Creation of the tokenomics committee (Draft 1)

Thank you for a great post. I find the budgets to be problematic, for Phase 1 we’re saying the squad should be renumerated for work done in an amount that is around a full seasonal budget for a guild. So I would very much like to hear more about these strategies that you’ve been working on before settling on how reasonable the budget is.

For me this amount of back-pay for gathering consensus (in part) is a bit problematic I must say. Most projects have had much lower (at least specified) amounts to ask for work done before a vote, in a nutshell, should we start working on strategies before we’re approved to spend. But this is a discussion for another place maybe.

For the 2M, it’s a lot without a clear guidance on what you’re planning to do. So I would think this needs to be clarified. I would also like the proposal to split renumeration of members from their operating activities to increase the value of BANK in their budget. This would allow you to present what kind of work youre estimating to be done here and how much is to be used for tokenomics. Way more transparent from the start.

My suggestion would be to moved the 2M at the very least to the S2 snapshot, and keep this for the first phases. Based on that you’re estimating 200hr of work of the 500k, you should be fine until the S2 snapshot.

Would the revenue % of non-BANK revenues be on top of the 2M?
I think 2.5M BANK (50% of guild budgets or over 2x our largest project last season) is an ask that needs a lot more clarification. Do it in steps and ask for a smaller amount until you can present something a bit more tangible in terms of strategies and why you need 2M + ETH per season.

just my 2 cents.

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I have some observations on top to what was said before.

  1. This retroactive token recognition may create some unbalances in the treatment of contributors and violate governance rules.

In Season 0 the only remuneration was given by a Coordinape round, even if people worked tons of hours to organize the work in the Guilds. Nobody asked for retroactive payments concerning specific tasks.

In Season 1 funds could be requested to the GC. This was the proper way to address the issue. As far as I know, nobody asked remunerations for the preparation of proposals (Frog would be billionaire :slightly_smiling_face:).

  1. In addition, I have also the feeling that the 2M amount is too high and that the presented program is too generic (for such an amount). The GC is a flexible committee, able to immediately respond to requests. It provides a fair assessment, which takes into consideration every potential problem (included legal observations). I think that proposals for tokenomics can follow the ordinary workflow of our governance system.

Just to clarify: I consider tokenomics of immense importance. I only don’t see the need of subverting our governance rules.

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Gonna try to address all the comments so far with this follow up:

-Permanent liquidity allocations
-Single sided BANK staking
-Liquidity mining incentives
-Token Swaps
-Yield generation (Alchemix, etc)
These are a handful of ideas that off the top of my head may be under the scope of the tokenomics committee.

The revenue allocation is actually not set, 25% was a suggested number. we’ve also discussed minimum balances/revenue streams to warrant use of non-bank funds.
The details surrounding those parameters are debatable, so rather than codifying any exact amount right away, an example is given.
(Those revenues could become single side staking rewards for instance)

I actually agree with this. I think at most 40% should be allocated that direction, and would encourage this number’s reduction, though others in the squad may have more to say about it.

A lot of this was outlined in greater detail in previous proposal versions, and it was mentioned that the scope of the proposal in that format was too large. The plan is for the 2m to provide sustainable incentive amounts + development and marketing budgets throughout each season. Much of these funds will end up in guilds as they are hired to perform these tasks.

This breakdown hasn’t actually been discussed yet. I’ve been operating under the assumption that the 2M bank is for tokenomics and development specifically, and will not be allocated to committee members. (perhaps this can be codified in the proposal)

Yes, it would be. However, the percentage, and eligibility parameters haven’t been set yet. I’m a fan of 250k Min balance, 100k/Season Min revenue = Eligible for 25% of seasonal revenue for tokenomic purposes only.

Since most of this funding is actually going to the implementation of incentives, with the intent to expand the economic bandwidth of BANK, I feel comparing it to other projects (which mainly are development budgets) is apples and oranges. I’d love to specify more which incentives are going to do what, but that is going to require results from the research guild on tokenomic activity effectiveness, and we’re planning on gathering approval in the forums for incentives before implementation.

In terms of overall incentive allocation, this comes out to .8% of the DAO’s total supply per year, which is (compared to most incentive programs in DeFi) far less funding than most of our competitors.
If broken down into 5 different tokenomic activities, that’s 400k/activity for Development AND implementation per season.

Actually, Bankless Academy Did ask for retro compensation for season 0, and it was granted (albiet less than they asked for) It just didn’t happen until season 1.
I feel reducing the amount as I had mentioned above is a healthy move to alleviate this concern somewhat.

