TRC #003-03 - Fund the 12 Month Operational Cost of the Timeless Engineering Unit

Author(s): @mcfly

Contributors: @szeth, @zefram

Status: TRC

Date Applied: 2023-02-08

Date Updated: 2023-02-18

Date Ratified: yyyy-mm-dd

Budget Start Date: 2023-03-01

Budget End Date: 2024-02-29

Discord gov thread URL: https://discord.com/channels/986277978776420413/1076539293910171778

Summary

Taking into account the latest community feedback, we are introducing a new TRC that includes a 1-year cliff on the Genesis team's vested LIT, as well as three budget options for funding the Timeless Engineering Unit (TEU) over the next 12 months. The results of the upcoming TRC vote will serve as the foundation of a services agreement between the TEU and the Timeless Foundation.

We believe that this new amendment will foster confidence and create a solid foundation for collaboration between the TEU and the Timeless community.

We encourage everyone to review the post before the vote, which will take place on Monday, February 20, 2023, at 12:00 UTC.

Mandate

The TEU is responsible for expanding the protocol's functionality, maintaining and operating existing smart contracts, and ensuring the safety and correctness of protocol design and implementation. The team's mission is also to provide the best user experience for participants, support the system administration and technical needs of the Timeless Protocol and its Units.

For the sake of clarity, we have not included the full mandate in this TRC. You can find it in TRC #003-01 for your reference.

Budget Amount

A total of $1,490,000.00, $1,342,250.00, or $1,266,250.00 in USDC will be streamed to the unit's multisig starting at 2023-03-05 and ending at 2024-02-29. The amount to be streamed will depend on which budget option is selected by veLIT voters.

• A one-off payment representing 30% of the budget will be made on 2023-03-05.

• 70% of the budget will be streamed to the unit's multisig linearly starting 2023-03-05 and ending 2024-02-29.

Furthermore, for the BasePlus and Base options, 10,000,000 LIT is requested for establishing a new employee vesting pool. These tokens will be vested linearly over a period of three years, with a 1-year cliff, and will be allocated to any new employees. These LIT can ONLY be spent on new employees vesting. Nothing else.

Budget Implementation

• The budget will be distributed to the Protocol Engineering Unit's multisig using LlamaPay.

• The initial payment will cover the 2022 costs incurred by the genesis team, as well as provide a start-up fund for the following months, to reduce reliance on LlamaPay revenue.

• The multisig is controlled by the following owners: zefram.eth, 0xszeth.eth, 0xmcfly.eth, and anonymous individuals selected by the Protocol Engineering Team.

Budget Breakdown

Expense Category	BasePlus Option	Base Option	Bear Option
Compensation & Benefits	$835,000.00	$750,000.00 (-10%)	$710,000.00 (-15%)
Genesis Team LIT Vesting Schedule	1-year cliff + 3-year linear vesting	4-year linear vesting	4-year linear vesting
New Employee Vesting Pool	10,000,000.00 LIT	10,000,000.00 LIT	0.00 LIT
Reimbursements Genesis Team Costs	$185,000.00	$185,000.00	$185,000.00
Legal/Operating Expenses	$85,000.00	$85,000.00	$85,000.00
Gas Costs & Contract Deployment	$50,000	$37,500.00 (-25%)	$35,000.00 (-30%)
Contingency Buffer	$335,000.00	$284,750.00 (-15%)	$251,250.00 (-25%)
Total	$1,490,000.00	$1,342,250.00 (-10%)	$1,266,250.00 (-15%)

To provide clarity on how funds will be spent, the following provides further detail for each budget category.

Compensation & Benefits

In the BasePlus budget option, the team will start with three full-time employees and aims to expand by hiring two new employees in the future.

In the Base budget option, the team will hire up to one new employee.

In the Bear budget option, we will not expand our team besides the optionality to hire contractors.

This budget is the total HR cost for the legal entity supporting the Protocol Engineering Unit. It includes US and non-US accommodations regarding healthcare costs in each jurisdiction with employer participation.

The specifics of the team additions and their roles will be disclosed in the forum at a later date. The contingency fund (as outlined below) will also support this growth.

Genesis Team LIT Vesting Schedule

For the BasePlus budget option, the Genesis team will cancel their existing 4-year linear vesting streams on LlamaPay and replace them with new streams that feature a 1-year cliff followed by a 3-year linear vesting period.

