ATOM ACCELERATOR DAO (AADAO) TRANSPARENCY REPORT #8
Report Date: October 15, 2024
Table of Contents
Summary
- Financial Reports
- Balance Sheet - Main and Strategy Wallets
- Balance Sheet - Operational Wallets
- Income Statement - Primary Wallets (Main & Operational)
- Income Statement - DAODAO Main Wallets
- Income Statement - DAODAO Operational Wallets
- Cash Flow Management Report - Strategy Wallets
- Cash Flow Management Report - Main Wallets
- Cash Flow Management Report - Operational Wallets
- Oversight
Oversight Committee Actions
- AADAO/Cosmoverse Dispute
- Performance-Based Bonus Methodology
- Incident Report: Testimony of the Financial Controller Regarding Possible Misconduct Involving the GM
- Oversight Committee Special Report
- Ongoing Investigation
- Cost-Efficiency Audit of All Grants
- Veto Policy
Oversight Committee Governance
- Mandate & Independence
- Removal Process for Elected Member to Oversight
- Other Process Improvements
Oversight Committee Updates
- Team Changes: Removals, Additions, Departures
- Temporary Increase in Oversight Committee Working Hours (FTE)
- Revised Hiring Process for Controller/Coordinator Roles
-
Payments
-
Grants
- New Grants
- Quadratic Funding Program Update
- Cosmos SDK Auction Module Update
- Ventures
- Ventures Activity Summary
- Venture #3
- Plaza
- Venture #4
- StratComm (Strategy Committee)
Summary
Financial Overview: Detailed balance sheets, income statements, and cash flow reports provided for main, strategy, and operational wallets across multiple blockchains.
Oversight Actions:
-
Mediated dispute between AADAO and Cosmoverse over grant payments
-
Rejected former GM Youssef Amrani’s bonus methodology proposal
-
Investigated allegations of misconduct against Amrani, leading to his removal
-
Conducting audits on all approved grants for resource efficiency
-
Oversight power to invoke/exercise veto (for termination grants) pending review and ratification
-
Comprehensive travel expense report forthcoming
AADAO Governance Updates:
-
Reaffirmed Oversight Committee’s independence from AADAO
-
Revised removal process for Elected Oversight Member
-
Implementing new hiring processes for key positions: Coordinator & Financial Controller
Team Changes:
-
Youssef Amrani removed as GM
-
Added Governance Specialist role
-
Temporary increase in Oversight Committee working hours
Grants & Ventures:
-
Several new grants approved, including DAODAO on Cosmos Hub and DRIP Module
-
Update Re Auction Grant Module ($90k of $150k approved disbursed)
-
Four venture investments executed totaling $950,000
-
Efforts to increase transparency in venture investment reporting
Oversight
The information below is provided by Oversight subDAO members
Financial Reports
AADAO maintains a structured wallet system across multiple blockchain networks for transparent and efficient resource management.
The following covers all financial activity from its primary wallets (main and operational) and subDAO (DAODAO) wallets.
Grants: Grants Committee
- cosmos1syhp2rh3kgqpa5hjrkyfsqsh49mqyye5k9ejc70lev9pq5g9spxs7ya6zd
- osmo16zm8crvnpawjf3mnnrdasma2m5d6q0edtllrg3w5dul7dg2tp2vsy2ftxm
- noble12rt0mgzsuqsnm2klsexdnry0zfkyvdmm9c9acy7949g5hrf6kgasql8zxy
Operations: Operational committee
- osmo13w39u0fjv65zshm6xq54mme5nuyg552crf5adjygydelw5htx6pqyyx3ey
- noble1e0yrkugktc4av38ms5esd5qrpsgg4jwztfp0nhktpt22g26jmaeq7y4222
Strategy: Strategy Committee
- cosmos1gs5595tkkvgr7vjc48vl9dv99pw7m6055lql4xrm0evwqa90pa7qtkm26j
- osmo1d2cjl6k99yk4np5h97a4trxx5x2cnq9n6l2fmmu408agxltcpqaqp972k4
SubDAO addresses:
The primary wallets on Neutron are linked to sub-accounts on Noble, Osmosis, and ATOM (Cosmos).
A. Balance Sheet
- Main and Strategy Wallets
- Operational Wallets
B. Income Statement
- DaoDao Main Wallets
- DaoDao Operational Wallets
C. Cash Flow Statement
- Strategy Wallets
- Main Wallets
- Operational Wallets
Oversight Actions
AADAO/Cosmoverse Dispute – Mediation
The Oversight Committee was asked to mediate a dispute that arose between the AADAO and Cosmoverse (grantee) regarding an $80,000 initial payment for a $100,000 approved grant. The transaction coincided with AADAO’s transition from ATOM-based to USDC-based disbursements. The conflict centered on two separate disbursements, each presenting distinct issues:
- March 20, 2024: AADAO erroneously sent 80,000 USDC to an incompatible Kraken CEX address (Payment 1)
- May 23, 2024: AADAO sent an additional 80,000 USDC as a “temporary loan” to support Cosmoverse’s operations while attempting to recover the first payment (Payment 2)
The situation was exacerbated by:
- Lack of clear communication between parties
- Absence of proper documentation and written/verbal agreements
- Cosmoverse’s delayed objection to receiving funds classified as a loan
- Disagreements over fault and responsibility for the initial disbursement errors, with AADAO acknowledging procedural shortcomings but Cosmoverse refusing to accept any role, particularly with respect to their decision to use a CEX address
- The former GM, Youssef Amrani having approved of Cosmoverse’s initial utilization of CEX address to receive grant funds
The dispute escalated when the community became aware of a “temporary loan” issued to grantees. This raised questions as to why the loan was issued, and under what terms. Further complications arose when Cosmoverse contested the loan classification of the funds they received as Payment 2, and argued the loan must be reclassified as a grant due to their perceived lack of fault in the initial transaction error with respect to Payment 1.
Core Issue
A defining problem for their dispute stems from AADAO and Cosmoverse’s mutual mischaracterization of their financial arrangement as a “loan.” This misrepresentation, originating on May 23rd, was inadvertently repeated again in an MOU executed on August 16, 2024. The terms of their signed MOU did not meet the standard definition of a loan, as:
-
There is no definite repayment obligation for Cosmoverse.
-
Fund remittance to AADAO is entirely contingent on an uncertain joint recovery effort.
