**POLL ADDED** Proposal: Finance Nest (F.Nest) Q4 2021

[Matthew_Graham]

Authors: @Matthew_Graham @ElliottWatts
Reviewers: @prairiefi @AcceleratedCapital @Ahuja @Pepperoni_Joe @Hammad1412
Proposal: Finance Nest

1. Summary

Building on the learnings from INDEX 2.0 and Future of Finance, we are expanding the remit of the Treasury Working Group (TWG) and rebranding it to the Finance Nest (F.Nest).

This proposal requests $60,920 per month or $182,760 per quarter spanning the 3 months from 1st October to 1st January. (INDEX @$35)

2. Challenges F.Nest will address

DeFi is a highly competitive landscape which iterates and adapts quickly. The Index Community has established itself as a leader within DeFi, for this reality to be maintained the Index Coop needs to enable the community to make informed forward looking financial decisions. How we financially structure the DAO, will directly shape the future of the DAO’s success.

Without a dedicated finance team supporting Index Coop growth, we will likely face challenges around:

• Lack of clarity and accountability on spend
  • Index Coop needs to ensure key financial information is clearly reported and allow the community to allocate capital most efficiently to provide data and challenge to ensure the correct initiatives are funded to maximise the growth of Index Coop and/or its products.
• Ineffective management of Operations Account and payroll
  • It is critical for the smooth operation of Index Coop that we have the ability to pay contributors and other expenses in a timely manner and manage Index Coop cash flow, multisig structure and operational expenditure in a risk free and responsible manner.
• Lack of strategic asset allocation and diversity in our Treasury
  • Failure to manage our Treasury represents a major lost opportunity to use our funds productively to generate yields and also protect Index Coop from major financial perili n a market downturn

3. TWG Impact in Q3

• “[TWG] leaders will carry Index Coop successfully through the next 9 month
  • 90% Very High Confidence
• “[TWG] is providing the right level of transparency”
  • 63% Very High Confidence
• “Rate the value provided by [TWG]”
  • 23% Very High Value, 65% High Value, 12% Some value / No Value / Neutral

Other key success from Q3 include:

• Consistent short form and long for article publications
• First Quarterly report was generated
• Backend transaction mapping, cost centres, financial structures all defined and maintenance OPEX reductions realised.
• Onboard Quantitative Finance competency
• Various IIPs covering revenue re-routing, wallet signer amendments and funding of Operations Account
• Defined Diversified Asset allocation strategy for the Investment Account

4. Overview of F.Nest in Q4

To date, a broad range of Financial activity has been undertaken via the Funding Council, POC and TWG. With the changes proposed by the Future of Finance, the Funding Council will be dissolved and Treasury WG will transition to be the Finance WG.

Reflecting this expanded role, the Treasury Working Group structure was changed to reflect the emergence of clear domain specialists within the Finance Working Group (F.Nest). Thus, going forward activities will be split into three distinct verticals which will operate semi-autonomously and be accountable to deliver against their respective objectives and initiatives.

• Accountability
• Operational Funding & Payroll (Operations account multi-sig)
• Treasury (Investment account multi-sig)

Within the F.Nest we allocate owners of specific deliverables who are responsible for ensuring the quality and published in line with expectations. All deliverables produced by the F.Nest are peer reviewed within the working group and discussed during weekly team meetings. A detailed review is performed during team meetings, talking through the specific intricate details of a given topic may take several hours. F.Nest weekly meetings are more deep dive analytical meetings that facilitate the deliverables being drafted. The F.Nest will be co-led by Matthew Graham and Elliott Watts.

Accountability

Operational Funding & Payroll

Investment Account

5. Budget

A detailed breakdown of the monthly spend is shown below:

The total F.Nest spend, using an INDEX price of $35, is equivalent to $60,920 per month or $182,760 per quarter.

6. Communication & Accountability

Accountability

In addition to supporting the efforts detailed with the core areas of the F.Nest, each co-lead is expected to be accountable for the following:

• Financial Working Group vision
• Challenging the forum regarding spend and being a steward of the DAO’s finances
• Representing F.Nest at community calls
• Hosting AMA sessions with the broader community
• Front running and removing blockers enabling work to be performed by F.Nest member
• Providing connections to other communities and internal folks as required
• Managing the progress of Financial Working Group deliverables to the community ie: cadence
• Co-ordinates the F.Nest weekly team meeting
• Co-ordinates the group day to day activities and various initiatives
• Actively contribute and review all Financial Working Group proposals

How will you interface with the community?

