[Proposal #839][ACCEPTED] Fund 2024 Hub development by Informal Systems and Hypha Worker Co-op

Hub Proposals Community Spend
22

Hypha has been doing fantastic work!

I’m really looking forward to wargame Thursdays.

With that said, I believe that the cosmos Hub team at informal is still too much a part of ICFormal. As those who frequent the forum are likely aware, I’m really disappointed with the response from amulet which has mainly been nothing.

Of course in addition to nothing, they also published and miscategorized a security issue. Their publication and miscategorization of this issue has forced myself and our team at notional to work in absolute overdrive.

Informal systems still seems to believe that it is important to go through amulet. I am arguing that it is dangerous to go through amulet, and that there is no need to go through them because notional is working security on the hub. If amulets response had been better, we would gladly work with them just like we would gladly work with hypha and gladly work with informal on security on the cosmos hub.

I do not believe that securing this amount of software is something that can or should be left to a single organization. Basically, security is the responsibility of everybody who touches the software stack. Hypha really seems to get this.

As many people are aware, there are legitimate concerns about conflict of interest with respect to the foundation and informal systems. The hub team at informal seems to act as though it is controlled by the foundation, even in matters of security, I have received responses like well our hands are tied and that’s just the policy we have to adhere to. Unfortunately, the reality is that the policy has left me talking to a brick wall.

Now please know, gentle team members of both hypha and informal, I don’t take making such a suggestion lightly, but what if informal hub team → Hypha?

For me this would dramatically reduce what are currently very serious concerns about efficacy in important matters. When funded by the hub, your hands are not tied. You need to do what’s necessary for the hub, and the foundation clearly wants no part in that, so we need to act like that.

I don’t like needing to separate these concerns like this one bit.

Here’s what I can endorse:

  • hyphas excellent work on testnets, security and onboarding
    • For those concerned with overlap, let’s say that I have been doing primary investigation on an issue which amulet should not have published and hypha has been facilitating that and the collaboration has been great.
  • informal hub teams excellent r&d - ICS shouldn’t work. But it does and that’s extremely impressive. What I mean by it shouldn’t work is that it’s a really challenging piece of technology and I think that the execution there has been fantastic.

what I cannot endorse and must decry

  • An overemphasis on proceduralism at informal, to the detriment of the hub security, and verily all of cosmos.
  • insistence on involving the foundations security contractor when:
    • The foundations security contractor is no more responsive than a brick wall
    • The foundations security contractor releases information against researchers wishes, when researchers are saying hey that would be really bad to release
    • The foundation security contractor is not creative enough to consider that a single issue can exploit multiple layers of the stack
  • “My hands are tied” should never come from a hub funded team wrt the foundation who wishes to cease funding the hub. When the hub has funded us, we work for the hub.

In summary, the foundation shouldn’t have influence on hub funded teams operations.

therefore

I wish to humbly suggest we’re not making a single funding proposal for two separate organizations but instead one organization dedicated to the hub. Now, please keep in mind I realize this is a hell of a bet and a hell of an ask for the people involved and I’m not going to blame anybody if that doesn’t go through. With that said, I do want to try to help to chart and optimal course, then I believe that what I have described is optimal.

if the hub funds it, the foundation doesn’t get to decide it, and that likely means that a new org is needed because informal is hard to distinguish from the foundation and follows foundation policies to its own detriment

licensing

Really cool to hear that @jtremback is open to exploring novel licenses. I’m also not a lawyer, and don’t know if we should cobble something together or consult with a lawyer on what should be cobbled. I think that making ICS(above the commit at which foundation funding ends)+Megablocks+AtomicIBC a hub exclusive through licensure places Gaia in a very competitive position.

one more thing

I frankly find it quite refreshing to hear @jtremback telling the community the direct truth about the non-linear nature of technology research and development. It’s not a sure shot. Jehan is a plain talker and a doer and Gaia is much better off because of his work.

