On behalf of OKX earn we are excited to continue working with AlphaGrowth. OKX users might contributed the most sticky TVL to Compound this year from both CEX and Web3 side. The partnership is definitely a win-win. Looking forward to the collaboration next year!
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In retrospect, AlphaGrowth has consistently demonstrated their ability to deliver on their promises. Over the past year, WOOF! has worked closely with the AlphaGrowth team and witnessed incredible results and unwavering dedication across all areas of their responsibility and even beyond. We firmly believe that AlphaGrowth has the potential to elevate Compound to new heights, and our team wholeheartedly supports this proposal.
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Man I don’t like that this proposal is being launched to vote on when we have recent questions and concerns in the discussion.
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Happy to continue discussions and work through any questions and concerns. We love constructive conversations.
Other then a couple comments on the forums all of our feedback has been positive for the work we did in 2024. All delegates we spoke with are supportive. We held an open office hours today and everyone on the call was supportive of the proposal.
To your point some delegates have been unresponsive. Some delegates do not respond until there is a vote available. Putting up a vote is forcing function for dialogue and discourse which we encourage.
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Understandable. My comment was not meant to be about your work only that I like to see more discussion before things get to vote.
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Thanks for the proposal @AlphaGrowth
We would like to thank you for all the work you’ve done so far for Compound we have been very pleased and impressed and it’s been a pleasure working with you from a delegate POV.
Ultimately, this proposal serves a major decision for the DAO as to the future of Compound and the acting forces behind it. While we like a good portion of the proposed vision in this proposal there are a few things we disagree with and a few things that we think are missing from this proposal.
Current Business Units we are against:
Wholistic Security:
Total Cost: 20,650 COMP = $2,160,196.5 ($104.55 / COMP)
- We get 1x CFO (Median U.S Salary $330k), 1x CSO (Median U.S Salary $160k), 1x adhoc Lawyer (hard to estimate cost)
- Maintenance and improvement for the front-end + RPC costs ($300k/yr at $25k/month)
So with the CFO, CSO, and RPC costs we have a total of $790k in annual expenses, leaving $1.37M in budget. Let’s say legal will cost $200k-$300k for the year, this leaves us with $1M to be allocated to operational costs? Please can you elaborate on where this extra $1M will be allocated.
Community:
Total Cost: 19,000 COMP = $1,986,450 ($104.55 / COMP)
As described in our prior feedback we are not supportive of this initiative and thinks it’s far too expensive. We don’t think the DAO should be paying for service provider governance participation and content writing for marketing should fall within the marketing budget. If the desire it to hire a community manager for the forum this is something we could support, but we don’t think it’s going to be too expensive based off our experience within setting up something similar in other DAOs.
This section also heavily lacks details and justification of costs.
Treasuries as Hedgefunds:
Total Cost: 11,700 COMP = $1,223,235 ($104.55 / COMP)
This section contains no justification as the costs of this business unit and what the DAO is actually paying for. How can the DAO weigh up the cost of this initiative vs the expected benefits when there are no concrete TVL goals? We also think this unit should be compensated based on deliverables.
DeFi Operations:
Total Cost: 11,900 COMP = $1,244,145.00 ($104.55 / COMP)
We’d like to know how the budget was decided for this and what costs are attributable to this business unit. Furthermore, we are not really sold on the idea of pushing the COMP token to various other chains via bridge pools. Even looking at COMP markets within Compound Finance, these markets aren’t that big and it already provides utility for COMP.
In general when we look at the budget and compare it to your current contract, the service fee the DAO is paying (not including working capital) is ~$11.3M vs $2.21M for your current contract. That is a +5x increase. While I know there has been a wider scope proposed, it’s just really hard to justify this level of an increase. This is also does not include the $5M bonus for every additional $1B in TVL.
Furthermore, the Launch Operation category from your current contract with a total ask of 6,600 COMP and which included Asset, Chain, & Market Execution has now been split into 2 separate categories. New Assets & Markets (9,200 COMP) and New Chains (12,300), is there a reason for this?
