RFC-000-026: Creation of a Ren Treasury Committee

This is a great RFC Defi Whiskey

I am in agreement specially because of, even the nature of a DAO is to coordinate decentralization activities, I do believe “this decentralization” shall come over time as we mature. At this point, some level of centralization is needed to kick off efficiently for good and stablish a good foundation for the years to come.

Transparency needs to be the first pillar of this treasury committee, as BlockchainBard already highlighted. There must be clear definition of what the committee can do and cannot, and approved by DNO.

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Fantastic work here @DeFi_Whiskey and thank you for putting in the time and effort.

I agree that a treasury committee is a good idea. However I think there are some other even more fundamental organizational pieces that would also need to be put in place so that this committee is in the best position to work for the highest and best interest of REN.

  1. I recommend that the committee we elect should have a mandate to follow that gives them the ability to act somewhat nimbly, yet limits the scope of their decision-making to a referendum-approved framework (Ie. a “charter” or “constitution”)
  2. I think committee members should be paid something for their time. Not an exorbitant salary but enough to compensate for the burden of extra responsibility
  3. Committee members should be verified DNOs and should be removed if they come to no longer operate any darknodes
  4. We should, in general, discuss if there should be other committees and how Treasury might fit into the mix.
  5. Treasury members should face regular windows within which a spontaneous vote by DNOs can remove or replace them.

We certainly want to avoid things that centralize control and in the spirit of the DAO, I think my main point is that we should be relying on a Treasury Committee for its loyalty and sound keeping with the best interest of REN. So I think the first step is really to build a solid mandate for said treasury to follow, so we don’t get any cowboys in there thinking we elected them to shoot from the hip and buy a bunch of $SHIB.

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Thanks for your feedback. I, too, am skeptical of groups and committees. We should tread carefully.

Decentralization is great, having such a large and active community is an advantage, but clearly some things can be accomplished more effectively in smaller groups. I suppose it’s all about finding the right balance.

And just to be clear, I am not suggesting we put the Treasury under the control of 5 people! As I noted above, I would view this committee as a facilitator. A way to move things forward faster. But all decisions should be voted on by darknode operators.

To give one example, if we are talking about asset allocation, I would see the role of the committee to provide recommendations (and reasons for those recommendations) to the larger Ren community, plus facilitate discussion in the form of an RFC, so we can all discuss, debate, etc. After discussion, the committee could prepare an RIP based on feedback. This would then be voted on by darknode operators. If passed, the committee would manage implementation, and later report on progress.

I could also see committees or smaller teams that have a mandate from darknode operators to manage a predefined budget for a specific purpose. So perhaps we have a “Community Rewards” team that has a budget to support and encourage community contributions. The quarterly or annual budget and scope can be approved by DN operators, but it’s silly for DN operators to approve every 10 USD allocation of REN tokens (if that is what we decide to reward) for each insightful post on the Forums or great comment in Discord or whatever…

  • If the community wants one thing, can the committee potentially override them/us?

In my opinion, the committee should have no power other than what darknode operators (note: not the community, but darknode operators) delegate to the committee. Under no circumstances should any committee (Treasury or whatever) have the power to override darknode operators.

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Agree with all of this, with one exception. I don’t think committee membership should be limited to DN operators. I think the entire community should be eligible to participate, provided they are voted into the role by DN operators.

I think we have community members who want to do more, and working on a committee or team or group is an excellent way to contribute. Not everyone has the resources to own a darknode, but we can all contribute our time, effort, etc. to help Ren.

The only condition I would impose is each member should be voted into the role by DN operators. So long as they can get the votes, I’m totally fine with anyone serving on Ren committees.

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This is where we can (respectfully) disagree. I am of the mindset that anyone elected to manage parts of the protocol/DAO should have a vested interest to the point where acting counter to the aims of RenVM and the DAO carry real and measurable risk. In other words, I feel safest when those who carry my delegated vote have as much to lose as I do.

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This is an excellent and timely article on Treasury Management.. It highlights some of the issues I tried to describe in my (unfortunately lengthly) initial post.

