SUDAO-IP-13: Budget and Compensation Plan Epoch 2(Q2’22) [PASSED]

SUDAO-IP-13: Budget and Compensation Plan Epoch 2(Q2’22)

This proposal is to define the budget and compensation plan for epoch 2 of the SuperUMAn DAO (April 1st, 2022 - June 30th, 2022).

DAO Balance Sheet

Here’s the DAO balances across it’s Polygon and Ethereum safes:

$UMA - 52,866

$USDC - 22,386.27

$MATIC - 1.97

$ETH - 6.57

$WETH - 1.61

N.B: 34,205 $UMA of the $52,866 is currently in 75,000 suINT-s & 2976.36 suINT-l as collateral with a proposal ongoing to unlock that collateral.

Here’s a detailed breakdown of the DAO’s balance sheet, this includes the $USDC balance across each team’s Msig including their budget for this current epoch.

Executive Summary

As per the SU DAO Design Principles, a budget and compensation plan should:

  1. Have sufficient stables to provide a level of stability for our members at all eligible tiers
  2. Distribute KPI Options that’s similar to the framework of prev. epochs
  3. Meet our pre-defined requirements for team budgets to enable operational costs to be covered
  4. Have an allocation of funds for gas & transaction costs
  5. Have sufficient reserves such that we can allocate to our defined emergency fund, while also considering additional tipping collateral, DAO actions, sponsorships, grants, bounties etc.

This Budget and Proposal plan proposes using our $UMA balance sheet ( 52,866 $UMA across our Polygon & Ethereum safes ) to compensate DAO members for #1 as defined in our DAO Design Principles. As well as making sure we have enough gas for transactions, an emergency fund in place, and all team’s multi-sigs topped up to at least $2500. KPI options are not within the scope of this proposal and will be dependent on approval of our long term funding grant to UMA DAO.

Rationale:

Due to our original funding proposal getting taken down after feedback from UMA DAO/Risk Labs we are now trying to find a way to continue paying our active contributors, make sure we can cover all operational costs, top up team multi-sigs, maintain an emergency fund, have enough gas reserves for transactions, etc. This proposal will show we can continue our normal operations except for the minting of KPI options which would be dependent on our long term funding grant’s approval. The compensation part is based on a discord poll vote to determine the runway length to be either 3, 6, 9, or 12 months long. With a supermajority of 72%, 3 months is the runway time length we are proposing.

Content of the Proposal:

This budget and compensation plan proposes that the DAO uses 52,866 $UMA to compensate DAO members. We still have a sufficient amount of gas for our ethereum and polygon safes at 6.57 $ETH and $1.99 $MATIC. We have over $20,000 USDC sitting idly to top up all teams back to $2500 for this quarter and support initiatives like the POAP lottery which is $5000 USDC that the governance team manages.KPI options collateral, minting, and distribution for this quarter would be dependent on our long term funding grant’s approval.

DAO members will be compensated in $UMA tokens using a 7-day Twap of $UMA’s price at the time of monthly compensation distribution.

UMA’s Floor Price

The floor price of 3.7$ per UMA was calculated as the price at which CoC = PfC. One of the essential steps in securing UMA’s Optimistic Oracle is maintaining CoC > PfC where CoC is the cost of corruption and PfC is the profit from corruption. When that ratio becomes unbalanced, UMA uses the funds from the Store to perform “buy and burn” operations on the $UMA tokens to maintain CoC > PfC.

How we derived the price 3.7$

CoC = Cost of Corruption = Cost to buy 51% of total $UMA tokens
Total UMA circulating supply - 66,000,000

UMA’s price at the time of calculation - 6.4$

Coc = 51% of 66,000,000 * 6,4$

= 33,660,000 * 6.4$

= 215M$

PfC = 125M$ at the time of calculation according to data from [UMAverse ](https://projects.umaproject.org/)

To calculate the floor price we need:

51% of 66,000,00 * floor price = 125M$

33,660,000 * Floor price = 125M$

Floor price = 125M$ / 33,660,000 = 3.71$

TWAP Value

Stables compensation will be replaced with compensation in $UMA tokens contingent on SUDAO-IP-12 being ratified. In order to determine the number of $UMA tokens distributed at the time of monthly compensation a 7-day TWAP will be used to determine UMA’s price.

