RGP-20: Allocation of Bond Issuance Funds


Ribbon Finance recently raised $3M in USDC through a convertible bond offering [1]. The cash is currently sitting in the Ribbon Multisig [2]. We intend to lend out the funds as proposed initially in RGP-17: Ribbon Bond Issuance [3].


We propose to deploy the capital in the following manner:

  1. A 1.5M USDC uncollateralized loan to the Orthogonal Trading pool [4] at a 9.5% APY via Maple Finance [5]. We are aware of the current situation with 3AC / Celsius. According to the Maple team, borrowers in the Orthogonal Trading pool have little to no exposure [6] to Celsius and 3AC.
  2. A 1.5M USDC deposit into the Ribbon Fuse Pool [7] money market. The Fuse reentrancy hack has been fixed by the Tribe team [8]. This will first and foremost bootstrap the lending market for borrowing against your Ribbon covered call position. The treasury will also be earning a variable rate APY on this position.


Rather than having the USDC funds sitting idle, we suggest to a) earn yield on the cash raised to increase working capital and b) bootstrap the lending market to borrow against the ETH covered call position which should increase TVL.


We have listened to the community and will amend the allocation:

  1. Allocate 500K USDC to the Maple pool instead of 1.5M USDC.
  2. Allocate 1.5M USDC to the Ribbon Fuse pool as planned.
  3. 1M USDC will be kept in the treasury. If there is traction for borrowing against the covered call position, we can supply the 1M USDC to the pool without having to undergo another governance proposal.


This proposal will be posted on the forum for 1 week prior to voting. Voting will then be open on Snapshot for 5 days. This vote will be a single choice vote. You may vote on the proposal by selecting “Yes, let’s do it” or “No, this is not the way”.


  1. Cash Raised
  2. Ribbon Multisig
  3. Bond Offering Proposal
  4. Orthogonal Trading
  5. Maple Finance
  6. Maple 3AC/Celsius Contagion Risk Update
  7. Fuse Pool
  8. Fuse Re-entrancy Fix

Hi @chudnov, totally supportive to put the $3m raised at work, thought I would suggest a slightly different approach:

  1. $1.5m to bootstrap the Ribbon Fuse Pool seems a lot in the current market, I am not sure it will be much demand for borrowing against covered call positions. I would suggest starting with $1m, and top it up later if we see utilisation growing.

  2. While the 9.5% APY is attractive, I would not feel confortable going all in into an undercollateralized loan. I would suggest instead splitting the $2m (assuming $1m in the Fuse pool) into 4x $500k investments with various risk profiles (the Orthogonal Trading pool on Maple being the more risky one). Other investments could include (depending on which stablecoins people are confortable getting exposure to with the DAO funds):
    – USDC/USDT/DAI/FRAX Uniswap LPs
    – USDC/USDT/DAI/FRAX Balancer LPs
    – USDC/USDT/DAI/FRAX Yearn Vaults

If I understand correctly, we took a overcolalteralized 9% fixed APR loan on our governance tokens, and we are thinking of putting USDC from that on a 9.5% APR undercollateralized lending position somewhere else?


Bond APR: 7%
Porter Subsidy APR: 3%

So we are borrowing at 4% APR and supplying to Maple at 9.5% APR.

I agree with point 2. We are going to put much less into Maple.

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The porter subsidy is in PTR, which I would value at 0. Unless we will be consistently dumping it for stables?

Even though the loan book of the Maple pool is not exposed to Celsius or 3AC, it is full of uncollateralized loans to hedge funds/prop trading firms, etc.

If we are conservative and rational, we should infer that most peers of 3AC followed similar strategies (stETH exposure, some LUNA/UST exposure, risky farming strategies, etc.).

So in my opinion the risk of depositing in Maple is too high - especially with funds that the DAO borrowed and will have to reimburse in a few months.

I would go with 3.1415r’s proposition: conservatively reinvest in stable pools on Curve or Uniswap, and maybe deposit some in Aave (2-3% on some stablecoins, which is better than nothing).

Hey @chefjommi - the subsidy will actually be in USDC, this is a recent development.

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Gaining 2.5% in yield (9.5% lend vs. 7% borrow APR) on USDC 1.5M for taking risks on uncollateralized loans seems not a healthy risk/return.

What is our potential downside in maple? Can we lose the entire USDC 1.5M?

I really like that we want to use other DeFi products, but raising the money through Porter without a clear intention on how to use it feels more like an experiment rather than a clear use case. I’m completely ok with doing that, but then we should probably also label it as such.


  1. It is not 2.5%, it is 5.5%: Bond APR: 7%, Porter Subsidy APR (in USDC): 3%.
    So we are borrowing at 4% APR and supplying to Maple at 9.5% APR.

  2. We are actually only allocating $500K vs. $1.5M as stated in the updated section. Yes, if the loans are defaulted we can lose $500K.

  3. We do have a clear intention of how to use it. We initially sought to raise $3M with the intention of bootstrapping the Fuse pool and lending on Maple. This was our reasoning for issuing the bonds in the first place.

Wasn’t aware of the Porter Subsidy APR! (as its outlined differently in the initial RGP)

We’re earning USDC 27.5k in yield (5.5% on 500k) for a risk of losing USD 500k. Probably the costs of implementing this (time used to do proposal, time implementing it etc.) for the team costs more than the yield generated. Imo still not worth it.

I like @3.1415r proposal of deploying (at lower yield, but different risk) into different stablecoin pools

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@spyro We were planning to do this proposal for bootstrapping the Fuse pool anyway, Maple is just a part of the proposal. And implementation is quick just a deposit call from multisig. So I wouldn’t say we lost any time due to the Maple portion of the proposition specifically.

Seems like there is considerable pushback in the snapshot proposal, so we may consider removing the Maple part altogether.

As for @3.1415r idea the yield is virtually non-existant. Better off keeping in the wallet.

We can probably get 2-5% on some of those low risk stablecoins pools, I would not qualify that of virtually non-existant. That would effectively lower the effective cost of the bond.