[Updated according to the comments during Phase 1 on December 11, 2023]
Thank you all for your input on the Strategies and Budget SEP discussion in Phase 0.
We’ve incorporated your comments into the Google Doc and the below thread, which is now part of Phase 1 for the upcoming voting stage, provided there is enough signaling by guardians/delegates until Monday, 11th December.
We also clarified that the budget would be for Season 1 (which is ongoing) and Season 2 according to the governance framework and OBRA (Outcomes-based resource allocation framework). Similarly, we pointed out, that the budget acts as an upper threshold, allowing any unspent amount to be carried over to the next season.
It’s important to note that the OBRA seasons will run as a dynamic, iterative process to enable continuous optimization based on feedback and outcomes at each stage.
The final call on the proposals in Phase 1 (Stablecoin allocation SEP + Strategies and Budget SEP) will be this Wednesday at 5pm UTC. Sign up here. Based on the feedback so far, our key topics will be:
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Revising the budget
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Modifying Strategy 5 to boost governance participation
Feel free to add further comments below, and I’ll include them in our agenda.
Title: [SEP #10] OBRA strategies and budget
Authors: Andre Geest, Dmitriy Klimov, Bernard Schmid, Lukas Schor, Christoph Simmchen
Created: 2023-12-04
Abstract
This proposal outlines five strategies and a wildcard strategy under OBRA with their respective budgets, which are aimed at pushing forward the goals in the SafeDAO constitution.
Proposal types
State which proposal type this proposal belongs to.
SEP: Resource allocation strategies
SEP: Resource allocation budget
Proposal details
The overall budget mentioned here is for Season 1 and Season 2 according to the governance framework and OBRA. The budget acts as an upper threshold, allowing any unspent amount to be carried over to the next season.
Strategy 1: Research and implement Safe token utility
1. Which goals does the strategy look to drive progress in?
Tokenize value (Goal 3): SAFE should represent the value of the Safe Ecosystem. Mechanisms should be created to link the growth of the Safe Ecosystem to the growth in utility of SAFE.
2. Which metrics and KPIs could initiatives under this strategy be measured against?
Disclaimer: KPIs should always be considered in relation to each other and not in isolation. For instance, the number of token utility contributions should be evaluated in conjunction with their quality. We would always prefer two high-quality contributions over five low-quality ones.
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Quality level of token utility contributions (via individual assessment)
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Specific Token Utility Participation Rate
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Increase in activity regarding utility
3. Outline the execution strategy or thesis
This is just an overview to give guidance on how to develop further token utility use cases:
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Research phase: Conduct comprehensive market research to understand current token utilities in the market.
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Development phase: Create use cases for Safe Token, focusing on user and developer value proposition and ecosystem growth.
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Implementation and iteration phase: Gradually roll out new utilities, monitoring user adoption and feedback.
4. What are some example initiatives that would fall under this strategy
Disclaimer: The initiatives mentioned below are just examples for discussion and should not be taken as confirmation of their actual implementation.
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Locking mechanisms: Implement locking mechanisms to reward long-term holders.
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Governance participation: Utilize Safe tokens for voting on resource allocation and product governance.
5. Detail around existing data or evidence to support this thesis
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Arbitrum (ARB): Functions as a governance token, allowing holders to vote on network upgrades. While it’s not possible to directly attribute the growth to token utility, following the token launch, the active user base increased by 44% from 1.8m to 2.6m in three months. The number of token holders increased by 112% from 285k to 604k, showing a steady ecosystem growth.
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Optimism (OP): Primarily used for governance, transaction fees, and to incentivise network and user engagement. Token launch allowed the protocol to increase the number of active addresses by 166% from 138k to 368k per month.
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Polkadot (DOT): Utility involves governance, staking for network security, and locking DOT for parachain slot auctions to support ecosystem development and growth. The total volume of staked reached 663m in 23Q3, showcasing a strong token utility.
6. Detail around any risks associated with this strategy
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Low user adoption: Risk of low engagement or adoption of new token utilities through misaligned token utility or overly complex utility.
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Market conditions: Potential impact on usage of token.
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Legal and regulatory constraints: Compliance with crypto regulations.
