Wallfacer did some great work, especially as the market is picking up. Glad to see TrueFi on Arb with Cicada.
With regards to the DAO plans, do you have any sense of the direction of how Wallfacer would want to see the DAO diversify in its service providers? How will you support the processes to open up competitive bidding and parallel development?
Without parallel development and diversification of service providers, we would expect the DAO to unfortunately fail due to lack of resilience and organizational process. A CAO is not a DAO, and I would hope WallFacer has a plan to support these initiatives and understand the issue.
Defining Performance Benchmarks
Have you considered preparing a formal statement of work with defined deliverables that could be “checked off”? All major DAOs are moving to more professional operations, including defined statements of work with performance clauses in their compensation.
I see payment terms in this proposal but the payment terms don’t seems to have any means of calibrating counterparty risk. As proposed, the only recourse afforded to the DAO is a binary choice – terminating the stream. This would be a bad outcome for either party, it is generally better to provide a spectrum of remedies that avoid conflict. One way to do this is to partition some incentive to be tied directly to performance.
Performance Based Compensation
Would it make sense for a portion of the comp moved and tied to calibrated to the performance of particular objectives? Right now DAO has no means on incentivizing exceptional performance, only punishing for non performance n a universally damaging manner. Of course ant negative outcome is unlikely considering Wallfacer is a steady supplier to the DAO. I think having a portion of compensation tied to performance is standard fare. This could look like having the foundation board or TrueFi holders vote at a later time to approve a specific compensation package for meeting defined benchmarks. For example, a TRU unlock if TRU price reaches .40 or other metric that can be tied directly to WallFacer Performance (TVL on new chains, New Partners, etc.)
I wrote previously about this to Wallfacer in support of the DAO in November 2023:
It is also worth noting the ask has been significantly increased and is in excess of what even the best compensated teams receive, even at protocols such as MakerDAO, which are cash flow positive. The request is quite substantial (approximately 8,000,000 USD per annum for what appears to be a 6-8 headcount team). With an ask like this, it may be worth considering some reasonable risk mitigation to protect both sides. This is a significant sum on the table; an ounce of planning is worth a pound of cure.
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Will there be some formal documented engagement ?
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Do you have projections on headcount ?
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How does this budget request calibrate based on the prior asks?
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What recourse would the DAO have if midway through the term it is dissatisfied with the performance of Wallfacer? Is the only recourse outright termination? What does this performance evaluation process and term look like?
Comment Term and SOW Composition
It may be worth noting, 13 days for a comment term feels quite short. Usually on a ~$4,000,000 contract, I would hope to have at least a couple of weeks to reflect on fully fledged document, including concrete terms and a statement of work with explicit deliverables to provide meaningful feedback. Due diligence on something of this scale is rather challenging.
As composed, there is an absence of what Wallfacer will concretely deliver, how they will do so, and then how it will be measured and satisfactory receipt of the work agreed.
This ambiguity is evident on “2H2024” specifically for items 2,4,5,6.
I have also noticed a primary issue with the current operational relationship with Wallfacer is a misalignment of operational incentives. Wallfacer has not been incentivized to evaluate their own work and does not yet have an objective counterparty to do so.
It also has not provided a reflection or comment period to allow for a performance evaluation prior to a new funding round, and connect past work to concrete future promises.
Without this process of reflection and due diligence, it creates a (potentially unintentional) leverage scenario, but a leverage scenario nonetheless. Wallfacer may want to consider ways to remedy this issue in the current proposal down the line, even if this goes to a vote and passes as is.