First, we would like to mention that the framework looks solid. While analyzing the initiative, we noticed similarities with how legislative bodies formulate governmental budgets today, even though, in this instance, we are not discussing financial allocations (which will come later with the budgeting framework).
Both in IRL governance and the digital era, budgeting is an extensive and complex process when we talk about covering countless activities, each potentially very different from the other.
From what we understand so far, aside from the ratification process of this very framework, the rest is repeated annually. This leaves us with 86 days from the start of the Notice Period to approval (both for the initial SOS strategy and for the amendments in subsequent years), except for ad hoc adjustments, which remain at the proposer’s discretion.
That’s almost three months (which is standard for traditional governance, although, in this case, it doesn’t include the fund allocation process). This raises some items for consideration:
1. Maintaining continuity during the review phase:
While the review process does not coincide with the final three months of each year (something understandable in this case, unlike traditional governance mechanisms, which are more refined), safeguards must be considered to ensure the continuity of the SOS.
During the review phase, the parameters from the previous year should remain in effect. This makes sense knowing that the plan will have a Year 1 and Year 2 each time it’s renewed. However, we wanted to emphasize this point, as it will be important to consider when defining the budgeting framework. In traditional governance, when a new financial allocation isn’t approved for the following year, mechanisms usually “renew” the previous year’s allocation automatically. This would be a reasonable option for the three months (proportionally) during which the review and budgeting framework phases are executed. Note: We are assuming the budget for each objective will also undergo an annual review.
The goal of ensuring continuity is to keep a framework in place during the three months of review that encourages “having a north” so there isn’t a gap in both social agreements and budget allocations.
2. Optimizing timelines in the future:
Clearly, we understand that this is the beginning, and as we learn how this framework works in practice, adjustments to the timelines can be made (by both Entropy, DAO, and also OpCo in the future).
Within this process of timeline optimization, integrating budget allocations into the review phase could help avoid extending the process unnecessarily in the future.
On the other hand, we had previously provided some key points for the elaboration of the SOS that we would like to share again:
We believe that the flexibility aspect is particularly addressed by the potential ad-hoc modifications. As @JoJo rightly mentioned, crypto is a market that evolves faster than DAOs or plans can adapt, making it essential to have mechanisms that provide the necessary flexibility to adjust the plan or allocate new funds as needed.
In the case of a major event, such as the example JoJo provided regarding AI, where a strong narrative emerges that the DAO may find worth supporting, we trust that this ad-hoc adjustment mechanism will be useful for modifying the plan on the fly.
The only thing we are not sure about is whether to leave this the time of discussion so open, We think that a minimum amount is what is established in the Code of Conduct, and being something so important the reasonable should be higher than this, but we would at least change the wording to conform to the recently approved code: