• Proposal

  • OIP-41 - Launch Olympus Incubator program

OIP-41 - Updated Proposal - Olympus Incubator

Please note further minor amendments separating the project budget from the DAO OHM and bringing advice and assistance of DAO members under the program budget at 10% of program funds. Please note major amendment concerning the solution to the impracticality of community AMA's in some cases.

Summary

Seek authority from the community to launch an Olympus Incubator program - governed by a program committee of known DAO contributors involved in the establishment of this project.

The program will incubate new protocols that utilize or build on OHM or other Olympus products. In exchange, they will provide Olympus a share of their governance token - as negotiated by DAO contributors and approved by the program committee. Wherever possible, the community will have the opportunity to engage with a protocol at the time of approval through an AMA - and will have the opportunity to bring an OIP to remove a program participant if they believe it is in the community's interests to do so.

As a part of the proposal, the program committee seeks authority from the community for a separate budget of $3.5 million from DAO reserved OHM - to be dispersed using current multisig signers managing DAO funds to:

  • distribute a maximum of up to $250K in DAO reserved OHM per an incubated project as directed by the program committee from time to time, over the life of an incubation.

In addition, up to 10% of the program budget may be dispersed to:

  • DAO contributors (including committee members other than for participating in approval meetings) assisting the committee in administering the program

  • DAO contributors providing advice & assistance to incubated protocols.

Unused funds will be returned to the DAO OHM pool should the program not continue.

Motivation

At our current size and market cap we have the bandwidth to provide outsized value to new budding protocols with:

  • community bootstrapping

  • exposure and promotion

  • advice and assistance

  • early funding

  • access to our launch and liquidity products

  • early usage of a protocol by Ohmies

Since we never sell tokens we receive to our Treasury and have large scope to assist with early liquidity - we make an ideal early partner for projects instead of having to sell out to mercenary VC capital.

Investing resources early in a promising project - in exchange for a portion of their governance token - provides outsized returns for OHM holders through increased backing value of each OHM.

The main agenda of this program is uses, integrations, liquidity and treasuries in OHM - we are a currency and need to be used. Of course, there is great potential upside for the Olympus treasury also - for example, if we paid $100K in OHM and received 5% of a protocol's governance token - then that protocol goes on to achieve a $500 million protocol fully diluted valuation - the DAO would have turned $100K into $25,000,000 in Treasury assets - a 250x return. The return on governance tokens is additional to the main game which is use of OHM.

We have identified and received in-principle agreement with a launch partner for this product - which can proceed to community consultation if this passes governance.

Proposal

Approve Olympus Incubator program for a trial period of 90 days with a budget of $3.5 million from DAO reserved OHM. The program will be overseen by a committee of 7 DAO contributors known in the community. These contributors have been involved in setting up the program they are:

  1. JaLa

  2. Glueeater

  3. Tex

  4. Wollemipine

  5. Indigo

  6. Unbanksy

  7. Mark11

As a part of the proposal, the program committee seeks authority from the community for a separate budget of $3.5 million from DAO reserved OHM - to be dispersed using current multisig signers managing DAO funds to:

  • distribute a maximum of up to $250K in DAO reserved OHM per an incubated project as directed by the program committee from time to time, over the life of an incubation.

In addition, up to 10% of the program budget may be dispersed to:

  • DAO contributors (including committee members other than for participating in approval meetings) administering the program

  • DAO contributors providing advice & assistance to incubated protocols.

Unused funds will be returned to the DAO OHM pool should the program not continue.

At the end of the 90 days, the program committee will provide a report concerning the program - including recommendations on further measures to include the community in the selection of projects moving forward and any other improvements that could be made to the program.

After receiving feedback from the community, the program committee will propose the parameters for an ongoing program and then proceed to a governance vote. During this process, the program committee and DAO will continue to be able to onboard projects and work with projects already onboarded - as long as it remains within the approved $3.5 million expenditure cap.

