Proposal to Retain Indigo Labs to Provide Services to the Indigo Protocol

[juanCardano]

on day 1 that you approve this and I sell everything and take it all back. I pay enough in fees (which is fair enough for me).

They have a large part of the assets.

I am now doubting your project.

I was starting to trust. I am giving them a chance, don’t ask for funds. It’s abusive, this proposal. Earn them honestly with what the project has! (YOUR USE)

if not from now on I tell you that INDIGO is going to die as 100% of the project that I said they were bad.

Anyway I am not here to save anyone, whoever wants to lose his money loses it, this is just my comment.

[jrm512]

for the first time I agree with you. I do not necessarily believe the team asking for funds is abusive, they deserve fair compensation for the work they are doing. However to come in like this and threaten “Make us the best paid team on Cardano or else” iv very concerning. I would have thought we would get one or two years of work and development from the 25% allocated before we had to start sourcing additional funds. The way they are doing this will drain the protocol, I’ll bet within 3 months there would not be enough liquidity for them to accept payments.

[JWolfish]

AAve was launched in January of 2020, although it has roots as ‘ETHLend’ back to 2017. The proposal referenced, paying Aave Companies $15 million for previous work on Aave, was executed in September of 2022. I don’t know what funding they asked for between those dates, if any. But that was a solid 2.5 years after the rebrand to Aave and 6.5 years after the launch of ETHlend. Aave is one of the most successful protocols on Ethereum, and is multichain. It generates a significant amount of revenue, and is the third highest TVL protocol amonst EVM chains, with $4.5 BILLION.

Indigo is months old, with a few million in TVL, it generates very little protocol revenue, and what little it does generate is currently being paid out 100% to token stakers. Most protocols and startups are bootstrapped for years by venture capital money…very very very few are ever in a position to have their product start paying its bills mere months after being launched. The statement is that Indigo has no VCs is not entirely true…the VC in this case is literally EC, the CEO of Indigo Labs, as he’s stated he’s put over a million dollars of his own money into launching Indigo. I completely understand if he is tapped out right now…that’s a lot! Unfortunately, I do not believe that Indigo right now is in a position to pay off that venture debt. The inference that Labs will accept more tokens to cover this debt, on top of the 25% already allotted to them, is, in my opinion, the worst possible way to pay this debt. There is not enough liquidity on Cardano to cover the sale of this amount when EC and his employees need to sell INDY to pay their mortgages and grocery bills.

By putting forward this proposal now, EC is essentially indicating he is tapped out. Fair, he’s done a lot. We obviously want to pay our developers, and they deserve a salary NOT PAID IN PROTOCOL TOKENS so that they can pay for their lives. As I see it, Indigo has three potential paths forward.

1. Submit and pass some form of this proposal, ‘paying’ the entire debt in INDY tokens, accepting the fact that much of that sum will have to be sold off over time into Cardano dex liquidity, potentially crashing the token price significantly for current holders.

2. Raise and implement new fees on the platform, and probably also reduce the amount of current fees going to INDY token holders. These fees would generate ADA, which I find to be a somewhat better way to pay devs…we could also implement a treasury management committee to manage the ADA collected, possibly converting much of it into stable coin. The danger here is that new fees anger users, reducing fees to INDY stakers angers them, and Cardano defi is still in an infancy stage…there is not a lot of activity to even generate the fees.

3. Sell a chunk of the INDY in the DAO treasury to a third party venture investor for a lump sum. This will not impact the miniscule liquidity on dexes, and some sort of cliff and vesting schedule could be negotiated. This will then give the DAO ADA or stable coin to implement a treasury management committee that can then begin to pay these bills. Additionally, I would strongly suggest to Labs that if they feel they are cash crunched, they need to look into doing this ASAP with a chunk of the very generous 25% of total INDY already allotted to them. Liqwid also secured themselves funding this way, it’s not a bad way to go, honestly. Fund yourselves, so we can continue to bootstrap Cardano defi into something that can sustain itself.

My thoughts…I am not a venture investor nor do I have any business funding experience other than running basic operating budgets for many farming (actual agriculture, not token farming) operations over many years. The DAO should probably find someone who is experienced in these things to have these negotiations with Labs.