The same is true of the rest of the informal hub team and hypha.

other factors

Additional things that could influence my decision making here would include the separation of the foundation and informal systems. The the funding of informal systems, coupled with Ethan’s role at the foundation have created non-distinct entities.

If this prop means independence for Gaia from ICFormal it has my full and unwavering support.

I don’t support hub funding for ICFormal.

Jehan and Marius’ engineering team is great.

It would be hard to find better stewards and facilitators than Hypha.

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23

Some really great points and feedback mentioned here:

I think a lot of good topics for feedback have been mentioned already and so I wont go into detail. As mentioned by others, it could be better to be more specific about the team members working on the deliverables of the funding and the funding itself to be ‘for XYZ deliverables to be worked on by ABC individuals from Informal and Hypha for EFG period of time’ instead of for ‘the Informal and Hypha teams’

This coupled with a funding amount and people responsible for work and delivery for each single area of work, as mentioned by @Rarma regarding R&D vs Interchain Security vs Gaia Maintenance etc, should allow the community to review each part of the work done by Hypha & Informal more effectively, generally resulting in better accountability and more effective communication between the community & the teams regarding the work conducted.

Seperating the work taken on from this proposals funding and the existing work being conducted by Hypha and Informal outside the scope of this proposal (such as existing work and projects or newly taken on work), from a reporting/accountability perspective, ensures the community can more effectively monito the work conducted and Informal/Hypha can more effectively communicate who by, how and when deliverables have been completed.

Overall, supportive of the Cosmos Hub funding its own development and maintenance costs and these are two great teams to work on Cosmos hub development and maintenance. It’s a large spend, 20% of the community pool for 1 year of development/maintenance work, so good accountability & transparency in communication will be beneficial for both the team and the community.

Look forward to seeing this proposal go on chain.

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Well, so a corporation really only has one set of books. Which is why I am suggesting that the hub team leave informal.

I don’t like the overhead of that move but informal has done very poorly by the hub lately. But this didn’t really come from the hub team, instead it came from informal and Bucky’s entanglements with the foundation

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I agree the points brought up by Liam. I feel like this proposal should be clearer in terms of who is doing what work, and what are the timelines. This allows for better accountability in the long term.

Whilst the rates mentioned are software development rates, is all this work really software development work?

For example, does it really cost $2.5million per year to do testing, testnet coordination, incident response and management? What part of this work also fits within the scope of @jacobgadikian’s Notional responsibilities?

Considering the teams are receiving $325k+ per team member (which seems insane to me), is there really a need to use another 100k ATOM bonus for performance?

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more specific about the team members

Jehan wrote an update to this that I’ve also included in the top-level post. On Informal’s side, it details the number and roles included in this proposal. I’ve done the same for Hypha here and in the top-level:

  • 2 general software engineers who write code, design and build tests, and work with other dev teams
  • 1 product manager who manages scope, timeline, communications, and is involved with every part of our team’s work
  • 0.5 devops engineer who manages and orchestrates our fleet of nodes on two public testnets and multiple consumer chains

For a little more context, Hypha’s team is pretty small (3.5 people) and we tend to be mostly heads-down developing and improving systems to ensure that quality code lands on the Hub. Over the last year, we have shepherded drastic improvements to the Hub’s operations and security, as well as the smooth release of new features such as Replicated Security and the Liquid Staking Module. We think we punch above our weight in terms of delivering on our scope of work.

As a note for both our headcounts, we will report on the precise number of FTE employed for each quarter and return any unused funds from the budget.

For example, does it really cost $2.5million per year to do testing, testnet coordination, incident response and management? What part of this work also fits within the scope of Notional responsibilities?

The testing and testnets line item is for $1M. This includes engineering work such as understanding specifications and designing/writing appropriate test cases and tests, creating and maintaining our automated testing framework to enable faster iteration on releases, and working directly with other developers who are using the testnets or working to understand aspects of the Gaia codebase. The things that happen on the testnet are intentionally chaotic and hit new parts of the code, so for critical new features such as key assignment, our team is often the leading expert on the topic.

