Proposal: Transitioning the Moonbeam Treasury to Stablecoin Payments

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That’s a wrap!

Referenda #114 is currently live!

With your valuable feedback and refinements, the Treasury Council is pleased to share the finalized plan for transitioning the Moonbeam Treasury to stablecoin payments via DCA strategy.

Here’s the adjusted plan that has been proposed and is now up for voting:

Treasury Stablecoin DCA Proposal Finalized Plan

Plan Summary

This initiative aims to reduce GLMR expenditure, mitigate volatility, and enhance financial predictability for the ecosystem.
The Treasury will convert 1.8 million GLMR — equivalent to roughly 25% of the expected Treasury inflows over a 6 month period — to USDC.AH (Polkadot Assethub native USDC) over 6 months using Hydration Network’s Omnipool and XCM transfers. These funds will be comprised of those 1.8M GLMR of these expected inflows and not add the roughly 456,000 GLMR from the Treasury’s existing Hydration GLMR LP position ( <= click the link to check its current size) in Hydration Network for now. This was decided by the Council and Alberto to get started asap without adding additional XCM batch call complexity which would have required additional time, effort. Still, this will be on our agenda in the weeks ahead — thanks to @AlbertoV19 for bringing this up.

Approximately 2.400 GLMR will be traded every 3.600 blocks (~6h), yielding ~730 trades over a 6 months time period.
Hydration Network has recently transitioned to 6 seconds blocktimes which was being accounted for in our calculations. A $0.05 price floor was incorporated that would pause conversions if GLMR’s price would fall significantly (>50% below $0.10 from when the code was put together). A $0.05 price floor was unanimously favoured over as a $0.045 price floor again to speed things up significantly as the latter would have required refactoring of previously tested XCM code.
With regards to HDX transaction fees, our Sovereign Account’s current balance of 52,705 HDX should very much be sufficient for the expected amount of swaps’ fee costs.

Notes

  • Stablecoin Choice: USDC.AH will be the stablecoin of choice due to MiCA compliance, per community preference and as the only stablecoin choice over USDT or Moonbeam Wormhole USDC for increased Hydration accumulation and Treasury payout simplicity.
  • Technical Execution: Post-RT3700 (expected to go live in June 2025), Treasury stablecoin payouts will be enabled from the tech side of things. @AlbertoV19 has been taking care of implementing our needs into the specific XCM call data for our dedicated purposes, with Treasury Council verification. Chopstics was used to test the XCM code and ensure reliability.
  • Governance: The 2M GLMR Root proposal deposit will be funded by the Treasury. A separate governance proposal at the end of the 6-months DCA period will address transferring USDC.AH back to Moonbeam.

Expected Benefits

This strategy will eliminate volatility-related safety margins, ensure predictable fiat budgets, minimize market impact, and build a more diversified Treasury for increased resilience and predictabilities.

Community Input

Your feedback shaped the plan: USDC.AH focus (@dev0_sik, @rom1.dot), the $0.045 threshold (slightly increased to $0.05), and a 3-month checkpoint (@rom1.dot). The 25% inflow conversion and DCA strategy over a 6 month period addresses timing concerns.

Next Steps

The Council has submitted the governance proposal as the XCM call data has been carefully crafted and tested. After the 6 months DCA period an evaluation review will be conducted by the Council and all dials looked at carefully.

We’re always welcoming & appreciating any thoughts and comments on any of the specific details and the entire endeavour.
Thank you, @rom1.dot, @dev0_sik, @AlbertoV19, and the community for your collaboration!

Best regards,
@_yrn on behalf of the @TreasuryCouncil

Notes

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