[EC_ATX]

The Labs team welcomes this discussion and the opportunity to educate everyone that this is a good and necessary proposal that’s beneficial to Indigo’s decentralization status. As we’ve stated, we will take the time needed to answer all questions and concerns before moving this Temp Check to a Poll or to an on-chain Proposal. It’s critical for us, that that through this process, we preserve and build on the faith and trust we have established with the community over the last two years!

We very much appreciate all of the posters who have commended the Labs team for building one of the most complex and robust DeFi dApps on Cardano; we feel that this Temp Check is the way to keep building as a maximally decentralized project.

Many of the questions raised are core to the concept of what makes a DeFi protocol decentralized, while others go to how businesses function. Below are our thoughts on the points raised so far:

1. THE DAO HAS TO CONTROL THE PROTOCOL. This vote is needed now because the Labs team cannot dictate or control further work on the Protocol without a DAO vote. As @droctafunk said, at the time of launch “the keys to the vehicle were turned over to” the DAO. Having no small group in control is core to decentralization, and core to not being legally subject to various laws and regulations that may apply to centralized DeFi applications. This Temp Check is just one of many where the DAO will decide what work will be done and who will do it. Contrary to some online speculation, Labs has no keys to the protocol or the DAO Treasury. The system is in the top 5th percentile of DeFi protocols in the industry that has a truly upgradeable system through on-chain Governance.
   The DAO voted for Labs to provide launch and post-launch work, as we’ve been conducting with regards to Web App updates, etc. to date; now we are asking for authorization for the next 12 months to continue showcasing our ability to you all as the most trusted dev shop to support the Protocol. We are not aware of another DeFi project that launched with our high-level of decentralization, so we understand how this process may seem unusual. But this vote – along future votes for other services to the Protocol – is core to the decentralization goal of the Indigo Constitution.

2. THE DAO HAS TO PAY FOR WORK ON THE PROTOCOL. The DAO has to pay whoever it votes to do work on the Protocol. Again, this is to us what decentralized means – that no small group controls the Protocol. Launching a decentralized protocol does not give the launch team any special rights or any additional obligations post-launch; what happens after launch is in the control of the DAO.
   We are grateful that many posters agree that the DAO cannot reasonably ask service providers to perform work into the future for no compensation, and that point is the heart of this Temp Check. As we said in the Temp Check, the fact that Labs team members are currently vesting in some INDY grants is not payment for years of future work; it is more analogous to an equity grant given to a tech employee in addition to their pay and benefits, and not as a replacement for any pay and benefits.
   Several posts have asked about audits, and the Labs team is happy to include an audit right in the Services Schedule for this work.

3. HOURLY RATES CAN BE CHANGED. Many posters have reasonably expressed concern with how paying for the services might over-tax the DAO Treasury. We do not believe that paying reasonable rates for necessary work will over-tax the DAO Treasury and the proposed hourly rates are based on what we understand other dev shops using US-based workers charge. A few experienced blockchain developers have confirmed in their Discord comments about this Temp Check that the proposed rates are at the mid-or low-end of market.
   Nonetheless, we are happy to agree to lower rates. We just need additional information as to rates actually paid in an arm’s-length contract with similar dev shops for similar work. We ask that anyone with a source (@gcarrharris ?) share any dev contracts or other information with us. You can share as a DM if you are not sure that you can or should make the information public.
   @Mike_C: Contractor hourly rates are not comparable to employee salaries broken into hours. A worker would charge more for doing the same tasks as a contractor than a salaried employee’s hourly rate because of the temporary nature of contractor work, the lack of benefits, and their higher taxes (in the US). Salary numbers also do not capture the significant costs of benefits (or equity grants). The Services Schedule we propose would allow the Foundation to, at any time, hire its own employees to provide the services instead of Labs; but we do not believe that using Foundation employees would be less expensive for the DAO for the near future.

4. WE DO NOT HAVE ENOUGH INFORMATION FOR FLAT RATES. Without knowing the exact work to be done and how much time it will take, no one can come up with fact-based flat rate fees for these necessary services. For example, we do not know as we sit here today what may be suggested for upgraded smart contracts – the developers need to assess feature options and what is technically possible with what amount of resources, and then there need to be conversations with the community, Working Groups, etc., on what will be proposed to the DAO for vote.

