SCP 205: DAO Org Adj Lean Measures for 2026

Term: February 1, 2026 - Ongoing (with review triggers)

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Summary

This proposal implements immediate cost-cutting measures to extend DAO runway through mid-2027 while maintaining core development capabilities. With current treasury projections showing only 7-8 months of runway at current spend levels, we must transition from growth mode to lean mode. This proposal chooses controlled, strategic downsizing over organizational collapse.

• Current Monthly Spend: $189k USDC + $42k FOX ($232k total)
• Proposed Monthly Spend: $110k USDC + $21k FOX ($131k total)
• Savings: ~$101k/month (~44% reduction)

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Motivation

The DAO faces a crisis similar to 2023. Current monthly expenditures of approximately $188-210k will exhaust stablecoin reserves by July 2026. Without bold action, we face complete depletion of stablecoins for expense operations.

Key Financial Realities:

• Current stablecoin runway: ~7-8 months at present burn rate
• No guaranteed revenue recovery timeline
• Market conditions remain uncertain
• Previous growth-oriented spending is no longer sustainable

This proposal establishes a unified approach to DAO survival, superseding individual workstream renewal proposals and creating a coordinated path to sustainability or orderly wind-down.

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Abstract

The ShapeShift DAO has operated in growth mode with the expectation of increasing revenues. Current market conditions (FOX token at $0.012) and revenue trends (~$30k a month in total revenue) indicate this strategy is no longer viable. Rather than continuing current spending until complete USDC depletion, this proposal implements strategic restructuring that:

1. Preserves Core Capabilities: Maintains engineering and essential operations
2. Extends Runway Significantly: Adds 4-12 months depending on revenue recovery
3. Creates Clear Milestones: Establishes maintenance mode triggers if targets aren't met
4. Enables Orderly Transition: Provides time for contributors to plan and for the DAO to achieve sustainability or execute controlled wind-down

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Specifications

Immediate Team Restructuring (Effective February 1, 2026)

Marketing Workstream: Complete Sunset

• Current: $41k USDC + $9k FOX ($49k/month)
• Proposed: $0 USDC
• Rationale: Despite operational improvements, overall marketing results cannot justify ~$50k/month in spend. Core growth and revenue outcomes have lagged significantly, and the DAO can function without a dedicated marketing workstream by shifting to a scrappier, contributor-led approach.

Operations Workstream: Complete Sunset

• Current: $17k USDC + $10k FOX ($27k/month)
• Proposed: $0 USDC
• Rationale: Many operational responsibilities can be absorbed by existing workstreams, shared processes, and lightweight automation. Maintaining a standalone Ops workstream at current cost is not justified given runway constraints.

Moderation Workstream: FOX-Only Model

• Prior: ~$6.25k USDC/month + $5.5k in FOX/month
• New/Existing: $5k in FOX/month
• Rationale: Keeps essential community and support moderation in place while removing USDC cost pressure.

Product Workstream: Proactive Cuts Plus Retainer

• Prior: Full-time designer/frontend resources, PM, Data
• New/Existing: 26% budget reduction (already implemented), maintaining a lean core product function focused on highest-impact roadmap items

Engineering Workstream: FOX Alignment

• Current: $95k USDC + FOX stream
• Proposed: $77k USDC (~20% reduction) + 3-month locked FOX of $18k
• Structure: Engineering remains on a 5-day schedule, with approximately 4 days effectively compensated in USDC and ~1 day per week compensated in 3-month locked FOX.
• Rationale: Aligns core engineering contributors with long-term FOX upside during a low-price period. Avoids an immediate 4-day week cut while still reducing USDC burn. Provides upside exposure and stronger alignment between contributors and FOX holders.

