Hello folks,
Over the last week or so, we as a community have been having a variety of discussions in community calls, discord chats, and here on the forum. I’m following up here to bring some of those highlights/questions/answers/ideas to the forums to help with conversation continuity. A lot of these things have been discussed already, but most of them have not yet made their way to the forums.
The Rook team and community feel there is a misalignment between the project’s stated mission and the priorities of ROOK token holders. Change is overdue. This proposal not only proposes a possible solution but also serves the purpose of formally beginning this discussion of how to solve this misalignment problem. The sooner we can have productive conversations the sooner we can come to some consensus about a solution.
I’ll jump right into some great comments/questions/highlights from other discussions, and I’ll also answer some questions that were directly asked here on the forums.
@Sha_har
https://discord.com/channels/732921100702318723/1088203620094320671/1088209218194112522
This proposed solution was not created specifically to combat rfvoors. In fact, this misalignment problem has been discussed internally and in the community for quite a while. The rfvoors event did, however, emphasize the need to get this conversation started sooner rather than later. A healthy solution is long overdue.
I would not go as far as saying that this project cannot continue with the current governance status quo, but the reality is that this project’s productivity and success has been negatively impacted and will continue to be negatively impacted unless we unblock this project’s mission (see this post’s proposal for an example of how to do that). The current token and governance status quo puts our development team at a handicap for securing partnerships and succeeding at our mission in a productive manner. Knowingly operating with a handicap is not ideal. And it’s also not ideal that token holders have their (good) ideas & proposals rejected due to lack of alignment with our project’s mission. Hence the desire for a solution that’s win-win for both the development team and the token holders.
Hazard provided an excellent example of this in the recent community call, linked below. I highly recommend listening to this if you haven’t already.
https://youtu.be/RBO2ofZALBg?t=1719
A.) MEV is highly competitive. Products and solutions must be fast to market, contain some % of proprietary infrastructure, and must maintain a competitive advantage.
B.) DAOs emphasize transparency, open source, community involvement, and governance proposal procedures.
Having A and B together is extremely difficult. Having B degrades A’s ability to be highly competitive in a market that rewards first movers. And having A degrades B’s ability to have transparency and community involvement. If we were fully transparent about everything we did all the time, we’d be handing out blueprints for what to do on a silver platter for everyone in the industry for free. That is a recipe for failure, especially because other projects aren’t limited (like we are) with restrictions that come with DAO governance and a token. In addition, our customers don’t even want to interact with a token, nor do they want DAOs due to the current regulatory environment.
As a result of all this, there’s tension between the DAO token holders and the Rook development team. My goal with this proposal was to begin the process of finding a solution. There are a lot of smart people here, we can certainly come up with something that works.
Now, let’s follow up on some more questions & comments:
Will Rook DAO remain after the creation of Incubator DAO? If not, what will the new legal entity/structure be?
The new entity will be whatever structure that maximizes the success of the mission & its products. The current DAO will remain governed by its multisig signers.
Why $10M and not half or all of the treasury?
The development team needs runway build industry-leading MEV products and infrastructure. This is the mission we set out to accomplish. If we gave all of the treasury to the Incubator DAO, we wouldn’t have runway to accomplish our project’s mission.
What happens to team ROOK tokens?
They will be treated the same as anyone else’s ROOK tokens, there will be no special treatment.
What do the original founders have to do with the project today? Or with this proposal?
I (JZ) am the only original founder involved in the project. Anyone can submit a proposal, just like I did with this one.
What does the founder lawsuit have to do with this?
Nothing, they are unrelated
Who owns the IP?
I do (JZ), my IP ownership over the technology dates back to early 2017 when I began building it. That’s well over three full years before the ROOK token even came into existence.
@Stile Could we have more info on the rationale behind this? Is it just to dissociate the current DAO from those that would like to liquidate the treasury and the potential legal risks that would involve?
We acknowledge the tension between the team and community. It has been concluded that the source of this is an irreconcilable incompatibility between the competitive necessity to push technology to achieve the mission and the community’s expectation about project transparency, the token, and token holder’s desire to use the treasury for non-mission related purposes.
@Stile If this were to pass, would there be any way for community members to still somehow legally maintain a connection to the project?
We’re open to ideas here. The Incubator DAO itself could come from a proposal to do something, once that DAO is booted up. A community member could also reach out to the Rook development team directly about an opportunity to work for us. After all, many of our full-time contributors were hired from the community anyways.
@Stile Is there a particular reason for the timing?
Many mainstream organizations have become significantly more risk-averse regarding DAO operations. This is true of both potential integration partners and other interested parties. In light of this, it has become increasingly challenging to meet partners’ technology and organizational preferences, which has prompted a conversation regarding the decoupling of the protocol development from the token and DAO.
@Stile If this were to fail, do you plan on making an immediate attempt at another type of proposal or would you allow some time to pass to re-evaluate the situation?
These proposals are where governance begins, not ends, and nuanced and constructive conversations are the only way to move forward with a framework that is befitting for all. This proposal was one possible path forward to address the concerns of token holders, community members, potential integration partners, and the development team. It was intended as a starting point for a larger conversation, rather than being put forward as a suggestion for a final outcome. We intend to maintain dialogue with the community to find the most suitable resolution regardless of the outcome of this proposal.
@rhizobtc Who would retain the management of Discord and Twitter/public coms?
The autonomous Incubator DAO would be free to set its own direction on brand, marketing and communications. Current comms channels might be repurposed for the new entity, but that will be addressed in more detail down the line.
@flips It should be clarified who are the current multisig owners of both the treasury and Strategic Reserve
The current group of multisig signers will remain for the current Treasury and Strategic Reserve multisigs.
Why can’t Treasury funding be allocated to community-driven ideas, marketing, or some other development project that would feed into the ROOK Finance ecosystem using the existing governance model
This is the misalignment between the project’s mission and the priorities of ROOK tokenholders. It is apparent that the tokenholders want the ability to pursue new initiatives, revitalize the Community, and increase interest in the ROOK token. With this separation between the development team and the token/governance, that is now possible.
@Wismerhill @Tony239525 Why is the token not a claim on the treasury by default?
The treasury was not accumulated through a token sale. In the governance beigepaper, it was explicitly affirmed that the token confers a single intrinsic right - the right for its holder to transfer it.
https://github.com/rookprotocol/kips/blob/master/gov-beigepaper.pdf
@Wismerhill @Tony239525 How can you talk about legal risk when you’re siphoning $7m a year?
We are investing in our mission. That involves attracting and retaining sought-after engineers, conducting R&D, paying for cloud infrastructure, professional services, etc. Paying engineers to build MEV solutions is what the project is about, but it’s clear that core motivation isn’t shared across the community. And that’s why we proposed the creation of Incubator DAO to clearly separate the differing interests.
Why name it Incubator DAO?
Name it whatever you want. This was a placeholder name.
