Looking at the graph we are spending the dev wallet funds on all of those categories, but particularly:
over the last year we have expanded the dev team
and spent well over $1mil on audits
Marketing is where we have spent the least amount of money. Please bear in mind that for most of the life of the dev wallet we haven’t had a product to market. We now obviously do and so will be dedicating more funds to that pursuit. This includes bringing on a dedicated marketing and community manager and building out that capability over time.
Our new marketing and community manager will be given a budget from the dev wallet, which will complement the funds already being spent by the pDAO. We will work with the new marketing and community manager to determine what that budget should be - as we want to match it to the strategy they come up with.
Some practical points about the dev wallet funds.
Firstly, the entire wallet is one big unrealised gain, which is great but it means that whenever we spend the funds we have to spend more to ensure we cover our taxes. Obviously not a reason to hold back spending but, when looking at the amount, bear in mind that a large proportion of it is going to go to paying taxes.
Second, as the last 3 months have taught us, bear markets are inevitable. RPL is now worth 1/3 of what it was 3 months ago. We prepare by swapping into stables but even still our overall operational buying power diminishes. We are a long term thinking team. Rocket Pool would not be here today if we had burnt through the dev wallet.
That said, we understand the frustration and thank you for raising the allocations with us. We are dedicating more of the funds to marketing and will develop a transparent budget, once our marketing and community manager is onboard. Additionally we will continue to expand the team in a sustainable way.
I think @jasperthegovghost’s proposed allocations gives a good initial start. There are obviously ongoing discussions around changes to ODAO and dev funding but no budget is set in stone and they can be adjusted as we go. I am conscious that we need to lock down decisions so that we can move things forward, particularly the grants program.
I think this budget is not very in line with the original defintion of the tokenomics:
The Protocol DAO will also need to ensure development of the protocol can continue to happen in a decentralised manner. The tokenomics ensure that a portion of RPL inflation can be used to fund the DAO treasury, from there governance can be used to pass proposals related to development and fund them at the same time.
As langers commented above, the dev wallet has a portion reserved for marketing. I don’t think it makes sense to spend homeopathic amounts on liquidity incentives governed by snapshot voting. If we want pDAO to be responsible for marketing and incentives as well, we ought to adjust tokenomics appropriately.
It appears that the bankless ad being paid by pDAO has been decided already. I propose to do that from accumulated funds since protocol launch and suggest the following split going forward:
Grants and Bounties - 30%
Reserves for future decentralized development of the protocol - 70%
From my perspective, incentives and marketing are kind of the same thing.
With marketing you encourage people to use Rocket Pool by convincing them it’s a good product.
With incentives you encourage people to use Rocket Pool by literally paying them.
Short term, incentives do wonders to bootstrap a protocol. Long term you also have to convince people it’s actually a good product. From my standpoint these 2 are equally important, and thus those 50% should go be changed to 25% and 25%. (or 50/50 whatever we end up with).
We can also use incentives VERY efficiently to target out bottleneck. We used to have an issue where not enough people minted rETH, then we had incentives on Scrabble pool and the deposit pool was instantly filled. Then we had a shortage of node operators, but the incentives went away and now we’re back to the point where we need people to deposit.
There’s more to the above example of course, with a lot of macro stuff. But it’s a much faster tool than general marketing.
I’m inclined to side closer to knoshua’s position here. I don’t believe that pDAO should be fronting marketing costs, at least long-term. I feel the suggested 30/70 split between Grants and Reserves sounds fair - gives some funds to put into productive additions to RP now while being conservative to hopefully enable that long-time support.
That said, bringing in users and matching demand for rETH and NOs are also both important for the long-term success of the protocol, especially with much larger competitors spending a lot of money on incentives and advertising already. I believe that pre-merge, and a bit after, it will be important to cement RP as a top-tier liquid-staking provider and since profit opportunities drives most of the demand in this ecosystem, RP needs a wide basket of top DeFi integrations. The major blocker for these integrations seems to be rETH’s low liquidity and volume, therefore, while in this growth state, I would be supportive of a split that includes 10-20% incentive spending (maybe more if the cost can be justified).
I completely agree that liquidity incentives are necessary, I just don’t think that this should come out of the pDAO budget. Currently pDAO funds are fairly limited and we are completely relying on the team to deliver necessary future protocol changes. There is no formal engagement and no recourse if something goes wrong. Therefore I think it’s extremely important to start building up resources that can ensure the survival of the protocol without the team.
I see rETH liquidity as a fundamental part of the protocol (it is supposed to be a liquid staking token after all) just like the oDAO plays a vital role and node operators are essential. The tokenomics allocate part of the inflation directly to node operators and oDAO and completely ingore the rETH side, which in my opinion is a mistake. Inflation and allocation are part of the pDAO settings of the smart contracts, so my preference would be to address an allocation for liquidity incentives that way.
Just to put in perspective what 10-20% of pDAO on incentives would mean: It’s approximately 13.5k - 27k RPL per year or 117 - 234 ETH at the current spot price. The tetranode incentives that started in March were the equivalent of ~200 ETH/year (source) initially and then adjusted to about 1/3 of that. So I’d expect an allocation like that to maintain the status quo and not move things forward in a meaningful way.
There’s a number of discussions that get intermixed…
I strongly agree with @knoshua that RP (the protocol) needs a way to continue regardless of the disposition of the current RP dev team. We should be credibly decentralizable on the dev side.
I also agree with @thomasg that at some point we should start paying for “additional” development as opposed to “initial” development from the RP dev team. I’m unclear what that point is, and we should define it. To me, some “initial” items include getting through the merge and related dev (forced exits, MEV-related and penalty work, etc).
There’s a pending question on if the oDAO is over-rewarding acting as an oracle (or if it’s meant to reward other items, in which case we should probably be judging oDAO members on those other items). In my opinion, there is more reward there than needed, and I’d love to see some of that redirected to the pDAO. I’d also like to see the RP dev team rewarded for their work from the pDAO (right now it seems like they’re effectively getting paid via the oDAO instead).
[updated 7/21: oDAO membership has changed; numbers now in both percent inflation and absolute inflation]
I end dividing the emissions something like the following, with numbers shown as percent of inflation [absolute inflation]:
70% [3.5%]: NOs
5% [.25%]: Grants/bounties
11% [.55%]: Reserves for future dev
2% [.1%]: RP team dev (this should be explicitly supporting the “additional” items - eg, smoothing pool work, not a new smartnode release so clients don’t break when the bomb moves); this is nice b/c we can vote to change it
12% [.6%]: oDAO; explicitly for the oracle role. Other work can be done pro bono if desired, or with grants/bounties if the pDAO agrees.
Remove 2 of the rocketpool oDAO members (gets them to 2). The overall income stream to the RP team will be minorly increased from what it is in the current distribution (from 4.3% to 4.7%).
This mostly follows the suggestions @knoshua put in, but puts in a small oDAO change to increase grants/bounties and create a stream for current dev, in addition to future dev.