7. If this strategy succeeds, what is the happy case?
Tangible, applicable models for token utility and strong community engagement with higher participation rates in governance
8. If this strategy fails, what would be some reasons?
“Random” collection of token utilities / not tailored to SAFE / not feasible
9. Assessment of the strategy’s maturity and if there is additional data that needs to be collected for the validation of this strategy
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The strategy is designed to be less mature and more experimental, reflecting the research mission’s nature (exploring what constitutes effective token utility) and the methodology for achieving impactful outcomes (we encourage various approaches to reach an outcome).
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Implementing a supportive legal framework to pre-vet token utilities could add significant value to keep contributions efficient and prevent non-regulatory compliant ones.
10. What budget should this strategy be allocated for?
Disclaimer: Please be aware that the final numbers might change based on the market price of the stablecoin allocation proposal.
200.000 USDC
Strategy 2: Foster module ecosystem
1. Which goals does the strategy look to drive progress in?
Foster vibrant ecosystem (Goal 1): SafeDAO benefits from a vibrant ecosystem built on shared components and standards. SafeDAO supports and empowers new and existing projects integrating with the Safe Protocol or initiatives supporting the usage of Safe Protocol.
2. Which metrics and KPIs could initiatives under this strategy be measured against?
Disclaimer: KPIs should always be considered in relation to each other and not in isolation. For instance, the number of modules developed should be evaluated in conjunction with their quality. We would always prefer two high-quality contributions over five low-quality ones.
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Quality level of proposed modules (via individual assessment)
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Usage of modules, e.g. value driven through modules / transaction volume / number activation / percentage of Safes with modules activated
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Integration of modules (actual traction and individually assessed via former cases/benchmarks)
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Developer satisfaction score (for improvements, via rating mechanism)
3. Outline the execution strategy or thesis
Developers are encouraged to create new modules focusing on new use cases, robust implementation, and thorough auditing. Creation of libraries and further developer tooling. Execution should have a strong emphasis on boosting the security of the module ecosystem, possibly through sponsored auditing. Prioritizing the development of Safe modules is crucial for the ecosystem’s growth, as it enhances Safe’s core functionality and drives onchain compatibility. For non-module-related development efforts, there is an alternative source of funding through the SAFE grants program.
4. What are some example initiatives that would fall under this strategy
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Creating new modules, e.g. recovery module, passkeys, security guard
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Make existing modules more accessible for developers and end users
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Porting existing modules
5. Detail around existing data or evidence to support this thesis
The Zodiac toolkit by Gnosis Guild is utilized by 239 entities, and has 19 active GitHub contributors, indicating its significant engagement and adoption
6. Detail around any risks associated with this strategy
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Curation and quality control: Risk of subpar module development without proper quality control
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Discovery problem and fragmentation
7. If this strategy succeeds, what is the happy case?
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Diverse and robust ecosystem: A vibrant ecosystem with a wide range of functional modules
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User satisfaction leading to development demand: Positive feedback from users leads to increasing demand for module development
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Strong market position: Enhanced competitive advantage through modularity in the industry
8. If this strategy fails, what would be some reasons?
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Poor quality modules: Development of low-impact or redundant modules with no clear value proposition
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Insufficient developer engagement: Lack of participation or interest from the developer community
9. Assessment of the strategy’s maturity and if there is additional data that needs to be collected for the validation of this strategy
The strategy has been assessed as mature as developing modules is a key growth driver, and it’s already showing initial traction in execution.
10. What budget should this strategy be allocated for?
Disclaimer: Please be aware that the final numbers might change based on the market price of the stablecoin allocation proposal.
300.000 USDC
Strategy 3: Increase awareness of Safe Ecosystem
1. Which goals does the strategy look to drive progress in?
Foster vibrant ecosystem (Goal 1): SafeDAO benefits from a vibrant ecosystem built on shared components and standards. SafeDAO supports and empowers new and existing projects integrating with the Safe Protocol or initiatives supporting the usage of Safe Protocol.
2. Which metrics and KPIs could initiatives under this strategy be measured against?
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Social media reach/engagement (for content pieces)
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Cost-per-activation (Number of attributable wallet connections (“users added”))
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Retention of attributable wallet connections
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Quality of content (via individual assessment)
3. Outline the execution strategy or thesis
The strategy could leverage content marketing and educational initiatives to highlight the benefits and functionalities of Safe products. This can cover IRL activations, educational content or documentation. This should not cover “random” educational initiatives that do not create an impact.
