Financial Proposal: ESD S1 Budget Request for Discretionary Funding of New Initiatives

## 1. Summary: New Initiative Funding

The Executive Sub DAO (ESD) requests funding according to section 5 (5) (e) Aragon Network Charter of 360k USD Equivalent as per budget to bootstrap ESD discretionary funding of new initiatives from April 1 2022 until 31 July 2022 so that the ESD can execute the powers as granted by section 6 (2) (a) of the Aragon Network Charter:

  1. Make grants to other community members at their discretion, providing;
  • such transactions are disclosed transparently on the Aragon Forum website.
  • an Escrow is used to hold funds until the completion of the agreed-upon deliverable.
  • the deliverable has been fully assessed by the members of the ESD
  • the funds are used further the Aragon Network’s Mission
  1. Pay suppliers of the Aragon network, providing such transactions are disclosed transparently on the Aragon Forum.

This financial proposal is in addition to

These proposals should be read in conjunction with the ESD End of Season Report March 2022 which highlights that the ESD needs to increase transparency, ensure our own accountability and improve community engagement. To this purpose the following ESD statements are provided to support all three current proposals

Situation/Rationale

Season 0: our funding request strategy was very much about supporting mission-critical operations and contributor activities under progress since DAO formation. We funded projects on a first come first served basis in order to secure the talent of key contributors - provided proposals defined clear deliverables and timelines. Through this process and thanks to the sterling and committed efforts of core and community contributors, a number of initiatives were funded. Reported here and tracked here

Season 1: We (ESD) seek to provide discretionary funding by which early-stage community initiatives, AA initiatives and partnership initiatives can be launched and maintained in the short term (maximum two funding rounds).

S1 priorities are projects that aid the GTM for Aragon.app including finance, talent, tech and others. We have developed the ESD Statement: S1 Funding Strategy - Allocation, Process & Reporting to provide clear, transparent information about S1:

  1. Funding priorities for new initiatives
  2. Funding request process
  3. ESD Response Times
  4. ESD KPI’s
  5. Transparency
  6. Report Requirements
  7. Limitations
  8. Exceptions

It is important to note that while we want to provide this transparency, discretionary funding is not entirely foreseeable nor fixed in stone. The S1 funding strategy is subject to change, pivots and budget restraints. Following voting, updates to the funding strategy will be included as comments on that post to clarify future changes should priorities shift for strategic alignment.

3. What impact will this project have?

Strategic Growth & New Initiatives: We seek proposals from all parts of the ecosystem and hope to fund proposals regardless of where they may arise - within the DAO or the Aragon Network or through DAO2DAO and ecosystem partnerships. We believe that approving ESD discretionary funding supports strategic alignment with Aragon Association, Aragon Labs and AN DAO and the broader ecosystem.

Discretionary funding is allocated using the standards set out in the Aragon Network Charter and the S1 funding strategy to boostrap proposals that we believe will ultimately

  1. grow the number of active Aragon DAO and
  2. support the overall purpose of the Aragon DAO defined in the Aragon Network Charter

ESD Team Members(s) @lee0007 @fartunov @daniel-ospina
ESD Discord: tag @Executive Sub-DAO members or danielo#2815 | Ivan | AN#6678 | lee0007#8152

How will you interface with the community?

  • ESD Public Governance Discord for KPI reporting and responding to community inquiry
    ESD Notion ESD meeting agenda and minutes
  • End of season forum posts for transparency, visibility and reporting on Exec SubDAO activity and summary KPI’s
  • Funding request forum proposal requiring a minimum of 7 days
  • Monthly reporting for projects with discretionary funding tied to deliverables
  • Monthly Community AMA to provide opportunities for contributors to seek advice on developing new funding proposals

4. Proposal Budget

The ESD has been given substantial power by the Charter which creates the need for strong alignment with and high transparency of spending. We want to balance the speed and impact of capital deployment being robust enough to minimize funding overlaps but nimble enough to scale funding. In terms of spending, there are fundamentally four types of funding; continuous, discretionary, fixed and strategic.

This is a proposal for 360k discretionary funding of new initiatives proposed by the community, AA and partners to enable faster network growth through the speed of start-up and execution. It compares funding for either two or three new projects per month (at the maximum funding allocation) with the assumption that budgets increase month on month to reflect cumulative funding.

Our 360k request is determined within the limits of Main DAO funds currently streaming at 200k per month, 800k season 1. Current discretionary allocation funds only six new projects in season 1 at the maximum of 20k. This level of funding is an increase of 112k from Season 0 (Q4 2021-Q12022) which could expect to fund the cumulative S1 expenses of at most three small projects. 360k would not increase our ability to proactivly sourcing new funding initiatives.

APR MAY JUN JUL S1
Unallocated ANT $ (in ANT equiv) 12000 24000 36000 36000 108000
Unallocated STABLE $ (in stable coins) 28000 56000 84000 84000 252000
Discretionary USDC Equivalent 40000 80000 120000 120000 360000

The following assumptions are applied to the budgets for 360k discretionary funding.

