Optimize Treasury Funds: Strategic Staking and Protocol APR Enhancement

General
1

Proposal writer: Oruen San a.k.a. Eldelbong.

Summary:

This proposal suggests moving 75% of the treasury funds into staking via network validators (such as Ethereum or other compatible chains) to generate additional passive yield. The yield earned would be strategically used to increase the protocol’s APR, and in the case of ETH staking, the rewards would be used to buy back and distribute K9 tokens, strengthening the ecosystem and delivering value to holders.

Rationale:

  1. Sustainable Yield: Staking treasury assets with validators allows us to earn passive and secure rewards without selling assets or relying on market volatility.

  2. Boosting Protocol APR: The generated rewards can be used to increase APRs for K9 protocol pools, attracting more liquidity, incentivizing user participation, and positioning the protocol as a more competitive DeFi option.

  3. ETH Staking Buyback Mechanism: If ETH staking is used, the rewards would go towards buying back K9 on the open market and redistributing it to protocol participants, which:

Increases demand for K9.

Reduces circulating supply.

Rewards engaged users and long-term supporters.

Suggested Allocation:

75% of the treasury goes into validator staking.

25% remains as a liquid reserve for operational costs, security, and contingencies.

Risks and Mitigation:

Validator slashing risk: Only work with validators with a strong and reliable track record.

Liquidity concerns: Maintain 25% of the treasury in liquid assets to cover short-term needs.

Centralization risk: Stake across multiple validators and chains to maintain decentralization.

Conclusion:

This approach puts K9Finance’s treasury to work in a way that directly benefits the protocol and its community. It enhances token value, boosts APRs, and positions K9Finance as an efficient, community-driven, and sustainable DeFi project.

2

As with the DeFi Index proposal, the net balance of K9 is negative since before each extra sale there will be a purchase to support it, and taking into account the 0.5% sales tax, the net balance of the price is somewhat higher in purchases than in sales.

3

Of course it should be treated as available treasury, except that it is staking 1 transaction away from having it available in the wallet.
This is simply another means of financing, without directly affecting the availability of treasury assets.

4

I support the idea of revisiting the treasury wallet allocation. I do believe we are seeing a good opportunity to grab some eth, bone, etc at current prices. I would love to see this idea expanded upon but as it currently exists I would vote no. I would love to know more on: why 75%, where exactly the $$ is going, and what profit are we talking about vs the upfront $$ risk. I really appreciate seeing this idea on the forum. Thank you for writing it.

1 Like
5

The 75% is because all the proposals have a budget below 25%. I set the percentage and it is completely subject to revision.

We’ve been working on this project for a year, which could have meant significant returns.

  • 75% is a good number for staking.
  • Why not use 100% if it is actually virtually available (one transaction away from getting it back in the wallet)
  • It’s risky, I wouldn’t put anything or I would put a smaller percentage.
0 voters
Summary

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