Operations Guild H1 2023 Onboarding and Funding - Treasury Manager

dxDAO
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After the successful passing of the DXdao Treasury Recommendation through the Operations Guild with 83% support, the following proposal requests authorization and funding to onboard MattyG to support DXdao’s accounting and financial operations.

Background

In the Operations Guild H1 2023 budget, DXdao approved a budget allocation for a new Treasury Manager. After the passing of this budget proposal, the ContributorX led a search for an individual candidate to fill this role at DXdao. During the search, 300+ applicants were sourced from online postings and inbound from DXdao’s social channels. The list was then narrowed to a dozen applicants for interviews with members of the Operations Guild.

In addition to these individual candidates, two entities - Karpatkey and Avantgarde - also presented proposals on how they could fill DXdao’s treasury needs. It is the opinion of the Operations Guild that an individual with broad financial and DAO experience can better meet the current needs of DXdao and will be able to quickly step in and fill the role that is being vacated by Dave’s departure. The Operations Guild passed a proposal with 83% support that recommends onboarding MattyG while exploring investment managers in the future.

MattyG: CPA with DAO experience

There were several great individual Treasury Manager candidates. After many interviews and discussions, the Operations Guild feels that MattyG is the best fit for DXdao given its current needs. As a CPA, he has traditional finance experience of how an entity like DXdao should be managed, yet he also has direct experience working with a DAO (Rook). Many of the proposals and discussions he has led in RookDAO are very similar to what DXdao needs in a Treasury Manager. He knows his way around governance systems and understands the importance of keeping the community informed on important issues.

Furthermore, he has shown great enthusiasm in pursuing this role, already attending several Governance and community calls and asking pointed questions throughout the past few weeks.

Scope of Work

MattyG’s focus would be the oversight of financial operations, streamlining of accounting processes, budgeting, and financial projections. As he did with Rook, MattyG may also present recommendations to DXdao on how to deploy its treasury while utilizing decentralized management strategies that ensure DAO sovereignty over funds. See below for a few of MattyG’s responsibilities and goals as DXdao’s Treasury Manager:

Responsibilities

  • Oversight of financial operations at DXdao
  • Contributing to the DXD Monetary Policy Committee
  • Budget development and monitoring
  • Runway and redemptions monitoring
  • Development and support in treasury governance processes.

Goals

  • Streamline financial operations
  • Develop robust financial reporting and data analytics to improve decision-making effectiveness and increase transparency for stakeholders
  • Develop a Treasury Management Framework that provides parameters for the DAO to operate within to limit risk and other negative externalities
  • Explore external mandates to investment managers

Additional details on MattyG’s scope of work can be found in his draft contributor proposal here .

Investment Manager: Explore further

While MattyG will address the immediate needs of DXdao. This process did open up discussion on potential opportunities on treasury deployment, particularly those with an external investment manager. These were intriguing options for the DAO to consider and should be further investigated once there is a solid foundation on the financial operations side of things. MattyG and the Operations Guild should provide some public update on investment management options prior to H2 2023 budget conversations.

Requested funds

This proposal is requesting funding from the Operations Guild contingency costs for a new Treasury Manager. MattyG will be a Level 6 Contributor as outlined in the DXdao Contributor Compensation Guidelines contributing at 75%.

With an expected start date of March 27th, this proposal requests 3.25 months of pay $19,500 ($6000 x 3) to be sent to the DXdao Dev Multichain Multisig (0x9467dcfd4519287e3878c018c02f5670465a9003.) It also approves an additional $4500 a month in vested DXD as per contributor compensation guidelines.

This proposal claims from a contingency allocation of $35k that was approved in the Operations Guild H1 2023 budget.

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Looking forward to seeing this proposal on-chain. MattyG has the right experience in both TradFi and DAO worlds to provide the financial services that an entity the size of DXdao needs, while also understanding the intricacies of DAO sovereignty and transparency as it relates to the treasury.

As I said on today’s governance discussion, there are two learnings I’ve taken away from this process. First, a better understanding of strategic goals and opportunities of DXdao’s treasury. There were many new ideas from Karpatkey, Avantgarde, Matty and others on how DXdao’s treasury could be better deployed, communicated or managed in a trustless way. It was great to be able to talk with the groups at such depth.

Second, an updated perspective on how DXdao can onboard new contributors/entities. Many different ways have been tried over the last few years with mixed success. This process enables guilds with more autonomy in onboarding. This has also been used recently by DXgov and Swapr to bring on new developers. It will be important to reflect in a few months on whether this is a better way of finding great contributors.

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I would have thought a role like this, would go through a vote through DXD / REP holders. As far as you show that there is 83.3% voted in the Operations guild, its still within a guild. You can say that DXGov and Swapr onboarded within the guilds, but a tech role is different from a “corporate” role. You can always measure tech effectiveness in github, peer reviews and other metrics, but these roles that span the Operations / Sales / Marketing / partnerships might be better off taking a consensus from the DAO. Or, we should go with DAO vide proposal like before for all the contributor onboarding.

Karpatkey is one of the biggest partnerships that we have in DXDao and a partnership that would be beneficial for us to keep going for when we want to see DAVI adopted, more engagement in Swapr, campaigns in Carrot and so on and I just want to be absolutely sure if you guys have taken into consideration how this will look. Does the Voice guild foresee any risk with this move ? What are the risks and considerations that we see with our existing partnerships ?

DXdao is pretty weak on partnerships already with no new major partnerships in the horizon and Karpatkey is one of the few partners that has upgraded their ways of working to suit the decentralised needs of DXdao and I would think we need to find a way to strengthen this partnership and see how this will move forward.

I think it also makes sense for someone outside the DAO (Karpatkey or Avantgarde) to look at our expenses and have a say on where we are effectively spending money and where we are bleeding.

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Hi @0xVenky, thanks for the comments.

This proposal and process IS going through REP/DXD holders as they now have the opportunity to voice their opinion and vote on this onboarding proposal.

To provide more context on its recommendation, the Operations Guild considered costs, strategy and process.

Costs
There is a huge cost discrepancy between this onboarding proposal and those from Karpatkey/Avantgarde. Those proposals were larger in scope and more expensive for DXdao - this proposal is a $20k commitment (+$13,500 in vested DXD), whereas the Karpatkey Proposal is $200-390k cost (plus performance fee). The Operations Guild does not have authorization to onboard those costs. The DAO should consider these larger cost commitments in its 2H2023 budget process with the context of its overall product spend, especially since it looks like the treasury commitment to fund product & operations will decline for 2H2023.

Strategy
Long-term, there will be two main components of DXdao’s treasury: financial operations and investment. This proposal would set a key cornerstone on the accounting and on-chain operations side before looking at the investment side. Onboarding MattyG would fill a hole left by the departure of Dave and that will give the DAO better tools to make decisions about investment management.

I also agree that Karpatkey has been an excellent partner. I have had great conversations with their entire team throughout this process. Their expertise is on the investment side and they have made strides in building and using non-custodial and automated DAO treasury tooling. I’m very open to engaging with them, and this proposal is an important stepping stone to DXdao evaluating external investment managers like Karpatkey.

Process
Lastly, I disagree there’s a difference for the non-product guilds. DXdao went through this before the shift to guilds with the onboarding of Dirk. Zett worked with Melanie to find the right person because Zett was seen as a credible evaluator of design. And onboarding was discussed specifically in the shift to Guilds in the 1H2023 Budget process:

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Concerning costs, why does this role need to be filled at all? Why can’t the outlined responsibilities be met by the existing operations squad? There’s about $15M give or take in the mainnet treasury and it’s already pretty well diversified. And seems Chris, Sky, and Melanie all should be concerned with the budgeting responsibilities already. @Melanie @sky @Powers, with DLabs leaving the three of you represent the majority of Operations Guild voting power, so would like to hear from you all specifically.

