TDP 47: mStable Restructure - Compensation Model & subDAO Funding Request Framework

Author	mZeroNine
Discussions-To	https://forum.mstable.org/t/tdp-47-mstable-restructure-compensation-model-subdao-funding-request-framework/897
Status	Implemented
Created	2022-07-13

Simple Summary

It is proposed to specify the compensation model for the positions the mStableDAO engages directly, as well as outline a detailed funding request framework under which existing and new subDAO entities can apply for funding from the mStableDAO.

This is done to streamline request processing, as well as to ensure an independent neutral status towards anyone directly employed by the mStableDAO.

Furthermore, it creates an elegant transparency layer, so anyone in the ecosystem can verify that disbursements and payments towards contributors happen in the correct fashion and within the applicable governance processes outlined.

Abstract

As the last of a series of TDPs concerning the restructuring of the mStableDAO, TDP 47 is concerned with the compensation model of employees and contractors of the mStableDAO that do not fit in any subDAO hierarchy, as well as outline the process for any subDAO to request funding from the mStableDAO via the TreasuryDAO entity.

In order to remain credible and neutral in a system that issues funds and disburses payments to other organizations and teams, it is important that contributors that oversee and coordinate these requests have the ability to act rationally and without the induced concern for their own job based on their decision-making process.

Because of this, several key positions in the ProtocolDAO & TreasuryDAO need to be compensated directly via the mStableDAO, and not through subDAO entities like the Builder or Ecosystem subDAO, which rely on approval of separate funding requests.

In the event of any adverse conditions, this will ensure that core operational capacities of the mStableDAO remain intact, and can be rebuilt and restarted with the help of these individuals, or allow for an easy replacement of key personnel outside of any subDAO structure that usually involves legal or otherwise binding entities.

In particular, this involves the Cat Herder role of the mStableDAO, as well as the Operational Signers within the TreasuryDAO and ProtocolDAO respectively, which this TDP is mainly concerned with. The exact proposed models for compensation and employment will be detailed per position in the “Specification” section.

The Funding Request Framework for subDAOs should serve as an easy-to-use template for any subDAO entity to apply for funding towards the mStableDAO. It also serves as a source of truth of commitments, milestones, and other key metrics that will ensure that the disbursed funds get used in the way that they are supposed to by the respective subDAO, and several proof-of-work indicators will be employed to measure that these metrics are reached.

Additionally, this will ensure that a continuous disbursement of funds happens, contrary to the previous model where the entire annual budget was disbursed immediately for use by the subDAO/requesting entity. The specific way of disbursement can be chosen by the subDAO from a selection of options offered in this framework.

Finally, the framework will also include a detailed section on crafting a forum thread in case the subDAO applies for funding for the first time in order to establish a basic overview that will detail why this subDAO is applying for funding in the first place, what its position in the wider mStableDAO represents, and if the formation is of a temporary or permanent nature to gauge if continued funding beyond the first request will be required or not.

Motivation

The mStableDAO is nearing completion of its restructuring process, and the final proposal in regards to this is concerned with the way key positions get employed by the DAO in the future, as well as how anyone else can become a part of the DAO via a subDAO entity.

While the relationship of these positions can be seen as amiable towards the core team, it is nonetheless important to have strict independence from it in terms of hierarchy and ultimately freedom to act in the best interest of the mStableDAO alone.

It is with this in mind that the proposition is made to separate the Cat Herder role in particular from the Builder subDAO, so the smooth rollout and operational flow in the mStableDAO itself can be guaranteed.

In regards to the Funding Requests themselves, it is imperative that every subDAO employs the same way of application in order to make verification and transparent rollout easy to understand and ratify.

This also ensures that requests can be processed swiftly, and quality assurance and control can happen in the same fashion for every subDAO.

Specification

The following first part of the specifications outlines the detailed compensation model for the Cat Herder of the mStableDAO, as well as the additional responsibilities and compensation given to the Operational Signers of the TreasuryDAO and ProtocolDAO:

mStableDAO Cat Herder

Role & Responsibilities

The following highlights the high level responsibilities of the Cat Herder within the wider mStableDAO ecosystem:

