Coming to this as a relatively new delegate, I want to first say how impressive the proposal’s authors have been in their willingness to adapt and refine the proposal in dialogue with the DAO. I was especially glad to see @Djinn and others on the team participate in this week’s governance call and share the latest developments. It has also been great to see members of the broader web3 gaming ecosystem get involved.
I’m voting abstain since I wasn’t around for the Snapshot vote for this important proposal.
While I think the GCP has transformative potential for Abritrum, and I have growing confidence in the team putting it together, there are a few aspects that would have led me to vote against had I participated in Snapshot. I detail these below in the spirit of suggesting areas for improvement as the program moves forward because we all have a vested interest in its success.
1. Information asymmetries. From their comments, it’s clear that the proposal team has been doing a lot of hard work behind the scenes to determine how best to structure the GCP. However, the results of that work - and especially the insights gained from groups like Delphi - has only filtered to the DAO in pieces, and it strikes me that we’d be more comfortable with taking the big swing here if more of those findings were shared with the DAO while in flight. I gather that may be happening in the tg channel and in conversations with involved delegates, which is a great step. Would love to see that taken further so that we can all be more conversant with the insights that are driving the decisions being made.
2. The f word. Establishing a legal entity is crucial for the investment component of this program but raises significant concerns, particularly regarding fiduciary duty. If there is a legal entity, then there will need to be some form of duty to someone. But if the DAO can’t be a legal signatory, then who is the entity legally bound to benefit? If things go south, how can the DAO ensure that its interests are protected if it’s not an LP, investor, board member, or whatever the counterpart is for the chosen structure? The ability to vote a single Council member out is necessary but not sufficient protection here.
We need to avoid a situation where the DAO is taking the most economic (and, as the deep pockets, potentially legal) risk while getting the least protections in whatever deals are struck. If the Foundation isn’t willing or able to act as the DAO’s proxy, then it will be extremely important for the DAO to have more clarity and voice at some stage in the legal setup, up to and including potentially hiring its own counsel to advise the DAO directly on whatever structure is adopted.
The f-word also matters because of the lack of clarity on how the investment decision process - which is typically geared to producing some hurdle rate of return - can instead be mapped to the broad and more qualitative goals of the program. This lack of clarity is a concern in terms of both return of funds (which is not a base case goal here but could be in the worst case) as well as the returns on funds. I think it makes a lot of sense to wait to initiate the investment part of the program until the mechanisms and structure of returns to the DAO are clarified in greater level of detail.
3. Scale mismatch. The lack of clarity around the above indicates a mismatch between the scale of the ask and the benefits to/protections for the DAO and its treasury. I buy the importance of the vertical, and I get the need for urgency. But given the amount of other potential claims on the treasury for other worthy projects, I do think this ask is too large in the absence of clear metrics and accountability to the DAO.
The best of all worlds would be to get to the fully requested amount, but that should be the outcome of successful execution over time rather than a binary decision. I agree with others above and on Tally that the best way to fix this is to move forward in stages following a very public and clearly documented pilot, with progress from one stage to the next subject to some form of DAO oversight given the amount of money involved. I’ve been impressed by other projects that propose some variation on this kind of structure even though they are much smaller. There’s no reason the GCP couldn’t be slightly modified to make this possible.
Congratulations to the team for taking the proposal this far - there’s a lot to be excited about here, and I hope we can all come out ahead as the project develops.