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.

Bracket may make changes to this 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, bracket 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

If the asset mix has drifted too far from the original mix at launch or a published pre-defined target, an occasional reallocation may be needed. The other asset reallocation process 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, Bracket will automatically cycle through all available LSTs and select the most liquid. However, Bracket may predefine the way these assets are selected to keep balance to the original mix. In this case, Bracket protocol will 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.

IMPORTANT NOTE: Because strategy managers will be using the underlying collateral within lending protocols to generate their ETH+ yield, the asset allocation will be based on the assets within the brktETH contract and the assets that are held in the lending protocols by the manager wallets.