[Governance Proposal] FIP1: DAO Treasury Management

[Proposal] FIP1: DAO Treasury Management

Authors(s): @Guzman_MassAdoption, @Hsuan-Ting

Label: #Governance #DAO

Abstract

Furucombo has grown into becoming a key transaction aggregation tool to simplify the users experience amongst simultaneous protocols! Since launching nearly a year ago (Jan. 2021), Furucombo has experienced a 15,276% growth in new users cumulative on Ethereum (Total Unique Ethereum Users at the time of writing: 3,998). Since deploying on Polygon, Furucombo has been able to acquire a total of 5,099 unique users. Which brings Furucombo’s cumulative user-base to approximately 9,097 (at the time of writing).

As Furucombo continues to scale it is imperative that we raise the conversation of community contribution and overall governance. Answer certain questions such as: (1) How will this governance process be structured? And most importantly (2) Why do we need this DAO?

The simple and easy answer to the latter is: because we want the community to be a part of the ecosystem both now and into the future of the protocol.

In order to stimulate community participation/contribution, the establishment of autonomous working groups should be arranged. The first of many Furucombo cohorts should focus on Treasury Management along with a Marketing working group (a separate proposal will be submitted in detail regarding this working group).

Proposal

Treasury Management will be executed amongst 12 key holders:

  • 4 keys from the core team
  • 4 keys from Protocol Partners
  • 4 keys to community elected delegates

The 4 community key holders will maintain their role for the duration of 3 months and can be re-elected upon the completion of their term. If the community believes that another individual is better-suited for the role, a proposal must be submitted within the Furucombo Forum, deliberated, and escalated to a Snapshot vote.

Responsibilities

Similar to what was proposed by @HelloShreyas in his Aave Guardian Update, the purpose of having these keyholders (‘guardians’ as Shreyas calls them) is to protect the decentralized integrity of the Furucombo protocol while enabling community contributorship, ownership, and reputation development.

With community members at the helm as being keyholders, they alongside the core team members and partners can steer Furucombo in the direction that will most effectively enhance the protocol, stimulate contributorship, and ensure transparency.

All 12 key holders should adhere to following principled duties as a code of conduct:

  1. Duty of Care: A Fiduciary duty meant to limit a partner (keyholder) from engaging in grossly, negligent, reckless conduct or intentional misconduct.
  2. Duty of Loyalty: Each partner (keyholder) owes the other (the community) something greater than just ordinary honesty. A partner cannot compete against another partner.
  3. Duty of Good Faith and Fair Dealing: Each partner must deal honestly and fairly in their dealings pertaining to the partnership/community.
  4. Duty to Disclose: Partners have a duty to disclose material information to other partners, even without asking.

[Reference: Managing DAO Treasuries]

Process of Becoming a Community Key Holder

There are currently 4 community member keyholder positions available. Those that are interested in becoming a Furucombo keyholder, please respond to this post with the following:

  • Background
  • Interest in the role
  • Involvement in Furucombo
  • Proposal for why you fit this position

As stated in previous sections, this 4 keyholder positions will be subject for (re)election after 3 months.

Election Process

Once community members have submitted their proposal/responses, a poll will be conducted highlighting each interested candidate. The community will then cast their vote to (re)elect the next Furucombo Keyholders. This process will remain as so until the deployment of Furucombo’s Snapshot page.

Once this is launched, the voting process will migrate over to Snapshot.

5 Likes

Hello, I would like to volunteer for a 3 month stint.

Background:
CS/econ major by training. Product manager at a number of bigtechCos over the years. Have done a number of startups where i do pm and dev so I understand smaller teams and how the building phase of an organization works. Currently a full time crypto investor/trader/coder and cofounder of NFT site carbonized.xyz.

Interest in the role:
I’m interested in taking a deeper role in a DAO and this, plus my combined technical and economics background as well as a Furucombo user made me think it would be a good fit.

Involvement in Furucombo:
I’ve been following furucombo since close to (probably?) right after its launch in late 2020 when @fifikobayashi was using it to do some flash arbs. At the time I was just starting to dig much deeper into defi. Ethereum quickly became too expensive for me to use it in any meaningful way by the time I ventured into the defi world early 2021. That is, until Furucombo came to Polygon. Thats when I tried a number of combos but what really clicked for me were the smart wallet and farms that were most recently launched. I use these pretty extensively. From time to time i’ve poked my head into the discord to ask a question or two.

Proposal:
I think I’d be good for this role for a few reasons, partly alluded to above.

  • First and foremost I’m a Furucombo user on polygon and feel I can advocate for users of the polygon app. Polygon users have different constraints and requirements that whales who can operate on ethereum do not have. I think I can do a good job representing these users.
  • Secondly I have a decent amount of my own personal funds in the furucombo smartwallet system and own some wood and metal cubes which means my interests are already well aligned with Furucombo’s success. While I don’t own any Combo I will purchase some coins in the event I am elected to further align interests.
  • I am a long term investor and not a trader, so you can count on my support over a long time horizon. I’ve been watching furucombo’s development since late 2020 which i bet is longer than probably most present members aside from the team itself.
  • As someone fairly knee deep in tech and someone well versed in the crypto I have never been victim to a hack. In addition I am in front of the computer almost all day and dictate my own schedule so I believe I can be a responsible community keyholder that is readily reachable in an emergency.
5 Likes

Hello Furucombo World,

I’m conditionally open to participate as a community key holder, but for reasons you’ll see below, I think we need to know more about how Furucombo is organized now before we could really understand the risks/benefits of holding keys in the proposal above.

