PIP-76: Governance Cost Rationalization and Operational Continuity

Summary This proposal realigns Velora’s fixed costs with current market realities. It pauses DAO-funded meta-governance, discontinues the PIP-69 treasury management role, and consolidates operations under the Laita Labs mandate. The objective is straightforward: eliminate administrative overhead to preserve runway for product development and protocol maintenance.

Motivation Velora’s governance and incentive structures were established during a period of higher protocol revenue and stronger token valuation. Since then, both revenue and token price have declined materially, reducing the DAO’s effective operating budget.

At the same time, fixed governance and administrative costs have remained largely unchanged. Today, the DAO is funding core protocol operations alongside paid meta-governance structures and treasury management roles, including SeedGov, delegate compensation (approximately 10k USD per month in ETH and 5k USD per month in tokens), and a DAO-funded treasury management mandate.

Under current conditions, the DAO cannot sustainably fund all governance incentives, discretionary administrative roles, and core protocol operations simultaneously. Continuing to do so would directly impact the DAO’s ability to maintain, secure, and improve the protocol.

SeedGov and funded treasury management fulfilled important roles during a higher-growth phase. Current market conditions, however, require prioritizing protocol survival and core operations. These tradeoffs are not ideal, but they are necessary given present economic realities.

This proposal is a cost-alignment measure, not a change in governance philosophy.

Recent Product Progress Despite tighter budget constraints, product development has continued.

Velora has recently announced upcoming improvements to Limit Orders, including:

Crosschain Limit Orders, intended to allow limit orders to execute across supported chains without manual bridging or multiple transactions.

Yield-Bearing Limit Orders, designed to allow funds committed to limit orders to earn yield while awaiting execution instead of remaining idle.

These products are announced and expected to go live following testing and audits. Continued funding for product development and maintenance is required for these improvements to ship and for the protocol to remain competitive.

Specification

1. Pause DAO-Funded Meta-Governance and Delegate Compensation Upon approval:

DAO-funded compensation for SeedGov and other paid meta-governance or delegate programs is paused as a temporary cost-alignment measure.

This pause applies only to compensation. Governance participation rights remain unchanged.

Community members may continue to participate in discussions, submit proposals, and engage in governance processes.

This pause is reversible through future governance action if protocol revenue and budget conditions improve.

2. Discontinuation of DAO-Funded Treasury Management (PIP-69) Upon approval:

The DAO-funded treasury management role established under PIP-69 is discontinued.

No ongoing compensation, retainers, or discretionary authority associated with PIP-69 will continue.

Treasury assets remain fully under DAO control and subject only to governance-approved actions.

No new treasury management strategy or discretionary mandate is introduced as part of this proposal.

This change reflects current conditions in which discretionary treasury management is not essential to protocol continuity and allows the DAO to reduce non-core operational overhead.

Any future treasury management initiatives would require a separate governance proposal.

3. Continuation of Core Operations Under Existing Laita Labs Mandate Velora will continue operating under the existing Laita Labs service provider framework approved in PIP-64.

No new governance bodies or entities are created.

The existing mandate is adjusted to also cover basic governance coordination previously supported by paid meta-governance structures.

Core responsibilities include protocol maintenance, development, infrastructure, security coordination, integrations, audits coordination, and communications.

This proposal does not transfer governance authority to Laita Labs. All protocol decisions, funding approvals, and mandate changes remain subject to DAO governance.

4. Allocation of Remaining PIP-45 Funds Any remaining, unspent funds approved under PIP-45 will be allocated exclusively to:

Product development

Protocol maintenance

Infrastructure and security work

Technical debt reduction

PIP-45 funds will not be used for delegate compensation, treasury management, meta-governance programs, or non-operational initiatives.

5. Budget and Operational Cost Floor To ensure protocol continuity, the DAO acknowledges a minimum operational funding level of 60,000 USD per month, invoiced by Laita Labs under the existing service provider framework.

This cost floor reflects historical protocol expenses across engineering, infrastructure, audits, integrations, and security response, adjusted downward for current market conditions.

All spending remains operational in nature and subject to regular reporting and DAO oversight.

Rationale Reducing fixed governance and administrative overhead allows the DAO to prioritize the work required to keep the protocol operational, secure, and improving during a period of constrained revenue.

Pausing paid meta-governance programs and discontinuing DAO-funded treasury management removes discretionary overhead that is no longer justified under current budget conditions while preserving full DAO control and governance rights.

This proposal does not remove governance rights, introduce new authorities, or create forward-looking economic commitments. It aligns spending with current realities while preserving flexibility to re-evaluate governance and administrative structures if conditions improve.

Non-Goals This proposal does not:

Remove or diminish governance rights from token holders or community members

Prevent future delegate, meta-governance, or treasury management programs

Introduce new authorities or governance structures

Commit the DAO to long-term spending beyond existing mandates

Implementation If approved:

DAO-funded meta-governance and delegate compensation will be paused.

The DAO-funded treasury management role under PIP-69 will be discontinued.

Core operations will continue under the existing Laita Labs mandate with adjusted scope.

Remaining PIP-45 funds will be allocated to product development and maintenance as specified.

Operational spending will follow the defined monthly cost floor and reporting practices.

Governance funding structures may be revisited through future proposals if protocol revenue meaningfully improves.

Disclaimer Nothing in this proposal constitutes investment advice, fiduciary obligations, or performance guarantees.

All work performed under the Laita Labs mandate is operational and best-effort in nature. Announced product features are subject to testing, audits, and implementation readiness. The DAO retains full authority to modify or revoke service provider arrangements through governance at any time.