Stables: 55-75% Tokens: 10-30% Option Strategies: 10-20%
Our stablecoin holdings will be deployed for yield. This will be run like a diversified portfolio of bonds avoiding concentration on any specific yield source. We will use fully collateralized stablecoins only. Cash will be deployed in well-established projects. We will do regular credit risk evaluation of our exposures and cap our exposure to 25% in any single yield farm.
Individual coin exposure is capped to 10% for high market cap coins such as Bitcoin or Ethereum. Individual altcoin max 1% of the portfolio. No more than 5% in aggregate in altcoins. Open to VC / SAFT investments but extremely well-vetted projects with no more than 1% of the total portfolio allocated.
Call and put overwriting strategies are primarily used as a rebalancing tool i.e. allocating part of stablecoins to buying the market in crashes and using call over-write as a way to take off exposure in rallies. No more than 10% allocation to puts and no more than 10% allocation to calls. Potential use of AMM when implied volatility levels are lower than AMM breakeven fees. Other uses of long volatility strategies for tail risk hedging depend on market conditions.
Portfolio rebalancing to achieve target weights will be done once a month on Options expiry to synergize with call/put options. Intra-month market rebalancing actions will be taken in the case of extreme market moves (>25%) or in the case of any security events on portfolio tokens. These are general guidelines and discretion and flexibility will be used from time to time to take advantage of or avoid losses due to extraordinary market conditions or lack of market liquidity.
The vault is managed via gnosis multi-sig with a 2/3 authority.