Yuga mint hype + thick blur bid walls present an opportunity for FloorDAO to sell its entire MAYC position with minimal price impact
The purpose of this proposal is to liquidate FloorDAO’s positions in MAYC into ETH before the next Yuga mint, which is expected to occur at the end of January. In the past, the value of Yuga items has typically appreciated significantly leading up to new mints, but then sold off sharply once the airdrop occurs. The value earned from the airdrop may not make up for the decrease in the price of MAYC that occurs after the airdrop is distributed. The potential for mint hype and individuals attempting to game the blur airdrop through the use of thick bid walls presents an opportunity for the DAO to sell its entire MAYC position with minimal price impact. After January, MAYC may not be as liquid.
This proposal also allows the DAO to rebalance its treasury. By holding a large liquid position in ETH, the DAO will be able to enter new positions that it is bullish on or deploy the ETH into yielding NFTfi strategies. Additionally, with $Floor redemptions scheduled for 2023, it may be beneficial to have ETH on hand rather than liquidating NFT positions at the last minute and incurring greater price impact.
If this proposal is approved, the following would be the next steps:
- Contact Opensea to unflag the MAYCs in the NFTx inventory. This process can be time-consuming and may take more than 10 days to complete, so it is important to initiate it as soon as possible.
- Decide on the method used to liquidate the MAYC position. This includes pricing each NFT individually on A P2P marketplace, accepting blur bids, or creating a one-sided sudoswap curve that sells at different prices according to a bonding curve. These options can be discussed further in another forum.
- Withdraw liquidity from NFTx
- Remove Liquidity from Sushi
It is important to note that there are risks associated with this proposal. Mainly opportunity cost with trying to time the market. If the value of mutants continues to appreciate after the DAO has sold its positions, the DAO will miss out on potential value and yield that would have been generated by its MAYC positions. Additionally, the removal of a significant portion of MAYC/WETH liquidity on Sushi may make the pricing of MAYC on nftperp vulnerable to manipulation. It would be helpful to get Jose’s input on this.
The current holdings of FloorDAO in MAYC are as follows:
- 61.282 xMAYC - ETH ($553,425)
- 1.735 xMAYC ($39,793)
- 1.103 MAYC ($17,697)
In total, these positions constitute approximately 12% of the treasury.
For: Approve proposal for Snapshot vote
Against: Amend the proposal