SUMMARY:

The most recently-approved phase of the Tokenomics Workstream ended on June 30, 2022. This proposal outlines the scope and budget for the following six months, through the end of 2022.

THE PRIMARY GOAL FOR THE SECOND HALF OF 2022:

Preserve and extend our runway

The paramount, number-one goal of Tokenomics in Q3/Q4 is to help ensure that the DAO remains financially solvent for as long as possible. There are a handful of core tools we have at our disposal to make this happen:

a.) An updated and accurate view of how much runway we have remaining.

This is being tracked by the DAO Runway Spreadsheet I’ve created, which factors in our current stablecoin reserves (all visible on-chain or via the DAOshboard), our monthly budgetary outlay, and debt service expenses.

b.) Our Olympus FOX/USDC bonds

c.) Selling FOX on the open market

d.) Other tools, such as Hedgey OTC or Porter bonds

e.) Budget austerity

In the wake of the violent downswing in both FOX and the broader crypto market, various Workstream Leaders have reacted by enacting or proposing budget cuts. While this is not a fun step to take, we’re in good company; many crypto projects and companies, big and small, are taking similar steps. While the Tokenomics Workstream has no ability (and no desire) to tell other Workstreams what to do with their budgets, it can still play a helpful role in modeling various scenarios, providing timely updates on the status of our finances, and offering advice on how to move forward.

Note that this section lacks a specific stablecoin goal, like the Q2 proposal. I hesitate to shoot for a specific target because: a.) the community has expressed discomfort at the idea, and b.) it’s difficult to advocate for a specific amount of stablecoin accrual in this highly depressed market, where liquidity has dried up and buyers are harder to find. Additionally, the community currently seems divided on whether we should continue to accrue stablecoins or simply make our stand with our current warchest. (I, for one, am strongly in favor of continued stablecoin accrual).

That said, 18 months of runway remains a good goal to shoot for–albeit an aggressive one in this bear market. It may be possible to get there through a combination of the tools described above–for instance, FOX bonds combined with monthly budget reductions. This would be much more feasible if FOX sees a sustained increase in price at some point.

A more conservative goal is to aim for the DAO to raise enough stablecoin income each month to pay for its monthly expenses. 10 months of runway is perfectly feasible over the long-run if we rein in our budget and increase our stablecoin income.

ADDITIONAL GOALS

Build upon the existing DAOshboard

Now that it’s created, what else can be done?

The logical next steps are to create ways to more easily visualize this data, detect trends, and suss out information and conclusions that could be beneficial from a strategic intelligence standpoint.

Contribute to new value-accrual mechanisms.

Reprising this goal from last quarter is an easy choice. In Q2 the focus was on FOXy. This time around, we have Yieldies to champion. This new financial primitive is concurrently moving though the audit and governance processes. Upon its release, the Tokenomics Workstream (along with the TMDC) will provide feedback and input on its strategies and parameters.

The next few quarters will also be a great time to assess new business strategies. Bear markets provide a few silver linings, and this is one of them: an opportunity to sit back and calmly assess what’s working, what’s not, and how to build back better for the next cyclical upswing.

Continue to increase awareness of the DAO.

I already have some potential opportunities lined up for spreading the word via articles, podcasts, and other avenues. With the assistance of our expert PR team, I look forward to continuing to help on this front.

BUDGET STUFF:

Workstream Leader Compensation

The Q2 proposal included a 14,000 USDC/month Workstream Leader salary–an amount commensurate with other Workstream Leaders.

This new proposal stipulates that the Tokenomics Workstream Leader will instead receive $14,000 worth of FOX each month. This will help to reduce our monthly stablecoin spend. Additionally, by going “Full FOX” I want to signal my own deeply-held belief that we’ll survive this bear market, find a lasting product-market fit, and wind up in a much stronger position than we currently are. It’s my sincere belief that WAGMI.

In order to allay any concerns about the FOX immediately being converted and dumped on the open market, this proposal also stipulates that these payments will be made via Boosted FOX, with a 12-month timelock. Per the Boosted FOX proposal, this option provides an extra 20% of FOX following the end of the timelock period. (In the unlikely event that there’s a technical issue preventing Boosted FOX payments from being made, payment will default to regular, non-timelocked FOX.)

Funding for Workstream projects and bounties

In Q2, the Tokenomics Workstream spent a total of 17,681 USDC. These expenses included DAO contributor compensation for their work on the DAOshboard, an analysis of our Ichi AngelVault, and the Boosted FOX proposal. The largest expense (roughly 14,000 USDC) was for an audit of the Yieldy smart contracts.

The Workstream currently has 32,000 USDC, of which 25,000 has been earmarked for the completion of the Yieldy smart contract code. That payment will leave us with 7,000 USDC for Q3/Q4. This proposal requests an additional funding of 13,000 USDC, payable up-front (concurrent with July payroll), which will provide the Workstream with 20,000 USDC to spend in Q3/Q4. These funds could be spent on all manner of projects, from code reviews to detailed financial analysis to in-depth audits of projects that are seeking to partner with the DAO.

POTENTIAL DRAWBACKS OF THIS PROPOSAL:

Imagine a ShapeShift DAO where there was only an unofficial, non-funded, Tokenomics Workstream. In this scenario, a lot of meaningful work would still get done; the TMDC would still function (its budget is not a subset of Tokenomics), and contributors could still find myriad ways to collaborate–all without needing to spend funds from the DAO treasury on Tokenomics functionality or leadership.

WHAT THIS VOTE DOES:

For the period of July 1st, 2022 through December 31st, 2022:

1.) Fund the Tokenomics Workstream with a one-time distribution of 13,000 USDC (payable in July) and a monthly Workstream Leader salary of $14,000 worth of FOX (payable in 12-month-timelock Boosted FOX).

2.) Re-elect Kent as the Tokenomics Workstream Leader.