Generate Yield to Buy + Burn LORDS

In December 2023 Royalty DAO passed prop 6 to deposit their treasury with Biblio DAO, stating:

Transfer of the Loot Royalty DAO funds is in the best interest of Loot and will be safer and used more effectively if managed by Biblio DAO.

This proposal will fulfill Biblio DAO's mandate to manage the funds by depositing them into safe, yield-bearing vehicles, and to use generated yield to buy + burn LORDS.

Why buy + burn LORDS? Why not buy Loot NFTs?

NFTs are illiquid and discrete, whereas LORDS are liquid and fractional. That makes LORDS buybacks better suited to stimulate ecosystem activity (stake them, LP them, swap them, use them in games) and they are accessible to more people.

Spending yield on NFT floor sweeps only concentrates value into a few holders. Those with cheapest floor nfts. Commons/gems don't benefit from floor buybacks.

On the other hand LORDS buybacks benefit an entire loot ecosystem (DAO treasuries, studio runways, prize pools, grants). That kind of systemic upward pressure strengthens every part of the network.

There is just no comparison. LORDS buy + burn is a lasting, ecosystem-wide impact, vs floor buys that mainly feed nft flippers and the benefits are undone with a single new listing.

The proposed strategy is to deposit 50% of the Royalty DAO treasury with Ether.fi at appx 2.94% APY, and 50% with Aave at appx 2.75% APY. Both yield platforms are generally considered low-risk, and are expected to generate appx $60K annually in yield.

Execution of this strategy will be completed using a new 3 of 5 multisig composed of the following members: Calc, Squid, Nejc, m0nk and Recipromancer. If any signer no longer wishes to perform these duties, another BibDAO volunteer will take their place. The multisig address will be posted to discord once made.

Yield will be earned on L1, bridged to L2, and bought on L2 using DCA on Ekubo. Claiming yield and duration of the DCA will be at the discretion of the executors, but will be carried out on a regular cadence and done to minimize slippage. After each DCA round the acquired LORDS will be burned by the executors, so balances of yield and LORDS are not held. Transaction history of the L2 address showing purchases and burns will be viewable on https://voyager.online.

At any time Royalty DAO may pass their own proposal to retake custody of their treasury and manage it themselves. If this occurs, treasury principal will be withdrawn from Ether.fi and Aave in full, transferred to Royalty DAO, and the buy + burn program will end.

Relevant Links Ethereum L1 Wallet: 0xa8e6efaf015d424c626cf3c23546fcb3bd2c9f1a Ether.fi Deployment Link: https://www.ether.fi/app/weeth Ether.fi Market Breakdown: https://defillama.com Aave Deployment Link: https://app.aave.com Aave Market Breakdown: https://defillama.com