GIP-78: Gnosis Guild Treasury Allocation (Proposal#2)

Governance GIPs
1 
GIP: 78
title: Gnosis Guild Treasury Allocation (Proposal#2)
author: Gnosis Guild
status: Draft
type: Funding
created: 2023-01-30
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Simple Summary

The proposal will fund the Gnosis Guild’s operations for one year. The Gnosis Guild treasury allocation would continue to foster needs-driven development for the GnosisDAO and of the Zodiac ecosystem at a total of $3,823,575 paid in 56% DAI and 44% GNO for our contributor compensation plan, administered by Gnosis Guild following the vesting schedule laid out in the Gnosis token plan.

Abstract

Gnosis Guild is a society dedicated to interdependent software and the growth of the Zodiac Standard. In 2022, Gnosis Guild completed a year of needs-driven development for the GnosisDAO and continued to grow the Zodiac ecosystem. With this proposal, Gnosis Guild requests funding to continue its development of GnosisDAO’s infrastructure, expand the Zodiac collection of tools, and further establish Gnosis Chain as an ideal ecosystem for DAOs. The budget allocation includes funds for key personnel, operations, grants programs, and other areas as needed to sustain this commitment.

Motivation

We are a small, but growing, team rooted in conviviality, mutualistic ownership, and experimentation. Since our last proposal, a year ago, we have completed many projects focused in 4 main areas: supporting GnosisDAO, developing novel treasury management tools, developing the Zodiac ecosystem, and convivial software experiments.

An effective and productive DAO implicitly spreads the technology on which it’s built; this is the core of our symbiotic relationship with GnosisDAO, and by extension, Gnosis Chain. In these early days of our organization, it is important to demonstrate the effectiveness of Zodiac by supporting Gnosis’s efforts to promote decentralized infrastructure. In the past year we have completed:

Gnosis has one of the most productive DAO treasuries, due to Karpatkey’s skillful management. Our tooling plays a key role in their day to day activities, and was a core component to Karpatkey winning the bids to manage Balancer’s and ENS’s treasuries. By supporting the effective management of Gnosis’s treasury, we help ensure the long term support of Gnosis Chain. In the past year we have built:

  • Zodiac Roles Module —The Roles Module enables enforced granular, role-based, permissions for attached modules. In combination with the Pilot App, Karpatkey has utilized these tools to securely manage treasury funds in a non-custodial way, and was a key factor in their successful ENS treasury bid. Version 2 of the roles mod will allow for even greater granularity and modularity.
  • Pilot Extension — The Pilot Extension allows a treasury management team to build a batch of transactions, simulate them and queue them as a transaction on any Safe, whether it is using Zodiac modules or not.
  • Zodiac Siphon Module— This MEV friendly module allows any Safe to make funds transferable from a money market into a debt position when undercollateralized. Karpatkey will use this to service Maker debt requirements (once audit is complete) .

The Zodiac ecosystem continues to grow, both culturally and in toolset. Deployed on Gnosis Chain (and other EVM compatible chains), our collection of open source modules sees regular contributions and use. Zodiac tooling combined with cheap and fast transactions make Gnosis Chain the optimal place for DAOs. This year Zodiac has expanded with these developments:

  • Zodiac Wiki — This wiki is home to a shared library of reading materials, documentation, stories, and a pattern language describing common problems and offering practical responses for DAOs.
  • Zodiac Exit Mod and App — This mod allows specified token holders to redeem a designated token for a portion of a Safe’s fungible assets.
  • Zodiac Governor Mod — This makes Governor style DAOs Safe compatible, bringing the security and flexibility of the Safe to the most popular on-chain governance method.
  • MolochDAOs can now control Safes— DAOHaus made their minion contracts Zodiac compatible.

With this treasury allocation, Gnosis Guild will continue to carry out needs-driven development for GnosisDAO’s infrastructure, executing on emergent GIPs and DAO requirements as we have demonstrated the past year. Furthermore, we will continue to serve Gnosis Chain’s DAO ecosystem growth by expanding the Zodiac collection of tools and the Zodiac Wiki. We will also continue our partnership with Karpatkey to serve GnosisDAO’s treasury management.

