CP130: Goals and Themes for Resource Allocation for the Centrifuge Treasury

Centrifuge Governance Proposals
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cp: 130
title: Goals and Themes for Resource Allocation for the Centrifuge Treasury
author: Kate_Bee
Contributors: @ImdioR
uses-component: CP4
technical-proposal: no
requires-onchain: no
impacts/modifies: CP2, CP107, CP108
status: passed
date-proposed: 2024-06-01
date-ended: 2024-10-18

Short Summary

This proposal is an agreement that the goal of resource allocation from the Centrifuge Treasury should always support the mission of Centrifuge and to this end, resources should be allocated to the proposals that can make the case for the highest return and highest impact for Centrifuge according to clear goals and themes.

High Level Objective

Centrifuge builds technology to tokenize financial products and creates communities to champion the adoption of RWAs.

We want to fund work essential to growing Centrifuge and we want protocol growth to benefit all token holders.

Now that we have a substantial Treasury [link] made up of block rewards, transaction fees and pool fees [link] and it will keep growing, we expect to see an increasing amount of proposals from people or groups who would propose to expand the network and use some of those funds.

This proposal puts forward a starting point for goals and themes so that DAO members have adequate and agreed on starting points to assess proposals made to spend treasury funding. Additionally, prospective proposers will have an idea of what is in scope for funding, and what is not.

This proposal will follow the standard non-technical proposal voting process (RFC → Opensquare snapshot).

  • If passed, all proposers will be asked to name which Goal(s) their proposal helps achieve and what Theme(s) their proposal supports.

  • All Treasury proposals must follow CP2 [link]

  • If CP128: Amendments to CP2 component passes, Treasury proposals which request a sum larger than $50K CFG equivalent must be paid via milestones. The details on how to submit a milestone-based proposal are part of the amendment to CP2.

Background

Treasury Spending Agreements

The DAO agreed to the RFC on Treasury Spending and the Updated Treasury Spending Agreement as well as mandating the Treasury and Advisory Group (TAG) to perform a host of activities, including giving a non-binding report on the relevance of every Treasury proposal submitted to the DAO.

This proposal does not replace the Updated Treasury Spending Agreement, but rather, builds on it to give more guidelines.

Historical spending

Historically, 95% of development on the protocol has been done by k/factory on behalf of the protocol and Centrifuge Network Foundation from funds raised before the Treasury was established.

Similarly, 95% of all marketing has been done by the k/factory team.

However, external proposals are still considered extremely helpful in the advancement of general growth effort, and are likely to be able to market and grow awareness of the DAO itself.

We want to see more proposals making use of the Centrifuge Treasury to achieve the Goals below, that support the following themes.

Goal and Themes

A goal is an achievable long-term outcome.

A Theme is a subject or set of ideas that groups work areas.

The Goals:

All proposals should connect to the wider Centrifuge goals, please specify which goals your proposal meets and how.

  • Building the best technology for tokenizing and securitizing real-world assets
  • Focusing on attracting new asset managers through great technology
  • Targeting high-quality issuers and financial products
  • Enabling on-chain and institutional investors to invest in tokenized assets
  • Creating awareness of RWAs
  • Bringing more liquidity to Centrifuge pools
  • Expanding token utility for CFG
  • Increasing utility for tokens issued through the Centrifuge protocol
  • Having the most interoperable and secure protocol in the RWA ecosystem

Themes

Proposals requesting funds from the Treasury should specialize in one or more of the following Themes. Each proposal must list which Theme(s) are applicable.

Here we set out 4 key Themes that are crucial to growing the protocol and suggest approaches to resource allocation of the Centrifuge Treasury.

Theme One: Fund Protocol Development

Building and improving the protocol is essential for achievement of the Goals.

This includes:

  • Building infrastructure
  • Developing new products
  • Adding needed features and functionality to existing products
  • Providing security and testing capabilities
  • Developing and executing integrations and protocol improvements
  • Research and development; including developer tools, and governance tools

Any proposals asking for funding related to protocol development must demonstrate the proposers experience and understanding of the Centrifuge Protocol and its technical components and considerations.

Theme Two: Grow Adoption

This includes work that involves:

  • Bringing liquidity to the protocol, for example business development like building key partnerships
  • Researching and successfully making business develop proposals to other DAOs
  • Bringing valid and desirable assets and pools to the protocol
  • Marketing to key audiences and institutions
  • Increasing usage of Centrifuge products or services
  • Lead generation activities

Any proposals asking for funding related to adoption must show the measurable level of growth and impact that their proposal will make.

Theme Three: Increase token utility

Support efforts to increase the utility of the CFG token:

  • Adding utility to the CFG token, for example, enhancing accessibility by integrating and connecting the CFG token into other ecosystems.
  • Expanding the token utility: including things like expanding the usability of the token (e.g. bringing liquidity via partnerships), adding fees (e.g. how the protocol charges fees, what level fees are set at) and so on.
  • Researching and proposing or utility increasing essential parameters, for example, possible staking for pools.

Any proposals asking for funding related to utility must show in detail their understanding of the tokenomics and legal underpinning of the token and the larger context regarding utility and have an action plan for how utility will be added. For example, if a proposal wants to add utility via staking for pools it would need to include, among others, legal research, functionality, and implementation details.