Ensuring that the mStableDAOs entire governance processes are adhered by, kept up-to-date and moved forward accordingly in the ecosystem
Creation and processing of mission critical proposals via mStable’s governance system
Assisting & guiding contributors in crafting proposals and getting them finalized on Snapshot & on-chain
Maintenance, curation, and tackling of open communication threads on public channels such as the forum and Discord
Daily interaction with the community on Discord and the forum
Organising and facilitating DAO signer calls, governance calls, and maintaining meeting minutes of them where applicable
Making sure all proposals reach quorum and DAO signers execute transactions in a timely manner
Managing proposal workflows to ensure they are voted on and discussed when they need to be
Writing & posting on the official Snapshot page as a comms representative for the DAO
Compiling and consolidating signer feedback and presenting it to Meta Governors via proposals or suggestions in Discord
Liaising with the Product Manager of the Builder subDAO, as well as the Ops Signers of the ProtocolDAO & TreasuryDAO
Maintaining and continuing to build out the respective internal Notion pages for the DAO
Acting as a liaison between the wider mStable community and its Community Manager
Business Development outreaches to other protocols & DAOs as necessary to drive the development of the mStable ecosystem and DAOs forward & help lead these opportunities being shipped into the mStable ecosystem
Daily ecosystem research to find and investigate new opportunities & promising developments in the vertical
Management and maintenance of the relationship between the subDAOs & the mStableDAO
Assisting in Treasury Management for the mStableDAO
Flexible assistance & general support function for the wider mStable ecosystem and their core contributors when required
Quality Assurance & Quality Control that subDAOs & Signers keep delivering upon their milestones & targets, and ensuring that the public representatives of the subDAOs communicate their proof of work in time and according to the funding request

Election

The mStableDAO Cat Herder gets elected by the mStableDAO on a yearly basis at the beginning of each fiscal year. Interested individuals can submit their application 4 weeks before the beginning of the fiscal year in a dedicated forum thread created for this purpose. The current Cat Herder will remain in their position until this new election process officially kicks off in December 2022 to reduce overhead & redundant operational workloads.

The thread will contain detailed information on the submission process, as well as requirements and other important points related to the position. If no applications other than the application from the current Cat Herder get submitted, it is assumed that the mStableDAO is sufficiently pleased with the performance of the current Cat Herder, and no elections will have to take place and the current Cat Herder will be automatically employed for an additional year, bearing no objections from the Cat Herder, and given that the current Cat Herder accepts the employment by the mStableDAO.

In case of the Cat Herder wishing to offboard during the fiscal year, or otherwise being put into a position of being asked to offboard, a 60 day notice period needs to be given on either side in order to elect a new Cat Herder with the above described election process started ahead of time.

Compensation

The mStableDAO Cat Herder is entitled to a compensation, just like other core contributors in the ecosystem.

Currently, this compensation is set to 6250 mUSD/month & a vested MTA stream that is set to conclude in November 2024.

This compensation is subject to an annual review after the election process has concluded and prior to the Cat Herder accepting employment for an additional year.

It is proposed to base the annual review on the following metrics:

Macro-economic situation in the real world (Inflation, taxes, overall risk framework)
Performance in the role from the previous fiscal year (where applicable)
Overall success of the mStable project in the previous fiscal year
Any other relevant KPIs helpful for the review process

Actual ratification of the compensation review will be subject to a formal governance vote on Snapshot, and resolution of such will have to be accepted in writing by the Cat Herder in the election thread to conclude the annual hiring process for the position.

In case of the Cat Herder objecting to the resolution, it is proposed that the Cat Herder has the liberty to turn down the position, in which case new elections will have to be held, and a replacement Cat Herder be found for the mStableDAO. The same 60 day notice period applies here.

TreasuryDAO & ProtocolDAO Operational Signer

Role & Responsibilities

The following highlights the high level responsibilities of the Operational Signer within the wider mStableDAO ecosystem:

1.) All the tasks that a normal DAO signer has, with the addition of seniority and leading as a good example of what it means to be a mStableDAO signer in the ecosystem (A previous minimum 6 to 12 month tenure as a normal signer is a minimum requirement for this role)

2.) Be comfortable in creating batch transactions for the DAO you’re situated in, and be proficient in the Gnosis Safe App, and it’s Transaction Builder.

3.) As before, depending on the signer spot taken inside the respective DAO, slight variations on the foundational duties are to be expected.

a) TreasuryDAO signers are required to have a sound understanding of DeFi, tokenomics, keep themselves semi-updated on developments and other crucial emerging technologies and are able to read and understand queued multi-sig transactions and their expected and actual behaviour, and also can comfortably queue and understand how to craft transactions inside the Transaction Builder in Gnosis Safe and directly on the smart contract level

b.) ProtocolDAO signers are instead required to have sound understanding of Solidity, smart contract interaction, and any other relevant skills to be able to execute their daily job in a sound manner, and are comfortable in negotiating the queueing up of complex smart contract interactions via Gnosis Safe

Election

The Operational Signers get elected on a half-yearly basis in line with the signer term period after the resolution of the overall signer elections. Interested individuals can submit their application internally to the respective DAO after the elections have taken place and the ops signer will be selected by a vote within the signer group order to streamline operations.

