[Discussion] Outcomes-based resource allocation framework (OBRA)

[lorny]

Gm gm,

As promised here are the notes from the Resource Allocation Framework call on September 5th. You can find notes from our calls in the Community Calls here.

A huge thanks to everyone who showed up and engaged in the conversation. We appreciate your inputs!

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Hosts

• Andre
• p3terpan
• Lorny

Attendees

• Lior
• Rickribera
• Lajarre
• Noturhandle
• Jengojojo
• Lorny
• Steven
• AntonM.eth
• Popou
• lazy coder
• v3naru
• Daytiva
• DefiDebauchery
• Nne

Discussion Points

• Andre:
  • Referencing the Phase 0 doc for OBRA
  • Goal: Have structured approach, keep track of funding initiatives, align with vision, which funds have been paid out and are active and which are stopped
    • Make framework measurable to assess success of outcomes and tie into overall goals
  • Overview on OBRA:
    • Peter: Initial post not to create a rigid framework but to create a set of guard rails
    • OBRA is a way for us to define what we want to achieve
      • Ensure how we spend funding and measure and review how we spend funds
      • Meant to avoid unhappy cases we’ve seen in other DAOs
• V3naru:
  • Wildcard strategy is interesting for flexibility
    • How do you plan to define and ensure Wildcard strategy not misused?
      • Andre: Wildcard = strategy that’s not pre-defined
        • Instead of turning initiatives away, the Wildcard strategy would entail a catch all bucket with lower budget attached to it if it’s outside the pre-defined strategies.
    • Re: metrics and strategies for them, for the 1st season who’s going to track the metrics and review the sprint? Will the stats/metrics be posted on the forum?
      • Andre: By default, SEF will manage this early on. This is not scalable though and shouldn’t stay only w/ the foundation. This can also eventually be delegated to other SafeDAO or Guardian members in future seasons and to reward them to allocate resources to this work in the future.
      • Who will drive forth strategies? How much comes from foundation and how much comes from SafeDAO?
        • More bottom-up approach
        • This is all to be worked out and developed over time
• Peter:
  • Try to design all processes early on. We need to define this first and them figure out how to automate.
• Andre: We can leverage templates for the Safe Grants program. The right tooling and who can support these resources is what needs to be defined in the first review cycle. A review cycle is 5 weeks long.
• Q: What’s the process for OBRA implementation?
  • Andre: We have a soft launch of the governance framework. It gets voted on. Then goes into effect. Then the resource allocation is voted on. OBRA itself does not include any strategies right now, but implements the framework. Strategies need to be voted on in a separate SEP. In future seasons, strategies will only be voted on in 4th sprint (review and governance amendment period). For the soft launch of the first season we will be able to vote on strategies in the 1st sprint.
• JengaJojo: Is there a max budget for each season?
  • Andre: That’s one of the q’s we put into the forum. For the beginning, there’s an argument to have a budget either on a seasonal and/or strategy level. Rn pre-transferability it’s not clear on how much safe treasury has of its own token. For the first few seasons, we need to devaluate if we have an approach similar to Safe Grants program —> have an allotment tied to a strategy. For OBRA this could mean e.g. a strategy for institutional adoption - where we want to assign x amount of that. If we max that out, we have to increase the budget in the future. A budget makes things easier.
• JengaJojo: I’m pro - seasonal budget bc if we have an initiative which goes over budget for a season, then it’s already following an allocation base strategy. On the other hand, if each initiative is a proposal, and we have a seasonal max budget, then we may approve than the max budget. Approval is not an individual proposal but a ranked choice.
• Lior:
  • Maybe better to have budget for more than one season. Gives confidence to market on what Safe DAO spends. Having something as a framework is good bc its a basis for discussion. Mostly this creates other streams and how you diversify token stability. You can change and update as terms change.
  • Andre: predictability can also come through an initiative being funded via a budget. If a project has a longer timeline to be completed, then there is no need to reapply. Safe token will also be allocated per milestones.
• How long can initiatives run? Do we agree on this before hand?
  • Andre: Probably no need to agree on this beforehand. If an initiative is super long, e.g. goes over 5 years, then SafeDAO members would say to break this down into multiple parts and milestones or have them broken down into separate initiatives. E.g. someone building saas product for dao that renews yearly, this wouldn’t make sense to hardcode into framework that theres a max limit if an initiative is too long. Smallest unit is Sprint, then season and then we see how this aligns with said sprint and season.
• JengaJojo:
  • It helps to have an equal periodic assessment vs something that is not periodic. If an initiative runs for 5 seasons and for 2 it is more successful, then the initiative that runs for 5 years is put into question. beneficial to limit inits and outcomes of inits. Can be renewed w outcomes.
  • A: Have review cycle every 15 weeks. If you show no results w/in 1 season or 2 seasons, this will raise questions in review cycle and may be subject for cancellation. 15 weeks which is more than a quarter, is enough to hit a milestone of any initiative.
• Payouts
  • Should it be in stable coin + safe toke as reward? Or all in native token?
    • JengaJojo: Where does USDC come from?
      • Comes from converted Safe token. USDC payment means that there is a pre-requisite to sell off safe token for stable coin. USDC do not come from foundation. Whole OBRA is about Safe DAO funds, and not about SEF funds. USDC part would need a conversion event beforehand.
      • Andre: 3 ways to get USDC:
        • Scenario 1: Always convert when every initiative is funded. X amount of USDC converted for initiative. Sell Safe token. Convert safe token on ongoing basis.
        • Scenario 2: to have budget for a season, we convert that amount into USDC
        • Scenario 3: We have a broader SEP for treasury diversification.
          • X% of Safe DAO treasury we want in stable coin not ONLY to fund initiatives but also for risk assessment for treasury.
        • OR we just pay all out in Safe token
  • What about successful fundings only w native tokens?
    • Anton: OrangeDAO fund with native token, people less excite since it’s not liquid
      • If it’s larger and needs more time and effort. It’s hard to convince them that that’s the only form of payment. If it’s a smaller project like content based, reward in nat token
    • Lior: Propose to have person choose between flat USDC pay and a mix to give them a bonus if they chose to take lower amount and get premium in Safe. This could fit for long term exposure .
• Missing items?
  • Anton: Can we review what procedures are in place that OBRA is replacing? What was that? and what’s considered a success and how measure it?
    • Andre: We’re not replacing anything. This is the first time we’re having a resource allocation framework being put in place
• Nneoma: Is there a body set up for Oversight?
  • Andre: That’s part of the review and operations. Review is DAO wide. Goal is to be DAO sourced.
  • Nneoma: Suggestion - Agree, only spin up working groups as needed and not before and then implement them.