StakeborgDAO Financial Committee

Proposals
1

It’s about time to share with you the idea of a “StakeborgDAO Financial Committee”, a way through which contributors will be rewarded and ideas in our ecosystem can be financially supported to proliferate and add value to StakeborgDAO.

Before starting, it’s important to understand that this is 1 out of the 2 steps needed to start rewarding contributors in our DAO. This specific Committee will act as a prerequisite for the Grants Program that is scheduled to start in H2 of this year, given no delays.

In this initial setup, I propose for the SFC (StakeborgDAO Financial Committee) members to act as interim until the Grants Program is launched when we will come back and review the committee’s work.

For all the information written below, I have researched >7 Grants Committee Programs to learn about effective and successful programs and have been influenced by Balancer’s, Aave’s, Uniswap’s and Compound’s.

Summary

The aim of this proposal is to outline the framework through which the SFC will give contributor rewards and grants to projects, guilds and subDAOs. The committee will receive an allocation of $STANDARD tokens from the treasury to use for funding through a multisig and will return the excess (if any) at the end of the term to the treasury.

Motivation

The StakeborgDAO treasury can only be called using a smart contract. For this reason, moving on-chain for every bounty, contributor reward makes no logistic and financial sense, hence the idea of a financial committee. They will oversee contributors’ work and reward them accordingly, and evaluate submissions for project funding, guilds and subDAOs alike.

Our ecosystem is ever-growing and, having multiple projects and potential guilds, we’ve noticed the need to support their growth. Given that our goal is to become an incubation community for the Web3 ecosystem, it only makes sense to have a dedicated support group for this.

Description

As of 23.05.2022 , StakeborgDAO has reserves of 6M STANDARD meant to improve our ecosystem and empower developers, guilds and ideas to thrive. Offering these incentives and grants is the only way of properly scaling in the long term given the speed at which Web3 moves and how fluid work is.

I propose at first a pilot program through which both the committee members and community members will observe upcoming hardships, will overcome them and learn in order to finally reiterate the SFC in a later proposal with a more stable structure.

The committee will be transparent in their work and will keep track of funds flowing for future reference. They will work in mandates based on seasons of 3 months each - meaning 4 seasons per year. The first iteration, season 0, will continue until the launch of the Grants Program considering no delays. Should delays occur, we will revisit this proposal at the end of it and discuss possibilities.

Considering the opportunity cost of not spending in an industry highly influenced by network effects and the need for Blitzscaling, SFC will request at most 90.000 STANDARD tokens seasonally. In this manner, StakeborgDAO’s treasury will spend 1.5 % of its current holding of STANDARD every season and 6% annually, a rate at which we will be able to keep up with competitor spending and make effective use of our warchest. The types of grants will be split into two:

  1. Contributor rewards
  • Amounts depend on the skill and availability of the contributor alongside project duration and activity (2nd step in contributor rewarding, more on this in the near future)
  1. Smaller checks: <10.000 STANDARD

  • For professional guilds and projects that will be proposed on our Agora page

  • subDAO investments:

    • These will have to go through on-chain voting as the financial resources needed could be considerably higher and a token swap between the parent DAO and the subDAO is needed. The SFC will give their thoughts on the application but the vote will be up to the community.

The evaluation process of a project or guild proposal will take a maximum of 10 working days, a time in which the committee will assess the viability of the project.

The guild and project financing will be given in installments that can be done using the cliff method or vested (to be discussed within the application and with the grant committee), based on presented and discussed KPIs and their selected roadmap. When such milestones are achieved, contributors will be rewarded. If they fail to meet the criteria, the rewards will not be given and the situation will be reevaluated, with the possibility of terminating payments or applying penalties. For this reason, the grantees are encouraged to map their progress, deliverables and timeline.

Payouts based on KPIs/OKRs reported by the project/guild/subDAO teams:

KPI/OKR Payout
Below 50% No payout
Between 50% and 100% 50%-70% of the reward
100% 100% of the reward

All applications are required to present a business/strategic plan, a means through which they create value and capture it accordingly. It’s important to mention that value created is not necessarily just financial, it can also mean brand awareness/marketing & others.

