- The ENS DAO expects to get around $13 million from the sale.
- The ENS DAO will use the funds to cover its expenses for the next 18-24 months.
- Some community members wanted the ENS DAO to sell the ETH in smaller chunks.
Ethereum Name Service (ENS) DAO has decided to diversify its treasury holdings to weather better the bear market and any potential decreases in crypto prices.
The governing body behind the most popular blockchain domain protocol has voted in favor of a proposal to swap 10,000 ETH for USDC. Almost 90% voted in favor of the proposal, including ENS founder Nick Johnson, former ENS Labs employee Brantley Milligan, and well-known developer Lefteris Karapetsas.
Update on ENS DAO onchain votes:
— ensdao.eth (@ENS_DAO) February 7, 2023
EP 3.2 - "Working Group funding request" has passed
EP 3.3 - "Sell 10k ETH to USDC" has passed
Both proposals are now pending execution.
After a 2 day time-lock, both proposals will be executed. pic.twitter.com/ZbOzEZOy5W
The proposal was posted on January 19 after the ENS DAO decided to decrease the treasury’s exposure to ETH, which makes up almost 100% of the treasury. The proposal said that having such a large exposure to ETH, a volatile asset, places the DAO in a “vulnerable position.”
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The ENS DAO expects to get more than $13 million for its 10,000 ETH sale, which it will use to cover operating expenses for the next 18-24 months. The 10,000 ETH represents around 25% of the total 40,746 ETH ($67 million) held by the ENS DAO.
While the overwhelming majority voted in favor of the ENS DAO’s intentions to derisk its treasury, there were lengthy discussions about the fact that the DAO wants to sell its ETH in a single transaction.
ENS DAO Will Sell 10,000 ETH in Single Transaction
Some ENS community members were perplexed by the ENS DAO’s proposal to sell its 10,000 ETH in one single transaction through a decentralized exchange aggregator, CoW Swap.
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A lot of users were in favor of selling the ETH over time in smaller chunks. However, the ENS DAO ultimately decided to stick to its original plan to sell the ETH in one transaction. That’s because selling in smaller orders would require multiple governance votes for each sale.
At the same time, there were others, like a user named Ronald, who pointed out that by selling a decentralized currency for USDC, a centralized stablecoin, the ENS DAO is taking up more risk.
“This shows how out of touch the DAO is with reality. USDC has a blacklist function, and the US government only needs to put a gun to one man’s head to KYC trap the funds. The DAO will have little recourse to recover the funds in this instance as the ENS token will be considered an illegal security if things get to this point.”
They also added that the ENS DAO’s decision to choose USDC over DAI, a decentralized stablecoin, is “absolute evil.”
On the Flipside
- The ENS DAO has yet to provide a date for selling its 10,000 ETH.
- CoW Swap was recently exploited for more than $180,000.
Why You Should Care
The ENS DAO’s decision to sell 10,000 ETH could make a significant short-term impact on the price of ETH. Users might want to consider following this story to better position themselves ahead of the sale.
