KIP-34: Labs Budget Request Through Year-End 2022

kip: 34
title: Labs Budget Request Through Year-End 2022
category: budget
authors: @DaddyMatty <[matt@rook.fi](mailto:matt@rook.fi)>
status: final
created: 2022-09-26
replaces: KIP-15
dependencies: KIP-15

Proposal

Allocate USDC, ROOK, and ETH for Rook DAO Labs through December 2022 in accordance with the Official Budget as defined below.

References

  1. Rook Treasury holdings
  2. KIP-15
  3. Rook Labs holdings
  4. Previous budget request
  5. Q2 Report
  6. Labs Ledger
  7. Team Building Research
  8. Distributed Teams Research
  9. High Performance Teams Research

Background

Summary

This budget outlines current and forecasted needs for various areas of Rook Labs operations for the remainder of Q3 and Q4, or through December 31 2022 (“Budget Period”).

This budget, if approved, will allow for the transfer of requested funds from the Rook DAO Treasury (0x9a67F1940164d0318612b497E8e6038f902a00a4) to the Rook Labs multisig (0xa8b0a855BE21568B93f32805b244158Cc61AD006). In addition to 5 ETH to pay for network fees, the funds requested in relation the current assets held by labs [3] are as follows:

image

Based on the Treasury’s financial position [1], this net funding amount would equate to less than 2% of our stablecoin balance as of September 26, 2022.

Note: While much of the costs requested are expected to fund ongoing programs and initiatives, approximately $403k (or 58% of the requested funds) are anticipated to be used to support the development of new projects and objectives. These anticipated costs are highlighted in more detail in the Key Highlights sections below.

Recap/Rationale

In February 2022, the Rook Labs team requested funding through KIP-15 [2] to support the ongoing operations and development of key Rook processes and infrastructure through June 30, 2022. More specifically, this proposal requested an allocation of 3,310 ROOK and $500,500 USDC to be transferred from the Treasury wallet to the Labs wallet.

The Rook Labs team used this budget to make progress on multiple fronts during the budget period, all of which can be found in the Labs Q2 report [3]. Labs also showed strong financial discipline in their spending, using less than 60% of the budgeted ROOK and approximately 70% of the budgeted USDC for a period longer than budgeted for.

The “budget-to-actual” tables below provide further detail of this discipline. “Actual” data presented below and pulled from the Lab’s Ledger [6] includes March 2022 as the budgeted amount are for March 1, 2022 through September 26, 2022. The following schedules present the Labs’ utilization of funding vs. what was allocated by the DAO:

The following schedules present the outflows by function from the Rook Labs’ dedicated multisig:

Term and Total Request

For what remains of 2022, Labs is budgeting total USDC and ROOK needs of approximately $689k and 1,500 ROOK units, respectively; however, because of the disciplined spending in the prior quarter, there is a large surplus of approximately $129.6k USDC already in the Labs wallet that is expected to offset this funding need by roughly 19%. The net funding amount of approximately $485k is expected to fund Labs through December 31, 2022 (“Budget Period”). The schedule below this reconciliation of budget funds to funds remaining from prior funding cycles:

The following schedules present the summary of Q3 budgeted costs by both Labs function and cost category:

image

Budget Detail: Individual Team Allocations

Engineering

The schedule below presents the summary of USDC needs through December 31, 2022 for the Product and Engineering team.

  • Key Highlights:
    • This team is expected to continue with the current contractor engineer as well as two other new engineers to assist in our internal product development. Each of these contractors is expected to cost $12k each
    • Dues and Subscriptions is comprised of various ongoing subscriptions, of which AWS is expected to cost $24k.
    • This team plans on leveraging the community for miscellaneous developer grants by deploying up to $500 per week.

Growth

The schedule below presents the summary of USDC and ROOK needs through December 31, 2022 for the Growth and Operations team.

  • Key Highlights:
    • The majority of budgeted funds ($54k) for this team are expected to be utilized for a sales development representative contributor to help manage the administrative side of the team’s business development (“BD”) initiatives, as well as a Comms/PR specialist.
    • There are $20k in budgeted funds reserved for conference expenses for the sales team to attend.
    • It is expected that approximately $6k in requested funds will go towards community grants to assist in the development of research pieces and other content that may aid the BD or operations functions.
    • The Growh and Operations Team expect to incur approximately $18k for various community and discord improvement projects.
    • Lastly, the Team is requesting 500 ROOK to support a new user incentive program expected to be created

Organization

The schedule below presents the summary of USDC needs for Q3 for the Organization Team.

  • Key Highlights:
    • The largest set of anticipated expenses expected to be incurred relate to the establishment of more formal legal entities, structures and compliance-based initiatives
    • Also included in Other Expenses are $26k of costs expected to be incurred in October 2022 to support the Offsite initiative discussed further below.
    • Budgeted contractor expenses are expected to support the continual funding of an internal governance associate, technical recruiter and another new anticipated contractor expected to support internal organizational operations
    • Lastly, this team is budgeting $20k for this Budget Period to provide community grants to community members that are expected to work on organizational operations project based work

Studio

The schedule below presents the summary of USDC needs through December 31, 2022 for the Studio team.

image

  • Key Highlights:
    • The majority of the budgeted expenses for this team relate to paying external parties for various marketing and branding initiatives including:
      • Content syndications (partnerships)
      • Speaking opportunity placements
      • Conference sponsorship
      • Other marketing and design work
    • The Studio Team is requesting approximately $23k to continue the Starbased community content service that was initiated in Q2 of 2022.
    • The remaining funds will primarily be used to fund various contractors to assist on copywriting, graphic design work, and video/content creation

Treasury

The schedule below presents the summary of USDC needs through December 31, 2022 for the Treasury team.

