The Gitcoin DAO, a decentralized organization fostering open-source development through grants, is proposing a strategic move to bolster its financial runway. The proposal, titled “SGTM-001: Converting 5M GTC to Stables,” seeks to convert $5 million worth of Gitcoin’s native token (GTC) into stablecoins like USDC.
The proposal argues that holding a portion of the DAO’s treasury in stablecoins will provide greater stability and flexibility. For one, the cryptocurrency market is notoriously volatile. Stablecoins, pegged to assets like the US dollar, offer a hedge against these price swings.
By building a reserve in stablecoins, the DAO aims to be prepared for potential downturns, ensuring continued funding for grant programs even during bearish periods. The proposal envisions a cyclical approach, with stablecoin reserves being used strategically for future grant cycles. This strategy aims to create a sustainable financial foundation for Gitcoin’s long-term growth.
The How-To: Selling GTC Strategically
The proposal outlines a plan to sell the GTC over a period of 12 to 18 months. The GTC will be sold incrementally, around 200,000 to 300,000 tokens per week, depending on the chosen timeframe.
A combination of dollar-cost averaging, limit orders, and potentially over-the-counter (OTC) deals will be used to minimize market impact and maximize returns. Plus, all transactions will be conducted on-chain, ensuring complete visibility for the Gitcoin community.
Management Options: Speed vs. Decentralization
The proposal presents two options for managing the funds from the GTC sale. First is the foundation-led execution, which would see the Gitcoin Foundation spearhead the stablecoin conversion process, ensuring swift action while maintaining governance oversight. The second option involves the formation of a new council with multi-signature control that would oversee the swaps and manage updates. This option emphasizes democratic control but might lead to a slower process.
Voting on the proposal will be open until May 21. However, more than 98% of the current votes rallied behind the conversion idea.
