On May 30th, the dYdX Foundation hosted a discussion on Discord with Callen and Joanna (dYdX Operations subDAO Trustees) regarding the recent dYdX Operations subDAO 2.0 DRC.
James (dYdX Foundation): Thank you for tuning in today. Thanks, Joanna and Callen, for coming on as well. I know it's morning for people on the West side of the world, evening for you, Callen, and Joanna, and midday for European time zones. A forum post was recently created, specifically a DRC, by Joanna and Callen. It dug into the detail behind their proposed revitalization of the second term of the Ops subDAO, which the community was particularly excited about. I'll let Callen and Joanna go into the depths of it later on.
I'm excited about having them here to discuss this and its role over the next 18 months. Just quickly for those new here, just a few housekeeping rules, as usual. Let's keep questions until the end. If you want to be brought on stage, feel free to raise your hand to ask that question. Or if you're not comfortable coming onto the stage, post the questions in the community town hall chat that everyone's just commenting on right now, which will be great.
Some of the audience have been engaging directly about the DRC with Callen and Joanna, which is great. So, Callen and Joanna, let's start with brief introductions about yourselves and how long you've been in the ecosystem, and then, we can dive into the depths of the proposal when you're ready. One of you, do you want to start first?
Joanna (DOT Trustee): Yeah, I can go. I've been around for a little while. I originally got to learn more about dYdX through a research report that I did that was funded by the grant program. It was actually about this process of decentralizing operations and transforming organizations. That was a super exciting report. I got to know a few of the community members through that. Then I participated in DOT, version 1.0, and oversaw that with the knowledge I'd gained from the report. I’m keen to continue supporting this initiative and acting with the community for the potential version 2 of this project.
I've spoken to several more of you in the last few weeks. Thank you for being welcoming and supporting all my efforts with this proposal. I've been impressed with this culture of being thoughtful, having insight or critiques, and having a bias toward action. That's been delightful, and looking forward to working with you guys more and answering your questions in this session.
Callen (DOT Trustee): Hello. Hey, everyone. My name is Callen. I've been around the dYdX ecosystem for a good year and a half now, working at Wintermute, handling all the governance side of things. For those who don't know me, Wintermute is an investor and market maker on the platform. We wanted to get our hands dirty and see how we could contribute to governance. And this led to several proposals and just connecting with the dYdX community. As she mentioned, I've enjoyed working with Joanna on DOT 1.0. We worked together to put forward this proposal, which has had a good reception from the community, which we appreciate.
James (dYdX Foundation): Awesome. Appreciate those introductions, guys. We can dive straight into it, then. Let's start with a really broad question. What was the rationale behind the dYdX Operations subDAO V2 post?
Joanna (DOT Trustee): The timing was right with this one. We're approaching the end of the first term for Ops subDAO 1.0. That's ending officially on June 19th. At the same time, we're getting a lot of public information released from dYdX Trading, as well as the dYdX Foundation blog and governance forum posts, with the vision of what could happen for the next 6, 12, 18 months going towards a decentralized version of the dYdX protocol. The Operations subDAO is in an excellent place to take the lead on some of these outlined activities regarding the indexer, decentralized front end, providing user support, and more.
We plan to scale up and have a more ambitious version of the Ops subDAO, where we're handling that function of providing the technical, operational support that the dYdX DAO needs to lead a fully decentralized version of the dYdX protocol.l
James (dYdX Foundation): Awesome. I am just jumping toward the end of the proposal. Currently, it's you two, as the trustees thus far. You mentioned 3 new trustees and 1 new enforcer. Regarding questions that were brought up in the forum posts and what you've addressed, what's the action plan there?
Callen (DOT Trustee): Reverie will be stepping down, as well as George, the enforcer of DOT 1.0. Given the request for $6.6 million, it is only suitable and secure to increase the multi-sig from a 2 of 3 to a 3 of 5 to ensure that the community's funds are more safeguarded. Joanna and I, who are remaining as trustees, are looking to add three more trustees to the multi-suit and then looking to get an additional enforcer.
We have been in discussion with the new community members. However, we are still looking for one or two more trustees and an enforcer. So if anyone from the community hasn't reached out yet, please feel free to reach out to other Joanna or I. We can organize a call to discuss some things.
James (dYdX Foundation): Awesome. That's great. Is there a timeline on this specifically? Or is it still tentative, I guess?
