Vote 011: Proposal to further decentralise by funding gas costs and repaying gas fronted by Grwth Lbs Ltd

TLDR: Gro protocol uses ETH and AVAX on a day-to-day basis in order to manage strategies (e.g. harvests) and deploy new contracts (e.g. the new v2 Convex strategies). This proposal ensures the long-term viability of Gro protocol by allowing the DAO to self-fund any ETH and AVAX necessary to function. It also reimburses Grwth Lbs Ltd for fronting initial ETH and AVAX required to deploy and run Gro protocol.

This is a summary post. You can see more detail at the community forum post here

Summary

• Gro protocol has been live on mainnet since May 2021 and has so far used 75.74 ETH and 417.36 AVAX (more information below)

• Gas costs are for deployment of new contracts, Ethereum strategy keeper bots and Avalanche strategy keeper bots for all Gro products on Ethereum and Avalanche.

• Until now this has been fronted by Grwth Lbs Ltd, a UK entity using its own funds to develop Gro protocol until Gro DAO is fully established.

• Following launch of Gro DAO Token Gro protocol has been handed over to the DAO. Grwth Lbs Ltd is now proposing to increase decentralisation by transitioning funding of the protocol’s development and operations to Gro DAO.

• Important step towards decentralising protocol operations, which is common in particular among yield aggregators (examples from Yearn and Pickle below).

• Includes repaying the operational ETH and AVAX costs fronted by Grwth Lbs to date.

• Enables further decentralisation of bot actions by using a keeper network that help with the functioning of our protocol (e.g. Gelato Ops).

• Forecast ongoing costs of up to 8 ETH and 160 AVAX each month.


Vote 011: Fund ongoing Gro protocol operational costs with up to 8 ETH and 160 AVAX per month and repay fronted ETH and AVAX to Grwth Lbs Ltd

Proposal that Gro DAO funds the ongoing Gro protocol ETH and AVAX costs up to 8 ETH and 160 AVAX per month for the next 12 months and that Gro DAO repay the existing spend of 75.74 ETH and the USDC equivalent of 417.36 AVAX (31,434.45 USDC) to Grwth Lbs Ltd.

These funds were fronted originally with a view to transferring ownership of Gro protocol entirely to the DAO. Now that this has occurred as part of the Gro DAO token launch, Grwth Lbs has no ownership stake or financial benefit from the protocol.

The running costs would be executed via the multi-sig on an ongoing monthly basis by transferring the relevant amount of ETH and AVAX to an operational DAO wallet controlled by core protocol engineers.

This repayment to Grwth Lbs would be implemented via a snapshot vote with a SafeSnap transaction to automatically transfer the funds on-chain to a Grwth Lbs Ltd wallet.

To allow for unusually high months (large deployments or high gas fees), the operational wallet would be permitted to build up a small reserve of ETH and AVAX up to a total of 3x monthly costs (24 ETH plus 480 AVAX). Once this limit was reached the multi-sig would transfer no more ETH or AVAX until the operational wallet was back below this level.

Historic data is pulled from etherscan and Snowtrace. See google sheet here and Dune dashboard here (Ethereum only)

Examples of other DeFi protocols paying for gas

This is standard practice within the DeFi space. Many of the OG DeFi and DeFi 2.0 projects are transparent about their gas spends and the funding by the DAO. Below are two data points for yield aggregators in the space. Gro DAO proposed spend is comparable or less than these.

• Yearn: up to $607k per quarter, $201k in latest month reported on github (Sep 2021): 2021Q3-yearn-quarterly-report
• Pickle: $22.7k per month: Pickle February 2022 update

Risks of approving the proposal and steps to mitigate

See more detail on the community forum post here

Voting process

This vote was discussed in the Gro community forum for 7 days, together with a dedicated Discord channel and discussion on the community call. The vote will run live for a further 7 days.

Yes: Fund ongoing protocol gas costs and repay fronted ETH and AVAX

No: Do not fund ongoing protocol gas costs and do not repay fronted ETH and AVAX