-
The continued use of inaccurate terminology misrepresents the true nature of the financial arrangement.
-
This mischaracterization can challenge the agreement’s enforceability.
-
A “loan” versus “contingent liability” e.g., “repayable grant” have different accounting and financial reporting implications.
-
Precision is needed for social reporting where public funds are involved
This being the case, Oversight directed AADAO and Cosmoverse to execute a new MOU, and the revised MOU was executed on August 22, 2024.
Key Learnings
- Use accurate financial terminology that precisely reflects the nature of the arrangement, avoiding confusion and ambiguity.
- Ensure all financial arrangements are clearly defined and accurately represented before any transactions occur.
- Implement protocols for verifying understanding of financial terms and concepts between all parties involved, while understanding the implications of their use.
- Be mindful that misunderstandings escalate when imprecise language is used and uncritically accepted, leading to disputes.
AADAO’s Response
- AADAO has implemented a new protocol requiring all grantees to send USDC test transactions to the AADAO Grants wallet for address verification before any transfers are made. This measure will be applied consistently across all grantees and transactions, addressing a critical oversight in the March transfer.
- The transition of Delisse Gamboa from a part-time to a full-time role as Operations Associate in mid-June has contributed to improved information management and operational efficiency.
- AADAO’s decision to transfer $80,000 from the team bonus allocation to the Grants wallet demonstrates commitment to direct accountability and their effort to preserve positive relationships with the ATOM community and its grantees.
Oversight’s full report on this dispute, and the initial executed MOU of August 16, 2024 can be found here.
The revised MOU executed on August 22, 2024 can be found here.
Performance-Based Bonus Methodology & AADAO Compensation Structure
The Oversight members decided to withhold approval of the individual performance-based bonus methodology as proposed by the former GM, Youssef Amrani.
This decision was communicated to core DAO members during the August 29th BiWeekly meeting and formally documented in this memo. Additionally, Oversight had issues with the proposed policy substantially diverging from how AADAO had publicly communicated its intended use of the ATOM bonus pool allocation. This misalignment between the proposed methodology and AADAO’s public statements raised serious concerns about transparency and adherence to community expectations, and is documented in a separate memo: “AADAO Bonus Methodology: Policy v. Language.”
Source: AADAO Historic Compensation (2023 & 2024) and Bonus Distribution
Incident Report: Testimony of Financial Controller Regarding Possible Misconduct Involving the GM (Youssef Amrani)
On August 30th, AADAO repurposed the Strategy Committee meeting to address concerns about the bonus methodology proposed by Youssef Amrani. The discussion aimed to understand his rationale and explore disparities in compensation structures between DAO contributors and the GM. Instead of addressing these policy issues, Youssef deflected and misdirected the conversation by accusing the Financial Controller of retaliation, claiming her refusal to approve the bonus methodology was motivated by her being denied bonus performance bonuses herself.
It’s important to note, the Controller wasn’t alone in opposing the bonus methodology. The Elected Oversight member independently had concerns about the methodology’s appropriateness and equitability.
Because Youssef accused the Controller of “lacking integrity” and “overreaching”, the Controller was compelled to refuted Youssef’s claims. The Controller explained that she never sought performance-based bonuses. She further reported Youssef’s various obstructions of Oversight functions beginning with conversations pertaining to the retention bonus calculation. She described a hostile work environment marked by intimidation and coercion since February this year.
In response to the Controller’s allegations, an internal “Incident Report” was produced on August 30th to document the reported misconduct. By September 1st, all DAO members except Youssef unanimously approved a plan as to how the team would procedurally investigate these concerns.
From August 30th to September 6th, 2024, Youssef exhibited a pattern of non-cooperation with the Elected Member’s attempts to engage him in conversations regarding the issues delineated in the Incident Report. On September 6th, Youssef unilaterally demanded that the Elected Oversight member, “cease and desist” the misconduct review. This action effectively disrupted the consensus-driven due process framework designed to fairly evaluate his conduct.
Youssef proposed the engagement of an external investigator or ombudsman to assess and verify his alleged misconduct. His proposal strongly implied the utilization of DAO resources for the engagement, raising concerns about the appropriate use of DAO ATOM funds.
While the Oversight Committee members were not, in principle, opposed to the concept of engaging a third-party assessor, we recognized that such an action would constitute an unconventional and substantial expenditure of DAO resources. The justification for a potential outlay in the lower six-figure range necessitated public disclosure to the community, in accordance with the DAO’s principles of transparency and fiduciary duty.
That said, Oversight had concerns with Youssef’s proposal, if implemented, could potentially:
- Constitute a conflict of interest, as it involves the subject of an investigation influencing the investigative process.
- Represent an improper use of DAO resources for what can be construed as an administrative maneuver benefiting his personal and strategic interest.
- Circumvent established internal oversight mechanisms, potentially undermining both oversight and organizational governance structures.
On September 10, 2024, the Oversight Committee released a Special Report entitled: “Notification Regarding Proposed Bonus Methodology, Alleged Misconduct and/or Mismanagement Involving the General Manager (GM), and Governance Concerns.” By this time, the Elected Member’s investigation had substantially corroborated the Financial Controller’s testimony as documented in the Incident Report through a comprehensive review of evidence, including interviews, correspondence, direct messages, internal documents, and comments to internal documents. This inquiry further uncovered additional instances of mismanagement extending beyond the initial misconduct allegations.
The Oversight Committee’s decision to publish the report at this juncture was driven by two primary factors:
- Critical and time sensitive issues pertaining to the resource utilization of ATOM for contributor compensation and proposed use of the ATOM bonus pool. Further delay in reporting would be inconsistent with Oversight’s given mandate to serve Cosmos Hub stakeholders rather than AADAO’s organizational interests.
- Youssef Amrani requested the engagement of an external investigator, to be funded with DAO resources. The Committee felt compelled to make this information public to ensure transparency and allow for community input on this potential and unconventional use of DAO funds.
For a comprehensive understanding of the situation, interested parties are directed to review the full report and subsequent discussions on the Cosmos Hub forum. Due to the extensiveness of these conversations, they have not been reproduced in this summary. Stakeholders are strongly encouraged to examine the forum content for complete background and context regarding this matter.
