GIP-84: Introducing GIP-Guards: On-chain financial controllers for GIPs

Governance GIPs
1

GIP-84: Introducing GIP-Guards: On-chain financial controllers for GIPs

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GIP: 84
title: Introducing GIP-Guards: On-chain financial controllers for GIPs
author: Dayitva Goel (@Dayitva)
status: Draft
type: Funding
created: 2023-03-29
funding: 30k USD

Category

Administrative

Executive Summary

Switch to Recovery-enabled GuardedSafes for all GIPs funded by the DAO to increase project accountability and continued communication with the community.

Terminology used

  1. GIP-Guard: A Transaction Guard designed for specific GIPs.

  2. Milestone Payout Guard: A GIP-Guard that only lets transactions be processed from a Safe if the defined milestones have been met.

  3. GuardedSafe: A Safe with GIP-Guard added to it.

  4. Recovery-enabled GuardedSafe: A GuardedSafe with a recovery module added to it allowing GnosisDAO to recover funds if they feel the team is underperforming.

Introduction

GIPs have been instrumental in Gnosis ecosystem growth. Most GIPs are funded upfront however, there is limited information available after funding. Milestones are untracked, project updates are sparse and their status is unknown. There is no easy way to analyse the impact of the project, learn from them, or know if the project is still active. Moreover, if the team becomes unresponsive, the funded amount sits idle in their wallet with no way to recover for the DAO.

Some examples of this we have seen are:

  1. GIP-61: Bootnode received $580k to contribute to the development and maintenance of bridges in the Gnosis ecosystem, Circles Infrastructure, Running Gnosis beacon chain validators, and long-term DAO growth. They promised bi-weekly status updates and reports on project progress. However, over the last 8 months, only 1 update has been provided.
  2. GIP-18: Tick-DAO received $750k from Gnosis DAO. There have been no updates to the community after the proposal has passed. The project even changed its name to Quiver Alpha, with no updates to the Gnosis community.

Being a GIP with multiple scopes of work there needs to be more transparency in how the funds are being used, milestone progress and how far the roadmap has been executed.

Proposed Changes

We propose transitioning to Recovery-enabled GuardedSafes for all GIPs funded by the DAO. These on-chain financial controllers have a Milestone Payout Guard that only lets transactions be processed from the Safe if the defined milestones have been met.

For each GIP, the community along with the builder team decides on certain milestones that need to be met by a particular point in time. For each of these milestones, the community appoints some milestone reviewers. These reviewers will be responsible for verifying the status of the pre-defined milestones. If the milestones are met, the reviewers mark the milestone as completed. Now, only when all reviewers mark a milestone as completed can transactions from the Safe be processed. In all others cases, it will revert.

Impact and Benefits

Since the GIP has milestones already defined in the proposal, this Milestone Payout Guard would ensure that the community is informed and the project is motivated to stay on track. These milestones can be as subjective and tailored to each project. It could include community calls, writing blogs or conducting workshops could be set.

With Recovery-enabled GuardedSafes, the GnosisDAO could recover funds upwards of $500k after seeing that the project was dormant and lacked progress.

These GuardedSafes nudge projects with funds to keep moving in the right direction while ensuring the community has some control if things don’t go according to plan.

Implementation Plan

During the proposal discussion (Phase 2), the exact milestones and rubrics need to be ratified, following which, a Recovery-enabled GuardedSafe will be created.

This includes two aspects:

  • Milestone Payout Guard: This is the GIP-Guard that will be added to the Safe that the builder receives money in and lets the builder withdraw funds from the Safe only if they meet the milestones set earlier. The milestones completion will be checked by a set of reviewers as explained above.
  • Recovery Module: This module will also be added to the same Safe and will grant GnosisDAO some admin privileges. It will let the DAO recover funds without needing the signatures from the Safe owners in case the team goes dormant or abandons the project and stops building.

We propose all GIPs going forward receive funds through Recovery-enabled GuardedSafes.

SafeGuard will provide technical support or assistance when needed. We will also work with the community on fine-tuning the Guard to each proposal.

Risks and Challenges

The main challenge with GIP-Guards is to ensure that the guards work properly under all circumstances. Transaction guards are smart contracts too and when dealing with financial matters, it is of utmost importance that the contracts are secure. Hence, all of the GIP-Guards will be throughly audited and only used after multiple rounds of testing.

Team/ Organization/References

SafeGuard was one of the winners at ETH India and is incubated and developed by Questbook.

Questbook is a grant orchestration tool being used by Compound, Polygon, Optimism and Aave to disburse more than $3mn in grants. The team has also built Open Quest and Zero Wallet.

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Thanks for the post @dayitva.

A big part of the solution proposed seems to be around a new operational procedure which is not dependent on adopting a new technology. As a matter of fact, funds can already be transferred in batches when milestones are properly aligned and tracked with current treasury management practices.

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