Community Call Governance Workshop - March 23, 2023

Today’s workshop covered three areas:

• Our usual review of proposals in the pipeline and their status;
• Two KIPs currently in Reconciliation; and
• A broader discussion of various proposals from Labs leadership and the community about the future of Rook DAO.

1) Review of existing proposals and their stages in the process:

Proposals in Reconciliation

• KIP-42 - Extend KIP-26 through Q2 2023: This proposal extends the powers granted to JZ and Hazard to continue as CTO and CEO of Rook Labs.
• KIP-43 - Q1 and Q2 Labs Budget Request: This proposal outlines current and forecasted budget needs, and requests funding for Rook Labs operations.

Proposals Under Sophon Review

• KIP-36 - Expand Funding and Strategies of Testing Wallet: Originally $600K was allocated to the testing wallet effort. Due to the success in generating yield, an additional $400K in DAI funding is being requested.
• KIP-38 - Replenish Discretionary Investment Limit Funds: This proposal gives the treasury the ability to quickly react to and take advantage of market opportunities in a non-public manner. This proposal would replenish the cap to the lesser of $5M or 5% of the treasury’s notional value.
• KIP-39 - Deployment of Additional ETH for Yield Generation: The ETH yield generation experiment has been successful, so there is a desire to increase the limit to 80% of idle ETH.

Draft Proposals

• Create Incubator DAO - This proposal explores the possibility of spinning off the DAO into an incubator to explore new opportunities for ROOK holders.
• Dissolution of the DAO - This KIP proposes to dissolve the DAO and distribute treasury funds pro-rata to ROOK token holders.
• Treasury Yield Management for USDC via USV - This proposal suggests investing 20% of the Rook DAO Treasury USDC holdings in Phuture’s USDC savings vault (USV).
• The Origin team has introduced the OUSD Treasury Utilization Proposal. Members of the Origin team joined a recent Treasury Tuesday call to provide more color on the proposal and answer questions (see the Rookbase recap).

2) Discussion of proposals in Reconciliation

As discussed in the workshop, Reconciliation is an exception state in Rook DAO’s governance process designed to protect the interests of dissenting voters. It is invoked for proposals where objection voting on Snapshot indicates (in the view of the Sophons) a need to engage with dissenting views. For more information on Reconciliation, see this post on the Rook governance forum.

Objecting voters were asked on Tuesday to post details of their objections to the respective KIPs on the forum, and to attest to the objection’s link to an Object vote in Snapshot. Only one such comment was posted, albeit without an attestation; the discussion today focused on this objection. During the discussion:

• Hazard reminded the community that proposals are where governance begins, not where it ends. One concern expressed in the objecting comment was that Hazard and JZ appeared to no longer want to operate in a DAO governed by ROOK holders. While this is not true, there is a need for a more nuanced discussion on the complexities of continuing to operate solely as a DAO.
• Hazard pointed out the high level of transparency in the DAO’s operations and spending. Addressing the community's concerns regarding burn rate can be done through increased communication.
• On the question of spending not being linked to performance metrics, Hazard mentioned that early-stage companies should focus on securing product-market fit rather than targeting key performance indicators. That being said, the team has been pursuing concrete KPIs and objectives internally, and is working on a means of communicating this progress with the community.
• Regarding the lack of a publicly visible roadmap, the team countered that there are public specifications, roadmaps, and discussions with partners. That said, some discussions with prospective partners must remain private.
• On a concern expressed about the management of DAO treasury assets, Hazard pointed out that the treasury has nimbly avoided perils such as catastrophic hacks and banking failures. MattyG noted that the Labs team has never had a deficit, and has been very conservative in budgeting.
• Pai-Sho, one of Rook’s Sophons, explained that the next step in the process is for the Sophons to review the objections and Rook’s response to them.

3) Discussion of the DAO’s future

The final part of the workshop focused on proposals and counter-proposals regarding the DAO’s future, as well as the motivation for the original proposal.

• Hazard began by acknowledging the tension between the team and community, and pointed to a mismatch between Labs’ need to maintain secrecy while the technology is being developed in a highly competitive environment on one side, and the community’s expectation to be publicly informed about the progress of development on the other.
• Hazard acknowledged that neither of those two extremes can be maintained, but also that the pendulum likely needs to swing back toward being more public and transparent regarding team operations. Leadership is working to establish what information they can share about Rook and how best to share it with the community.
• In the past year, many organizations have become more risk-averse regarding DAO operations. This is true of both potential integration partners and other stakeholders.
• In this context, it has become increasingly challenging to meet partners’ technology and organizational preferences. Decoupling of protocol development from the token and the DAO is one possible path forward to address these concerns. That said, this week’s proposal was intended as the starting point for a larger conversation with the community rather than a final outcome.