5. OUR ROUGH ESTIMATE OF TOTAL COST IS $30-$60K/MO, OR $360K TO $720K/YEAR. Claims that Labs’ work will amount to $1million or more for a year are not rationally based in our view; they involve unreasonable assumptions that someone will always be billing at each proposed hourly rate for 40 hours per week, every week. As said in the Temp Check, we believe the total charges - for all hourly billed time - are likely to be in the range of $30k to $60k per month; still a significant amount, but far short of $1 million for the year. We would be happy to agree to include an aggregate payment cap of at most 10% of the current DAO Treasury, or 455,000 INDY, for the 12 month term of the services to address concerns regarding draining of the DAO Treasury.

6. THE DAO CAN AND SHOULD CONTRACT WITH MANY SERVICE PROVIDERS. We agree (as noted by @jrm512) that the DAO should also directly vote on and have the Foundation contract with other services providers – for Oracle services, MLabs or other developers, accountants, lawyers, etc. The Protocol will be stronger with a diverse array of service providers and all should be contracted through the Foundation. This concept also plays into the idea of eventually establishing a Technical Working Group of ecosystem figures to provide technical oversight and support to the Protocol. These resources could be paid in some form as service providers.
   While we think work by Labs is needed now and this Temp Check is necessary, the Temp Check is clear that the DAO can end any service at any time and hire someone else to do the work. Our hope is to have a broader collection of service providers supporting the Protocol, and our Temp Check has been designed from the start to give the DAO maximum flexibility to pursue that goal.

7. THE DAO CAN AND SHOULD CONSIDER OTHER REVENUE SOURCES. Part of the work Labs wants to support with this Temp Check is considering how the Protocol might generate other revenue streams, as @moonshoteod and @jwolfish raised. But for now, the DAO only has INDY, and any agreement would accordingly have to be based in INDY (since the Foundation could not promise to pay with something that it does not have).
   The Labs will gladly agree in the Services Schedule with the Foundation to accept payment in ADA, USD or stablecoin should the DAO be able to do so.
   Selling DAO Treasury INDY (as @jwolfish suggested) to an investor is a possibility for the DAO to consider – but the services in this Temp Check are needed first to upgrade the Protocol in order to make such selling of DAO Treasury funds possible.

8. ANY PAYMENTS BY THE DAO REQUIRE A PROTOCOL UPGRADE. We of course appreciate that INDY liquidity is low on the DEXs at the moment, but note that it will be several months before any Protocol upgrade of the governance smart contract - which upgrade is needed for the DAO to make any transfers of INDY to Labs or anyone else.
   Therefore, if this Temp Check is approved on-chain this month or in April, the first payment to Labs likely would not be made sooner than Q4 2023. We would also propose that the full amount owed to Labs when payments are first possible would be paid out in three installments as opposed to one lump sum. We hope that DEX liquidity will be improved by then, but regardless the Temp Check commits to telling the community about any liquidation plans of any INDY paid to Labs.

9. ABSTENTION DECISION. Lastly, while we cannot tell Labs team members how to vote with their INDY as all DAO Members are free under the Indigo Constitution to vote on any Proposal, myself and many other Labs team members have voluntarily agreed to abstain from voting on this Proposal if or when it eventually moves on chain. We want to be cautious here though as we do not want to set an expectation that anyone will abstain from future Governance votes, so this should not set expectations for the future.

We hope that this post helps expand on our thinking a bit. We continue to believe that this Temp Check is constitutionally and legally essential, and in the best interests of the Protocol and all INDY holders, and we look forward to further discussions.

[moonshoteod]

Thanks for the detail reply.

This is similar to traditional business with multiple owners. Some are silent owners, with less shares, that don’t do any work. Some are majority owners that do all the work. It is fair for the owners that do all the work to be compensated. When the business is not generating enough money to compensate the owners that do all the work, or to cover other operating costs, all owners will have to decide if they want to dig into their own pocket to continue to fund the business through the hard time.

Since no concrete plan has been presented on how to make up for this funding, you, the $INDY owner, have just been asked to shared the burden of funding the continued operation. You might not feel like you are funding it but you are in the sense that the token price will likely drop unless the project can find additional revenue to offset this request.

This is a fair and transparent request, but you have to figure out if this is right for you.

[Bathori]

I would say it is fine to develop the necessary smart contracts to make possible Indy DAO treasury payments for the different services required by the DAO.