Initiatives for this strategy should show their previous track record, avoiding untested, random efforts. Due to the difficulty in measuring effectiveness, a higher reputation standard is crucial for ensuring impactful and reliable results.
4. What are some example initiatives that would fall under this strategy
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Partnering with thought leaders for webinars and live Q&A sessions.
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Creation of recurring content like newsletters or podcasts
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Interactive social campaigns encouraging user participation and feedback
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Workshops about how developers can leverage Safe products, e.g., SDK / Protocol with regard to modules
5. Detail around existing data or evidence to support this thesis
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Arbitrum Grants Program has expanded its awareness initiatives by engaging a broader group of contributors through various contests (like jokerace) and initiatives (such as the Gitcoin partnership). This approach has resulted in a significant increase in contributions (>20k contributions) and a surge in grant program applications, enhancing awareness. Similar strategies can be employed to activate the community’s interest in SAFE’s products.
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Polkadot and Revolut partner to launch a “Learn&Earn” course on Revolut’s platform in order to foster the adoption of crypto, as well as to bring interest to the DOT token.
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Optimism Collective’s RetroPGF is dedicated to supporting projects that help develop and use the OP Stack. Eligible initiatives include YouTube channels, newsletters and educational websites. 10m OP was allocated to 195 projects, where the top 10% of projects received more than 140k OP and generated measurable results reported in the forum.
6. Detail around any risks associated with this strategy
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Misalignment of content tone or subject matter with target audience
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Fragmentation and oversaturation of content
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Low impact production of content through AI tools
7. If this strategy succeeds, what is the happy case?
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Significant increase in ecosystem recognition and product understanding.
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Measurable uptick in wallet activations and sustained user engagement.
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Further establishment of Safe as a thought leader around smart accounts.
8. If this strategy fails, what would be some reasons?
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Ineffective content that fails to create an impact
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Inadequate reach due to poor distribution
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Not focusing on the right target audience
9. Assessment of the strategy’s maturity and if there is additional data that needs to be collected for the validation of this strategy
Quality assurance of contributions remains a challenging task, given the broad nature of the strategy. To avoid arbitrary contributions, we aim to especially focus on setting more specific examples and emphasize stringent feedback to ensure focused and effective progress.
10. What budget should this strategy be allocated for?
Disclaimer: Please be aware that the final numbers might change based on the market price of the stablecoin allocation proposal.
250.000 USDC
Strategy 4: Research decentralization of Safe tech stack
1. Which goals does the strategy look to drive progress in?
Resilience through decentralization (Goal 2): The Safe Ecosystem shall be independent from any single entity. The Safe Ecosystem components, including governance, should be decentralized and permissionless.
2. Which metrics and KPIs could initiatives under this strategy be measured against?
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Number of research pieces, incl. coverage of pre-defined elements
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Quality level of contributions (via individual assessment of depth, accuracy, actionability)
3. Outline the execution strategy or thesis
The strategy involves conducting comprehensive research and prototyping regarding the decentralization of the Safe tech stack.
4. What are some example initiatives that would fall under this strategy
Formats can cover initiating whitepapers or reports on different aspects of tech stack decentralization as well as developing prototypes or models to test theories and solutions in a controlled environment. This can cover topics such as potential censorship vectors, cross-chain scalability and compatibility, or (existing) tech stack considerations like the transaction service or fee engine.
5. Detail around existing data or evidence to support this thesis
This thesis is building on comparable research investments from other ecosystems, such as the Ethereum foundation investing into decentralization-related research such as lightclients, RPC decentralization or the decentralised relayer standard ERC-4337.
6. Detail around any risks associated with this strategy
The complexity of the subject might lead to challenges in communicating findings effectively so it can be used as a basis for practical development.
7. If this strategy succeeds, what is the happy case?
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Creation of a robust body of research that significantly advances the understanding of decentralized tech stacks.
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Development of practical solutions and models that can be implemented for improved decentralization
8. If this strategy fails, what would be some reasons?
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Research findings may not be actionable or applicable in a real-world scenario.
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Limited engagement or collaboration from the wider development community.
9. Assessment of the strategy’s maturity and if there is additional data that needs to be collected for the validation of this strategy
Strategy is aimed to be less mature and more experimental due to the nature of the research mission itself (many different potential solutions and duality on how to get to tangible decentralization of the tech stack) and the methodology of how to land at an impactful outcome (we encourage different paths to get to an outcome).
