Abstract

This proposal outlines the allocation of the second tranche, comprising 16,000 ETH, from the ENS DAO to the ENS Endowment. Additionally, it introduces minor adjustments to the existing permissions preset for maintenance purposes.

Motivation

In March 2023, the ENS Endowment was formally established following the joint proposal by karpatkey and @steakhouse, after the successful execution of E.P 3.4 - Fund the Endowment (first tranche). The community had expressed a preference for a phased funding approach, leading to the decision to allocate the funds in two equal tranches over a six-month interval. As we reach this pivotal milestone, this proposal seeks community approval for the second tranche.

Endowment Update

Based on the most recent monthly report detailing the Endowment’s performance for August 2023, the Endowment has achieved:

$28.03 M of ncAUM (non-custodial assets under management)
100% of capital utilisation
An APY (annual percentage yield) of 4.1%
Monthly farming results of $93,841

A comprehensive review post detailing our collaborative efforts with the ENS DAO has been recently shared on the forum. We encourage community members to consult this post for insights into our achievements and ongoing initiatives.

Cumulative Revenues

In the 182 days since the Endowment was established, 173 ETH have been accrued through ETH-neutral strategies and $136,764 in stablecoin revenues via USD-neutral strategies. Operational reports were initially shared on a weekly basis and later transitioned to monthly updates, all of which were made available on the forum for community review.

The Endowment's phased initiation should also be taken into account when interpreting these results. Full capital utilisation was only achieved 49 days after the Endowment's inception, following the completion of the earned ETH-to-stablecoin tranche swaps. This staggered approach had a discernible impact on the reported financial metrics.

Taking into consideration the revenue generated during the most recent four months—after reaching 100% capital utilisation—the projected annual revenues at the current Endowment’s size stand at 367 ETH from ETH-neutral strategies and an equivalent of $351,654 in stablecoins from USD-neutral strategies. This results in a projected Annual Percentage Rate (APR) of approximately 3.4%.

Specification

Fund Transfer

Transfer 16,000 ETH to the Endowment (0x4F2083f5fBede34C2714aFfb3105539775f7FE64).

Permissions preset adjustments

In line with our commitment to streamline governance and reduce the frequency of voting events for the community, we propose targeted adjustments to the existing permissions preset within this proposal. Specifically, we are requesting three key changes:

Whitelisting the updated wstETH-WETH Pool and Gauge: As part of our ongoing optimization, we propose to whitelist the updated wstETH-WETH pool on Balancer and its corresponding gauge on Aura.
Revoking Permissions for Aura's bb-a-usd Pool: In light of the recent vulnerability disclosed by Balancer on August 24, 2023, we recommend revoking all permissions associated with potentially compromised pools. It's important to note that the Endowment had no exposure to these compromised pools at the time the vulnerability was made public.
Whitelisting the delegatecall function on Cow Swap: A minor bug was found in the existing preset configuration. Specifically, the signOrder function within Cow Swap's order signer contract is designed to be executed solely via a delegate call, a capability not currently supported by the preset. This oversight not only hindered functionality but also revealed a flaw in the SDK preset testing framework. The issue has been swiftly addressed and rectified in a recent commit to the codebase.

As is customary, we are presenting an updated version of the "Preset permissions - ENS Endowment'' document. This document comprehensively lists all permissions granted to karpatkey, with newly requested permissions highlighted in green and any revocations marked in red.

We are also sharing the payload to apply the proposed changes for your review. We strongly encourage community members with the required technical expertise to scrutinise the content and share their invaluable feedback.

Transactions

All transactions can be found in the following payload.

[EP4.2][Executable] Fund the Endowment (second tranche)