[GIP-138]: Gearbox Foundation Budget, Authority & Certain Other Matters

Author:

Gearbox Foundation (acting by DAObox Inc.)

Summary:

This proposal is aimed at approving:

• Ratifying and authorising the grant of $40,000 to the Gearbox Foundation to finance the wrapper’s activities;
• Authorising the Gearbox Foundation to engage in certain activities and transactions, and to enter into, amend or terminate, as may be required from time to time, associated legal agreements and other instruments;
• Approving specific transactions requiring DAO’s consent.

Motivation

Gearbox Foundation serves as a legal wrapper for the GEAR DAO and is presently administered by DAObox.

In March 2023, the DAO passed a resolution GIP-46 determining certain short-term and long-term assignments for the Gearbox Foundation and providing for the allocation of a budget to finance the wrapper’s activities during the period from March until December 2023.

Despite the foundation being able to extend the 2023 budget to cover an extra period of operations, as of end-May 2024 the budget is running out, and the foundation is therefore requesting a grant to top up its budget.

Furthermore, certain matters have been accumulating during the last year of operations, which the foundation would like to ask the GEAR DAO to address, including to enable the foundation to operate more efficiently and better assist the DAO with their needs.

DAO Resolution

I. Foundation’s Budget Top-Up

Gearbox Foundation asks the GEAR DAO for a grant in the amount of $40,000, to be mainly used to finance the infrastructure and its maintenance, as well as certain other operational expenses during a 12-month period. Additionally, in December 2024, the Gearbox Foundation must complete its corporate continuation (renewal), which will require the payment of all applicable state and agent’s fees.

We request this grant now, before the current balance is exhausted, so that the Gearbox Foundation can continue functioning in an uninterrupted manner. You can find our preliminary calculations here. MD5 checksum: FA709ED2A3C36D0176EB276113F208D0.

By adopting this resolution, the GEAR DAO ratifies and authorises the grant of $40,000 to the Gearbox Foundation. This amount will be transferred in the form of USDC and/or USDT to the foundation’s designated wallet, as may be notified by the foundation to the DAO or appropriate DAO contributors.

II. Foundation’s Authority to Enter into Agreements

We observe a substantial increase in the number and volume of the foundation’s transactions and matters overall. Although the majority of these transactions are authorised by the DAO, the GIPs often do not include clear authorisation for the foundation to engage in a specific transaction, enter into an agreement with a particular person, or undertake certain obligations or commitments.

To ensure that the foundation acts within the mandate and authority granted by the GEAR DAO, we propose the GEAR DAO to authorise the foundation to engage in any transactions authorised by a DAO resolution, regardless of whether the foundation was specifically mentioned in such resolutions.

By adopting this resolution, the GEAR DAO authorises the Gearbox Foundation to:

1. Carry out any deals, operations, and transactions approved by a DAO resolution, including GIPs (the “Transactions”), in such manner and to the extent as the foundation may, in consultation with relevant DAO contributors, consider necessary, advisable, and/or appropriate. This applies whether the Transaction was approved before or after today and whether or not the foundation is mentioned in the relevant DAO resolution;

2. Engage in and perform any such Transaction if it is considered a “DAO reserved matter” under the Gearbox Foundation’s Memorandum & Articles of Association. Approval of such Transaction by a DAO resolution shall constitute the GEAR DAO’s consent to the foundation engaging in (and dealing with) all relevant DAO reserved matters, without needing further authorisation;

3. Enter into legal agreements and other documents related to any Transaction, and make any necessary amendments thereto. The terms of such agreements and documents must not conflict with the terms set out in the relevant DAO resolution;

4. Upon an instruction by the GEAR DAO or request by a relevant counterparty, modify, terminate, or transfer legal agreements and documents concluded by the foundation and/or associated rights or obligations, provided that such actions do not conflict with the terms set out in the applicable DAO resolutions; and

5. If a DAO resolution establishes a specific initiative (like a program or project), the Gearbox Foundation can carry out any transactions it deems appropriate or advisable to implement that initiative, after consulting with relevant DAO contributors, regardless of whether the foundation was specifically authorised or directed to engage therein. Unless otherwise established by an applicable DAO resolution, any such transaction by the foundation will be considered approved by the GEAR DAO.

III. Approval of Certain Transactions

1. Chaos Labs Transaction:

In GIP-116, the DAO resolved to engage Chaos Labs and determined specific engagement terms for this transaction.

As we approached the agreement execution stage, we discovered some discrepancies in the fee amounts set out in the DAO resolution, due to which we were unable to identify the genuine intent of the DAO regarding this specific transaction. Upon consulting with the appropriate DAO contributors, we have clarified the actual terms of the transaction and are therefore asking for the DAO’s authorisation to engage Chaos Labs and/or associated entities on the terms set forth below, with other terms to be as the foundation may, in consultation with relevant DAO contributors, deem appropriate, reasonable or advisable:

- Fees:

• If the Gearbox protocol’s average TVL for the calendar month preceding the quarter (“TVL”) is below $250M, the quarterly payment will be 50K USDC and $50K worth of GEAR tokens;
• If the Gearbox protocol’s TVL is between $250M and $750M, the quarterly payment will be 62.5K USDC and $62.5K worth of GEAR tokens;
• If the Gearbox protocol’s TVL is above $750M, the quarterly payment will be 75K USDC and $75K worth of GEAR tokens.

- Other essential terms:

• A two-year contract term, renewal permitted;
• An extra 1/2 of the quarterly payment (based on the current TVL) is payable upfront, together with the first quarterly payment, and will be applied as a credit towards the last quarterly payment under the agreement.
• Throughout the engagement term, Chaos Labs will directly determine, establish, and modify risk parameters (the “Risk Parameters”) within the Gearbox protocol and its liquidity pools to optimise and improve their performance. You can find list of these "Risk Parameters" here. MD5 checksum: 9D0F1DEBE074E85567A17A4A4FDD0948.
• Exclusivity. This engagement will be exclusive, and the Gearbox Foundation will not be able to contract with or announce an intent to contract with, or otherwise receive services from, any risk service providers or other providers of related services other than ChaosLabs; in case of violation, the foundation is required to pay, as liquidated damages, a sum equal to the aggregate amount of funds paid to ChaosLabs under the agreement.

2. Cointelegraph Transaction:

The foundation is asking for the DAO’s authorisation to engage Cointelegraph and/or associated entities to provide certain marketing, PR and other services, and to enter into relevant agreements with them, as part of the GIP-89 initiative and within the applicable budget, on such terms as the foundation may, in consultation with relevant DAO contributors, deem appropriate, reasonable or advisable.

3. Certain Other Transactions:

The foundation further asks the GEAR DAO to ratify all transactions in which it engaged prior to the date hereof, together with all associated agreements, documents and instruments, provided such transactions were authorised by a DAO resolution, regardless of whether such authorisation occurred before or after the transaction date and whether the foundation was specifically mentioned in any such DAO resolution.

By adopting this resolution, the GEAR DAO approves and authorises all transactions indicated in this Section III, and consents to the Gearbox Foundation entering into agreements, other documents and instruments with the relevant counterparties, in each case on such terms as set forth herein and, in the absence thereof (including where the terms have not been defined), on such terms as the foundation may, in consultation with the relevant DAO contributors, consider reasonable, appropriate, or advisable.

Voting

Simple Approve/Reject voting