Stake DAO Q1 Report — 2022

A data-driven look at Stake DAO’s performance in Q1

Stake DAO
10 min readApr 19, 2022


  • TL;DR (Introduction + Q2 2022 Roadmap)
  • Total Value Locked (TVL)
  • Protocols
  • Strategy
  • Option strategies
  • Liquid Lockers
  • P&L
  • Sanctuary/ Palace
  • Treasury
  • Market analysis
  • Liquidity overview
  • Platform traffic analysis
  • Stake DAO APYs

Data Source

The data used in this Annual Report is taken from internal analysis, on-chain data, as well as from external sources such as The Block, Token Terminal, and Dune Analytics.

TL;DR Q1 + Q2 Roadmap

  • TVL as of 31 March 2022 across the Platform exceeded $633M, marking a 20% decrease in comparison to 2021 Q4; correlating with the decline in the market this quarter
  • Cumulative Protocol Earnings nearly $12.7M since inception in January ‘21
  • SDT currently has a Market Cap/ TVL of (0.05) and P/E (3.1x) ratio
  • Launched Stake DAO Liquid Lockers beta version & veSDT. New features and integrations will be built for the Liquid Lockers platform in the coming weeks
  • The DAO has significantly expanded the size of the contributor team in Q1, and started to create reserves in the quarterly budget to take potential new hires into account.

Tentative Q2 Roadmap

  • The main focus next Quarter on the development side will be to progressively build out the final version of Liquid Lockers for the liquid staking of Governance tokens (CRV, FXS, ANGLE). Here is a comprehensive breakdown of all the features we have in the pipeline:

The vision is to provide a permissionless version of Liquid Lockers, empowering projects with ve-like tokenomics to create their own lockers and benefit from their own permissionless on-chain lockers, strategy and gauge voting—in a completely frictionless way.

Q2 objectives

  • Increase the number of projects benefiting from Liquid Lockers
  • Provide clearer analytical insight into Stake DAO operations and on-chain activity through a combination of Dune Analytics Dashboard and in-house Analytics
  • Deploy the Treasury-Management-as-a-service Vertical, offering DAOs a way to optimize treasury asset yield across chains
  • Provide clarity around the Staking-as-a-service vertical and start employing validators’ rewards for treasury management activity.
  • Increase the protocol’s own liquidity and bring additional revenues to the DAO by matching SDT inflation with ETH in Treasury
  • Deployment on Celo
  • Increase on-chain governance

Total Value Locked

Stake DAO Total Value Locked (TVL) has been fluctuating around ~$550M for the last 2 months, down from its peak at $830M in December.

Passive Strategies

  • The total TVL in Passive Strategies on Ethereum has held steady in the $200–250M range over the last 3 months.
  • The multi-chain agnostic vision has made in-roads in the last quarter, with the Passive USD Strategy on Avalanche and Harmony accounting for more than $100M and $70M respectively.

Options Strategies

The TVL on option strategies saw less in-flows than expected over Q1. See a full analysis below under the “Options vertical” section.

Protocol Staking

  • Avalanche validators experienced a decrease in delegations, leading to a steep decrease in AuM from Staking-as-a-Service.
  • Negative market conditions led to a decrease in total AuM in $ terms.

We expect this negative trend to change in the months forward, led by:

  • Launch of a retail-oriented UX on the Stake DAO platform, which will foster more delegation across the entire validators stack.
  • Increase in the number of blockchains supported.

Options vertical

In Q1, the Options vertical suffered from a challenging market environment— as a result our target of doubling TVL was not achieved. Myriad factors explain this slow-down after the significant growth we experienced last year.

Stake DAO was the second DeFi project to really dive into the DOV (DeFi Option Vaults) market after Ribbon Finance. Since our entrance, many projects have followed suit (Thetanuts — $38m TVL, Dopex — $90m TVL, Jones DAO — $8m TVL, and many others, on many different chains). The total TVL of DOVs has increased dramatically, flooding the market with options, leading to downward pressure on option prices. As a result, implied volatility (directly linked to option prices) also saw downward pressure and became highly underestimated. On top of this, the market’s downtrend and the war in Ukraine brought a lot of actual volatility to the market, not reflected in the implied volatility. Finally, the high level of uncertainty of current markets had a huge impact on the total liquidity of CeFi markets, either for direct trading or derivatives, impacting further option prices and volatility assessment.

This led many protocols (such as Ribbon), who are using implied volatility as a tool to select their strikes, to take very aggressive positions, and end up in the money most of the time, resulting in consistent negative performance for users. This made the derivative market less of a hot topic than previous, and explains the slow down in TVL growth this quarter.

In these challenging times, we believe that there is still—and will always be—a place for derivatives in DeFi, and that there are ways to navigate these markets to maximize proceeds for users while minimizing risks.

That’s why we shifted the focus from increasing TVL as quickly as possible (the initial target of the quarter), to recruiting experts and developing advanced financial models to properly assess risk and ensure our users are protected from risk implied by the market. This has been a successful endeavor, as we have recruited several seasoned professionals (experienced Quants, brokers to sell the options, etc.), and have now a very efficient tool for real volatility calculation and risk assessment. This allowed us to be much more effective in targeting a 10% delta, a 10% weighted risk.

The success of this effort is reflected in the performance of Stake DAO Options Strategies this quarter.