Lastly, we do think that pushing an onchain vote this early is not in the best interest of the DAO. The proposal is significant and has only been up for 6 days (which included a weekend), @PGov has also specifically asked for additional time to review the proposal.
Unfortunately, we cannot support the proposal in its current form due to the lack of justification in costs and increased scope that we do not see beneficial to the DAO.
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Our largest concern here is just the timing. We understand with the holidays coming up the team wants to get this through asap, but some more time to review would be nice.
From our end:
Some clarity on the Wholistic Security side would be nice, or even just requesting a specific $ budget for this (or all budgets) just so it’s a little easier to comprehend in terms of $ and then who’s being paid what.
It does seem pretty steep, agree that marketing content should be within marketing tranche. Some more information as whole would also be nice.
Could the team provide some examples here on what this would be? The idea sounds pretty interesting and definitely worth exploring in some capacity.
A good chunk of delegates’ issue here we think just come down to COMP price and how well it’s done recently. If this proposal was submitted a couple weeks prior, a 2x justification in a lot of these tranches it more easy to comprehend. Now with the price spike, a lot of the individual tranches just deserve some more explanation, and time deliberating.
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Thank you for your thoughtful response, you’re right this is a major decision for the DAO to make in its future and the providers that will push Compounds evolution. We’re glad to hear you’re supportive of a good portion of the proposal. On the parts where you disagree.
Wholistic Security:
You bring up the same great point as @mexilc which we addressed here. This proposal started circulating when the price of COMP was $50 A price around which it has fluctuated for the last 3 years. You’ve justified our security budget at $50, your problem is the fact that COMP has doubled during that time. But, a 3 week price trend does not make a 52 week pattern – and our operating expenses will need to exist regardless of price volatility.
We are completely at the mercy of the volatility of a non-yield bearing, non intrinsically valuable governance token, when we put this proposal up, we did it at the 1 year moving average, yes we’re in a mini bull market, but we need to cover operations so we don’t have to shut down security if the price of COMP goes down, which it has fallen 2.5% between your comment and our response.
Where the argument is “too expensive” in future sections, please review this response.
Community:
We don’t think the DAO should be paying for service provider governance participation.
Our responses to delegate question #5 can be found above by searching “Answer #5: Community” we are still open to suggestions on how to incentivize great folks like those on your team to respond to forum posts on a regular basis with your great understanding of how other DAOs operate. This is the goal for the community.
Content writing for marketing should fall within the marketing budget.
In a sense, the DAO is our largest target audience, because the most meaningful changes that can be made to the protocol must be done through governance writing. “Marketing” as a budget is focused on campaigns which are meant to direct value into Compound from the outside. Sharing growth strategies on the Forums, and proposing that we re-think stale policy decisions is an area which has potential for growth which can only be achieved by further engaging delegates and community members.
Treasuries as Hedge Funds
This section contains no justification as to the costs of this business unit and what the DAO is actually paying for. (objection #1)
We’ve created a line by line budget that’s been made available to every active delegate who has requested access, please review, we are more than happy to have an in depth conversation with you on budget items.
How can the DAO weigh up the cost of this initiative vs the expected benefits when there are no concrete TVL goals?
See the answer to delegate question #6 above. “Treasuries as Hedge funds: This section needs concrete goals to justify its costs.”
We also think this unit should be compensated based on deliverables.
See the answer to delegate question #7 above. “For Treasuries as Hedge funds, we’d prefer compensation for this to be structured on deliverables and KPIs.”
DeFi Operations:
We are not really sold on the idea of pushing the COMP token to various other chains via bridge pools.
See answer to Delegate question #8 above
New Assets & Markets:
Why have New Assets & Markets (9,200 COMP) and New Chains (12,300) been split into two separate teams?
Throughout our first year operating the Growth Program we’ve seen each of these teams hyper focus to serve two separate client bases and splitting into two teams will help them continue to specialize.