This work contributes directly to a safe and secure mainnet and provides a platform for testing by folks like Notional (which I spoke to here), consumer chain teams, and any other Hub developers. We think the quality of our work speaks for itself.

The other $1.5M to do the entirety of Gaia maintenance, which includes a regular release cycle, updating dependencies such as the sdk and ibc, integrating version updates from other sources like ICS, working with other teams to scope out new features and how they fit into the release cycle, preparing release candidates and iterating on them in close coordination with the testnets team, and providing support to validators during regular and emergency Hub upgrades.

Incident response and management is part of maintenance, but definitely not all of it.

Considering the teams are receiving $325k+ per team member (which seems insane to me), is there really a need to use another 100k ATOM bonus for performance?

~325k includes operational overhead that is just the cost of running a business. It works out to approximately 225k in employee compensation and we think this is a good standard to set for work on the Hub. We want the best people working here, and that requires a competitive compensation package (including performance-based bonuses) as well as job security.

However, we have adjusted the bonus in the proposal such that no one gets a bonus unless we exceed expectations for the quarter based on Rarma’s feedback. We think this is more in line with what a ‘bonus’ should be – a recognition of exceptional work.

Thank you to both of you for the thoughtful comments :pray:

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This comment contains details about liquidation and payment mechanisms that will be executed as part of the proposal.

Details of liquidation process

To carry out the goals listed in the 2024 funding proposal, Informal and Hypha will need to hold the majority of the funds in the form of USDC, not ATOM. While we are obviously very aligned with the success of ATOM and will hold 30% of the funds in the form of ATOM to provide added incentivization, the majority of the funding will go to pay employee’s salaries and other fixed costs and for this we need stability.

However, the community pool contains ATOM. So, before the start of our contract in 2024, a significant amount of ATOM will need to be converted into USDC. This USDC will then be put into the vesting accounts described in the funding proposal. Over 2024, this USDC will vest and will be used to pay for our expenses. Keeping 30% of the total budget in ATOM means that 4M worth of ATOM will need to be converted to USDC; there are several ways this could be done.

Potential conversion methods

  1. Fully automated
    • The ATOM amount would be transferred into some mechanism like Timewave, which would automatically and trustlessly convert it to USDC on a Cosmos DEX.
    • This is the most appealing option in principle, but currently there is no mechanism available to do this (let us know if we are wrong).
    • There are also issues with slippage, which we will get into more below.
  2. Multisig with DEX
    • We would name an interim multisig with several trustworthy validators or community members to perform the conversion on a Cosmos DEX.
    • Due to the low volume currently on Cosmos DEXs, this trade would currently incur a high amount of slippage. Most likely, the multisig would need to do many swaps over a period of time to allow enough time for arbitrageurs to backfill the liquidity on whichever DEX we used. This would be demanding for the multisig participants, and the price could move during this time, further complicating matters.
    • It would also be possible to use concentrated liquidity on DEXs that offer it (like Osmosis) to place a liquidity position at a discount below the spot price, and allow it to be filled by arbitrageurs. This might have some advantages over swapping, but it could also involve complications if the price moved. Also the position would have to be closed quickly after it was filled to avoid inadvertently buying the ATOM back.
  3. Multisig with OTC
    • Instead of using a DEX, the interim multisig would use the OTC desk on a centralized exchange. This would allow the entire liquidation to be done in one step, with very little impact on price. $4M can be handled very easily by OTC desks on most centralized exchanges. OTC liquidations by definition do not have an immediate impact on price since they occur off of the order book.
    • The downside of this method is that it would require the interim multisig to put the funds into a centralized exchange account, which is not very decentralized. However, we believe that this is probably the most expedient solution.

