Engineering Workstream Budget March - August 2022

[0xdef1cafe]

Proposal to fund the Engineering Workstream, March - August 2022

Abstract / Overview

The ShapeShift DAO relies on the Engineering Workstream to maintain the open source code base, undertake core engineering work to enable new features, support bounties from the broader community, and to provide architectural oversight and technical leadership as we continue to execute the DAO’s vision.

This proposal is to fund the Engineering Workstream’s budget from March 1st, 2022 through August 31st, 2022 inclusive.

This proposal also seeks to appoint 0xdef1cafe as the Engineering Workstream leader, taking over from Josh Forman.

Motivation

Leadership

Josh Forman is stepping down as Engineering Workstream leader at the end of the current budget cycle to pursue his personal passion of leadership and coaching full time. Josh has been instrumental in his leadership of engineering within ShapeShift for many years, previously as Director of Engineering at centralized ShapeShift, helping the team navigate through progressive decentralization as ShapeShift transitioned from a centralized entity to a DAO. On behalf of the team and community, we thank Josh for his inspiration and leadership over his tenure, and wish him the very best success with his own endeavours. Josh will remain a part of the Engineering Workstream in a part time capacity, providing leadership coaching, guidance, and facilitating retrospectives and workshops.

0xdef1cafe (that’s me!) has been with ShapeShift since January 2021, previously as a Senior Software Engineer and Engineering Manager. You can see my technical contributions to the web and lib

• repositories respectively.

  Outside my direct technical contributions, I

  represent ShapeShift at conferences including EthCC and MCON Denver in 2021, and ETHDenver 2022;

• represent engineering in discussions and partnerships with Bancor, Yearn, IOTA, XDEFI and others;
• say gm and run standup daily;
• collaborate closely with all other workstream leaders, and the ShapeShift Foundation;
• define, plan, and oversee execution of our technical roadmap;
• do whatever it takes to execute the DAO’s shared vision.

Financial

Budget spreadsheet

The details below expand upon the budget spreadsheet.

Current team & growth

• Please see the budget spreadsheet for an authoritative list, but in summary, the current team includes ten current contributors; nine former ShapeShift employees, plus welcomes one new full time contributor, 0xApotheosis, starting the week of February 7th 2022.

  The budget also includes five open positions to further expand the workstream and it’s ability to deliver.

  Two mid level engineers

• Two senior level engineers
• One technical program manager

The Technical Program Manager role is new, and is intended to include, but not be limited to, project management, administration of bounties, coordination with other workstreams, managing releases, and fostering partnerships. This role will relieve pressure from engineers administering these tasks, allowing them to focus on individual contribution work.

Accordingly, this budget seeks approval for the commitment of $1,821,050, plus an allocation of FOX as explained below. This will cover direct labor costs, to cover fifteen total current and open positions, and funds for a health community developer ecosystem.

FOX streams

1. The labor market for engineering talent is becoming increasingly competetive. It is essential that the ShapeShift DAO is able to both attract and retain top engineering talent, in order to remain competitive in the rapidly-evolving crypto landscape. Organizations offering at or above market rate compensation are more easily able to attract said talent.

   The proposed budget seeks to achieve this goal by

   Increasing engineering salaries by 20% over the previous budget cycle, in alignment with current US market rates for mid and senior level engineers, and

2. Incentivizes the attraction and retention of talent to the Engineering Workstream by an additional stream of FOX tokens, to create an assymmetric upside opportunity for committed contributors.
3. The FOX stream is inspired by traditional compensation models used by private or public companies with options or restricted stock units respectively. This is typically a 4 year total period including a 1 year cliff, with the potential upside equal to the base salary at the outset annually.

   A FOX stream will work as follows:

   The strike price for FOX will be determined as the 6 month average FOX Price to March 1, 2022, or the date which a contributor joins the Engineering Workstream after March 1 2022, whichever is latest.

4. Total FOX compensation equal to 3 years base salary, excluding overhead compensation, at said strike price, over a 36 month (3 year) period, not adjusted with future negotiations.
5. Each contributors FOX stream is subject to a 6 month cliff after their start date, no earlier than March 1 2022. A 6 month lump sum will unlock at this date.
6. After the 6 month cliff period, the remaining amount will be made available via a streaming smart contract over 30 months.
7. If a contributor leaves, or fails to adequately contribute to the Engineering Workstream at any point during the 36 month period, the contributor’s stream will be cancelled, with any remaining funds to be returned to the DAO.
8. The exact streaming tool is to be determined, but may include Sablier or Superfluid for capital efficiency.
9. Tax implications are the responsibilities of individual contributors.
10. The stream is specific to the Engineering Workstream, and is non-transferable between ShapeShift DAO workstreams, unless approved by a governance vote.

The budget seeks approval for a provisional total amount of 17,709,794 FOX to committed - a minimum of 11,796,856 FOX for current workstream members, and 5,912,938 FOX for open positions. This total amount is contingent on all current workstream members, plus all provisional open positions being filled. In the event that open positions are not filled, some of the addtional 5,912,938 FOX may not be required.

It must be noted that this proposal seeks the commitment, but not the spend of, 17,709,794 FOX for this budget. From a cash flow perspective, approximately one sixth (6 out of 36 months) will be required to cover lump sump payments for members contributing full time to the end of this budget, plus any additional amount required to be committed to contributor’s streams thereafter.

Additionally, it must be noted that the FOX amounts outlined above are provisional, and calculated based on a 6 month average FOX price to February 1st 2022. Actual amounts will be finalized based on the 6 month average FOX price prior to the beginning of the budget - i.e. March 1st 2022.

The workstream will ensure the tool chosen in point 6 for streams meets our requirements in points 5 and 8 above, while maximizing capital efficiency for the DAO, such that the minimum amount of FOX is locked in contracts.

Bounties

• In the previous budget cycle, the Engineering Workstream delivered a completely new version of ShapeShift. Open source and written from the ground up, it is architected for extensibility, ease of integration, and maintenance, among other goals.

  Given the open source nature of the new version, the Engineering Workstream has been able to create bounties via Gitcoin to outsource the completion of well defined work. These bounties have proved to be an extremely effective and efficient way to

  attract new ad-hoc and full time contributors to the code base,

• complete tasks with varying scope and complexity, from single line changes to research spikes, and
• allow the Engineering Workstream to focus on delivering core engineering work.

Engineering-sponsored bounties will continue to be an integral part of our strategy to deliver bug fixes, maintenance, new features, and attract new contributors, and the number of bounties will to continue to increase.

Accordingly, this budget seeks $175,000 over six months, equivalent to two full time senior engineer positions annualized, to be managed at the workstreams discretion to continue to operate and expand the bounty program.

Non-labor costs

• The budget also contains two line items for

  Four contract audits at a cost of $50,000 each, and

• Six month of team building and entertainment expenses, at $5,000/month.

Both of these line items are provisional, and any unspent funds will be returned to the DAO.

This budget seeks approval for the commitment of $260,000 for non-labor costs.

Contingency

Unforeseen costs will arise, and 10% of the subtotal is requested accordingly.

The budget seeks approval for $329,900 for contingency to be spent judiciously at the workstreams discretion, shall it be required.

Variance

Unused funds from any budget category will be returned to the DAO at the end of the budget cycle. In the unlikely event that the Engineering Workstream requires more funds, a separate governance proposal shall be raised.

Deliverables

Goals

The Engineering Workstream was initially formed on September 1 2021 via this snapshot vote. The Engineering Workstream has since matured, and will continue to operate in accordance with the original proposal.

The budget spreadsheet contains a list of goals and deliverables the workstream intends to complete during this budget. Detailed breakdowns of each item are available upon request.

The DAO recognizes that the crypto ecosystem is rapidly evolving and liable to change quickly. The Engineering Workstream reserves the right to add, remove, or reprioritize goals from this list, with the intent to deliver the most valuable and relevant items expediently to the market.

