CIP: 39
title: Continued funding for development services - Service Agreement No 3 author: @Kowrigan
status: active
created: 2024-03-21

Simple Summary

This is a truncated version of the full Service Agreement. Please refer to the forum post for full details: https://forum.cow.fi/t/cip-draft-continued-funding-for-development-services-service-agreement-no-3/2336

This CoW Improvement Proposal (“CIP”) requests the DAO to approve the allocation of 3,850,000 USD from the treasury to Nomev Labs, Lda (the “Service Provider”) for the execution of the Services under the terms of the Service Agreement hereunder (the “Agreement”). The compensation will cover the Service Provider's labor and expenses on a per-use basis for the period from 1 March 2024 to 31 December 2024 (the “Term”).

The requested funds, if approved, would as:

• 1,500,000 USDC of KYCed funds that was previously set aside in the DAO treasury; and
• 1,500,000 USD of non-KYCed funds.

The addition of non-KYCed funds to the request answers the necessity for the DAO to keep a substantial amount of KYCed funds for potential activities requiring KYCed funds.

Overall, this will leave a total of more than 700 thousand USDC KYCed funds at CoW DAO’s disposal (of which 2.2M currently in use by CoW DAO’s Core Treasury Team, cf. passed CIP-19 proposal, and the remaining 49,876 USDC in the CoW DAO’s Daughter Safe).

Motivation

The Service Provider remains committed to fulfilling CoW DAO’s vision of a decentralised future where digital assets can be traded in a fair, efficient and reliable manner among people and communities around the world. Trades, liquidity provision, and any blockchain transaction must be securely protected, no matter who the user is.

We consider this CIP critical to ensure ongoing development and refinement of the CoW Suite and for keeping a competitive edge within the decentralised exchange ecosystem, including strategic pivots.

I. Service

I.a Services

The Service Provider will provide the CoW DAO with the services as outlined hereunder (the "Service").

• Code development and design based on Section 1.b below ;
• Continuous improvement of the existing product and user experience;
• Executing relevant user research and proposing development focus adjustments based on its findings;
• On behalf of CoW DAO, hosting relevant interfaces, upkeeping and housekeeping of forum.cow.fi;
• Assisting the CoWmunity in the promotion of the CoW Suite, including at and for conferences and with promotional materials;
• Engaging in, and maintaining the activity of participating in the consensus of proof of stake blockchains such as but not limited to Gnosis Chain as part of the DAO’s treasury management
• Fostering collaborations and partnerships on behalf of CoW DAO;
• Any other assistance and advice that may be provided by the team’s expertise, e.g. computer engineering, design as well as relevant project management, accounting services, legal, compliance, and other relevant fields of expertise;
• Facilitating solver onboarding, vetting and assisting with payouts on behalf of CoW DAO;
• Ensuring system security, providing development operations and security personnel. Per need, driving bug bounties for CoW DAO’s settlement (incl. via Grants DAO);
• Engaging the CoWmunity in the decision making process using the regular governing mechanism;
• Effective outsourcing to specialists and external parties.

Other Services may be included in further CIPs for CoW DAO to decide upon separately (they can but must not lead to additional funding requests, dependent on scope, timing and efforts).

I.b Main Development Focus

We propose that the rest of the year 2024 be dedicated to the below items and features. This list is not exhaustive and may evolve based on the CoWMunity feedbacks, decision and change of priorities:

• Network expansion: deploying CoW Protocol to other Ethereum based networks
• CoW AMM: expanding on the functionality of CoW AMM
• MEV Blocker: improvements to MEV Blocker
• Continuous experimentations around fee models, according to CIP-34
• Continuous decentralization of the CoW protocol
• Development of a Smart Contract Version 2 for CoW Protocol enabling advanced functionalities such as NFT support; enforcement of post order interactions; etc.
• Support for additional smart orders (such as DCA, stop loss, etc)
• Support for a CoW Hook UI and SDK allowing for easy integration by partners

I.c Budget

From 1st of March 2024 - 31 Dec 2024, the USD budget estimate comprises the following significant positions:

Cost Center	Budget
Team compensation (aggregate)	2,630,000
Third party services	230,000
Events & Travel	240,000
Hosting	240,000
External tooling	100,000
Office	60,000
Tax Provision	350,000
Total	3,850,000