There is also the possibility of gaining exposure for funded projects through existing social media platforms and help from business developers to integrate other tools or projects or reach out to whoever is needed.

Approving the grant following a thorough evaluation will then have to go through a multisig of 4/7, with 1 lead and 6 reviewers. For the amount allocated to be transferred to contributors and projects, 4 people out of the 7 will have to sign the transaction. This way, we enable enough room for discussions inside the committee and more opinions to emerge.

For this pilot season, I believe a team composed of 3 the bootstrapping team, 2 members from DMOB and 2 ambassadors/moderators will suffice to make sure that the grants are in the best interest of the DAO. In this way, more experienced members are part of the committee and 2 newbies (for this season - the ambassador and moderator) are trained and will be more knowledgeable by the end of the season so they can participate in the next election and, in turn, teach others.

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In the future, the committee is willing to decentralize progressively away from the core team through community-based elections and meritocracy proved through skills, credentials and experience.

Timeline

If the proposal passes, the SFC will start working on 01.06.2022 (1st of June 2022), season 0 will last for 4 months at most (1 month longer than the regular season length). This is influenced by the launch of the Grants Program and meant to provide a “clean” start for season 1 on the 1st of October, with an end date on the 31st of December 2022.

Should there be a vacant spot in the SFC before the season is finished, there will be a period where anyone can volunteer by submitting an application on the proposals section of Agora.

Resources

Insights about the ongoing proposals regarding the help of the finance committee will be discussed on our Discord channel, Agora page, and highlighted on StakeborgDAO’s Twitter page.

This pilot team will not be rewarded financially as it is mainly a subset of the bootstrapping team but once we reach decentralization, there will also be rewards.

Success metrics and KPIs

Although this is a pilot program, it is important to hold members accountable and the overall activity, therefore we will measure:

  • Growth in the number of compensation/grant applications received season-over-season
  • Growth in actual contributors/projects rewarded/funded
  • Growth in community participation over proposals on Discord, Agora and Snapshot.

There is also the possibility to measure more subjective criteria, such as

  • Improved sentiment within the community
  • Improved StakeborgDAO brand and awareness in the market

Team background

Lead: Vlad

Reviewer1: Mihnea

Reviewer2: Matei

Reviewer3: Bogdan Gheorghe - DMOB

Reviewer4: Alex Tudorache - DMOB

Reviewer5: RaluW - Moderator

Reviewer6: 1johnny - Ambassador

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Before moving to Snapshot voting, we intend on leaving this proposal for 48h on Agora to gather feedback. After that, people can vote until 31st May (since the committee begins operations on the 1st of June).

Lastly, should that go through, we’ll move to on-chain voting (to call the funds from the treasury into the multisig). More details and guides/information on how to vote on these other platforms in the following days, on our Discord channel:
http://discord.gg/stakeborgdao

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I’m so glad to see this happen, which is a milestone for our community and shows us that to build something great it takes time.

Regarding the actual form of pre-voting offchain on Snapshot, there are two points that I need to be better clarified because I do not understand how it is designed in its current form:

  • To create a proposal your voting power must be greater than or equal to 1 vote.
  • Quorum on a proposal is defined as 1000 votes

In order to fulfill the Quorum it is necessary 1 vote from one wallet with 1000+ vStandard? or means that is necessary 1000+ voters with 1+ vStandard? which is a huge difference.

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Idea that came while reading the proposal:

Imagine allowing strategic investors to buy vested rewards directly from the contributors.
Investors buy the right to claim the STANDARD after the vesting period is over and contributors gain stables in a way which doesn’t impact the price of STANDARD.

This is a potential solution for helping contributors pay their bills when treasuries don’t hold stables.

I’ve also thought about a couple of ways to implement this.

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I’m glad to read your proposal Matei! At the first look I have a couple of questions:

  1. Is this step mandatory for any initiative that wants to use funds from the Stakeborg DAO treasury, or will optional as one tool that contributors can choose to obtain funds for guilds and subDAOs?