The product roadmap, externally posted bounties, emerging partnerships, and changes in resourcing are all factors liable to change the scope or prioritization of listed goals, however, broadly speaking, we intend to complete the strategic goals that are currently defined.

Additionally, the Engineering Workstream anticipates the listed goals to be non exhaustive, and is confident that the scope of work completed within six months to be greater than what is explicitly defined. The DAO must acknowledge that a rigidly planned six month roadmap within the crypto ecosystem would be naive at best, and that the Engineering Workstream, in conjunction with the DAO as a whole, should remain agile in responding to and capitalizing upon market opportunities as they arise.

Reporting

• The Engineering Workstream will report progress against these goals via the following methods

  daily public standups

• availability during normal working hours in Discord
• weekly engineering/product public meetings
• weekly governance calls
• weekly marketing newsletters
• fortnightly engineering demos
• monthly forum posts
• periodic engineering office hours

Benefits

Fundamentally, the DAO delivers a product to increase ease of use of the multi-chain multi-wallet multi-protocol universe that we find ourselves in. It is the Engineering effort that builds our product. We need Engineering in order to thrive. The goals listed above will be delivered.

Drawbacks

Engineering labor is the most expensive component of the DAO’s budget. Any aspect that does not seem appropriate to serve the greater needs of the DAO should be criticized.

Disclosure

The author of this proposal, 0xdef1cafe, stands to benefit from it, and is long FOX.

Vote

[gomes]

That looks good. I think the addition of the Fox stream as well as the 20% increase over previous budget cycle are two very clever ways to incentivize new, and keep current engineering talent onboard.

The purpose and goals of the new Technical Program Manager role are clear, and to my experience as an individual contributor and collaborating with other engineers, I can see the value of this position relieving pressure from engineers so they can focus on their individual contribution work.

The goals, as of now, of the engineering workstream are well-defined in this proposal and it is clearly stated that they are non-exhaustive and subject to change of scope, in the spirit of delivering the best value.

As a transparency note, I - gomes - am a candidate to one of the engineering positions described above.

[ssmegan]

I’m fully in support of the aggressive 20% increase in salaries to attract talented engineers. The competition is steep and working for a DAO is risky, so salaries need to reflect that.

I’m also in full support of the Workstream Leader changes. It’s been a pleasure working with you and your leadership talent has been clear to me. You run meetings confidently and stay well organized and welcoming in a sea of chaos.

How did you come up with the 6 month cliff period? Why 6 months? Feels sort of short (but that’s just a feeling on my end). And to clarify if the team member leaves at month 7, they will only earn the 7 months of FOX? correct?

Also can you share some examples of team building costs that would amount to $5k/month?

[0xdef1cafe]

Hey, thanks for the feedback and questions.

The 6 month cliff and 3 year total period is intended to be aligned with the budget, and recognizing that the crypto ecosystem moves much faster than the web2 world. Yes, if a member left at month 7, they would have received the 6 month cliff payment and 1 month worth of streaming FOX.

Examples would include our post ETHDenver retreat/offsite, conference attendance, and any sporadic entertainment expenses.

[theoboldfrazier]

Disclosure: I am a current engineering work stream member and plan on continuing if this proposal passes.

I think this is great def1. It’s clear what this means for me and I couldn’t be more excited to continue along with the DAO.

I plan on voting for this proposal and am happy to see you take the role to lead the work stream.

[PTT]

I think this awesome take on rewarding long-term contributions to the DAO. Sets a great standard for work streams to consider going forward. Talented engineers are something we want to hold onto when possible.

[jonisjon]

Overall I think this is well thought out and I am in strong support of this workstream moving forward, thank you for your leadership to this point and thank you for picking up the torch moving forward. I will be supporting this and voting it forward when it hits snapshot.

