[Formal Review] [Phase 0] Transition to the DAO

As outlined in The Next Phase of the RadicleDAO post, the project’s next decentralization goal is to have the scaffolding in place to transition Core Teams to the DAO by November 2022 with initial teams transitioned by February 2023.

This proposal outlines Phase 0 of this transition which transitions Radicle’s development runway and contributor token rewards to the DAO. It requests 3M USDC to fund six months of Core Teams operational budgets (until February 2023) and 1.9M RAD to distribute among Radicle contributors who joined the project post- token launch.

❗Note: The original estimations included in the Temperature Check and Discussion (2mUSDC and 1M RAD) have been updated to accurately reflect the calculations that were conducted when preparing the proposal. More details on the numbers are included below.

A full overview of Background, Purpose, and Impact can be found in the Temperature Check and Discussion posts. This post outlines notable changes and additional information that have been included after the Discussion post.

Design Approach

Contributor Compensation

The total USDC amount was calculated based on an annual estimate of all Core Team budgets (CHF ~2.6m), with an additional allocation for hires made over the next sixth months, Foundation expenses (CHF ~5k) — which include accounting, legal, and event sponsorship costs — and an additional 10% "buffer" for extraneous situations.

Contributor Rewards

As outlined, each qualified contributor will be granted 1.5x their annual estimated fee in RAD, vested over 4 years, with a one year cliff from their contract start date (i.e. if they leave before the end of their first year, they don’t get any RAD). A contributor’s “annual estimated fee” is based on their daily/hourly rate and amount of time spent on Radicle.

Qualified contributors include every contributor who currently holds a contract with the Radicle Foundation, community contributors selected by the Foundation, and future hires that are planned for the next sixth months.

Technical Implementation

Proposal Code

After further consideration, the proposal will transfer the USDC amounts and RAD amounts to two separate multi-sigs. Both will be controlled by four signers, with a two out of four quorum. The signers will consist of the Foundation Council (@abbey @lftherios @cloudhead) and the Foundations Op Lead (@ange).

0xA0b86991c6218b36c1d19D4a2e9Eb0cE3606eB48 0 "transfer(address,uint256)" 0x85C6CeEeb8E1A2E49D23cE8b9E0e59413FDb8bbB 3000000000000
0x31c8EAcBFFdD875c74b94b077895Bd78CF1E64A3 0 "transfer(address,uint256)" 0xBA6D95426467a55b007345dBC6292127EbcE71C4 1900000000000000000000000

Vesting Contracts

Each contributor will have their tokens allocated an on-chain vesting contract, with a 1 year cliff and four year vesting period. The “vesting start date” of each vesting contract will be the date the contributor first started working for the Foundation. These vesting contracts will be created by the Foundation Council over the next couple of months. The vesting contracts should be configured to ensure maximum flexibility for the DAO to upgrade the contracts as it sees fit, as well as create new ones for future contributors.

The goal is to transfer ownership of these vesting contracts to the DAO to decentralize control of contributor incentivization.