DAO or no DAO?
In case you guys didn’t know but the founder of TimeWonderland Daniele Sesta just tweeted this approximately 13hours ago. They sold over 893k of AVAX for just over a hundred million (~112USDT per AVAX), another 50594 AVAX on traderjoe for 5494523USDC (~108.6USDC per AVAX) and 50000 AVAX on traderjoe again for 1181ETH (assuming at the time of writing, ETH is trading at approximately 4560USDT which leaves us with ~107.70USDT per AVAX).
All of the swaps/trades conducted yielded a higher value in USD terms than if they were to do nothing and continue holding everything in AVAX.
After all the swaps were concluded, all the stable coins were swapped to MIM which is also a stable coin running on the Avalanche network.
Now here are some pros and cons of the actions taken. I’ll start with the pros. The Time Wonderland treasury reduced their exposure to volatile assets such as AVAX for a stable coin which should allow them to have a much more accurate and stable runway. If the treasury relied on AVAX and it crashed today, the runway will drastically decrease as there is clearly not enough liquidity from the treasury to distribute to the stakers. This was one of my concerns earlier when I was writing the story about Invictus. Now that they’ve rebalanced the treasury, this will leave us with a much more stable treasury balance which I am very happy about.
The cons with what happened are that this was all decided by the developers/founders and only announced on Daniele’s twitter, not even the main Time Wonderland’s twitter account or their discord group. This leaves us extremely vulnerable to the actions of the founders which may or may not work out. You may think that with a competent team, things get done faster without the bureaucracy of a DAO but what if the actions were bad? Even if it wasn’t bad, it kind of defeated the spirit of defi as a whole.
In this scenario, the actions weren’t bad but the fact that such a huge move was done with little to no transparency ended up plummeting the price down to below $7000 from well above $8000 in less than 24 hours. Not that it matters when the yield is over 79200% but this huge price drop may be a result of users losing their trust in the system and selling off their share.
For me, such a thing is still kind of acceptable and I will continue to (3,3) but only TIME will tell.