A few thoughts that I want to get out there that are important to note:

(1). For anything related to a FOX stream it is important that this is administered by the DAO treasury directly and not by the workstream leader IMO, this is because the treasury needs the ability to directly revoke the stream if necessary, which will usually be at the direction of the workstream leader, but also could be the leader themselves that needs to be revoked in a high consequence circumstance. Im not worried about this in the case of in particular, but we need to set the right precedent for streams like this moving forward that they will always be administered directly by the DAO treasury since they are long term commitments that go beyond the term of any particular workstream budget.

(2). The stream and additional compensation makes a lot of sense in regards to engineering which is the most competitive and particular talent set that the DAO needs, but it may not be appropriate or appropriate at the same levels for every workstream. This is not meant to say anything negative about all of our other amazing workstreams doing amazing work on behalf of the DAO, but I want to be clear up front that just because the DAO supports this effort for this workstream with highly technical and specific talent does not mean it should support it for every workstream or person working for the DAO, the DAO should always work to make the most efficient use of its resources, and part of that is recognizing which talent sets are the most competitive (generally engineering in DAO land) and being willing to compensate appropriately. This does not mean I would not support some streams for other workstreams to incentivize long term retention and alignment (at times I would) but need to be clear up front this likely won’t be appropriate for all workstreams/contributors and we should recognize that before we set a precedent of every workstream expecting the exact same stream compensation terms as engineering (which IMO would definitely not be appropriate). Ultimately these will be discussions to be had around future proposals, but I feel the need to put this stake in the ground now so it is not surprising later in terms of my perspective on this.

[0xdef1cafe]

Thanks for the comments Jon and fully in agreement with this.

Wording this proposal was difficult given the new and time-phased nature of the FOX stream commitments, and tried to preface them with “provisional” as much as possible, and highlight the cash flow considerations that extend beyond this particular budget cycle. I fully recognize and support that the long term nature and large size of the FOX stream commitments should be the concern of the treasury directly, and I absolutely cannot administer my own stream for obvious conflict of interest purposes. The ~$1.8m stablecoin portion of the budget however, is proposed to be managed by the workstream independently.

Agree that engineering roles are more technical, specialized, and harder to hire and retain, and that this proposal should not set a precedent or expectations for other workstreams. The streams were inspired by the same engineering roles at centralized organizations with the intent to be competitive in that specific labor market. Other workstream leaders are welcome to propose their own creative incentives with the same intent to attract and retain talent, but those proposals must be justified and evaluated empirically on their own merits, and on a case by case basis.

[Neverwas]

Thank you for putting this together and taking on the added responsibility and new role of work stream leader

1. . I would be remiss if I didn’t take a moment and inquire about a few items in the above post that I had questions about, if you would humor me with the additional information.

   I see line 4 on the proposed budget for the continuing role that Josh will directly play within the Engineering/Development team. In working to better understand the “Title” what are some of the goals and or deliverables that can be measured for this contribution? Are there any achievable benchmarks or direct breakout of anticipated time spent or workload being proposed?

2. I would ask for some additional information on the proposed 6 month deliverables. I do see and recognize items on the list that are in part meant to help achieve the current “parity” conversation with the current bata version of the platform but some line items are vague/broad in scope.
3. Mobile app strategy: Can this be interpreted as a developed and direct plan of action including architecture design/structure, designation of resource, application of execution (I.e. how to operate as a developer or organization on the different app platforms as a DAO, accountable accounts), and deployment additions/omissions? If so any loose timelines or targeted goals?
4. I would ask about the loose timelines and targeted goals for any of the listed deliverables, with full understanding that the SDC has accountable variance and priority shift. But as stated by other community members I can see value in a verifiable targeted goals and the ability track such deliverables within reason.
5. OSMO Bounty Support: I wasn’t sure of the significance of listing this separately from Cosmos implementation or general application or work stream bounty support.
6. KeepKey Settings: I know what is intended here but might be difficult for those not following specific KeepKey or engineering conversations. Maybe defining this as the ability to directly interact with Keepkey settings and or configuration from within either the “alpha” or v2 application.
7. And the above point would bring me to the very broad interpretation of using vague descriptions within deliverables. I understand that variance happens and can be expected, but having a little more definition within designated deliverables can be helpful in accountability for budgets. Examples could be to include expected function/behaviors. For the sake of brevity I will just list it as such and allow for interpretation.

