NMPIP 228: Allocate 6,575 ETH to Chorus One and EtherFi

Governance Discussions
1

Overview

This NMPIP proposes investing the currently unused WETH from the Nexus Mutual Treasury Yield Vault (“NXMTY”) into ETH staking using Chorus One as an operator via Stakewise V3

This follows on from the following two RFCs:

Following the suggested governance approach and the conclusion of the indicative snapshot vote, the Investment Committee proposes allocating 75.88% of the idle ETH to Stakewise / Chorus One and 24.12% to EtherFi’s weETH.

Following the recent withdrawal from NXMTY of Enzyme’s protocol fee, there is 6,575 ETH available in the Enzyme vault for these investments, so we propose allocating this balance in the proportion based on the signalling vote, resulting in the following actions:

  • allocate 4,989 ETH to Chorus One via Stakewise V3
  • allocate 1,586 ETH to EtherFi by acquiring weETH

Rationale

The WETH in the NXMTY vault that’s not being used for staking via Kiln isn’t generating a return for members.

With these investments, members can expect to generate

  • ~3.6% p.a. on the Chorus One / Stakewise V3 portion
  • ~3% p.a. + rewards resulting from points on the weETH portion

These investments have a risk profile that is in line with the Investment Philosophy and similar to the existing ETH staking investments - stETH, rETH and Kiln.

In addition, as the assets are already in the Enzyme vault, there is no technical effort required from the Nexus Mutual team to make the investments.

For more detailed information on the potential rewards, fees, monitoring strategy, technical details, fees and risks, you can refer to the individual RFCs:

Specification

If members vote to approve this NMPIP, the Investment Committee will instruct the Enzyme team to take the following actions:

We have requested that the Enzyme team provide a technical overview of the adjustments to the vault as part of this NMPIP.

Proposal Status

This NMPIP will be open for review and comment until 17 July.

After 17 July, this NMPIP will be eligible to be put onchain for a full-member vote.

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Hello @rei & all,

we’re glad to see this proposal moving forward and believe the updates will bring significant benefits. We are ready to support its implementation as soon as NMPIP 226 gets a final binding vote from the DAO.

In the latest proposal for NMPIP 226, a few changes are being introduced compared to the current NMPIP 196 structure.

As thoroughly described above, the portfolio will be fully allocated with the addition of Stakewise/Chorus One and EtherFi, which will hold 4,990 ETH and 1,586 ETH respectively, while Kiln remains unchanged at 6,784 ETH.

As a reminder of the recent changes in the fee structures, the management fee stays at 0.14% but now capped at $5k per month, reviewed quarterly. The performance fee remains at 0.00%, and the protocol fee stays at 0.01%. Also, gas fees are now paid by the vault via a gas relayer, instead of by Avantgarde Treasury.

Policy-wise, the allowed adapters and slippage tolerance remain the same, but the allowed external positions will now include Stakewise V3 alongside Kiln Staking. While the addition of Stakewise V3 in the vault settings requires a vault reconfiguration, the exposure to EtherFi’s weETH can be achieved through Paraswap v5 without further adjustments or policy changes.

This new configuration aims to diversify staking positions and optimize fee management and we think it will bring significant benefits to Nexus Mutual. You can find a recap of the changes i the table below.

We hope it helps to give full visibility the scope of NMPIP 226 and we remain available in case of questions from the Nexus community.

Screenshot 2024-07-08 at 10.32.21
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NMPIP 228 is now open for voting in the Nexus Mutual UI :point_down:

You can participate in this vote over the next three (3) days. Your voting power is equal to 1 + your NXM balance.

Members who vote will receive their share of 100 NXM in incentives, which are provided to offset the gas costs associated with voting. These rewards are distributed based on the number of voters, not on the amount of NXM that participates in the vote.