Regardless of method, the price impact of liquidating $4M USD worth of ATOM is minimal compared to the 24h trading volume. CoinMarketCap regularly reports a 24 hour trading volume of $50M - 100M USD for ATOM.

Step-by-step liquidation process using OTC deal

  1. Immediately before going on-chain:

    • Use the spot price of ATOM to convert the $5.7M USD budget into a pure ATOM value.
    • Add 25% to cover fluctuation in ATOM price over the 2-week voting period.
    • Add 100k ATOM to this number.
    • This produces the total ATOM amount used in the Community Spend proposal (### ATOM).

  2. If/when proposal passes: Total ATOM amount will be sent from community pool to a 3 of 5 interim multisig comprising:

    • CryptoCrew
    • SimplyStaking
    • Stakecito
    • Stakin
    • Citadel One

  3. The interim multisig will use an OTC deal or swap to liquidate $4M worth of ATOM (using the 25% buffer to cover price fluctuation and fees if needed) into USDC. This $4M represents 70% of the total budget. The remaining 30% will be retained in ATOM.

  4. The interim multisig will send the following transactions to vesting accounts managed by the respective teams. While all accounts are continuously vesting over 2024, the ATOM budget and ATOM portions are divided for ease of transparency and reporting.

    • Informal budget: 3.16M USDC + $1.34M worth of ATOM
    • Informal bonus: 79k ATOM
    • Hypha budget: 840k USDC + $340k worth of ATOM
    • Hypha bonus: 21k ATOM

  5. The interim multisig will return all remaining ATOM buffer to the community pool.

    • If the ATOM price is exactly the same as when the prop went up for voting (2 weeks before this point), then the entire 25% buffer will be returned to the community pool.
    • If the ATOM price went down over the 2 week voting period, then some of the buffer will have been used to cover the difference, and less will be returned.
    • If the ATOM price went up over the 2 week voting period, then more than the 25% buffer will be returned to the community pool – the interim multisig will only sell enough ATOM to cover the amount specified in the funding prop.

  6. The interim multisig will publish a full description of the deal, including documentation of:

    • Trading venue for the OTC deal
    • Price received in the OTC deal (it may be necessary to offer a slight discount from ATOM’s spot price)
    • Any trading or other fees involved

Details of vesting and payment mechanism

Budget vesting

Once the USDC + ATOM budget is in Informal and Hypha’s vesting wallets, it will vest continuously through December 2023 and the 2024 year. The teams will not stake ATOMs which are vesting. Until tokens have vested, they have not been earned and we are not entitled to reward from staking them.

Beginning at the start of January 2024, teams will withdraw the full vested amount of USDC and ATOM on a monthly basis to meet payroll and operational needs for the upcoming month. On a quarterly basis, the teams will report on the burn rate for the quarter (i.e., how many FTE were employed) and return any unused budget to the community pool.

Bonus vesting

The ATOM bonus will vest on the same continuous schedule over 2024. Similarly, teams will not stake vesting ATOMs.

On a quarterly basis:

  1. Tams will present reports to the oversight committee. Reports will also be posted publicly.
  2. The oversight committee will give grades to the teams based on the grading schemes in Appendix C.
  3. If the team receives a grade of ‘Exceeds Expectations’, the quarterly ATOM bonus will be sent to a vesting account with a one year locking period to further incentivize good performance. For example, any bonus earned in Q1 2024 will be locked and inaccessible to teams until Q1 2025
  4. If the team receives a grade of ‘Meets Expectations’ or ‘Needs Improvement’, the entirety of the quarterly ATOM bonus will be immediately sent back to the community pool

I’ve edited this in the top-level post as well but I’ll reiterate here:

Teams will only earn a bonus if they exceed expectations based on the quarterly reports and grades received from the Oversight Committee:

  • “Needs improvement”: 0% of bonus awarded
  • “Meets expectations”: 0% of bonus awarded
  • “Exceeds expectations”: 100% of bonus awarded
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Thanks for the proposal Lexa and Jehan, I think you add great value to the Cosmos Hub. Just one comment. The CP funds come from a tax to ATOM stakers and validators. This funding will come from the CP to pay the salaries of several Informal Systems and Hypha employees. However, Hypha and Informal Systems are for profit companies.

