GIP-4: Resource Allocation Framework

Note: The first funding round will begin on 1st August and will run for 2 months rather than the usual 3. This is due to timing of passing this proposal and to give sufficient time for contributors to submit initiative funding proposals.

Title: Resource Allocation Model

Authors: cr1st0f

Created: 06/27/2023

Abstract Building upon the foundations set by the previous GIPs, which delineate the overarching strategy of the DAO, this proposal delves deeper into the critical aspect of resource allocation.

The proposed resource allocation model aims to:

Retain high-quality contributors by facilitating information feedback loops and promoting accountability for the tasks performed. Foster transparency and consensus regarding the DAO’s principal activities, thereby mitigating resource misallocation and over-centralized control. Empower data-driven decision-making processes, averting governance monopolization and extraction of value at the expense of community participation. This proposal focuses on a streamlined model for governing Goblin Sax’s resource allocation. The model emphasizes strategic deliberation before resource deployment, and calls for metric-based review cycles for the DAO’s resource allocation decisions.

This Resource Allocation Framework is closely based on the OBRA model proposed for Safe DAO available to view here.

Proposal Details Resource allocation framework purpose and structure The resource allocation framework’s main objective is to shift the governance focus away from resources themselves, concentrating instead on:

Goals & Metrics: What are the vision, goals, and north star of Goblin Sax? This is outlined in GIP-3 eg. ‘To empower individuals and institutions to participate in NFT Finance effortlessly.’ What metrics does the DAO use to measure progress towards its north star? eg. ‘# of Autopilot instances deployed, TVL of Autopilot instances, volume of loans originated, p2p lending market share" Strategies: What are the different approaches to achieving the DAO’s agreed-upon goals? We propose that the strategies at Goblin Sax will fall under these categories: Product creation & support (with focus on gaining greater adoption and market share of GS products). Value accrual (focused on accruing value to the DAO). Risk management (focused on addressing and managing risk for the DAO). Fundraising Initiatives: Initiatives are work proposals that are funded by Goblin Sax. Initiatives are more traditionally thought of as more traditional ‘DAO proposals’. This hierarchical governance model and how Goals & Metrics, Strategies, and Initiatives fit into it is illustrated below (per Safe DAO).

1192×1000 104 KB Proposal types and format Proposals for each of the elements of the resource allocation framework listed above, should have a slightly different format depending on which category it falls into.

Strategy proposal template Identify the metrics employed by the DAO to gauge progress towards its north star (as outlined in preceding Goals & Metrics proposals).

Detail of the goals and metrics the strategy looks to drive progress in Outline of how to execute the strategy Detail around existing data or evidence to support said thesis Associated risks Why would the strategy fail? Expected outcomes Initiatives that would fall under the strategy Initiative proposal template Individuals may also propose initiatives under an accepted strategy. An initiative proposal should include:

Which approved strategy is this initiative driving forward? Which metrics and KPIs will the initiative be measured against? Who is the initiative lead? (individual or organization) What is the initiative about? What resources are being requested from Goblin Sax? What risks does this entail? Timeline and roadmap Upfront funding Success reward if the team achieves all work milestones (i.e. - vested token bonus) Other considerations Strategy operating procedures We expect there to be many valid strategies that the DAO can adopt to achieve its goals. We should both carefully assess the validity of strategies while also focusing on experimenting and validating new strategies. The maturity of each strategy and progress being made on each front should determine the level of resources being allocated by the DAO towards initiatives under that particular strategy. Initiative operating procedures All initiatives must align with an existing DAO strategy. All initiatives are funded by streamed payments via a tool such as Superfluid or Sablier unless the sum of funds is < $10,000 in which case a lump sum payment is acceptable. The proposer may request an initial lump sum to kickstart the initiative, but the lump sum may not exceed more than 20% of the total funding requested for the project unless the project timeline requires less than 3 months to complete. The $SAX success reward for the completion of initiatives will be locked up for 1 year, followed by a 1 year linear unlock via vesting contract. Proposal review period Goblin Sax will operate on a fiscal quarter basis, with operations lasting 3 months. During the last 3 weeks of the fiscal quarter, the DAO will enter a review period, which funded initiatives of Goblin Sax will be reviewed by token holder and delegates During this review period, all initiatives with streams of funding will be required to share a progress update. The DAO will also review existing strategies and initiatives, which must be proposed before this period to be considered for funding. If token holders and delegates wish to terminate an initiative, the rest of their approved funding is returned to the DAO (all unspent funds and unvested tokens). The timeline for the above looks as follows: Q1 operations: Jan 1 - Mar 31. Q1 review: Mar 10 - Mar 31. Q2 operations: Apr 1 - Jun 30. Q2 review: Jun 9 - Jun 30. Q3 operations: July 1 - Sept 30. Q3 review: Sept 9 - Sept 30. Q4 operations: Oct 1 - Dec 31. Q4 review: Dec 3 - Dec 31 (this review period is longer to account for Christmas disruptions). Voting thresholds We suggest there be minimum thresholds in governance power for being able to vote on the DAO’s core strategies, initiatives, and review cycles as a means of encouraging coordinated delegation parties to emerge in the governance process while also discouraging low effort and low signal participation.

We suggest the following parameters:

Governance on strategy: minimum 1% of circulating supply. Governance on initiatives: minimum 1% of circulating supply. Governance on review: minimum 1% of circulating supply.