Interestingly, one of the main issues this article focuses on is the problem of native tokens. Specifically, most DeFi protocols have the vast majority of their Treasury assets in their native token. Funnily enough, we have the exact opposite problem: we have no REN tokens in our Treasury! That’s a bit crazy if you think about it, but it’s true. Ren holds zero $REN! :grin:

That is something we should probably fix as part of an asset allocation strategy. We should want to hold REN to use as rewards, for example. We should also be buying REN if we believe it’s undervalued relative to our existing assets, which in our case is primarily BTC. But again, only as part of a comprehensive strategy. If buying more REN dramatically raises risk, or impedes our ability to finance development of our ecosystem, we should avoid.

We are also in a unique situation regarding expenses, as the Core Team is not paid through the Ren Treasury, but by Ren Labs (which is not part of Ren). Yes, we are partners, our success is linked to them, their success is linked to us. Which is why as part of a Ren Treasury strategy we should ask for more info on their Treasury strategy, and we should coordinate closely with them. This is why I suggested having one Core Team member on our Treasury Committee. Can Ren Labs operate in a multi-year bear market? I hope the answer to that is yes, as the future of RenVM may depend on it. :scream: More details would definitely be welcome.

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This proposal sounds very inclusive. Will have a thorough look. :+1:

Great to see such a well thought out proposal, thanks for putting this together @Defi_Whiskey!

It took me some time to digest all of this and do the required background reading, and all I can say is that I wholeheartedly agree with this proposal. I don’t agree with the fear that has been voiced here and in Discord about centralization. We need dedicated members driving a particular work item or proposal, be it elected or otherwise, to drive them to completion successfully and do the required legwork to come to the best decision/outcome.

This proposal does raise some questions on how the community governance over Ren is supposed to work, now and in the future, in conjunction with the Ren core team and Ren Labs which is apparently bankrolled by Alameda.

To me it seemed like the simple Community Ecosystem Fund was set up as a way for the community to get some play money, get our toes wet with regards to DAO governance and the funding of cummunity/3rd party initiatives. This proposal for a comprehensive treasury management strategy leapfrogs this entirely, that does not have to be a bad thing of course, as long as we are not putting the cart in front of the horse that is.

That being said, we cannot start soon enough thinking about our treasury vision, and above all the risk allocation.

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The fact that we do not have any REN in our treasury is an interesting conundrum indeed.

I’ve been breaking my head a little already thinking about this. Since the whole point of the treasury is to run and grow the protocol, it seems important that we also hold REN so the treasury can grow with the token appreciation. However, buying REN from the market and driving up the price without running any nodes lowers the ROI for new Darknode operators, and does not increase the TVB by as much as when actual nodes would be operated with said REN. In that sense it seems like it is counter to our protocol security. Then again, if the treasury is an acyclical trader of REN we might dampen the market down turn a little and prevent TVB from falling more than it does :thinking:

Additionally, the fact that all our tokens are outstanding and none of them in control of the treasury also makes it more difficult to take advantage of easy ways to align incentives with our partner DAOs and integrators. Namely using token swaps, as for us it will be that much harder to get hold of our own tokens, it will be more difficult to match their contribution.

About time we launch renREN and start accumulating automatically :grin:

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I couldn’t participate in the community call today but watched the video and I already commented how I could imagine we can create a working DAO structure here: RFC-000-025: Incentives for Community participation - #42 by XTC0r

After some more thinking I created a draft to visualise how it could look like. I imagine a two step scenario. First where the treasury committee controls most of the funds and later we move to a structure with different working groups.
The open question for me is: Who controls the actual treasury wallet or have can we release the funds after a positive snapshot vote? Do we need the REN core TEAM?


It was decided to use Safesnap as treasury management system, see RFC-000-024: Community Ecosystem Fund | Governance & Safekeeping

This means the Ren Core team does not need to facilitate and move funds out of the treasury after a vote. The treasury is on-chain in a Gnosis safe and we can use a Snapshot vote to move the funds. This means we also do not need to move the entire budget for a specific committee to a multisig owned by said committee because the committee as well needs to create snapshot votes to spend the budget.

The only exception is when we want to give the committee full control and discretion over a particular budget so they can spend it as they see fit, for example if they plan to dish out many small amounts and we do not want to bother DNOs with votes on each and every one of them.

