Temple Investment on Convex
TempleDAO has begun investing its $160M+ treasury into the FRAX3CRV pool on Convex Finance. This will allow us to accumulate strategic assets and enter the lucrative “Curve Wars”. This investment is safe, liquid, and will allow us to evaluate and re-deploy assets as other opportunities emerge.
Our first investment was today for $30M FRAX.
Temple Gates Ritual Recap
Two week ago, we launched the Temple Token Exchange using our private AMM. Based on the Uniswap v2 smart contract, the exchange featured several unique price-stability mechanisms:
- Built-in price floor
- Floating threshold price over which the protocol can mint new tokens to fill a portion of market buys
- Deep liquidity pool
- Exit queue that smooths out sales volume
Because of the reversed unlocking order of tokens from the Opening Ceremony and the bearish turn in market sentiment, an unusually high number of holders desired to take profits and join the exit queue. This future sell signal incentivized everyone to enter the exit queue. Knowing there was sell pressure both in front and behind them, holders undecided about selling their Temple joined the queue to avoid becoming exit liquidity for others. As a result, it created a negative feedback loop that saw the buy volume vanish entirely.
We felt like we had a good plan, and one oversight was costly. To restore operations and the faith of our holders, the team worked hard to resolve this vicious cycle of trading dynamics over the past two weeks. We rolled out an updated exit queue that processed withdrawals more quickly, changed the liquidity pool to facilitate faster price discovery, and actively listened to the Templar community.
Nothing has changed with our abilities; we will deliver on the promise of balancing stablecoin depreciation and naked token volatility. As we start 2022, we stand in a much better place with a fully processed exit queue and a stable (albeit low) price. This enables us to turn our attention to growing the Temple treasury by investing our assets and generating more income.
Temple Enters the Curve Wars
TempleDAO owns a massive treasury of more than $160mm in FRAX. After careful evaluation of opportunities available to us, we have decided to make our first yield farming investment in the FRAX3CRV-f Convex pool.
This strategy will:
- Generate significant revenue (over 20% variable APR as of this writing)
- Invest in one of the deepest liquidity pools in all of DeFi (more than $2B as of this writing) with minimum slippage in and out
- Keep our investment fully liquid, with virtually no risk of impermanent loss
- Focus on the most trusted (highest TVL) and battle-tested protocol, therefore minimizing smart contract risks
- Earn reward incentives in strategic assets that can be compounded for higher returns (by converting and staking CRV rewards for 50%+ APR), or locked to start earning protocol bribes (by locking CVX and delegating to Votium)
With overwhelming community support, we are taking this path to position ourselves strategically while betting on ecosystems we strongly believe in — Convex / Curve and Frax.
We are very grateful to the many Templars who have engaged on this topic. They proposed many worthy ideas, including:
- Obtain Nexus coverage to insure our funds against Convex smart contract risk
- Diversify into more stablecoins
- Allocate a portion of our funds to a lending protocol
- Expand to other chains and L2s
- Single Staking Options vault (SSOV) to facilitate Covered Calls sales
- Gain strategic assets in a more direct manner
We will elaborate on these and other ideas in the Treasury Investment Chamber in our Enclave of Logic. If you want to contribute, please join the discussion in our Discord where we can work together on strategies that will grow our treasury and increase our influence in the DeFi space. We value the insight of our holders and community as it is crucial to the foundation of the Grand Temple.
We have moved a portion of the treasury to a new wallet that will be responsible for all yield farming activities. Treasury numbers will look off on the website until we fix tracking on the UI. The Dune dashboard might also look weird for a bit once we start investing the funds in the Convex pool.
Don’t worry, all funds are safu.
Here are all the Treasury addresses if you want to track transaction activity.
TempleFraxAMMRouter (for Temple Defend):
Here's a zapper link to track the farming wallet specifically: https://zapper.fi/account/0x5c8898f8e0f9468d4a677887bc03ee2659321012
And here's a zapper bundle to track all Treasury wallets at once: https://zapper.fi/bundle/0x5c8898f8e0f9468d4a677887bc03ee2659321012,0x22c2fe05f55f81bf32310acd9a7c51c4d7b4e443,0x8a5058100e60e8f7c42305eb505b12785bba3bca,0x6021444f1706f15465bee85463bcc7d7cc17fc03
As we enter 2022, we will continue to assess the broader market and will re-allocate our treasury investments to the best risk/reward opportunities as they emerge. Our goal is to use our treasury to not only generate yield, but also to build strong partnerships with reputable and promising teams and protocols. While maintaining a conservative risk profile for our treasury reserves is key, we are also evaluating several strategies to leverage our native-token treasury to generate additional income for the protocol.
Thank you to all of the faithful Templars who are supporting us and offering insights. We are continuing to engage, learn, and improve for the highest good of the collective. We won’t rest until we realize our dreams of building the Grand Temple with you.