Bonsai DAO Proposal: Compensation and Token Vesting Plan for Bonsai DAO Contributors

Overview This proposal outlines a one-year funding plan for Bonsai DAO contributors, focusing on aligning incentives with the DAO’s success. The plan includes a $133,000 monthly USDC spend limit, a Bonsai token vesting schedule, and Bonsai compensation supplementation. This proposal aims to provide a funding runway for contributors while ensuring the long-term sustainability of the DAO’s treasury and the products it supports. It is intended to be the final compensation proposal, after which individual projects will become self-sustaining. Moving forward, Bonsai will transition to facilitating grants for funding projects and expansion efforts, rather than carrying the continuous burden of contributor payments.

Token Supply & Treasury Stats

Token Supply: 10,000,000 Bonsai Circulating Supply: 4,472,083 Treasury Tokens: 5,527,917 Bonsai Assets for OpEx Runway: $1,854,439 Non liquid assets: $522,166 Proposed Treasury OpEx for 1 Year Monthly Total USDC Compensation: ~$100,000 ($133k Max)

Core Dev Comp: $53k Variable costs: $47k *A 33% buffer is needed to enable expansion. Current comp structure will stay similar post DAO acceptance.

Vesting This proposal consists of two possible Bonsai token distributions, each designed to incentivize and reward contributors based on their performance and the growth of the DAO.

Initial Distribution Token Allocation: ~400,000 Bonsai Value: $50,000 (based on a $0.25 per token exchange rate) Vesting Period: 6 month cliff then a 1 year vest Performance-Based Distribution Token Allocation: 800,000 Bonsai Vesting Period: 6 month linear vesting begins once the revenue milestone is reached. Vesting only occurs if the DAO achieves positive revenue in the months following the milestone. Performance Metrics: The performance distribution will be released based on achieving a defined set of performance metrics: Revenue Milestone: Performance based revenue is greater than costs for 3 months.

Leaf Milestone: Successfully launch Leaf Products and meet profitability at the SubDAO levels.

Bolster Existing Product Offering: Launch $ARB, $USDC Index, and further GM Vault Markets. Continue merging Vendor into the Bonsai ecosystem.

Deliver Value back to Holders: Identify and execute on value delivery back to token holders once we are firmly in the positive

These metrics are designed to ensure that the contributors are rewarded only if the DAO achieves significant growth and success.

Bonsai Compensation Supplementation A maximum 25,000 Bonsai tokens (approximately $6,250) will be vested monthly to supplement USDC spending. This conservative distribution aims to provide contributors with upside potential in the Bonsai token while minimizing market impact, aligning their interests with the DAO’s success, and reducing overall USDC OpEx burn.

The total allocation for the supplementation stream is a maximum 300,000 Bonsai tokens. Key Points of this Proposal

Total Bonsai: (15% of supply) 1,500,000 Bonsai tokens will be vested over a 18 month period.

Proportional Distribution: Each tranche’s token allocation is based on the current treasury supply at the time of execution. These totals ensure that the DAO is not overcommitting its resources and that the token distribution remains sustainable.

Risk & Commitment: The proposed compensation plan recognizes the risk and commitment that contributors have taken to build and grow the DAO. The option to receive compensation in Bonsai tokens is a fair way to reward contributors for their contributions and account for market volatility risk.

Alignment of Interests: By allowing contributors to have compensation in Bonsai tokens, we align the team’s interests with the long-term success of the DAO. This approach directly incentivizes contributors to increase the value of the Bonsai token and achieve the DAO’s goals, all while preserving the treasury’s OpEx runway.

Conclusion Considering the revenue streams from multiple DAO-funded products and the treasury’s yield position, this proposal outlines a fair and sustainable max spend limit approach, ensuring the prudent management of the DAO’s resources. By tying Bonsai token vesting amounts to performance metrics and future treasury supply, we create a plan that rewards success and promotes long-term growth. The option for contributors to exchange compensation for tokens further aligns their interests with the DAO’s success.

Next year, the leaf protocols will reach sustainability milestones, enabling expenses to be shifted from Bonsai onto the respective protocol teams and their revenue streams. This transition will allow Bonsai to continue its pursuit of sustainability with low capital expenditure while increasing the assets owned by the DAO.

The Bonsai DAO community is encouraged to review and discuss this proposal, aiming for a consensus that benefits both contributors and the DAO. This vesting plan is intended to be the final vesting allocation for the team, providing sufficient resources to support expansion efforts.