Financial Proposal: Recurring funding for the Executive Sub-DAO

Proposal Information

Proposal summary: A moderate stream of funds (2,500 ANT/week) to fund the Executive Sub-DAO

Previous work on the proposal area:
The Executive Sub-DAO was bootstrapped by the Aragon Association with $25,000 worth of funding that has largely already been budgeted to pay for community contributions (accounted via SourceCred) and to bootstrap new initiatives.

Previously, a CFDAO was deployed and operated to provide a similar function for the community. It was shut down at the same time that the Floc and NEST programmes were, for reasons related to cost-cutting and a desire for greater product focus.


Proposal description:
The proposal enables any ANT holder with the required collateral to start a stream of funds from the Main DAO’s treasury (the Investment Vault) to the Executive Sub-DAO’s treasury (the Operations Vault), using SuperFluid.

This stream is set at 2,500 ANT / week (roughly equivalent to $50,000 month at the time of writing) or 14.88 ANT per hour. The stream also requires a 4 hour initial deposit of 59.53 ANT.

Upper and Lower Thresholds:
To prevent excessive accumulation or depletion, the proposal also enables any ANT holder to stop the stream if the funds in the Executive Sub-DAO surpass the equivalent of $150,000 USD, and to resume the stream if the funds go below $50,000 USD.

Proposal Rationale:

The Executive Sub-DAO’s mission is providing small pockets of easy access funding to community contributors and covering operational expenses as needed. Having to recurringly ask for funds from the Main DAO takes time away from working on this mission. Equally, having a large lump sum would create a temptation to make larger grants or otherwise risks confusing the mission of the Executive Sub-DAO. As such, a moderate but recurring stream enables the Sub-DAO to best serve the community.

A risk in this approach is diverting too much from a focus on the product. However, the fact that the Executive Sub-DAO is dogfooding creates incentives for focusing on product fixes as the pain points are felt directly. Also, part of the team partakes in strategy conversations with the Aragon Association, providing a bridge for knowledge sharing and strategic alignment. Finally, the precedent and warning that the CFDAO represents is well understood by the current Executive Sub-DAO members to avoid repeating that path.

Rationale for using Streams:

Streams enable recurring funding for the Executive Sub-DAO with minimal governance overhead (one proposal enables continuous funding).

And compared with pre-approved recurring transfers, stream accounting is rather simple using streams, as outflows are subtracted from inflows in the SuperFluid UI. Any surplus accumulated is then easy to budget as a reserve runway in case the inflows ceases or as an additional budget for 1-off grants. This is essentially automated accounting that’s reconciled by the second!

For context, see the literature on Beyond Budgeting that’s been revolutionising financial practice in the traditional world for over a decade and paving the way for similar practices in DAOs: https://corporatefinanceinstitute.com/resources/knowledge/finance/beyond-budgeting/

Rationale for using SuperFluid:

Compared to other stream suppliers (e.g Sablier), SuperFluid doesn’t require the lump sum of funds to be deposited before a stream is started. Equally SuerFluid streams are set without a fixed end-date. These two properties are essential for our use case as the Main DAO is currently funded using a Stream and as such won’t have availability of the funds to make any lump-sum transfers until later on and then we’d still be in a position of having to request another stream to be started over and over, creating significant governance overhead.

Limitations of any benefits mentioned above:
The current proposal will eventually require amendments as the funding needs of the Executive Sub-DAo evolve in the future.

Equally, the current proposal could lead to an accumulation of funds in the Executive Sub-DAO if this fails to deploy the inflows. As the Main DAO could still choose to cease or reduce the stream to the Executive Sub-DAO, the risk of exercise accumulation is seen as an acceptable trade-off to the governance overhead of constantly having requesting funds and the administrative overhead of budgeting for every cycle.

Expected duration or delivery date (if applicable):

Active until decided otherwise.

Team Information

Names and/or usernames, preferred contact method, and/or relevant social links for team members (Twitter, Github, Aragon Forum, etc.):

danielo#2815
lee0007#8152
Fortunov | Aragon#6678

Funding Information

Amount of ANT requested: 2,500 ANT / week

More detailed description of how funds will be handled and used:

budget breakdown; to be determined monthly by the Executive Sub-DAO members
the key categories are:

  • rewards for Ambassadors’ contributions to the Aragon Network via tipping, bounties, and/or SourceCred
  • bootstrapping new guilds via Coordinape or other mechanisms
  • reviewing funding requests from the community for small pockets of funding ($15,000 or less)

execution approach; the use of funds will be determined by the Executive Sub-DAO members using Lazy Consensus as per the Aragon Network Charter

2 Likes

I think this is a great idea! With this, we can get more solid plans in place for funding which will encourage people to contribute more and take initiative to help drive the AN DAO forward as a whole.