If no applications other than the applications from the current Operational Signers get submitted, it is assumed that the respective DAO is sufficiently pleased with the performance of the current Ops Signers, and no elections will have to take place and the current Ops Signers will be automatically employed for an additional term of 6 months.

Compensation

The Operational Signers are entitled to a compensation, just like other core contributors in the ecosystem.

Currently, this compensation is set to 1500 mUSD/month and replaces the original Signer compensation.

subDAO Funding Request Framework

This section is concerned with the actual rollout of the funding request process every subDAO must adhere to during their submission towards the mStableDAO. Failure to follow this framework will result in the immediate denial of any funding, and necessitate a re-submission of the applicant.

Application Process

The following framework is proposed for the application process of a subDAO to apply for funding, but can be extended discretionally by the requesting entity if they feel it helps the request be successful:

1.) A new thread has to be created in the official mStable forum with the headline [Funding Request]

Introduction & Name of the subDAO applying:
Internal structure of the subDAO (members/signers/org-chart/type of DAO):
Reason for application & purpose inside the mStable Ecosystem:
Amount requested (initial amount & streaming amount over time):
Terms of request (timeframe/milestones/key deliverables/accountability):
Key point of contacts (liaison for the Cat Herder/name and presentation of the subDAO representative):
Additional comments (helpful insights/any other points to help a successful resolution/other relevant metrics to help the application):

Once this initial post has been provided, the Cat Herder of the mStableDAO will be following up with a response detailing the next steps for the funding request, and give additional time and opportunity to Meta Governors to comment and feedback the request in greater detail over a period of 1 week.

2.) Once general consensus to the request has been formed during this time, the Cat Herder will be moving the request towards a formal proposal in the following week, where additional feedback and more in-depth details can be provided for another week.

3.) Once the feedback and additional input has been provided in the formal proposal, necessary adaptations will be made for the proposal until basic consensus has been formed on the request, after which the proposal will be moved towards a Snapshot vote, as per usual governance process.

4.) Upon resolution of the vote, funding will either be provided as per request, or withheld upon unfavourable outcome. If such an unfavourable outcome should occur, the subDAO entity can once again apply for funding in a separate request in the forum and follow the process as outlined here. A proposer can make changes and resubmit an application for funding of a subDAO a maximum of 3 times, and should they get denied funding after 3 attempts, no subsequent request can be made to avoid feedback loops in the ecosystem.

Milestones, Quality Assurance & Control & Miscellanous

It is imperative that in this request workflow some basic guidelines be established that hold each subDAO entity accountable for the work they promise towards the mStableDAO, as well as guarantee and ensure a continued support for the ecosystem, well beyond the initial funding provided.

To facilitate this, a few rules and guidelines are proposed to give Meta Governors a chance to observe continued rollout of work, and have a say and option to grant or withhold additional funding beyond the initial request made by the entity:

1.) The first tranche amount of the request will be disbursed immediately to the subDAO upon successful resolution of the Funding Request in line with the amount requested there (usually to sustain operations for the first quarter), as well as an agreed upon amount stream started to last for the remainder of the funding request period.

2.) A elected representative inside the subDAO will be responsible for providing a monthly or quarterly report in the forum regarding KPIs, milestones, and other relevant data points as agreed upon in the Funding Request in the respective thread.

3.) On a quarterly basis, an objective review of the KPIs, milestones, and other relevant data points will be conducted by the mStableDAO Cat Herder and TreasuryDAO committee to serve as adjudicators of the wider ecosystem in liaison with the representative of the subDAO in an open meeting to ensure that development and goals are on track and in line with the respective request, and funding be subject to approval of this review.

a.) Should the review conclude favourably, the pre-defined streams from the Funding Request will be maintained towards the subDAO, which can be followed transparently from the initial funding request topic.

b.) Should the review conclude unfavourably, a governance process will be started that will include a formal proposal to Meta Governors on whether or not the funding stream should be continued for the subDAO in question, and might also include alterations to the goals and KPIs the subDAO agreed upon in the initial funding request to find consensus on next steps.

4.) Should there be any change in structure or other deviations from the initial funding request by the subDAO, it is the responsibility of the representative of said subDAO to report these changes to the community via the Funding Request thread, so Meta Governors can gain an overview of the changes and decide whether or not changes need to be enacted during the quarterly review.

TDP 47: mStable Restructure - Compensation Model & subDAO Funding Request Framework Source