My concern is that it’s not clear to me whether $COMBO (which I own some amount of as I’ve been an active user of Furucombo and some of the mining programs) is properly aligned. According to the docs, Furucombo code is not open sourced, and it’s not clear who “owns” Furucombo. Is it a centralized corporation? What is that corporation? Who owns that corporation? Where is it registered?

The key to the above questions is that we’ve seen some bad examples of “governance” tokens effectively only really function as some sort of VC exit liquidity. If Furucombo is just another centralized company with VC backing and a “governance” token of unknown/unknowable power, then count me out. But, if Furucombo is a project truly aiming to become decentralized and where the token will have real control and value (i.e. $CRV, $MKR), then I might be more interested in helping.

A bit about me: I’m a mechanical engineer and lawyer by training. I currently run a cybersecurity business focused on the oil and gas market for one of the biggest companies in the world. In my spare time I’m an active member of LexDAO and LexPunks. I had a bit of notoriety last year related to the crypto/governance space with my CIP#xx proposal. I own $COMBO and the Furucombo Pizza - Sushiswap Flavor NFT (sammiorelli.eth).

6 Likes

Hello Furucombo community, I apply to be a furucombo community secret key holder.

Background

He is currently the head of Meter China, has more than 3 years of experience in cryptocurrency, has worked as a researcher, and is very good at DAO related fields, hoping to awaken the sense of ownership of community users through DAO.

Interest in the role

I am interested in taking on a community-related role in DAO. I believe that a sense of ownership is not gained through token incentives, but is cultivated through long-term interest in community building, and that a better way is to make users aware of their long-term involvement in the community building process through system design, and to give more opportunities to users who have been building the community for a long time.

Involvement in Furucombo

I have been involved in furucombo’s Chinese community since late 2020, when furucombo was first launched, and have authored the “furucombo Research Report” and several articles to be disseminated in the Chinese community to give people a better understanding of furucombo.

When furucombo encountered a hacking incident, he also took the initiative to communicate with the team and offer his ideas.

Until the last few months, it has also kept in communication with the furucombo team and wanted to help furucombo run better.

Proposal for why you fit this position

  1. First of all, I am a loyal user of furucombo, I understand the current situation of furucombo also have my own ideas that can help furucombo change the situation gradually.

  2. I work with the cryptocurrency field and can bring more resources to furucombo and find more collaborations.

  3. I am an industry practitioner, focused on building the industry, not a trader, and rarely trade in the secondary market, so I am better able to focus on helping furucombo

Address: guoxinchen.eth
Contact TG: @guoxinchen

4 Likes

Thanks @jokie88 @SamMiorelli @shanjiefengyi for your replies, we are very excited to see more people participating in our community!

In reply to SamMiorelli’s question, Furucombo started from a hackathon project by several people (who are now team members) who were interested in DeFi. Additionally, we are a software company registered in Singapore that focuses on developing blockchain technology with team members all around the world. That doesn’t mean it’s a centralized project, or it’s owned by those stakeholders though. Our investors understand that the Furucombo team has full autonomy over the development of the platform, and the decisions we make are the ones that we believe are the best for growing the platform & achieving success for everyone involved.

At that being said, we believe transferring some of this autonomy to the community is the best way to move forward to help us continue to grow and achieve this success. Without the support from the community, we cannot reach our goals. In the near future we will fully transfer the ownership of this project to the community, & this DAO treasury management FIP is the first step.

Very soon we will set up our Snapshot system to allow people to start voting on FIPs. The next FIP we are working on will decide on how are we going to allocate our revenue.

Also, Furucombo’s smart contracts are all open-sourced and can be found here:

https://docs.furucombo.app/resources/smart-contracts
https://github.com/dinngodev/

Thanks again for your questions and feedback, I hope this helps to alleviate some of your concerns.

2 Likes

Thanks for the clarifications @hsuanting!

As a general matter this clears my concerns. Just one point on the linked Westrick article’s citations to the RUPA, it’s not to me entirely clear that treating a DAO as a partnership is the best way to go or even accurate. For example, under RUPA there’s the concept that a partner should not take business opportunities which the partnership could have benefited from (§ 401(b)). The application of that to a crypto project quickly becomes a bit vague as the boundaries are unclear and RUPA wasn’t written with DAO’s in mind. For example, if the partnership is amongst dentists to run a dental practice and a dentist in the partnership goes and invests in building a hotel, the line drawing exercise is relatively easy.

But what’s the boundaries for a community keyholder for a project which is expressly organized around the idea of making transactions amongst DeFi projects easier to compose? Does helping build an API on another project that does not include Furucombo interoperability conflict? Another example: what counts as a material disclosure from a keyholder? Is a public reference to their wallet enough or must they do something more? It’s easy to imagine scenarios that are not easy to resolve using RUPA’s framework or which RUPA simply didn’t contemplate.

I’d suggest that part of the FIP process should be to have a more granular evaluation of the obligations of keyholders. There are other examples: at one extreme is Curve’s Emergency DAO, which has a very limited mandate, a much more complicated framework is used by Yearn, ENS uses The ENS Foundation which being a Cayman Islands Foundation Company incorporates Cayman Island law to determine obligations of their directors along with the articles of incorporation. The point is that there’s no one-size-fits-all and actually just adopting unmodified one or another statutory framework from a particular jurisdiction is probably not the best solution.

But, with the clarifications from @hsuanting, I’m happy to be involved in this :slight_smile:

3 Likes

Thanks for the reply!

Indeed, there are quite a few conflicts between the implementation of community governance and the actual legal aspects, which are worth thinking about. I think this will be a good opportunity to review the existing DAO framework and organizational structure as a whole.

In addition to defining the responsibilities of key holders more clearly, what else do you think we can/should do?