[GRFC] - Gro DAO Strategic Path Forward

DAO Treasury
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23

This is the way I’ve thought about it:

  1. Transition to Minimal Viable State - We’re shifting to a more streamlined setup, cutting back on complex user interactions and data collection. This means a heavier reliance on on-chain reads, focusing mostly on withdrawals. With this shift, tools like subgraphs and bots will be phased out.

  2. Operational Shifts This simpler approach is likely to lead to fewer technical hurdles.

  3. Support Structure We’ll have some engineers on standby for vital support, but a big chunk of inquiries might be from folks catching up to these changes. To guide them, we’re launching a Q&A section and a general informational PSA.

Let me know if this makes sense

24

What’s the surface level?

If you have the chance to opt for more streamlined process. You can strip the protocol down to barebones and be able to build up again?

Side question.

Hindsight is always 2020, of course. If you had a do over (which may be what you’re vying for). What would you (or what do you believe should have been done) have done differently to see a greater outcome?

Also, I second @2_cu4 ‘s question

1 Like
25

Let’s break it down. We’re not thinking about taking the protocol apart and putting it back together. Instead, we’ll put the protocol in a “withdraw only” mode. After that, we’ll mostly leave it be, but we’ll still help out users who run into problems. Our main goal is to go back to what we were really good at in the beginning. That means we’re getting back to the basics of creating and building, which is what we’ve historically been good at. So, to answer your other question, we’re focusing on building and delivering.

26

Thank you for sharing your concerns regarding the proposal.

To clarify, the treasury was created by the DAO as a result of this vote
Grwth Lbs seed round was separate from this, although some investors will have participated in both.

When we consider the initial tokenomics and allocation, it’s important to note that the DAO played a pivotal role in establishing these guidelines. The DAO was not just an approving body; it autonomously deployed these decisions via Gnosis Safesnap. For those interested in tracing back to the roots of this decision, the very first action taken by the DAO can be reviewed here.

Before the inception of the DAO, the Gro protocol was already being shaped by its founding team, who, with the support of seed investors, dedicated over a year to its development. This early commitment and trust from both these groups were instrumental, which is why the DAO allocated them a meaningful governance stake.

Highlighting their belief in the long-term potential of the project, both the team and the initial investors agreed to a 3-year vesting schedule. In the evolving world of crypto, this duration stands out as being notably long-term, especially when compared to many other projects that often have much shorter vesting periods. Typical vesting period for teams and investors was <1 year.

The decision to allocate governance stake wasn’t just a token gesture or a reflection of short-term work. Instead, it recognized the foundational work and early trust placed by the founding team and investors. The Gro protocol’s journey, regardless of its perceived success or setbacks, is the outcome of collaborative efforts spanning several years. Over the years the composition of the DAO has shifted with both entrants and departures in every stakeholder group.

Aiming to prioritize the community’s interests, Web3studios proposal would grant community members (excluding the founding team and initial investors) full and immediate access to both locked and unlocked GRO tokens, thus reducing the initial vesting period from 365 days to an immediate release. For the initial investors and founding team, however, the originally set 3-year vesting schedule by the DAO remains in place, ensuring only vested tokens are available to them. Given the community’s centrality to the DAO’s functioning, it is expected that this arrangement would find favor among the larger DAO voters.

In conclusion, it’s imperative to approach the complexities of such projects with a comprehensive understanding of the foundational decisions, the reasoning behind them, and the commitment of all stakeholders involved.