Finding these points of ambiguity/clarifying is exactly why this post is labeled (draft 1)
I hope my answers can provide some clarity. Thank you for the feedback.

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Are you talking about the liquidity mining of other protocols, which allow you to earn their own token for staking and other activities? The problematic thing about that as I’ve seen so far is that either A) the rewards are not high enough to make an impact B) are high enough to attract ppl to hold the token at the cost of a significant dilution of the token’s value → downward price movement.

Either way, we probably don’t need to discuss the details of any specific program just yet. My point is - I agree with what was said above, at this time I would prob request a budget just for the work of any dao members needed to come up with some specific proposals, in much more detail.

Once we have a detailed proposal for eg a liquidity mining program - then I would expect an assessment of how much value it would bring and how much money we need to spend on it to make it most effective. Not sure pre-approving such budgets makes sense.

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It is a good idea to have improved tokenomics, and thank for sharing a great post.
Nevertheless, would like to point out that retro-compensation should be explained in more details, it is stated 100+ hours, without much details to offer, and should be aligned with DAO rules.

Regarding budget for Season 2, I am fan of a more milestone planned budgets, so that you list some obvious goals that will be reached with tokenomics. From the proposal, it seems that you are asking solid amount of money in Season 2 (2M $BANK) with goals to implement strategies and plan on proactive basis, but there is no clear outcomes that will be visible and measurable?

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Thanks everyone for their comments. I just want to pop in to respond to two themes I’m seeing in the response, and to chart next steps.

  1. Overall 2M Allocation for Tokenomics Committee to Commit to $BANK Bolstering Activities

As outlined in the proposal, the 2 million $BANK allocation would be an overall budget that would be allocated toward the Committee’s utility bolstering activities. The Committee would then allocate these funds to specific Guilds for implementation by the Tokenomics Committee.

These funds will provide the Tokenomics Committee with the flexibility (and dedicated budget) required to, most importantly, execute on agreed-upon strategies. Note that the strategies would only be implemented (and budget allocated) upon community review and approval.

The key thing to remember is that the 2 million budget would be allocated, to the Committee, but not dispersed until after the strategy development, review period, implementation details are determined.

  1. Retroactive Compensation

As illustrated by the detail of this proposal the squad has already dedicated significant time and effort into gathering community consensus, researching potential strategies, developing the structure of the proposed Tokenomics Committee, engaging in cross-guild conversations and initial planning, and other activities. The hours ranges provided in the proposal cover these activities, and many more.

As @AboveAverageJoe mentioned, In the next version of the proposal, we will reduce the requested amount to 40% of the initial $BANK allocation.

Next Steps

I appreciate everyone taking time to review the first draft of this proposal. We will be submitting a second draft based on these responses that:

  1. Makes it clearer that the allocated 2 million $BANK budget to the Tokenomics Committee will only be dispersed after community review of the details of specific strategies recommended by the Committee — the majority of funds will be allocated toward implementation-related activities, including smart contract development, etc.

  2. Reduces the initial share for retroactive compensation to 40%

We will submit the revised draft in the next week or so, which will be the basis of the Snapshot vote ratifying the creation of the Tokenomics Committee and the initial budget allocation.

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Many points of opposition have been raised above, which I agree with. But I will raise my own points to:

First, let’s start with the macro level view of this proposal. As I read this, what tangible value has been accrued? Historically, the activities being remunerated fall into:
• Engaging in community discussion
• Proposal writing and scoping
• Initial strategies for bolstering BANK utility (Where is the documentation for this? What actionable insights?)

Since when are we in the habit of rewarding administrative overhead before value was ever accrued? If there was an actual document showing the research completed thus far, then I would be more willing to remunerate work completed. Joe raised the point that Bankless Academy got remunerated – Yes, but they got remunerated for value accrued. They had already started drafting design graphics, course content, and deployed test released.

Furthermore, this proposal is not thoroughly staffed. There is the assumption that the TC will pull resources from dev guild, marketing guild, and design guild with no representation from any of these guilds. Reckless assumption of resources is how projects fail. Please reread the project proposal workflow:

Second, let’s talk budget. 2M? 40% if the entire S2 seasonal budget? With 0 indication of how those funds will be spent? You write

I’d love to specify more which incentives are going to do what, but that is going to require results from the research guild on tokenomic activity effectiveness, and we’re planning on gathering approval in the forums for incentives before implementation.

Then do that first. Ask for the BANK to put together the research first before this next step.