Subsequent to the published Special Report, the core contributors of AADAO made three governance proposals:
Proposal A4. Operational Freeze for Youssef, Grace, Pati
September 11, 2024 (passed unanimously)
Proposal A7. Update Internal Protocols and terminate the employment of Youssef Amrani as GM
September 23, 2024 (passed unanimously)
Proposal A8. Remove the Operational Freeze - Patricia and Grace
September 26, 2024 (failed unanimously)
Via Proposal A7, Youssef Amrani, Co-founder and General Manager of AADAO was removed unanimously via an all-DAO core contributor vote. The cause for his removal was misconduct and mismanagement.
While Proposal A8 is titled: “Remove the Operational Freeze - Patricia and Grace”, a governance proposal requiring the removal of operational freeze was unneeded as the freeze was ending mere hours after this proposal submitted on-chain (as per the terms of the freeze defined in Proposal A4). It is true to say, the larger objective of this proposal was an attempted censure against the Financial Controller and the StratComm members. This motion failed unanimously.
The AADAO consists of nine voting members, each with varying weighted voting power commensurate with their respective roles and responsibilities.
| AADAO Member |
Committee Assignments |
Voting Power |
Wallet Name |
| “Better Future”/Ryan O. |
Strategy |
20% |
7_sig |
| Mark From Denmark |
Grants, Strategy |
20% |
aadaocosmonaut |
| Reena Shtedle |
Grants, Operations |
15% |
Lama |
| Joni Z/”Curious J” |
Grants |
10% |
AtomAgent |
| Syed Choudhury |
Marketing |
10% |
LeftLedgerAtHome |
| Jordan Andrews |
Ventures |
5% |
ducks |
| Carter Woetzel |
Strategy |
10% |
neutron…2q5 |
| Delisse Gamboa |
Operations |
5% |
Ktire |
| Facundo Medica |
Grants |
5% |
Falcon |
Additional Linked References for Oversight’s Special Report:
Ongoing Investigation
AADAO, in collaboration with its Oversight Committee, is conducting a comprehensive review of all grant applications, both approved and rejected, to identify any instances of misconduct in grant approval processes.
Scope:
- Undue or inappropriate influence of core DAO members (current, and former) in the grant application process (preparation, submission, review, consideration approval)
- Inappropriate behavior by core DAO members (current, and former) involved in grant decisions
- Instances of favoritism in grant allocations
- Potential favoritism, and or nepotism involving the former General Manager, former contributors, and/or current contributors
Reporting Mechanism:
AADAO encourages individuals with substantiated information regarding any of the aforementioned inappropriate behaviors or other forms of misconduct to come forward. To facilitate this, we have established the following reporting channels:
Primary Reporting Channel:
Submit a detailed report via the AADAO Oversight GitHub repository under “Issues”:
URL: Issues · gaiaus/aadao · GitHub
Alternative Reporting Channel:
Email a comprehensive report to: grace@atomaccelerator.com
We emphasize the importance of providing substantiated claims. All reports will be treated with the utmost confidentiality and will be thoroughly investigated by the Oversight Committee members.
Cost Efficiency Audit of All Grants
In collaboration with the Oversight Committee, the Grants SubDAO lead Mark Dencker will conduct a limited audit on all approved grants – the scope of this review is strictly limited to evaluating the resource efficiency assessment for every grant issued to date.
Scope and Limitations:
- Focus: The audit will strictly assess whether the allocated resources for each grant were appropriate and justifiable.
- Exclusions: This review will not explore potential efficiency gains or suggest operational changes (e.g., recommendations for process improvements, alternative pricing methodologies, operational change proposals)
Primary Objective:
The central question guiding this audit is: “Is the price right?” This inquiry aims to determine whether AADAO has overpaid or underpaid for services based on market standards and the value delivered.
The audit aims to provide a clear understanding of AADAO’s grant allocation efficiency, offering insights into whether the organization has been prudent in its resource distribution relative to market standards and delivered value.
This limited audit represents AADAO’s commitment to financial transparency and responsible resource management within the constraints of its current operational framework. We are aiming to deliver a special report by the end of November.
Key Areas of Examination:
- Budget Analysis:
-
Detailed examination of grantees’ budgets and cost breakdowns
-
Example: Evaluation of the $150,000 allocation for the auction module
- Labor Costs:
- Pricing Structures:
-
Analysis of pricing models (e.g., hourly rates vs. flat fees)
-
Evaluation of the appropriateness of chosen pricing structures
- Additional Costs:
- Identification and justification of supplementary expenses (e.g., auditing fees, go-to-market costs)
Specific Focus Areas:
-
Actual Expenditures: Verification of how funds were utilized
-
Cost Reasoning: Understanding the logic behind cost allocations
-
Negotiation Processes: Review of how final grant amounts were determined
-
Expense Justification: Evaluation of the rationale provided for various expenses
AADAO Travel & Expenses
In response to multiple inquiries regarding AADAO’s expenditures on contributors’ travel to conferences, the Oversight Committee is preparing a comprehensive report on these outlays. Rather than including findings in the next Transparency Report, Oversight feels a more comprehensive and valuable report can be provided as standalone report, following this year’s Cosmoverse conference. This timing will allow for the inclusion of the most relevant expenses for the current conference season.
The Oversight Committee will publish a complete and detailed report on all travel expenses by the end of this month. This report will include:
-
Itemized breakdown of all travel-related expenses
-
Categorization of expenses (e.g., conferences, retreats, other business travel)
-
Analysis of expense patterns and any notable outliers
-
Recommendations for future travel expense policies, if applicable
Based on an initial review of travel-related expenses, the Oversight Committee can provide the following interim figures:
-
Total Travel Expenses to Date: $79,929
-
Annual Contributors’ Retreat:
-
Location: Marrakech
-
Duration: 5 nights, 6 days
-
Cost: Approximately $38,000
-
Note: This single event accounts for nearly half (47.5%) of the total travel expenses
It is important to emphasize that these figures are preliminary and subject to final verification in the comprehensive report.
Veto Policy
The Oversight Committee has drafted a Veto Policy. This draft policy is scheduled for immediate review and ratification through an upcoming all-DAO vote.
The AADAO Veto Policy establishes a comprehensive framework for terminating grants under specific circumstances. With clear guidelines and procedures, the policy seeks to uphold the integrity of AADAO’s grant-making program and protect the interests of the Cosmos Hub and its stakeholders.
