Vote 012: Fund initial DAO contributors to ensure protocol development and further progressive decentralisation

TLDR: to build a world class protocol and deliver maximum value to the Gro DAO, we need a world class team. There is currently over $18m in the Gro DAO treasury. We propose some of this is invested in developing the protocol to continue building towards long term success.

Background and Summary

  • 6 different contributors (both entities and individuals) have been working on Gro protocol since 2020
  • There’s been a good start with over $40m TVL and over 2,000 users, but more investment and work is required to get to the level that the DAO wants and expects
  • To have the best team driving the best outcomes for the DAO, monthly contributor costs of up to USDC 150k is required across 6 contributors (up to 16 individuals in total)
  • This spend is comparable or less than other yield aggregators and new DeFi players (e.g. Yearn, Pickle and Maple)
  • Graadient (founder) will not take any salary and instead has a token allocation for economic alignment with the success of Gro protocol
  • Grwth Lbs also requests a retroactive grant for USDC 516,201 of the contributor operating costs since the DAO launch in September (this is less than half of total spend on the protocol)
  • Payments would be made monthly from the DAO by its multisig to the contributors
  • Implementation of the retroactive grant to Grwth Lbs would be via a SafeSnap transaction

Vote 012: Fund contributor operating costs for Gro protocol with up to USDC 150k per month and fronted costs from Oct 2021 to Mar 2022 to Grwth Lbs Ltd

Proposal that Gro DAO funds actual contributor operating costs of up to USDC 150,000 per month (inc. software development, product, operations and marketing) and that Gro DAO repay USDC 516,201 already spent on contributor compensation for these functions by Grwth Lbs Ltd from Oct 2021 to Mar 2022 (this is less than half of total spend on the protocol).

The ongoing contributor operating costs of up to USDC 150k per month would be distributed as follows:

The ongoing operating cost payments would be executed via the multisig on an ongoing monthly basis by transferring the relevant amount of USDC to the wallet requested by each contributor. Only actual costs will be paid (i.e. it will likely be less than the requested budget), and there will be a quarterly report setting out variance from budget. The multi-sig is empowered to confirm that budgets are used as per instructions and in line with budgets.

Current contributor costs are USDC 88,079 per month. We expect these to ramp up over the next few months as the number of contributors grows following this proposed investment from the DAO.

The one-off repayment to Grwth Lbs would be implemented via a snapshot vote with a SafeSnap transaction to automatically transfer the funds on-chain to a Grwth Lbs Ltd wallet.

Examples of other DeFi protocols budgets

This is common practice within the DeFi space. Several OG DeFi and DeFi 2.0 projects are transparent about their contributor costs and the funding by the DAO. Below are data points for players in the space. Gro DAO proposed spend is comparable or less than these.

Risks of approving the proposal and steps to mitigate

Risk that contributors underperform vs operating cost spent on them

  • Grwth Lbs is taking on the role of performance management currently
  • Already had iterations of team makeup to keep performance high; will continue to do this to ensure DAO gets maximum value for money
  • Full time contributors budgeted at an average of up to USDC 112,500 per year per individual, including a majority of software engineers; this is good value in current crypto markets (for comparison Yearn is 23.5% higher at $138,923 per year per individual, including part time contributors)

Risk that the contributor selection is incorrect

  • Currently 6 contributors being funded by this proposal, including Grwth Lbs who are doing performance management
  • Risk that Grwth Lbs may be fundamentally the wrong team to take Gro protocol forwards for further successes
  • In that case the DAO can choose to approve separate grants in future for more effective contributors, and the multi-sig would take instructions from those contributors (as instructed by the DAO)

Risk that funds are insufficient to build a world-class protocol (regardless of contributor selection)

  • Costs are comparable or less to other OG DeFi projects Yearn and Pickle (yield aggregators) and Maple (DeFi 2.0)
  • Budget is for 6 months and includes 10% buffer which gives some headroom for necessary changes
  • If any further costs considered critical then the DAO can choose to approve these in a separate vote

Next steps

After 7 days in the community forum, if there are no major unresolved objections or comments then the proposal will be posted as a vote at https://vote.gro.xyz where it will remain live for a further 7 days.

We will use dedicated discord channels and the weekly community call to discuss the proposal so that all DAO members are aware of the proposed changes and have the opportunity to consider and discuss ahead of voting.

Should we fund operational investment in Gro protocol with up to USDC 150k per month and repay a portion of fronted costs to Grwth Lbs Ltd?

  • Yes
  • No

0 voters

That almost looks like a real company’s expenses breakdown.
Please don’t tell me DeFi is going to have an attack of accounting rationality?! Will you be publishing a P&L statement next? I was just getting used to twitter-induced speculation as a means to wealth creation, and now have to re-calibrate to actually valuing protocols. Memes are so much easier, no maths and I always love a good story.

In all seriousness, its a “yes” from me: you progress to the next round, and can do your interesting interpretation of that Mariah Carey classic to please the judges.

1 Like

This proposal is aligned with contributor budgets we have seen at other DAOs, so we are supportive.

Let us know if you require our assistance with any other compensation matters.
C3 Group

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Thanks for joining the community, and welcome!

It would be great if you could share a few examples you’ve seen of similar levels. We referenced three above (Maple, Pickle, Yearn) but more data points would be interesting.

And I think the DAO will need some help on the compensation side, specifically around managing the grants program month-on-month. Is that something your team can help with?

To be honest, I the compensation is… quite on par with many funded tech start ups these days. I actually expected it to be somewhat higher. The rough breakdown looks reasonable to me

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Thank you! We’re excited to engage with the community.

Budgets are difficult to compare across protocols because each organization’s size, budget timeline, talent strategy, number of contributors, and governance practices differ. An alternative approach to evaluate reasonableness of budgets is to benchmark pay levels for individual contributors and/or groups of contributors (i.e., a bottoms-up approach). If individual contributor pay levels are aligned with market, then contributor budgets should be aligned with market, assuming reasonable hiring practices. Of course, this benchmarking exercise is administratively more complex, but we do see it as a compensation “best practice” item as the industry matures. With that being said, here are a few more examples from major DeFi protocols:

  • Maker organizes by Core Unit. The budget/actual for February is here and you can find detail around each Core Unit in separate posts (e.g., Data Insights, Gov Comm)

  • Alchemix

  • Balancer (–>[Proposal] Fund BalancerDAO for Q2 2022) (sorry, we would include a link but we are capped at two links per post :grin:)

Yes, we can assist with managing grants programs. Happy to connect and learn more. Please let us know.

C3
c3group.xyz
info@c3.email

2 Likes

Update to vote: removal of repayment of fronted costs to Grwth Lbs Ltd

We propose to separate out the repayment of fronted costs to Grwth Lbs Ltd to a later grants request (if at all).

Although we have seen broadly positive support for this proposal in its current format (both on the forum and in discord) we are conscious of making the separation between Grwth Lbs Ltd and Gro DAO completely explicit.

We believe that a separate grants request from Grwth Lbs Ltd would make this separation clearer. It is also simpler for the DAO to vote separately on (1) the ongoing contributor operating costs across a range of contributors (of which Grwth Lbs Ltd is just one), and (2) any one-off payments to Grwth Lbs Ltd. This is because a DAO member may have a different vote on each of these proposals.

1 Like

Vote 12 is now up on Snapshot

Go vote!