The New Assets and Markets team mainly serves large token projects like Lido, Uni, Ether.Fi, tBTC, USDT, USDC, etc … across every chain on which compound has been deployed. This team focuses on more than just listing a new market or collateral and moving on, they develop strategies to make sure the markets that are deployed grow to a successful scale.
For example with tBTC listing an asset is no longer enough. Threshold was listed on mainnet, but it remains unused, in spite of the fact that the market is over utilized. Meanwhile Aave is eating all of that TVL. This means that Compound did not properly consider Threshold’s needs before listing that market. Our offering was not competitive enough to compete with Aave, we were not paying attention to what Threshold users wanted, and we ended up listing an asset that was not used.
We have spoken to Threshold, and they are very interested in more custom solutions – markets which are designed around their strategies, on L2s, or even collateral listings, with structured products, which would only be possible on L2s. Or, even being first to market for native minting for tBTC on Arbitrum.
This attention to detail has to do with a single client.
If we want Compound to grow, we need to be providing this level of detail to each of our clients, and understand what it is that will motivate them to use Compound not only as a solution for their treasury management, but also as a solution which they want to push to their community.
This requires additional team members to focus on solutions for each of these clients, as well as funding to support small grant development for these structured products, and incentives to run small targeted campaigns to push these products once they exist.
The New Chains team provides this same level of support and detail to all of the chains that we analyze for potential partnership. There are a lot of conversations that go on behind the scenes with chains & partners that are deemed to not be a fit. Each of these evaluations and relationships require a deep level of time and expertise to evaluate not only the chain itself but the entire DeFi ecosystem and the partners who would contribute alongside a Compound deployment.
Lastly
We appreciate your feedback on the timing, our main goal was to spur interaction from major delegates on the forum as many have been incredibly vocal behind the scenes and we would love those opinions to be shared with the community. We are very grateful for @pgov providing their feedback.
Would love to hear your take on the budget after reading the answers to the “Delegate Questions above” and am curious to hear which part of the increased scope would not be beneficial in driving the DAO forward?
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For your three budget related questions, I’ve shared the budget breakdown from Delegate Question #3 with your email for you to review, happy to share it with others who request it.
Delegate question #6 gives great additional information on Treasuries as Hedge Funds and how we are approaching top treasuries already https://defillama.com/treasuries. The best example we have right now is Mantle who came to Compound with the goal of performing a basis trade with $200M from their treasury and we guided them through how Compound could be used to achieve their treasury management goals. This boosts TVL on Compound and brings revenue back to the DAO for providing trusted infrastructure to large sticky institutional capital.
I understand your concern, but AlphaGrowth we have the opposite concern. Our last funding to perform DAO work was funded at a local maximum which put us in the position we are today watching our profits evaporate even while breathing new life into Compound and turning around its trajectory.
If timing is the main issue, this proposal started circulating among delegates on November 26th asking for feedback before pushing to the community forum. We were prepared then to continue doing great work for the DAO when the price of COMP was $50, we continue to be ready now during this mini-bull, and we will continue to be ready 3 weeks from now should the price again be $50. We are at the whim of a token price we do not control, but we believe in the long term value of what Compound can bring to DeFi and TradFi. We’re bought in for the long run and hope to inspire others to do the same.
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So AG made a loss by selling prematurely and now wants to make bank on this mini-bull…
There is a clear solution at hand ( AREA) that other vendors like Gauntlet and OZ are utilizing, to get paid in USD, for clearer costing reference and without worrying about the market fluctuations…
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First of all, thank you @alphagrowth for this proposal. It’s been great seeing your contributions bring a new ambitious energy into Compound, and we remain very excited about the growth mindset and various related initiatives you’re driving across the board. Very much onboard on this general direction for Compound.
Overall, we are very supportive of the work that you do, but we do have a few points we’d like to raise which we’ve listed below. Also, seeing that the proposal has already gone up on Tally feels rushed, and we agree with others that more time is needed to digest this. While we understand the desire to get this through before most go on a break for Christmas and New Year’s, we don’t think it makes sense given the magnitude of this proposal. Hence, we’d encourage you to wait with the vote to allow for more time to incorporate feedback.
