TIP 28: Threshold DAO funding for the Relay Maintainer
Vote Type:
Token Holder DAO, Snapshot
DAO Elected Representative Sponsor:
Will
Overview:
This is a proposal to request that the Threshold DAO funds the full costs of the relay maintainer in T for a timeboxed period of 5 months starting with June.
Milestones and Deadlines:
At the end of each month the Threshold Council transfers T to a Keep wallet based on the variable cost of the maintainer for that month.
Who is Involved:
This proposal directly involves Keep, the Threshold Treasury Guild and the Threshold Council.
Why:
The relay maintainer is a major cost that up to this point has been burdened by the Keep team. Moving this cost to the DAO allows Keep to allocate resources more impactfully which will ultimately positively impact the DAO and the protocol.
Detailed Summary:
Community discussion on this topic leading up to this proposal occured in the #governance channel on Discord and at regular Threshold Treasury Guild meetings.
The Keep team will continue to monitor and top up the relay maintainer with ETH. The Threshold DAO will fund the full cost of the relay maintainer on a timebox of 5 months starting with June. This will be in the form of T transfers to a Keep wallet at the end of each month. The total T will be determined by the amount of ETH used to keep the relay maintainer going for that month.
ETH is a more scarce resource for the DAO and the Threshold Treasury Guild does not want all of its upcoming treasury diversification efforts to go towards relay maintainer expenses which is why this proposal includes T.
Beyond the process objections I raised in discord, I have several questions that can hopefully be clarified before the snapshot concludes.
What is the amount of gas required to operate the relay on a monthly basis? It’s been quoted as ~$150k historically and estimated to be ~$24k per month with the recent ETH drawdown. If we have an idea of the amount of gas consumed we can more easily anticipate likely costs under different scenarios.
How does Keep plan to convert the T into ETH? Will this be done via market sells on the Curve teth pool, OTC, or some other mechanism?
It’s worth discussing whether Keep should purchase a sufficient amount of ETH today to cover the anticipated gas costs. That way the DAO could lock in the ~$24k monthly cost regardless of future ETH price movements. This requires knowing the amount of gas required as per question 1.
Keep already has ~400 ETH in its diversified treasury. So we would only convert T to ETH via algorithmic TWAP with a large market maker if necessary. Most likely unnecessary for the next 5 months.
We have already done this, but it shouldn’t be Keep selling a call option to the DAO with a strike price of $24K per however much ETH it takes. It’s about the DAO taking ownership of the Relay, so it is about the DAO picking up whatever the ETH cost is monthly for the next 4-5 months for the Relay and sending it to Keep (who will fund the Relay as needed).
Hedging my statement before I make it: I appreciate Thesis and the KEEP team for all of the work that they’ve put into this product. I know many of you personally and know that you are working hard on this.
The tone assumes that this is a DAO responsibility and at times it has felt like we are being strong-armed into a decision. While I recognize that we likely are being strong-armed into a decision (with or without the discussion) due to the rock-and-a-hard-place, I think we should have a higher standard for the discourse.
Being part of the DAO right now feels a little like being a kid who just graduated college thanks to your parents investment in you, but when you get home they drop their debt and mistakes on you and then say you should “take ownership” of the liabilities they have accrued. The DAO does not need to do this, rather it should do this. The elephant in the room is that this relayer is only a burden because (1) the TBTC development timeline has been pushed back significantly and (2) the relayer was not built optimally. As a community we have had extreme patience with this primarily because we generally share the value of “ship right not fast”, but we have another value that we want upheld:
Honest and transparent ownership with goal oriented discussions.
I think we could all benefit from trying our best to uphold this as a standard going forward.
jakelynch sums up my take on the topic quite well. The elements of appreciation for this dev team, taking ownership and rock+hard place are well stated. All I can add is that I’d expected the considerably higher KEEP/T vending machine ratio was arrived at so it could be leveraged for such outlays - I was quite surprised by the ask, so with an eye to the future, the other to fairness, I raised my hand.
The vending machine ratios are based on the circulating supplies of the two projects at the time inflation was paused for NU. So that KEEP would be exchangeable for 45% of the supply and NU would be exchangeable for 45% of the supply and 10% set aside for the treasury.
Both teams continue to operate independently with their own resources.
It’s good that we are taking time to have a healthy discussion on this.
The outcome here is determined by a DAO vote. That shows two important things:
The DAO has been increasingly empowered to make it’s own decisions regarding this protocol
By default this isn’t something the DAO has to do
However, I agree it is something the DAO should do.
Why? Selective empowerment and ownership over this protocol isn’t fair.
As a DAO we shouldn’t take all the positive (decision making power, treasury ownership, discretionary funding, more) but not be willing to take the negative. Especially when the positive far outweighs the negative. At present the DAO treasury holds more than $42M in assets on chain which is viewable here (which includes an eth loan and around $460k in KEEP tokens that was sent from Keep to help with liquidity rewards).
I understand there is frustration about the v2 timeline but this doesn’t need to be a discussion about or outlet for that frustration (slow and steady wins the race here). This isn’t a matter of honesty and transparency (a comment I didn’t think was fair btw @jakelynch).
It really is more simple and more steam lined. So, let’s get to the heart of it:
The reality is the Keep team has been really solid with the DAO in the past. We have worked hard to empower and support the DAO. Evidence for that is all over the project. Keep has been funding the relay maintainer for a long time. The Keep team, understandably so, did not want to continue to burden that burn especially given market conditions. So, the Keep team asked if the DAO was willing to step up and use some of their assets to help. An ask that isn’t going to crush the DAO. To make it easier, I made sure that the proposal included compromises that took into account feedback from DAO members. Those being this cost is paid in T and there is a time box.
Now the DAO is going to vote on it.
This shouldn’t be divisive either. Regardless of the outcome we will all continue to build together. Bear markets are tough but we are going to come out of it with stronger products and a stronger DAO. It will be bumpy ride but one that in the end I know will be well worth it.
This is apt. My apologies for the perceived tone here — @dougvk asked me to review his post, and I didn’t catch it either.
I’ve spoken about v1 to v2 migrations for over a year. The liquidity crunch we’re about to get hit with, as well as the relay maintenance costs, are also a direct result of community push-back on the migration plan we’ve put forward. We’re letting “ship right not fast” harm the project, both in the DAO, and on the Keep team, IMO.
EDIT: Apologies for the lack of citations here, this discussion has ranged across multiple Discord servers, calls, etc. I just want to make sure it’s clear that this has been a long-running discussion, and not just a product of development time.
Unfortunately, the suboptimal part about the relayer is that updating it is a public good. I’d love suggestions on how to go about avoiding those in v2 @jakelynch.
The snapshot was pulled down based off of community feedback. The proposal is currently being modified by @Will based on a community conversation that occurred on Discord today. In the coming days everyone should expect to see a new proposal, any final comments and a new snapshot.
I don’t have enough time to keep up with all the discussion threads in our Discord that I’d like to (maybe that’s an opportunity for a bounty related to filtering/surfacing key discussions in a channel or other location that makes it easier to both keep up and to not miss something?), so I didn’t see the discussion on this and only heard what was discussed verbally on last week’s community-wide call.
So coming at this from the perspective of an active member of the community (mostly as advisor to Threshold Marketing Guild), a few thoughts:
While some discussions may have gotten a bit tense, it’s really good to see the efforts people are making here to share how the discussion feels and to preface feedback with common ground, particularly praise for the hard work everyone is going. Also excellent to see the effort to review posts for tone and acknowledgement that even then non-ideal descriptions can slip through.
Any time you’re doing something unprecedented - and in addition to the merger, we have cutting-edge technology and products to educate the world about - there will be challenges that are harder to anticipate, and it can be difficult even when anticipated to determine how much time to invest. This requires not only more communication, but also the kind of meta conversations happening here about how/where/when we communicate. Which is yet another stream for community members to try and monitor and contribute to (as noted, I came very late to this one so didn’t have context).
I’ve observed that often when disputes arise in complex organizations fundamentally it comes down to different parties having varying expectations - and varying degrees to which expectations have been explicitly articulated and discussed. I don’t know to what extent we’ve had discussions about the expectations of the Keep and NuCypher dev teams vs. the DAO and stakeholders, but now strikes me as a really good time to take a step back and have a meeting about how this is going and how what if anything we’d like to add/change moving forward (so perhaps in the form of an agile sprint review: what worked well, what didn’t work as well as we’d like and what takeaways can we align on for the next “sprint”).
I’m honored to play a small role in building the future with all you inspiring and highly capable and creative people.
For the purpose of clarity, suppose that for some unforeseen reason, the maintainer is required for more than the 4-5 months estimated - what would come next?
I am sure this is an unlikely scenario, but it is worth thinking about. Would there be another request for additional funding from the DAO? Would Keep pick the cost back up at that point?