The 7-day TWAP value is calculated using the average of UMA’s closing price in the previous 7 days at the time of submitting the SCD proposal. UMA’s closing price is calculated using the UMA/USD price identifier.

If the Twap Value falls below 3,7 $UMA then the price used to calculate the number of $UMA tokens distributed will be replaced with 3.7$.

Additional Notes:

  • Allocation for stable compensation will be ~$186,000 (97% of 52k $UMA).
  • There’ll be no allocation for quarterly KPI Options as that will be determined by our funding proposal to UMA DAO.
  • Full timers will also be compensated.
  • Top up all teams multi-sigs with the $USDC sitting in the treasury’s polygon safe back to $2500 and an extra $5000 USDC for the POAP lottery to the governance team’s multi-sig.

The compensation details are below:

  • 1506$/month for UMAsters
  • 805$/month for Core SuperUMAns
  • 421$/month for Basic SuperUMAns
  • 4551$/month for Full Timers

Values have been pulled from the final working documents that were presented on Discord prior to this vote.

SU DAO - Compensation Structure (Epoch 2)

Reasoning:

  • This is a somewhat doomsday scenario accounting for if 1 $UMA were to be equivalent to $3.7 USDC. If UMA were to stay around $6 or go up we would have a decent amount of UMA left over at the end of this quarter.
  • Going into this epoch there was an expectation that we would have a funding proposal approved by UMA DAO to be able to use for our compensation and budgets of Q2 ‘22. Our initial proposal has been taken down and we are now working on a more long term proposal but this also means we won’t be able to pay contributors if we are solely waiting on the next funding proposal to pass in order to do so.
  • There should be an expectation that this is the last quarter we will be using this compensation structure as we plan on setting up a new infrastructure and revamping how contributors get compensated.
  • There isn’t enough time to come up with a totally new compensation structure and continue paying contributors. Thus we decided to move forward with compensation based off of a runway of our current funds.
  • The DAO currently doesn’t have enough funds to meet the predefined requirements in our DAO design principles. We’re unable to distribute KPI Options to members and also offer a sufficient stable amount to DAO members.

Drawback / Risks:

  • If we are unable to get our long term funding grant approved by at least the middle to end of July ‘22, ~3 months, we would potentially be unable to continue to pay contributors or have to significantly reduce the amount we can afford to pay out.

What on-chain actions might this proposal entail:
None at this time.

  • Yes
  • More Discussion
  • No

0 voters

11 Likes

Most comprehensive sir.

8 Likes

Speaking as a founding member of the SU DAO and voting token holder in the new UMA DAO, I feel this act of governance is not pursuant with the goals of either organization for two main reasons:

  1. It front runs our formal Funding Proposal to the UMA DAO, acts explicitly against much of the feedback we received from our first Funding Proposal, and would effectively leave our Treasury empty should there be no further funding (or a major delay in further funding).

  2. Makes no mention of any kind of KPI Options incentive, again front running our Funding Proposal, and leaves the Ambassador team with nothing to shoot for.

I would be in favor of this proposal once our Funding Proposal is up and we at least see a consensus from UMA DAO members (which seems to be mostly RL employees and us) in a Discourse poll.

As it stands, it leaves us in a bad light with major UMA token holders, makes us look like a liability, and weakens our chances at getting further funding.

5 Likes

Please stick to the old plan of giving KPI options as this will not take us anywhere. We will be emptying the Treasury .We should be going for integrations and hardly see any new leads coming. Why will UMA give us grants if they don’t see value in us. The top 3 request to ask UMA for grants is integration. We are no way near that. We are also deviating from what UMA core competence is KPI options distribution by hitting the desired goals.Suggest to redeploy the members and put some of them in Ambassadors team.

2 Likes

I’m against the proposal as it puts the survival of the DAO at risk in favor of immediate considerations.

We are missing the point here, completely, and sadly.
This should be not about our budget and compensation. This should be about if we enter resilience mode, or we’re not.

If that proposal passes, we will potentially burn the treasury entirely in comp., leaving us with nothing left to operate in the future.

5 Likes

Im also speaking as a founding member of the SU DAO and also a token voter before the SUs were a thing and still today! I think this act of governance is pursuant with the goals of either organization for two main reasons:

  1. We actually addressed one of their main concerns of trading $UMA for $USDC and since added design principle changes which should be going to snapshot starting today or tomorrow! The majority of our active contributors that get base pay are knowledgeable, participate in the DVM, and id say are currently fulfilling an obligation of getting $UMA tokens in the hands of those that understand its value and will hopefully use portions of their $UMA to vote with.