Callen (DOT Trustee): Yeah. Ideally, we would probably want this sorted by the end of the week or at least early next week. This is to get things moving with DOT 1.0 by June 19th. We still need to launch the snapshot and on-chain proposals. From a legal standpoint, we need a snapshot to enforce these new trustees and enforcers for DOT 2.0. Hopefully, we'll want this finalized by the end of the week. So if anyone is willing to contribute to DOT 2.0, please speak to me or Joanna. We can have a chat.
James (dYdX Foundation): Awesome. Thanks, Callen. Within the Ops subDAO specifically, you want to hire an Operations lead (OL), a Technical Project Lead (TPL), and a Site Reliability Engineer (SRE). What was the decision-making process behind this?
Joanna (DOT Trustee): I think there's no one right way to set up a subDAO. For the mission, we thought we wanted to work towards this configuration with the three roles, OL, SRE, and TPL, which would be ideal. So to just briefly explain what their functions and responsibilities are. For the OL, part of that is continuing to develop operational excellence, which was a focus already in DOT, version 1, but it's getting much more practical. In the last mandate, we had a playbook that was developed, now, we want to put these principles into practice and continue to iterate on them and develop them. The idea with that is, with this subDAO, we're creating a set of best practices, we're creating a model that future subDAOs created by other community members, so they can learn from it and hopefully iterate on as well.
A second aspect, and I think this is important, comes from this culture that we have there in the dYdX community, where transparency is essential, and accountability is really important. A significant contribution for the ops lead for this coming mandate would be to engage an external auditing firm. That would allow us to have an objective performance and financial audit of everything this ops subDAO is doing.
Then the third important part of this role is helping the subDAO scale into this new function of providing technical, and operational support, providing that infrastructure for a decentralized version of the dYdX protocol. That means overseeing the technical talent, the other two roles, onboarding, managing vendors, and everything that goes along with supporting those processes. I'm dropping the job description in the chat so you can get a closer look at what that role entails. You should be able to see that there.
For the SRE, I think the three main things that this person would be responsible for are ensuring that we have stability, availability, and security of the services provided. So ensuring that everything is performing and predictable. There would be further development and automation of different services. Basically, involves maintaining high-quality enterprise-grade scalable production systems, improving processes, and, very importantly, working on productively identifying any issues that might come up just to ensure everything is running smoothly all the time.
Then the TPL. This is an exciting role because it's technical but also quite a social one. The idea is this person would connect the ops subDAO with this broader community in the ecosystem of builders, validators, front-end operators, and index operators. Really just making sure that they have everything they need to get onboarded into the ecosystem and that the rollout of their projects happens super smoothly. In terms of technical requirements, they know everything they need to know. So this person will be an essential player, working, again, towards supporting decentralization.
That's my summary of these different roles. I will also get the other descriptions, so you guys can see that in more detail. So just dropping those links in the chat now. We're still promoting these roles and trying to get as many high-quality applicants as possible. So, if you know of anyone who would be ideal for any of these positions, I encourage you to let them know that we have these openings and encourage them to apply. We're looking at different ways to advertise these roles and want to ensure we have a promising pipeline of talent for these.
James (dYdX Foundation): Awesome. That's exciting. It's the first subDAO that's going to be hiring full-time contributors to the DAO. So excited to see that process kick-off. Cool. Let's move on from there. If anyone has any questions on that, feel free to drop them in the chat or put your hand up at the end. Let's move on to a few questions that people have about the ecosystem. I know there were some on trustee compensation. What are the general thoughts here?
Callen (DOT Trustee): Sure. I think there's been some discussion on this. Just touching on why the trustee compensation is $2,000. This comes from Joanna and my experience as a trustee on DOT 1.0. We also want to be conscious of the costs of the DAO. Within our experience, the $2,000 is pretty adequate. This was also increased from $1,500 to $2,000 from DOT 1.0 to DOT 2.0. This is honestly, I guess, an expected increase based on the level of work expected for trustees over the next 18 months, and we think this is pretty substantial.
We can also potentially increase or decrease this if the community, current or future trustees feel the workload is too high. But, trustees are there to play a support role for the DAO and also to make sure that the dYdX Operations Trust is fulfilling its mandate purpose. They are there to help the OL, once they're hired, with any documentation that is required, and possibly stepping up if there are certain times where maybe the mandate of the dYdX Operations Trust is not being fulfilled.
Then, on top of that, they also need to be around to sign multi-sig transactions. With all that in mind, and from personal experience, we believe the $2,000 a month is adequate. However, we appreciate the community's willingness to support and increase this.
James (dYdX Foundation): Thanks for that, Callen. Cool. I guess the next question that came in was about the funding timeline. Today's funding is a six-month capacity for many of these funding rounds. What was the thinking around the 18-month funding period instead of the usual 6 or 12-month period?
