cp: 117
Title: Give a mandate to form the Treasury Advisory Group
author: @Kate_Bee
Contributors: @imdior @sezer @theoyster
Uses-component: CP1, CP2
technical-proposal: no
requires-onchain: yes
impacts/modifies: CP107
status: passed
date-proposed: 2024-06-21
date-ended: 2024-08-03
Short Summary
This proposal requests a mandate from the Centrifuge DAO to set up and legitimize a core group called ‘The Treasury Advisory Group’ (TAG) to facilitate, coordinate, formalize and advise on treasury activity and resource processes.
High-level objective
We are proposing to form the Treasury Advisory Group (TAG) with the mandate to advise on all Treasury related activities in the Centrifuge Protocol. This includes but is not limited to:
- Spending advice
- Treasury financial overview and proposal advisory
- Treasury related governance processes
- Accountability measures for funded proposals
Background
We have witnessed many promising DAOs fail due to mismanaged treasuries. For the ecosystem to develop and for DAOs to sustain themselves, the necessity of bringing together effective and efficient treasury management systems and contributors cannot be overlooked.
This applies to the Centrifuge DAO as well and we have already taken several steps in this direction. Since May 2023, there has been significant discussion about how best to ensure the funds in Centrifuge DAO Treasury support the growth of the protocol.
This mandate draws on the past year of discussion (found here, and here) suggesting a Group form on treasury advisory and resource allocation. It also takes precedence from the Founding Documents of the Centrifuge DAO which promote small groups of expertise as a core pillar of good governance and lessons from the establishment of the Governance & Coordination Group (GCG), Credit Group (GC) and Protocol & Engineering Group (PEG).
The intention and main purpose of this group is to provide the Centrifuge Community and Centrifuge DAO with the critical knowledge and guidance they need to make decisions about the Centrifuge Treasury Spending.
Description of Activity
We seek the mandate to help the Centrifuge DAO achieve its goal of wise treasury management by applying our skills and experience in participatory budgeting, stakeholder engagement, DeFi and DAO treasury management, process design, governance and finance.
Spending advisory
One of our first activities will be to propose objectives and goals to indicate priorities for Treasury spending. In the future we plan to use these objectives to produce non-binding objective assessments (essentially ‘opinions’) of every Treasury proposal submitted via governance. The intention is that CFG holders can utilise these assessments as they vote but these assessment are non-binding - i.e. CFG holders can ignore their findings.
- Propose spending goals and priorities via RFC
- Produce non-binding assessments on treasury proposals that:
- Explain the potential implications of proposals
- Check adherence to objectives and goals
- Check adherence to governance processes and previous treasury related proposals CP107:Updated Spending Agreement.
Accountability process
After we establish best practice and process on proposal assessment, we aim to institute accountability and reporting processes for monitoring and evaluating funded proposals. Tasks include:
- Set up a clear accountability and reporting process (for successful proposers) to ensure funds are spent according to expectations and milestones.
- Propose amendments to the governance process to mandate that successful proposers follow agreed accountability processes.
- Be in regular contact with the funded teams & projects to assist them in their reporting.
CFG support
We seek to make CFG holdings clear and the information about them accessible by:
- Graphics and easy to read graphs showing the balance
- Modelling Treasury funds over time
- Modelling of CFG rewards
- Providing info and advice about the assets held in the CFG Treasury
- Collaborating with a third-party service provider to visualize treasury data in the dashboard
Education
Another key activity will be to improve the engagement of the community in discussions about spending and building a sustainable Treasury. Education will be one of our key work areas:
- Communicate how objectives and priorities are aligned with the goals of Centrifuge via information sessions, written and graphic content
- Enhance transparency and accountability through regular reporting on treasury activities and the overall financial health of the DAO.
The above activities outline the current mandate that is sought. In the future there is scope for the DAO to widen the mandate to include activities which would grow the treasury, provision for liquidity and further aspects relating to utility. However this is not in scope at this time.
Deliverables
- Bi-monthly treasury report: A comprehensive report detailing the current state of the Centrifuge Treasury, including holdings, inflows, outflows, and overall financial performance
- Assessments of all CP-2s - Requests for Funding
- Active spending proposals report: A summary of both active spending proposals, an assessment of each proposal’s alignment with spending objectives and potential impact and of passed proposals with information on their status and achievement of deliverables
- Process/governance improvement proposals: Proposals aimed at enhancing the treasury management process, improving transparency, or strengthening accountability measures
- Comparative analysis: A twice-yearly report analyzing the treasury management practices of other prominent DAOs, highlighting potential areas for improvement or best practices to be adopted.
Outcomes and Objectives of the TAF:
- DAO members have easily accessible information on the state of the Treasury
- DAO members have easily accessible information on implications of funding proposals
- Wise spending is achieved: aligned, rigorous, quality proposals pass and unaligned, unqualified proposals fail
- Malicious proposals are identified and prevented
Proposed TAG Members, Accountability, and Membership Process
I, Kate, propose myself as the first ‘Lead’ of this Group, with the intent of facilitating the group to make it transparent and non-hierarchical. The three members I nominate based on their skills, background, availability and commitment are Sezer (forum profile), ImdioR (forum profile), and Andrew Liffey/OnlyDefiGuy (forum profile).
