Formal Vote - Executable GCP3 - Network Operating Costs and Upgrade

Abstract

Proposal aims to:

• outline planned network upgrade
• ask the DAO to approve the Security Council to sign on the upgrade
• outline current network operating costs, and how the costs will change with network upgrade
• shift those costs to the DAO

Motivation & Rationale

1. Network operating costs are not insignificant. Although they will decrease with network upgrades they should be covered by the DAO, rather the the limited runway core teams rely on for basic expenses such as payroll.

2. Crosschain upgrades are not sufficiently tested therefore it is safer that Security Council approves the upgrade.

Key Terms and Specification

For the purpose of readability of this proposals details on v1 and v1.1 upgrade were not included here, but can be found in the RFC - Network Operating Costs linked in discussion.

Gas Costs

Gas costs associated with the network are outlined below:

• Current state:

  • Estimated costs - Connext network operating costs inclusive of all chains (6) are estimated to $187,528.51 per month.

  • Actual Costs - The network was slowed down in June resulting in July gas costs decreasing to 41.6301743 WETH ($65,830.21 USD @ $1,581.31/ETH).

    Note: The network will operate this way until v1.1 launch, when the costs will decrease to the estimates outlined below, and the network will resume the speed it operated at before the slow down.

• Optimistic Roots v1 and v1.1

  • v1 network upgrade will decrease estimated total costs to $49,447.15 USD

  • v1.1 will decrease estimated total costs even further, to $16,509 USD

    NOTE: v1 and v1.1 costs above are likely overestimated, and could turn out to be lower.

Audit Costs

• Optimistic Roots v1.1 Audit costs - $10,800.00
  • Optimistic Roots v1 audit was completed.
  • Optimistic Roots v1.1 audit is already underway.
• Whitehat bounty audit - $100,000.00
  • Funds are earmarked for white hat bounties, enough for a critical vulnerability payout.

Timeline & Steps to Implement

• [done] Develop and audit v1 upgrade.
• [done] Develop and audit v1.1 upgrade.
• [in progress] QA and detailed scenario testing.
• [done] Governance RFC.
• [not started] Production testnet dress rehearsal upgrade.
• [in progress] Executable governance proposal that will move funds specified in Overall Costs from DAO multisig to Connext Labs safe: 0x8d5b5444e503e78086c31a63c84af6afd1ebf93e
• [not started / planned for December 2023] Mainnet upgrade will be done with Security Council and not via executable proposal because crosschain upgrades are not sufficiently tested. In the future, all upgrades will go through the executable proposal process, but this path is too risky and not sufficiently tested for sensitive upgrades at the moment.

Overall Costs

1. This proposal asks the DAO to approve the Security Council to sign on the upgrade described in the proposal.

2. Further, this proposal asks the DAO for 2,425,000 NEXT tokens to cover the costs below. Token value taken to calculate amount of tokens was 0.1 USD, to account for potential changes.

• V1.1 Audit - $10,800 - Audit of the v1.1 of the protocol upgrade, performed by Macro.
• Gas Costs - $131,660 - Cost to operate the network for up to 10 chains until v1.1 goes live. Estimated based on July costs.
• Whitehat Bounty - $100,000 - Cost sufficient to cover white hat critical vulnerability payout in case critical vulnerability is reported.
• Total - $242,460 - Total costs= audits + gas costs