In 2023/2024, Gnosis Guild plans to complete its spin out from Gnosis Ltd/Gnosis Services GmbH, forming a separate entity based on mutualistic ownership and decentralized governance. The Gnosis Guild entity will continue with the same team, objectives, and values, executing on this GIP and our symbiotic relationship with GnosisDAO. This grant will be made to Gnosis Ltd., and once the spin out is complete all grant assets will be transferred to the Gnosis Guild entity.

Specification

Gnosis Guild Treasury Budget 2023

Rationale

Gnosis Guild’s chief priority in 2023 remains needs-driven development for the GnosisDAO and other DAOs within or engaged by the Gnosis ecosystem, along with expanding the suite of composable DAO tooling and mechanisms available for the Ethereum and Gnosis ecosystems. Keeping that in mind, the Gnosis Guild treasury allocation budget has the following categories with their rationale described below:

Core Contributors: This budget category refers to the salaries and token plan for 15 full-time contributors with the following roles

  • 1 communications and community role
  • 1 operations role
  • 1 business development role
  • 12 engineering and product roles

The contributor incentivization plan is intended to roughly double contributors’ salary, with an initial two-year cliff followed by a rolling one-year holding period.

Stewards: This budget category refers to the part-time payment for 2-4 “pod” roles to extend outreach, education, and documentation of the Zodiac ecosystem, as well as assist with general community and communications needs related to Gnosis Guild.

Brand Design: This budget category refers to contract-based payment for visual communications.

Grants Program: This budget category refers to the amount allocated to support initiatives building on Zodiac and related DAO tooling.

Ops: This budget category refers to operational costs related to administration, services, and subscriptions.

Cultural Program: This budget category refers to what would traditionally be construed as a marketing campaign. The cultural program is intended to further establish Gnosis Guild’s reputation as a creative, editorial, and experimental team, while seeking to meaningfully broaden discourse.

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As a member of the Gnosis Guild team, I support this proposal.

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I wanted to take this opportunity for a shout out to the Zodiac team. In the past year, great tools were developed and services rendered by the Zodiac team. Thus, sorry to hear the Zodiac team leaving Gnosis this / next year.

With regards to the proposal:

1. On the proposed budget
I think it is fairly similar to the 2022 Budget, however 1.000 GNO / employee compensation on top of a >$115k average compensation appears too high, especially for non-senior technical personnel (operations role, communications, BD, junior developer). Imho it is not unrealistic that GNO might be at $200- $250 at the end of the year. Therefore I suggest to cap the GNO compensation at $100k p.a. on the date of payout. GnosisDAO can transfer the equivalent amount of GNO in the month of payout once known.

2. Funding
The Zodiac team did great contributions to Karpatkey, leading to several wins recently. However all the funding is coming from GnosisDAO. Doesn’t it makes sense to ask Karpatkey DAO for partial funding or a grant? Alternative, Karpatkey could grant a discount on their services for the tools / services rendered by GnosisDAO via Zodiac.

3. Zodiac spin-off
Finally, can you specify the current plans for the Zodiac spin out? For example,

  • does it makes sense to have a Zodiac token? (if yes, why (utility)?)
  • will the funding for the Zodiac spin out come from GnosisDAO, Gnosis Ltd or externals?
  • etc.
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Really appreciate this! :heart:

We’re certainly not planning to leaving the Gnosis ecosystem. But, similar to Safe, CoW, and Karpatkey, there is a point where makes sense from the GnosisDAO’s perspective for Gnosis Guild to become a distinct entity, rather than a team of contractors for Gnosis Ltd / Employees of Gnosis GmbH. I definitely wouldn’t view it as a negative or as if the GnosisDAO is losing anything in this scenario. It would be yet-another instance of GnosisDAO successfully incubating a team, in which GnosisDAO would obviously remain a key stakeholder.

This is in-line with the compensation packages that we’ve had from Gnosis over the past few years. However the Gnosis Guild team has taken steps to both flatten and globally standardize our compensation structure, we’re planning to publish some content on the rationale for this later in the year.

There is certainly a speculative aspect to this, but we think this is an important part of the incentive alignment for our team; we should be incentivized to contribute to the long-term success of the Gnosis ecosystem. Again, this is similar to how Gnosis’ token allocations have functioned in the past. For what it’s worth, we’ve also taken the down-side of this in the past. For example, the value of GNO granted in Gnosis Guild’s previous proposal was significantly lower when it was allocated to team members at the end of last year than when the proposal was put through at the start of the year.