27

Here are a few winding down proposals from the past year (roughly after Tribe DAO’s shutdown) that were passed by voters:

A few relevant learnings:

  1. Saddle took a retroactive snapshot + airdrop approach to distributing their treasury to SDL holders. In the first announcement about the liquidation methodology (SIP-X: Protocol operations and treasury management - Proposals - Saddle Community), Saddle included a retroactive snapshot of the dated one week before the announcement, as a strategy to prevent opportunistic traders/treasury raiders from benefiting. A one-week retroactive snapshot was kept in the final proposal and eventually passed via governance.
  2. Hector announced an upcoming snapshot + whitelisting process for redemptions, a process which is still ongoing (https://hector.network/).
  3. Babylon Finance announced a snapshot 6 days after their notice of shutdown and (I think) quickly removed gov token liquidity from the primary DEX, stated in the blog post: “In order to prevent people from raiding the remaining liquidity, we are extracting all the liquidity from the Uniswap pool. The decision is pending to be ratified by governance.” They then required holders to join a whitelist to receive their share of the proceeds. According to the blog post, the team returned all tokens. I could not find evidence of that governance vote.
    -Babylon was not mentioned above since there was no governance vote for a winding down that I could find, but the process they took for liquidations & distributions is noteworthy.

Rome DAO was examined in the Strategic Paths Report, but there was quite a bit of controversy surrounding it and other Ohm forks that became targets for so-called RFV raiders. This article explains more about the topic.

Since the Strategic Paths report has already been released to the public in its current state, the dimensions of the DAO have been shifting immensely and it is worth paying attention to. To be clear, I am not suggesting that anyone involved in the recent changes has malicious intentions - it is possible that they do have the DAO’s best interests in mind. I am merely recommending that others make themselves aware of what has happened.

Like wint3rmute said above, I welcome anyone to share their thoughts and suggestions about how to benefit the collective interests of the community, especially in light of recent events. This proposal is still in the GRFC stage and, as ratified in vote 26, is open to feedback before it proceeds to a Snapshot vote. So, please share your feedback and suggestions in this forum thread.

28

https://app.gro.xyz/ completely not working?
forgot to pick up my gro from there

29

It seems a difficult decision and I appreciate that at least we have clear options from which to choose. While not exactly the same, I’ve seen situations before where ventures have been left to wind down with insufficient resources to do properly, and it didn’t end well. In this case at least, the provision in Path 1 to leave sufficient funds makes sense to ensure the right level of talent and time is secured to properly unwind. There’s never a perfect balance, but at least this seems to balance the distribution of treasury with respecting the work done and community effort by ensuring an orderly unwind.
Especially given the bear market and current outlook, it is likely the funds can be deployed more effectively elsewhere and should be distributed as part of the unwind with an appropriate provision for resourcing, which led me to Path 1.

30

Thank you so much for dedicating your time and sharing your insights, @Defiat and @martin.

@Defiat: I understand from your comment that you believe the proposed timeline and budget by Groda Pod for the DAO’s dissolution appears excessive. You expect the process to be more concise and efficient. (Do let me know if I’ve missed the essence of your concerns.)

@martin: You’ve highlighted similar sentiments, particularly on the duration and costs, but you also acknowledge the importance of redemption. I’d like to address both of your concerns.

During our last community call on Friday, we dissected the costs and the breadth of work associated with Option 1. Yes, treasury consolidation and the redemption contract setup could potentially be finalized in a shorter timeframe. However, our extended timeline and scope are based on:

  • Constructing a new set of smart contracts for the specified window.

  • Transitioning GSquared and liquidity pools into a “withdraw only” mode, which would involve deactivating all current products.

One of the most significant components of our timeline is the support framework we’re putting in place post-wind-down:

  • Ensuring that the unwinding process proceeds seamlessly and providing necessary support to users in the aftermath, We’ll have a dedicated team to handle any issues users may face during the transition, ensuring a point of contact for any challenges.

  • For users who might face technical difficulties, the engineers will be available to assist. This involves debugging, transactional support, and resolving any other tech-related issues.

Our foremost priority is to execute a well-structured and thoroughly supported wind-down, especially considering past issues where projects were abruptly abandoned post-winddown. We intend to minimize any potential risks to DAO members.

Concerning the budget, I’ve been contemplating potential modifications to the current proposal. If Option 1 gets approved, in the foreseeable future, there might no longer be a need for FIST or People Pod. One might argue that maintaining the pod structure is redundant. Hence, a plausible solution could be to amalgamate all the pods, assimilating the assets allocated to their mandate, into a single unit and retaining only the essential personnel for the wind-down.