  2. Will this proposal also follow the 1% rule and be voted on by the holders? Since this council proposes to manage 28% of the total Standard supply, shouldn’t the vote be based on the power vote? I ask because with snapshot voting if the 1% rule is avoided, this may set other precedents in the future.

  3. Can the SFC put in debate a form application example before the final vote?

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I’m glad to see your input, @Teo :slight_smile: For the quorum to be met, there must be at least 1000 votes (vStandard).

1 token = 1 vote if you have your Standard staked in governance BUT not locked. Otherwise, your voting power increases judging by how much time you locked it.

Hi @eugenPtr ! That’s an interesting idea, if you’ve got any ideas for implementation you could start a proposal of its own regarding this.

We’ll definitely have to go through a treasury diversification process so we can provide this ourselves but until then, this proposal is just for the start of the SFC, regardless of what other iterations and ideas we could add in the future. It’s the starting point for being able to do all of this stuff.

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Great questions, @MAC.

  1. This step (i presume you refer to the business plan since that’s the funding part) is included in the already-existing supported structure of proposals on Agora (the “Resources” section of every proposal - that’s where contributors say what they need, for who and how much). Showing how the project creates value for our ecosystem should already be presented in the overall project, so I don’t think that’s a problem.

  2. This proposal is meant to get rid of the need to constantly call the treasury through on-chain voting (which takes more time and costs token holders - that’s where the 1% of Total Standard Staked rule applies). Thus, we’ll move to vote on Snapshot for such decisions (after the committee gives its thoughts on the funding of a project). The council proposes to manage at most 90.000 STANDARD every season (1.5% of the total treasury) and the total supply is 20.000.000 (and circulating supply as of 24th May 2022 is ~2.88M). The voting power is all the same in Snapshot and on-chain (so locking your tokens in Governance gives you increased voting power in both places).

  3. This specific proposal is meant to kickstart the committee itself, so we can then learn and reiterate the way it works, operations and whatever else we see fit. There is no application form available, as the funding application is included in the overall proposal of a project itself (“Resources” section and execution, alongside Motives). If we see fit, we can develop a template inside the community in regards to these sections or we can check other proposals from other DAOs and see what they’ve done and apply it to the project’s case.

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Does this mean that a single voter with a 1000+ vStandards wallet can make a Offchain proposal to reach a quorum?

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Hello Matei

Your proposal is very well written an explained, congrats on that.

I do have some questions though on the financial aspect:

  1. Will the SFC, trough the grants that it will provide, bring any direct value to Standard holders for example other projects token airdrops?
  2. Other than vesting/cliff, are there any more established rules on how can the grant receiver can use the Standard ?

Maybe a more detailed plan on how the grants will benefit the StakeborgDAO community will be beneficial here.

All the best!

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@Laur The SFC is meant to be a facilitator for our goal: becoming a web3 incubation community cultivating a Web3 ecosystem of sub-DAOs and guilds (with a strong focus on DeFi applications).

So the committee is here to:

  1. Offer rewards to contributors (we’ve had people that have been working for months without necessarily thinking or asking for compensation - but some definitely deserve it).
  2. To offer funding for projects. In this case, the committee will review the applications of the teams (they will present the project to all of us at first in Agora and then, after feedback, they’ll move it to Snapshot). So the community will decide whether the project brings enough value or the right kind for them when voting. The SFC is merely a facilitator for this to happen (otherwise, every single funding request would have to go through an on-chain proposal, which takes time and is more expensive).

The cliff/vesting schedule are ways in which the grant receivers get the reward. It is up to them (and they’ll present this in their proposal) how they use the funds. For example, they might use some for bounties, they might pay a graphic designer, a few developers and a project manager. Or any other combination of roles they see fit to get their project done.

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Offer rewards to contributors (we’ve had people that have been working for months without necessarily thinking or asking for compensation - but some definitely deserve it).

