Impact of De-Risking DL DAO Treasury on Longevity and FDV

1. Longevity Analysis

The longevity of the DAO depends on maintaining financial stability through stable reserves. The treasury, valued between $75,000 and $87,000 at $350 SOL (without DEAN in consideration), is proposed to be converted into stablecoins to reduce risk.

Longevity Benefits

1. Reduction in Risk: Stablecoins provide immunity to SOL and SPL tokens price volatility, securing the treasury's value.
2. Operational Buffer: Locking in $75,000–$87,000 ensures predictable funding for operations and development.

Probability of survival:

• Before de-risking: 50% (subject to market volatility).

• After de-risking: 90% (stable reserves secured).

Thus, de-risking increases the probability of DAO longevity by 40 percentage points (from 50% to 90%).

credits - @BearUntied

2. Impact on Fully Diluted Valuation

The current FDV is $500,000 (Conservative FDV to accommodate proposal duration). De-risking the treasury by converting to stablecoins positively impacts market perception, reflecting the DAO’s financial prudence. Investors may attribute higher value due to reduced uncertainty.

De-risking results in a confidence boost, modeled as a percentage increase in FDV. Two scenarios were calculated:

1. Low Confidence Boost (5%):

• Updated FDV: $500,000 × (1 + 0.05) = $525,000

• Percentage Increase: (525,000 - 500,000) / 500,000 × 100 = 5%

1. High Confidence Boost (20%):

• Updated FDV: $500,000 × (1 + 0.20) = $600,000

• Percentage Increase: (600,000 - 500,000) / 500,000 × 100 = 20%

credits - @BearUntied

3. TWAP Calculation

We require TWAP > 3% for the proposal to pass:

DL DAO FDV: $500,000

DL DAO FDV + 3%: $515,000

The potential increase from de-risking our treasuries is well above the TWAP requirements.

credits - @BearUntied

4. Combined Analysis and Conclusion

De-risking the treasury by converting risky assets to stablecoins significantly enhances the DAO’s probability of survival and positively impacts FDV:

• Longevity Probability Increase: From 50% to 90% (+40%).

• FDV Increase: $500,000 to a range of $525,000–$600,000 (5%–20% increase).

This strategy ensures financial stability while signaling prudence to investors, promoting the DAO's growth and resilience.

credits - @BearUntied