Now for these 2 points:

• Continue to administer the calculation and distribution of INDY rewards which have been authorized by Indigo Proposal 1 , through March 31, 2024.
  Should not the automation of the process be included in these services?
• Continue to administer and improve the Indigo Protocol web app, oracles, and off-chain functions, through March 31, 2024.
  Should not the integration with a decentralized Oracle (when available) be included in the above?

Best regards

Edit:
Additionally for item A. Services to be Provided: in general:
What is the estimation of hours per each position described in the proposal required to carry out the listed Services?

[diwalost]

If the DAO is paying the Lab in INDY, then can we create a vesting system where such INDY paid are under vesting schedule? Whenever lab wants to sell them, they have to create a DAO proposal specifing the amount and if the proposal is passed only than the vesting is lifted on that amount of tokens only.

[Bathori]

Would it be interesting instead of requiring a vesting schedule for Indy, to require this Indy to be sold for iUSD and this iUSD to be provided as liquidity in DEXes for a certain vested periods of time by the recipients of the payments?

Another option would be to convert this Indy in to ADA, get a CDP for the necessary payments in iUSD, the DAO should then manage this CDP to make further profits for the DAO at least in the form of ADA staking rewards.

[MrGurzo]

If I understood it right the 25% INDY vested for development are to be seen only as a bonus and not as a long term way to pay the developers of the protocol. This is fair to say but I think we should discuss to maybe lower this 25% and use the percentage to pay partly, or completely this specific proposal.
Doing so we can secure ~1.5 years of development (1 year paid plus the time the Labs needs to update the smart contracts) when during this time we can propose/discuss more detailed plans and also let the liquidity -hopefully- to flow in, both in Indigo and into Cardano.

[Massi1]

How can we users without development skills understand if the price paid is right for the work done? Is it not possible to develop payments based on proposals? example: we want to integrate a stablecoin as collateral, the hours of work are calculated and those hours are paid every time there is development. This would incentivize the work and continued development of the protocol.
Honestly, for the payment method, the solution is not easy, selling the token would be counterproductive because people would abandon indy making it lose even more value… a small commission would be added to the treasury and perhaps stake part of the DAO indy to have of the % on the closure of CDPs

[bobthesrategist]

I also think the rates quotes are on the high side. But it is also important to to compare apples with apples:
The prices you are looking at for Bloomberg, Salesforce etc are salaries. The prices quoted by indigo labs include personnel overhead cost (insurance, benefits, admin cost etc.) on top on that salary because the Dao would not pay the salaries but pay indigo labs to all-in manage the workforce. On average the personnel overhead cost can range anywhere from 10% to 40% (can be more or less depending on a number of factors).
Hope that helps to make a better comparison.

Edit: Was also referenced above by EC

[Spuds]

First of all I’m certainly not opposed to individuals getting paid what they are worth, what they deserve or what they are owed. For the sake of transparency the DAO should be entitled to detailed receipts of expenses incurred and preferably henceforth approved prior not in post.

With that said I think we first need clarification on what exactly the 25% team token allocation was for. I was under the impression team token allocation was for work completed and future work. Now we are learning that team tokens were just a hiring bonus and reimbursements are still owed and will be due every 12 months. So what exactly was the 25% for if not for compensation.

The fact that EC holds the largest portion of $Indy in circulation has been difficult to digest. Now considering EC invested $1 million of his own funds and nearly 2 years of his time and energy, maybe thats fair in light of his personal sacrifice. But now the treasury is to reimburse some $55k for legal and clerical fees paid out before the DAO was created. Does this mean the DAO is going to eventually reimburse EC his full $1 million investment? Why not back pay for 2 years salary too. Again I’m not against people getting paid what they deserve I just don’t like surprises or being left in the dark in regards to contract agreements.

Everything being billed T&M seems a bit ambiguous and vague. Why is it impossible estimate costs. The administration costs to run this forum should be as simple as paying the web client’s monthly fee. Why does this require an hourly rate. If we must pay hourly because contractors don’t know what it will take to get the job done then maybe we should be paying contractors that don’t need learning curve pay.

When can we expect the Foundation to be staffed? When can we expect to see some financial oversight of the Labs. Why is there so much trust required in this “decentralized” protocol? When can we begin to discuss making this protocol profitable and self sustaining.