10. What budget should this strategy be allocated for?
Disclaimer: Please be aware that the final numbers might change based on the market price of the stablecoin allocation proposal.
200.000 USDC
Strategy 5: Increase governance participation
1. Which goals does the strategy look to drive progress in?
Resilience through decentralization (Goal 2): The Safe Ecosystem shall be independent from any single entity. The Safe Ecosystem components, including governance, should be decentralized and permissionless.
2. Which metrics and KPIs could initiatives under this strategy be measured against?
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Creation of tooling with believable impact on transparency
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Impact on governance participation (direct attributable increase in participation through tool): amount of tokens used for voting, amount of individual voters, distribution of voting power
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Impact on facilitation of governance process
3. Outline the execution strategy or thesis
Increasing accessibility through tooling, services and campaigns to increase active participation in governance processes and to enhance transparency and efficiency in the governance system. Additionally, increase contributor effectiveness through real-time accountability mechanisms, to increase the decentralization and capture-resistance of the DAO
4. What are some example initiatives that would fall under this strategy
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Development of analytics dashboards for real-time tracking of governance activities.
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Introduction of authentication solutions to secure and streamline the participation of stakeholders in the governance process.
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CRM tools specialized for governance to facilitate communication and decision-making.
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Implementation of partial delegation systems to encourage broader participation.
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Milestone tracking system or service to ensure transparency and accountability in governance decisions and resource allocation
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Development and execution of campaigns to encourage delegation and delegate participation
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Formalizing the power and decision-making structures (roles) in the DAO to create clarity, transparency, and accountability
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Automating authority and access management as a way to create security, decentralization, and accountability
5. Detail around existing data or evidence to support this thesis
There are various case studies how governance tooling, services and campaigns are being utilized. The following only serve as an example:
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Authentication Solutions: Platforms like Llama, Hats Protocol and Aragon aim to provide secure access control and action execution in governance. Lido is utilizing Aragon to secure its governance.
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CRM Tools for Governance: Tools like Tally improve proposal creation, voting, and delegation, enhancing communication and decision-making. Compound and Uniswap are successful use cases.
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Milestone tracking system: Gearbox DAO uses OBRA Framework to streamline and optimize resource allocation.
6. Detail around any risks associated with this strategy
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Increased operational complexity of the overall governance process
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Fragmentation
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Lack of composability of the tooling selected does not integrate well with existing or preferred tools
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Power structures remain undefined or informal in such a way that results in capture or dysfunction caused by individuals or factions
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Tooling selected does not effectively evolve with the needs of the organization
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Tooling selected optimizes for top-down communication but not bottoms-up communication from the community at large, resulting in implicit power dynamics
7. If this strategy succeeds, what is the happy case?
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Significant increase in the number and diversity of participants in the governance process.
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Enhanced transparency and efficiency in governance decisions.
8. If this strategy fails, what would be some reasons?
Lack of integration with existing governance structures and missing impact.
9. Assessment of the strategy’s maturity and if there is additional data that needs to be collected for the validation of this strategy
The strategy has been assessed to be mature, as it is fairly evident which type of initiatives and tools would be integrated, supported by data to measure governance activity based on services and campaigns in other DAOs.
10. What budget should this strategy be allocated for?
Disclaimer: Please be aware that the final numbers might change based on the market price of the stablecoin allocation proposal.
150.000 USDC
Wildcard strategy
1. Purpose of this strategy
Our wildcard strategy invites contributions beyond our predefined strategies, supporting wider innovations from builders and contributors.
For instance, initiatives for the wildcard strategy could encompass development efforts not limited to our module ecosystem, like dApps or infrastructures integrating the 4337 module, MPC implementations of Safe for hybrid custody, or the addition of more recovery providers.
2. What budget should this strategy be allocated for?
Disclaimer: Please be aware that the final numbers might change based on the market price of the stablecoin allocation proposal.
100.000 USDC
Open Questions
Anything that needs to be cleared up before the community can make an informed decision?
Acknowledgements
Special thanks to Auryn, Nick, Georg Reichhelm, jengajojo, Lindsey, Nneoma, Charlie, and Varit for their contributions and feedback.
Copyright
Copyright and related rights waived via CC0.