Theme Four: Awareness, Education, and Community

Support efforts that drive awareness of Centrifuge and build an active DAO.

  • Helping expand current education and utility for the existing users and community (educational material)
  • Helping more people become DAO members and especially Active Contributors through growing awareness (campaigns, content, ambassadors, case studies and so on)
  • Marketing efforts including videos, campaigns, hackathons, conferences and conference attendance
  • Marketing campaigns that spread awareness of Centrifuge to existing and potential audiences
  • Partnerships and initiatives with other organizations to support and educate about RWAs and other aligned topics

Any proposals asking for funding related to marketing and growing awareness must show robust understanding of relevant audiences and prior Centrifuge marketing efforts/campaigns/actions.

Changes

If this proposal passes, the following changes would be instituted in the proposals applying for Treasury funding:

  • All proposals should connect to the wider Centrifuge goals, and specify which goals your proposal meets and how.
  • Proposals must specialize in one or more of the Themes and list which Theme(s) are applicable.

Alignment to the mission of Centrifuge DAO

This proposal helps ensure Centrifuge DAO members allocate resources to robust, needed, and impactful proposals that expand the protocol and growth of Centrifuge ensures we are on track to achieve our mission.

Note: we are open to input on the Goals and Themes stated above and would like to hear from you about others that you think should be added, as well as other feedback about this proposal. Please help make this proposal better!

03-10-2024: The proposal has been submitted and merged on Github as CP130 and is now final
03-10-2024: The OpenSquare snapshot vote for CP130 has been created and set to start 04-10-2024 11.00am CET and last for exactly 14 days

8 Likes
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Hi, Kate!

First, I really think this is an incredible framework that will help streamline future discussions and proposals. It is clearly articulated and should drive additional conversation moving forward.

Next, I think I already have a goal and theme in mind in relation to the team I am speaking in El Salvador about tokenizing Certificates of Deposit from some of the largest banks in the country. I met with them today again and part of our discussion surrounded the need to secure funding to help build out their MVP.

Finally, I will likely share more thoughts on these matters at the upcoming meeting and then huddle up with Jared again to see what sort of synergies exist between the ADE team and Centrifuge, especially with these new parameters in play.

I’d write more but am unfortunately about to eat dinner and it’s been a long day already. Either way, I am excited by the prospect of how this treasury can be put to work to further build out my favorite RWA protocol!

Gratefully,

Ryan / Phunky

4 Likes
3

Hi there!
Thank you for bringing this up.
I guess this is one of the hottest topics in all DAO treasury spending right now.
Without a shared mission and clear vision, as well as without an understanding of how the proposal can help to achieve The Goals, the Centrifuge (or any other Treasury) will be just spent on 1000 proposals without any significant impact on the protocol.

I have seen dozens of recent proposals on Polkadot and other DAOs that on their own were successful(or at least looked not bad), but however they didn`t achieve anything significant for the Protocol at all.
The situation with Kusama is a clear example of how the treasury could be badly spent and drained until the bottom without ANY impact on the ecosystem.

I also do agree that k\f leads 95% of development and marketing, however, I believe that an external proposal can not only highlight the issues that k\f or the marketing team can not solve due to low priority or due to lack of human resources, but also they can improve Centrifuge Protocol and expand the interconnections with other protocols (not only).

The best symbios, as for me, would be a parallel work of k\f\ team with external proposers with synching and helping each other to achieve the common Goals.

5 Likes
4

I second your statement its not just with Polkadot and Kusama but in lot of other projects that DAO Spending doesn’t justify the results or I can see very few examples of good achievements.

I do agree DAO be controlling the spending but a clearly stated metrics and success factors before committing the amount for spending can help to some extent.

While not every $ is not accountable with respect to results but a clear approach should be developed and we learn it by doing it as we proceed.

4 Likes
5

Would be great to have rubrics for evaluation on initiatives under each of the categories.

That helps both the project evaluators/community and the contributor to get clarity on the expectations and also creates transparency in the system.

2 Likes
6

Good day there!
@Kate_Bee would you be so keen to share the slides that you used during the Governance Call?
Thank you.

1 Like
7

CP130 has now been merged into the Centrifuge proposal repository on GitHub and is now final.

The OpenSquare Snapshot has been created and will start the 4th October 11.00am CET and will end the 18th October 11.00am CET (open for exactly 14 days).

:ballot_box: Vote here: CP130: Goals and Themes for Resource Allocation for Centrifuge DAO Treasury

2 Likes
8

Well done. It is well written, clear, and sets out a sound policy framework. Stakeholders should most definitely vote in favor. The only thing I would recommend is monitoring mechanism which should be a periodic review of acivities to make sure they are in line with the policy. Also the policy should be revisited periodically to ensure it remains consistent with the overriding objectives, especially if those objectives change.

9

The OpenSquare snapshot vote for CP130: Goals and Themes for Resource Allocation for Centrifuge DAO Treasury has passed unanimously.

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Thank you for voting everyone!

2 Likes
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What a really good initiative. If you need any assistance at all, please do reach out to me.