Ethereum Name Service mulls initiating endowment fund with $17 million

Quick Take

  • Karpatkey has proposed $17 million of initial funding for the ENS DAO’s endowment fund.
  • The ENS DAO endowment fund is supposed to hold $51 million worth of assets when fully financed.

DeFi treasury manager Karpatkey has asked the Ethereum Name Service (ENS) DAO to consider activating the DAO’s endowment fund with 10,766 ether ($17 million), according to a recent governance proposal.

The endowment fund is a treasury management step taken by the ENS DAO to optimize its reserves. The DAO chose Karpatkey to manage the fund in a governance vote concluded last year. Karpatkey is supposed to manage $51 million worth of assets on behalf of the DAO. These funds will come from the DAO’s treasury, which currently holds $1 billion worth of assets.

Karpatkey’s $17 million funding proposal will constitute the initial seeding of the fund if approved. There are plans for two other monthly installments until the fund reaches its $51 million funding goal.

The ENS DAO $1 billion treasury currently includes 40,959 ether ($64 million). When the endowment is fully seeded, it will hold all the DAO’s ETH funds, minus $16 million. This left-over $16 million is to create a two-year runway for the DAO’s expenses.

Karpatkey’s proposed plan will see the fund keep 59% of its holdings in ether. The rest will be converted to USDC, according to the proposal. Karpatkey will deploy the funds into a few ether-neutral and U.S. dollar-neutral DeFi investment strategies. The stated goal is to earn up to 5.43% in annualized returns.

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