[RFC] Expand and Enhance SCCOC and Empower it to Close Staffing Gaps

Turned to PIP-44 – Vote: Snapshot


authors: @larry_cucumber, @leekuanjew, @cerunos


Abstract

This proposal aims to give our protocol the means to grow further, by seeking to:

  • Expand, Enhance, and Empower the Select Committee on Continuing Operations and Compensation (SCCOC).
    • Expand: from a 7-member body with minority DAO-elected membership to a 9-member body that’s majority DAO-elected.
    • Enhance: into a “standing committee” i.e. a committee with a permanent mandate and a rotating membership.
    • Empower: from a narrow set of discrete mandates to holding the “power of the purse” when it comes to all personnel matters of the DAO, including the Core team.
  • Authorise the appropriation of a budget of $2.5M to the SCCOC, until 1-Sep-2022.
  • Call for a by-election for the additional DAO-elected membership to the SCCOC.

Background

Pickle is at a turning point concerning our competitive positioning in an ever-changing market. We have proven our resilience concerning our decentralized way of governance as one of the first yield aggregators on the scene. However, we’ve also always been conservative (perhaps too much so) in the way we’ve managed our finances.

A majority of our token holders have locked for close to the 4-year maximum in DILL, showing their trust in the mission and vision of the Core team. Subscribing to the maxim of “trust, but verify”, we welcome oversight as it allows us to connect with the needs of the community and to jointly realize our potential. By building an increasingly perfect governance model, we serve as a catalyst for our Protocol to reach new heights.

Shift to Community-First Treasury Management

An important concept in governance is the “power of the purse”, or the ability to exercise oversight over executive power by controlling budgets and placing stipulations in the use of funds. In our governance, funds have been requested to the DAO since PIP-20 for significant discretionary expenses, and since PIP-22 to expand the Core team.

To capitalize on the competencies of our community members, the Select Committee on Continuing Operations and Compensation (SCCOC) was established in PIP-39, as a 7-member collegiate body with a narrow mandate to:

  • propose a compensation package for core team members @leekuanjew, @chimaera, and @0xanon whose contracts were expiring; as well as standardize compensation packages, hiring/firing processes, and talent management matters more generally.

The committee was formed by:

  • an election to appoint 3 committee members. This provoked an engaging atmosphere in the community and provided the committee with a high degree of legitimacy
  • @larry_cucumber, Pickle’s CEO; @jintao, an original multi-sig member; @rawb and @yyctrader who were appointed by Larry

It is abundantly clear that the SCCOC has filled an important role in community representation and oversight of the Core team. Although the Core team has been able to push forward objectives and deliver key results in a short period of time across many areas of interest, permanent oversight structures have been lacking, which we now believe are extremely beneficial.

Our protocol needs to take an important decision to stay competitive. As discussed in our last community call, our first anniversary is approaching and TVL >$100M is our new normal. We need to take the next big step and start investing boldly in key talent, new strategies, and novel mechanisms to reach our next goal: $1 billion in TVL.

Given our strong financial position, having enough provisions to operate even in a prolonged downturn, we can confidently start investing in accelerating our growth and securing our future.

Proposal

This proposal is to Empower, Expand, and Enhance SCCOC, established by PIP-39, as follows:

Empower the SCCOC with the “power of the purse” - $2.5M/year

Empower the SCCOC with discretionary contributor spending powers (e.g. funding of Core team, Periphery squads, contractors, marketing, event organization/sponsorship).

