Phase 3: DXdao Budgetary Process v1

The Phase 2 Restructuring Proposal passed this weekend with over 24% REP voting FOR. The first item of that proposal is to shift to a 6 month budgetary funding process for squads as opposed to the ad hoc process where contributors submit proposals to all of governance.

This will be a big shift. I wanted to outline a proposed process as well as identify some issues that will need to be resolved. The schedule below allows us to make the shift before the new year. I also want to propose another big shift - in wording. Instead of squads, groups that receive funding through this process should be guilds. This should also coincide with the DXgov’s rollout of guilds themselves.

Schedule:

  • Guild budget draft posted in forum
  • Public presentation (Product strategy or Governance call)
  • Community feedback phase
  • Signal proposal (Gnosis Chain)
  • Mainnet funding proposal (one at beginning & one halfway)

For the next two weeks we will discuss the process and squads will prepare initial budget drafts. Here’s a schedule for how governance can consider funding the different guilds.

Six month budgetary cycles

Guilds will submit a maximum 6 month budget for consideration. Most of DXdao’s existing squads will likely apply for six months as their goals and responsibilities are more defined. Governance may consider smaller cycles if there is more uncertainty/risk.

This process could also apply to new projects/guilds that apply to DXdao. It also doesn’t have to be tied to a number of months. The Infinite Hackathon Guild could apply for budget requests about delivering the event, instead of working a certain number of months.

For 6 month budgets, there is an initial signal proposal to approve and then two funding proposals, one at the beginning and one in the middle. Guilds are expected to manage the treasury and distribution to contributors, but are encouraged to use tools like Llamapay for ease of streaming.

Budget template

To make it easier on DXdao governance, all guilds should use the same budget template, which consists of

  1. Guild Vision, Objectives & Responsibilities

  2. Contributor Roles & Compensation

  3. Other costs

This spreadsheet is a template, but budget drafts should be published in the forum for easy consumption and then linked out to the spreadsheet for more information, eg:


Guild_name: _______
Vision: How does this guild contribute to DXdaos mission and execute on priorities of DXdao?
Structure: What is the address of the guild? How is the guild governed? 
Time_period: When will the work be done and completed?
Budget: What is the overall amount being requested? 
USD amount: 
Vested DXD: 
Regular costs:
Contingency costs:
Key_milestones_goals: How should the guilds work be judged and what long-term goals is the guild trying to achieve?
Guild_personell: Who are primary contributors to the guild?

It’s also recommended to prepare a slide deck for the public presentation.

Budget requests can be broken down into regular costs and contingency costs. All regular costs are funded directly to the guild at the start of the period and the halfway point. Contingency costs are approved for funding by DXdao governance, but these funds are not sent to the guild until the expense occurs.

Feedback Phase

Budget drafts should be posted two days before the presentation and then there must be at least seven days open for discussion in the forum before a signal proposal can be submitted. Guilds could use this period to adjust milestones and goals in line with governance expectations. Governance might also want to expand or shrink the scope.

Next steps

I am finalizing an expenses update this week. I will send each guild a breakdown of their last three months of expenses, which should be a good basis for the future budget going forward. Guilds will use that to fill out the budget template as outlined above.

I’ll be presenting this on tomorrow’s governance discussion and also doing an expenses update on Friday. Please attend and give your feedback there or in the comments below.

FAQ:

Do guilds need to follow DXdao guidelines? Guilds are autonomous but will still rely on many DXdao guidelines for operation. This may include compensation guidelines and on and offboarding policies. Guilds are also expected to operate in the same ethos as DXdao (transparency, commitment to promote decentralization, etc). Guilds will have the ability to carve their own way, but they will still be accountable to DXdao governance.

How will contributors deal with worker proposals? Guilds may differ but it is recommended that guilds use two, three month proposals for each contributor to the guild.

Who will make hiring decisions for guilds? The budget for a position must be approved by all of DXdao governance, but the hiring decision is up to the guild. It will be held accountable for the output of the hire. Guilds can pay any compensation amount (even those outside DXdao’s comp guidelines) if the budget is approved.

What about Reputation? Good question. At start, contributors should continue to receive the 0.1667% a month as they have before. Guilds may offer their own reputation, or the guilds could even earn reputation themselves?!

Are there any budgetary limitations? The Phase 1 proposal limited the overall event budget for DXdao to $150k and the overall audit budget $150k. Be mindful of these when allocating (especially events, as that averages out to about $2.3k a contributor for six months). Guilds should also be mindful of the current market environment and DXdao (and DXD holders’) desire to cut costs and extend runway.

Can payments be made outside of the budgetary process? Some unexpected expenses might come up where DXdao pays an expense outside of the budgetary process, but these should be limited and special circumstances. It could be a specific product opportunity or an audit for Governance 2.0

What about existing worker proposals? Contributors should only receive payments for work to be done in 2022, lest those payments will need to be taken out of the initial 6 month budget for the guild.

Some issues to be resolved:

  • See “Contingency costs” - what if a guild wants budget to hire someone that they have not found yet (Say Swapr & Solidity dev). Should those funds be kept in DXdao until someone is found? Sent to the guild and returned if no one is found?
  • How many guilds need direct funding from DXdao governance? Some are simple (Swapr), but should others be combined?
  • How do guilds make decisions? Guild lead? Reputation system?
  • How about DXD payments?
  • Should DXvoice service Swapr guild or DXdao?

Final point:

  • All costs need to live somewhere!!
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The first draft of a Guild Budget proposal has been posted. See the Operations Guild H1 2023 Budget Proposal [Draft]. This will be presented on tomorrow’s governance discussion.

I also wanted to share templates for the other guilds. It’s important to make the format has standard as possible so it’s easier for REP & DXD holders to evaluate it.