- Goal of this proposal
- Merging the Treasury Working Group and Risk Pod
- Goal of the Business and Finance pod
- Focus areas
- Deliverables (per Focus area)
- Team set-up and skillsets
- Budget / Expectation
- Guiding principles
This proposal grew out of the work for a Treasury Working Group Proposal.
- Which focus areas and deliverables should ideally be taken over by the Treasury Working Group to ensure a long-term sustainable continuation of the Gro DAO. These deliverables are mainly in the areas of Business Strategy, Treasury Strategy, and Financial Reporting.
- Which overlap exists between a Treasury Management Function and the Risk Pod. And in the same breath, what is the most effective organizational setup to realize the core outcomes of these functions to the best extent?
As a result of these discussions, we have decided to merge the Treasury Working Group mandate, as well as the Risk Pod mandate into one Finance and Risk Pod.
To understand the extent to which it makes sense to incorporate Risk Pod tasks into the Treasury Working group, we first looked at which core functions are performed by the various groups. In doing so, we focused on concrete business outcomes as opposed to pure decision-making functions.
In its essence, the Risk Pod comprises three different risk areas:
- Finance-related risk - with a clear overlap with the Treasury Working Group
- Business-related risk - with a clear adjacency to finance-related topic
- Protocol and security-related risk - most independent, but still benefits from a strong collaboration with the finance and business-related team members and can be integrated with specific skill sets.
To ensure effectiveness and avoid hiring too many resources, we see it as the most sensible solution to bundle these skill sets under one pod and ensure close communication within this pod.
The goal of the Finance and Risk Pod is to ensure the long-term growth of the Gro DAO. To achieve this goal, we want to focus on sustainable growth and longevity through a sustainable business strategy, risk-mitigated treasury strategies, and prudent financial management and reporting, while ensuring transparent communication to its members.
While focusing on these areas, we aim to use the treasury’s long-term assets productively, while ensuring liquidity to cover short-term financial needs of operation. Hereby, we want to emphasize the importance of tracking and reporting. This applies both to the work of the treasury working group contributors and for the financial metric that will be shared with the community in a transparent manner to support decision-making.
For this endeavor, we will team up to offer the best mix of Financial Metrics and Treasury Yield Strategy (@exa256.eth + Exponent) with a structured approach in Business Strategy and Financial Reporting (@Bernard + web3 Studios). For prudent Risk Management, we will complement the team with a best-in-class risk management resource (tbd). We are confident that with this strong set-up we will be able to lead the Gro DAO through these adverse times in the market and strengthen its positioning within the wider DeFi ecosystem.
1. Business Strategy: Analysing the long-term viability of Gro’s business model and evaluating strategic directions (i.e., is GRO a charity to make DeFi more accessible, or should it become break-even/ profitable?)
2. Treasury Research and Strategy: Researching yield strategies, allocating treasury into selected strategies and managing these allocations - to unlock the economic potential of the treasury holdings while ensuring operating expenses are covered with downside risk mitigated.
3. Financial Reporting and Tracking: Creating standards for financial reporting and delivering periodic financial reports, incl. forecasts - to establish transparency for the DAO members and act as decision-making support.
4. Risk Management: From holistic business and strategic risk to operations, working with internal stakeholders as a back office function to identify, evaluate, monitor, and manage risks exposures across the organization
1. Business objectives: Analysis of Gro protocol business strategy, high-level plan of the financial needs, educating focus areas deliverables
2. OKRs and Tracking: Objectives and key results per focus area and deliverable, transparent progress tracking for community
3. Execution structures: Outline responsibilities for contributors, decision-making structures, capacity, and resource planning. The Finance and Risk Pod will not have execution rights to the assets held by the DAO but can facilitate the efforts.