We do have a very symbiotic relationship with Karpatkey, primarily in service of the GnosisDAO, either directly to help make their treasury management activities more efficient and more secure, or indirectly to help them provide similar solutions for other clients. In both cases the GnosisDAO is a benefactor as the GnosisDAO is a significant stakeholder in Karpatkey. Karpatkey’s success is GnosisDAO’s success.

We’re still working through this, but the current thinking is that Zodiac is a standard and would likely benefit from a kind of dedicated standards alliance to help steward and promote the standard, along with maintaining credible neutrality between the different users of the standard.

We’ve been working on a membership NFT token model for some time, this would be distributed to individuals and organizations who have made significant contributions to the DAO space and the Zodiac standard. Exactly what this is used to govern is a little murky still, but it would likely be responsible for properties like the zodiac.wiki, ratifying updates to the standard, and potentially curation of modules and other tooling.

We don’t predict this organization having a great deal of overhead, the funding for establishing this organisation is baked into this and last year’s proposals.

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Thank you for your responses.

Great! :slight_smile:

Since it is in GNO holders best interest to use the DAO’s limited funds efficiently, here a few additional thoughts as response to your remarks. Eventually it is up to the GNO community whether they feel comfortable with the financial ask and services offered.

I see this proposal as some sort of suggested budget subject to negotiation.

  • Does GnosisDAO wants Gnosis Guilds services? I think so!
  • Should GnosisDAO pay “junior” positions an above market average salary + huge bonus? I don’t think so!

Imho the argument that Gnosis (Ltd?) paid these amounts in the past, should not constitute a basis for overspending in the future.

That’s fantastic. However, the proposal will be decided within the next days, i.e. there will not be further details available for a GNO holder to make any decisions on the budget other than on what has been shared above. It would be great, if you could add more details to the staff budget, i.e. salary and GNO bonus by role.

Couldn’t agree more. However, a period of one year is not long-term to me. My suggestion was to grant $100k GNO on the day of payout, which may be worth $500k in 5-10 years (long-term).

I think it is just a different perspective (financial vs. product development). From a product development side it is great that we have a companion that tries new tools and provides feedback. From the financial side, GnosisDAO pays an independent Treasury Management team at a fair market price to mange its funds. On top, Gnosis provides software and development work to Karpatkey (for free). This may have been fine for the incubation phase but I think the Gnosis Guild team has proven that it can ship great products and is now asking for an extended contract. All I’m saying is that the team may want to ask its biggest “customers” to also support its work financially to some extent. Just my two cents.

Does that mean, the Gnosis Guild team is currently not envisioning a ERC-20 Token but rather an NFT distributed to contributors? Like that idea.

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I agree with @Adam_tosz on the proposed budget, for GnosisDAO participants it would be crucial to understand more on the role that every employee/contractor will play into the team, how many of them are already working for Gnosis Guild and how many would be new hires.

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Not sure if it was mentioned in the GIP’s proposal, I understand the request is for an upfront payment.
I would propose to consider the option to stream payments as it’s being discussed in Introducing more accountability to the GnosisDAO or at least, tie part of the budget to the tangible progress the team is making.

Thank you!

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Worth noting that we don’t really have anyone on the team that we would consider “junior”, which is why the averages are skewed higher. Most of the team are what we’d refer to as either “senior” or “staff” level. Everyone on the team is well beyond junior / entry-level in their given roles.

For reference, here is a breakdown of our compensation levels.

Level Modifier Compensation
Junior -15% $85k
Base 0% $100k
Staff +15% $115k
Senior +30% $130k
Leadership +35% $135k

This is currently uniform across all roles and locations, which we recognize is different to how most teams approach compensation. We’ve left open the possibility for compensation for different roles to diverge in the future, but wanted an equitable starting point. We don’t believe that compensation should differ based on location, especially given our entire team is remote.

Along with the time between when the grant is approved and when team members receive their allocation (6-12 months), there is also a two-year cliff (from the recipient’s start date) and one-year holding period (from the time of allocation), so it’s more like 1.5 to 3.5 years from the date of this grant application, depending on how long the recipient has been a member of Gnosis / Gnosis Guild. This has proven to be sufficiently long-term incentive alignment, along with being a fantastic retention mechanism, for Gnosis / Gnosis Guild in the past.