The primary considerations of the committee for approval of a project will include:

  • Prospects of success of the project including development to date

  • Value derived to OHM holders through utility or integration of OHM or other Olympus products

  • Qualifications, experience and reputation of the founders/team

  • Resources required of the DAO compared to the in-principle terms-of-agreement for the project to be included in the program

Secondary considerations will include:

  • Connection to, and reputation in, the Olympus community of the founders/team

The program will provide the following:

Capital

  • Allow the DAO to distribute a maximum of up to $250K in OHM per an incubated project over the life of the incubation from the DAO reserved OHM.

Distribution

  • Exposure and coverage in our social media and discord servers.

Go-to-Market Expertise

  • Recruitment assistance from our Olympus community network of DeFi natives

  • Advice and assistance when required from highly skilled Olympus DAO members - with expenses covered by Olympus DAO - including community building, content creation, marketing, front-end and backend assistance, advice and review.

End-to-End Liquidity Needs

  • Priority access - with reduced or waived fees - to our upcoming launch and liquidity products.

Terms

  • The incubated protocol will provide a percentage of their governance token - as negotiated by the DAO contributors and approved by the program committee.

Example process for onboarding a project to the program

While the selection and onboarding will be iterative and improve over time - an example of how an onboarding will happen is as follows:

  • A project fills out an onboarding form requiring it to disclose specific information

  • The form is reviewed including review of pitch material and involvement in past projects by the DAO contributors

  • If there are no red flags, the project will be invited for a discovery call - this will include a discussion of the project’s ambitions, roadmap, development to date, tokenomics, current token allocations and the type of arrangement that would make sense for the project if it were to be accepted for incubation. This will be led by the DAO contributors and include at least one committee member wherever possible

  • The DAO contributors will prepare an assessment of each project including:

    • Prospects of success of the project including development to date

    • Value derived to OHM holders through utility or integration of OHM or other Olympus products

    • Qualifications, experience and reputation of the founders/team

    • Resources required of the DAO compared to the in-principle terms of agreement for the project to be included in the program

    • Connection to, and reputation in, the Olympus community of the founders/team

  • The committee will meet on a regular basis to select program candidate’s inclusion in the program in-principle

  • Following in principle selections, the terms of the incubation would then be settled by the DAO contributors and approved by the program committee.

There has been a lot of debate about the appropriate mechanism for community inclusion in the selection of projects. There are good reasons to include the community in a decision-making process:

-it is the ultimate authority of Olympus

-community buy-in to projects will drive attention and engagement to the incubated project

-it will ensure the committee is not including projects that are not approved by the community.

There are also a number of considerations that make it impracticable to engage community decision making in every case:

-making an informed decision may require access to information that is subject to a non-disclosure agreement

-it may not be in the incubated project's best interests to publicly appear at an AMA to discuss the innovation or design of the protocol at the time of the commencement of an incubation

-if projects are regularly joining the program it may lead to clustering of required AMA's and community decision-making fatigue leading to lower engagement in other important decision-making processes.

I propose the solution to this is that the committee undertakes to require an AMA and high-level disclosure of the terms of agreement with an incubated protocol - at the earliest available opportunity - taking into account the interest of the incubated protocol's success. This will often be at the initial time the incubation is approved by the program committee.

Projects approved by the committee will be optimistically accepted into the program - with the caveat that at any time any member of the community may introduce an OIP to remove a protocol from the program if they believe it is in the community's best interests to do so.

Financial Risk Controls

Some of the proposed financial risk controls include:

  • Staggering seed capital through milestone payments

  • Payments being made from an Olympus multisig wallet to a project multi-signature wallets with a majority of known entities - including pseudonymous entities with sufficient reputation

  • Preference for dealing with parties where their identity is known or they are pseudonymous entities with sufficient reputation

  • Use of SAFTs where practicable

  • Regular accounting to the community of funds dispersed by the program and compliance with financial risk controls

Reputational Risk Controls

Some of the proposed reputational risk controls include:

  • A morality clause in the agreements to prevent projects bringing Olympus into disrepute

  • Preference for project founders/teams with industry reputation

  • Preference for dealing with parties where their identity is known or they are pseudonymous entities with sufficient reputation

  • Requirements for audit/code-reviews of new codebases used before main-net release

  • Regular accounting to the community of compliance with reputational risk controls

Polling Period

  • After 24 hours of further community consultation on the proposal, it will proceed to a Snapshot vote at 06:00 UTC on 06/11/2021 until 06:00 UTC on 09/11/2021.