I think an aggregate payment cap at 8% is a step in the right direction. Detailed documentation of services rendered, contract agreements, expense reports, independent audits and DAO oversight are necessary for voting confidence. It’s likely there will always be a need for hourly contracted services but certainly not every business expense needs to be a blank check.

Maybe I’m being too harsh but I’m more interested in being honest and asking the hard questions. I have nothing to loose and I would love to see Indigo become the industry standard for decentralization and DAO governance.

[juanCardano]

I am concerned about proposing due to previous criticisms, but well, given your clearer explanation, I agree, but I say make the release quarterly and if no results are seen, vote at the DAO every 3 months to release the funds, if people are not happy they can vote not to continue funding this. If no changes or improvements are seen, people would vote not to continue to release those assets.

Also, (I’m afraid to propose, but oh well) I suggest(I’m not an INDIGO developer, just an idea of mine for anyone who doesn’t understand) that 1% or 2% of synthetic settlements go to the Indigo team, but to not affect the liquidators or debtors, raise the settlement limits.

For example, iBTC and iETH would settle at 112%. This way, the team would not ask for funds and this would be for 1 year.

I also propose that those funds go more to protocol improvement and security, as I think before any changes or whatever they want to fund, they should invest in more audits to the protocol and improve the protocol design, and synthetics to make it more attractive.

I swear I’m already afraid to even comment here in this community.

This is for you to think about and nothing else. But if I do not agree with giving them funds for 1 whole year, it is an exaggeration. and if I do not see changes the truth would make me angry. that is why every 3 months the release in the DAO. and if they do not like it I leave and they can approve that. There are already other PDCs just like Indigo in other chains and they are not asking for funds, with all due respect.

[Spuds]

You’re always welcome to voice your opinions bud. It’s important to hear all sides even if some may be unpopular opinions.

Quarterly expenditure approvals is not a bad idea. I doubt Labs would go for it but it’s a fair ask.

I definitely think we should be funding more protocol audits, front end and back end.

[EC_ATX]

Thanks again to everyone for your additional thoughtful comments. Here are more of our thoughts in reply:

1. OTHER REVENUE SOURCES. A point raised by a few of you (moonshoteod, Spuds) was whether the services could be paid for through additional or different sources other than the DAO Treasury. We would like nothing better, and have said before that we are happy to allow the services to be paid for in ADA or a stablecoin available to the DAO.

But we believe that the services that Labs would provide under this Temp Check - drafting smart contracts, supporting Working Groups, and ideating on long term Protocol improvements - are key to defining and implementing any new revenue for the DAO. Bottom line is that the work proposed in the Temp Check is part of getting to new revenue and therefore not something that can wait until after new revenue is found.

On this issue, it seems helpful to reiterate that it will be ~6 months at best before the first Protocol upgrade and that will be when DAO will first be able to pay Labs for any services. So the DAO, the Working Groups, and the community will have at least that amount of time to ideate on Protocol changes (new fee revenue, staking revenue, diversification of the DAO Treasury INDY, sales to investors, etc.). We see supporting this Temp Check as supporting taking the most direct path towards determining what options are available and implementing those options sooner than any other alternative development path.

2. REIMBURSEMENT CLARIFICATION. Spuds raised a question regarding whether this Temp Check involves some form of reimbursement of the amounts that Labs (and its founder) have invested in developing the Protocol. We are not sure what may have raised that impression, but the emphatic answer is NO.

This is not a reimbursement request for Labs’s pre-launch work or its own pre-launch expenses. The only reimbursement request is for expenses related to building the Foundation; we ask that those costs be reimbursed because the Foundation is independent from Labs and only owned and controlled by the DAO. Future annual fees to maintain the Foundation will also need to be paid by the DAO.

3. TIME & MATERIALS BILLING. The issue of flat rate vs. time & materials billing has been raised again (bathori, Massi1, Spuds). To be clear, we agree that it is more ideal where possible to pay for any work on a flat rate basis given the cost certainty that it provides both parties.

But the reality is that we simply do not have enough definition of what work needs to be done on a go-forward basis, or the time needed for any such work, to even make an educated guess at what flat rate fees would be appropriate. Even Labs’ past work is not a basis to project flat rates for future work because the future work will be mostly unique, one-off projects and tasks. In our experience, development shops seldom agree to solely flat rates for unique work for the same reason - they have no data on which to make a reasonable assessment of actual time and costs required to achieve a goal. Some of the Foundation support - web app and social media - is common web2 work so there is more data available on that, but what the overall support needs are would be guess work because we do not know how the DAO may vote to build the Foundation.