Because of price uncertainty, GnosisDAO has typically shown a preference for allocating a fixed number of tokens up-front, rather than promising a certain USD amount at some point in future. It’s operationally much simpler, gives teams autonomy over how they handle compensation and token allocations, and allows teams to use the tokens productively in the mean time.

Agreed. We have ongoing discussions with Karpatkey about incentive alignment between the two teams.

Exactly! We’re really excited about this.

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We have 12 team members currently: 7 engineers, 2 designers, 1 comms, 1 BD, 1 ops.
Everyone wears multiple hats.
We’re planning to hire another designer and two more engineers this year.

My reply above gives a breakdown of compensation levels.

I generally like the idea of streaming payments, my only major concern with it is that it would likely introduce additional overhead and decrease the productive use of the assets on either side, simply because Karpatkey would need to either stop using these assets productively or consistently top up the streaming accounts to ensure they don’t default. Nevertheless, I’m open to exploring this for future grants. @espina, perhaps we can start thinking about what processes might need to change on each of the GnosisDAO, Karpatkey, and Gnosis Guild sides of this equation to make something like streaming viable.

Given that the proposal is to fund a team that has quite a broad and varied mandate, I’m not sure that it necessarily makes sense to find some specific metrics to tie the grant proposal to, unlike project-based grants where there are well-defined milestones up-front.

That said, I do think the push towards greater accountability is really important, so I think we should make a commitment to posting regular updates (perhaps quarterly) on our work, to our contributions to the Gnosis and Ethereum ecosystem a little more clearly visible. cc @marvln, @espina, and @hamza.

Obviously our ability to make successful follow-up grant proposals is entirely dependent on the GnosisDAO being satisfied with our work to-date and its assessment of our ability and commitment to continue providing that standard of work. Which is part of the reason we are limiting these proposals to one year of funding.

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Thank you for the transparency! These details are great for context.

That sounds reasonable. However, if the retention rate is high, I would assume that the cliff period will be met for most employees this year already, i.e. the next allocation might be payable at year-end for most of the employees. Added the GNO compensation (“comp.”) at different GNO prices (including todays price $119 / GNO) for full disclosure.

Zodiac Comp

Good to know. I was also including roles such as BD, ops, comms to my definition of junior non-technical positions. These seem to be very well paid.

Great!

Ultimately, I’m in favor of this proposal.

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@auryn_macmillan I really appreciate the hard work of Gnosis Guild and dedication that the Gnosis Guild team has put into their proposal.

However, I think the GNO compensation is too high and the past cannot be easily transferred to the future. 2021 was the foundation for the previous year. The new foundation includes a Gnosis ecosystem that has 15%+ of SAFE, lots of other projects and its own Beacon Chain. Therefore, I believe that the GNO compensation should definitely be revised. In my opinion, 30% of the previous GNO would be justified as a bonus (one year cliff, linear vesting over three years).

An idea I would like to bring up is that the remaining 70% should be staked by GnosisDAO. The staking rewards can then be paid out as a bonus to Gnosis Guild on a monthly basis as long as they support the Gnosis Beacon Chain (~1700 GNO per year). In my opinion, this would be a more strategic plan that can be reviewed by GnosisDAO on a yearly basis.

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This is in-line with the compensation packages that we’ve had from Gnosis over the past few years. However the Gnosis Guild team has taken steps to both flatten and globally standardize our compensation structure, we’re planning to publish some content on the rationale for this later in the year.

Hey, I can weigh in on this: Yes, until the end of 2021, the team (both Ltd and GmbH) received a rather large GNO incentive. At the time when the total was allocated, GNO was worth significantly less and went up 10-20x in the meantime. We decided to honor these allocations but overhauled the token plan for the subsequent year, adjusting to much lower GNO numbers (since the token valuation had ballooned). The highest token components we have had since are 500 GNO/ yr. A senior token allocation is 300GNO, with many juniors ‘only’ receiving 50GNO/ yr.

