SIP: 1Q25 Budget

Full Proposal and Exhibits: https://common.xyz/sector-finance/discussion/26115-rff-1q25-budget

Mandate The Sector Budget will continue to focus on:

Expanding protocol functionality. Strengthening solving and market-making functionalities as core pillars of our strategy. Maintaining and operating existing smart contracts. Ensuring safety and correctness in protocol design and implementation. Enhancing growth and adoption through strategic marketing, business development, and partnerships. Our mission remains to provide infrastructure that sustainably scales the DeFi ecosystem and onboard the next generation of users.

Recent Developments and Changes CowSwap Solver Success We have made significant progress on our CowSwap solving functionalities:

The solver is now live and performing well, delivering revenue. Improvements in solver efficiency have allowed us in a short duration to rise in the solver ranks. Strategic Pivot: Market Making and Intents Solving As outlined in prior updates and budgets:

We have paused our vault strategies and will commence a DAO vote this quarter to formally deprecate them. Focus has shifted toward market-making and intents-solving functionalities as core drivers of growth. 4Q24 Review Performance This is the first quarter where Sector meaningfully achieved revenue since the pivot into intents solving. The team is excited about the early results and see a path to profitability.

Total revenue of $52,543, consisted of $33,773 from CowSwap Solver and $18,769 from Market Maker Offset. The offset were funds we previously were using for market making.

Total expenses of $189,912, which were lower than forecasted by $23,588 but included higher operating costs due to legal fees incurred this quarter.

Treasury Overview The DAO treasury remains strong, bolstered by market conditions, CoW Swap earnings, and is well-positioned to support ongoing initiatives. At the end of 4Q24, the treasury allocation was as follows:

stETH: $389,680 (64%) ETH: $223,980 (36%) Key Achievements Strong solving performance and meaningful revenue from Cow Swap solving Initiated live testing of solving strategies with plans for scaling. 1Q25 Budget Breakdown We anticipate a similar budget spend as last quarter. With now meaningful revenue and a strong treasury of ETH, the team has materially enhanced our financial position and runway to continue growing our solver and market making capabilities.

Expense Allocation Engineering and Development: $150,000 Business Development: $40,000 Marketing: $3,500 Operating $20,000 Total Budget: $213,500 1Q25 Objectives Product Development Scaling Solving: Monitor live performance and optimize solving functionalities for greater profitability. Expand to other market-making opportunities on similar platforms. Research & Development: Research and integrate advancements in DeFi intents and swaps. Deprecation of Vault Strategies: Formalize DAO vote on the deprecation of paused strategies. Reallocate resources to intents and market making Business Development Expand strategic partnerships to support market-making and solving functionalities.