That leads nicely to my third point of whether we even need a TC committee right now. I don’t think we do. For one, we’ve been exploring different tokenomic ideas in a decentralized fashion., such as with the Balancer proposal, which led to robust discussion. Furthermore, IcedCool is working on a proposal for Tokemak. Why add this extra layer of coordination and friction when we already have a POC that we can make tokenomic decisions in a decentralized fashion?

What happens if I want to propose a tokenomic program? Do I have to go through the TC first and get their backing? If not, then what’s the point of the TC? If so, then that creates friction. Could this entire initiative be rolled up into the Research Guild and then individual initiatives be broken down into Projects with their own budgets?


For these reasons, I have voted to reject this proposal outright.

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I was going to write a long reply until I read what @frogmonkee wrote. I agree with each comment. Creating committees are helpful when there is no direction at all, but we don’t want overkill with a political nightmare within the DAO.

I specifically like the idea of adding this within the research guild and then creating specific projects. This way each tokenomic idea can be thoroughly spelled out, communicated, and a proper budget can be voted on that perfectly fits the project for approval. Then with the blessing of the research guild and the approval of a budget a team can be put together to complete the tokenomic concept (after proper feedback from the community).

2 Likes

Compensation is a delicate subject and rewards for KPIs is what I thought Bankless DAO was moving towards.

A couple of points in general:

  1. It would be good to gauge what other DAOs are doing and what compensation they are paying for similar jobs.
  2. A refined KPI list of achievements or a roadmap and payouts for milestones reached should be required (if not already) for every grant request.
  3. Rather than form a committee immediately, why not ask members of each Guild and the community to nominate people and then vote for committee members. It seems that the same names come up repeatedly for the positions of power with very little notice to other members.
  4. Committee members should have term limits. This goes back to diversification opportunities.
  5. A minimum number of Members should respond to a poll in the Forums before it heads to a Snapshot.

I am against this proposal as it does not adequately benefit the Bankless DAO community.

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Thanks everyone for your feedback on this proposal.

Given the response to the proposal, we won’t be moving ahead with this effort.

@AboveAverageJoe, as you posted this proposal, please close the poll and archive this post. Thank you.

I love these suggestions. When drafting the proposals, remuneration wasn’t talked about much, and little thought went into the method thus far. I labeled this proposal as draft 1 specifically to get this wider community input, and will be integrating much of these suggestions into the second draft.
On 5: It is generally considered in good faith after at least 30 respondents in favor, which this is far shy of.
Ironically, a previous draft of this proposal had many more details, but the thought at that time was the scope of the proposal was too wide, and it was pared down. Based on the feedback here, many of those points will be recaptured in the next draft.
As far as KPIs, I like the idea, but I’m not well versed in implementation, and would need more help to bring that into focus.

If you’re willing and able, I’d like you to join our next meeting in #tokenomics to help with this process a bit

Many good responses here. One that I did not see much mention of was in relation to the committee establishment process. Rather than a small squad making recommendations or selections to the committee, I would prefer to see a DAO-wide committee staffing process of some kind, where candidates:

  • can be nominated by anyone,
  • can provide their bios and qualifications for all to review,
  • can post their tokenomics viewpoints or philosophy for others to consider their potential impact in the committee,
  • are elected in a transparent process on forum or snapshot.
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While I support some of the specific functions of this proposal: for example single side $Bank staking and incentivising liquidity providers.

I think the $Banks could be better spent directly on events and activities.

Funding metaversal events such as giving a free decentraland Bankless T-shirt or Meka-droid costume, or funding giveaways, treasure hunts, QnA, Parties.

Basically funding FUN, communities and experiences will drive the “utility” of the $BANK, not artificially bolstering its value.

For example, check out the nft-club, the tokens pay for itself!

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maybe more research first, seems like there is funding and resources available within the research guild for some of the preliminary steps proposed here.

Just caught up on this. Do we have a draft2 in the works @AboveAverageJoe ?

we need tokenomics, but it should either be open table or an elected committe

i think renumeration for tokenomics team makes sense, but it should come as individual project proposals like any of the guilds. Everyone else has had to outline in detail where the bank for their proposals is going

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this proposal got a majority Reject (as opposed to make amendments). So I would be surprised to see a v2?

Also, glad to see that tokenomics proposals are being crowdsourced now, even without a committee. It’s nice seeing DAO-wide discussions on them, instead of gating.

Yes indeed! We are drafting up a Tokenomics Department underneath the treasury guild, that will have specific responsibilities.

For now, we will just continually bring proposals forward that we are interested in implementing.

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Moving to archive. Please reply to reopen.