Vote type: Token holder DAO snapshot, single-choice voting (yes/no/abstain)
DAO-elected representative sponsors: @JohnPackel @Eastban
Timeline: 7-day discussion period followed by 7-day Snapshot vote
tl/dr
- Following tokenholder approval to create Threshold Labs per TIP-98 and TIP-100, tLabs submits a year-1 budget request for $2,850,000
- This number reflects at-cost projections with zero profit margin added
- Proposed milestones by which to measure tLabs success include doubling revenue to 50 tBTC and increasing TVL by 60%, to 7,500 BTC
- tLabs has commenced operations based on $250k fronted by the former Treasury committee, which will be deducted from the total
- The former Treasury committee created an expense payment plan based on estimated tLabs budget; Threshold Committee will update it to reflect the actual
Purpose
The stated purpose of creating tLabs was outlined in TIP-100 as addressing core challenges facing Threshold and tBTC: 1) growth coordination challenges and unclear market position, 2) stalled tBTC product and technical development and 3) limited tokenomic model.
Threshold became “default alive” (the protocol and network can operate sustainably and profitably) thanks to significant cost reductions from eliminating emissions (modified TIP-92), discontinuing investment in thUSD and putting it in maintenance mode (TIP-102) and reducing by $1.1million/year the cost of Threshold DAO committees and roles via restructuring in anticipation of tLabs executing on tBTC development and growth (TIP-103).
The 3 challenges are being addressed by the newly formed tLabs team, and in a section below milestones are proposed for outlining the efforts planned and underway, as well as measuring success.
Budget request
In order to achieve these goals, tLabs submits a 12-month budget request of $2.85 million. While competitive and other considerations prevent the detailing of planned expenditures, we can share that staff employees make up 66% of the total and include Technology, Product, Business development, Ecosystem growth, Marketing and Operations. The planned budget category totals are:
- Paid employees: $1.88M (66%)
- PR, marketing & growth: $570k (20%)
- Outsourcing, audits, miscellaneous: $300k (11%)
- Legal: $100k (3%)
Note that MacLane waived all compensation as CEO, and as also stated in the discussion on TIP-98, “There will not be a tLabs treasury and annual budget requests will be at-cost without a profit margin baked in.”
Milestones
TIP-98 approved that “tLabs lead protocol, product, business development and marketing functions for tBTC”, stating that high-level goals would include increased tBTC TVL and bridge velocity, upgraded tBTC core technology, and developed tBTC product and usability.
tLabs proposes the following milestones to measure success in year one:
- Double revenue to 50 tBTC
- 60% increase in TVL, to 7,500 BTC
Threshold revenue (which is currently from redemption fees only) was ~17 tBTC in 2024 and is currently on track for ~25 tBTC in 2025. Doubling it to 50 tBTC will cover ~80% of Threshold expenses at a tBTC price of $100k (it’s $104,255 at time of writing) – a very large step toward profitability (inclusive of tLabs’ budget request).
tBTC’s TVL hit a peak of 5,274 last November, dropped to 4,190 in March and has averaged ~4,700 over the last 7 months (in part owing to velocity of redemptions; we hit 20,000 minted a few weeks ago and are now approaching 21,000, while redemptions total more than 16,000). Increasing TVL 60% from current to 7,500 BTC should accelerate our momentum, draw increased attention and support the growth narratives tLabs is driving in the market (note the recent media coverage and market sentiment following a first press release a few weeks ago).
Rather than offer more tactical milestones based on the growth, tech and product workstreams underway, tLabs believes that these two milestones put the emphasis on the growth Threshold needs to unlock even larger opportunities – and which tokenholders emphasized repeatedly during the discussions leading to the formation of Threshold Labs and the DAO restructuring.
Logistics
Based on passage of TIPs 98 and 100 (which included an expected budget range of $2M to $3M), tLabs commenced operations and the former Treasury committee fronted a payment of $250k. This amount will be deducted from the total (budget begins April 1, 2025 and runs through March 2026). Any unused budget will be returned at the end of a year, or rolled over to a future budget.
Upon Snapshot approval of this TIP, the Threshold Committee will update the expense payment plan created by East and the former Treasury committee (see overview in the Expense Planning section of TIP-103) to reflect the actual amount, then provide 3 months of average expenses in an initial transfer, followed by a monthly transfer to tLabs.
Members of the tLabs team are available for a community call to share high-level strategy and initiatives designed to achieve the milestones above. While tLabs will remain in close contact with the Threshold Committee and DAO contractors on at least a weekly basis, the team also proposes a quarterly community call to share updates and progress toward milestones.
Also upon approval, tLabs and Threshold Foundation will formalize the relationship in an agreement reflecting this budget total, milestones and cadence for updates.