We plan to start with these four members, and will request applications from the community if there is a need for another member. We propose that TAG members work for a minimum term of six months.
Membership positions can be renewed, subject to approval via majority voting within the group and\or via the Centrifuge Governance Process. Every six months the TAG will publish a form seeking an assessment of its performance from the DAO, and based on this input, change personal and/or approach.
If a Centrifuge community member finds an issue with the TAG and it’s members or leader relating to the work and objectives set out in this proposal, or as pertaining to the code of conduct, they can raise it on the forum or privately to governance facilitator Orhan and it will be treated with seriousness.
Recusal / Disclosure
Centrifuge Network Foundation (CNF) contractors Kate Beecroft and ImdioR must recuse themselves from assessing any proposals proposed by other members of CNF. All TAG members must recuse themselves if they submit a Treasury proposal. Disclosures of conflict of interest from any TAG member must be published before an assessment is made.
Principles of the TAG
Community members can hold the group accountable both to the description of activity and deliverables but also to the Principles listed below:
- Objectivity
- Transparency
- Long term thinking
Proposed Group Members
The Treasury Advisory Group (TAG) will consist of experts with diverse knowledge across various domains including; finance, decentralized finance, marketing, DAOs, DeFi, community building and collaborative budgeting.
Kate @Kate_Bee
Kate is the Governance and DAO lead for Centrifuge. She has worked with organisations doing collaborative resource allocation and alternative finance for over 10 years. She was a Founding Partner of the distributed network Greaterthan, member of distributed builder network Enspiral and business developer of the software tool Cobudget and has facilitated numerous groups through participating budgeting processes. She has been a process designer in 3 DAOs, and was the community builder and governance designer for the Genesis DAO - one of the first DAOs to allocate its treasury. She specialises in stakeholder engagement to achieve robust governance decisions.
ImdioR @ImdioR
Imdior has been involved as an author or contributor in several important proposals in Centrifuge DAO, such as Block Rewards, Protocol Fees, Transaction Fees for Pools, adjustment of CFG Rewards on Tinlake and decrease of Centrifuge inflation rate over time.
He curated and traced all minting processes in Centrifuge DAO in the last 2 years and understands the inflation mechanism and Centrifuge Treasury funding very well.
Sezer @0xjulcaesar
Sezer has been involved in the web3 ecosystem for about four years. He organized some of the first crypto events in his country and established a few of the earliest crypto communities. Sezer has participated in numerous Web3 projects, including DAOs such as CryptoQuant, PrimeDAO, Inverter, and Bankless. He actively provides blockchain educational sessions on behalf of UNICEF and offers marketing and DAO services to various web3 projects.
Andrew/OnlyDeFiGuy @theoyster
Andrew has a background in traditional capital markets, with experience in the Central bank of Ireland and Interactive Brokers. Now working in Singapore for a hedge fund focused on high frequency trading on-chain across multiple blockchains. A lover of all things polkadot he has experience working with Acala, Moonbeam and Hydration. Highly active Polkadot market participant, enthusiastic coder and happy Irishman.
Additional Expert Advice:
Ongoing input will be sought from Centrifuge Active Contributors and other DAO members as the TAG gives advice on proposals and expenditure of Treasury funds. We will also seek advice from experts if we do not have requisite knowledge to assess a proposal.
Funding Request
This proposal requests funding from the DAO treasury to implement this Group and has the following initial funding request to be paid every six months. The figures below are in USD equivalent and the total CFG amount sought will vary.
In order to minimize bureaucracy and performative governance we request to be paid in bi-annual (twice yearly) installments, the total amount being $22,800 equivalent, by submitting an onchain proposal for CFG token holders to vote on.
| Name | Description | Six months Budget |
|---|---|---|
| Payment of Members | Compensate work of 2 members (based on $70 p/h at 5 hours per week = $350 p/w or $1400 p/m) *note the time of 2 proposed TAG members is already covered in their compensation as contractors to CNF | $16800 |
| Input from non Group Member experts | Where the TAG does not have the requisite knowledge we would pay for expert input | $6000 |
| Total | $22800 equivalent per 6 months (annual $45600) |
With the actual CFG price 0.49$, the request for this proposal from the treasury is roughly 47,000 CFG.
TAG wallet address: 4g2JJ7Lq56WgSvPdzsGuLQRbmU3EAQmYK8SH23JmWmi2j1iX
Group members will account for their hours spent every 6 months, and if under the total amount, the balance will be sent back to the Treasury. Similarly, the payment of experts will be tracked and if funds remain unspent they will be sent back. All Group expenditures will be documented in the bi-monthly report.
This RFC will be followed by an onchain proposal, requesting the indicated funds. If that proposal is passed by the DAO, the TAG will receive the first funding and the mandate. The proposal requests these funds (54,300 CFG) to be transferred to this wallet (to be added if there is support for this proposal).
Change or improvement
Centrifuge DAO has direction and clarity on best practices for Treasury management and is well set up to avoid wasteful spending. This group could further enhance the decentralization of the Centrifuge Protocol by enabling participation in governance by making it easier for DAO members to understand proposals and their implications, and therefore vote.
22-07-2024 The proposal has been submitted and merged on Github as CP117
Could not agree more with 
Please vote on Council Motion 100 at your earliest convenience councilllors!