GCP Update Thread

Djinn · June 17, 2024, 2:08pm

The GCP Working Group will post regular updates on this thread to keep stakeholders and community members informed on roadmap, priorities, and other important news.

Djinn · June 17, 2024, 2:27pm

Update #1 [6/17/24]

A big thank you to everyone who voted for the GCP and to those that offered constructive feedback to better structure the Gaming Catalyst Program and serve the DAO’s best interests.

There was a lot of passionate debate from DAO participants over the Tally period, and while things may have gotten heated at times, we believe that dialogue is essential to creating a robust and successful program. We are committed to keeping the lines of communication open!

The GCP working group will make frequent posts to the forums, delegate channels, and hold office hours to keep information flowing. In addition, I am personally available via dms here on the forums or on telegram via @vela_djinn if any DAO member would like a direct line.

We know the gaming community and DAO is super excited to get things off the ground, but there are still some very important details to finalize before we start funding projects.

Overall, the GCP working group has been focusing on several critical functions:

Creation of an interim DAO committee for advice on governance, transparency and oversight during this critical set-up process
Validation of budgeting and treasury management setups, controls, and oversight
Analysis of suggestions and feedback from the Tally vote process
Review of timeline and key details for the GCP Council nomination and election process

There are many other to-dos and priorities, but we wanted to share the immediate, most urgent processes we are tackling.

Details for each bullet point are shared below.

Creation of an interim DAO committee for Transparency and Oversight

The idea of an Interim Transparency Committee [ITC] was suggested by several delegates and community advocates. The ITC will be responsible for advising the GCP working group on best practices to strengthen the program while protecting the DAO’s interests as a temporary, independent oversight mechanism.

Committee members are free to communicate to the DAO within disclosure limitations any relevant matters or decisions that could constitute a significant “breach of trust” between the GCP working group and the DAO.

This Committee along with GCP working group members will provide updates via open offices and written forum updates as we work to become a live operational program with a functioning elected Council, and full-time team.

Initial interim committee members include a variety of respected delegates with a wide area of expertise. We included two delegates that voted “against” in the Tally vote so that we can work together to find alignment and workable solutions.

We believe that each of these delegates will serve as a critical feedback loop for us and offer a wealth of diverse perspectives:

@krst (representing himself, not L2Beat)
@JoJo the famous cow
@Bob-Rossi
@limes
@coinflip

The DAO elected GCP Council is an incredibly important part of the oversight process for the program - and the ITC will ensure there is a trusted, independent oversight party collaborating with us until a formal Council is elected. We are grateful to the members of the ITC for stepping up and advising the working group!

This committee will continue until the election of the Council is completed, at which point we will decide on whether the group continues to function as an advisory committee or is dissolved. The cost of this committee will be covered by the existing Council budget (no impact to overall expenditure).

A big thank you to all the members who are dedicating their time to advise the GCP working group and to keep the DAO informed.

Validation of budgeting and treasury management setups, controls, and oversight

The working group is collaborating with the Foundation’s legal resources and ITC to review proposed structures to manage the treasury and ensure that funds are utilized in a responsible and compliant manner. The GCP’s goal is the creation of an amazing gaming ecosystem on Arbitrum that provides revenue and long term value back to the DAO treasury.

Below is a schedule of items we are aiming to finalize:

Treasury management process shared / validated with Interim Transparency Committee (ITC) (within 1-2 weeks, in-progress)
Process approved by legal and compliance
Process shared to DAO (within 3-4 weeks)
Team compensations reviewed and validated with ITC, compared against standards offered by tools / services like Compensia
Approval of budgets by the Council (after elections)
Budgets and other details shared within 6 month transparency reports (within disclosure safeguards)

This is a critical part of the program and there has been substantial feedback from many delegates and community members. We look forward to sharing a robust structure very soon.

Analysis of suggestions and feedback from the Tally vote process

Overall support and constructive feedback from the DAO has been both incredible and voluminous.

The GCP working group has made time to engage in numerous conversations / dialogue to understand the diverse range of perspectives offered throughout the Tally vote period.

We are continuing to work with the DAO to explore and address concerns and suggestions. Transparency and collaboration are core values of the GCP program.