Vote

Yes - approve Olympus Incubator program administered by the DAO

No - do not approve Olympus Incubator program at this time

Does the community approve Olympus Incubator program administered by the DAO?

    Fully in support of this. Olympus Incubator will allow us to build relationships with protocols from an early stage, and work on mutually beneficial partnerships right from the get-go. I see these partnerships adding tremendous value to the Olympus ecosystem.

    Many protocols are already excited about the idea of working with Olympus, who are seen as an industry innovator and emergent blue chip diamond hand org. Give the apes what they want!

    Nice work team.

    Full support! +EV for everyone. For projects, seed funding and the immense benefit of a fasttrack into the Olympus ecosystem (and usage by Olympus protocol itself). For Olympus, developing trust and participation in forming the products and services from an early stage will be highly valuable.

    Does DAO vote before allowing each new protocol into the incubator?

      I love the general idea of an Olympus incubator program, but there is no mention of risks in this proposal, and the breakdown of costs to the DAO is very high level. At minimum we need an estimate of how much total it will cost the DAO to incubate each project. So far you've mentioned $250k but this doesn't account for DAO time which is a specified service we would be offering.

      What are the criteria for incubating a project? Which ohmies are deciding whether a project gets accepted or rejected? How long is an incubation period going to be? How many projects will the DAO take on at once? Who will have visibility of the work? Do we have an expected ROI and how will this be measured? Or do we have another measure of success? Or do we have a max cost we are willing to reach before we cut a project? I agree with the benefits mentioned but they are broad and fairly intangible.

      The idea itself is great and I very much want to vote yes. But there is a lot of detail missing from this proposal.

        Fully support this proposal, huge opportunity for OlympusDAO and ohm to make a difference in the industry.

        Voting in favor of this as I think one of the best ways to make OHM a reserve currency is to help launch useful platforms and protocols which treat it as one. However, before I would vote in favor at the Snapshot level I would need to know what the process would be for how the protocols are decided on. Does each potential one get its own OIP, or will there be a discord channel/forum for it, or something else entirely? A step by step explanation would be good.

          kleb Thanks Kleb - because each incubated project will be unique and have differing negotiated agreements I don't think putting to many strictures in place at outset is desirable.

          As a DAO all the agreements will be public and I am sure receive rightful scrutiny - the DAO will track any payments and assistance provided to projects and report back to the community. Over time processes and policies for dealing with the program will be developed - but we have to have room to see what works to begin with.

          As the level of assistance required and size of grants will vary from project to project so will the amount of governance token the Olympus Treasury will receive - this will all be by negotiation.

          We are probably not going to get it right every time and some will think we got a good deal and others not - each agreement will be negotiated by the partnerships contributors and approved by Strategos.

          If after allowing the program to run for a few months the community wishes to put certain strictures in place or decommission the program - they can of course do so by OIP vote.

          In response to your specific questions:

          1. So far you've mentioned $250k but this doesn't account for DAO time which is a specified service we would be offering.

            Advice and assistance carries with it certain inferences about the amount of time required and, as it would be remunerated in comparison to the ordinary compensation, it would be minimal if the assistance is a small part of their overall roll in a given week. I imagine it would only amount to a few hours a week from several DAO members depending on the advice or assistance required - it would of course vary from time to time, maybe less at the start but more in the week before they launch.