1. DeFi methodology for treasury assets: Given a sufficient body of research into DeFi yield strategies, the Treasury team will be in a position to submit allocation suggestions for the DAO treasury to meet its financial objectives
2. DeFi strategy recommendations: Current and future DeFi position analysis and active market monitoring. The pod will conduct regular holistic portfolio analysis and perform rebalancing suggestions through the governance process
1. Portfolio summary: Holdings
2. Protocol revenues: Average APR, Farming Funds, Monthly Revenue
3. Token rewards and vesting contracts: Vested $GRO token rewards, emissions management, liquidity pool incentives, $GRO token holder distribution
4. Liquidity mining positions in detail: Position, Protocol, Assets, Funds, Last month APR, Current APR, Monthly Revenues, Yearly Revenues
5. Holdings portfolio detailed: Coins, Price, #Tokens, Holdings, % of Portfolio, price movements (24h, 7d, 30d))
1. Financial dashboard: Dune analytics and custom DeFi position monitoring
2. Quarterly report incl. commentary and advisory: Focused on the Treasury working group, and state of the Gro protocol, incl. Financial reporting and forecasts
1. Maintain a channel in Gro’s Discord: Platform for community members to ask questions, lead discussions, and receive regular financial reporting updates
1. Operations Risk Management: Define procedures and guidelines for team operations. Assist the team across functional departments in modeling risk matrices based on degrees of threat severity and probability. Establish and formalize individual processes such as a launch readiness checklist
2. Capital risk management in collaboration with risk pod: DeFi positions are held within the risk guideline at all times so that treasury assets are not pushed down the risk curve in pursuit of unhealthy returns. Once the risk pod is established- we expect to collaborate closely to develop and follow the pod’s treasury risk framework and establish the DAO’s risk profile.
1. Liquidity provision analysis: Check effectiveness of LP pool on Univ2 against USDC. Analyze if there is a better way to have a much higher market depth and reduce downside pressure. Define whether current token emissions receive positive ROI.
2. Token holders analysis for decentralization: Holder distribution, Number of token holders voting, Voting quorum, Amount of $ needed for governance take-over before the DAO is migrated from Snapshot to Governor Bravo contracts.
3. Listing on DeepDAO
4. Mixed deliverables will be discovered throughout work
- The current team will consist of 3 full-time contributors and 1 part-time contributor, with the flexibility of hiring a second contributor after the first month of operations, if the need arises. Two of the full-time contributors (exa256.eth and Bernard) are part of larger teams (exponent and w3s) that will be tapped for the dedicated support and contributions that make up the full-time positions.
- The facilitator role is shared by two full-time contributors with complementary skill and accountability functions. They hold the overarching responsibility for core topics of the Treasury working group, steering it, and „putting the pieces together“.
- exa256.eth (@exa256.eth), full-time – Contributor & Facilitator
- Bernard (@Bernard , full-time – Contributor & Facilitator
- Risk Management Contributor, full-time - Contributor
- TBD, half-time - Contributor
Exa256.eth - Focus: Treasury Research and Strategy
- in full-stack dApp development since early 2017
- part of Exponent - a treasury and financial risk sub DAO, providing managed products and services- a corporate treasury desk for Web3. a team consists of data analysts, software engineers and treasury managers.
- manage Exponent’s own Treasury vault as a Safe Multisig signer
- supports on-chain financial operations within the team, from budget allocation to approving on-chain payment transactions
- multisig signer and member of Enzyme Technical Council and a Safe DAO delegate
Bernard - Focus: Business Strategy & Financial Reporting and Tracking
- prior working for McKinsey’s Digital Practice
- part of w3s - a team of DeFi/TradFi contributors (ex-Blackstone, JP Morgan, DeFi) to support crypto companies and DAOs in strategic finance topics (M&A, Fundraising, Strategy and Finance Management)
- supports strategic advisory (growth, monetization, operations) and financial reporting topics within w3s
- steering committee at McKinsey-DAO (global community of former McKinsey employees incl. several top web3 founders).
To be determined - Focus: Risk Management
Total budget over 6 months: 212,000 USDC + 20,000 USDC Contingency buffer
3 full-time contributors: 180,000 USDC over 6 months
- This covers the contributors named above (exa256.eth, Bernard), and includes the use of internal resources of our teams (Exponent, web3 Studios) that will be plugged in for specific tasks on demand (e.g., Dune SQL queries, Yield Research capabilities, etc.), as well as the compensation for the facilitator role that we will take on with shared responsibility.
1 part-time contributor: 24,000 USDC over 6 months
- This covers an additional half-time contributor.
Contingency buffer for another part-time contributor: 20,000 USDC over 5 months
- This covers the contingency for an additional part-time contributor. The need of such will be determined after the first month of operation. If the resource will not be needed, the contingency buffer will be returned in full to the DAO treasury.
Buffer for software costs: 8,000 USDC over 6 months
- This covers operational costs of managed services and SaaS related to Such as: Dune Analytics pro, Nansen, Cryptoquant, Crypto accounting software and market feeds, Risk analysis tools
The Finance and Risk Pod will work in a fully transparent manner to the rest of the DAO, contributing to Gro’s collaborative and trustworthy forms of interaction.
The focus areas and deliverables presented in this proposal are subject to discussion by the Gro DAO and may need to be adjusted to account for developments in the areas of governance, legal, or regulation. This proposal should not be used for making investment decisions.