Fund initial DAO contributors to ensure protocol development and further progressive decentralisation

TLDR: To build a great protocol and deliver maximum value to the Gro DAO, we need great contributions. This is a proposal to spend up to $150k per month from the DAO treasury on core contributors to develop the protocol. Cost will be reconciled to actual spend - which are currently ~$88k/month.

You can see the (original community forum post here)[https://community.gro.xyz/t/vote-012-fund-initial-dao-contributors-to-ensure-protocol-development-and-further-progressive-decentralisation/279].

Background and Summary

• 6 different contributors (both entities and individuals) have been working on Gro protocol since 2020
• There’s been a good start with over $40m TVL and over 2,000 users, but more investment and work is required to get to the level that the DAO wants and expects
• To have the best team driving the best outcomes for the DAO, monthly contributor costs of up to USDC 150k is required across 6 contributors (up to 16 individuals in total)
• This spend is comparable or less than other yield aggregators and new DeFi players (e.g. Yearn, Pickle and Maple)
• Graadient (founder) will not take any salary and instead has a token allocation for economic alignment with the success of Gro protocol
• Payments would be made monthly from the DAO by its multisig to the contributors

Vote 012: Fund contributor operating costs for Gro protocol with up to USDC 150k per month

Proposal that Gro DAO funds actual contributor operating costs of up to USDC 150,000 per month (inc. software development, product, operations and marketing). The ongoing contributor operating costs of up to USDC 150k per month would be distributed as follows:

The ongoing operating cost payments would be executed via the multisig on an ongoing monthly basis by transferring the relevant amount of USDC to the wallet requested by each contributor. Only actual costs will be paid (i.e. it will likely be less than the requested budget), and there will be a six-monthly report setting out variance from budget. The multi-sig is empowered by this vote to execute these operating cost transactions in line with agreed maximum budgets.

Current contributor costs are around USDC 88,079 per month. We expect these to ramp up over the next few months as the number of contributors grows following this proposed investment from the DAO.

Examples of other DeFi protocols budgets

This is common practice within the DeFi space. Several OG DeFi and DeFi 2.0 projects are transparent about their contributor costs and the funding by the DAO. Below are data points for players in the space. Gro DAO proposed spend is comparable or less than these.

• Yearn: $301k in latest month reported on github (Sep 2021) (2021Q3-yearn-quarterly-report)[yearn-pm/2021Q3-yearn-quarterly-report.pdf at master · yearn/yearn-pm · GitHub 1]
• Pickle: $96,667 per month (Pickle Feb 22 update)[SCCOC February Update - Scotty - Medium 1]
• Maple: $220,582 per month (Maple Q4 2021 report - link to discord)[Discord 1]

Risks of approving the proposal and steps to mitigate

Risk that contributors underperform vs operating cost spent on them

• Grwth Lbs is taking on the role of performance management currently
• Already had iterations of team makeup to keep performance high; will continue to do this to ensure DAO gets maximum value for money
• Full time contributors budgeted at an average of up to USDC 112,500 per year per individual, including a majority of software engineers; this is good value in current crypto markets (for comparison Yearn is 23.5% higher at $138,923 per year per individual, including part time contributors)

Risk that the contributor selection is incorrect

• Currently 6 contributors being funded by this proposal, including Grwth Lbs who are doing performance management
• Risk that Grwth Lbs may be fundamentally the wrong team to take Gro protocol forwards for further successes
• In that case the DAO can choose to approve separate grants in future for more effective contributors, and the multi-sig would take instructions from those contributors (as instructed by the DAO)

Risk that funds are insufficient to build a world-class protocol (regardless of contributor selection)

• Costs are comparable or less to other OG DeFi projects Yearn and Pickle (yield aggregators) and Maple (DeFi 2.0)
• Budget is for 6 months and includes 10% buffer which gives some headroom for necessary changes
• If any further costs considered critical then the DAO can choose to approve these in a separate vote

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: approve budget of up to 150k USDC per month for DAO contributor operating expenses No: do not approve a budget for DAO contributor operating expenses