Callen (DOT Trustee): Sure. It boils down to dYdX being at a critical jump shot in its timeline, with B4 potentially launching very soon. We ultimately didn't want to have the community dealing with the renewal of dYdX Operations Trust and also the potential hiring of new people 12 months down the line when it may take a couple of months for these new full-time equivalents to be onboarded and fully understand both dYdX, the ecosystem, and the community. It just seemed like it would have been a bit of a burden and a waste of resources at that time.
So we thought 18 months was needed to attract top-tier talent and ensure proper development progress within the Operations subDAO. The longer the term, the higher the job security for applicants. So I guess that's probably our main reason behind that. We want stability and for people applying to have that sense of job security.
James (dYdX Foundation): Based on this, will additional staff be required during this 18-month term?
Joanna (DOT Trustee): This is a good question from some community members. What if we realize, "Okay, things are going well; we want to expand even more, let's add more people to the team." The budget does include a buffer. We're not planning explicitly for that scenario, where we would want to hire more people, but things can change. So we do have that buffer, and potentially, that would be able to cover it. If we want to hire more people and it seems like that would exceed the buffer, one approach would be to shorten the budget timeline. We could have a community discussion to ensure this is all approved and that the community knows what's going on with this change, how the budget would be used, and the change in the runway.
You could shorten it from 18 to 14 months, let's say. We could request another round of funding and request for approval of another mandate, based on everything that's happened, which will take place at the end of that shortened period. Also, just important to note in another scenario, where we wouldn't use the buffer, we wouldn't hire more people, or just any scenario, where we don't use the total funds, they are, of course, going to be returned to the dYdX treasury.
James (dYdX Foundation): That makes sense. Thank you, Joanna. Okay, the last few things from my end were around compensation and benchmarking. What were your thoughts on the benchmark compensation with the FTEs?
Callen (DOT Trustee): Sure. These comments were from community members, I guess that was looking at the material that we referenced in the original proposals saying, "Hey, there's a bit of a difference between what people at Maker, Aave, etc, are being paid." However, I think it's important to understand that these DAOs have been operating under a very decentralized structure for many years. This has allowed them to iterate functions and compensate based on feedback and experience. These DAOs also receive critical income, which is used to offset this. This provides more stability for the contributors. This is very different in the case of dYdX. We have DOT 1.0, but DOT 2.0 stepped it up a notch, and hiring three individual full-time equivalent contractors is a big change for the DAO. Our compensation structure is fairly competitive, especially considering the dYdX token allocation over the 18-month period.
While there aren't exact figures, and we haven't fully lined them out, there is a rough range for the OL to be incentivized with 20,000 to 30,000 DYDX for their full 18-month contribution. For the TPL and the SRE, it's around 30,000 to 40,000 DYDX. So I think, taking that into account, it brings us closer to the benchmarks that maybe these more well-established and long-time existing DAOs already have.
James (dYdX Foundation): Just confirming, that's obviously on top of, say, USDC salary for the 12 months?
Callen (DOT Trustee): Yeah, that's correct. So everyone still has their base salaries, and then we'll have extra, I guess, incentives in the DYDX token for alignment, but also a nice little bonus for the applicants that want to apply.
James (dYdX Foundation): Okay, that makes perfect sense. My last question is about the interview and selection process for the advertised roles. Will there be a process? What will that look like?
Joanna (DOT Trustee): Given the roles' importance, vetting is really important in this situation. We've devised a multi-stage vetting process for each of these three roles. They all include a practical assessment and a take-home task for the potential OL. We will most likely have a live technical assessment for the technical roles, so we can check their competency and ensure they're suitable for the position. We'll also seek support from other stakeholders in the dYdX ecosystem to aid us in that decision-making process. Once those new hires are in place, we will share documentation of that overall process with the community again for transparency. So that's what's coming up for us.
James (dYdX Foundation): Awesome. Appreciate you covering those questions. Before we open the floor to anything or questions on the community side, is there anything else you want to touch on or cover?
Joanna (DOT Trustee): Yeah. I guess we did post a reply covering some of the questions for anyone who may not have time to check it out. We've already addressed some of them in this call but covered some other details again. Thanks so much to the community members who made this thoughtful request for clarification. So I recommend going into that. I'm going to link that reply directly now in the chat. If you have further follow-up questions, please share them with us on the forum, or we can go into them now. Let me get that link.
Happy to go into questions from the audience.