The policy defines a Veto as the Oversight Committee’s unilateral right to terminate a grant if it demonstrates malicious intent, deviates from the Cosmos Hub’s best interests, or severely underperforms. Malicious intent is extensively defined, including misrepresentation, abuse of process, fraudulent activities, and other unethical behaviors. The policy outlines the roles of key parties: the Community (as information providers), the Grant Committee (as primary grant overseers), and the Oversight Committee (holding exclusive Veto discretion and power).
The Veto process involves several steps, including the issuance of a Veto Consideration Report by the Oversight Committee, allowing the Grant Committee to propose alternative resolutions.
The Oversight Committee’s voting requirements for exercising a Veto are as follows:
- When three members comprise the Oversight Committee: A majority vote of at least 2 out of 3 members is required to exercise a Veto.
- When only two members comprise the Oversight Committee: A unanimous vote of 2 out of 2 members is required to exercise a Veto.
The policy emphasizes that Veto is a last resort, to be used only when other resolution attempts fail. It also details the post-Veto actions, including immediate grant termination, funding suspension, and potential requirements for fund repayment.
The policy aims to ensure transparency, accountability, and due process in grant management. It provides a structured approach to addressing serious issues with grants, while offering opportunities for resolution before Veto execution.
Oversight Governance
In light of recent developments that have introduced ambiguity and conflict regarding certain key governance matters, the Oversight and Strategy Committees deem it necessary to provide explicit clarification that there is organizational agreement on the following points. The following statements are provided in the interest of transparency and education.
Mandate & Independence
The AADAO Oversight Committee operates as an autonomous and independent entity, separate from the Core DAO members and AADAO organization. Its primary responsibility is to represent and serve the interests of the Cosmos Hub community and stakeholders, superseding any alignment with AADAO’s business, strategic, entrepreneurial, marketing, or public relations objectives.
The Oversight Committee is not obligated to support AADAO’s organizational goals, and its decisions are guided solely by community welfare and stakeholder interests of the Cosmos Hub. In the event of a renewal mandate for AADAO, the Oversight Committee recommends explicitly codifying its independence in governance documents. This includes clear delineation of its separate mandate, structural independence, and decision-making authority.
The Oversight members have advised core DAO members to update internal protocols and governance establishment documents to reflect this autonomy. Currently, Section 08 of AADAO Protocols reads:
08. Oversight Committee Bylaws
Purpose and Establishment
i. The Oversight Committee is responsible for doing random spot checks on the performance of projects, the subject of a grant awarded by the Grant Committee in accordance with its terms and to keep under review the performance of the Grant Committee and any other committees or sub-committees of the AADAO.
We also recommend enhancing guidance documents with clear language acknowledging the Committee’s independent status and establishing conflict resolution mechanisms for potential disagreements between the Committee’s decisions and AADAO’s objectives. This explicit recognition and reinforcement of the Oversight Committee’s independence are crucial for maintaining AADAO’s governance integrity, ensuring that community and stakeholder interests remain paramount via representation from Oversight.
Removal Process for Elected Member to Oversight
As per Section 08.B.v of the AADAO Protocol, the Elected Member of the Oversight Committee may be removed under the following circumstances:
-
Dissolution of AADAO
-
Death or retirement of the member
-
Expiration of the 18-month term, commencing from the conclusion of the appointing Cosmos Hub Public Governance vote
-
Cases of gross misconduct, unethical behavior, or fraudulent activities
For situations falling under point 4, the current removal process is as follows:
a) Initiation of termination via either:
- Unanimous recommendation from the other two Oversight Committee members, or
- A 60% supermajority recommendation by the Strategy Committee
b) Following initiation, ratification via an “All of AADAO vote” is required
It is important to note that an “All of AADAO vote” excludes Oversight members and involves only core DAO contributors with voting power.
AADAO and Oversight have reached a consensus that subjecting the Elected Member to removal utilizing an “All of AADAO” vote is inappropriate. Consequently, the following amendment to the AADAO Protocol bylaws has been proposed:
The Elected Member of the Oversight Committee can only be removed through an on-chain proposal submitted to the Cosmos Hub, utilizing established Cosmos Hub governance mechanisms, only.
This proposed amendment aims to enhance the independence of the Oversight Committee and align the removal process more closely with the Oversight Committee’s mission and given mandate.
The AADAO Protocol bylaws will be updated to reflect this change in the removal process for the Elected Member of the Oversight Committee, pending formal ratification of this amendment via a DAODAO governance proposal.
Other Process Improvements
- Compensation Structure Review: The Strategy Committee and Oversight Committee are hereby granted the authority to conduct comprehensive reviews of AADAO’s base salary and total possible compensation structures. This review process aims to ensure the promotion of parity and equality across all levels of the organization.
- Public Disclosure of Compensation Structure: Prior to implementation, AADAO commits to disclosing its base salary and total possible compensation structure to the community. This disclosure is intended to facilitate community validation and feedback, ensuring alignment with stakeholder expectations and organizational values.
- Transparency in Performance Metrics: Any Key Performance Indicators (KPIs) utilized for the allocation of performance, retention, and/or strategic bonuses will be subject to community scrutiny. These metrics will be publicly disclosed and opened for community validation before their implementation. This measure ensures that the criteria for financial incentives are transparent, fair, and aligned with community interests.
- Mandatory Annual External Audit: To maintain the highest standards of financial accountability, AADAO Oversight mandates an annual external audit.
Oversight Updates
Team Changes: Removals, Additions, Departures
Removal:
General Manager, Youssef Amrani via all-DAO vote on Sep 23, 2024
Addition:
“Malek M”, Governance Specialist, 50% FTE for remainder of 2024 mandate
The Governance Specialist at ATOM Accelerator (AADAO) will be integral to shaping and advancing the Cosmos Hub’s governance framework, will collaborate closely with the Governance Lead (Carter Woetzel) and other stakeholders to develop and promote proposals that align with the AADAO mission and the broader interests of the Cosmos Hub community.
Core Responsibilities:
- Work with the Governance Lead to research and draft governance proposals for the Cosmos Hub.
- Socialize draft proposals with key stakeholders, engage Cosmos Hub validators and stakers, ensuring broad awareness and understanding of the proposal, and gather feedback to amend the proposals as required.
- Generate conversation around proposals.
- Actively respond to questions and feedback on the Cosmos Hub governance forum and other channels.