Many hours of work and community/PWG meetings will be needed to ideate on and propose what Protocol upgrades should be made. This Temp Check is needed now for Labs to be able to support that work. Down the road when the Protocol is more mature and when we have been through an upgrade or two, we will all hopefully be in a position to have Labs and other development shops make flat rate proposals for specific defined work; but we are just not there yet.

It is not fair in our view to say that the inability of anyone to currently know the 12 month development road map for the Protocol means that the Labs team is not competent. This Temp Check needs everyone’s support so that the very talented Labs team can be authorized to do the work to come up with the specific proposals, upgrades, etc., needed to keep Indigo a leading Cardano DeFi dApp.

4. FOUNDATION ROADMAP. Spuds asked about the roadmap for development of the Foundation. That is up to the DAO. It seems a good task for the Protocol Working Group (or perhaps eventually a Foundation-focused Working Group) to consider what resources the Foundation needs to be fully operational at specific points in the months and years to come. This Temp Check includes Labs’ support of the Foundation (such as a web app and social media pages) and expressly states that the Foundation can cancel those services and have them filled otherwise at any time.

Labs would like to see the Foundation build out as soon as possible since a robust Foundation is a core part of our vision of what a decentralized Indigo Protocol should look like. It’s important for the Foundation and Labs to evolve into completely independent entities that work together collaboratively as vendor and customer. We also believe that the Foundation should eventually have some paid staff this year or early next year. But what is the most efficient structure and how to pay for it is to be determined by the DAO/community and will be enabled by the needed protocol upgrade to access DAO Treasury funds.

5. INCREMENTAL CONTRACTS. A few have suggested on Discord and here (juanCardano) that this services agreement be set for some other time period than one year. Considering the services agreement that Labs has proposed could be canceled by the DAO at any time on 30 days notice, we do not feel that breaking services contracting into a quarterly or semi-annual process would give the DAO any more flexibility than it already would have.

That said, Labs is happy to agree to quarterly reviews. That could be by the PWG or others, or could be part of a townhall, or both. We are happy to revise the temp check to provide for any oversight that the community would like.

To the extent some comments suggest that Labs perform work and then the DAO vote quarterly to decide whether to pay Labs (or if to pay Labs), our view is that any vendor contract has to include a firm commitment to pay agreed amounts for the services; no vendor - including Labs - would reasonably agree to provide services and then later ask or have the customer decide what it will pay - if anything.

We hope these continued conversations will highlight our collaborative spirit with the Indigo DAO and welcome any further feedback from here!

v/r

EC

[jrm512]

It was previously mentioned that you would provide further information on a revenue generating plan, but thus far no concrete details have been presented. May I kindly request that you review the Revenue Generating Proposal and provide input on the feasibility of the options, including estimated implementation timelines and potential impact on the protocol. Additionally, I would suggest that the DAO collect revenue generated in the Treasury to support ongoing platform maintenance and development rather than implement some fee directly to Labs.

Many members of the community are seeking a comprehensive plan and are hesitant to commit funds without a clear understanding of the proposed initiatives. While it may be challenging to predict all of the work that Labs will undertake in the next year, it would be helpful to have a starting point. Could you provide details on efforts to collaborate with more oracles to expand iAssets, as well as steps to enhance the protocol’s decentralization and ability to integrate with other platforms?

Regarding the foundation’s expenses, could you please outline past and future accomplishments, as well as estimated costs for ongoing operation? Finally, if future work is likely to consist primarily of one-off projects, would it be prudent to establish contracts for each project rather than committing to a blanket agreement?

[k-stack]

First i love all the engagement in this topic so far most comments are clear, intelligent, and pertinent thoughts and ideas. However, despite all the discussion so far on this topic i have yet to see any factual accounting statements or balance sheets needed for a dao to make an informed decision regarding its budget. Can we get a full accounting report showing all ongoing expenses/continuing costs of keeping the protocol running, not just the hourly rates of the human capital. Im trying to get a handle on whether there are additional costs the dao would be responsible for paying for hardware/cloud/domain/partnerships/etc. or is the only annual cost to the dao for this service contract include all those ongoing fixed costs as well?