James (dYdX Foundation): Right. Has anyone got any questions? Feel free to raise your hand; I can bring you up onstage. Alternatively, feel free to ask on the side; we can address them from there. One from me quickly, Callen and Joanna, providing consensus has been reached, and everyone is comfortable with the proposal; what's the next step from your end? When is the potential snapshot? What are you thinking here?
Callen (DOT Trustee): We will initiate a snapshot by Wednesday, latest, Thursday, 1st June. Then, if everything goes well, and we can get some numbers for the trustees and the enforcer, we will probably include this in the on-chain vote, which ratifies both the budget and the new trustees and enforcer.
James (dYdX Foundation): Awesome. Appreciate it. Has anyone got any questions that they'd like to ask? We'll give it a couple of minutes. Mo, we can bring you up. Mo, you should be on the stage. Go ahead.
Moe-L (Community Member): Thank you. I have a question regarding the trustee role. What is the candidate profile, I'm very interested in applying to be a trustee. So I would like more info if there is anything predefined by now. Thank you.
Joanna (DOT Trustee): We'll look at dYdX contributions. Having an established reputation at DeFi can be essential for the role. We should also consider your location, geography, and just the practical aspect of signing transactions so that it can happen promptly. But we're pretty open. So I would say that it's great that you're interested, and we'll get in touch. We want to speak to as many potential trustees as possible. So definitely, you can expect to hear from us. Anyone else who's interested, please just let us know. It will be great to meet as many of you as possible.
James (dYdX Foundation): Thanks, Moe-L. I noticed a question in the town hall chats about Hedgies NFT. If you like, we can speak about this in the Discord chats. We'll keep this conversation specific to the Ops 2.0 subDAO proposal. It's a good question, and I'm sure members of the Hedgies can probably address that as well. Any other questions relating to the DRC? We have a RealVavoshka question. General consensus in the community is that trustees should come from the community and not professional governance projects. Any thoughts on that, Joanna and Callen?
Callen (DOT Trustee): I guess I can touch on that. I understand that consensus entirely. However, I want to emphasize that this is a significant funding amount for which these multi-sig trustees will be responsible for. So I think that, while we will prioritize people who have contributed to dYdX and our community members, we also value reputation and contribution throughout DeFi organizations. I think it's essential. Joanna and I spoke about this the other day, and we believe one of the perfect places to slot in a community member is definitely on the enforcer side. The enforcer is in there to ensure that the trust mandate is being fulfilled and that there is constant communication between the trust, the community, and OL. So we think an enforcer is a perfect place for a community member.
Joanna (DOT Trustee): No one is in a better place to do that than an existing community member because community members know the level of communication that this community finds appropriate. I agree with what Callen said. We'll be in conversation about this. You'll hear from us in terms of candidates. Let's keep discussing. We have a hiring email address if you want to apply as a trustee. I'm just going to type that in here now. So, for a trustee or enforcer, we have the same email address. I'm just typing it in. It's just firstname.lastname@example.org. Drop us your email in there, and we'll be in touch. Some of you have already done that. That's great. If you DM'd me already, you don't need to do that. We're already in touch.
James (dYdX Foundation): Fantastic. Thanks, guys. Thanks for your comments as well. Okay. Short and sweet. That was fantastic. Joanna, Callen, thank you so much for answering those questions, staying around late to engage with the community, and explaining everything. Thank you to everyone in the audience for supporting and providing your thoughts, feedback, and insights. It is an exciting time for the dYdX ecosystem, and looking forward to seeing everyone actively engage in this DRC snapshot in the near future. I think the reminder is that this is being recorded, and we'll publish this on YouTube by tomorrow at the latest.
Thanks for joining, everyone. See you next time.
Legitimacy & Disclaimer
dYdX Foundation’s purpose is to support and grow the dYdX protocol ecosystem by enabling communities, developers, and decentralized governance.
Nothing in this post should be used or considered as legal, financial, tax, or any other advice, nor as an instruction or invitation to act by anyone. The dYdX community is sovereign to make decisions freely from time to time, in accordance with the governance rules, principles, and mechanisms adopted by the dYdX DAO. Community discussion and interaction on the contents of this post are encouraged. The dYdX Foundation does not directly participate in governance decisions to be made by the dYdX community, including, without limitation, by making and/or voting on governance proposals. The dYdX Foundation may change, update or complement its analysis or opinions expressed in this post in the future and assumes no obligation to publicly disclose any such change or update. This post is solely based on the information available to the dYdX Foundation at the time it is made and should only be read and taken into consideration at the time it is made and on the basis of the circumstances that surround it.
Get Involved with the Community
Become a part of our journey to reshape the financial landscape