#50 proposal for funding the 2023 Economic Committee

Governance Community Fund
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When the first Economic Committee (EC) was formed, the Decentralized Cooperation Foundation (DCF), in response to community request, agreed to provide the initial funding to compensate the EC members as well as to provide support for an operational budget.

The stipend for the EC members amount that was approved by the BLD stakers was $50,000 per year for each of the EC members, and XX for the EC member appointed as Secretary.

The operational budget was set at US$50,000 and provided to the EC by DCF in order to cover expenses such as travel, and subscription services (like Slack). Those funds are administered directly by the EC.

Long term, these expenses should be covered by the community via community controlled funds, but in the short term it will likely be difficult for the community to fully cover all expenses. Given that the EC is an important element for Inter Protocol, the DCF is willing to continue to support the EC member stipend. However, the DCF would also propose that, beginning this year, the community take on providing the operational budget for the EC, and that the funds necessary for that expense are drawn from the Community Fund.

Specifically, passage of this proposal will result in the following:

  1. That DCF will pay the EC stipend amounts this year, from DCF funds, and
  2. The US$50,000 EC operational budget will be paid from the Community Fund.

FAQs:

Q: What if I disagree with the amounts proposed?
A: A new discussion and on-chain proposal would need to be made with alternative amounts for the BLD stakers to vote on.

Q: What are the steps to post an on-chain governance proposal for the BLD stakers to vote on?
A: Proposals are voted on, Yes or No, in their entirety. It is recommended that any on-chain proposal be posted to the forum for a 10 day discussion period before posting an on-chain vote. Posting on-chain will require a deposit of 500 BLD, which will be refunded if the proposal is not voted no-with-veto. Voting is currently a three day process.

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As a curious on looker I’m wondering what learning we have from the last year?

  • How has the committee been functioning?
  • What were some of the unexpected challenges?
  • What went well?

Not looking for a in-depth report but it would be good have a few paraphrase from the committee.

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Good question. We’ve been thinking about exactly that ourselves. First thing is that there is the individual committee members skills and experience and contributions and what have you, and the ticket was selected with that in mind, and to have strong coverage and experience. But one of the main lessons this year was learning to work together, to know who had what specialist knowledge and insight and to learn how to leverage that up. This is a common experience in creating a high functioning team, but I would first note that that is a real process. We did a valuable offsite in March this year where we all got together for 3 days and ran through lots of exercises/ wargaming/ strategic thinking etc that really helped gel the team. Another thing that we do more of than I initially thought was teaching ourselves stuff. We have a regular cadence of meetings, and much of that is scheduled business and discussions. But more and more we are spending time, doing “we need to learn all about X” where x might be a new tech application or project, a possible new capital type or whatever the new thing is. So we assign from within the team who the most expert person is to present a review to the committee, as a live tutorial. We often invite guests in to fill knowledge gaps. So that process - committee as learning system - has been important and I expect we will be doing ever more of that. As we’ve all got to know each other better too I think the quality of discussion and analysis is getting deeper. Which is good. We are also realising that we don’t always need to think everything through from first principles, although that instinct remains strong. But it’s not always the most effective way to proceed. More and more we’re looking at other stablecoin projects that have committee governance (hello Maker) and asking why did they do it like that. Why are we doing it differently here. Etc. competition is good for markets, but it’s also good for learning in production. Overall I it’s been an incredibly exciting project to launch. We have a great committee with top individuals, but right now our main strength is institutional culture. We’re good at learning and dealing with a world of novelty. Meetings are really engaging, thoughtful and productive. Hope that gives some insight into at least how we’re seeing it from the inside.

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One of the projects that either the Economic Committee or the DCF should focus on over the coming months is to improve the corporate governance principles that govern the committee.
For example - at present the committee is being elected as a slate of candidates and is elected for a set period of time. This is entirely appropriate for setting up a committee and, in the first instance, that should continue to be the case in the short run. But, in time, the committee should be staggered - e.g. half the committee standing for election. This ensures both continuity of the committee and the retention of ‘corporate history’ but does give the community (and committee members) the opportunity to renew the membership of the committee. I would also recommend that, in time, that the practice of offering up a slate of candidates be discontinued and that individuals run for places (of course there should be no prohibition of people running on a joint ticket).

More controversially, I am of the opinion that the DCF continue to fund both the stipend and the running costs of the Economics Committee. Build is still trading at a massive discount to its trading high and the prices many community members paid for their Build. I think it is only fair that the community be given an opportunity to recoup their losses before being asked to bear the burden of any running costs.

Furthermore - Economic Committee members should not be paid in cash (or stable coin) but rather in Build and value vested. This further aligns their interests to community interests. I have recently published a paper on DAO compensation in the Journal of the British Blockchain Association and would be keen to see the Agoric community adopt its recommendations - or, at least, have a lively debate about the merits (or demerits) of the idea.

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I strongly agree with everything SincDavidson especially this:

This amount is roughly ~ $400,000 at the time the community fund was proposed. It would be incredibly shortsighted to fund running costs with that given both the perception and the opportunity costs of how community funds could be better spent.

There is only a fraction of the proposed amount in BLD liquidity.

Is the best current use of community funds to subsidize the economic committee or improve liquidity and push initiatives that are necessary to onboard market participants, developers, and build community?

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Please note for clarification that the amount this proposal would shift to the Community Fund would be US$50,000 and could certainly be paid in BLD. The budget for the first year was $50,000 and this proposal simply adopted that amount for the next 12 months. If the EC does not require a sum this large for the next year, I would hope they would speak here.

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I do not feel strongly either way about the source of the funding for this year, but would like to echo concerns from @Larry about the large dent this would put in the community pool.

As a potential solution, and perhaps something that should be done regardless, I have started a thread to discuss a proposal to increase the community tax from 0% to 3%.

To me, it seems very relevant to the topic at hand, so feedback and discussion are greatly appreciated.

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Hello @Ric, speaking as the acting EC secretary. The amount mentioned in the original post (50K) was based on our yearly budget from last year.

From that budget, we do have a balance representing $32,711 spread more or less equally between IST and USDC. We still have a liability of $4,254 so our balance net of liability is $28,457.

Below are our wallet addresses:
Agoric
Osmosis

Our total expenses since we took office in September 2022 is $21,543. Worth mentioning that the vast majority of the total expense came from our trip to Amsterdam in Feb-March, 2023 where most of us got to meet for the first time irl and where we strategized and worked on refining our roadmap.

Given the details presented above, we believe an ask of $15K would be enough to cover our expenses for the next 12 months, including a new work trip. It is important for the EC members to meet on a yearly basis to deepen the ties, reflect on our past work and prepare future plans and workflows.

The requested funding of $15K from the BLD community pool will result in a total treasury of $43,457. I remain available should you have any question with respect to our budget.

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Thanks for that @yamrani . We will assemble a proposal for a vote in line with this request and get it up soon. Let’s see how the community responds.

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