(Note: For an expanded version of this proposal, including deeper context and further exploration of this topic, check out the initial draft proposal.)
This proposal relates to the creation of a ShapeShift DAO Workstream dedicated to tokenomics. The workstream would focus on a broad range of issues related to treasury management and FOX value-accrual (as outlined and scoped below). Also defined are the workstream’s initial structure, budget, and success metrics.
This proposal, if passed, would also install a Workstream Leader and set aside funding through March 31st, 2022. This initial phase will allow the community to assess whether the workstream’s activities, leadership, and budgetary outlays are a net positive for the DAO.
Currently ShapeShift has an ad hoc workstream focused on tokenomics, with vibrant discussions already taking place–primarily around treasury management questions. These discussions are already bearing fruit (for instance, around the creation of a treasury management committee), but could benefit from additional structure and strategic direction.
Following community approval of this proposal, a tokenomics Workstream would be created, existing alongside other workstreams in ShapeShift’s org chart. The workstream’s leader would be Kent, this proposal’s author. The tokenomics leader would be tasked with bringing clarity to the current ambiguous structure and strategy, as well as providing guidance and direction to other community members operating in the workstream.
Tokenomics is the lifeblood of most successful DAO’s. When a DAO has its own token (a governance token, in the case of ShapeShift), it unlocks a host of exciting possibilities, including:
Funding for the DAO via its treasury
- Sustainable business models that were previously not possible
- Value-accrual mechanisms for holders of the token, of which a subset are users of the ShapeShift platform
Clearly defining the Tokenomics Workstream and a cohesive strategy will enable the ShapeShift DAO and FOX Token to achieve its greatest potential. The current workstream, operating as a placeholder until something official could be built out, has already made great strides in terms of a.) engaging community members and b.) contributing to discussions and decision-making around topics such as treasury management and engagement with novel DeFi protocols.
In light of the progress that’s already been achieved without a fully-funded and clearly-defined Tokenomics Workstream, it’s easy to imagine how much could be accomplished once these elements are in place. Equally important, a workstream budget would incentivize more community members to spend their time, effort, and brainpower on these issues. Additionally, these economic incentives might also bring invaluable new talent to the DAO.
The Tokenomics Workstream will focus on two broad questions:
How should the DAO manage its treasury?
- How will value accrue to FOX and holders of the token?
What are the core responsibilities of the Tokenomics Workstream Leader?
1.) Define the strategic goals of the Workstream.
2.) Build a team of contributors who can help make those goals a reality.
3.) Work alongside that team as the Workstream devises and employs the tactics necessary to achieve its goals.
4.) Revisit and revise the strategic direction as necessary.
What constitutes success?
For this first four-mouth term, initial deliverables will include:
1.) Creating a “State of the FOX” snapshot that provides an updated view of our treasury, current partnerships, and value-accrual strategies. With a clear picture of where we are now, we’ll be better-positioned to execute on our strategic objectives.
2.) Creating strategic treasury management diversification goals, for consideration by the Treasury Management Committee.
3.) Diversification of the treasury (pending Committee approval).
4.) Building a team of tokenomics contributors.
5.) Contributing to the creation of new value-accrual mechanisms for FOX.
Who is this guy, and why should he lead this workstream?
I (Kent) humbly submit myself to the community as the proposed leader of ShapeShift Tokenomics, owing to my relevant background and experience.
From September 2018 until August of this year, I served as Head of R&D at (centralized) ShapeShift. (Previously I worked at ShapeShift as a marketing strategist–a position I started in February 2017.) In R&D I had two main areas of focus. I believe both are relevant to the tokenomics role:
1.) Helping to incubate Microtick, a decentralized short-term options trading protocol that can also serve as a censorship-resistant oracle.
2.) Strategic research and analysis around all things crypto.
Part of my job was to help ensure that ShapeShift was never caught flat-footed in the fast-changing crypto world, and was better-positioned to spot risks and take advantage of emerging opportunities.
To this end, I carried out research around various relevant topics, such as new blockchains, NFT’s, DeFi, Layer 2, and cross-chain bridges. The resulting reports were disseminated for internal use. Several were also repurposed for public-facing “thought leadership” pieces:
Additionally, it appears I’ll soon be a member of the newly-created Treasury Management Committee. As described above, treasury management is one of the core functions of the proposed Tokenomics Workstream.
How will the workstream be structured?
This proposal clearly defines only one initial position: Workstream Leader. This flexibility will allow for multiple contributors to emerge in the months ahead.
Additional roles likely include:
Degens: DeFi experts who can help surface potential new opportunities for treasury diversification and growth, help to accurately assess their risk/reward profile, and advise on (or actually execute) the entries and exits from those positions.
Tacticians: Community members who can jump in to help execute our strategy and manage projects, where necessary.
Outreachers: Tokenomics entails constant liaising with other DAOs and crypto projects. Whether we’re talking with a DeFi protocol that offers new diversification options, or talking to a blockchain that would like to integrate with the ShapeShift platform, building and cultivating close relationships are an important function of this workstream.
Should this Workstream be created, it’ll need funding for bounties, salaries, and operating costs as follows:
Workstream Leader: 0 FOX (salary), $45,500 (conditional performance bonus)
The Workstream Leader has no associated salary for this first term. However, should the Workstream meet its goals over the following four months, the community will have the option of rewarding its Leader a $45,500 performance bonus. This bonus equals four months of the standard Workstream Leader compensation package, multiplied by 0.7 to compensate for the fact that it’s unclear exactly how much work this will entail. (In other words, it would be unfair to other Workstream Leaders if this position paid the same amount for less work).
Issuance of the performance bonus will be tied to the accomplishment of all the success factors outlined above, as well as the community’s overall assessment of the leader’s performance.
Bounties and salaries: $50,000
Given the emergent nature of a brand-new workstream, it’s likely that we’ll want to initially employ bounties for specific projects and/or duties, rather than create salaried positions right off the bat. As the workstream gains clarity, we may consider adding salaried positions later in this initial four-month term. Performance bonuses could also be considered for Degens and other trading-related activities.
Note that the total requested for contributor bounties and salaries may not be necessary; leftover funds could be rolled over to the subsequent workstream term or moved back to the DAO, with that decision left to token holders.
Total requested funding: $95,500
One could argue that if the DAO were very budget-conscious, it could continue to operate Tokenomics on an ad hoc basis, without a leader and a budgetary outlay, and still make progress on important related issues.