          2. What are the criteria for incubating a project?

            The criteria is maximizing the benefit to Ohmies - this will depend on the estimation of the value of return to the DAO Treasury from the project governance token received or other strategic benefits it may provide for example building on top of OHM or increased utility for OHM.

          3. Which ohmies are deciding whether a project gets accepted or rejected?

            The partnerships contributors will negotiate the agreements and they will be approved or rejected by Strategos. Any one is free to join the DAO and get involved in the partnerships team.

          4. How long is an incubation period going to be?

            This will vary from project to project - it may be 1 month or 6 months - it will be by negotiation and, I imagine, affect the size of the share of governance token received by Olympus.

          5. How many projects will the DAO take on at once?

            This will no doubt vary from time to time - but I would say we wouldn't accept new projects if we don't think we can deliver value to them or that we can't maintain our reputation because we have taken on too many.

          6. Who will have visibility of the work?

            Given the sensitive nature of new projects the current thinking is we will limit it to the person managing the incubation, Strategos & Core, and whoever is required to assist. We will be transparent with the community on the amount of assistance we are providing to projects.

          7. Do we have an expected ROI and how will this be measured? Or do we have another measure of success?

            The ROI will be in the value of deposits of governance tokens to the Olympus Treasury, any fees from our products (this are likely to be low or waived given our interest in an incubated projects success) and other intangibles like utility from OHM and use of OHM as a liquidity pair or holdings in the project's Treasury. It probably won't be useful to measure until sometime after the first few projects go live and have had time to mature.

          8. Or do we have a max cost we are willing to reach before we cut a project?

            Yes $250K or where, after a period of time, the DAO judges that the project is not likely to be viable without unreasonable further expenditure of contributors time and energies.


            There is a little bit of trust required from the community for the DAO in approving the program - but the incentives are aligned for the DAO to maximize the value for the community. Being given the bandwidth to conduct the program nimbly as we get it up and running is very valuable - so we can find what works without having to regularly come back through governance which is very time consuming and diverts a lot of resources.

          • kleb replied to this.

              ProofofSteveGM

              Thanks Steve - the project onboarding will be negotiated by the partnerships contributors and approved by the Strategos - given incubations may be occurring quite frequently I don't think it is desirable for it to come through an OIP process or similar. Additionally, going through an OIP process or similar would likely require the disclosure of confidential information, for the community to be able to usefully reason about whether to agree to a potential project joining the program and any terms of agreement. The diversion of resources and contributors time to come through governance would be quite an additional cost to the DAO in a very competitive landscape. You, having run the gauntlet more than once, know the unseen hours it takes.

              The incentives of the DAO are aligned to maximize value to Ohmies - and Strategos are best placed to reason about the value and value-add given they have most visibility to see the road ahead. Having said this of course the DAO will not always get it right and some will think we got a good deal or a bad deal depending on each agreement. The DAO members will have to wear that in the proposed process of negotiation by partnerships team and approval by Strategos.

              The DAO will be transparent about the agreements, the assistance, and financial disbursements - if the community would like further oversight or strictures in place over the program - an OIP can be made at any time. I think this will be a matter taking a chance trusting that the DAO will get it right and of it building up trust with the community in relation to the program - or not getting it right and rightfully getting reigned in. I think it's worth the risk.

                  siainsin

                  Hi siansin - the process will be for the negotiations to be done by the Partnerships team and approved by Strategos - the DAO will be transparent in the agreements, the assistance it provides and the financial cost of the program. The community have ultimate oversight of the program through the OIP process.

                    Mark11 That's all totally valid and reasonable. But I'd like to suggest that in the Snapshot vote, you include an example of how exactly the intake process works. We did this for the bug bounty OIP recently. A literal 1, 2, 3 detailing how a request is received, how it is approved, and who approves it.

                        As the DAO scales and grows, this is an exciting time to also support new entrants into DeFi.

                        I am of heavy support!

                        i really like this proposal and i think we can hold a ohmers hackthon

                        Extremely exciting! The first steps into becoming the bank of DeFi. You love to see it.