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The Operations Guild is making this recommendation because there’s not enough bandwidth in the Operations Guild now to complete these tasks. The on-chain component is very significant. Dlabs was reimbursed for 2.5 ETH across hundreds of mainnet transactions in 2022 (plus all the ones on Gnosis Chain). These are important on-chain actions that must be done for contributors to get paid and DXD buybacks to continue.

There are also a number of important treasury items that could be worked on now if there was additional capacity (streamline treasury dashboard, portfolio performance analysis, Cowswap whitelist, guild reporting & expenses). Furthermore, there isn’t the expertise amongst myself/Sky/Melanie to build a robust accounting, financial operations and budgeting system for a DAO.

DXdao can revisit Operations Guild funding for the 2H2023 budgets if the performance does not justify the costs.

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What is it that is occupying the full time bandwidth of you, Melanie, and Sky? It’s pointed out above that there isn’t much in the way of partnerships. Can we see some reasoning and justification as to what business development, HR, and governance operations are keeping people so busy? I’d have to say things overall seem rather quiet in all these domains.

Furthermore, you may have noticed that 2600 DXD were redeemed today, further reducing the size of the treasury by $2M. The treasury is being rapidly depleted, which is also reducing the need for a treasury manager. And portfolio performance? Really? You don’t already know this? Gotta say this seems like a lot of empty words to justify more spending on your guild.

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Also, I don’t think it’s a healthy governance habit to discount discussion because “it can be revisited later” . . . . after all, when have you ever cut any costs Chris?

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This proposal was submitted and staked on, it will be eligible for voting in 20 hours

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Overall, I think dlabs is a big loss for DXdao, and hard to replace.

I also think that DXdao could benefit from a wider set of contributors contributing to DXdao, bringing new ideas, outside perspectives and changes. We’ve been calling this Expanding the Opportunity Field.

I agree that the shrinking treasury is decreasing the capital that can be put to work. Getting smarter about how to allocate it is a must.

Overall, DXdao has been decreasing costs (by choice and organically) and will likely continue to do so.
Unfortunately, DXdao has also been losing good contributors. I think DXdao needs to position itself to attract more contributors that are interested in DXdao’s vision.

My guess is that getting contributions, insights and ideas from MattyG over the next few months for this known already budgeted cost will be beneficial and net positive to DXdao.

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I just had a very good call with MattG in my current role with Kumo to explorer how treasury manger perceive stablecoins. (facilitated by chris)

I can just highlight that Matt is for sure one of the best candidates to have because of his dedication, overall industry knowlege, background and of course his experience with rook.

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Level K voted against this proposal for the following key reasons:

  • This is unnecessary spending given that the treasury is shrinking with DXD redemptions, and given that the Ops guild has several people already that could pick up the responsibilities of overseeing the remaining treasury. I believe the spending target was about 6% of the treasury and with current size of the treasury, DXdao products would be facing drastic cuts to meet this target. And with the rate of redemptions this is getting more dire.

  • Key existing partners and potential partner proposals were not put up for votes by the DAO. While I think the treasury probably isn’t big enough to even warrant their attention, it would still be the savvy thing for DXdao to put their proposals through a formal vote before rushing ahead with alternatives.

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Liquity is my favorite stablecoin and this project looks cool Martin. Best of luck.

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Downvoted because of reasons listed here long before the vote took place: karpatkey-DXdao Treasury Guild - #8 by dlabs

Nothing at all against DaddyMatty, chatted with him and met him in Denver - cool guy.

But simply presenting a single option is not fair process IMO - in fact I think it’s insulting towards Karpatkey and Avantgarde who spent time preparing their pitches, joining calls etc. to then not even have a vote take place.

I asked for a snapshot multiple times, if DaddyMatty had won the snapshot I’d have voted for this proposal.

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