PGM-50: Retroactive Grant Request

Hi everyone ! Great to see more comments here, and sorry for the late reply.
Many different topics were raised so I wanted to answer everything and back it up with facts/data, which took some time.

Indeed, what happened on PGM-46 demonstrated that many are not aware of the difference between a delegate and a service provider role. It’s also why the post contains so many details as it’s understandable for those not following closely the governance can be confused.

Thank you for the support, appreciated ser.

Also thanks for mentioning that. I believe you’re definitely not the only one with this issue, which is probably the reason why several people said the amount seems high.

It’s true that we don’t have many examples in the Paladin DAO itself, however I strongly invite everyone to check into other DAOs that compensate contributions in the scopes mentioned to see that the amount is already in the low range of the market cost. Not quoting any to avoid influencing researchs.

Also since we’re speaking about Paladin DAO, let’s compare wih the very few examples we have.

It’s really napkin math so might not be perfectly accurate (please correct if needed) but we now have Mithras Labs requesting $37K/month in cash to cover the costs of 7 people working there.

That’s $444K / year or $888K / 2 years if we’re looking at the same period. According to this post it seems that approx 75% of this is for team salaries, the remaining being taxes & utilities. If you divide this amount equally by 7 (which is most likely not the case in reality as profiles are different), it gives you $126.5K per person over a 2 year period so approx 5x what I’m requesting. Note that this is in liquid assets (ETH atm to repay the loan but USDC once debts will be cleared), and does not include any of the team allocations in PAL which comes on top.

Considering some are full time contributing to Mithras, it’s normal that this amount is way higher than what I ask, but it also demonstrates that the amount requested is more than reasonable especially in PAL, without even mentioning the locking terms.

This is an important point to discuss, and it should definitely be taken into account when creating the grant framework. However, as said above, these proposals are still contributions that had a purpose & took time to realize, so not rewarding it at all would be unfair as it would basically mean you get paid only if people agree with your ideas. However adding some security on the participation rate might be a good criteria.

To give a bit more context on the 2 ones concerned in this proposal:

  • PGM-XX: Treasury Strategy around Warlord - Replaced by PGM-31: I submitted this proposal which was a really complex one as it included many different topics around Warlord & treasury managements. It took a long time to prepare and draft, and even more time to discuss on the forum about the potential outcomes. Since we couldn’t find a consensus, the core team decided to resubmit with PGM-31, effectively replacing my proposal with a simpler version, making mine useless.

  • PGM-XX: OTC budget to onboard projects on Tokenomics - Denied in PIP-20: This proposal was made at the same time as PIP-20 and was aiming to allocate a % of the PAL remaining supply for OTC deals with project committing to the new tokenomics system, enabling them to enter with low slippage and allowing the DAO to repay part of its loan without selling strategic asset earning incomes or supporting strategies. As there was some pushback in the comment, I added another option of simple whitelist that was canceling this proposal, which is the one that got approved.

In both cases my goal was to improve the Paladin DAO, and you can see both were discussed a lot (the second one was mostly discussed in PIP-20) so I don’t believe these should not be rewarded but I agree the reward should be lowered, and I did reduce it before even posting.

Again, the DAO can afford an additional $12,5K expense in USDC if we were to switch part of the grant in stables. It would require us to sell some assets which might not be the most efficient, but as explained in Figue’s post about preparing for both loans repayment, we already need to sell some for Mimo and for Mithras at the end of March.

The difference between the need to gather 230K (Amount of Mimo loan & interest + 40K for Mithras) or 242,5K (if we add 12,5K for half of the grant) in USDC/ETH in one month is not high, which is why I keep saying that it should be considered if paying everything in PAL without vesting penalty is that much of a concern for everyone.

It would also be best for me because I would get rewarded with funds I can actually use now.

The above data was written yesterday so might have changed a little but as a reminder, the DAO treasury total excluding PAL & locked assets is around:

  • $24K on main multisig excluding POL (or $150K including stable/eth part of the POL)
  • $177,2K on the collateral multisig excluding POL (or $410,2K with ETH part of the POL)
  • $1K on the arbitrum multisig excluding POL (or $13K with ETH part of the POL)

Excluding the POL that’s a total of approx $202,2K, to which you can add:

  • The protocol fees & yield from strategies that will be generated by end of March (hard to estimate but I’d say at least 15K as last swap session we got 9,6K on mainnet and ~2K on Arb + the yield on the 2 other multisigs)
  • Approx 30K AURA unlocked by mid march on locked msig currently worth $24K.