If the ATOM stakers and validators are paying the salaries of certain employees of Informal Systems and Hypha, shouldn’t these employees be ‘employed’ by ATOM stakers and validators, for example with some subDAO entity? For example, imagine a person works for company A, then he gets hired by company B and receives a salary from company B. Here what it is suggested is, people work at company A but the ‘company’ B pays the salary for the people at company A. If the Cosmos Hub is paying the salaries, these people should be ‘employed’ by the Cosmos Hub and work exclusively for the Cosmos Hub.
If they are still employed at Informal Systems and Hypha, there are bosses in the companies so they need to answer to them and not to the Cosmos Hub since they are employed there. Also, Informal Systems and Hypha benefit because their overall costs would be lower since many salaries wouldn’t need to be paid, so the earnings would be higher and hence the valuation of these companies which benefits the shareholders of these companies not the ATOM stakers and validators.
I support the proposal, I just find it surprising that Cosmos Hub will pay all these salaries without really ‘hiring’ these people.

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I think it is not right to say that the Hub would be paying salaries without actually ‘hiring’ the people themselves. We’re talking in terms of salaries because it’s a convenient way to break down what it means to have a contract worth a certain number of dollars, not because the Hub is directly paying salary directly.

This is an agreement between the Hub and the companies, not the individual employees. The Hub pays the company to deliver the things we’ve outlined in the prop, and the company has its own employment agreements with its employees (including bosses, whose job it is to make sure this work gets delivered). Many people would choose to work for a company over a DAO or subDAO entity because of things like health insurance, benefits, retirement contributions, taxes, etc.

I’d be very interested in seeing a DAO figure out how to offer a competitive employment package that accounts for things like health benefits, vacation time, etc. I think that would be a huge evolution in our ability to do decentralized work. Delphi Labs published content earlier this year about the idea of a legal entity that uses decentralized tech as an integrated part of the entity’s governance and activities. I know some folks in our ecosystem are definitely thinking about this idea and how to keep it moving forward.

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This proposal assumes the “community” is positioned to perform accountability efficiently and effectively. It is not.

To date, ATOM Community Pool expenditures and funded recipients have lacked a clear and consistent framework for transparency deliverables and initiatives; overall, even well meaning entities rely on a combination of self-policing and seemingly arbitrary and or partial disclosures.

The hub community has yet to define nominal or normalized standards for “standards” essential to meaningful monitoring, evaluation, and reporting. At present, the “accountability” that exists is entirely self-designed and self regulating AND operates internally within funded teams. The “accountability” is totally dependent on ethical frameworks and internal controls at the design discretion of funded teams.

To be clear, DIY accountability is not accountability.

The community has observed challenges and limitations with internally curated and “ratified” oversight committee functions, as per AADAO operations.

All that said, I recognize the importance of securing hub funds for Informal and Hypha hub teams.

I also conjecture the ICF desires more separation from funding maintenance of a thing that can be interpreted as software use to create digital assets that are securities.

This proposal reinforces to me the importance of, and urgent need for an external and independent oversight hub committee.

And in the absence of such committee, I do recognize the measurable efforts Informal and Hypha teams have taken to differentiate their pre-proposal in articulating deliverables for an accountability framework. You’ve shared alot of ideas on how to make reporting meaningful relating to what’s effectively a service of work agreement with the hub. But we can use for details as to how the financial reporting will be delivered. Some suggestions for your consideration:

  • semiannual and annual financial reports to be delivered with 1) clarity and comprehensibility 2) completeness 3) reliability 4) materiality 5) consistency with respect to presentation and valuation 6) no offsetting of assets or liabilities in income and expenses

  • seminannual report should be inclusive of 1) grant financial report 2) grant cash/crypto transaction report

  • make public all your operational wallets managing hub disbursed ATOM and other funds

  • annual financial reports to include 1) balance sheet 2) income statement 2) cash flow statement

  • add an accountant to your oversight committee

  • Informal Systems and Hypha AG to make necessary disclosures e.g., who owns equity (voting shares and non voting shares) in coop, and how much? Are either entities invested in other projects? If so, in what/who?

