By Wen Moon and Steven-T
The Umami DAO team has been hard at work, navigating an eventful September. Bitcoin exhibited strong bullish momentum, surpassing the performance of the traditional stock markets. On the other hand, ETH continues to see downside momentum vs BTC thanks to the FTX exploiter with $150m in ETH slowly selling the price down and in some cases swapping to wBTC through Thorchain.
The Burger Dev team has remained dedicated to their work, diligently advancing the development of Umami’s GMX V2 vaults. Those who stay engaged with our Discord community and follow the Bun to Bun updates are aware of the ongoing progress of the developers. We have been actively engaged in implementing, fine-tuning, and rigorously backtesting the strategies for the GM pools. Additionally, we are working on enhancing the user interface in preparation for the forthcoming grant incentive program.
For those who may not be aware, the team has been tirelessly dedicated to the advancement of Umami’s Arbitrum Short Term Incentive Program (STIP). Our primary focus has been ensuring that our value proposition to the Arbitrum community remains clear and straightforward. We’ve proactively engaged with numerous key protocols, garnering crucial support from the community. We are proud to announce we are one of the first protocols to secure our request for 750,000 ARB incentives, boasting an impressive ratio of over 96% “For” votes. With 75m ARB votes already casted, we want to thank the amazing Arbitrum community for their continued support. You can track the snapshot progress here.
Now, let’s take a dive into September’s numbers:
Overall Performance
Treasury value, excluding UMAMI token holdings:
- End of August, $3,904,302
- End of September, $3,878,770
In the month of September, there was a Net Treasury loss of $25,532 or 0.6%.
For comparison:
- The total crypto market cap was up 2.8% to $1.056T
- The price of Bitcoin was up 4% to $26,965
- The price of Ether was up 1.5% to $1671
The treasury performed in line with the market considering expenses.
Gross Yield: $19,949.48 at time of writing, which constitues a 6.2% APR return for the whole treasury!
- 11.16 ETH ($18,648)
4.29 wETH from GLP, 3 wETH distributed to marinatoors
.37 ETH from Liquidity pools
6.5 ETH from vaults profit - Liquidity pools($1,455)
USDC — $104
ETH — $618 (.37)
UMAMI — $733 (1224)
Net Yield was $14,941 using Gross Yield — Marinator Payout.
Expenses: Umami’s OpEx was $101,065 in September. The monthly USDC break down:
Fixed OpEx was $101,000
Variable Expenses $65
Asset Appreciation for Umami’s treasury is a net appreciation of $93,146 or 2.4%, using this formula:
Asset Appreciation = Net Treasury Gain — (Gross Yield — Expense Outflows — Marinate Payout)
Treasury Breakdown
Currently the breakdown of our treasury is as follows:
Liquid Runway: is $2,548,555 or 15.9 months (assuming monthly opex of $160k). This is the value of any blue-chip liquid treasury holdings. It constitutes our GLP position; treasury stables + ETH; GMX hedges and our Vendor positions. It does not include ARB, esGMX or xGRAIL.
GLP & GMX
GLP continues to see lower than average yield, currently sitting at about 5%. This obviously affects the potential earnings for Umami Vaults but thanks to volatility traders managed to lose a net $536k for the month, further increasing our vaults gains vs par. GLP continues to hold it’s value nicely as it was designed to do.
GLP’s AUM value has steadied this month moving from $381 million to $371 million. Despite this downturn, Umami’s vault share of GLP TVL has increased to $4 million (Share of TVL up 34%). Demand for single-asset GLP exposure continues to increase solidifying our thesis that the market wants this type of product.
At present, there’s a total of $120 million in open interest for V1, with $88 million of that representing long positions. This weighting within the GLP vaults underscores their inclination towards mitigating downside volatility. Opting for Umami’s GLP vaults can still be seen as a secure strategy, especially for those seeking to hedge against bullish exposure.
UMAMI Liquidity Pools
Our current allocation of the treasury to LP support stands at a healthy $67,000, enabling us to maintain efficient capital allocation and flexibility. This allocation size allows us to seize opportunities when prices dip, enabling the treasury to accumulate Umami. We remain committed to allowing the market to determine prices, intervening to provide support when necessary.
Due to our limited ownership of protocol liquidity and some liquidity pool purchases, the ETH revenue from LPs was below the average in September. Additionally, September witnessed year-to-date lows for the UMAMI token, briefly dipping below $5. This presented an opportunity for the treasury to acquire Umami at an advantageous price point through Uniswap liquidity pools, resulting in the acquisition of a total of 5,919 Umami tokens at an approximate cost of $5.50 each.
Final Thoughts
Our vaults have continued to undergo optimization, and we’ve reaped the benefits of lower gas prices and some fine-tuning. This has resulted in our most successful month to date in terms of net revenue. To break it down, our Vault ETH revenue amounted to 8.748 ETH, with Vault Keeper Costs at 2.25 ETH, ultimately yielding a Net Vault Profit of 6.498 ETH. We’re on the right track, and these improvements underscore our commitment to delivering value to our community.
As we gaze ahead into the crypto market’s horizon, the BTC chart seems to be in good shape, though it’s crucial to remember that risks are still out there, especially with bond liquidity facing some tests. For the bulls out there, keeping an eye on ETH’s performance, getting above the October central pivot at $1632, is essential. Plus, there’s word going around about a Bitcoin Spot ETF on the horizon, and we all know how news can sway prices in unpredictable ways. Stay vigilant and adaptable in these exciting and ever-changing crypto times!
As always, feel free to reach out to us regarding any questions or feedback. See you next month!
🍔