Your feedback is invaluable to us. If you can suggest more cost-effective alternatives, our doors are always open for a constructive discussion.

2 Likes
31

As discussed on the community call today, one other imbalance that exacerbates the hypothetical split of the treasury in case of option 1 (as it currently stands), is that to date, much less of the Community Quota has been issued in relation to Founding Team quota, of which much less has been issued compared to Investor quota. For context:

I understand that these were the initial tokenomics decided by the DAO (Snapshot) and that there was a proposal passed to say that community GRO could only be distributed up to 9m before a further vote on the matter (Snapshot). But given the circumstances of what is being proposed in option 1, it might be worth considering the final allocation of GRO as specified in the tokenomics (45m Community, 22.5m team, 19.5m investor, 13m treasury), before hypothetically liquidating the treasury.

What do people think?

2 Likes
32

The community should indeed have a bigger chunk of the treasury. The treasury was funded with community funds that people have worked hard for. They put trust in the team to deliver, and the team could not. Now, should 80% ($8 million) of the treasury be paid out to the team and investors? Absolutely unacceptable. While 45 million tokens have been set aside for the community, only a small portion of those have been issued, as you mentioned. This cannot be ignored.

33

First of all, thanks for your thoughtful engagement and active discussion. It helps ensure the DAO has considered every aspect throughout this critical process.

@raambo, you’re concerned that the community quota has been under-issued compared to the Founding Team and Investor quotas. @2_cu4, you find that the community should have a larger share of GRO.

However, it’s crucial to remember a few key points:

Transparency: The token allocation across all stakeholders was decided by the DAO at its inception and has been public for more than two years. All allocations were in line with industry practices.

Community Decision-making: All emissions of community tokens have been decided by the DAO, in line with all governance processes. Over the years, various proposals have been made on how to spend GRO for different purposes, all within the framework of the initial tokenomics. Almost the full 9 million GRO that was approved by the DAO for community incentives as part of vote 2b, plus several other independent proposals over the years, have been distributed. All GRO distribution has been done in accordance with DAO votes. Any DAO member has been able to propose GRO distribution through our governance process, and many have done so.

Fair Practices: The proposal system has been designed to be fair to all stakeholders. In fact, none of the wind-down cases that w3s studied, of which jaypow shared a couple under this thread, have such strong discriminatory practices against investors and team.

Community Prioritisation: w3s integrated accelerated vesting mechanisms into the proposal specifically for community members.

In summary, while we understand the concerns raised, the current tokenomics and governance processes were designed to be equitable and have been transparent from the start.

34

The vote on Gro DAO’s Strategic Path Forward is now live on Snapshot.

Voting Options:

  • Option 1 - Unwind Protocol and DAO: Clear exit strategy for all stakeholders.
  • Option 2 - Unwind Protocol, Continue Building: Focus on leaner, more targeted development.
  • Option 3 - Reject all options: Two potential outcomes, either leaving the DAO without technical capabilities or opening the door for new proposals.
  • Option 4 - Abstain: No opinion on the proposal

The vote will remain open on Snapshot until September 18th :left_speech_bubble:

Please read through the snapshot proposal and use your vesting GRO to cast your vote:
https://vote.gro.xyz/#/proposal/0x8d4daa83895fe24a121d5e255e783b098ea634a21e6be8c4a5e6ed20c8d03dd1

35

Although the snapshot is already live, I would like to help the community understand the DAO’s involvement in options 2 and 3 in case either is the outcome chosen by voters. I think this could use more clarification than what has been given so far.

tl;dr - If options 2 or 3 are chosen, the DAO continues to exist and can vote to do whatever it chooses. For example, it could soon after propose a GRFC for a voluntary redemption of GRO tokens, a plan that was raised by community members in the past week. It could also propose a different approach to the parameters of the treasury redemption, or anything else it wants. It would be wise to determine its path forward before pod grant periods come to an end, but this is up to the DAO.