  • the permanent mandate of the SCCOC will be “to ensure the availability of a competitive and willing pool of talent to run and contribute to the DAO”. This includes but is not limited to:
    • administering the talent management Budget of the DAO; apportioning it between Core, Periphery, and Other categories of contributors; and overseeing recruitment for these roles
    • setting standards for compensation plans and packages, including tiers, titles, and salary bands for contributors
    • setting hiring, retention, and firing processes for core contributors as well as rules for the procurement and engagement of non-permanent contributors.
    • investigating all matters relating to human resource management as well as auditing the Treasury in order to carry out its reporting duties.
    • as the “power of the purse” originates from the DAO, the DAO will retain power, via the PIP mechanism, to appropriate funds and earmark them to/from the SCCOC.
  • the SCCOC will also have the duty to report to the community at regular intervals (quarterly, at minimum) on the state and progress of matters under its mandate. For this purpose, it will elect a Secretary from amongst its community-elected members who will be responsible to collect and publish the SCCOC’s official reports.
    • as the SCCOC will, in the discharge of its mandate, engage in some form of administrative rulemaking for the DAO, a “comment period” shall be required before each rule is adopted where DAO members shall be able to give their input for the SCCOC’s consideration. The comment period shall not be less than 3 days unless the SCCOC unanimously approves otherwise for exceptional circumstances.
  • an inaugural budget of $2.5M is requested for the inaugural term i.e. until 1-Sep-2022.

Expand the SCCOC to a majority of DAO-elected members

SCCOC is currently a 7-seat body (current members listed above).

  • SCCOC to become a 9-seat collegiate body:
    • 3 Core team members
      • Larry and 2 other Core team members, appointed by Larry.
    • 6 DAO-elected members
      • 3 already-elected by the DAO: @merpenduous, @cerunos, and @cipio.
      • 3 additional members from the DAO, to be elected in a special by-election, following an internal nominating process.

Enhance the SCCOC to “standing committee” status

SCCOC will be a permanent organ of the DILL DAO, with rotating membership but a perpetual mandate.

  • DAO-elected SCCOC members to have a term of 1 year.
    • Term for those elected will end on 1-Sep-2022.
      • There are no term limits, members can stand for Nomination again.
      • Nominations will run from 1-Jul-2022 to 15-Jul every year.
      • Election Day will be 1-Aug every year.
      • Winners will assume their seats for the new term on 1-Sep when the handover will take place.
  • Whenever members cannot serve for their whole terms, a by-election will occur within 1 month of the resignation or removal of an existing member. Winners serve the remainder of the term.
  • Elected members of the SCCOC can be removed as follows:
    • due to inactivity, no elected member of the SCCOC may exhibit high levels of absenteeism or dereliction of duty. A motion can be passed by the SCCOC to remove the member in question.
    • due to a conflict of interest, no elected member of the SCCOC may be involved in an official capacity in the running or governance of another protocol. A motion can be passed by the SCCOC to remove the member in question.
    • due to special circumstances, at the discretion of the DAO. Using the PIP mechanism, a motion of censorship shall go into effect immediately and remove the member(s) in question if it passes as a PIP, according to regular rules of governance at the time.

Rationale

We must continue to further decentralize governance. A lean multi-sig is great for operational efficiency, but oversight by the community can be improved; the proposed SCCOC does exactly that.

  • But isn’t $2.5M a lot… why? :thinking:
    • current protocol finances are super healthy
      • Treasury >$2M
        • stables in reserve: $1.4M approx.
        • ether in reserve: 100 ether or $0.37M approx.
        • smart treasury ($0.45M)
      • Treasury revenues: $3.6M/yr, based on the most recent week
      • Burn rate: $1.3M/yr, mostly in salaries
      • Revenues approx. 3x burn
      • Practically infinite runway since (revenues >> burnrate). Assuming zero revenues (extremely unlikely), 18 months.
    • staffing gaps to scale are significant
      • Pickle’s salaries lag a little for top DeFi talent
      • currently, the team additionally needs:
        • 1 blockchain solutions architect or CTO
        • 1 strategist/smart contract dev
        • 1 frontend/Web3 dev
      • the SCCOC should determine this in more detail in consultation with the team as well as with the reality of candidates Pickle is able to attract. The bottom line is that the budget request is not excessive if Pickle is looking to expand (and take its rightful place as the best yield maximizer in DeFi :wink:).

