Restructuring and Refocus - Draft #2

This is a second draft version of the Restructuring and Refocus Proposal.

Current State

DXdao has built up to an organization of 33 contributors, with a burn rate of nearly $4M per year in direct pay to contributors, and $2.08M per year in vesting DXD. If this burn rate stayed constant, and only used the $12M in stablecoins in control of the treasury, there are 3 years of runway. And this doesn’t account for increased contributor levels, or investment into new products. There is nearly 14,000 ETH in control of the treasury, but selling of ETH during the bear market would be a very bad look for DXdao.

If a startup raises money, it will build an organization. However, it is not a successful organization unless its business generates a sustainable amount of money. And in spite of raising 25K ETH 2 years ago, DXdao has achieved very little traction, whether that be fees generated, users, or even just recognition. Omen is barely used, and a bad experience for those who do use it, Mesa is all but sunset, Carrot has really only been used by DXdao and still doesn’t have a team beyond Federico, and Swapr, while finally starting to get into a groove as a team, only generates about $50K per year in protocol fees. In addition, DXdao has yet to deliver on Governance 2.0, which was promised over 1.5 years ago, and is still perhaps another year away from delivering on this. DXdao has built an organization, but it is not yet successful. And if DXdao follows its current direction, it is unlikely to even have a chance at becoming successful. Thus far DXdao has not shown itself to be nimble as an organization and in fact has very rarely cut back on spending. Those couple cases where DXdao did remove people involved direct involvement from very early members, and even so, the process was exhausting and difficult. The market reflects this reality, with DXD price showing a negative value for DXdao as an organization. DXdao is a ship floating at sea with a pot of gold in its hold.

Operations Proposal

  • Disengage from contractors
  • Limit auditing budget to $300K per year, with any additional spend requiring special justification
  • Limit event budget to $150K per year, supporting up to 35 active DXdao contributors
    • Every contributor will have a 3k budget for conferences or additional training/courses a year
      - ETH conferences are global events. 3k can easily cover costs for at least 1 or 2 conferences a year
    • 10k for event sponsorships
    • 35k budget for DXdao offsite/s
    • Accommodation, transportation, and activities included in amount
  • Restrict onboarding of developers to level 6 or higher. DXdao is currently overweight on junior developers.
  • Reduce non-product overhead spending to $409K per year
    There are 4 squads in this group, DXvoice, Governance, ContributorX, and BizDev

    From the beginning Community has been a key element of DXdao. It’s the connection to the DXD holders, to the users, and more. As such, DXvoice is indispensable to DXdao.
    288K

    ContributorX acts as a glue amongst contributors, and an outward face to potential contributors. As such, ContributorX is also indispensable to DXdao.
    121K

    As a flat organization controlled by the consensus of REP holders (and later also DXD holders with Gov 2.0), it is fundamental that everyone participate in governance. As such every contributor should have 10% of their time allocated for governance. Other than the responsibilities shared by all contributors, things like buybacks and governance refunds have been managed by the governance squad. These responsibilities can be absorbed by the DXgov squad, which will also be responsible for increasing automation of routine governance activities.
    0K

    Bizdev is an important functionality for products, but since traction is currently minimal, there is not currently a need to spend in this area. Promotion of products also falls under DXvoice, so here we propose to consolidate these activities under DXvoice.
    0K

Implement a new product development cycle for all product squads. By the first day of 2023, all product squads must have submitted a requisite plan and had it approved by governance. All product squads will put together budget requests, submitting them on DAOtalk one month or earlier before the start of each cycle. Each budget request must be passed by DXdao governance prior to the start of the new cycle. The cycle length will be 6 months. Timing of start dates will vary by squads but all squads must maintain continuous standing with DXdao governance. For example, for product development to continue past an initial 6 month cycle, a request must posted on DAOtalk one month before the end of the first cycle, and be passed by governance before the end of that cycle. Each budget request must include the following:

  • A max budget expenditure for the 6 month cycle, with funding going a squad multisig. By funding a squad multisig, governance decisions are simplified and responsibility is given to the sqaud leadership.
  • A detailed estimate of how funds will be spent, including a list of all roles, a breakdown of planned overhead expenditure, and a list of involved contributors and their planned commitment.
  • A clear and simple deliverable goal by which the product team will be assessed. For example, “deliver a working MVP on Gnosis Chain with the following features by the 3rd month, and iterate on additional features by the 6th month.” 20% of compensation will be contingent on meeting this delivery goal.
  • A clear and simple traction goal by which the product idea will be assessed. For example, “raise outside capital to fund ongoing development,” or “reach 10,000 users by the end of the cycle.”