2 Likes

I like this proposal and will support it, my only suggestion is to include the desired cap when the stream should be stopped, so it won’t create a debate in the community about this number later on. It can be included as part of this vote, or you can suggest a fixed number as part of the proposal itself e.g. 150k.

1 Like

Great idea! I edited the proposal to include it, also adding that the stream can be resumed if the funds go again below 50k, so there is less of an incentive to spend money just not to lose the ongoing stream.

2 Likes

I would not be supportive of this proposal as it currently stands. The bootstrapping of new Guilds, including Technical Support Guild would be better placed as direct applications to the AN DAO.

I understand there is also a draft proposal in circulation for the Tech Support Guild to request funds from the AN DAO. This proposal would result in double counting of funds dedicated to Tech Support and I would therefore like the Tech Support Guild /bootstrapping of new Guilds section of this proposal to be removed.

To minimise potential conflicts and duplication of work between various guilds, I would propose that the AN DAO funds Sub-DAOs that in turn finance other guilds underneath them. This ensures there is more structured coordination on capital and task allocation and we don’t end up in a scenario whereby we have multiple different teams overlapping with one another and stepping on each others toes = Coordination and conflict nightmare!

2 Likes

Please look at the date of the proposal above. It was posted before we had agreed on the new proposal that’s just for the tech support guild.
The intention of the proposal above for recurring funding for the Executive Sub-DAO is to achieve the variety of purposes that the Exec Sub-DAO is meant to serve (like bootstrapping new guilds of which the Tech Support Guild is but an example).
I’ll update the proposal above before posting for a vote to clarify that it’s not directly linked to the Tech Support Guild.

I believe the compliance committee should be veto’ing this Voice vote as it does not comply with the rules for financial proposals set out in the charter. As a reminder, these are:

Process for Financial Proposals and/or Other Proposals: in sequential order:

i. Public deliberation phase: A post with the draft of the proposal is posted in the Aragon forum for a minimum of 7 days and maximum of 14 days with the format:

1. Title of Proposal (in the format “Financial Proposal:[title]”)
2. Description of the Action
3. Description of why the author believes it will help to increase the number of Active Aragon DAOs
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.
4. And suggested optional: ETH Wallet address of the author(s) and/or other identifiers

Regarding the above proposal:

a) It doesn’t specify how it will increase the number of Active DAOs (part 3 from above)
b) The Voice vote does not include the full text from the forum post - which is concerning because a forum post can easily be subsequently edited any any point.
c) It doesn’t specify why Escrow is not required (part 3a from above)
d) It arguably should involve some technical due diligence on Supefluid (which last I heard was not yet on Ethereum mainnet but maybe this has changed? ) and the charter states that “the Tech Committee has up to 14 days to decide and communicate via a post in Aragon Forum whether a proposal will be”. But yet the Voice vote duration is only 7 days.

Other reasons I will be voting against this proposal:

  • The executive sub-dao is already receiving $25k of funds, none of which have yet been deployed. Before requesting additional funds from the AN DAO, the executive sub-DAO should demonstrate their ability to coordinate on spending these funds appropriately.
  • The use of funds is lacking detail and there has not been an attempt at budgeting how those funds should be spent across different initiatives and if so, this has not been shared publicly.
  • Not all committee members of the Executive Sub-DAO viewed this proposal or agreed to positing it before it was made.
  • It’s not clear how this proposed stream should be prioritised relative to future proposals that also have approved streams. Specifically, there is a risk that the the sum of approved outward streams from the AN DAO is greater than the incoming stream into the AN DAO. And at this point, there are not clear accounting policies in place to view and tally stream liabilities of the AN DAO.

Tagging @ronald_k @eaglelex @Tayy for input.

On another note, I think all Voice proposals should include the full text of the proposal and not just a summary with a link to the forum post. Forum posts can be edited after the vote, so it’s not secure.

3 Likes

The points highlighted by @joeycharlesworth seem undeniably correct. The voting phase on this proposal should be interrupted.

We understand that funding is important in order to scale the AN DAO’s activity. Nevertheless, due to the importance of the involved issues (governance, creation of guilds, etc.), in our opinion it would be better to involve the entire Main DAO and every Sub-DAO in the preparation of this kind of proposals.

According to the AN DAO Charter, the exec. Sub-DAO “controls and executes”. It should not have the power to determine funding on a discretional basis. Moreover, given that we are in the early days of our AN DAO experience, it would be perhaps wiser to begin with a step by step approach, in granting the agreed financial monthly means to every member of the Sub-DAO (200 ANTs per month) and work on the basis of precise grants requests.

Eagle, Ronald, Tayy
(Compliance Sub-DAO)

4 Likes

In addition to the previous, we are soliciting an immediate request for documentation from the Executive Sub-Dao committee.