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Add an accountant or a person experienced with preparing financial statements, please.

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Some of the roadmap sounds like it can be redundant with R&D initiatives funded by AADAO. What will be done to avoid redundancy with AADAO if they’re renewed in December?

Separately – R&D on ICS insufficiently samples sentiment and experience of operator-stakeholders, namely validators. What will you do to make your R&D more diverse and inclusive of operator/provider perspectives and their ongoing concerns?

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Accountability

Really appreciate these two contrasting ideas –

  • urgent need for an external and independent oversight hub committee.
  • the importance of securing hub funds for Informal and Hypha hub teams.

Without any existing accountability structures on the Hub, we’ve done our best to provide the best ‘DIY accountability’ possible. But accountability standards on the Hub are sorely needed, and it would benefit both the community and any entities looking to make proposals.

Financial reporting and disclosure

Our orgs work with accountants, who will be involved in preparing reports. Adding an accountant or another finance-oriented person to the committee is an excellent suggestion, thank you. We’ll look into that.

Our vesting and operational wallets (including any locked vesting wallets for earned bonuses) will absolutely be made public.

We’ll deliver financial reports (balance sheet, income statement, cash flow statements) on Hub-dispersed funds every quarter – this seems like the most sensible cadence to me since there will be monthly payroll withdrawals and quarterly assessments around the performance bonus. Each quarter, we will be able to report on our expenses, return any unused funds, and publicize the relevant transactions. Because it is a proposal for a single year, I think annual/semiannual reports would not provide enough information for the community to make sense of and give feedback on.

As for disclosures, Hypha is incorporated as a non-share capital worker co-operative in Ontario, Canada. Because we don’t have shares, we don’t have shareholders, we don’t pay out dividends, no one owns equity in Hypha. Our corporate governance is 1-member-worker-1-vote and we currently have 7 members and 6 employees/contractors who may become members. One of our members is doing product/engineering work with Timewave, which is a new project building tools for DAO-to-DAO agreements. Other workers’ projects are not directly relevant to our work here but you can read more about those projects here.

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Hey Lexa,

To be clear, my use of “DIY accountability” was minus snark. It’s clear to me both teams anticipated these concerns and shared as much re: roadmap, KPIs etc. The effort is both noted and appreciated.

RE:

  • urgent need for an external and independent oversight hub committee.
  • the importance of securing hub funds for Informal and Hypha hub teams.

Contrasting, yes. Although distinct, they don’t necessarily conflict.

Thank you for adding an account/finance person to your committee. An unsolicited suggestion/nomination for you – someone like James Parillo at Figment would be an excellent addition. No idea about his availability or amenability, however.

As for addressing ambiguity in accountability standards – down to get something done on this front.

Any thoughts on creating/authorizing an independent oversight dao via hub governance? Standardization is both an education and an enforcement process. The community can also benefit from a dedicated team to routinely evaluate transparency measures; and streamline community demands for transparency/information requests. Might help reduce FUD tape. Wishful thinking, maybe.

More importantly, think such dao can be a resource hub for increasingly distributed teams lacking in-house experience and orientation with best practices for fiscal management + internal controls. Kinda had an adhoc working group to organize ideas for an oversight committee months ago (alas, distracted by some legal stuff). Happy to pick that up again, and would be great to prompt you for inputs if possible.