DXdao’s ability to spin up teams, set goals, and assess progress, will take involvement by the community and will improve with practice. Structure can and will be added to this process as DXdao learns. If product ideas don’t meet traction goals and get discontinued, product team members will be expected to continue working with DXdao on other initiatives, granted they are meeting their individual and squad deliverable goals.

Change compensation guidelines to support recruitment of senior solidity developers. A big part of recruitment success depends on attracting candidates via exciting product opportunities and great culture. The above adjustments are in part aimed to address this. In addition, the compensation guidelines will be assessed by ContributorX and adapted to improve DXdao’s ability to recruit senior solidity devs. This includes but is not limited to adding appropriate financial incentives.

3 Likes

It would have been good to have this proposal reviewed in today’s governance call. I think it is very important to discuss publicly big proposals like this and try to get a consensus on it before proposing it on chain.

Looking forward to discussing this next Wednesday.

In the current state I would vote against it, I think most of the dao will do it too based on all the feedback received on this proposal in public channels.

The draft proposal was posted after the weekly governance call so it doesn’t make sense to request to present on the call. Also, the proposal was discussed in last Fridays product strategy call (I guess you where not around?).

Would be great to get some reasoning/arguments why you are against introducing accountability on squad levels? Why do you think “most of the dao” will be against more accountability in terms of budget and deliverables?

I think this subject is critical for the future of DXdao and especially for DXD holders.

1 Like

What is implied by “2nd draft”? Is the old post to be ignored, or should this be considered in combination with it? Although the previous post is referenced, if this new post exapands on the first, it would have been better to post it as a comment on that one. In this form, the context is lacking a bit. Reading them in combination is different from considering them separate.

1 Like

Nope, I couldn’t attend, I was in the hospital, I watched the recording and I left my thoughts on Saturday on a channel you are member of in keybase.

I never said that I am against introducing accountability on squad levels, I am very much in favor of that. I am against how you propose to do it.

I never said that either, I think the dao recognized lately that this is something we should work on. I think the way you propose to “fix” it it is wrong. And this would be one of the main things we will be working on in the retreat next month.

It would be better if next time you reply read carefully what you are replying too. Cause here you just assume that I am not recognizing the issues cause I disagree with the “solution” you are proposing, if you see my Conributor Proposal #7 I propose to start working on accountability and management of developer resources, both of them address the issues you just mentioned.

On this, we agree.

1 Like

Disappointing to hear most contributors would vote against it. I would think the vast majority of DXD holders would be very supportive and would vote in favour.

Discussion in the last proposal had veered pretty far off topic, and was lengthy enough to put off anyone new from reading through and joining the conversation. Probably not a bad thing to have it cleaned and refocused on the content.

2 Likes

What might also look bad is, we have diversified into stables and been extremely bearish with the product development and innovation. We should probably take this opportunity to spin out new products, but instead we go into a spiral of questioning whether we will be able to pay salaries of a limited set of people after 3 years. If at the end of 3 years, if DXDao is still not able to find traction for their products, there is something fundamentally wrong in the way we are doing things.

I agree with all of the above. 3K budget is pretty small for conferences I feel, maybe increase the limit to 5K.

There is nothing in DXDao, except decentralisation, that would make a person join DXDao. If this was not the case, we would have had tons of people applying and joining. But, I would probably support this as well if we are not too dogmatic about onboarding only if a person is qualified as Level 6. We need senior people and we need them to go through trial and the trial period and subsequent time periods could be Level 4 or 5, but we should look for people that has Web3 experience, have shipped / delivered Defi products.

This seems to be too low budget when you compare this with almost 2M for developers. For startups, it is ideally a 2:1 engineering:non-tech, I would probably have around 750Kish for a year. Or, peg this against the DXDao goals. I would also look at probably running a year with 750K and then cut down if there are not enough leads / opportunities / growth that is being brought out.

I would prefer if DxGov squad just ships Gov 2.0 before they take on any of the other automation of routine governance activities. I dont think if we should force everyone to spend 10% of their time on governance of things that I dont own. When there is no ownership of governance, there is no governance. Maybe we take this into account when we have shipped Gov 2.0, guilds and we have sold guilds to atleast 5 other projects outside DXDao. Else, it just takes away precious time out of all the devs to figure out if they have to govern the DAO as well.

I think we have to rethink about how Bizdev operates. I would like to see a “Growth” squad that does Growth marketing, sales and partnerships. Right now, for Bizdev, I feel Nathan is bringing a lot of partnerships, integrations and ideas to integrate Swapr with. But, we havent been able to support because we need Solidity devs for supporting most of these initiatives and the current set of Solidity devs have not provided timely feedback to them perhaps. Bizdev comes after growth phase, when there is a business to develop. I would prefer to just have it called as Growth and work towards the Growth of DXDao, Swapr and DxGov and all the other products.

I like the idea of product development cycle. But it would also be good to get a long term commitment from the DAO on certain products being built. Sometimes, it could happen that we were early to the market on certain initiatives (like Carrot) and 6 months might not be enough to get enough traction, dev completion etc. But if there is a commitment from DAO with a potential make / break clause (control charts) it will be good to commit to new products.

For instance, lets say the goal of Swapr is increase the number of daily users to 5000 by June 2023, hopefully DAO will be sensible to not budget anymore because it has grown to only 4000 daily users. So, there has to be a control area where if a product operates and the traction within those control limits, the DAO would be able to provide budget. Based on where the product is in reference to the control chart, we would be able to increase or decrease the budget for the subsequent half year.

I agree, but if this part of proposal passes, I would prefer to not have any of our current devs to make use of this unless we have actually gone ahead and recruited atleast 3 of them and stayed on for 6 months. It acts as an incentive for the current set of devs to go and recruit some superstars.

I would vote for this proposal if we increase the budget of non-product spend and leave Governance to Chris and Dave. If any feedback is to be given to improve the way they are coordinating, lets try to collect it and provide. But, we need them until we have shipped Gov 2.0 since they are also the “power users” of the governance products and I am sure they provided plenty of feedback to DxGov on dxvote.

8 Likes

Is the 2:1 based on something? Doesn’t seem unreasonable, but hadn’t heard it before. Regardless, instead of DXdao committing to a 33% overhead run rate relative to tech spend, I think it would make sense for the squads to request the people/resources they need. As you point out, when there is no ownership of governance, there is no governance. I think this concept of ownership should be applied to squad budgets as well. I respect you as a project manager and would feel better about related spend if I knew you were accountable for it and had to defend the spend to DXD holders, who have a strong sense of financial ownership. In other words, I would support the numbers you are talking about if it was coming from squads. I still think DXvoice and ContributorX are the only spend that makes sense separate from the product squads.

2 Likes

agreed

Agreed with John that we should take a ‘justifying all spend upwards’ approach, rather than benchmarking budgets against eachother. But, also no issue with your point that maybe more is needed - I’d just push for it to be put forward on an as needed basis, rather than more developer spend automatically translating to more other spending & vice versa. If everything is justified to the DAO & DXD holders as it’s needed from squads, then accountability increases & IMO there’s more purpose and intent with operations.

This is sensible, having some common sense factor and some case-by-case flexibility, I’d just caution against falling back to where we are now where there’s a feeling of not wanting to stir the pot too much when it comes to hard decisions. Not sure what the middle ground looks like, but we absolutely need to be able to make tough decisions when needed, without feeling bad about it as an organization, and without misplaced guilt clouding sensible judgement (e.g. 50% of a conservative goal being achieved might clearly indicate a lack of traction beyond salvation, but does not necessarily mean funding should continue at 50% - but it’s easy to be persuaded into this where flexibility is too high).

3 Likes

I agree with the main argument, DXdao is failing on many fronts, and we are simply not delivering well on these issues.

That being said, your proposal is once again throwing accusations at random directions that are not yourself, and include an unsatisfactory level of accountability or goal setting. This leads me to conclude the end result will not be different to anything that is happening right now.
“We don’t need A B C, let’s get rid of that. Now we are focusing on D, E, F” Why? Because a coordinated group of REP holders decided so.

I propose a high level actionable metric for DXDao

At the End of Q3 2023, DXdao products have 100,000 unique monthly gas paying addresses

  • This includes spun out products (Nimi, etc)
  • A bot / wash trading analysis will be done by an external entity to remove fake/spam interactions

With this high level goal in mind we need to allocate a per squad quarterly budgets and goals.

  • At the beginning on each quarter,
    • Squads will conclude the previous quarter, and quantify the how well they’ve achieved their KPIs
    • Squads will propose new KPIs for the future quarter.
  • Each squad will be able to freely allocate their budget amongst itself.

KPIs are quantifiable metrics – e.g.

  • 100,000 Monthly active addresses,
  • 1,000 Tweets per quarter
  • 50 Articles published
  • 20 token swaps with other DAOs / Organizations
  • 50 protocols using/integrating our products
  • Collect 100 written reviews of the product
  • At least 60% code unit test coverage
  • 1,000 unique NEW addresses

The Squads:

  • Products
    • Swapr
    • Carrot
    • others
  • ContributorX
  • Governance
  • DXvoice
  • DXbiz

There is a lot more thinking that needs to be put into this, and I’m happy to start working on this with Venky and others, HOWEVER if there is no participation from the greater DXdao team this will simply not work.

I propose to allocate most of the DXbiz call to focus on the different squads to ideate, work, and propose their OK-Rs.

1 Like