Vote

This is a binary vote. The option that wins a simple majority of the casted votes will be implemented by the DAO.

  • For: “Proceed with Proposal”
  • Against: “Do Nothing”

Thank you for reading and your participation. And as always…

4 Likes

I support this. It does seem that the responsibility for this role will be pretty significant. Will there be compensation for this role outside of the 2.5M/year for those serving. It would seem to be beneficial to making sure that this role isn’t just served by those who have the financial capacity to serve in the role and invest this time, but those with expertise and connections.

basically a stipend or something of that nature would be beneficial. I fully support this proposal though. I think the continued oversight by the DAO was an important component in the mechanisms for removal.

5 Likes

This is very well written I support this proposal

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I fully support this, thanks for bringing it up. This is definitely work that should be compensated. I thought about baking it into the main proposal, but it already had more than enough meat to it… :sweat_smile:

So from my experience working with the existing hiring committee, I’d say the members put on average 5-10 hours over the span of a month to decide hiring matters for 1) LKJ, chim, anon, 2) fennec, and 3) myself.

I think a stipend to the tune of ~$700/month for each of the members of the commitment outside the 3 core team members may be fair. This bears a total annual cost of $50.4k to the treasury. Perhaps this can be used as a starting point, and adjusted up to a cap of $1000/month (or more, depending on what others think) at the discretion of the team (cost of $72k), just so we get the budgetary approvals out of the way.

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I m not the right person to argu on this because I will benefit from it if it is voted, but compensation is a good idea in my opinion to ensure dedication and fairness with no other form of remuneration perceived…

Concerning the amount something from 700-1000 $ as a basic seems fair, it will depends on the work load / missions the committee is managing, we will perhaps need a vote on both RFC / Discord about what the Dilldao think it’s fair? It must be voted by te community.

As @Jomari said it will ensure everyone can invest himself in even if he does not have already enough wealth to sustain himself.

@Larry_Cucumber i think I have spend a bit more time than 10hours, as a French guy I m taking more time translating documents :stuck_out_tongue_winking_eye: joke aside we had many discussion outside the committee with our own personnal advisors and sourcing info and discussion with concerned party…still when you do what you trust in to ensure quality you do not count your time :nerd_face: and it’s a big honor to put our experience network and competence to the greater good!

1 Like

My intention was to get all budgetary approvals out of the way as part of this PIP, just to not have to create a separate proposal (as the topic of committee compensation is germane to this proposal). Happy to hear others’ thoughts on what they think a fair number is (I appreciate that you spent more than 10 hrs :pray:). Perhaps we can request a blanket approval of $100,000 to be used at the discretion of the team for compensating the committee?

2 Likes

An average pickler does not know where the treasury is and where it is going. Can the treasury have a forum thread with some basic accounting for the interest of transparency? Quarterly or bimonthly updates would suffice.

$10k ETH and 300 GWEI floor are a possibility. I think we should keep a large proportion of treasury on Polygon and do payroll there, so that we don’t burn too much money on transaction fees.

4 Likes

I agree with both of these points. Perhaps not a thread but at least a monthly(?) update on where treasury funds are being spent with a full cost breakdown. Would add to the workload of the committee but would be a useful exercise in keeping the community engaged.

2 Likes

I think the workload does not need to be high.
Accounting is already being done. Copy-paste into the forum should suffice.

1 Like

General proposal is a great idea, problem is that you basically vote for a black box, no one has an idea what the people actually do/ what’s the reasoning for the decisions. Monthly updates where the SCCOC explains the progress/reasoning/development should be required as part of the compensation.

3 Likes

TL;DR: If we are spending $2.5m, let’s spend 1.5-2m USD and $0.5-1m in long term vested PICKLE to make sure incentives are aligned.

$2.5m is a lot of money.
Spending it with limited transparency does not feel right even in the crypto world. Since spending plans are so generous, vesting should be discussed to make sure incentives are aligned.

