SW DAO Monthly Report: February 2022 Edition

Welcome to the SW DAO Monthly Report for February 2022. In this document, we will take a look at the financial statements of the DAO Treasury. The Treasury is funded by income generated from the fees of our on-chain products and exclusive licensing agreements with third parties for use of our automated investing systems. We will look at the expenses that SW DAO faces and how we are changing month to month. This report is an important tool for our community as it allows us to track our financial progress and ensure that we are using our resources wisely.

One of the most important aspects of any organization is financial accountability. As a decentralized autonomous organization, it is crucial that we track our spending and make sure that all expenditures are in line with our goals and values. The SW DAO Treasury is committed to financial transparency and will publish monthly reports so that our community can track our progress.

February Income Statement

SW DAO generated $12,500 in revenue coming from a delayed January and February StackedInvest subscription payment. Our liquid treasury stands at $178,198 with nearly all of it being held in SW Yield Fund actively producing yield. The biggest change to our income statement was the significant decline of SWD liquidity provisions from $283,192 to $50,148.93 as we await solutions to fixing our Balancer liquidity pool per SWIP-05.

Overall, the DAO treasury total value of $228,346.93 is approximately $88,000 less than in the January report of $316,556.90. This can be attributed to a lack of newly generated income as well as a declining value of MATIC (-14%) which is held by the treasury for DEX liquidity provisions. All expenses this month were covered by the Founding Team and none by the treasury during the month of February, resulting in no capital outflow during this period.

February 2022 Expenses

During the month of February SW DAO’s expenses were reduced by ~$148,000 from the previous month's $188,924.54 down to $40,000.37. Our expenses were drastically reduced this month as there was no current payment necessary to our mobile app dev team, RoboCat for their continued development of Sun Wallet. The Marketing + Community Management Group expenses increased approximately $1,000 this month from $11,424.54 to $12,500.37.

The Remainder of Q1 Anticipated Expenses

Over the next month, the SW DAO Founding Team anticipates the following total expense of $110,000. There are no new additions or changes to the anticipated expenses since they were first outlined in January as milestones and deliverables have remained relatively constant. Overall the majority of our spending will still be on the critical design and development work related to the pending launch of our investment ecosystem.

SW Alpha Portfolio

During the month of February, SW Alpha Portfolio returned +2.1%, with a NAV per token changing from $83.19 to $84.92. During this time Ethereum performance was +8.7% with a positive swing of +22% from baseline and a -14% decline from baseline. This ~36% up and down trading range made retaining newly captured alpha difficult. SWAP NAV over this past month declined from $58,503.97 to $54,195.65. There are currently 10 unique Polygon addresses holding SWAP, resulting in no change from last month.

SW Yield Fund

In February the SW Yield Fund appreciated +5.23% with a NAV per token increasing from $1.09 to $1.147. During this period SWYF's total NAV increased from $125,746 to $224,000 as the SW DAO Treasury now has an active stake in SWYF as per SWIP-05. There are currently 18 unique Polygon addresses holding SWYF, an increase of +1 from last month's 17 addresses. The only project that SWYF participated in farming this month was DYDX, which has been a consistent place for SWYF to capture yield.

Conclusion + Looking Forward

February represents another month where income was limited as our currently largest potential income source, our MarketPeak fee, was not claimed due to a negative return on their algorithms. The Founding Team is looking forward to the addition of +20 new products over the coming month which is sure to boost the DAO treasury bottom line via on-chain fee generation. Additionally, March will represent the first full month with SW Yield Fund on the DAO treasury balance sheet, providing a consistent and stable return for our Treasury and Dividend Pool.

Without a functioning dApp, brand awareness and sales campaigns for the SW DAO product line have been piecemeal across the GitBook, TokenSets page, and StackedInvest algorithms. As we head closer to our April 1st dApp launch, the release of many new structured products, and brand new homepage product feature pages (coming soon), the SW DAO team is prepared to double its existing advertising spend to drive TVL and increase the DAO community user base. We absolutely cannot wait to have a one-stop-shop that is both informative and user-friendly, as this is currently our biggest hurdle to the conversion of web traffic into community members or clients.

Our SW Yield Fund continues to be a stable and consistent source for yield generation and March will mark the first full month with SWYF on the DAO Treasury balance sheet in size. Should SWYF return +5% per month as it has on average, our DAO income will increase by a consistent ~$8,900 each month. As SW DAO Founding Team furthers to build out the market value in our brand name and product lines, we are preparing a VC fundraising round, likely in Q2, to further pad the SW DAO balance sheet with more of our own structured products and cover development expenses.

We are excited to continue bringing new products and features to the community. Our team is hard at work on dApp 2.0, which we expect to launch in April. In the meantime, please keep an eye out for our upcoming announcements and be sure to check out our latest product updates. We want to thank you for your continued support of SW DAO and look forward to growing with you in the future.