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Scope & Request: The scope has indeed expanded significantly, though it’s unclear if the added responsibilities require such a budget increase, whether it’s 3, 4 or 5x the current mandate. In general, a more detailed cost breakdown of the proposal would be helpful to make this assessment. The very broad also leads me to some slight concerns about what it means for centralisation. I do feel that a few areas could’ve been covered with a more collaborative and decentralised approach in the DAO, or at least been explored, as there is a lot of relevant competence among active delegates (grants, community, treasury etc).
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Borrower demand: The proposal emphasises TVL growth, and very ambitiously so which is super exciting if achieved. And while strategies like staked COMP or TradFi integrations may help indirectly, the proposal could’ve said more on strategies to increase borrowing. How are you planning to drive borrower-side growth to avoid underutilisation/inefficiencies?
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Re CFO, CSO and General Counsel: While the rationale seems valid given the scale and scope of activities (managing $2.7B+ in assets, $1B TVL targets, and multi-party partnerships), it is unclear why these roles need to cost 20,650 COMP/year.
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Community engagement: 19k COMP/year seems excessive for the listed activities like content writing and governance participation, or at least the need is not clear. Our first choice would be to explore delegating this to a grants committee as we have plenty of relevant experience among delegates, and if not, reduce the scope of this to focus solely on high-impact activities like grant writing.
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Treasury BD: While sticky TVL from treasury deposits would be highly desirable, the cost seems disproportionate. Treasury BD is a long sales cycle, spending $1M/year before securing concrete commitments risks ROI. Would rather see commission-based incentives/link funding to deliverables like signed treasury deals or net TVL growth to align costs with outcomes. Also curious to understand how you plan to compete against specialised treasury managers, if anything just on yield and the tailored strategies they can offer. As an onchain asset manager specialising in treasury management, we would’ve been happy to have had a prior conversation on the topic.
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I assume there’s legal issues with COMP paying in non-COMP. Could we agree on a floating budget with 10% margin for the next year where COMP is sold monthly and if it looks like it may fall short we can have an emergency vote to top up? And if not the excess is returned or moved into next year’s budget (which can be voted on).
It takes money to make money, and I don’t think anybody can seriously suggest that AlphaGrowth doesn’t work their tails off and consistently deliver.
The scale and potential successes should this go through can more than pay for the operational expense. That’s not easy to do, but that’s why there aren’t a ton of non-founding teams capable of delivering significant and directly monetizable growth in general.
Growth mindset says you can only reduce cost by 100%, but can raise revenue infinitely. In an increasingly competitive industry, slow pace will definitively have Compound lose market share.
I think we need to be very aggressive throughout this bull market, securing as many partnerships, as much TVL, and as much velocity both with tokens and deals, as possible.
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Good discussion here.
People need to look at the ask and compare it against the COMP treasury, its a big ask.
Also, how much of the ask is going to AlphaaGrowth margin? Still not answered
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As an early Compound user and a Threshold Network contributor I’ve had the privilege of collaborating with AG and witnessing their actions and magic on different topics and would love to see the same continue. This renewal is an exciting step forward for the community ensuring continued innovation and value creation. Fully supportive of this initiative!
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As an initiative of the Growth Program, I have had the pleasure of working with the AlphaGrowth team for the purpose of Brand Protection and Security for Compound.
I fully support the renewal of the Growth Program and the many projects that are contributing to the longevity of the Compound Brand and Community.
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Hi there - just reading this given the Tally. What country is Aquifer DAO located? What is the entity type?
It seems like a significant amount of funds are proposed to be held by this DAO for the benefit of the Compound community (i.e. you will distribute such COMP as grants, or otherwise return them back to the community if unused). But then the community needs to indemnify you if you are negligent in holding those funds? Does that mean that if you get hacked and you lose our COMP because you were negligent in your own security, we need to pay any losses you incur?
It seems like their is no performance standard you will be held to in the first place, and even if you act really bad, Compound will also cover any expenses you incur because of that? Seems like you can’t lose and don’t have to act well
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