Looking at the incentives, the protocol revenues are derived from the hard work of core team and the value of the Pickle token. Thanks to the Pickle token retaining value, PICKLE incentives lure people to deposit money and generate profits from the 20% fee. The Pickle token price is the marker of the protocol success. Without the value in PICKLE token, it will be hard for the protocol to succeed in the long run.

There is an interesting thread [RFC] Team incentives - #7 by Bayes touching on this subject.

Picklers show their confidence in the protocol by locking PICKLE for 4 years.

This proposal says nothing about the vesting schedule and vesting times. leekuanjew’s salary comes in a 2:1 mix of stables and PICKLE. I did not find details about the vesting schedule on that.

To keep the incentives aligned, it would be best to pay renumeration in a mix of stables and vested pickle/DILL. A proportion of the renumeration locked for 4 years (2:1 sounds ok) comes to mind. If picklers have confidence to lock for DILL for 4 years, the team and the contractors will likely be ok to have some Pickle locked.

There is no mechanism to algorithmically lock pickles for DILL. However, there are plenty of easy ways to implement token vesting for example: https://github.com/DeversiFi/ethereum-vesting. Handling vested PICKLE on mainnet is expensive, having DILL on Polygon could resolve the cost issues.

1 Like

Good ser, I appreciate you being active and asking important questions here. Let us take a step back and reason what is the purpose of this elaborate proposal: it is a system of checks and balances for the DAO to monitor this category of Treasury spending (the largest) and all processes relevant to the matter. The main point is to eliminate “limited transparency” and transition to full transparency.

  • DAO elects the overseers. Two-thirds of the body (6 out of 9) are directly elected by the community and the other third is 3 members of the core team including the CEO/Larry. The core team members have all been themselves vetted by the current SCCOC, and are the people that will work with new core members, peripheral members, and other contributors.
  • DAO can dismiss the overseers at will, with full discretion.
  • the SCCOC has reporting duties. On a previous internal draft, these were explicit. The language was cut (together with a lot of other details) with the intention of making the proposal less verbose. We probably should add explicit language to these duties in back on the final PIP if we can get rough consensus at this stage. I believe a monthly update/call should be reasonable.

Just to clarify that the SCOCC isn’t responsible for the Treasury, and will not be under this proposal. That is still a power the DAO has given to the Core team upon the enablement of fees and reaffirmed subsequently many times. The Core team provides updates on Treasury matters at regular intervals. The last update on the Treasury situation was two weeks ago during the Community Call – the minutes of which have been posted on this Forum. This reporting is for ease of understanding, our Treasury addresses being on-chain.

I was hired under the authorization of PIP-22. Indeed, payment has been in stables and vested PICKLE in the ratio described there. This was pre-DILL. The vesting is for 1 year, to match the compensation. Every quarter, 25% of the vested PICKLEs unvest. I have received 2 such PICKLE payments and locked for DILL out of my own will. I have also locked for DILL my own money and virtually all earnings from DILL I have re-locked. You can see my interactions with the DILL contract here: Ethereum Transactions Information | Etherscan.

I believe we should not mandate this to the SCOCC. The point is that they have ample powers to decide on the best possible compensation policies that are adapted to the time – this being an evolution of their current powers. In my renewal contract, I got 35% vested PICKLEs out of total compensation of $200k/year. The strike price was the day’s low for the day of the renewal – which happened to be a spike over the recent price trend. Not getting nitpicky, but to use it as an example, I don’t think the way we pick the strike prices is that attractive compared to other protocols that use formulas like “discounted TWAP” to set these strikes in a way that’s less arbitrary but that’s the policy that was in place from the previous PIPs and the SCCOC was working in a hurry to evaluate our performance and decide on the renewals, this particular point wasn’t dealt with. I personally believe empowering the SCCOC to decide and then have to justify those decisions publicly is the best way for our infant DAO.