Answers to FAQs/concerns around budget raised by DAO members:

“Where are the funds now? Are they safe?” The Foundation currently has full control of the funds approved for the GCP. We dive deeper into treasury matters below.
“Are grants or investments being made” If not, when will this start” No grants or investments will be made by the GCP until the treasury is set-up, GCP Council is elected, budget approved and other appropriate infrastructure measures are created.
Why did the budget change between the Snapshot and the Tally? After diligence with experienced venture operators and gaming industry leaders, we determined that two years was too short of a time horizon to invest in projects and see results.

The change to the program’s time period was communicated in open offices and AMAs, and documented in the forum. That said,we accept the criticism that communications could have been even more robust, more direct conversations with delegates calling out the impact on the change to the budget with the delegates.

“What is the budget for salaries? Is it $18M or $25M? The “salary budget” is capped at $18m over three years. An additional $7M budget is available over the three year period for other operational costs. Please note, any bonus programs will require the approval of the GCP Council with specific KPIs.
“What is the budget process for the GCP?” A yearly budget will be established by the GCP team and approved by the Council.
“How will the overall compensation budget for GCP employees be created? We intend on using a professional compensation analysis resource like Compensia or alternatives to benchmark salaries against industry standards while accounting for any unique aspects of the GCP to provide a fair compensation model for the operating team.

Please note, the roles described within the Tally proposal do not constitute a comprehensive list of the team members needed to run the program. The GCP team lead will be responsible for identifying the additional roles needed to make the program succeed.

“What is “carry”? I have seen people mention it on the forums? Carry is a long-term compensation incentive given to Venture Partners at VC funds. Here is an article that explains how it works: Carried interest in VC — what it is and how it works | Sifted.

Why does carry keep coming up? GCP team members will not receive “carry” due to the duration of the program and it’s mix of short and long-term objectives (i.e., make a profit, fund worthwhile projects that take more than a year to build, improve infrastructure to make Arbitrum an attractive choice for game builders, and give grants to builders who have never built a game before). The GCP program needs to attract top-notch talent in order to succeed and will need to offer a compensation schema that is market competitive (without carry).

Oversight and Treasury Setup

Another item that popped up in recent feedback was the improvement of communications around oversight for the overall program and treasury setup. Final structuring of the treasury is going through due diligence with the Foundation’s legal partners, but the ITC will be working closely with the working group throughout the process to ensure the DAO’s interests are best represented.

A few things we want to share:

The ITC’s primary focus is to ensure that DAO interests are represented and best practices shared at the formation of the program and before funds are disbursed in the form of grants or investments.
No funds will be distributed as grants or investments until infrastructure (Council, entity, treasury management, etc) has been created.
Drafts of the treasury setup and flows will be shared with the ITC for feedback. Note: The GCP working group requires approval from the Foundation’s legal and compliance functions before socializing info on treasury set-up with the wider DAO.
The funds will be moved to a multisig or other source of custody that will have clawback for the DAO.
No grants or investments will be made until the above clawback mechanism is set up.
Additional due diligence is being done to ensure budgeting and any multisig wallet, custodian, or other holder of funds are aligned and created with sufficient controls / oversight
We are actively reviewing insurance and other provisions to ensure the safety of the funds
Council processes will start soon and are described below in the Council section

We are continuing to review any additional feedback, but believe the above captures the major concerns shared by DAO participants. Reach out to us directly or via forums for any additional questions / feedback - we are happy to continue collaborating!

Review of timeline and key details for the Council nomination and election process

The Council is an essential component of oversight for the GCP, and we want to ensure that the process and next steps are clearly laid out.

There will be a separate post coming soon with exact timelines, but these are high-level steps to implementing the Council:

Nominations period for Investment Committee and Gaming/Venture focused Council seats shared by GCP working group
- 2 / 5 of the Council positions will be nominated by the GCP working group, but require confirmation by the DAO before the end of the year.
- These individuals will be highly qualified industry professionals that will provide a unique perspective and enhance the Council’s abilities by combining industry expertise with DAO oversight
Nomination / application period for remaining 3 / 5 Council seats (2 weeks)
- Exact requirements will be added, along with Council roles / responsibilities
Nomination review period begins (1 week)
- Candidates are reviewed by the GCP working group and Transparency Committee to ensure the finalists possess minimum requirements and qualifications.
Host / finalize elections
Confirmation vote for Investment Committee and Gaming/Venture Council Members
- If DAO rejects, working group selects two additional members for vote until confirmed
GCP Council onboarding and kickoff
Hiring for first team members start

Update Conclusion

Thanks again for all of your feedback. Please feel free to send over any questions or concerns on the forums or directly via dms to myself or any other working group members.

