From its inception, mStable was designed as a decentralised protocol and DAO governed my Meta token holders. Our initial venture investors purchased Meta tokens very early in the protocol’s lifecycle; many of these investors now actively govern the protocol. Until this point, mStable core operations and contributors have been funded by their investments, which totalled c. US$1.5 million. mStable’s core contributor salaries and every other related fiat expense has been funded from this pool of funding (legal, accounting, security audits, etc.)
The pool of funding from venture investors is almost used up and in order for the current contributors to continue building and growing mStable, funding is required. The intention of this forum post is to begin a discussion with Meta Governors to:
- Begin the exploration of a new, more decentralised method of funding mStable core contributors via the mStableDAO
- Create a new sub-DAO within the mStableDAO, that is responsible for authorising payments to core contributors on behalf of Meta Governors along with other funding requests to other destinations (such as the new GrantsDAO). The sub-DAO would have the following characteristics:
- 2/3 signer structure
- Made up of existing signers of the mStableDAO
- Elected by the current signers of the mStableDAO
- Funding amount approved by Meta Governors
- Commitment to transparency reporting. We propose this to take place quarterly.
- Seek Meta Govenor authorisation to fund this sub-DAO with a 12 month runway for core-contributors and critical operations such as smart contract audits
The current core contributors are as excited as ever to serve Meta Governors to ultimately build an enduring pilar of decentralised finance infrastructure.
Funding breakdown and destinations
@jwpe as head of operations and project co-lead has calculated a projected burn rate for the next 12 months of mStable’s operations with a fully built out team that factors for:
- New hires across engineering, BD, Marketing, Community management, and DAO operations
- Salaries in line with DeFi market expectations to retain talent
- Funding set aside for future security audits
- A “buffer” to manage uncertainty for the next 12 months of funding.
In total, the projected annual burn rate is approximately 2.08m USD, with the vast majority of this going toward salaries, and includes buffers for unforeseen expenses. Broken down, this includes:
- Current contributor salaries - 997,000 USD
- Budget for future hires - 610,000 USD
- Office space, legal, accounting, other operational expenses via operational entities - 274,600 USD
- Security audits - 200,000 USD
Funding request broken down by area of responsibility
Funding request broken down by current vs. future hires
We are aware that this is a material request to make of the mStableDAO and Meta Governors. Should this funding request be granted, there will be a commitment to retrospective quarterly transparency reporting so that all stakeholders in the mStable ecosystem can scrutinise how funding is spent and allocated by core contributors. Projects like Yearn have led the way in this style of reporting, and we will seek to emulate their level of transparency.
Should this request be approved and the sub-DAO be funded, funds will initially be distributed to up to four destinations:
D44 Ventures UG, a Berlin-based software development company founded by three mStable core contributors. It is currently contributing to mStable’s core development. The entity hires software engineers and soon will be hiring business development professionals to help scale mStable. Importantly, D44 doesn’t own these areas but rather is a core contributor to them. More granular information about D44’s function can be found here.
Gordian GmbH - a Swiss based software development and business consulting company that is currently being set up by an mStable core contributor. The entity plans to contract software engineers and business professionals to the mStableDAO.
Barnem Ltd, an operational and services company. It is responsible for handling mStable’s fiat operating expenses, fiat invoicing, organising core contributor work processes, and assisting with community growth and culture. More granular information about Barnem’s function can be found here.
Directly to core contributors via Sablier stream. Core contributors have been given the option to opt-into receiving their compensation directly via Sablier stream from the DAO. Those who opt into receiving a stream will not be compensated for their work from either entity listed above.
We thank all mStable stakeholders far for their continued support, and hope that this funding request presents a clear sense of the core contributors’ ambition and commitment to mStable’s future. We hope that we are trusted by the mStable ecosystem to deliver on the vision of making mStable a piece of public financial infrastructure fit for the world.
Note on Previous Swiss Association funding commitment
Please note that we are requesting that this proposal supersede the USD funding request for the Swiss-based mStable Association, approved here. This is because the non-action letter from FINMA has not yet been approved, meaning it is not able to fund contributors through grants from the Association as of yet. Given this, and the need to continue to fund mStable’s development, we are proposing that the Association’s funding would need to be subject to another Meta vote following the possible FINMA non-action letter should Meta Governors and the community feel it is necessary. The above structure is designed to be effective without the mStable Association.