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The issue I see is we have to vote too often or have to transfer too much money in one shot when going the path with different working groups.

Let’s say we have working group for SW development and they want to create a dapp which would benefit the REN ecosystem and they budget 120K$ over one year for it. After DNOs approved to spend this money I would not like to send the total 120K$ to them and also don’t like the idea to vote every month to send the next 10K$ batch to them. Rather the 120K$ should be locked in a multisig specific for this project and the reoccuring 10K$/per month should be released by the treasury committee (TC) (without additional DNO vote).
Also the TC should overwatch the project of this working group and put up a vote to stop the funding (multisig veto) to return the funds of the project multisig to the treasury if the development does not work out like stated in the original proposal.

I see the TC as a steering comittee which overwatches the acitivites of different working groups. Each working group will have separate projects and each project within a working group a specific funding (multisig). The TC has to approve the regular funding of the working group activities.

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Reoccurring payments is actually an interesting case. Here it might be suitable to create a quorum vote for Darknode operators to approve the grant, and use Snapshot votes structured using the “rule of non-opposition” principle to release the recurring payments. The latter votes are non obtrusive for DNOs as they can generally ignore them, unless they want to oppose the transaction.

This has the added benefit that the funds stay in the general treasury as long as possible, making it easier to perform treasury management in accordance with the asset allocation and risk management strategies.

Again, I would avoid to put too much votes on DNO and think it’s better to put 4-6 people in charge to do regular payments and parts of once agreed grants. These 4-6 just need to get verified by DNOs every 3? months. This trust has to grow over time. So we might want increase the funds over time.

Maybe you can share a flow chart what you imagine or can directly comment on certain points of my (1) intermediate solution chart and second step chart (2) using working groups. Explain what you don’t like and how you would change it.

It’s a very interesting RFC, thanks’ for bringing the topic up. I will provide my thoughts on this.

I don’t see why we couldn’t pay anyone to create a proposal to get voted on. Why do we need a committee, if it’s to reward for contributions then why can’t we just reward anyone that wants to contribute.

I watched the call, all the traditional finance people thought they would be best suited, but that’s not how you build a team. Are any of these traditional finance guys real business or technology managers?

Why give power to the few when we can give power to anyone that has a sensible proposal. I think an easy to use voting UI could be very powerful for engagement across the community.

my thoughts are to grow the treasury for at least 12 straight epochs, in some way reinvest back into Ren for yield, cap the participation of the fund to 5% of the total staked so that the community fund never overtakes the community itself, and have a committee meet 3x/year (like every 4th epoch, or maybe just 2x per year) and discuss spending/investment opportunities of the community fund that would be of benefit to the Ren community.

Great proposal @DeFi_Whiskey, thanks for writing it up. I believe such a committee will be helpful in the long run but IMO it is too early to consider establishing it at this point, especially if members are to be financially compensated purely for belonging to the committee.
I think we should keep things more nimble for the first few initiatives instead of trying to impose the structure in advance. I also think that work relating to pushing forward proposals etc. can be better compensated as part of the individual proposals, rather than a salary. If a superstar emerges from the community we could certainly vote to allocate them a salary to continue their work, but doing so for a group - in advance of any initiatives being completed - feels premature to me.

First I need to apologize for spamming the discord discussion (as “olchemist”) before reading this. All of my own ideas are already mentioned here. Special thanks to @DeFi_Whiskey

Maybe there is a lesson. Our community is spread across this forum, TG, discord channels, etc. with little sync. It is difficult for initiatives to precipitate into action.

I feel the same is also true for funding activities. I understand the critics of centralisation and we definitely should stay nimble for the moment. BUT it’s not like there is a ton of engagement asking for community funds yet. I feel we need a dedicated group that feels the responsibility to facilitate and kick off this process.

Once it’s rolling, we can always reconsider.

Looking forward to the call tomorrow.

Here is another interesting and relevant article that touches on committee management and facilitation. I highly recommend reading the entire piece, but this is especially relevant:

Yes, it’s a simplification, and yes, all DAOs are a bit different. Still, I think this is highly applicable to our current situation!

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Interesting. Hope the DAO style structures become more prevalent in the future.