[DAO:jhxdyk4] Strategy & Finance Squad

by 0x11cbb078596e5100f4cbb999c5c9b69ca2ff6477 (Bronstein)

Should the following Tier 5: up to $120,000 USD, 6 months vesting (1 month cliff) grant in the Community category be approved?

Abstract

Alastor wrapped up our initial grant preparing revenue, expense, and treasury exhibits for the community. You can find that grant and our report here [DAO: QmUrSmT] Preparing detailed financial statements, budget, and long-range forecast

Following our work, we propose the creation of a Strategy & Finance Squad, led by Alastor to take ownership and drive forward a number of important key strategic initiatives for the DAO, including treasury diversification, additional data and analytics transparency, monitoring of MANA valuation, and expense reporting and management. This engagement will last for six months starting in September with the plan to put up a new proposal to extend the engagement next February.

Grant size

120,000 USD

Beneficiary address

0x11cbB078596E5100F4cbB999c5C9b69cA2FF6477

Email address

sam@alastor.ooo

Description

Our first priority over the course of the next 1-2 months will be to lead a treasury diversification for Decentraland to ensure that the DAO has adequate stables in its treasury to continue to fund operations in the event of a material decrease in MANA price. This will include: third-party/counterparty reachout, ROI analysis on various options, fleshing out necessary hurdles/details (DAO legal entity organization, etc.), and providing a final recommendation to the community on the right path forward.

Our focus for Q4 will be around improving Decentraland investor relations, beginning by working with the Decentraland team (or engaging a data engineer, if necessary) to make platform performance data more readily available publicly.

We will also provide two quarterly reports (Q3 2022, released in October and Q4 2022 released in January) on Decentraland’s financial performance, including platform statistics, treasury performance, and expense details.

In addition to the specific projects above, Alastor will plan to be fully involved in the community as Decentraland’s internal strategic finance team. These ongoing functions and responsibilities will include:

-Working cross functionally with the Decentraland team and community to inform the set up and maintenance of accounting and data retention processes to inform community transparency and reporting (this inform the quarterly reports mentioned above)
-Maintaining and evaluating and updating a living business operating model and financial projections to inform and drive strategic decision-making such as expense management, treasury diversification, partnerships, M&A, token swaps, and organic growth initiatives
-Leading conversations and negotiations in all strategic and financial transactions that the DAO may engage in (M&A, strategic fundraises, token swaps, etc.)
-Monitoring token valuation, particularly in the context of MANA spend, including regular analysis of token trading against comparable protocols as well as intrinsic valuation exercises to determine proper scale and ROI of contributor, rewards, and grants spend as well as any other token-related transactions
-Leading efforts and being the team liaison with the Decentraland community regarding treasury management including yield decision-making, diversification efforts, and risk management
-Perform ad-hoc analysis at the request of the Decentraland team and community to assist in all financial and strategic decision-making

Alastor will plan to provide all resources necessary to accomplish the above tasks, including necessary data subscriptions (Dune, Nansen, Kaiko, etc.) and any third-party contracting

Specification

All of our work will be done using a combination of on-chain data analytics tools (Dune, Nansen, Etherscane, etc.) and Microsoft Office. To the extent we require additional third-party data engineering we will plan to engage them ourselves and pay for any work out of the Alastor budget.

Personnel

Sam Bronstein: Sam Bronstein - Alastor | LinkedIn
Jordan Stastny: https://www.linkedin.com/in/jordan-stastny-78160461/

Alastor was founded at the beginning of 2022 to provide strategic and financial services to DAOs. Alastor has done grant work for Uniswap, Lido, Gitcoin, and others and also serves as a core contributor to Llama.

Prior to founding Alastor, Sam & Jordan were M&A advisors at Qatalyst, where they advised leading technology companies on M&A and strategy across more than $150Bn of M&A transactions, including the sales of Slack, LinkedIn, Mailchimp, Glassdoor, and others. In this capacity, the Alastor team has significant experience working with CFOs and finance teams of large, publicly traded companies on their financial reporting, budgeting, and forecasting.

See here for a sample of past grant work that Alastor has performed for DAOs: Alastor Catalogue - Google Drive

Roadmap and milestones

We envision four distinct milestones for this engagement, each described in more detail above:

Milestone #1 - Decentraland diversification initiative (exact timing TBD)
Milestone #2 - Q3 Decentraland Performance Report (October 2022)
Milestone #3 - Platform data dashboard creation (December 2022)
Milestone #4 - Q3 Decentraland Performance Report (January (2022)

Vote on this proposal on the Decentraland DAO

View this proposal on Snapshot

Can you provide more details on how the funds will be spent?

4 Likes

To clarify, is the purpose of this grant proposal purely for the purpose of strategic advisement and recommended treasury management pathways, which the DAO can then take under consideration for implementation? Or is this Squad intended to have capacity to make treasury management decisions?

3 Likes

Shout out to a fellow MD person but I must ask @yemel or even @HPrivakos if the foundation or security team has their eye on these kinda analytics already. Does the community want or need a reoccurring fee for bookies to eye the finances and speculate as a roundtable. There are many in the community in discord groups already watching like hawks. People with great Positive PNL margins who have made some serious calls. Even our own community have already tried to reach out and tell people we need to diversify.

2 Likes

The main expense will be a data engineer for the Q4 investor relations dashboard project. This will cost between $15-$20k.

There will also be a few different subscription services utilized over the 6 month period:

  • Dune - $2,400 over the period
  • Nansen - $900 over the period

All in this will cost $17,500 - $25,000 with the remaining budget to compensate Alastor for the work required to fulfill this responsibility and achieve the deliverables set forth above.

Our view is that projects at the scale of Decentraland should have contributors with a full-time focus on strategic finance - tracking and reporting DAO performance and taking ownership over key initiatives in that vein. To that end, the remaining portion of the budget would be compensation for our time and efforts in this arena. Examples of other at-scale DAOs with similar committees include Lido (recently budgeted ~$500k annually for the equivalent of two FTEs to take this role - Lido DAO Finance Workstream Proposal: Steakhouse Financial - Proposals - Lido Governance) and Maker (recently budgeted >$1.1M annually for an existing team of four to add a few additional positions and continue on in this role - [SIGNAL REQUEST] Budget Re-allocation & Core Unit Accountability Framework - Governance Signal Archive - The Maker Forum)

The former - we are not asking for carte blanche decision-making with regard to the treasury and candidly that isn’t a form of treasury management that we support, we believe that all large-scale treasury decisions should always sit with the community. We are suggesting that the DAO engage Alastor to take on an internal research and advisory role, beginning with the diversification of the treasury but including financial reporting, investor relations, and advisory on strategic directions / grant requests looked at through a financial lens.

Thanks for the Clarification! I support this, and I think the report you completed for the first grant your team received was very well done and relevant!

1 Like

Just to say that there are thoughts that Decentraland needs strong financial foundation to forecast profit and grind economic problems.

Strategy & Finance Squad

This proposal is now in status: REJECTED.

Voting Results:

  • Yes 4% 116,266 VP (31 votes)
  • No 96% 2,710,123 VP (32 votes)