GBI Rebalancing Frequency Update

What?

As one of the first suggestions from the community in the new SPICE DAO forum it was proposed to change the rebalancing frequency of the GBI index from monthly to quarterly.

Why?

GBI is more of a passive strategy index that tracks some of the biggest large-cap assets in the crypto market where the constituents don’t need to be changed on a monthly basis.

The reasoning behind the proposal is that by changing the rebalancing frequency from monthly to quarterly we would reduce the costs involved in the transactions and therefore increase the return.

How?

We will open conversation here and in the discord group, where SPICE DAO can discuss all the pros and cons involved in the proposed change.

After the discussion all the valid inputs will be collected, the proposal will be formalised and put up for a DAO vote on the Snapshot page.

Once the voting period ends, the decision will be announced and implemented.

The new rebalancing schedule will be effective after the upcoming rebalancing of the GBI, which will still take place on the regular monthly schedule on June 11, 2021.

When?

We propose the following timeline:

Today - Start of open discussion on the Spice DAO forum

07.06 - Vote formalised and opened on Snapshot.page

10.06 - End of vote and communication of results

14.06 - Result will be implemented

These are the gas fees from the all transactions in the last three rebalancing events summed up according to Etherscan:
May rebalancing: $2659
April rebalancing: $482
March rebalancing: $1196

But each time a rebalancing happens, there is a bit of slippage between the exchanged assets (usually in the low one-digit percentages) because the assets are exchanged on Uniswap

So less rebalancing events lead to less slippage in that regard.

Given that the constituents are not changing within GBI, I think it makes sense. Theoretically if we reduce the fees it will have a greater impact on the AUM which would also impact the DAO token. We’re likely talking about saving a 1-2 thousand each quarter, which over the course of the lifetime of the index would add up.

:round_pushpin:Voting for the change of the rebalancing frequency of the $GBI index has ended!

As one of the first suggestions from the community in the new SPICE DAO forum it was proposed to change the rebalancing frequency of the GBI index from monthly to quarterly.

:sparkles:All of the votes were in favour of the proposed change.

Mission Control will put the change in effect after the upcoming rebalancing of the GBI, which will still take place on the regular monthly schedule on June 11, 2021.

Well done to all SPICE DAO members who participated.

You can see the vote results here: Snapshot

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