Tokenomics Workstream: 3-Day Schedule

• Current: $7k USDC + $8.5k FOX
• Proposed: $4.5k USDC + $6.5k FOX
• Structure: ~3 days/week schedule focusing on treasury management, projections, revenue modeling, and maintenance-mode planning

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Departing Contributor Severance (FOX-Locked)

• Proposed: $1,000 equivalent in FOX per departing contributor, locked for 12 months
• Rationale: Provides modest runway and recognition for affected contributors without increasing immediate USDC burn; long lock reduces immediate sell pressure and aligns with long-term FOX upside.

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Post-Marketing Communications Approach

With the Marketing Workstream sunset, the DAO will shift to a simple, contributor-led communications model:

Platform Ownership

• Assign clear individual ownership for major channels (e.g., Twitter/X, Reddit, LinkedIn, Discord announcements) to existing contributors across workstreams.

Scrappy, High-Leverage Focus

• Emphasis on direct engagement, timely responses, and simple, consistent updates over complex automation or campaigns.

Coordination

• Bi-weekly (or monthly) short "marketing/communications" sync to:
  • Share what's working on each platform
  • Coordinate upcoming launches/announcements
  • Adjust platform owners as needed

This approach reduces cost and complexity while ensuring core channels remain active and responsive.

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Financial Projections

• No additional revenue: Through November 2026 (+4 months)
• $20k monthly revenue retained: Through January 2027 (+6 months)
• Selling ETH LP or TWAP ($25k/mo) + $20k monthly revenue: Through September 2027 (+16 months)

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Maintenance Mode Trigger

Condition: If revenue target (3-month average > $50k total) is not met in Q1 2027 (i.e., by the end of March 2027)

Automatic Transition to Minimal Maintenance Mode:

• Basic operational costs only
• Skeleton engineering coverage
• Multisig coverage on-call or retainer basis
• Essential security and infrastructure maintenance
• Requires new proposal to be drafted by workstream leader(s) outlining specific maintenance-mode structure, budgets, and responsibilities

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Implementation Timeline

• January 15, 2026: Proposal submission and discussion
• February 1, 2026: New budget structure takes effect
• Ongoing: Monthly DFC reviews of progress toward sustainability and revenue generation
• Q1 2027 (by March 31, 2027): Revenue target checkpoint for potential transition to maintenance mode

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Benefits

• Extended Runway: Adds 4-16 months of operational capacity depending on revenue
• Preserved Core Team: Maintains engineering and product capabilities essential for product development
• Clear Path Forward: Establishes concrete milestones and decision points, including a defined Q1 2027 maintenance-mode trigger
• Contributor Planning Time: Provides affected contributors time to transition, including modest FOX-based severance
• Unified Approach: Creates coordinated strategy rather than piecemeal cuts
• Maintains Optionality: Keeps DAO operational long enough to achieve sustainability or execute orderly wind-down

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Drawbacks

• Reduced Capacity: Significantly diminished marketing and operational capabilities
• Contributor Impact: Many contributors will lose positions; all contributors face reduced compensation
• Growth Constraints: Limited ability to pursue new initiatives or expand operations
• Morale Risk: Organizational downsizing may impact remaining contributor motivation
• Market Timing: If market conditions improve rapidly, DAO may be under-resourced to capitalize

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Rationale

This proposal chooses strategic downsizing over organizational entropy. The alternative—continuing current spending until complete treasury depletion by July 2026—leaves no options for contributors or FOX holders.

By implementing these measures now, we:

1. Extend operational runway significantly
2. Maintain ability to ship product and generate revenue
3. Preserve core team knowledge and capabilities
4. Create time for market recovery or strategic pivots
5. Enable orderly transition if sustainability isn't achieved

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Supersedes

This proposal supersedes individual workstream renewal proposals and creates a unified approach to DAO survival. Specifically, this affects:

• Marketing Workstream renewal
• Operations Workstream renewal
• All workstream budgets specified herein

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Vote

• For: Approve the DAO Organizational Adjustments for 2026 as specified above
• Against: Reject the proposal, maintaining current spending levels
• For with Changes: Approve with modifications (please specify in forum discussion)