Managing the Treasury

Automating the Management of the Treasury

$brktETH will be available on the Ethereum networks and the treasury will be held within that Ethereum smart contract. The Treasury will be managed based on a policy document that will be updated from time to time. Bracket will not be applying discretion in how the treasury is managed or re-balanced, all actions will be just an automated consequence of applying the policy.

The policy will be published here prior to Phase II launch. Bracket will protect the treasury, and make changes to policy in the best interest of all users and the platform.

The mix of accepted LSTs/LRTs will change over time mostly due to the balance of deposits vs withdrawals. Further, we will also add new eligible LST/LRTs as new issuers enter the crypto space. Based on the policy, we may also need to remove an asset from the treasury. This would usually be due to:

• One LST/LRT is no longer producing competitive block rewords and is dragging down the treasury's return.

• The LST/LRT's protocol has become overly risky in some way such as:

  • Too many slashes

  • TVL has dropped below our thresholds

  • Swap pool liquidity has dropped too low

  • The issuer had a major security incident

In most case the treasury would need to swap an asset for a more acceptable asset, which may involve either a DEX swap or via the issuer.

Asset Allocation

The policy document will specify a target asset allocation, if the asset mix has drifted too far from the target, an occasional re-allocation may be needed. The other asset re-allocation tool the platform will employ is in the way ETH and wETH deposits are processed. If a user deposits an LST, we take the asset provided. In the case of ETH and wETH, we have the ability to choose the asset we will acquire to put in the treasury. This gives us the ability to buy the asset that is the furthest away from it's target allocation and will bring the asset allocation closer into alignment with the target.