In accordance with the aforementioned, the Executive Sub-DAO must:

  1. Keep an up to date record of their activities and use of funds.
  2. Hold a General Meeting (online or offline) every fortnight and keep a record of the meeting available to the ANT Holders. (page 25)

In light of the foregoing, we are requesting the above records be immediately available to the Aragon Community. Including, without limitation, documentation pertaining to ALL meetings (minutes, impressions, or otherwise), the use of funds and any payments tendered to any member of any Sub-Dao committee – notwithstanding the Executive Sub-Dao – and any and all pertinent records within 48 hours from the time of this writing

Moreover, pursuant to the Aragon Network DAO Charter, each committee member of a Sub-DAO shall be paid a monthly fee of 200 ANT per month.(page 24). These responsibilities are conferred upon the Executive Sub-Dao, as follows:

1. In particular the Executive DAO has the following powers:
  1. Pay members of other Sub-DAOs

(see also pgs. 24-25)

No member of our Compliance Sub-DAO committee has received such payment. Further, we are of the belief that members of the tech committee are similarly situated. Indeed, no member of the Executive has undertaken this responsibility. The very essence of a “guild system” is ensuring that just compensation is appropriated for contributors/laborers and those individuals are protected against monopolistic governance. Additionally, extending funds to a committee that has demonstrated no effort to ensure these core values are represented is unreasonable and reckless. Moving forward, to protect the charter, proposals of this nature will receive heightened scrutiny.

We strongly believe that the Executive Sub-DAO is deeply misaligned with the Main DAO.

Just to confirm a few points

  1. We have had only one informal meeting, simply to introduce ourselves to each other. This was held the same day as the last community call, almost a fortnight ago.
  2. As far as I am aware, we are yet to hold our first official executive meeting. I have inquired about and requested a second formal meeting (prior to these issues being raised)
  3. I am aware that we are responsible for fortnightly meetings with minutes, to provide full transparency to the community.
  4. I am not aware of any funds being released to any sub DAO or community members by the Exec.
  5. I personally expected the sub-DAO member payment (200 ANT) would not be released until the end of the month.

Certainly, if there were meetings or funds released that I am not aware this would represent a major communication failure within the Executive.

I disagree that the executive is deeply misaligned with the Main DAO as I myself posted in discord this week looking to clarify the organisational structure within the sub DAO model. And as stated - based on my experience with the guild model - I am in support of developing a Sub DAO model for the same reasons expressed by @joeycharlesworth above

Furthermore, I have requested training on the proposal process and for the exec as a team to clarify the following points

  • what templates are available to make exec sub DAO proposals
  • where these are posted/shared
  • an agreed minimum standard/guidelines for assessment
  • when to schedule
  • how to schedule
  • how to object
  • how we will advise outcome to proposal creators
  • how to advise the community
  • how to initiate funding
  • how to keep the community up to date on available funding
  • review process/requirements for proposals

This would be on the agenda for our first formal meeting and will provide a clarification of the Exec direction, for community input feedback and discussion. At the moment, as far as I am aware, you are seeking information that does not yet exist.

In light of the foregoing, we are requesting the above records be immediately available to the Aragon Community. Including, without limitation, documentation pertaining to ALL meetings (minutes, impressions, or otherwise), the use of funds and any payments tendered to any member of any Sub-Dao committee – notwithstanding the Executive Sub-Dao – and any and all pertinent records within 48 hours from the time of this writing

I trust that my response within the required 48 hours will suffice until such time as we are able to convene an Executive Meeting - as soon as possible this week.

In terms of timing here I would like there to be recognition that both of the other two sub-DAO - compliance and tech - have the benefit of drawing upon well-established industry processes and best practices.

DAO are at the leading edge of new organisational structuring and if you can point me to the established processes and best practices for an executive Sub DAO with the same or similar mandate, I will happily learn from them. The members of the executive Sub-DAO should be empowered first to develop processes before being held to account for them.

The compliance intervention at this point is appreciated and having been made aware of your concerns, I will certainly be taking a more proactive approach to the role.

1 Like

3 November 2021

Process agreed

  • make a forum post with a basic explanation and share the link on discord #executive-sub-dao channel and tag the others
  • give 48h for the others to object before scheduling
  • schedule and then 7 days enforced before execution
  • fortnightly meeting to be scheduled

To the best of my knowledge, this constitutes the information requested

All Meeting notes are available via Notion here
Ongoing discussions are available to the public via the Executive Sub DAO Discord Channel

The Executive Sub-DAO has corried no activities whatsoever othe than an onboarding meeting (notes here: Notion – The all-in-one workspace for your notes, tasks, wikis, and databases.)

In fact, the members of the Executive have not yet been granted any powers to schedule transactions.

I urge the Compliance Committee to reconsider their evaluation of the alignment or lack thereof of the Executive Sub-DAO and Main DAO, as the Executive Sub-DAO first meeting is yet to happen (was meant to be scheduled for this week) and as such there are no actions or statements upon which such an evaluation could conceivably be based.