Executive summary
In this proposal, the team is requesting 500 osETH and 500 osGNO in grant funding from the StakeWise DAO to cover the ongoing costs of maintaining and developing StakeWise for the next 12 months. The grant will go towards development salaries, business development and marketing activity, admin, and legal expenses. The team shall provide a quarterly breakdown of the expenditures. This grant will ensure that StakeWise continues bringing new products to market, onboarding new partners, and promoting the protocol despite the recent market downturn.
Motivation
Not everyone knows this, but StakeWise has recently celebrated its 4th birthday (we officially launched on March 8th, 2021).
In those 4 years we grew from 0 to ~270k ETH, went through 2 fundraises, 3 protocol iterations, acquired several high-profile partners, and ultimately made some history. It’s been a fun, but challenging ride, and it was worth it: the protocol is in the best shape it has ever been, with all metrics near an all-time high 
.
Admittedly, SWISE appreciation has been the missing piece, and proposals that aim to fix this are underway, with more to come after Pectra. However, the protocol’s foundation is solid, and we’re excited to continue building on it.
It’s worth mentioning that the “we” is a collection of companies behind the StakeWise front-end, contributions to the protocol codebase, and the operator of nodes for the Genesis Vault(s). For simplicity, we can broadly refer to these companies as “StakeWise Labs”.
Much like the DAO’s own revenue, the revenue of Labs is denominated in ETH and GNO, and is currently driven by running nodes. When converted to dollars, our income fluctuates - sometimes up to 10% on the day. However, unlike the DAO expenses, which are mostly tied to the price of ETH itself, our costs are denominated (and paid) in dollars. In practice, this means that ETH and GNO must trade at a certain level for the development companies to break even - otherwise, reserves must be tapped to close the gap between the costs and revenue.
Recent ETH and GNO price performance have been subpar to say the least. This puts the companies in a tricky situation - one where we are forced to continue drawing on the reserves to keep StakeWise development going, because our revenue is not enough to cover the expenses. As the economic outlook gets more uncertain, we’d like to ensure that covering our expenses is not a problem for the foreseeable future. This brings us to the grant request.
To ensure a smooth operation of StakeWise Labs throughout the next 12 months, we’re requesting a grant of 500 osETH and 500 osGNO from the StakeWise DAO, to go towards covering the operational expenses of remaining the core contributor to the StakeWise DAO. These expenses include development salaries, audit, admin, and legal expenses, a marketing budget, as well as oracle compensation. Here’s the estimated breakdown:
| Expenses | Per month | Annual |
|---|---|---|
| R&D | -$53,000 | -$636,000 |
| Oracles | -$10,500 | -$126,000 |
| Marketing | -$10,000 | -$120,000 |
| Admin, legal, audits | -$20,000 | -$240,000 |
| Total | -$93,500 | -$1,122,000 |
Combining funding with the current income of Labs, we get the following picture:
| Income | Per month | Annual |
|---|---|---|
| ETH nodes | $23,250 | $279,000 |
| GNO nodes | $7,200 | $86,400 |
| Total | $30,450 | $365,400 |
| DAO funding | Per month | Annual |
|---|---|---|
| osETH | $67,917 | $815,000 |
| osGNO | $4,375 | $52,500 |
| Total | $72,292 | $867,500 |
| Net inflows/outflows | Per month | Annual |
|---|---|---|
| Total | $9,242 | $110,900 |
Some comments on the underlying numbers:
-
Comparatively lean operations: our cost base has been purposefully kept as low as realistically possible, running at a fraction of what is spent by similarly sized projects.
-
Room for further price corrections: at the current ETH & GNO price level, the 500 osETH and 500 osGNO budget should allow Labs to stay slightly profitable. However, this is not “profit” per se - any funding unused by the end of 12 months will increase the company’s reserves, extending its runway. However, should the prices fall further, Labs would be able to draw on the “excess” funding to work through the slump.
-
Flexibility is paramount: the current breakdown of costs may change, even if we don’t currently anticipate it. We would like to reserve the right to adjust the costs and spending as necessary, for example, spending more than budgeted on new hires (or less).
Similarly to the breakdown of expenditure towards incentives, Labs will prepare a breakdown of grant’s usage on a quarterly basis.
Considerations
StakeWise Labs have always aimed to keep as much “profit” in the protocol’s Treasury as possible, even forfeiting its own node operating revenue in favour of the DAO for ~2 years (between inception and Dec 2023), and fronting the ongoing expenses for audits and oracles. (For example, audits alone have cost a total of ~$1M over the past 4 years).
