# MIP55c3-SP4: Adding a Special Purpose Fund - Makershire Hathaway

## Preamble

```
MIP55c3-SP#: 4
Author(s): @SebVentures, @Aes, @adcv
Contributors: @luca_pro, @MakerMan @juanbug
Tags: spf
Status: Rejected
Date Proposed: 2022-04-15
Date Ratified: N/A
Amount Requested: 10M DAI
Recipient Address: TBD
Forum URL: https://forum.makerdao.com/t/mip55c3-sp4-adding-a-special-purpose-fund-makershire-hathaway/14643
Ratification Poll URL: https://vote.makerdao.com/polling/QmZjU2pG
```

## Sentence Summary

The Makershire Hathaway SPF will be a 10M pool managed by the SF CU under the supervision of Risk CU and prospective LOVE CU to experiment with various yield generation strategies and support DAI liquidity/utility.

## Motivation

The Maker Protocol holds over $5.4B in stablecoins earning zero yield. There are multiple efforts underway ([short-term bonds](https://forum.makerdao.com/t/mip13c3-sp12-declaration-of-intent-invest-in-short-term-bonds/13084), [IVs, RWA, Multi-chain](https://forum.makerdao.com/t/maker-growth-strategy-we-must-act-now/14501)) to invest the majority of stablecoin exposure into growth opportunities.

Our aim is to begin experimenting with generating yield on balance sheet assets and support DAI liquidity/utility, creating a new revenue stream for the protocol. As DeFi is evolving quickly, we should continue researching, investigating, and experimenting with DeFi-native yield-generation strategies.

## Special Purpose Fund Name

Makershire Hathaway

## Scope & Work Credentials

### Scope

* Invest protocol capital to improve DAI liquidity, utility, and diversify our revenue streams
* Improve DAI liquidity/utility. For example:
    * Bootstrap liquidity of DAI on L2s and other networks by providing liquidity and participating in DAI yield farms
    * Providing Liquidity on DEXs for ETH/DAI, ETH/MKR, MKR/DAI etc.
* Experiment with strategies with the goal of automating them later. For instance:
    * Rate arbitrage on term-lending product (recursively lending on Protocol A and borrowing on Protocol B)
    * Providing liquidity to an option DeFi Protocol
* Earning yield on ETH through staking, providing liquidity and/or liquidity farming
* No management or performance fee is charged

*Note - Gas for operating the pool will be taken from profits*

### Risk profile

* Strategies are expected to be mainly done in DAI or $-based stablecoins but can also be done in ETH (incl. derivatives), and MKR. ETH exposure [could be hedged](https://forum.makerdao.com/t/balance-sheet-manipulation-how-to-yield-farm-safely-on-uniswap/5722) or not
* Positions may require high concentration in situations where we seek to bootstrap liquidity or take advantage of temporary high-yield opportunities
* The pool might allocate to protocols that haven't passed a comprehensive risk and smart contract assessment by respective CUs
* For both whitelisted (Ethereum and direct L2s) and non-whitelisted domains, SF CU will provide clear guidance and limits, informed by PE, Risk, and Lending Oversight CUs

### Operating Guidelines

* MakerDAO community can contribute to the management of the pool by discussing ideas in the Makershire Hathaway Discord channel and posting them to a Google Form (link to be added)
* Investment strategies will be implemented on-chain for transparency
* A live Dune dashboard will provide insight to the extent possible into the performance of the fund
* Further improvements will be made on an ongoing basis to reporting quality and to increase the frequency of information availability
* Monthly reporting will provide information on the strategies pursued and the results
* A successful signal request or an unilateral decision by Strategic Finance or Risk CU can be used to wind down the fund. The fund will be wound down within six months thereafter to minimize slippage and avoid frontrunning. The remaining DAI will be transferred to the Surplus Buffer


### Funding Breakdown

* The total funding will be done in one step when this prroposal is approved
* 12 months following the approval of the proposal, all funds will be returned to the Surplus Buffer and a full post-mortem will be posted for the community to evaluate and decide if the project is worth expanding, maintaining, or shutting down.

### Special Purpose Fund Details

```
Official Contact or Group Name: Makershire Hathaway
Contact Email/Handle: Makershire@gmail.com
Multisignature Wallet Management: Owned by MakerDAO following MIP47c1 application
Date Added: 2022-04-15
Total Amount: 10M DAI
Wallet Address: TBD
Comptroller signers (5/7 multisig): @hexonaut, @Aes, @SebVentures, @Primoz, @luca_pro, @ultraschuppi, @MakerMan
```