@sparkes25 - I appreciate you taking the time to propose this and I like the idea of constantly looking at the optimal treasury holdings for the protocol, however I am strongly opposed to accumulating wBTC with protocol profits for a couple of reasons.
Big picture, I’m wary of making small changes that may not make sense when taken together. Accordingly, my preference is to come up with optimal portfolio balances for the protocol and consider them holistically. If we do 20% now for wBTC and then have another proposal or two for other assets, we’ve quickly just cut the veFXS yield significantly, which could have more significant implications for the protocol. I’d be happy to chat with you and others to think through a larger plan.
For wBTC specifically, I do not think we should invest heavily in this asset. As a protocol, I really don’t think we need bitcoin exposure at this time. It’s sort of a second class citizen in DeFi due to the limitations of the various implementations. wBTC is also a centralized BTC token that is custodied by BitGo.
If we want to add a volatile blue chip crypto asset, ETH is the very obvious one. Frax is built on Ethereum, it is the most trustless (I wanted to say this differently) asset on Ethereum. The protocol can use ETH to pair with Frax and FXS to add FRAX/ETH and FXS/ETH liquidity. Even with ETH, I’d prefer that we come up with a big picture plan so that we do not stumble into a problem down the road.