Over the next weeks, the GCP working group and ITC will be sharing frequent updates and hosting open offices, direct conversations with delegates, and other pathways for transparency and updates.

Thank you!

Djinn · June 26, 2024, 9:46pm

Update #2 [6/26/24]

The last weeks have seen the focus of the working group shift towards streamlining infrastructure standup with the goal of starting Grants and Investments in August of this year.

With the standup of the ITC, we have been able to create a working model to move things methodically from the working group to the ITC and collaborate with the Arbitrum Foundation to accelerate things like entity structuring.

Below is a list of accomplishments and completed tasks:

ITC rituals started and feedback applied to Council process, bylaw creation, and others
Treasury management draft created and ready for review
Council nominations and nomination process started
General entity structure reviewed and progressing through last phases of due diligence

In the next we hope to accomplish the following workflows:

Compensation analyst vendor secured
Initial budget released to pay for legal setup, entity structuring, compensation analysis, financial modeling, and other needs
Draft of treasury management reviewed with ITC and moved towards the Foundation for execution
Finalize details necessary for creation of internal governance and bylaws moved to a completed draft phase with ITC oversight

An in-depth update was provided to the DAO during the monthly governance call, with slides available here: GCP Open Governance Call - Google Slides

Please reach out to myself or other working group members with any questions / feedback, we are here for you!

stonecoldpat · July 19, 2024, 3:59pm

Hi all,

At the request of the GCP working group, we have transferred 350k ARB from the GCP multisig:

100k ARB will be used to pay the contributors outlined in the proposal.

250k ARB will be used to help kick-start operations for the GCP.

longshortleftight · July 21, 2024, 12:08pm

thanks ser how do we verify that these funds are being spent on the appropriate items and things ? eg for kick starting operations for GCP, any invoices/receipts and line items to show what the spend is on? thanks!

Djinn · July 23, 2024, 9:01pm

There won’t be a line item breakdown, but the Interim Transparency Committee (ITC) and Council will have access to information by request. The ITC / Council are serving the DAO while helping maintain operational efficiency for the program.

karelvuong · August 7, 2024, 6:47pm

Informal update unrelated to the broader GCP as a whole but sharing a personal announcement that I have formally stepped down from the GCP Working Group as of August 7, 2024. See full note here.

Djinn · August 19, 2024, 9:55pm

8/19/24 Update

Hey everyone, we wanted to share an update (our first post council elections!) on the GCP progress.

To simplify this update, we have split the update into a Council update to help illustrate the progress since elections, and a general update.

Council Onboarding and Activities

The working group and council have been hard at work revving up the program operations.

We have had a few key accomplishments since the council elections ended about two weeks ago:

Council onboarding completed, including a comprehensive overview of GCP context, Council procedures, working dynamics, and an initial look at thesis
Interviewed 7+ compensation analysis firms and hired a specialist with the skillset and capacity to handle the GCP scope
Initial compensation analysis completed, led by Tim Chang and Andrew Green with the support of a professional services firm

Next steps:

Review of final bylaws provided by our legal partner for approval
Approval of initial hiring budget and initial team members

Other Updates

Our focus the last few weeks has been to start gathering data and perspectives from industry partners to inform a thesis, and equip the team with operational standards.

Key accomplishments:

Met with Offchain Labs to start building alignment on perspectives towards web3 gaming and create a collaborative process to BD, partnerships, ecosystem growth, dev rel, and marketing.
Started data gathering from key VC partners to start reviewing evolving perspectives towards gaming broadly and within the web3 context
Initial view on budgeting for the rest of 2024, including key hires, operational needs, etc
Final ITC offboarding call to share latest updates with the ITC as they leave their roles
Started interviewing full-time and fractional CFO providers
Started building templates for legal / compliance related needs (investments, NDAs, etc)