For the immediate term (doesn’t have to be a dao) an independent crew w/relevant experience can research, define:

  • minimum reporting requirements,
  • reporting cadences,
  • evidencing requirements,
  • standard templates,
  • and other associated deliverables (practical output measurement pending on funded organization type and funding amount received)

Then share a formal recommendation of reporting requirements for cp funded teams through governance.

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fwiw, an omnibus attempts to pork barrel a number of diverse and unrelated topics. “Omnibus” is a misnomer, here – while the proposal scope is substantial, and there are many parts, they’re all parts of that singular thing called hub development. I do share @Rarma’s view tho that it’d be good to R&D decoupled from funds for dev team. For different reasons.

R&D requires objectivity – if it’s lead by and large by devs moonlighting as product managers and economists, can make agenda setting and research priorities tolerant of cognitive biases and such.

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Thanks for the comments @Cosmos_Nanny.

AADAO redundancy

We have a good relationship with @Better_Future and @Youssef of AADAO, and speak with them frequently about Hub direction and upcoming AADAO grants. We also have good relationships with many of their grantees, such as @effortcapital and @Noam. Through this we synchronize our efforts and avoid overlap. We also focus on different areas. Our team is focused on building and maintaining the base layer of the Cosmos Hub, in the form of Gaia and ICS, while AADAO grants tend to focus on higher level features of governance and tokenomics.

ICS validator concerns

We speak to validators frequently, but we will be stepping up our efforts to involve them in product decisions.

A lot of our research has been focused on reducing costs for validators, especially small validators. Soft opt out is one early effort in this direction, and one of our main research focuses for next year, partial set security, should make a major impact by allowing validators to choose whether or not to run any given consumer chain, and giving a larger fraction of the rewards to validators who do choose to run it. Another mechanism that I will write up in a CHIPs proposal soon is to allow validators to set separate commission rates per consumer chain. This will allow them to adjust for infrastructure costs on more demanding consumer chains.

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Thank you, Jehan.

Are you able to comment on ICF’s reasoning for situating hub dev funding through governance? While I agree it’s better to establish a more direct relationship between dev teams and the community – funding ongoing hub maintenance and development is the mandated purpose of the foundation.

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I can confirm AADAO has a good working relationship with key people from Informal such as @jtremback and Lauren Gallinaro and we have regular touchpoints.

Often times, we request their contribution to advise us on strategic grants like SDK module deployments for example and anything that touches the Hub’s base layer.

Oversight

On oversight, AADAO has paved the way to the self appointed committee methodology in absence of a dedicated mechanism and Informal/Hyphaa are taking the same path, which I salute.

While our oversight committee is not perfect, it has so far been able to establish internal control mechanisms, manage conflicts of interests and discontinue grants that were not effective. Our Oversight Committee has also been fully transparent and proactive in terms of AADAO’s operations and financial reporting. I see our oversight committee as a self regulation body within AADAO that is catered to the specific needs of our organization.

Is there a place for a Hub’s specific oversight team? Sure! Normally, any spend proposal should have oversight, whether from a self-appointed body or a community-elected one.

To be honest, I think what matters most is not who from the Hub or the DAO provides oversight but if the oversight function itself is done with integrity and competence.

I do see risk of excessive power in the hands of a Hub’s oversight-only committee that would have the wrong motivations and @jtremback I believe has expressed similar concerns in the Oversight topic created by @lexa. One way to address excessive power while having a Hub’s elected oversight body is to clearly define the SoW and the perimeter of such oversight such as it doesn’t become an impediment to the DAO (ie: AADAO) itself.

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@Youssef wasn’t questioning the relationship between AADAO and Informal/Hypha.
The question is how redundancy can be avoided in the event of renewal. You can have good relations and redundancy with R&D objectives. In some topic areas, redundancy might even be desirable.

As to oversight – am in agreement with you. generally.

It’s not about who, rather what we can have established as standards and requirements so we can move the ecosystem beyond ad hoc accountability thick with “expectations,” thin on details.

Expectations are messy. And no one is made happy.