ETH Covered Call

Stake DAO, August 23-present

BTC Covered Call

Stake DAO, October 2-present

ETH Put Selling (USD collateral)

Stake DAO, October 23-present

Looking at the performance of these strategies, it is clear it was a sound strategy to focus on refining our model before expansion. This is also the reason why, after seeing such low liquidity and demand from market makers on the altcoin side, we figured out that the risk taken by users was too high for the rewards they could expect, and decided to close those vaults, and repay all performance fees taken, as well as gas costs from entering and leaving the altcoin option strategies (AAVE, UNI, SUSHI, LINK).

For the next quarter, the focus will be to onboard more market makers through the integration of Paradigm, and deploy v2 vaults so that we remove the withdrawal fee (replaced by a performance fee), generate higher yields, grant users entry and exit from strategies at any time during the week, and optimize the product. We will also deploy option vaults on Avalanche. Our ambition is to position Stake DAO Options as the leading standard for DeFi derivatives.

Liquid Lockers

The first Liquid Lockers were deployed in March 2022. The idea behind this new platform is to unlock the power of tokens with a ve-model (yield, voting and boosting power) while enabling full exit liquidity thanks to the upcoming allocated strategies.

It started with FXS and ANGLE lockers, and will follow with CRV, APW, BPT, QI and many others.


Stake DAO’s Revenues have remained above $1M/month for the last quarter, slightly lower than last quarter due to hostile market conditions.

Costs have also increased alongside the DAO’s operations. The main costs items can be found below:

  • Gas Costs: They are accounted for under the Strategies Vertical. These decreased in the last quarter due a reduction in Ethereum network Gas costs.
  • Dev-ops costs and taxes: They are recorded under the Protocols vertical and take into consideration all the costs linked to running and maintaining validators and servers. This cost item has been increasing due to the introduction of a new chain’s validator.
  • Core Team Rewards: contributor rewards have been increasing in the last quarter due to an increase in the Stake DAO contributor headcount.

Net Earnings have also exceeded the $1M/month mark, representing on average more than 80% net margin, a slight decrease in comparison with recent months, due to an increase in contributors’ reward costs.

The consistent profitability of the last year has pushed cumulative earnings to over $12M. The quarter-month rolling average of annualized revenues stood at $16.3m in March.

Sanctuary/ Palace

TVL in our Governance Vaults has demonstrated a healthy trend over the last quarter, increasing to over 10M SDT locked at the end of January. Since then we can observe a decrease, driven by the launch of the new SDT (veSDT) tokenomics.

As of March 30th, SDT locked in the Sanctuary represented 33% of total Circulating Supply, and accounting for more than 40%+ before the launch of veSDT. With the replacement of xSDT with veSDT, we expect this metric to decrease further in the months to come.


The value of the Stake DAO Treasury has grown steadily and sustainably over the last quarter, due to the increase in cumulative earnings from Strategies and Staking-as-a-service.

The Treasury is divided into three main wallets:

  • Multisig: 0xF930EBBd05eF8b25B1797b9b2109DDC9B0d43063
  • Treasury: 0x9D75C85f864Ab9149E23F27C35addaE09B9B909C
  • Deployer: 0xb36a0671B3D49587236d7833B01E79798175875f

And is composed of different assets with the following breakdown, for a total DAO value of over $17M:

  • Tokens in wallet: $2,395,740
  • Deposits: $2,849,843
  • Debt: $0
  • Other Assets (LPs and sd tokens): $3,139,386
  • Locked Assets (locked CRV): $9,363,341

Market trading analysis

Initially, protocol-owned liquidity was on Sushiswap, but it was migrated to a Curve V2 pool after SDIP#11.

The goal of this migration was to request a CRV gauge eligibility to increase the interest of the pool, reduce the SDT incentives and accumulate CRV with protocol liquidity.

This move should help us to decrease slippage for Stake DAO users.

The pool now has $3.6M of liquidity (including 20% held by Stake DAO treasury), with 90% APR without boost and up to 225% with max boost.


Stake DAO’s mission has always been to offer the most competitive APYs on the market for a certain level of risk. Each one of Stake DAO’s strategies has achieved a significantly better APY than all competitor strategies for similar risk profiles.

Moreover, the platform has made significant advances in multi-chain and cross-chain capabilities, and users can now benefit from Stake DAO products across several chains.

Stake DAO is also providing the best APYs in the entire market for its DOVs. As you can observe the Achieved APY since inception.

Options Strategies will go multi-chain in Q2 2022.

Platform Traffic/ Social Media Overview

Q1 saw a steep increase in the number of new user daily views, highlighted by the number of new community members we welcome every day. This is a highly encouraging sign for the DAO!


A new governance framework was proposed in Q1 to improve transparency and user engagement.

Each proposal requires a 2 days feedback period minimum on the forum before posting on Snapshot.

The proposals can be filled in different categories depending on the topic:

  • SDIRs: Stake DAO integration request: New liquid lockers requests, partnerships and DAO whitelists to lock SDT.

Voting period: 3 Days

  • SDGPs: Stake DAO governance proposals: DAO expenses and budgets, contributors rewards, grants and liquidity mining updates.

Voting period: 5 Days

  • SDIPs: Stake DAO implementation protocol: Modifications of smart contracts, Multisigs and governance framework updates.

Voting period: 8 Days

As we’re still in the migration phase to veSDT, the quorum for each category will be voted on later.

A new category was created on the forum for treasury allocations and reports.

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