That’s approximately the amount needed excluding POL (even though I think we should sell some stables in POL which we can build back later over AURA but that’s another topic) with current prices so not taking into account the market starting to wake up, but also assuming it doesn’t drop.

Even in the event where we’d have to sell the AURA unlocked & would be missing some, selling 5% of the non PAL in the POL would make an additional $29K liquid, which should be more than enough to cover everything.

Long story short we can afford to pay half of the grant in stables & repay debts.

Thanks for understanding. On my side I’m against vesting as it just doesn’t make any sense to favor this over a max lock commitment imo, and because none of the grants before got any vesting so it would be unfair & illogical (especially as grants are usually used to pay for expenses).

I hope this helps everyone with a better understanding of the treasury state & expenses.

Feel free to ping me if you have any questions.

Thanks for the feedback & support, appreciated.

The token amount is not that high tbh. If we compare with the Tholgar grant (biggest distributed so far in token amount iirc) we nearly distributed 75K PAL (down to 55K & 1 ETH to cover expenses).

According to PGM-38, they started to work on Tholgar when Warlord launched in June and requested the grant in mid September so that’s around 3,5 months of contributions for building it, to which we can estimate 1 month for additional contributions mentioned in the post prior to the deployment (requires confirmation or correction from @0xTekGrinder or @0xMemorygrinder on this estimation).

Again it’s really napkin math but assuming it was splitted equally, that’s 27,5K PAL each for 4,5 months, excluding the ETH. Assuming it took 2 years to build (just to compare with the same period as this proposal and taking the PAL amount as above), it would have actually made 146K PAL each, which is very close to my request, and it would actually be higher by taking the initial amount requested which was converted to ETH as well.

It’s also worth noting that the decision taken to reduce the grant in token size & avoid selling pressure back then was not to request a vesting, but rather to reduce the amount of PAL to convert remaining in liquid assets.

As for the market cap, it’s easy to say that now but I could also have made a similar proposal at the bottom price a few weeks ago, which would have more than doubled the issue.

Now imagine if 2 years ago I took the same deal as what I proposed (when PAL was trading at $1+), I would be unlocked now and would have contributed for 5x less than what I requested in usd value. Of course it can also happen the opposite way (which I hope tbh) but no one here can guarantee how much PAL will be worth in 2 years, as this ecosystem is really moving super fast and I could also end up with nothing.

What I propose is not only showing commitment, but also the risks I’m willing to take to avoid impacting liquid treasury (despite having expenses to cover, just like everyone else).

As for the concern on governance power, it is really irrelevant imo because even with this grant approved & max locked, I would still be very far from the top voters (who are probably either core team members or investors, which are not voting often but with considerable voting power when they do).

  • Looking at one of the most controversial proposals like PIP-14 which had the highest participation ever in votes amount, the biggest vote was casted by 0x8b53 with 890K votes (last time it voted).

Notes: The voting power is boosted when max locked and this address didn’t relock so currently has 1:1 voting power on 715K hPAL including 350K locked. This address also had a total vesting of 1,125M PAL (2,25% of the supply), of which 546K were claimed & 499K are claimable as visible on the vesting contract here: Read Contract → lockedAmount = total vesting; releasableAmount = Claimable; TotalReleasedAmount = Already claimed).

  • The second biggest voter (0x9F8F) voted with 771K last time (on PIP 14/16), holding 514K hPAL locked but not relocked so 1:1 voting power. It also had a total vesting of 675K (1,35% of the supply) including 479K claimed & 194K claimable.

  • The 3rd biggest voter on PIP-14 is Figue.eth, which despite voting more often is similar to ones above: 439K hPAL including 250K locked but not relocked so 1:1 voting power, and vesting of 2,13M PAL (4,275% of the supply) of which 595K were claimed and 1,39M are claimable.