  • Key Highlights:
    • The majority of the budgeted expenses for this team relate to support two existing contractors that have been assisting on recurring Treasury initiatives. Additionally, the Treasury Team is expecting to use $6k in requested funds to bring in a new contractor to assist on ongoing Treasury efforts.
    • In addition to these contractors, the Treasury Team also has budgeted to incentivize other community members to support various community based projects.
    • Other Expenses include $15k in requested funds to support effort to automate the accounting function for both the Treasury and Labs. Lastly, the remaining $3k within this category is expected to be used to support travel and conference expenses.

Leadership

The schedule below presents the summary of USDC and ROOK needs through December 31, 2022 for Leadership (Hazard and JZ).

  • Key Highlights:
    • To effectively position the DAO and the protocol to be prepared for the rapidly evolving DeFi landscape, Leadership has earmarked $54k to be leveraged to hire 3 research contractors. These contributors will help develop deep analysis that will aid Leadership in making more effective and efficient decisions.
    • Other expenses are comprised of a $60k USDC and 1k ROOK discretionary budget. While not strictly defined, these discretionary funds could be leveraged for items such as:
      • Team deficits as a result of unforeseen circumstances
      • Activities that require greater levels of confidentiality or speed
      • Additional incentives to encourage partnerships

Budget Detail: Highlights

Q4 Offsite

Occasional face-to-face meetups [7], including a mix of working on real tasks, brainstorming, and getting to know each other, are the lifeblood [8] of distributed teams and are demonstrated to increase productivity through cohesiveness [9].

Some organizations meet up very regularly, up to once a quarter. Given our distributed team, this would not be practical nor financially viable. We will need to calibrate our perfect ratio as we understand our team dynamics more in depth. As initial step, we have started organizing our first full team meeting, taking some non-negotiable design elements into account:

  • Key Deliverables: retrospective, prioritization and planning for Q1-Q2 2023; brainstorming session at team and organization level; strengthen human connections, to boost the team ability to deliver.
  • Location: proximity to the majority of team members (to limit cost of travel and cost of jet lag); we opted for a destination in Mexico, as it provides better cost efficiency than locations within the United States.
  • Venue: preference for a single facility with the possibility of cooking own meals and strong wi-fi to be able to work from.
  • Duration: 4-5 nights

The meetup week will take place October (24th to the 29th). The expected cost breakdown is below.

ETH Requirements

We intend to use 5 ETH for network fees incurred during the transfer of grants over the budget period. The increase in ETH funds requested can be attributed to the following factors:

  • The new Compensation 3.1 structure requires that the ROOK component of
    contributor compensation be disbursed to each contributor monthly.
  • With additional contributors and other meaningful activity, we have exhausted
    budgeted ETH funds quicker than expected in previous quarters. The previous
    quarter’s funding was utilized in full in approximately 6 weeks, resulting in
    contributors using personal funds to cover gas costs.

Implementation

Multisig Implementation

This budget, if approved, will allow for the transfer of requested funds from the Rook DAO Treasury (0x9a67F1940164d0318612b497E8e6038f902a00a4) to the Rook Labs multisig (0xa8b0a855BE21568B93f32805b244158Cc61AD006). The current signers of the Rook DAO Labs multisig are:

Excess ROOK and USDC Rollover

The budget above represents in all cases an upper bound. It isn’t required that Labs spend all of it, and we do not seek to. If excess ROOK or USDC exists at the end of the budget period, it will carry over into the subsequent budget period unless superceded by another KIP.

Specification

  1. Transfer, 560,177 USDC, 17 ROOK, and 5 ETH (for gas) from theRook DAO Treasury (0x9a67F1940164d0318612b497E8e6038f902a00a4) to the Rook DAO Labs multi-sig (0xa8b0a855BE21568B93f32805b244158Cc61AD006).
  2. As appropriate, provide funding from the Rook DAO Labs multi-sig (0xa8b0a855BE21568B93f32805b244158Cc61AD006) to meet the needs outlined above during the budget period.
  3. Ensure proper recordkeeping to provide for ongoing review of any transactions by the DAO on the public Labs Ledger [5].
  4. Continue to provide detailed quarterly reporting to the DAO on expenses and revenues.
3 Likes

Hi all, the Labs team has some upcoming marketing/media initiatives planned, and will be updating budget allocation for the following line items in the Studio budget:

Update:
Content Syndication - new total 65k USDC
Video Creators - new total 30k USDC
Brand Designer - new total 20k USDC

2 Likes

This proposal was discussed at our recent Treasury Tuesday and received support from those attending. A recording of the meeting can be found here.

2 Likes

10/10/22 Update: These changes have been updated on this KIP as requested

1 Like

This proposal has reached Sophon consensus of No objection, and will be live for voting from 2:30 ET October 18 for three days on Snapshot

Voting has closed for this proposal, with roughly 16k ROOK and equivalents voting No objection, and less than 1 ROOK voted to object.