a couple bears :smirk:. Way to kick things off! Let’s get this party started

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OA - this is really great work. Thanks for spearheading and putting in the time and effort to get it done.

Here are some of my thoughts:

  • Overall, I really like the breakdown. I think this is a great place to start. If we want to adjust it moving forward, we can of course vote on changes depending on what we see as advantageous.
  • BTC / other L1’s: I just wanted to point out that it might be smart to allocate some of the “30% Income generating ETH” to a different L1 like BTC to give us a bit of diversity and hedge against a total ETH disaster. I’m not saying I think there will be one, but having a safety valve might be a wise choice.
  • Will there be a rebalancing stipulation? By this I mean, say we flip an NFT and make 10 ETH profit. Does that 10 ETH stay in the Flipping Fund? If it does then the percentage of the honeypot allocated to the Flipping Fund would increase. We could do that, or use the profits to rebalance the allocations to keep all of our buckets at the desired percentage - much like an auto-rebalancing 401k. My suggestion would be to rebalance every month(?) or so to keep the allocations as steady as possible. I hope this is clear enough.
  • I think we should put a little effort into inking shared goals/mission statement, kind of like what OA brought up in his original post quoted here:

If I can figure out how to make a poll on here I will start one after I post this.

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Sharing from discord (known as @theshark):

Hey!

A bit late to the Bear party.

Not sure if this has been discussed at all, so will share the idea.

  1. Use some ETH (I would recommend ~$25k), swipe some the floor with this sole purpose.
  2. Take a chunk of those NFTs, launch an NFTX index of floor bears.
  3. Take additional $20k ETH, launch a pool on Uniswap or Sushiswap (or another DEX to co-marketing/make some buzz).

Good way to create some additional liquidity and additional DeFi incentives. The NFTX index would then be able to get listed on other DeFi solutions.

To any of the people who own very rare Bears, I would recommend launching a vault on Fractional.art. It’s great organic exposure, and will bring a lot of recognition to the Bear “brand”. Also a nice way for people who hold the rare items to have exit liquidity.

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:clap::clap::clap:I’m very inspired to see this level of diligence and community sentiment analysis​:clap::clap::clap:. Personally, I’m into holding ETH (as I feel it will equally perform or outperform many coins) and having a nice balance of long-term NFT’s and flipping. Land in DCL sounds wise.

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:owl::handshake::bear:
Welcome Mark! Nice seeing you around here

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I’m pretty sure I’m the bear who allocated 300% :rofl:

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