On the other hand, for the Base and Bear budget options, the Genesis team will retain their current 4-year linear vesting streams.

LIT New Employee Vesting Pool

If new team members are hired, they will receive LIT that's vested linearly over 4 years. If a new hire decides to leave the team, their unvested LIT will return to the new employee vesting pool to be used for future hires.

It is worth noting that the current Timeless genesis team members will not receive any LIT from the new employee vesting pool. Like the name suggests, it's only for new employees.

Reimbursement of the Genesis Team's Initial Costs

Budgeted for reimbursement of the genesis team's initial costs, including auditor expenses (Spearbit, yAcademy, Zellic), gas costs, team tooling (hardware & software), and 3rd party contractors for setting up the legal entities such as the Timeless foundation and the initial development entity.

Legal/Operating Expenses

Budgeted to cover annual reporting, entity fees, legal advices, 3rd party services, and hardware costs.

Gas Costs & Contract Deployment

Budgeted based on last year's gas cost estimate by the genesis team to fund development and testing activities.

Contingency Buffer

The contingency buffer is used for various business expenses, including hiring new employees, hiring contractors, and unforseen expenses. Maintaining a robust reserve of funds is critical to our survival, and the contingency buffer serves this purpose.

Notes on Auditor Costs

The costs for future audits will be funded through a dedicated proposal published by the Timeless Engineering Unit. As the cost and parameters of these audits are uncertain, it is difficult to accurately budget for them in the first year.

Reporting

The Timeless Engineering Unit will evaluate their prior year's budget allocation and post the review on the forum for transparency at the end of the 12-month period. This will help ensure that the next budget renewal request for 2024 - 2025 is accurate and clearly defined. We'll welcome any comments and questions about the published documents.

Roadmap and Objectives

Our team will use quarterly product roadmaps to allow for accountability whilst preserving flexibility. Every three months we'll publish a ‘Roadmap Spotlight’, which is an elaborate forum post to wrap up the past quarter and commit to a focus for the next quarter. In addition we'll maintain a public backlog of ideas and projects, which is where prioritisation happens.

Our short-term product roadmap includes:

1. Implementing bribing support.

2. Improving frontend performance (WIP).

3. Create a Gauge Boost Calculator to better inform veLIT holders about their max boost possible.

4. Introducing a 'zap in' feature that streamlines the process of balancing input tokens, adding liquidity, and staking in a gauge.

5. Partnering with other protocols to incentivize liquidity for their assets using Bunni gauges.

Please note that the short-term product roadmap we have outlined is not a prioritized list, but rather a general vision for the near future.

In the longer term, we aim to expand our offerings to include cross-chain gauges and L2 solutions. Our goal is to develop gauges that can read veLIT balances from Ethereum via message bridges, enabling users to 'push' their balance from Ethereum to other networks and receive boosts.

In addition, we will focus on further decentralizing the protocol by transitioning from the Timeless governance multisig + Snapshot to a governor contract. We also plan to offer frontend access via IPFS to improve accessibility and usability.

Overall, we believe this approach will support LIT's tokenomics and provide a more seamless user experience. Every community member is more than welcome to shape this roadmap with us.

Proposal Parameters

Instead of binary voting, this budget will use a ranked-choice voting, with the options as follows:

A: Approve BasePlus Budget ($1.49M USDC + Genesis Team 1-year cliff / 3-year linear LIT vesting + 10M LIT for new employee pool)

B: Approve Base Budget (-10%) ($1,342,250 USDC + Genesis Team 4-year linear LIT vesting + 10m LIT for new employee pool)

C: Approve Bear Budget (-15%) ($1,266,250 USDC + Genesis Team 4-year linear LIT vesting)

D: Reject budget

In order for this vote to conclude successfully and the contained proposal(s) move to TIP status, each of the following conditions must be true:

1. The winning option will be determined by the Ranked Choice Voting (RCV) system supported by Snapshot — also known as Instant Runoff Voting (IRV). Learn more about it here.

2. Quorum must be equal or exceed 20% of the veLIT total supply when the vote period starts.

Vote will start on 2023-02-20 12:00 UTC, and will end on 2023-02-23 12:00 UTC.

Proposed Unit Facilitator

@McFly