[SCP-TBD] Draft Proposal To Austerity Options

Proposal Discussion
1

[SCP-XX] Draft Proposal To Austerity Options

Summary

Offer WorkStreams and the DAO community options and context to resource allocation. Helping to preserve capacity and capability discerning spend versus non-spend.

Abstract

Resources are limited, we spend less thru not spending, is the initial focal point on subtracting the DAO’s capability and capacity or can we find ways to hold on to that for as long as we can. This proposal is demonstrating the differences of preserving DAO resources including treasury and contributors.

Shifting spend from one asset to another is still a spend and can have similar consequences albeit deferred or immediately indistinguishable. When we trade treasury stable spend for FOX we are still spending, boosting this is an undetermined multiplier of this course of action.

This proposal is about addressing the needs of the treasury and working to preserve capability and the capacity to achieve. It lays out a few options of direct treasury savings in the forms of shift of spend and non-spend detailing pathways to how and what each can offer.

This is not a proposal looking to justify which choice should be determined, it provides the data for the community to evaluate and enact as seen fit.

These outlined options are intended to be used in conjunction with other fiscally responsible actions such as obsolescence identification and discretionary expense removal, and in doing so can offer a means of prolonging treasury assets, operating options, and the ability of the DAO.

How is this different or what does it change?

This proposal is offering the ability to spread the fiscal responsibility as entrepreneurs helping to offset spending and better insure the capability of this DAO. The proposal is also working to preserve where possible for existing WorkStream human and tooling resources providing the opportunity for continuing to build future options within this DAO.

Motivation

Recent discussions and concern has been directed at the capabilities of the DAO treasury and possible bear market impacts. These impacts are mainly focused on stable coin spend and the accompanying conservation efforts to stretch this resource as far as possible.

Recent actions have found WorkStreams removing expenses, including tools and resources providing the capability and capacity to achieve the stated task of the WS, this is their decision but does have greater organization impacts that if unchecked can have far reaching and lasting effects. This proposal is looking to change this narrative and utilizing this as a primary action. Offering an alternative and focus with options and the distinct difference in obsolescence and working to preserve resources as long as possible.

The value it adds:

These options directly impact the treasury in a few different ways. Depending on the goal the DAO can focus on non-spend preserving resources(Not using treasury funds), leaning into our FOX resources(shifting the treasury spend to a different asset), or a blending of these two options. This can significantly decrease our DAO’s monthly compensation spend providing and preserving treasury assets and longer uninterrupted operations.

Looking toward mid to longer term solutions that can address larger organizational concerns that are broader than any individual WorkStream. In providing examples and possibility, WorkStreams have options preventing crippling cuts and enabling a greater focus on overall health and capability.

Specification

  • The DAO for the month of July had an estimated spend of $398,891 for compensating contributors within all WorkStreams. This includes any 1 to 1 payouts of USDC or FOX, this doesn’t include “boosted” FOX payouts.

    Non-spend is exactly that, this can happen in a few ways but the result is not spending a resource. When it comes to compensation to accomplish non-spend, people can choose to take less for the benefit of the whole or typically “management” will determine what tasks or roles to remove or stop compensating.

    Shifting spend is just transferring the associated expense to a different asset, it is still a spend and could have known/unknown immediate as well as future implications. Switching to a volatile asset has risk and reward to both sides, but for the treasury it is still a spend and with possible added risk. This is a primary reason for transitioning to stable coin spend in the first place.

    A blended approach that looks to offset dramatic swings for either extreme. In working to offer a mix of non-spend and shift of spend the proposal offers a few blended options.

    What this proposal offers is an adjustment to how current compensation could be addressed and ask all FOX holders, voters, and most impactfully contributors to lead by example versus difficult eliminations.

    Being that everyone’s appetite for savings and ability to impact living expenses is different, I have provided a few different examples and levels of adjustment hoping to better preserve the human assets providing utility, capability, and capacity across all WorkStreams.

    These examples offer a range of monthly savings that directly affects our monthly spend and ultimate treasury capability. This range on the high end is $130,395.98 a 32.7% decrease to our monthly spend to $26,214.43 a 6.5% decrease on the lower end. All of the provided current examples have taken in account the current makeup of all of the WorkStreams, only so far taking into effect the non renewal of the security WS and the new renewal proposals that are already approved or posted with contributors listed.

    So once again we keep our current capacity and capability and still are able to enact significant savings. I am going from data I was able to gather and can anticipate that some figures were not readily available and could be updated as needed.

    The following are blended examples using numbers that focus on a greater balance of non-spend and shifted spend. As with all of the provided examples these numbers are just placeholders and can be adjusted as seen fit.

    Option 1 is a (5) Month term with two slight variations. The first part is a 18% reduction of compensation for contributors with active Sablier Streams for the full period of 5 months.