• Governance Forum Posts
• Weekly Presentation during Org Work Session Meeting
• Monthly Community call (AMA style)
• Quarter Financial Update/Presentation
• Index Coop account publications
• #Treasury channel in Discord

Vote

Should we create the Finance Nest ?

• FOR
• AGAINST

[lee0007]

Fantastic proposal. Heart emoji does not express how much I love this approach to securing the Coops future. Awesome work Finance team. Thank you

[Matthew_Graham]

G’Day Folks,

It is that time of the campaign. Time to get voting.
This is the “Final Vote”.

Announcement:

• The Final Vote must be announced by the author as a reply to the original post
• This announcement should make clear this is the “Final Vote.”

[overanalyser]

Will the TWG post TWG reports to the forum (i.e. what the TWG has done vs what the coop financials have done)?
I’m not sure I’ve seen such reports from TWG,

[Matthew_Graham]

Hi @overanalyser

That is not a listed deliverable for the Finance Nest.

However, financial reports are published on the forum and F.Nest will report on particular wallet address as outlined in the post above.

[overanalyser]

@Matthew_Graham

That is not a listed deliverable for the Finance Nest.

Why not?

All the other Working groups provide periodic reports on what that have done in the last month / Quarter, what doesn’t TWG?

I know you have been doing reports and presentations on what the COOP’s financials look like. What else has TWG delivered? I think there have been weekly standups with no representation from TWG.

My other comment is directly related to @Matthew_Graham as the #360 INDEX per month does not sound very good value for money for a part-time role within the coop. How do you justify that expenditure? How many hows per week do you spend on TWG activities? From what I’ve seen the majority of your efforts are BD or methodologist related.

Finally, you are listed as a core contributor in the BD proposal for this quarter, is that on top of the $12,775 per month allocated here?

[Matthew_Graham]

HI @overanalyser

F.Nest is a bit unique to other working groups, a lot of content has been published on the forums and all key decisions are run through IIP. F.Nest is not like the FLI pod. As a delegate voter yourself, I am sure you have noticed the numerous IIPs that are finance related and the associated research publications.

If you are asking for a publication that just links in all the publications on the forum then we can take that feedback onboard. The sCoop is a great source of what has happened within Index Coop and searching TWG brings up a lengthy list of publications. There is always the opportunity to IIP through more autonomy to F.Nest and then publish updates.

@overanalyser

My other comment is directly related to @Matthew_Graham as the #360 INDEX per month does not sound very good value for money for a part-time role within the coop. How do you justify that expenditure? How many hows per week do you spend on TWG activities? From what I’ve seen the majority of your efforts are BD or methodologist related.

Spinning this around, how much do you think my contribution is worth ?
I can comfortably say that if I was a purely a financial decision, then the same commitment elsewhere would net a larger return. I would also encourage you to read the section around accountability in the above post. Noting: Time is not rewarded but energy and impact is.

Relative to the Full Timers, most if not all owls are underpaid.

@overanalyser

Finally, you are listed as a core contributor in the BD proposal for this quarter, is that on top of the $12,775 per month allocated here?

I believe all WGL are allowed to contribute at other working groups. Rewards are then discretionally allocated by the respective WGL. The only role which is not rewarded for toil across multiple working groups are those with vesting contracts. If this is an issue, I suggest it be addressed systematically as it is applicable to several WGLs.

[lee0007]

Although not in this context I have shared @overanalyser concerns around fixed stipends across multiple working groups. This was expressed and discussed in the Q4 APWG. There’s obviously at least two different approaches going on and I hope that “accountability for management, oversight and improvement of contributor rewards” will look to provide a single clear direction around multiple vs fixed. Is this a realistic expectation?

[Matthew_Graham]

You are very right and spot on here. The below link details how we as a community are looking to address the double standards and the tiered nature within one of those approaches.

