STP-9: Issue Treasury debt


Simple Summary

This proposal seeks to empower the Treasury Council (TC) to issue debt using up to 4 million SNX tokens as collateral. The aim is to fund growth initiatives and buy back SNX tokens in a way that preserves the value of SNX and avoids negatively impacting its market price.


This STP proposes sending up to 4 million SNX tokens as collateral to an appropriate debt issuance mechanism. The funds raised, in USD, will be allocated for funding protocol development and buying back SNX tokens. This mechanism will be structured to prevent mark-to-market liquidations and restrict the borrowing or short-selling of the SNX collateral.


The TC has sufficient stablecoin reserves to meet short and medium term needs, and currently earns more fee revenue than expenses. The TC could use further growth capital that does not compromise potential appreciation of SNX, or exert downward pressure on its price.

While the TC has adequate stablecoin reserves and a positive fee revenue balance, there is are opportunities to deploy additional growth capital. This capital should not undermine the potential for SNX value appreciation or exert a downward pressure on its market price.



The proposal allows the TC to use up to 4 million SNX tokens as collateral to issue debt. The loan-to-value (LTV) issuance ratio is capped at 50%, with variable interest rates determined by market conditions, but not exceeding 30%. The debt issuance mechanism should be transparent, open-source, and prevent third-party borrowing or short-selling of the SNX collateral. The debt can be tradeable in the open market, and should be issued on Optimism. Liquidation criteria should be based on the total debt notional, set at 110%, rather than the market-to-market price of SNX. The TC is committed to repaying at least 4% of the issued debt every quarter, managed through a 3/4 multisig address.


Issuing debt against SNX is a strategic approach to deploy growth funding while preserving the long-term potential of the SNX token. The TC’s financial stability, backed by existing reserves and revenue streams, supports the ability to manage and repay this debt.

Alternative sources of growth capital like leveraging liquidity from protocols like Aave or seeking OTC liquidity. However, these options pose higher risks, including mark-to-market liquidations, limitations on using SNX, and challenges in securing consistent and efficient credit.

Financial Specification

  1. Transfer up to 4M SNX to a dedicated USD debt mechanism on optimism
  2. Borrow up to 50% LTV at interest rates determined by market dynamics, capped at 30%
  3. Pay back minimum 4% of issued notional debt per quarter
  4. Manage debt, repayments and and additional borrowing as needed

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