Indexed Finance Team Funding / Operational Funding / DAO Based Leadership through Voting

Am formally proposing for us to put the Treasury NDX to use to hire and grow the project with both a hiring and an operational budget.

Proposal

  1. Allocate an annual budget for hiring and other expenses for Indexed, starting with 2m NDX for the next year.
    a. 1m NDX to be used to hire 10, with a 2k-10k NDX payment per month, adjusted to maintain a salary at $2.5k-$20k per 4w, decreasing salary in NDX as price rises, depending on role.
    b. 1m NDX to be used on operational costs including but not limited to marketing, operational costs like gas, hosting, security costs, events for the next 1y.
    c. The executive lead has the right to change these allocations as needed between more to operations, hires or used for investment by other actors.

  2. Elect a leadership team responsible for managing that budget, hiring new team members and other project management.
    a. This team will consist of an executive lead and potential vice executive lead, who must both cosign all budget allocations in a Gnosis multisig to a hot wallet.
    b. All transfers will go through a 1 week timelock to give the DAO the ability to oversee and veto budget decisions.

Aims
We need a way to get people to focus and be able to commit time, and compensate them for that time to start to grow the protocol again. We also need to engage the community for leadership and transition towards a community focused approach as the project matures as has been done with projects like Yearn and Sushi, making the process more DAO based. Finally we need a dedicated lead who can just make decisions on behalf of the DAO and execute as needed.

Having to go through DAO governance for operations is way too slow, often just approves what the team want anyway acting as an oversight with low proposal creation by non-team members often in projects and makes the overall project a mess from operations.

By having the leadership be accountable by the holders as well as able to be terminated if they fail to act in the DAOs interests, the system can be made much more efficient and able to implement new features and grow the project. Having the architecture based around an accountable leadership mirrors the democratic models which work around the world, and see no reason it cant be applied to DAOs. By being able to implement new features, hire and run operations independantl;y the leadership can get us back to a high growth phase, and decentralizing the hierarchy as the community and project expands, rather than from the early start.

Voting
We will have yearly votes, with the DAO able to trigger early votes with 10% quorum as to who the leadership are for the following 12m with the DAO able to create early votes through standard governance proposals at any time, to appoint the leadership team and renew the budget. The leadership team will consist of an executive manager and potential vice executive manager, who must both cosign all new hires and other budget allocations. Can also use some community members for the msig.

The voting process will follow a process whereby parties are nominated in a forum post, followed by snapshot vote to decicde the winners are without restricting to those who can afford gas.

The funds will be sent to a timelock with 1w delay wth the DAO able to override withdrawls and actions from the timelock if they believe the executives are acting maliciously, with the Management Team able to withdraw from the timelocks as needed in advance for planned costs

Am looking for feedback for this and to fine tune the proposal, but feel it is needed so we can get back to growth and establish a proper, active team.

4 Likes

sounds like a good starting point. lets work on this.

1 Like

I appreciate and agree with the spirit and intent of this proposal. We’ve know that we need more paid, full-time resources on the project to see it grow to self-sustaining critical mass and maturity. I like that you’ve structured this as an execution team with oversight from the DAO. While there are centralization risks with the proposed approach, I think true decentralization can only come through growth and community engagement. TBH, while the protocol is decentralized, the project is not decentralized right now, so it’s not like we’d be taking a step backwards IMO.

Here are some specific points I would like to contribute based on the proposal and the Discord discussion:

  1. Currently the structure and governance of Indexed Finance is detailed here: https://docs.indexed.finance/ and I would want to see the details of this proposal reflected in that document (or a proposed draft) for transparency to the DAO and any future investors, the Day to Day Operations and Governance sections are the areas I am thinking about.
  2. Of the 10M supply of NDX I understand that just over 4M remains in the treasury, how much of the “20% will go to the founders and future contributors of the protocol, subject to vesting periods” remains unallocated and available? It would be helpful to understand the current composition of the treasury balance in the context of the stated distribution plan.
  3. How does this change the existing relationship between the DAO and the 2 core members @d1ll0n and @Norsefire who are currently responsible for protocol development and operations?
  4. With annual voting on leadership and the possibility of early removal, some portion of compensation (~25%) should be locked for the 2 executive positions until 3 months after conclusion of each term. Consider this a “performance of duties satisfactory to the DAO” performance mechanism as opposed to a vesting lock, performance of duties would include successful execution of management transition in case of any changes to elected executives.
  5. Would the elected Sigma and Growth committees be suspended or changed in connection with the proposed changes? At this time the term of both of these committees has ended, however the Sigma Committee still controls the remaining Indices.

(edit to include item #5 above)

Who will vote on what the salaries are and the granular details there?

I am all for people being compensated well, but it is of utmost importance to structure the compensation such that it incentivizes the kind of contribution we’d want for the project’s ultimate success.

Namely - $20k a month seems pretty high for a lot of roles. I won’t argue that we should lower that, but I do argue that this should be locked in a vesting period for a sufficiently long-enough timeframe. Otherwise, we risk somebody joining, accumulating $240k for 12 months worth of work, and being tempted to cash out and leave with more than $4.8M the moment NDX pumps 20x (which is not realistic as that’d be a $80M market cap, and in bull markets we’ve seen similar DeFi projects reach $350M+ market caps).

What we want to avoid is incentivising people leaving right at the time we need them most.

I really agree with this.

A lot of time/opportunity has been wasted on this project due to a lack of manpower.

The people working on it now are great, but we need a lot more dedicated people on this. Two people is not enough, no matter how capable they are.

As far as compensation goes, it is competitive to get good/talented/ambitious people onto projects right now. You get what you pay for, in-order to incentive people that could actually add value to work on the project, I agree with @pr0’s payment proposal.

If people cash-out with a lot of money, but contribute to the progress of the project that is great. That’s how the world works at times, for better or for worst. Need to get the best/most-talented people on-board, that should be the most important objective here.

  1. Will do.
  2. The founder allocations are not really free to use as alot has been used already to pay for other stuff like lawyers, our own costs as well as like used for hires that had been done previously. Dillon has some left as do I personally but tbh the few 100k we have doesnt really compare to the 4m chiilling in the treasury. So just assume the treasury NDX is what we have to mess with.
  3. Tbh thats gonna be up to them if they want to contribute still or what their plans are. Both have already given the go ahead that should this execute they understand that the leadership roles will be taken by the voted committee as would be expected. They would either decide to run, contribute peripherally or externally to the voted leadership or whatever they choose, but the lead will be taken by those voted.
  4. Thats not a bad idea. The compensation plans will probably be refined, am looking at options models where they are given options they can exercise as a bonus rather than large upfront allocations. Timelocks can also be used aswell as bonus compensation post.
  5. Tbh we dont need 20 different committees, its decentralization theatre and just fucks with operations. You want 1 collaborative team that operates as 1, theres a reason companies dont have 10000 different brances and tend to operate from HQs.

Salaries for executives could be a voted param with the snapshot. Salaries for hires will be up to the executives because thats gonna need to be based on the role, experience, all that for the hire.
$20k is what can probably be expected for executive level roles as well as senior solidity devs (usually they run for about >$250k a y). This will be based on the hire role

Tbh if the team cause the token to 20x they are more than entitled to take out their fair share from that growth. There may be vest and all that but tbh potential profit is a large motivator, and artificial limits just because we dont want to people too much is bad

@pr0 I’m good with all your answers, I appreciate the further clarity here - I’m supportive.

I would love to see how this develops.

I believe in the Indexed leadership to take the Team forward.