The rest of this post will summarize some arguments for and against the most popular alternative paths that were discussed in the community, retouch an important point about option 3, and finish with some final reminders for all DAO members.

Arguments for the voluntary redemption path

  • It would allow anyone with GRO to cash out from the treasury and exit, similar to option 1.
  • Others can remain GRO holders & DAO participants by choice.
  • Benefits users who may want to cash out partially while continuing to have a limited stake in the DAO.

Arguments against or disclaimers about the voluntary redemption path

  • Specifics about the percentage of the treasury to allocate are unclear.
  • Ambiguity regarding the architecture of the new redemption mechanism.
  • What happens if too much of the treasury is depleted by early exits?
  • What happens to vesting GRO if a final redemption is pursued after 6 months?

Arguments for a different approach to the treasury redemption & distribution

  • Choose a retroactive snapshot to reduce the ability for RFV speculators to redeem a share of the treasury at the expense of historical GRO holders.
  • Calculate the GRO distribution differently to account for unfinished GRO emissions and voting power that has allowed team & investors to vote with “future” vesting GRO.
  • Add multipliers for addresses who have demonstrated commitment to the DAO (by voting, choosing to vest rewards, participating in the LBP, etc.).

Arguments against a different approach to the treasury redemption & distribution

  • Disagreements about what “fair practices” are.
  • Some historical precedents were and weren’t established by the DAO for situations like this, and those that were established are being followed.
  • Certain concessions have already been extended to community members.
  • There are complexities involving snapshots & accounting for various GRO token iterations.
  • Questions about the viability of pursuing altered parameters in the wake of recent voting power shifts (this applies to any future DAO proposals in options 2 and 3).

NOTE - These are simplified overviews and can be expanded on in the future if necessary.

What can the DAO do in Option 3?

In the case of option 3, the text of the GRFC suggests two potential outcomes, A and B, and is presented overall as an extremely risky path. In the Snapshot text for option 3, it states:

“The DAO will no longer have any technical developer capabilities within its Pod contributors as of October and an orderly unwinding of either protocol or the DAO will technically not be possible.”

However, a reminder that the DAO can determine what it wants to do - the above claim is not a foregone conclusion. For example, a wind-down and treasury redemption with different procedures or calculations could still be proposed by the DAO at any point if option 3 is chosen.

Finally, Option 1 is still the most direct path to redeeming GRO tokens and winding down the protocol and the DAO, for those who agree with the processes and parameters described in the GRFC.

If anyone would like to know the current voting power distribution, wint3rmute’s GRO Vesting G2 Dune dashboard, specifically the Total Vesting GRO pie chart, is one place to begin. Note that “Rewards” refers to GRO that has been distributed via liquidity pools, airdrops, and the vesting bonus pool - it includes community members as well as addresses owned by other entities. For those who want to see the voting power exactly at the time of the snapshot that was taken for vote 37, you will need to backdate the dashboard’s data to this block: Ethereum Blocks #18127164 | Etherscan. Please do your own research beyond this point.

I hope everyone has taken the time to inform themselves about the proposal and various perspectives before making a decision. The DAO welcomes all votes during this critical juncture.

2 Likes
36

Update on Vote 37: Groda Strategic Paths Forward - has passed

Dear Community, Vote 37 has concluded, resulting in a community decision of Option 1:

  • Unwind the Gro Protocol and the DAO - providing a clear exit strategy for stakeholders.
  • This means an extension of the current Groda Pod for 3 months

The Groda Pod is now planning the next steps and will update the community shortly. Alongside this, the DAO is putting together a community call to discuss these future actions in depth.

This is a significant moment for the Gro DAO. We recognize the gravity of the situation and the contributions and trust that each one of you has extended toward Gro DAO.

For continuous updates, please stay tuned to Discord and the community forum.