This is not a widespread practice - other notable DAOs, like Aave , Yearn , and Lido , have funded the costs of developing and growing their protocols using the Treasury. While we will continue to stay economical with our spending and prioritize DAO Treasury health, the current market environment forces us to prepare for the worst. This means having the DAO funding ready for deployment by Labs at a moment’s notice.
We believe that keeping StakeWise Labs insulated against further price declines will ensure the team can keep its focus on shipping new, revenue-accretive products, and promoting StakeWise via BD and marketing channels.
Implementation
Upon successful resolution of this proposal, 500 osETH would be minted by the StakeWise DAO Treasury wallet address, and transferred to the Labs’ multisig. On Gnosis Chain, 500 osGNO would be transferred to the Labs’ multisig.
JSON for Ethereum
[
{
“to”: “0x20BC832ca081b91433ff6c17f85701B6e92486c5”,
“operation”: “0”,
“value”: “0.0”,
“data”: “0xfc22d0e5000000000000000000000000144a98cb1cdbb23610501fe6108858d9b7d249340000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000002239b5be65c95cc2b”,
“method”: “migrate(address,uint256,uint256)”,
“params”: [“0x144a98cb1CdBb23610501fE6108858D9B7D24934”, “0”, “39459233605090659371”]
},
{
“to”: “0xAC0F906E433d58FA868F936E8A43230473652885”,
“operation”: “0”,
“value”: “0.0”,
“data”: “0x201b9eb5000000000000000000000000144a98cb1cdbb23610501fe6108858d9b7d24934ffffffffffffffffffffffffffffffffffffffffffffffffffffffffffffffff0000000000000000000000000000000000000000000000000000000000000000”,
“method”: “mintOsToken(address,uint256,address)”,
“params”: [
“0x144a98cb1CdBb23610501fE6108858D9B7D24934”,
“115792089237316195423570985008687907853269984665640564039457584007913129639935”,
“0x0000000000000000000000000000000000000000”
]
},
{
“to”: “0xf1C9acDc66974dFB6dEcB12aA385b9cD01190E38”,
“operation”: “0”,
“value”: “0.0”,
“data”: “0xa9059cbb000000000000000000000000f330b5fe72e91d1a3782e65eed876cf3624c780200000000000000000000000000000000000000000000001b1ae4d6e2ef500000”,
“method”: “transfer(address,uint256)”,
“params”: [“0xf330b5fE72E91d1a3782E65eED876CF3624c7802”, “500000000000000000000”]
}
]
JSON for Gnosis Chain
[
{
“to”: “0x6aC78efae880282396a335CA2F79863A1e6831D4”,
“operation”: “0”,
“value”: “0.0”,
“data”: “0xfc22d0e50000000000000000000000008737f638e9af54e89ed9e1234dbc68b115cd169e000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000003fe7c891cd5abe0f28”,
“method”: “migrate(address,uint256,uint256)”,
“params”: [“0x8737f638E9af54e89ed9E1234dbC68B115CD169e”, “0”, “1178846636172981964584”]
},
{
“to”: “0x4b4406Ed8659D03423490D8b62a1639206dA0A7a”,
“operation”: “0”,
“value”: “0.0”,
“data”: “0x201b9eb50000000000000000000000008737f638e9af54e89ed9e1234dbc68b115cd169e00000000000000000000000000000000000000000000003635c9adc5dea000000000000000000000000000000000000000000000000000000000000000000000”,
“method”: “mintOsToken(address,uint256,address)”,
“params”: [
“0x8737f638E9af54e89ed9E1234dbC68B115CD169e”,
“1000000000000000000000”,
“0x0000000000000000000000000000000000000000”
]
},
{
“to”: “0xF490c80aAE5f2616d3e3BDa2483E30C4CB21d1A0”,
“operation”: “0”,
“value”: “0.0”,
“data”: “0xa9059cbb0000000000000000000000006da6b1efccb7216078b9004535941b71eed30b0f00000000000000000000000000000000000000000000001b1ae4d6e2ef500000”,
“method”: “transfer(address,uint256)”,
“params”: [“0x6Da6B1EfCCb7216078B9004535941b71EeD30b0F”, “500000000000000000000”]
}
]
Discussion
Given a significant amount of funds is on the line, we have allocated 21 days towards the discussion and voting on this proposal. Share your thoughts below, and don’t hesitate to ask questions.
Voting
The Snapshot is here: Snapshot