- Manage the timing for when proposals are submitted on-chain, ensuring strategic alignment and optimal impact.
- Facilitate communication between voters and AADAO governance representatives, organizing calls and discussions as needed.
- Develop and expand lines of communication with validators and delegators to strengthen community ties and support governance initiatives.
Departures (not immediate):
- “Better Future”, Co-Founder & StratComm Member, Dec. 31, 2024
- Syed Choudhury, Marketing/Communications Lead, Dec. 31, 2024
- Patricia Mizuki, Internal Auditor/Financial Controller & Oversight Member, October 31 - November 30, 2024
Temporary Increase in Oversight Committee Working Hours
The Strategy Committee has authorized a temporary adjustment to the Full-Time Equivalent (FTE) hours for Oversight Committee members. This change, while not constituting an addition to the team, represents a significant modification in time allocation for existing members.
Details of the Adjustment:
- Previous FTE: 35%
- New FTE: 50%
- Duration: Two months
- Affected Parties: Elected Member & Financial Controller
The Oversight Committee is currently tasked with producing several critical reports, necessitating increased working hours.
It is important to note that this adjustment is temporary and specifically designed to address current organizational needs. The increase in FTE hours reflects AADAO’s commitment to thorough oversight and smooth operational transitions during this period of heightened activity and change.
The Strategy Committee will reassess the need for these additional hours at the end of the two-month period, with any further extensions or changes to be communicated transparently to all stakeholders.
Revised Hiring Process for Oversight Coordinator & Financial Controller
The Oversight Committee and Strategy Committee members are currently engaged in a comprehensive revision of the hiring processes for two critical positions within AADAO Oversight Committee: Coordinator and the Financial Controller. This initiative is in response to concerns regarding the previous hiring methodology, which granted disproportionate discretionary influence to the General Manager.
For a detailed understanding of the previous hiring process, please refer to Transparency Report #7, which provides that information.
Key Changes in the Revised Hiring Process:
- Open Application: Both positions will now commence with an open application process, fostering greater transparency and equal opportunity.
- Candidate Evaluation: Qualifying candidates will undergo a thorough interview process conducted by the Oversight Committee and StratComm members.
- Democratic Ratification: Final candidate selection will be subject to an all-DAO contributor vote for ratification, ensuring collective decision-making in these crucial appointments.
While some procedural details are still being established and formalized, these core principles will guide the new hiring framework.
Application Requirements:
- Curriculum Vitae (CV)
- Cover Letter
- List of Professional References
- Successful completion of KYC process
This revised hiring process aims to enhance transparency, reduce potential conflicts of interest, and ensure that the most qualified candidates are selected for these roles.
Further updates regarding the finalization of the hiring process and the open application period for both positions will be communicated in due course.
Payments
Venture Payments
08/02/24: Venture Grant #3, $10,303.50 (Payment 1) To be announced
08/02/24: Venture Grant #3, $100,000 (Payment 2) To be announced
08/02/24: Venture Grant #3, $140,000 (Payment 3) To be announced
08/30/24: Convexity Labs (Plaza Finance), $100,000
09/17/24: Venture Grant #4, $88,000 of $100,000 To be announced
Payments for Venture Grant #3 exceed the investment amount of $250,000 due to legal fees AADAO had to remit to the investee.
Some of the investments cannot be identified by name at this juncture, and thus referenced as Venture Grant #3 and #4 accordingly. AADAO is contractually bound by non-disclosure and confidentiality agreements that preclude the public dissemination of specific details pertaining to certain venture investments. Such disclosure is contingent upon either a formal announcement by the investee or explicit authorization from the counterparty permitting the public sharing of investment activity details. It is the considered opinion of Oversight that these confidentiality obligations create a potential conflict with AADAO’s public reporting responsibilities.
Furthermore, it remains ambiguous to what extent Cosmos Hub governance has conferred limited autonomy upon AADAO regarding the expansion of key activities, particularly in the area of venture investments. For the sake of transparency, it should be noted that the team has internally allocated $5 million for venture investments and $3 million for grants.
However, it is not definitively established whether this distribution aligns with the mandate renewed under Proposal 865. This ambiguity raises potential governance and compliance issues that may require further clarification and, potentially, additional ratification by Cosmos governance to ensure full compliance with AADAO’s operational mandate and public accountability obligations.
Grants Payments
07/31/24: Messari Research Reports - Milestone Payment, $20,000
08/13/24: DaoDao on Cosmos Hub, $80,000
08/13/24: Lava Network - Final Payment, $60,000
08/21/24: NFT Nashville - Initial Payment, $8,000
08/21/24: Drops - Cosmos Hub User Engagement Campaign, Initial Payment, $1500
08/21/24: CryptoCrew - Interchain Security Onboarding Service, $60,000 (Payment 3)
08/21/24: Hypha - Cosmos Testnet Program, $20,000 (Payment 2)
08/21/24: Ludium - Developer Activation in South Korea, $5,000 (Payment 2)
08/21/24: Numia - Snapshot Service, Initial Payment, $15,000
08/21/24: Kado - Fiat Onboarding to AEZ Zone, $10,000 (Payment 3)
08/30/24: AstroVault - Milestone Payment, $66,000
09/09/24: ProDelegators - Economic Model for Interchain Security (PSS), Final Payment, $1,000
09/09/24: PYOR - Frontend for Economic Model for Interchain Security (PSS), $3,000
09/09/24: ATOM Hacker House - Barcelona 2024, Initial Payment, $14,000
09/09/24: DRIP Module, Initial Payment, $32,500
09/09/24: DoraHacks - Quadratic Funding for the AEZ (Round 2), $20,000
Grants
The grant descriptions provided are derived from the Grants subDAO team’s internal notes and should not be mistaken for official Oversight reviews or assessments. The Oversight committee has a specific role in the grants process that is primarily reactive. They do not typically review grant applications, curate grantees, or participate in the selection process. Their involvement is generally limited to pausing or terminating grant engagements when there is substantiated cause. However, the committee can become involved in considering a prospective grantee if informed of compelling reasons why they should not be funded, such as a history of misconduct or fund mismanagement. This allows the committee to intervene when there are serious concerns about a potential grantee’s suitability. It’s important to note that this involvement is not routine; the Oversight committee does not regularly review applications or select recipients. Their main function is to provide a check on issued grants when necessary, rather than shaping the entire selection process. This balanced approach ensures that while the committee can step in for significant concerns, the day-to-day grant consideration and selection remain separate from their oversight role.