[gcarrharris]

Spoke to our Dev team at Summon. The “junior dev rate” seemed very high to them. I couldn’t extract any concrete evidence as we are a startup and are doing the same thing as @EC_ATX and his team are doing, bootstrapping it ourselves.

On a broader note, within this convo it was brought up that in Cardano, we have generally seen bounties that get paid out based on completed work. Has the team given any thought to taking some of the premier tasks and protocol upgrades, and putting a bounty on them?

Maybe another option to get the team paid, is agree to pay back the 55k start up fees, and then start at the bounty list. If the V2 upgrade is worth let’s say $140,000(making up a number) then based on completion time and quality, it could be attained.

Although this hasn’t been done on Cardano, the convo is important but maybe not doing it all at once. Let’s pick the biggest “upgrades” that the labs sees fit, and compile them(know you guys already have this:)) and make a case for the work. Versus a monthly/hourly/ rate projection.

[defiroose]

This discussion holds significant importance, and it’s crucial to establish a formal agreement for ensuring the protocol’s decentralization. However, the current proposal appears to be inadequately thought out, with substantial requests and insufficient justification.

It’s essential to recall that the Labs received 25% of INDY as compensation, with the majority allocated directly to EC. This compensation didn’t undergo DAO approval – if it had, EC’s current allocation might have been different, considering his actual role and contributions within the company.

The proposed ~$52k reimbursement to the Labs should be dismissed, as it is already accounted for with a 5.125M INDY allocation.

Further justification is necessary before the DAO can approve this proposal, as the rates seem unreasonably high. Comparing Indigo DAO to more mature DAOs, such as AAVE, is inappropriate. Once the Labs has demonstrated its value, the community can contemplate larger compensation requests. While the Labs has done an exceptional job launching the protocol, post-launch development has been underwhelming. The Labs possesses 875k of unlocked INDY that can be utilized to raise capital from the market or VCs for ongoing operations.

It would be prudent to await a more transparent and detailed plan from the Labs before authorizing additional INDY withdrawals from the community treasury.

EC has mentioned the difficulty in estimating future expenses due to a lack of clarity. In light of this, it’s advisable to wait for further clarity before authorizing more INDY for the Labs. The DAO Treasury currently has limited funds, and to ensure Indigo’s longevity, it’s vital to preserve these resources during the DAO’s early stages.

[EC_ATX]

The Labs team appreciates the thoughtful engagement that we have had on this critical Temp Check so far. We have updated the text of the Temp Check to add more detail (to allow for audits and regular Townhalls on the work) and to include elements that we have agreed to in the conversation so far (reduced Rates, a 10% cap, and payment in ADA). These updated areas of text are in bold. As to the new, lower rates in the updated Temp Check, we frankly have not seen new information which supports changing from the originally proposed rates, but we’ve made the changes to be responsive to community concerns.

We have understood from the start that Labs is making some significant requests with this Temp Check, both in terms of the cost to the DAO Treasury and - just as importantly - the need to proceed on an agile development basis with no firmly defined roadmap. We are confident that the work that Labs will be able to do under this Temp Check, if passed, will go a long way to taking the Protocol to the next level by building a detailed roadmap. That roadmap will in turn allow the DAO in the future to proceed not with agile development proposals, but with very specific work proposals which allow for flat rate bidding. However, at this early stage in the life of the Protocol, we see retaining Labs under this Temp Check is the most time-efficient and cost-efficient way to get to that next level while best furthering the decentralization efforts of the Indigo Protocol and ecosystem.

We continue to believe that this Temp Check is constitutionally and legally essential and hope that that point has come through clearly. It is in fact the key driver of this initiative, and our belief has only been reinforced in recent weeks with the large number of regulatory enforcement actions which have been launched in the US and outside the US.

We hope that the conversation to date has sufficiently supported our strong belief that the best structure for the long-term growth of the Protocol is maximum decentralization with the DAO in control at all times - and that a key part of that is hiring vendors like Labs when needed.

We will continue to engage with the community here and reply to new posts, but will also move the Temp Check to the Poll stage later this week. We are grateful for everyone’s continued trust and belief in the Labs team, and ask that you support the Poll when published.