How would this work precisely?
Will it follow the same process as project grants, which are sort of a pull principle (writing and submitting an application)?

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That’s what we are looking into, yes, but will be developed more thoroughly in the near future. We’re looking at other DAOs and their frameworks, what works and what doesn’t so we can create something flexible for more types of contributors.

We can definitely identify full-time/part-time contributors vs project-specific contributors (the 2nd type of payment will be decided after writing the project proposal). So I’m researching more to see what an MVP would look like and from which we can start and improve as we go.

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Congrats Matei!!

Glad to see the proposal out and can’t wait for everything to unfold…

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Will there be any requirement on how the project uses grants internally?

Some projects might prefer setting up a Coordinape circle for the members while others might use fixed percentages for each member. This is of course influenced by the size of the team as well, it does not make sense to set up Coordinape for a team of 2.

I’m not a fan of fixed percentage, it removes part of the incentive to do your best. In the worst case scenario this can be the trigger of not the greatest vibes inside projects.

I think SFC should leave that for the project to decide, but strongly encourage some sort of performance reviews directly linked to compensation inside the teams. Coordinape is nowhere near perfect, but it’s a good tool for that.

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First of all, congratulations @matei Co. for coming up with this proposal. I belive that it will provide a lot of value to StakeborgDAO’s projects and contributors.

One question from my side: Does the initiation of SFC means that all projects in the (old) Area51 that would require funding, will have to present a business plan on Agora, that of course, will include the funding requirements and how the project will provide value to StakeborgDAO?

Thanks and GG!

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@andrei good question. I think that’s best for projects to decide, no definitive requirement. The SFC will review the resources the project asks for and talk with the team to see what the best way for them to receive funds is (coordinape or directly to contributors). As you say, some projects might prefer a different decision and I think it’s best to stay flexible. We definitely intend on using web3 tools such as Coordinape (and/or payment management tools such as Parcel).

@ostanescu glad to see you here and thank you! It’s not a necessity for already-existing projects to apply for funding but this proposal opens the door for the ones that want to. If they choose to get funding, then yes, submitting a formal proposal regarding their project (with all things included, I think it would also be best to say the things/milestones they’ve achieved by now since it adds credibility) is necessary.

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I enjoyed reading this proposal a lot. Congrats!

I agree and support everything written in there.

Looking forward to reading the second one.

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@matei and rest of the contributors, good proposal and vision and I can see how this could speed up the process in many cases/initiatives, one and recent one being VeeCon2022.
I have a few questions:

Stakeborg or StakeborgDAO? want to make sure there is no confusion between LLC and DAO.

Will this be discretionary, based on what the SFC thinks? Or how will work? I suppose more will be debated on this part.

Who is gonna check the validity of the reported KPIs/OKRs?

@eugenPtr
I agree and do not agree with this idea. While price stability might be something useful a lot of the time, volatility may represent some opportunities for entry and exit for a lot of people. Nevertheless, by trying to influence the price through a maneuver like this one, may sound like some price manipulation.
But the idea is good and may find utility depending on how it is implemented.

Agree with both points, especially with the first one!

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Hi Matei, a way may be to build a SC that allows any $Standard holder to become a lender for the treasury, in stable coins. The treasury issues the native token, that can be staked. This will incentivise the lender and will not force the treasury to sell.

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@etf_dao thanks for pointing these out!

  1. That’s right, I’ll edit the proposal for it to be the StakeborgDAO Financial Committee (SFC)

  2. We’re in the middle of working through the contributor rewards (so definitely more on this later) - we will most probably allow for more flexibility and there will be different compensation mechanisms for:

  • Fulltime/parttime contributors

  • Ambassadors

  • Moderators

  • Bounties

  1. The KPIs will be communicated by the team in their proposal (first milestones to achieve and when). They should be easily measurable (ex: increase in Twitter followers with 500 by the end of June for the TDI Twitter Account). Both the community and the SFC will hold the projects accountable, but the SFC will make sure to check whether they met their goals to continue/discontinue funding.