  • 360k Discretionary: four-month cumulative, unallocated funding for new initiatives
  • Limitations: up to a maximum of 20k per month per project
  • 360k Targets: 2 new projects per month at maximum funding

4.1 Full S1 ESD Budget Request

Portion of discretionary funding requested in this proposal shown in bold based on 360k

APR MAY JUN JUL S1
Discretionary USDC Equivalent 40000 80000 120000 120000 360000
Continuous USDC Equivalent 110000 110000 110000 110000 440000
Strategic Allocation USDC 15000 15000 15000 15000 60000
SubDAO Member ANT 1800 1800 1800 1800 7200
TOTAL USDC Equivalent 162500 202500 242500 242500 860000

Applied assumptions for this discretionary funding proposal

  • Rational: Streaming of 800k funds to the Main DAO is a primary determinant of the total ESD S1 funding requests.
  • Carry Over: Funding beyond 800k accounts for ~60k unallocated funds from Q1 2022 (USDC ANT ETH)
  • Discretionary: Fund requested in this proposal are 360k unallocated for new initiatives
  • SubDAO Members: Funds requested in this proposal are 7200 ANT
  • Denomination: ANT equivalent values based on current accounting proposal
  • ANT USDC Allocation: 30:70 ANT: USDC based on current accounting proposal

4.3 Payment of Funds

ESD Gnosis Safe: 3/4 0x394Feb37899BB9aF6963B823a2d84668929d59f7

Charter Aragon Governance proposal section 5 (f) 3 a By default, all Financial Proposals involving a deliverable should use an Escrow (see Additional Definitions). In cases where the use of an Escrow is omitted, a justification must be included in the Description. b. Greet.me shall be the default Escrow provider for Financial Proposals.

Justification for Use of Multisig: Our experience in season 0 has highlighted the need for a simplified payment process. There is a technical error that is blocking USDC payments from Govern and for this reason, two multi sigs were used for payments in the last month of season 0.

We herein formalise the use of a multisig in favour of default escrow. We believe this is necessary to effectively function and meet our commitments to contributors in a more timely manner. Once funding is approved by ESD the full funded amount is transferred in a single payment via Govern to the EDS multi-sig. This will significantly reduce the number of monthly transactions and minimise unforeseen issues that have delayed contributor reward payment.

The ESD are committed to upholding

The Aragon Network Agreement | The Aragon Manifesto | The Community Guidelines | Aragon Governance Proposal Process

Voting will be scheduled within 7-14 days of this proposal

ANT holders are asked to vote on the level of discretionary funding

  • YES fund ESD 360k discretionary funding
  • NO do NOT fund ESD request for 360k discretionary funding
  • ABSTAIN
4 Likes

Fully in support of the proposal, and back the justification of using a Multisig. Multisigs are used by a number of top projects in the ecosystem (reference: Balancer Multisig) This will provide us with greater flexibility when making payments and in the speed of execution.

2 Likes

Typo here.

1 Like

Is the intention here to do 2 separate Voice votes? One for $360k and a second one for $540k with the latter only being valid IF the AN DAO is able to increase it’s monthly inbound into the main DAO beyond $200k per month?

If the latter, what happens if other finance proposals are also made, for a claim on future funds the AN DAO might get?

If I i’ve understood this correctly, it feels overly complex and would remove 4.2.

Can you please confirm that the discretionary funding would be made according to the criteria on this post? ESD Statement: S1 Funding Strategy - Allocation, Process & Reporting

1 Like

Agree. Edited

Yes can confirm that discretionary funding would be made according to the criteria provide in [ESD Statement: S1 Funding Strategy - Allocation, Process & Reporting]

Further to this point adding some rules that the Multisig will endeavour to follow -

The Transition to a Multisig model will benefit the whole DAO as we will have the ability to make payments quickly. To be clear, our use of a Multisig does not solve all the challenges such as complex batch payments which are similarly opaque as they are in govern.

To make this transition I would propose opening up rules around the Multisig signing for all Multisigs that are under the DAO umbrella. We are seeing a number form and this is another point to standardize across the DAO.

A signer shall lose his/her role (by action of the remaining multisig signers excluding him/her) in case he/she:

  1. Does not sign a Transaction in one week twice in succession
  2. All transactions must be signed (can be abstain)
  3. If three transactions are missed without a valid reason (medical or loss of wallet access)
  4. Acts against ANT token holders’ off-chain voting

If any of the four rules are breached, the signer is removed and replaced with an appropriate member as proposed by the other signers in the wallet as a default.

2 Likes

Thanks, Alex, I am happy to commit to these rules for the use of multi-sig and appreciate you taking the time to think about this. For transparency, I think it would be good to make this a stand-alone post that people can be directed to.

I am in support of these rules to make operating the multisig more efficient. I am somewhat confused about the difference between 1 and 3… if someone is offline for a week and there are 2 or 3 transactions scheduled within that week that person gets removed based on two separate rules, or?

Hey Renee!

Thanks a lot for coordinating this proposal!!

I can’t help observe that the current ANT assignment of the Executive Sub-DAO (ESD) of 200 ANT / mo doesn’t really match the amount of responsibility and work that should be expected from the role.

I believe that we should:

  • Clearly define the role, responsabilities, and KPIs tied to the position
  • Significantly improve the retribution for the position.

Otherwise, we won’t be able to properly reward the time, effort, and energy that this role entails. This can only lead to frustration and disentanglement with the project.

Probably as “beneficiary” you can’t “vote” on this one, so I’m calling out other non-ESD community members to express their opinions on this topic :slight_smile:

3 Likes

Hey Joan, we really apreciae your recognition of our efforts!
In this proposal there is an up to $5k per month allocation for supplemental incentives towards the ESD:

2 Likes

Budget has been increases by 2.5k per month for a total of 30k season 1 for all subDAO

Thanks for the reply!

  1. Could you clarify how much would the allocation per each SubDAO member per month, in USD equivalent, considering this + the 200 ANT / mo stablished in the Charter?
  2. Wouldn’t it make sense to create 2-tiers of rewards, so that the ESD members may have a slightly increased comp? Seems to me that their responsibility is broader and therefore, more burdensome.

Thanks!

1 Like

Appreciate your support @Joan_Arus
Figuring out our own compensation is a conflict of interest and not something we the ESD can achieve in isolation. Keen to get this figured out during April S1, in consultation with leadership and finance teams - should our proposals pass.

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