  2. There’s no guarantee our treasury would be empty. The proposal outlines that this is a somewhat ‘doomsday’ scenario and if the price were to remain close to even $5 USDC or above we would still have a good chunk of $UMA at the end of the quarter. That’s not to add if $UMA actually takes off we’d have even more left over. Theres no guarantee either way so I think we need to take a wait and see approach and not just assume the worst case scenario where if $UMA hits $3.7 then the buybacks start happening. We don’t know either way and thats been the most frustrating part of not being able to have some sort of $USDC which would at least rely way less on market conditions. We are unfortunately not allowed that luxury without heavy criticism though.

  3. We can always backdate the KPI options to a certain date starting at April 1st, 2022. We can safely still focus on integrations as that KPI is still going to be worth the majority of the KPI option’s worth. We will ask in our funding proposal to include at the very least integrations as part of our KPIs which theres no reason for both organizations not to agree thats a metric worth pursuing. I would encourage every ambassador to keep doing what they do and be optimistic that the next KPI option will be backdated to April 1st, 2022.

I think not paying our active contributors is also a bad precedent to set when we have the funding to do so. We need contributors to continue working on things like the (LFG) long term funding grant. What you’re suggesting is a bit radical to expect our contributors to keep working without pay when we have the means to do so. Or to at least continue contributing at the level they currently are. I think UMA DAO will understand we cant expect people to continue their normal contributions without some form of compensation. I also haven’t seem some type of practical proposal to counteract this one after asking multiple times for one from multiple people.

7 Likes

I can’t in good conscience vote for this proposal without knowing why this helps advance the DAO’s mission and goal of sustainability. I WOULD support compensation for a very small/skeleton team that needs to exist to continue day-to-day operations.

5 Likes

Coming back to the earlier conversation around this, I feel withholding compensation for the sake of our DAO is totally fair. At the same time, I do understand some folks have hard pressing needs that need to be addressed. Retroactive payment for the contributors with a bonus can help address that. For the others, partial payments can be made as per their specific needs.

2 Likes

For disclosure after further deliberation and hearing responses from others I have changed my vote to No.

This is because that we are continuing to load our expenses with compensation, and while paying contributors is important, doing so at the sake of emptying the treasury is short-termist thinking, and carries an underlying assumption that we will achieve the scope and level of funding by the dates set upon ourselves. I am conservative and will think that we will probably not, but that’s purely my opinion.

As a counterproposal I would approach this with backpaying contributors with significant ‘interest’ once the LFG has been approved, or set up internal compensation this epoch as all KPI options until the funding issue is resolved. In addition we should explore immediately all avenues for revenue generation.

I do not feel at this point that a skeleton team should be paid directly unless they pass the ‘bus crash test’.

1 Like

Depending on what route we go for, if we decide to only pay contributors in KPI Options then we have until end of next epoch to get the LFG through.

If we’re going to be paying monthly compensation then we have until end July to get the LFG through. That’s at least 3 months. That’s a lot of time.

If people think we’re not going to pay contributors for 3 months and they’ll continue contributing to the DAO, then I find that really absurd. My assumption is that people saying that are ready to continue contributing and that’s fine.

But you should also consider folks that spend their time working here and have pressing needs. I’m one of them and this is just going to fuck me over lol. Maybe I’m selfish, and not thinking about the DAO but I’m comfortable with people seeing me that way.

We don’t have enough $UMA to plan for a 6 months runway and that’s the reality we find ourselves in. That is the whole idea of the long term funding proposal.

5 Likes

So what happens if we don’t get funded by then? people continue working for nothing? or we pay them even lower or say there’s no funding anymore ?

For our mission and goal of sustainability, that is for our long term funding proposal not what we have right now.

3 Likes

After reading the feedback here I have also changed my vote to no. As much as I want to get paid for my work I want to make sure our DAO has a consistently growing treasury as well as hitting our targets to ensure we continue to bring value to UMA. This delay in payment is frustrating for many of us but we need to do this right. I hope we can get to a resolution soon but this proposal would drain our treasury and put us back at square one and 3 months further away from any kind of self sustainability.