The second piece has the variations around minimal thresholds of required compensation paid in FOX, 1a (12%) and 1b (15%)

  • .
  • The third part is a 15% reduction of compensation for 1 month of the stated period for all other WS members, this month would be determined in advance by the contributor.
  • The final stated piece is a minimal threshold of FOX compensation of 25% for 4 months of the term, excluding the month of compensation reduction.

1a would create a monthly savings of $124,220.06, $67,845.46 of non-spend and $56,374.64 dispersed in FOX. Over the full term non-spend of $245,727.10 and $250,202.07 FOX disbursement, total savings would be $495,929.17

  • , and remember this includes the current WS capability.

1b numbers are as follows, Monthly savings of $130,395.98 of which $67,845.46 is non-spend and $62,550.52 dispersed in FOX. Over the full term non-spend is the same as 1a but FOX disbursement is $439,436.27 and a total savings of $526,808.77

  • .
  • The following are non-spend focused choosing a greater non-spend, and relying less on a shift of asset spend to FOX.

    Option 2 also has a (5) Month term with a higher reduction to Sablier Stream contributors but no mandatory payout in FOX. The reduction and mandatory FOX payout stays as outlined in option 1 for contributors without a FOX stream. Monthly Savings breakdown is $115,650.84 total, $83,979.93 in non-spend and $31,670.92 in FOX distribution. Term savings is $326,399.43 in non spend and $126,683.67 in FOX disbursement for a Total savings of $453,083.10

Option 2b is similar to option 2a but has an added month of reduction for contributors without current streams of FOX, the breakdown of the full (5) month term is as follows: $349,774.48 of non spend savings and $126,683.67 in FOX disbursement for a total of

  • $476,458.15

The next examples are currently exclusive non-spends, no shift of spend and each have a term of (5) months.

Option 3a is using an even 5% multiplier of the individual’s percentage of total average WorkStream compensation which is $8,196.76. This produces a savings of $26,214.43 a month and a (5) month term savings of $131,072.14

  • .

Option 3b is using an even 5% multiplier plus a 4% addition if receiving a FOX stream of the individual’s percentage of total average WorkStream compensation. This produces a monthly savings of $34,450.24 and a (5) month term savings of

  • $172,251.22

And the last section’s focus is on shifting spend to a different asset (FOX) and attempting to reduce the impact to our treasuary’s stable assets.

Option 4a has a (5) Month term and the reduction is in the form of mandatory minimum flat rate of 20% FOX compensation. This produces a monthly stable savings of $75,039.53 and a term stable asset savings of

  • $375,197.57.

Option 4b has a (6) Month term with the same minimum flat rate 20% FOX compensation. It has the same monthly stable savings of $75,039.53 but a term stable savings of

  • $450,237.20.

The permutations are only limited by our own appetites to change and the community’s willingness to communicate any such ideas or calculations. I have included a spreadsheet that lists out the collected data and calculated formulas for anyone to view. [view] (DAO Austerity - Google Sheets).

Benefits

The potential for savings is available. It is up to the community to determine the scale and scope of the benefits of any of these behaviors. This proposal is about addressing the needs of the treasury and working to preserve capability and the capacity to achieve. Within the provided examples are some different strategies, one has a greater focus on non-spend protecting treasury resources, a second focus is on using the FOX resource that we have to help off-set the community ask, but still having a larger spend. And lastly provided are a few blends of the two approaches.

With the capacity of treasury assets increased the DAO can create options to how funds are used and help ensure the future capability of not only the WorkStreams but also the organization.

Drawbacks

This is a contributor’s livelihood and affects each person differently, this while looking to help the larger community, needs productive and inclusive dialogue from all parties. Without this participation the presented solutions can cause additional harm and disproportionately affect one or more groups.

2

Something about the way this is worded makes it difficult to distill a summary of what’s being proposed. Like there’s lots of metadata, but no summary statement.

Is the tl;dr that DAO contributors take a short term pay reduction while not losing headcount in any individual workstream? Do contributors get reimbursed retroactively when the bear market recovers?

3

Summary edited thank you. Your tl;dr is close, short term pay reduction and a blend of minimal FOX payment, with different examples. I didn’t address retroactive reimbursement yet but could be a included discussion point. Thanks again for your help.

4

I appreciate you putting tangible and well thought out options on the table for the community to consider !

As I am not a paid contributor of the DAO I cannot really weigh in or make assumptions about what the paid contributors are or are not willing to do on this front.

Before voting for a measure like this, I would want to hear from contributors if any of this is viable from their perspective and get a sense of who/which contributors we might lose over measures such as these(which may have the same effect as cutting contributors from workstreams anyway).

Many contributors have already indicated they will be taking a sizable portion of their pay moving forward in fox and/or boosted fox, which already cuts down on some of these numbers in terms of stable spend, was that taken into account in your calculations and potential savings?

Ultimately I like seeing options presented to help the DAO save money and elongate runway, but they are only tenable if the contributors are willing to take these options, otherwise it may just lead to the same losses of human capital that cuts in Workstreams would cause with little additional benefit.