These categories are estimated to include the following positions:

• Team compensation - Includes total compensation of team members for the rest of service period.
• Third party services - Includes all outsourcing providers and financial intermediaries & banking fees as well as third party development providers.
• Events & Travel - Covers relevant presence in conferences, business development events as well as team meetings.
• Hosting - Covers mainly DevOps related expenditures (AWS and nodes).
• External tooling - Covers softwares and subscriptions.
• Office - Includes fees supported for temporary rental of spaces.
• Tax provision - lump sum provision of 10% for potential tax costs (unforeseen and relating to various tax categories)
• Accounting provisions (such as tax provisions) that are dissolved, arising in a positive cash-flow, will be reinvested in line with CoW DAO’s vision of a decentralised future and mission of enhancing the CoW Suite. Remaining funds from the execution of this CIP as well as other financial decisions in the upcoming year may prolong the estimated length of the Service Agreement.

II. Terms of the Service Agreement

Validity

This Agreement is subject to the approval of CoW DAO's Governance Mechanism as defined in CoW DAO's Participation Agreement. In the event CoW DAO does not approve this Agreement through its Governance Mechanism, this Agreement shall be null and void.

Term and Termination

This Agreement shall commence on the 1st March 2024 and shall remain in full force and effect until the 31st December 2024 (the "Term"). CoW DAO and the Service Provider agree that this Agreement cannot be terminated before expiry of the Term. Notwithstanding the foregoing, should funds remain available to continue the mandate provided by this Agreement, the Agreement shall continue in effect until such funds are exhausted. The Service Provider shall notify CoW DAO in advance regarding the continuation of the Agreement and the estimated period for which the remaining funds will support its operation.

Compensation

CoW DAO will compensate the Service Provider a fee of 3,850,000 USD for the delivery of the Services.

This fee represents the Service Provider's estimated costs for the Term. Estimates are based on projected labor, materials, and other direct/indirect costs to provide the Services.

The budget agreed upon for delivery of the Services is effective for the current term of this Agreement. In the event of any substantial changes to the budget or Services requiring an increased allocation requires the Service Provider to submit CIP to CoW DAO to adjust the fee on a monthly basis to account for actual costs incurred. Any such CIP is subject to the approval of CoW DAO's Governance Mechanism as defined in CoW DAO's Participation Agreement. In the event the Service Provider submits a fee adjustment proposal, it must provide a detailed account of costs incurred in the preceding months.

In the event the Service Provider releases or sell any accounting provisions (including but not limited to tax provisions), the resulting positive cash flow shall be reinvested solely into the Service Provider's operations, in accordance with CoW DAO's vision of a decentralized future and its mission to enhance the CoW Suite.

Payment

Upon approval of this CIP, CoW DAO agrees to a prepayment in full of the approved fee to the Service Provider.

Unless the Service Provider asks for further compensation due to incorrect estimation no detailed time report will be provided by the Service Provider to CoW DAO.

This prepayment constitutes the only compensation owed to the Service Provider for delivery of the Services over the engagement term, unless amended by a future DAO vote.

Upon approval of this CIP the prepayment of funds to the Service Provider will be transferred from the DAO's treasury via the established financial processes.

Intellectual Property

[...] Please refer to the forum post for full details: https://forum.cow.fi/t/cip-draft-continued-funding-for-development-services-service-agreement-no-3/2336

Miscellaneous

[...] Please refer to the forum post for full details: https://forum.cow.fi/t/cip-draft-continued-funding-for-development-services-service-agreement-no-3/2336

Execution

Safe Transaction Data: Send 1.500.000 USDC from the KYC’ed pool from the treasury safe eth:0x616dE58c011F8736fa20c7Ae5352F7f6FB9F0669 to eth:0x1D579bc0459d75a1cF74cf878617ed9Fcafdf8E2 Send 1.500.000 USDC from non KYC’ed pool from the treasury safe eth:0x616dE58c011F8736fa20c7Ae5352F7f6FB9F0669 to eth:0x1D579bc0459d75a1cF74cf878617ed9Fcafdf8E2