The purpose of the PowerPool DAO is to execute a vision to drive maximum value to the CVP/xCVP token pair, in part by deriving fee income from structuring convenient, diversified, curated bullish and lower risk yield seeking investment pools across multiple chains and layers, and in part by managing the xCVP staked token and linked DAO Treasury to offer a defensive ‘cushion’ for investor portfolios during inevitable periods of declining prices in the market.
Traditional hedge funds keep the majority of their gains on bearish, short positions inside vehicles internal to their private partnerships, which is why the leading hedge fund partners are all so rich (see leading hedge fund listing in References). Long term, institutional investors will be more attracted to hold CVP if it is managed defensively, thought of as a ‘hedged’ token, with real fee income, but also with downside ‘insurance’ to reduce volatility of xCVP NAV. This adds value to externally-held CVP as collateral since lower CVP price volatility enables individual CVP holders to borrow more comfortably against their own CVP (and staked xCVP?) with much reduced risk of liquidations. The DAO Treasury would initially hold defensive positions centrally and track the NAV accruing to xCVP, which we all hope will rise, driving up the exchange rate CVP/xCVP for investors who wish to un-stake and sell their CVP. Subject to DAO governance, however, PowerPool may also package defensive , auto-hedged structured investment pools for trading on the open market, with only management fees for the DAO Treasury.
Obviously, this approach to investing the DAO Treasury makes risk management one of the key skills of the DAO, and the protocol underlying the Power Universe needs to be governed not only by dynamic shortlist management and continuous (re)weightings, but also by clear risk mangement position limits or boundaries.
Retail Investor Reporting
See examples below from Index Coop
Index Coop July 2021 Financial report
The Index Coop has performed well in challenging market conditions throughout July. With overall gross profit growing 7.5% in June, while revenue grew 6.5%, highlighting better capital efficiency due to lower liquidity mining incentives which dropped 14.5% MoM. The treasury has seen an upward growth trajectory which currently stands at a total of $57.7m.
Institutional Investor Reporting Requirements
Institutional investors are greatly burdened by the reporting requirements associated with managing their clients' investments. There is a role for PowerAgent/PowerOracle in helping PowerPool differentiate itself from other asset management protocols by, for example, sourcing prices for Power Universe tokens from multiple sources routinely.
DAO Treasury xCVP/NAV Reporting
PowerPool Treasury Monitoring
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