5

First GM, and thank you for thoughts and as always helpful discourse, I always look forward to your comments and perspective.

discourse-post-upload20231125-65354-zsozg2.png jonisjon:

Before voting for a measure like this, I would want to hear from contributors if any of this is viable from their perspective and get a sense of who/which contributors we might lose over measures such as these(which may have the same effect as cutting contributors from workstreams anyway).

Agreed, I definitely want to hear from contributors as to the viability, while I hope that we as a community can find ways to maintain capability and capacity, I understand that not all ideas work for every individual, holding hope of finding compromise and common ground with numbers that can make sense and help us reach the DAO’s determined goals.

The current numbers are recent spend and do not reflect the proposed FOX or boosted measures. I wanted to try and keep this “clean” or a direct correlation to WS spend from contributor compensation, but I do see the possibility in which these numbers can be easily adapted to the possibilities submitted in the examples. I don’t have all the recent numbers for every WS contributor as to FOX % or Boosted FOX as to it isn’t listed for all or at least at the time I was putting the spreadsheet together in my free time.

Thank you again

6

Several of the strategies suggested involve DAO contributors taking a pay cut if they are getting a Sablier stream. This would potentially put added sell pressure on FOX.

Example: “I’m not making as much money now so I need to sell some FOX to make up the difference.”

Overall this isn’t a terrible idea IMO, but I think it will be difficult to get everyone on board with taking a monetary sacrifice (pay cut).

I will keep an eye on this forum post and am interested to see what others think. Props to you for coming up with creative ways for the DAO to save $.

7

Thanks for putting this together - I always appreciate your thoughtful, disarming contributions.

I think this is a viable option for cost savings, however from my workstream’s perspective specifically we did just make 15%+ cuts across the board, plus laid off 30% of the team, so I don’t believe taking additional paycuts at this time would make sense for our workstream. Great minds think alike, to a certain degree here and what you’re suggesting is what we did for our July cuts in order to help save money. Not to say there aren’t more creative ways to continue widdling down our spend, but I do fear that hacking away at people’s salaries time and again can be incredibly demoralizing and hard for bringing in the talent we need in the never future (like yesterday near future).

I’m guilty in this as well, but do feel like a lot of the conversation has swung towards cuts cuts cuts instead of - "how can we build, build, build over the course of the next 6-12 months, so we gradually increase our net worth as a company…thus making these cuts less and less necessary.

Another aside, while the sablier stream is something some ex-centralized employees have, I look at that stream as my reward for my time at centralized ShapeShift…not necessarily for the direct hour to work ratio I’m committed to now. It influences the way I work and contribute now, ie: I want this project to succeed, I want people to be happy with their job, the platform to be as sexy as can be, etc.

This model could be something that works, or maybe could work again in the future if measures like this need to be taken, but with the asynchronous approach to budget cuts that have happened over the past 2 months, it seems like it could cause a lot of problems between who should have to abide by this and who shouldn’t.

Thanks for opening up this dialogue.

8

GM and of coarse thank you for adding perspective. I understand that the cuts already made are of consequence and concern, It would have been nice if I could have offered this before some hard choices had already been made. But In offering this, the hope is to prevent continued unnecessary loss of resource and the possibility of gaining it back if still readily available. That said I do see possibility that numbers can be adjusted in ways that still can provide utility in addressing contributor and community concerns. I will add some additional modeling examples, in hopes of displaying further possibilities.

9

The Streams were setup by SS AG, nothing really todo with SSdao, unless im totally off?

10

I have taken into account feed back received so far and edited the draft proposal and added some additional examples for feedback and consideration. Thank you everyone that has taken the time to offer ideas and thoughts.

11

I hope that the draft edit’s and additional examples can provide additional context and simplification of areas of concern. Thank you for taking the time

12

Thanks. it IS easier to read. I dont know who has any Sablier streams from SS Dao. (oh now that i say that, i think some in the ENG were offered something as an incentive. i forgot) But bit wierd to target those that got something to boost up their interest. Noone outside of ENG is getting a Sablier stream from SS DAO that i know of. (willy? correct me?) 2) we just did alot of cuts. asking for more instantly is going to be bloody.

But i can comprehend most of the big thinking now!

13

GM ShapeShift community,

While the market moves along with no real determined direction and the DAO works to continue forward, I still very much feel for the need in discussing the DAO’s approach to fiscal responsibility. I did spend some time gathering data and building modeling formulas in the examples spreadsheet. At this point I see that (7) people have clicked on the provided link, now I don’t know the active forum numbers but to me that seems low. I don’t feel that as a community we have had the ability to come to some form of conclusion, but get the indication that the conversation has landed with the idea that the WorkStream cuts made are sufficient in buying a “perceived” runway of stable assets and we have “kicked” the can of responsibility a little further down the road. In not having this conversation we are limiting the DAO’s options and capability to meet future challenges, both known or unknown.