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Auryn, can you talk about the adoption of Zodiac a bit? Maybe I don’t have the full picture, but what I see is the following: Zodiac has built outstanding technology, but adoption is lagging. I would like to understand which DAOs (besides Gnosis) are using which modules and how you expect these numbers to develop/ which measures you’re taking to make that happen. 12 engineers but only 1BD person for a project that has not yet found PMF seems a misallocation of resources.

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Definitely agree that periodic adjustment is necessary given the volatility of GNO. The GNO allocation in this proposal is an example of this.

Our previous budget proposal included a GNO allocation targeted at $100k per team member (denominated in USD rather than GNO, I wonder if keeping this denomination would have made a difference to how this proposal has been perceived?), at the time of the proposal the GNO price was hovering between $350 and $450. Our allocations from the previous year, denominated in GNO, are in line with the levels you mentioned. However, by the time team members received the allocations, the price had dropped significantly below the target USD rate.

Given that this was a new budget proposal, it felt natural to make that periodic adjustment to the amount of GNO to accommodate the price movement and bring the GNO compensation back in line with the target.

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I’ll put together some more thorough information on this and post it here some time next week. But can talk about it briefly now.

First thing worth mentioning is that I think it’s important to disambiguate Gnosis Guild and Zodiac. Zodiac is a standard for composable tooling for programmable accounts, and while Zodiac is a big part of what the Gnosis Guild team spends its time working on, it’s certainly not the only thing. We also spend a considerable amount of time working on other needs-driven development for the Gnosis DAO (things like the GNO locking contract, the COW vesting contracts and interface, the safe token allocation contracts, tooling, and interface, and various governance process updates for the Gnosis DAO), along with other tooling (e.g. ethersmultisend, apps (e.g. tabula.gg, currently getting an update to make it much more functional after taking on a bunch of feedback since launch), and touchpoints (talks, workshops, essays, etc) for the broader DAO community.

Being a standard, I actually think that the more important adoption measure is quantity and quality of the tooling/infrastructure/platforms that are leveraging Zodiac, either by building on top of the Zodiac mods that we’ve built or by building their own.

I actually agree that this is still lagging behind where we’d like it to be, it’s been more challenging and required more hands on dev work in other people’s code-bases than we expected, but it perhaps gives more insight to the balance of personnel.

Here’s a short list of some of the projects that have integrated/built, or are currently integrating/building, Zodiac tooling into their product:

  • Snapshot (SafeSnap, Reality and UMA module)
  • DAOhaus (Moloch safe minion)
  • Railgun (upcoming) (super secret module)
  • Moloch v3 (Built as Zodiac mods around a safe)
  • Tally (Open Zeppelin Governor Mod)
  • UMA (zodiac module, similar to our Reality module)
  • Tellor (zodiac module, similar to our Reality module)
  • SZNS (NFT product based around our Reality module)
  • DxDAO’s DxGov / DAVI (upcoming) (built as Zodiac modules around a safe)
  • Cardstack (metaguard)
  • SekerDAO / Usul (build as Zodiac modules around a safe)
  • Bulla Banking (Zodiac module for accounting)

To answer your initial question, we have somewhat limited insight into who is using Zodiac modules and for what, currently. This is something we need to improve on. However, it looks like there are currently about 170 Snapshot spaces using the reality module. Several appear to be tests, but some notable spaces in this list are 1Inch, Agave, Dappradar, Deversifi, mStable Governance, Safe, ShapeShift, and Stakewise, and of course Gnosis.

The Roles module has been critical in Karpatkey’s non-custodial treasury management, allowing it to take to clients like ENS and Balancer, and presumably with many more to come.

Just wanted to quickly touch on this point from a previous reply. We’re not in a rush to push this through, we very much want to take our time on this proposal to make sure it aligns with stakeholder expectations. Everything in the proposal is most definitely still up for discussion.

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Based on my own view but also the echo from the other community members, yes $100k / team member (on average) would be much more reasonable than 1000 GNO. I further also suggested to make tiers for GNO allocations based on the position, similar to the salary levels. Don’t want to pick on the BD, comms, ops. guys but it makes a difference whether you are a senior lead developer or operations manager and this should be compensated differently (e.g. Senior Dev / Leadership receiving $120k worth of GNO on the day of payout, and Ops / BD / Comms. receiving $60k of GNO on the day of payout).