I agree with this and think this may be the way to go. I am not in favor of sacrificing our future so that we can make sure that one group of super umans get paid in usdc. As i have said before i am willing to make sacrifices in whatever compensation i may receive in order to ensure the dao stays healthy but honestly we need a better plan that takes into account our long term viability. @SurfTranquille i’ve now posted my objections here on discourse

Isn’t that the point of the long term funding proposal though?

We have limited funds at the moment so it’d be hard for us to do a budget & compensation plan for multiple months. I don’t think we can do a budget and compensation plan that helps us grow our treasury given the limited funds we have.

I know this was mentioned in the feedback to our funding proposal, but that was us being advised to request a longer term funding proposal.

Most DAO contributors (I assume the people voting yes) are not going to comfortably put in their best into the DAO hitting it’s targets if they’re not being compensated for it.

I currently contribute to two other DAOs and throughout the month of April I have spent less than 3 - 4 hours total contributing there because of the Full Time program and now people are suggesting that we don’t get compensated at all or in KPI options.

I’d definitely rather spend most of my time from now on in other DAOs so I can meet my daily needs and I can imagine that a lot of folks are in the same bus. Now imagine all of those folks not contributing here anymore because they’re not being compensated (which makes a lot of sense that they would do so), a lot of things will be slowed down.

@poopster we’re not paying contributors in USDC, we’re paying them in $UMA tokens.

5 Likes

I totally agree with this tbh, I can’t imagine not being paid for all the hours I contribute to the DAO coupled with the fact that I had to stop being active in other DAOs.
I care about the DAO a lot and I strongly believe that we will get funded.:slightly_smiling_face:

5 Likes

I understand how delicate things are right now but this is so unexpected and it will personally throw me off balance if i don’t get paid, i’m sure it’s the same for most people that voted yes, We are the DAO, and if 74 percent of the DAO get thrown of balance how will the DAO function properly? , I love the DAO and i want to keep being here and fight for it’s existence, i can’t do that if i’ve not figured out my how to fight for my personal existence lol

I strongly believe we will get funded and we are putting in a lot of effort.

2 Likes

What the proposal here is saying is not that contributors don’t get paid, they just get backpaid and made whole upon the approval of the LFG. Examples of real-life scenarios are US federal employees under forced furlough during government shutdowns.

For those of you who absolutely need to be paid on time right now, may I suggest the following options:

  1. Structure this epoch’s compensation as a ‘payday loan’ so that once the LFG passes, contributors pay interest in this facility (TBC) and get reduced compensation once the LFG passes. This is a moment of hardship for the entire DAO and to be paid in full on time is a benefit in kind - and therefore, should now incur a cost for this benefit.
  2. Reduce the KPI Options tranche of compensation for this epoch only to 50-75%
  3. Keep all pay constant but provide ‘patience bonuses’ only to all contributors who forego compensation right now.
1 Like

Why is the governance team leading the compensation proposal? Isn’t this the task of the Treasury team? Why was this proposal rushed through a poll that I personally didn’t understand then put up on the Forum on a Friday?

Everyone in the DAO is in the same position of financial hardship due to our circumstances. The selfishness is palpable here, but no one’s going to get anything at all at this rate.

If the DAO decided to build KPI Options, we would have goals to pursue to keep us on track. If people needed financial assistance, I’m sure we could work something out. I won’t participate anymore here unless the mindset of personal entitlement disappears.

Instead of building trust and keeping a position where we could help each other out, we’re making poor decisions based on faulty thinking out of fear…driving away all the good people who would be willing to help.

I personally feel the hardship of every single member here. If it weren’t for my personal family situation, I wouldn’t be stepping down. I would still have a major issue with the whole manner a few members of the DAO decided to go about this, and couldn’t wait one or two more weeks to figure it all out.

You cannot have a promise of KPI Option that is dependent on a funding vote.

I like where you’re going here. I think we can’t promise backdate pay either dependent on a vote. We need to step up and help each other out or call it quits.

We have put ourselves in such a bad light. If SuperUMAns are already talking about not voting for the LFG (which they are), I can only imagine how UMA DAO members will feel.

I see this whole proposal as a last ditch attempt to grab our remaining funds by people who never intend to continue in the DAO, even should the LFG go through.

I came here not just to work, but to be a part of a community who cares about each other. I’m definitely willing to help the people I can. Some are going to be last in line.