Thanks again for your dedication and application of the efforts of the work stream.

[Neverwas]

I am a little surprised at the apparent dismissal of budget accountability for the second point. I am sure that I am misinterpreting this and of coarse personal belief and opinion are perfectly acceptable, but broadly discounting the future needs of the DAO as less competitive and needed can be dangerous. Many titles can be described as highly technical and very specific to what is known and accomplished in pro-forming tasks. Placing this stopgap or possible perception of blocking/limiting future requests or needs can have direct negative impact. While I can agree with a value, if the DAO even in its earliest stages has shown in part, is the capacity of finding capable and willing global talent. Just within this worksream the ability to leverage bounties shouldn’t be overshadowed by the desire for job security and past perception/experience of scarce talent pools. Allowing exceptions to the rule just because it seems to address a past concern in a different situation, when the present is providing new alternatives seems precipitous.

[jonisjon]

Not sure what you mean by dismissal of “budget accountability”. I have reviewed and pushed on the engineering workstream to be as efficient with their budget as possible without becoming uncompetitive, they have heard my comments directly in discord and in other conversations on that front.

My point regarding the streams is simply that this exact structure is likely not appropriate across the DAO as a standard, that doesn’t mean it can’t inform or help form future structures across the DAO and other workstreams but that we need to take the individual circumstances and merits of each workstream and aspect of the DAO into account and not let us generalize a broad precedent that leads to an inefficient use of the DAOs resources “just because” it has been done in one particular circumstance. That is my fear that I want to warn against, but ultimately any particular proposal needs to be evaluated on its individualized aspects.

[Neverwas]

no problem, thanks for the like and reply. It was meant for my interpretation that this approach is “perfectly” acceptable for this workstreams budget which has determined increases in a few areas but I haven’t seen many requests for documented accountability where as other budgets have had direct requests to include in proposals direct ROI actionable deliverables/items.

[jonisjon]

Yea - I have made this same request on discord and directly to the engineering workstream to have specific goals they commit to (which they did commit to in the sheet) - most of these are falsifiable as they are either delivered into production or not, which for engineering is a relatively easy thing to measure (either the code ships or it does not).

That being said, I appreciate and agree with your asks for more detail and clarity on some of these items that you listed, I would like to see more of that as well before this moves forward into ideation.

I am always a fan of more detail and better defined goals/kpis wherever possible for all workstreams, I also am familiar with the difficulty of doing this with a 6 month engineering roadmap, but the better we can define and measure these items and efficiency/productivity of engineering over the term the better IMO.

[0xdef1cafe]

in response to your comments here

With respect to Josh’s role, immediately starting March 1, in Josh’s role as coach / advisor, he will be providing 1:1 coaching to 5 individuals in the DAO. He also currently teaches one leadership class, which include 6 DAO contributors. He will continue to provide 1:1 coaching to individuals as requested and as he assesses there is a fit. He will also continue teaching at least one class at a time. That is, by the time the current class of 6 sessions completes, he will offer at least one more class. He may offer classes that includes 3rd-party licensed material. If this occurs, there will be an additional charge for that class.

With respect to the other questions regarding deliverables, I’ve updated the budget spreadsheet deliverables tabs with links to detailed specs where they’re currently available, and left a summary comment for items that aren’t fully specified yet.

did a good job of summarizing the difficulties of giving dates and managing changes in scope and priorities in a rapidly changing environment over a six month period.

Were this a tightly specified contract with well-defined deliverables, I’d give a fancy Gantt chart and financial forecast and report against it with budget and schedule variance. Thankfully it’s not, and doing so in my opinion would be counter productive for this budget.

Remaining agile, coordinating with other workstreams, and responding to the market and high level direction for the DAO is going to achieve the best outcomes across the board.

[Neverwas]

Thanks for the context and informational reply. I appreciate the added details and the time that you took to provide a response.