R3gen Consultancy Phase 2 Budget

Proposal to extend TWG Allowance for r3gen Consultancy

Background

R3gen Finance have been working with Inverse Finance DAO contributors since the provisions of Proposal 92, and the continuation granted in Proposal 112. Significant progress has been made, notably in areas such as legal discovery, FP&A work on budgeting and the impending launch of Season 1.

Overview

This proposal seeks to grant an allowance to the TWG for Phase 2 with r3gen consultancy, where the work started in March 2023 and will be finalised and presented to the DAO. A 7-week period is requested for this, lasting from August 1st to September 20th. The deliverables being worked on in this period will be:

Season 1 Launch

  • 1 x review and feedback for each WG proposal
  • 1 x optional 1:1 feedback discussion with contributors on WG Proposal and proposed self-set compensation
  • 1 x Season 1 Working Group Spend Summary Report
  • 1 x Season 1 Recommendation Report document

Legal

  • Continued support on Legal incorporation discovery, with a specific focus on engaging and exploring service providers able to offer a perspective on Middle East jurisdictions
  • Continued facilitation of conversations around BVI/Cayman incorporation with Lime Legal

$INV Vest

  • 1 x Options Proposal for recommended restructure of contributor $INV vest
  • Facilitation of conversations and discussion related to $INV vest readjustment in the period from August 1st to September 20th (7 weeks).

Fee

$8000 in $INV using spot price at the point of payment and $4650 in $USDC. Fees to be at the commencement of work due August 1st. This is a 13.1% fee reduction for USDC and 12.0% INV reduction compared to the previous periods. The DAO Treasury no longer holds USDC, having converted it to DOLA, so a DOLA allowance is requested.

Given this:

  • USDC fee for 7 weeks: 4650 USDC
  • (Upper) Approximate INV fee for 7 weeks: 260
  • Existing TWG DOLA Allowance: 3,465,247
  • Existing TWG INV Allowance: 15,057

The requested allowance will be the sum of the current allowance and the impending fees.

On-Chain Actions

  • Set the TWG’s DOLA allowance to 3,469,897
  • Set the TWG’s INV allowance to 15,317

Hi everyone - some questions/comments for the r3 team:

Can you describe what is to be included in the operating model? Revenue forecast? What are the steps to complete before Sept 20th?

We received a Q1 financial status report Inverse Finance - Financial Status @ 31st March 2023 - and was expecting us to have a Q2 financial status report about now. Important for the DAO to continue this reporting - any reason this is not being included in the deliverables?

Also awaiting engagement estimate from Lime Legal re Caymans/BVI approaches and should run that down as well as part of the deliverables for legal.

Also would like to see an hourly breakdown for each of the deliverables if possible and the team members involved for each.

Thanks!

Hey @Patb, happy to address some of your questions.

Great point as an operating model can mean different things to different people. In the context of Inverse Finance, this is best viewed as a recommendation report on Season 1 budget and spend. This will account for revenue forecast figures provided by Harry which will also be shared publicly in the Season 1 Strategy Post.

We have worked together for 4-months, and I see this report being a close out piece capturing r3gen’s reflections on the organisations, and recommendations to Inverse Finance as it moves forward. To remove terminology ambiguity, @cryptoharry can we change the wording of this deliverable to “Season 1 recommendation report”.

A Q2 financial status report was not requested or included as part of r3gen’s Phase 1 extension. However, one of our deliverables for this extension is the Working Group Spend Summary Report which will contain key financial information provided by TWG.

Well noted. @cryptoharry, can add an additional deliverable to the Legal section: Continued facilitation of conversations around BVI/Cayman incorporation with Lime Legal, with the deliverable being the discussed fee quote.

Whilst our initial work scope was anchored on 0.5 FTE, our extension workshops have been deliverables based. Similarly we engage with Inverse Finance as r3gen and so resource allocation in support of successful delivery is managed internally.

Thanks for the feedback and questions!

We originally retained r3 to help us begin the process of standing up an FP&A function at Inverse with the goal of helping us build an operating plan (revenue forecast, budget forecast, etc.) to use with prospective investors and for internal/DAO planning purposes. We’ve begun to rationalize the budgeting process somewhat since then - and budgets are part of an operating plan - but the engagement seems to have shifted well into non-FP&A functions like HR and I would like to see us re-calibrate this proposed extension back towards the original intent of the engagement - building an operating plan.

The Q1 financial status report was not included as a deliverable in R3’s original proposal either but this was one of the basic and fundamental FP&A deliverables we discussed prior to our initial engagement and was delivered as part of the first phase of the engagement. To reiterate - and seems like this should be obvious - it is important have this continuity for the DAO and INV holders and would like to see it prioritized in the deliverables and especially above non-essential deliverables like close-out reflections on the organisations, etc. which are out of scope.

Not part of our engagement goals and not (really) essential to an operating plan. Please strike this deliverable and focus efforts on Q2 financial results and again, an operating plan for the DAO.

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$INV Vest
1 x Options Proposal for recommended restructure of contributor $INV vest
Facilitation of conversations and discussion related to $INV vest readjustment in the period from August 1st to September 20th (7 weeks).

What exactly does this mean and what is the purpose? I’m not understanding why we need to pay for this.

Is this only r3gen drafting these or is there Inverse contributor influence to what the scope is preceding the proposal being posted? I’m unsure how it works, Pat seems to have some great ideas that could move us in the right direction more efficiently.

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Regarding the INV vest section, it has come up a few times in previous r3 workshops (I believe around April this year) that at least a few contributors thought there could be improvements with the contributor INV vest process. Some ideas were discussed at the time as a group, but it was put on hold to prioritize the other work. What this means r3gen will help facilitate the conversation among contributors again with end goal of having the plan to implement improvements if they are found.

r3gen are an organisation with experience of dealing with these sort of issues and improvements, while having already proven to be effective at facilitating productive debate among contributors. The reality is without r3gen’s assistance, improving the current process would likely be knocked down the internal priority list and potentially never covered. My view is it’s an important deliverable as we already know that some contributors aren’t satisfied with the current unstructured process, so there’s value in at least fleshing this out further.

r3gen drafted the deliverables based on what is currently being worked on and has been for a while, as well as further conversations with contributors. I then reviewed and drafted into the proposal template we commonly use since the budget has been coming from the TWG.

Hey @karm

Thanks for your questions on Inverse Finance contributor vesting.

Through various conversations it has become clear that there is some dissatisfaction around current contributors $INV Vesting - and it seems an important topic to address to ensure we retain the current team of high impact contributors .

r3gen will be playing a facilitation role in this process, both proposing ideas to, and soliciting ideas from current contributors. This will be discussed and ultimately consolidated into the Option Proposal mentioned above, allowing $INV holders to ultimately make a final decision on the best route forward.

Why r3gen’s help? Compensation is a devilishly hard topic in a traditional org, and double hard in a DAO. r3gen have delivered 5+ DAO native compensation restructures and have the experience to ensure this important topic is address with the best possible outcome.

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Will R3 be providing a Q2 financial status report as it did for Q1?

As discussed with contributors at the outset of the engagement, due to the current incorporation status of the DAO we can’t complete data aggregation or bookkeeping for Inverse Finance. We provided a template report for internal use in Q1 which can continue to be populated and shared in Q2.