Below are grants issued since Transparency Report #7, published Jul 31, 2024. For more detailed information on individual grants, please refer to the hyperlinked title of each grant.
New Grants
Noah Saso, Jake Hartnell
Category: Governance, Tooling & Infra
Date Approved: Jul 24, 2024
Amount Requested: $100,000
Amount Approved: $80,000
Description: This integration, building on DAO DAO’s successful deployment on Neutron, will leverage CosmWasm on the Cosmos Hub to enable native creation of SubDAOs and specialized governance structures. By eliminating the need for independent development of governance modules and utilizing DAO DAO’s proven capabilities, this initiative represents a critical step towards a more organized and efficient governance framework for the Cosmos Hub and the Atom Economic Zone (AEZ).
DAO DAO, a leading platform managing over $300 million across 11 chains and supporting 5,226 DAOs, offers audited smart contracts and robust governance solutions including Token, NFT, and Membership DAOs. DAO DAO and Polytone contracts will be deployed, and DAOs will be fully functional on the daodao.zone site.
Additional Links:
https://daodao.zone
https://x.com/DA0_DA0
Category: ATOM Interchain Data
Date Approved: Jul 31, 2024
Amount Requested: $54,500
Amount Approved: $54,500
Description: The Snapshot Service Grant aims to develop a comprehensive snapshotting system for Cosmos chains supporting ATOM or ATOM derivatives. It includes three main components: snapshot logic development, a self-service dashboard (with backend API and frontend interface), and snapshot subsidies. The service will support multiple chains (including Osmosis, Neutron, Kujira) and various DeFi protocols and LST providers. Development is planned over six weeks, with two weeks for snapshot logic, four weeks for dashboard creation, and concurrent beta testing in the final two weeks. The service is designed to be scalable, allowing for easy addition of new chains and protocols without extra cost.
CryptoTank, Joe 2.0
Category: Marketing, Growth & Developer Engagement
Date Approved: Aug 15, 2024
Amount Requested: $9559
Amount Approved: $9559
Description: 2024 NFT Nashville scheduled for November 2, 2024, promotes ATOM use cases in NFT/CFT ecosystems. This community-focused event for NFT creators and collectors aligns with AADAO’s support for projects like Stargaze, Superbolt, and Asteroid Protocol, which are expanding ATOM’s utility in the NFT space. The sponsorship includes ATOM-denominated ticket sales, AADAO-branded NFT tickets, a commemorative Asteroid protocol inscription collection, educational content by Cosmos Joe, and co-marketing opportunities with NFT communities. The grant will enable a larger venue, experienced event planning, and an inscription-focused side event, all integrated into the AtomXYZ program. The event is organized by Crypto Tank, with co-organizers Amanda Keay, an experienced Web3 event planner, and Cosmos Joe.
Andros, Drops / Wonderverse
Category: Marketing, Growth & Developer Engagement
Date Approved: Aug 16, 2024
Amount Requested: $8,850
Amount Approved: $7,500
This grant funds a three-month engagement growth campaign (September-November 2024) with Drops, leveraging their bounties platform to generate user-generated content (UGC) for the Cosmos Hub and AEZ, while also encouraging increased ATOM staking. Drops’ platform, with its significant user base, employs innovative ‘multiplier’ and weighted-points mechanics for leaderboard competitions, offering $5k in prizes. The focus on long-form UGC with engagement targets, coupled with Twitter API integration, aims to reduce low-effort content. Drops’ familiarity with Cosmos SDK transactions through their work with Injective is expected to facilitate campaigns related to onchain balances. This partnership is designed to bootstrap campaigns efficiently, targeting top-of-funnel engagement growth and experimenting with strategies to boost ATOM staking balances.
Adrien Be of Web3Family, Drew Roberson of Axol.io
Category: Marketing, Growth & Developer Engagement
Date Approved: Aug 23, 2024
Amount Requested: $68,200
Amount Approved: $40,000
This grant funds the inaugural Cosmos Hub Hacker House in Barcelona, December 2024, as part of the AtomXYZ program. The seven-day event targets founders, CTOs, developers, and DevRels, offering coworking, networking, workshops, panels, and a two-day hackathon focused on developing products for the AEZ. The program includes education on the Interchain Stack and covers topics such as launching smart contracts on Neutron, deploying chains on Interchain Security, and ICS partial set security. Web3Family, leveraging their experience from 50+ non-Cosmos events and university collaborations, aims to attract 100+ daily attendees. AADAO’s funding model is variable, with a maximum commitment of $40,000: $20,000 pre-event and up to $20,000 post-event, contingent on the organizers securing additional sponsorships.
Daniel Harapko, with Noam Cohen consulting
Category: Marketing, Growth & Developer Engagement
Date Approved: Aug 28, 2024
Amount Requested: $246,154
Amount Approved: $246,154
This grant funds the development of the Developer Revenue Incentivization Protocol (DRIP) module, proposed in the 2023 ATOM Tokenomics RFP, to address limitations in the Cosmos Hub’s funding mechanisms for core development efforts. DRIP enables milestone-based funding with periodic payouts linked to ATOM’s real-time market price, mitigating execution and pricing risks associated with current upfront payment methods. The module allows for flexible, ongoing payments (e.g., “$50k per month”) adjusted to ATOM’s current price, with mechanisms to handle extreme price fluctuations. The grant includes approximately $87.5k for audits and remediation, plus $58.2k for six months of post-launch maintenance. Noam Cohen, the DRIP research author, will support Daniel Harapko in designing the module, which will be integrated into the Cosmos Hub by Informal Systems. Implementation is now feasible with CosmWasm on the Cosmos Hub, and deployment will require a governance vote. This initiative aims to significantly improve the Hub’s ability to fund and manage long-term development projects efficiently.