As the 3 have similar patterns with same vesting terms & received from same contract & since Romain public address is one of them, I’m assuming these are all core team members. By adding the claimable amount, we can see that the vesting is ending soon which means a massive amount of PAL could be locked anytime to increase governance power.

Plus, if I remember correctly the last community call, it was said that all investors are now unlocked as well and that all the ones that wanted to sell did, which either means that others are waiting to be in profit again to sell, or they are planning to lock to participate in governance & benefit from tokenomics emissions.

On my side, I currently hold 95K PAL max locked on my ENS dydymoon.sismo.eth (as it’s max locked & since I have delegated voting power there too, this address currently votes with 335,4K votes), and if this grant was approved and max locked, it would increase my holdings around 250K PAL (0,5% of the supply) and this address would vote with ~ 560K votes including current delegations.

I can assure that even if I had 2 or 3x that amount locked, it would not represent much compared to the current total voting power, and even less compared to the estimated 20%+ of the supply released to the team & investors (as well as the projects/individuals that might enter the VF) which could all lock in theory.

Considering I’m the most active delegate, I don’t think having an important voting power is really an issue. However if these potential new lockers (who will further dilute current voters & lockers) don’t properly vote or delegate, it can actually be a risk of having proposals failing even if most delegates already voted as we have dynamic quorums, meaning that as more of the supply is locked, the quorum to make a proposal valid also increases.

Also, my goal is not to control the governance or to be able to pass controversial votes on my own (as demonstrate my track record including the renewal of the delegate program despite the 1st one not having much traction, to bring more diversity in the governance discussion & votes).

Moreover, surprised to get this concern from you @starny as you know very well that I’m quite concerned about decisions being taken by few people rather than by most governance participants possible and doing what I can to improve that aspect.

Hope the above helps everyone to have a better view how the locked hPAL supply could grow consequently if part of the team and/or investors and/or projects clients of Quest and/or any newcomer that can just buy on market or OTC were to lock once emissions begin.

I sincerely believe there is no way to be more long term aligned than what I initially proposed, which is a 2 year commitment in DeFi where everything moves at a crazy pace.

Interested if you have a counter proposal on something that would be even more aligned.

Hey Alex ! Thanks a lot for the feedback & support, appreciated !

As mentioned above in this comment, I really encourage anyone to look at other DAOs on this to be more familiar with the topic. Not sure I wanna quote a specific one for this as they don’t have the same size & don’t wanna influence the references, which is why I also took exemples in the Paladin DAO (despite that we don’t have much left).

Thanks. Indeed I haven’t seen an actual counter proposal that is not penalizing me despite having proposed two alternatives so far.

Well, thanks for this new comment full of inaccurate data & misinformation. Really starting to feel offended by your behavior in this post.

“There are no issues to reward outside of the amount & the timeframe” lmao

You are right, asking after 2 years of contributions is too early, should have waited until 2027 and requested 100$.

Not exactly, Tholgar members requested 27500 PAL each (not 37500 as part was switched in actual liquid assets = ETH), and according to the proposal it was for 3,5 months of work, which should be around 4,5 months with previous contributions.

Just calculate the same amount of PAL per person & per period on the same timeframe as this proposal, you would have seen the request is pretty similar without taking the ETH into account and higher if you take the ETH (in PAL amount).

As for the liquid part, I said multiple times I was committing to max lock instantly so this argument is irrelevant.

So you’re proposing a new tokenomics, but when its approved and a power user & involved DAO contributor belives enough in your project to max lock & stay aligned it’s an issue, despite other addresses having the ability to control much more than what I ever could ?

Also, are you aware your token is tradable & that anyone could buy that amount or more to control emissions ? (didn’t double check this 5% share tbh but I imagine it’s atm so before emissions begins which will bring many newcomers or remotivate old lockers, diluting current ones)

Not to mention I clearly expressed concerns about the emission proposed (I actually voted for a rework on PIP-14 but top holders showed up to make sure it would be approved, and I voted abstain on PIP-16) so it’s weird to see you being worried now.

Wait, so anyone adding liquidity on PAL LPs is now subtracting revenues from the DAO, just because we’re voting with its vlAURA holding to reduce PAL emissions while still sustaining the PAL liquidity ?