On your other point about using DILL or requesting the Core contributors lock for DILL on top of their vesting, this would also change the calculus of compensation as DILL in 4 years (or 4 years after the vesting period) isn’t the same level of risk as PICKLE in the here and now (or at the end of a vesting period). The DAO may not be able to execute its desired staffing plan if suddenly it needs to pay a significant premium over current compensation levels (think at least 50%, probably >100%) in order to comply with a mandate that 1/3rd of salaries come in a 4-year lock, and that’s beside the engineering complexity of having a smart contract lock for DILL on behalf of DAO contributors. I believe the current system has been working well for now, and that a sufficiently empowered and involved SCCOC can amend things as necessity and reality signal adjustments are needed.

2 Likes

I totally agree with you, transparency can only be achieved though reporting, and also is part of what justify remuneration…I will gladly propose myself to ensure these monthly report with both support from other members and core team! :nerd_face:

2 Likes

I also agree with you we need to make accounting transparent as much as possible!
Bur putting it on forum is a bit too much as it’s internal documents, which should not be too much « public » in my mind, Strategically speaking, only for Dilldao members who are mostly like « shareholder », when classic pickle holder are more « common clients », so « common » information are what they already have through Weekly Pickle reports… what do you think?

I was thinking adding an « finance report » provide by Dilldao each quarter, and our monthly report will have essential details information about how treasury funds are used? What’s your opinion @napa @Maz @Wunderbernd ? :blush:

3 Likes

This is an important move in helping Pickle take a giant step forwards. We have spent the last 6-9 months building the foundations, now it’s time to start construction in earnest.

I suggest that we move forwards with a snapshot to vote this in asap, 24 voters have unanimously indicated the proposal should move forward for DAO consideration.

5 Likes

So, I agree with some of your ideas, but you’re thinking too detailed rather than what is being proposed.

The proposal is that the DAO get an official representative body that should ideally be responsive to the people. The details (setting a policy for how much of compensation should be pickle, should it be required locked, etc) could be decided in that committee and be changed by that committee as either market or team conditions change.

By having the entire DAO decide these finer details directly and in pips, it becomes very difficult to change in the future, leaving the protocol inflexible to changing situations.

Generally, a government does not have the entire citizenship vote on specific budget amounts for each and every department. The representatives will do that and will be required to provide their minutes / summaries of events and debates for transparency. And of course, if you all are serious about electing your qualified representatives, then you’ll be perfectly comfortable suggesting your ideas to them regarding vesting terms or other staffing ideas specifically.

There are problems with making everything public. If two workers have a pay differential, and it becomes public, one may become grumpy. We clearly can’t just publicize what everyone makes. But I think we should publish stats more generally about how much we spend on compensation and maybe split it into departments.

It is totally within the DAO’s powers to (for example) mandate salaries are paid on Polygon, but I also think that’s an implementation detail better left to the committee with the community suggesting it to the committee.

My personal opinion is this: We’ve recently seen how a whale or two can sway a PIP. Hold one on a slow day, or on a day where people aren’t paying attention, and a single whale can implement whatever policies they want. I’m not suggesting we have such a malevolent whale, but, it’s possible. Wouldn’t we be better off having an election and ensuring wide voter turnout and then a representative government that teh DAO trusts could make a lot of these implementation decisions with feedback from the community?

To improve the proposal, we could mandate a week of public comment on any issue before the committee is allowed to make large policy decisions. This would be similar to the USA’s executive branch making rule changes and changes to the list of regulations. And I think this would be a good addition.

I think we’d all agree having to have a PIP every time the core team wants to hire someone is bad. I think we’d also agree having Larry make all the decisions with no oversight whatsoever is also bad (less bad but still bad?). The compromise should be a permanent body we can trust, with requirements for reporting and soliciting community feedback, that can make these decisions, rather than have the DAO have to support individual hirees.