Agwn, Ludium
Category: ATOM Zone Build-Out
Date Approved: Sep 12, 2024
Amount Requested: $15,000
Amount Approved: $12,000
Building on Ludium’s previous grant for creating a mission-based developer education course in Korean, which has produced 49 articles and 74 missions, partnered with university blockchain clubs, and is hosting 7 instructor-led sessions, this new grant funds a local hackathon in South Korea. Targeting at least 50 developers currently enrolled in the course, the hackathon will select winners to participate in Hackmos 2024 in Dubai (October 25-27), with their travel and accommodation costs covered. The grant aims to foster projects with direct ATOM/Cosmos Hub connections, such as CosmWasm-based DeFi, social, or gaming dApps on Neutron or the Cosmos Hub, developer tooling for the AEZ ecosystem, or other ATOM-related projects. This initiative extends Ludium’s efforts in developer education and engagement, providing a pathway for South Korean developers to contribute to the Cosmos ecosystem on an international stage.
2024 Grants, Completed
- Incentivized Testnet for Interchain Security, Hypha $50,000
- Lava Network: Incentivized Public RPC for the Cosmos Hub, Yuval Binder, $75,000
- DAODAO on the Cosmos Hub, Noah Saso & Jake Hartnell, $80,000
- Cosmos Hub @ETHCC, Miwa Events, $29,540
- Economic Model for Interchain Security (PSS), Pro Delegators, $15,000
- Frontend for the Interchain Security (PSS) Economic Model, PYOR, $10,000
For additional information on the above completed grants, please see Transparency Report #7.
Quadratic Funding Program Update
The information below is provided by Grants subDAO members
The AEZ Quadratic Funding Program, a joint initiative with DoraFactory (the team behind DoraHacks), supports the sustainable development of projects within the Atom Economic Zone (AEZ) or public goods projects that the AEZ relies upon. The program aims to amplify the impact of grassroots support for projects by utilizing a quadratic funding mechanism, which ensures that smaller donations receive a proportionally larger share of matching funds.
What’s QF? Quadratic funding is an on-chain funding distribution mechanism based on the result of quadratic governance, an innovative governance scheme often considered an improvement of the traditional 1-person-1-vote or 1-dollar-1-vote model. With a quadratic voting algorithm, the power of each vote to a single project from a single contributor will decrease, which would prevent funding distribution from the extreme preferences of whale voters. For more details, check out Quadratic Funding & Voting Guide
Cosmos Hub governance mandated this program and allocated 80,000 ATOM (~$700k at the time) to the program as part of proposal #917. This funding was then backed a $200,00 USDC contribution from the Atom Accelerator DAO. This total matching pool will support 10 successive rounds of quadratic funding at AEZ Quadratic Grant, starting from Round 2 to Round 11 over a period of 24 months starting in March 2024.
Observable QF Trends
Over the course of now three rounds (currently the fourth is open), we’ve identified a few trends that helps benefit AADAO’s operations and grant programs:
-
Strategic direction of the Hub: The Hub’s regular grants are becoming larger and more focused on strategic priorities, allowing it to differentiate itself within the Cosmos ecosystem. However, much of this strategic direction remains unclear to many developers and builders in Cosmos, leaving a gap in opportunities to propose innovative ideas. Quadratic funding (QF) offers an inclusive alternative, enabling these contributors to present their project proposals directly to the community, even if their initiatives don’t align with the current strategic priorities of the Hub.
-
Splitting up and directing grant applications to a regular grants part and a QF parts: There is growing distinction between projects eligible for regular grants and those better suited for quadratic funding. Regular grants are increasingly metrics-driven, focusing on key performance indicators like transaction volume and fees that directly benefit the Hub. Projects that don’t clearly align with these metrics, though still valuable to the broader Cosmos ecosystem, often struggle to secure funding. Splitting funding mechanisms between performance-oriented regular grants and community-focused QF provides a win-win scenario. The ATOM community gains the benefits of projects that may not meet strict KPIs but still offer significant value, while builders retain the ability to contribute meaningfully to the Hub.
-
Getting a second opinion from the community: The ATOM community is both vocal and engaged. While AADAO’s grants committee has the autonomy to make decisions based on the expected value they will bring to the Hub, not every decision will be universally accepted. Quadratic funding gives the community a direct voice, allowing them to weigh in on which projects they believe should be prioritized. This mechanism fosters greater alignment between AADAO’s operations and community preferences, ensuring that both the Hub’s strategic goals and the community’s input are considered.
For every round of quadratic funding (10 rounds have been match-funded), DoraHacks will send a raw list of projects proposals received to be vetted by AADAO before going live for community voting.
All projects receiving quadratic funding can be found on Quadratic Funding – Atom Accelerator DAO
Cosmos SDK Auction Module Update
The information in this section is provided by Grants subDAO members
The total grant amount for Cosmos SDK Auction Module is $150,000, and it was rationalized based on the project’s scope and deliverables:
- Code Development: $90,000 (60% of total)
- Allocated for two developer contributors
- Covers the core implementation of the Auction Module
- Go-to-Market and Long-term Support: $60,000 (40% of total)
- DevRel activities
- Hackathon organization and participation
- Tutorial creation
- Ongoing support and maintenance for 9-12 months
The project benefits from the expertise of two experienced developers who, while maintaining full-time employment elsewhere, dedicate part-time efforts to:
-
Module promotion
-
Educational content creation
-
Ensuring the module serves as a vital learning tool for Cosmos Hub and SDK v0.50
To date, 60% of the total approved amount ($90,000) has been disbursed. This distribution corresponds directly to following milestones delivered:
- All core development work for the Auction Module has been finalized.
- Module has successfully passed implementation and testing phases, rendering it product-ready.
Current Focus and Remaining Allocation:
The project has now entered its go-to-market phase, accounting for the remaining 40% of the grant allocation. This phase prioritizes:
- Developer Documentation: Creation of comprehensive guides to facilitate developer onboarding.
- Tutorials: Development of educational content to drive adoption and showcase potential use-cases.
Long-term Value Proposition:
- ABCI++ Education: The project delivers the first-ever tutorial for ABCI++, filling a critical knowledge gap in the ecosystem.
- Developer Onboarding: By providing a functional module and comprehensive documentation, the project aims to facilitate the entry of new developers into the Cosmos ecosystem.
- Cross-Chain Utility: The module is designed to encourage diverse use cases across multiple chains, enhancing interoperability within the Cosmos network.
In conclusion, this grant supports not only code development but also fosters ecosystem growth through education, developer onboarding, and the creation of reusable, cross-chain infrastructure. The allocation of resources between development and promotion ensures both immediate product delivery and long-term ecosystem benefits.