It reminds me of something I suggested to you in order to align LPs with specific gauges as I proposed on the Aave SM but you said it was ridiculous, I guess it wasn’t after all if you don’t want users to dilute the DAO strategies.

Anyway, to clarify I never proposed to be a full LP, it would be way too expensive and risky for me to source 2 ETH+ to pair it all. What I can consider is 25% (could try to push to 50% if really needed but would require around 1 ETH to add), of the grant paired with ETH and added in the 80/20 on Arbitrum.

So 25% of the grant + associated ETH would represent ~ $7,8K in LP. According to Aura Finance UI, the current APR of this pool is ~ 37%. Assuming I stay 6 months in LP with 25% before locking the remaining, it would make ~ 240$/month or 1440$ over 6 months. You can double that for 50% so 480$/ month or 2880$ over 6 months.

Even by taking 100% (which I’m not interested to do, but just to demonstrate you don’t seem to verify any number before posting nonsense) so a total of $31,2K LP, it would make 962$/month or 5770$ over 6 months, which is actually lower than your top estimation per month.

Not to mention this is accurate now with this APR, but may change if the DAO has to sell some AURA, reducing its emission power.

Hard to estimate what would yield the tokenomic part since it’s not live and we’re far from being able to distribute actual profit sharing in it so it will only be PAL rewards for some time.

On top of a grant that would be instantly max lock to support the project so not liquid at all according to my initial proposal* but again you keep pretending to not understand that.

Also since you estimated I’d control 5% of tokenomics emissions on my ENS if I max lock this grant + adding my existing locked hPAL: 250K PAL locked so 0,5% supply would control 5%, how much would you control if you were to lock the majority of your 2,13M PAL vesting so 4,28% supply (fully released in 3 months) + anything you farmed/bought on your ENS ?

Also how much would control the biggest investor if they were to lock now, or any other big holder currently liquid ?

Ofc I know you most likely won’t lock it all, but that doesn’t mean you can’t, same for others.

I am also requesting you to edit/delete this which is also absolutely incorrect and misleading for anyone reading only a part of the discussion please.

First, you’ve told me enough time I’m not a core team member (who are also receiving a salary in cash every month btw), so there is really no reason to compare here.

Then, it’s great that you bring up this topic, because I noticed something this morning about it when augmenting my answer, which I’d like to ask some clarifications about:

For context, the core team received an allocation of 15% of the supply approved by governance as can be seen in PGM-1 forum post & vote. However when checking some data to demonstrate the important amount currently released, I noticed the proposal specifies the duration terms to be 6 months cliff + 3 years vesting (at least for genesis team members as more arrived after so terms might have changed).

My concern is coming from the fact that the duration from the vesting contract returns 30 months as you just said, which either corresponds to 6 months cliff + 24 months vesting (if cliff is accounted prior to the vesting, which is how I understand PGM-1) or 30 months vesting (if cliff is included in vesting duration). If I’m correct, it would mean that one of the first governance proposals was not executed according to its vote, resulting in a reduction of 1 year (or 6 months) on some of the team vesting, including yours.

I also double checked with the formula (Total vesting amount - Claimable - Claimed) to verify proportions for which the remaining match the 3 months left to vest, meaning that these are ending in May 2024 instead of May 2025. This results in a single address having 1,39M PAL claimable (2,78% of the supply) when a part of it should still be vested 1 year from my understanding.

I believe this point should be explained and fixed as it’s concerning if initial vesting terms were not properly set up, especially as the DAO doesn’t have any idea about the initial repartition, about who received the remaining, how much and under which terms, potential vesting stopped, unallocated left if any etc

(Important to note that only with your ENS, it’s nearly 10x the amount requested here that can be either liquid or locked anytime but to be fair also that you and others 0x mentionned didn’t claim since a long time ago to not increase the circulating yet)

Taking all this into account, it’s probably easier to understand why I’m surprised about so much push back & concerns despite the full details added and max lock commitment from an identified grant recipient.

As said several times in this comment, especially on some data I had to check with sc calls and since I’m no expert, don’t hesitate to correct me if anything is incorrect.

Looking forward to more feedback & lmk if any additional questions !