2 Likes

thanks everyone for comments

leekuanjew, thanks for clarifying. “Burnrate: $1.3M yearly, mostly in salaries” could do with some expanding. Transparency is very welcome :-). Looking at the treasury address, it strikes me that it’s very fragmented and it will cost a lot of ETH to liquidate it. I think this treasury should be ready for 200-1000 USD ETH mainnet transaction fees. I think Pickle should slowly but only partially migrate towards Polygon. Maybe a long term plan to concentrate the treasury should be put in place? Something to think off in a bear market one day in a few months.

I have misunderstood a few things about the SCOCC.

leekuanjew, salaries in DILL have been discussed before and I agree these are impossible. My point is that part of the salary can be paid in vested PICKLE, completely outside of DILL. Vesting contracts are widely used in DeFi and pretty mature. If 2:1 mix is too harsh, maybe 80-30 or 80-20 proportion would work better? Essentially, if you bring in a contractor dev to do work for Pickle, his work will be different if you pay him pure USD vs mix of USD and vested PICKLE. It’s just a natural incentive.

Kudos for locking up Pickle, leekuanjew!

Cerunos, « finance report » provided to the Dilldao each quarter outlining how treasury funds are used would be good :slight_smile:

Rawb, I agree I might be too detailed. Thanks for clarifying things that I got wrong. I agree with the public comment things. Picklers are indeed missing votes and letting whales steer the ship. Maybe communicating planed votes a few days early in Discord announcements and extending them from 2 days to 4 days would do some good? Some people did not vote recently because they were busy at work.
Agreed, having to have a PIP every time the core team wants to hire someone is bad.

To sum up:
1 Some more details than “Burnrate: $1.3M yearly, mostly in salaries” will be welcome. Posting that for “shareholders” in dilldao quarterly would be good.
2 Since we’re agreeing to spend $2.5m, we could take an opportunity to add some incentives here. Paying in DILL is impossible. Paying in vested PICKLE is possible. If this is unrelated to SCOCC, maybe a different thread is justified? The bottom line is that paying a contractor USD vs USD+vestedPICKLE will likely result in different quality of work.
3 Treasury is unprepared for success of Ethereum and $200-1000 transaction fees. With $1000 tx fees on ETH, significant part of the treasury will be bricked. Maybe we should plan to consolidate in a bear market within a few months?

1 Like

Currently, everyone gets between 20-40% of their salary in PICKLEs. Larry gets more PICKLEs because his PICKLE grant isn’t a % of salary but a fixed amount of PICKLEs which is big and so it constitutes a bigger chunk of his salary. The contracts are for 1 year so the vesting is every 3 months, meaning there are 4 vesting periods in a year. I think going above 1 year means people are putting their faith in work that will be done outside of their contract period so it is not a better alignment of incentives.

@0xAnon has the better numbers but even with high gas fees we are spending 85-90% in salaries.

I don’t think it’s unrelated but it is how things are done at the moment – so there is not a need, in my opinion, to add it to the proposal – it’s unnecessarily prescriptive. My advice would be, if you support community governance, please consider supporting this PIP. The candidates will have to get nominations and essentially campaign on Discord. In these “town halls”, I would ask if they can commit to only support packages with high ratios of vested PICKLEs and hear their answers. You can vote in those that have your trust and campaign to vote out those that betray it.

This is a good observation, and rest assured L2s will probably help here, which is why we are not overly concerned. At the moment, we constantly sell small positions when gas is low ( that’s one of @0xAnon 's main duties ). I expect protocols like Gnosis Auction which we currently use to unwind our Treasury positions for stables and ETH to deploy on L2 and we should be able to batch our auction with others to pool funds and absorb the mainnet transaction fees together. However, the management of our operational Treasury, while I understand its importance and your interest, is indeed outside the scope of this RFC and of the SCCOC’s mandate and powers.

3 Likes

this is a good plan, thanks

3 Likes