Ventures
Ventures Activity Summary
Executed Investments:
- Number of investment agreements: 4
- Total deployed capital: $950,000
Approved Investments:
- Number of projects: 3
- Total approved amount: $350,000
- Status: Investment agreements (SAFE, SAFT) not yet executed
Investment Process:
- Recommendations made by: Ventures Lead (Jordan Andrews)
- Investments and their investment amounts are approved by: StratComm members (“Better Future”, Mark Dencker, Carter Woetzel)
Note: “Approved” investments have been given the go-ahead but are not yet finalized through formal agreements.
The Oversight committee has issued a set of requests to the Ventures team aimed at enhancing transparency and community understanding of investment activities. Specifically, the committee has asked the Ventures team to make their investment approval process and reporting procedures more transparent to the community. This includes providing clearer information about how investment decisions are made and how they are subsequently reported. Additionally, the Oversight committee has requested that the Ventures team share the terms of executed investment agreements with the community. These measures are intended to provide greater visibility into the Ventures team’s activities and decisions, allowing the community to better understand and engage with the investment process within the ecosystem.
The AADAO Ventures team has relayed the request from the Oversight Committee on behalf of the Atom community, to AADAO / Cosmos Hub portfolio companies in an effort to provide more transparency on Venture Funding activities and investment terms with portfolio companies.
One team in response was able to share some terms of AADAO’s investment publicly, which is stated below, from Plaza Finance.
Some teams have communicated in reply that due to abiding by regulations, they are only able to announce the investment officially between AADAO / Cosmos Hub & the investee once the funding round is closed, and a mutual fundraise announcement is agreed upon.
The information below is provided by Ventures subDAO members
Venture Funding #3
Date Signed: Jul 10, 2024
Investment Amount: $250,000
This is an investment into an interoperability protocol that expands and improves the interoperability between blockchain ecosystems, including Cosmos, non-Cosmos chains, and any Cosmos native assets such as ATOM. This team is already showing significant traction in securing partnerships with high profile blockchain ecosystems.
From comms with the team, and per the team’s request, more information on this investment will be publicly shared once the funding round has closed and the team has mutually agreed to a formal investment announcement between AADAO / Cosmos Hub and the investee.
Date Signed: Aug 28, 2024
Investment Amount: $100,000
The AADAO Ventures team has invested in Plaza Finance’s pre-seed round, supporting the development of a decentralized platform for programmable derivatives. Plaza Finance aims to address key challenges in the current DeFi landscape, including limited product variety and liquidity fragmentation. By enabling the creation of custom financial products that are easily tradable and redeemable for underlying liquid tokens, Plaza Finance seeks to broaden the range of DeFi offerings while maintaining strong liquidity. This investment aligns with the goals of enhancing the Cosmos Hub and Atom Economic Zone (AEZ) ecosystem, potentially driving a new wave of DeFi innovation that increases flexibility and overall liquidity. The platform’s ability to facilitate diverse, user-tailored financial tools could attract new users to the ecosystem and provide existing users with more options that match their risk-return preferences.
From comms with the Plaza Finance team, Plaza Finance is willing to disclose the following investment terms that AADAO / Cosmos Hub participated in:
- Stage of funding round: pre-seed
- Total size of the funding round: $2.5m
- AADAO’s investment size: $100k
The team will also share more information once token related economics are more solidified.
Venture Funding #4
Date Signed: Sep 11, 2024
Investment Amount: $100,000
This is an investment into a chain agnostic DePIN cloud gaming platform that utilizes a leading L1 as primary infrastructure & Akash for ongoing R&D. The build will also include chain agnostic gaming hardware wallets with support for major blockchains for gaming.
This can open the door for partnerships and exposure with eventual games within Cosmos & AEZ. In an effort to bring more vibrancy to the AEZ, we hope that this encourages more blockchain games to be built within the Cosmos Hub & AEZ ecosystem, while providing additional avenues of exposure to any existing blockchain games both within AEZ and the wider Cosmos ecosystem, in tandem with blockchain games from other blockchain ecosystems on their gaming platform. This team is showing traction with active gaming partnerships, with key team members having relevant backgrounds in both blockchain & traditional gaming.
From comms with the team, and per the team’s request, more information on this investment will be publicly shared once the funding round has closed and the team has mutually agreed to a formal investment announcement between AADAO / Cosmos Hub and the investee.
StratComm
Guernsey Purpose Trust
A Guernsey purpose trust is a legal entity created under Guernsey law to fulfill specific objectives rather than benefit individual beneficiaries. In late July 2024, AADAO established a Guernsey purpose trust to create a bridge between decentralized governance and traditional legal frameworks. The objective of this structure is to allow AADAO to maintain its decentralized nature while interacting with conventional financial and legal systems.
By adopting this hybrid approach, AADAO can leverage both decentralized governance and established legal frameworks, creating a flexible, tax-efficient, and legally recognized structure for its operations.
AADAO’s Guernsey Purpose Trust Deed can be found here.
Links
- Oversight Report on AADAO Cosmoverse Dispute, Cosmos Hub Forum
- 08/16/24 MOU Signed by AADAO & Cosmoverse (nullified)
- 08/22/24 MOU Signed by AADAO & Cosmoverse
- Oversight Memo to AADAO re Decision to Withhold Approval for Individual Performance Based Bonuses
- Oversight Analysis of Bonus Methodology: “Language v. Policy”
- Oversight Committee Special Report: Notification Regarding Proposed Bonus Methodology, Alleged Misconduct and/or Mismanagement Involving the General Manager (GM), and Governance Concerns
- Proposal A4. Operational Freeze for Youssef, Grace, Pati
- Proposal A7. Update Internal Protocols and terminate the employment of Youssef Amrani as GM
- Proposal A8. Remove the Operational Freeze - Patricia and Grace
- Proposal 865, Mintscan
- Proposal 865, Cosmos Hub Forum
- AADAO Next Steps, Cosmos Hub Forum
- IPFS Pin – Full Text with Comments (Proposal 865)
- AADAO Performance Bonus Structure (this document was not linked in the text of Proposal 865, rather it was linked to the IPFS pin and shared on Forum)
- Transparency Report 7 (please see “Performance Bonus”)
- AADAO Historic Compensation (2023 & 2024) and Bonus Distribution
- AADAO Internal Protocols & Bylaws
- Veto Policy (draft)
- AADAO Guernsey Purpose Trust, Deed