Right now, funded teams are hostage to whimsical demands for reporting, as an example. And when is what is delivered on a volunteer basis ever going to be good enough?

Invocations of community “expectations” and preponderance of transparency demands happen in pockets of partisan conversations. This is wrong. Disgruntlement and annoyance with these demands also transpire in segmented rooms. This is also wrong. It’s not sustainable if we want to create minimum viable culture of respect in Cosmos.

Just thinking out loud as to what we can do, collectively (as dissimilar we might be with respect to what kind of products and implementations we want to see on the hub) to minimize fud and the self-regulating burden of funded teams. It has to detract from creative and operational efficiency of teams.

We need to normalize reporting, meaningfully. And I do acknowledge AADAO’s contributions on this front.

I share your concerns for concentrated power of oversight, and the risks of having committee actions getting politicized. But the fear is more incidental to having to perform oversight action as a self-regulating regime. If an independent oversight dao is properly structured with efficient scope and mandate, it would be difficult to weaponize for partisan interests.

Re:

One way to address excessive power while having a Hub’s elected oversight body is to clearly define the SoW and the perimeter of such oversight such as it doesn’t become an impediment to the DAO (ie: AADAO) itself.

imo, this is less service-agreement with the hub. More an issue with ensuring the governance documents clearly elucidate duties and obligations via charter and bylaws. In the event any limited powers are given, must be enshrined with reason. That said, installing an oversight committee without an authority to enforce renders accountability toothless.

Checks and balances. It doesn’t make sense to have oversight housed internal to teams. And it also defeats the function and spirit of oversight to be given any unreasonable authority over funded teams.

The most urgent need is to develop and define standards and reporting requirements for cp fund recipients. We don’t need to formalize a committee via governance to get this done.

Can you elaborate on what you mean, here:

doesn’t become an impediment to the DAO (ie: AADAO) itself.

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James is a great suggestion :pray:

The most urgent need is to develop and define standards and reporting requirements for cp fund recipients. We don’t need to formalize a committee via governance to get this done.

+1 to this. I think that’s the most impactful work that can be done in the least amount of time and I’m happy to talk more about it when I have a bit more bandwidth.

Are you able to comment on ICF’s reasoning for situating hub dev funding through governance?

I can’t speak for ICF of course, but Maria did comment higher in the thread about refining their focus to the core stack and ecosystem.

Hypha is also not so involved in R&D, but I specifically want to call out the CHIPs process as a major factor in reducing redundancy with anyone, not just AADAO. Features from Informal’s Hub team, any AADAO grant recipients, and other dev teams should be posting ideas on the forum as their discussion phase, during which time any redundancy can be highlighted.

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Hi Maria, thank you for your comments.

It’s somewhat puzzling to infer that the foundation doesn’t view the Cosmos Hub as part of what it deems the “most relevant tech stack.” One could argue that the hub represents a direct and most relevant expression of the most relevant tech stack.

During Cosmoverse, Brian mentioned that the projected outlay for 2023/24 is about $45 million. Can you clarify whether this figure accounts for ongoing funding to support development or if it assumes any offsets or other financial considerations?

Separately, some quick questions for you and @crainbf:

Financial reporting

Are there any intentions/plans to disclose public-facing financial reports covering the period from Q2 to Q4 in 2021? Releasing reports for all the under-reported/unreported quarters and years can help us contextualize claims of responsible stewardship and the information shared in your 2022 annual report.

Asset management and policies

Does the foundation maintain specific regulations or policies concerning the pace of endowment spend-down? Are there guidelines in place regarding the liquidation of particular asset types to support the foundation’s operational activities? Additionally, are there policies addressing portfolio diversification requirements or minimum asset ratio thresholds within the treasury portfolio?

Asset management structure

Could you please clarify whether the foundation handles asset management internally, utilizing its own resources and expertise? Alternatively, does the foundation engage the services of an external asset management provider or operate under a combination of both internal and external management structures?

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