Compensation & Community Ownership - Next Steps

Authors: @jdcook , @Pepperoni_Joe , @DevOnDeFi , @Metfanmike , @anon10525910 , @Hammad1412 , @ElliottWatts , @iluscavia , @bradwmorris Summary This post seeks to outline a holistic redesign of Compensation (salary) and Community Ownership (equity) at Index Coop. It is intended to share the current thinking before additional forum posts & calls occur on these topics that enable us to continue this discussion together. This post is the first of six exploring the comprehensive overhaul of Compen…

Hopefully Q1 of next year, this is all standardised and the playing field is level. Currently, the underlying incentives in the process encourage wage inflation each quarter.

[overanalyser]

@Matthew_Graham

F.Nest is a bit unique to other working groups, a lot of content has been published on the forums and all key decisions are run through IIP. F.Nest is not like the FLI pod. As a delegate voter yourself, I am sure you have noticed the numerous IIPs that are finance related and the associated research publications.

If you are asking for a publication that just links in all the publications on the forum then we can take that feedback onboard. The sCoop is a great source of what has happened within Index Coop and searching TWG brings up a lengthy list of publications. There is always the opportunity to IIP through more autonomy to F.Nest and then publish updates.

I see lots of posts and IIP’s but I’m not seeing delivery.

Compared to reliance on the scoop, a periodic WG report allows everyone to see what IMPACT a WG has had and to provide WG specific feedback and challenge.

In the last Quarter, we have had deep and detailed discussions with our partners around streaming fees and how we move forward. I’ve seen extensive contributions by members of:

• BD (@BigSky7)
• IB (@fallow8)
• POC (@Pepperoni_Joe)
• Automated indices (@afromac )
• PWG (@Cavalier_Eth )
• AWG(@JDcook)

I’ve not seen any deep involvement from TWG /F.Nest.

These are critical discussions that determine the profitability of our products and thus the long term sustainability of the coop.

I see F.Nest being very concerned about cost control and asking for justifications / more analysis on multiple fronts. But I’m not seeing similar scrutiny of methodologies fee splits which will have a longer impact on our sustainability.

@Matthew_Graham

Spinning this around, how much do you think my contribution is worth ?

@Matthew_Graham

Noting: Time is not rewarded but energy and impact is.

To be honest, I value your efforts on BD significantly higher than those on behalf of TWG/ F.Nest. When I saw you listed as a core contributor in the BD Q4 proposal, I was wondering if it was signalling a transition to a more BD focused role for the TWG position you entered 12 months ago as the coop was growing.

{Edited to remove final paragraph}

[0x_Dev]

I think @Matthew_Graham ’s value is clear and fear we are often far too penny wise round here. His time contributed and results driven are large in TWG and BD in my view. He’s built the TWG machine, seems to work through the night and I’m happy with the information I receive about TWG and our finances. TWG has helped Coop become a reference point DAO for financial management and reporting. I also understand TWG members also rate and back Matt.

We can disagree about styles and approaches from time to time (he and I have 1-1s disagreeing on things), but that’s a separate issue.

Aligning comp structures is also a separate issue - not that we shouldn’t look at it. I want Index 2.0’s Comp and Tokens area to optimize that - and drastically improve the DAO for those that give it so much time and value.

Separately, some of this thread is also guilty of forum bombing and could have been done direct 1-1 or in small groups before landing here in this pretty pointy manner. I’m not sure it’s value adding or looks good to observers.

[MrMadila]

@overanalyser

{Edited to remove final paragraph}

{Resolved - issue closed}

[mel.eth]

@overanalyser

Compared to reliance on the scoop, a periodic WG report allows everyone to see what IMPACT a WG has had and to provide WG specific feedback and challenge.

There’s a lot of discussion going on here and this response is meant to touch on this single point. As the sole decision-maker to date on what gets included in sCoop I do not in any way see it as a tool to hold WGs or Owls to account.

Comprehensive goals since inception:

@mel.eth

The sCoop will endeavor to:

• Provide a summary of WG meetings within a broad organizational context for those that may not already have it, or need to step away for a few days without worry.
• Surface calls-to-action and opportunities for cross-WG engagement.
• Foster engagement in IC initiatives, outreach, activities, and governance.
• Link to resources, reducing the friction required to view posts and engage in governance.
• Incorporate contributor feedback to improve the product and make it as useful as possible for the intended audience: Index Coop Contributors.
• Memorialize Coop happenings for future reference.

That said, I believe verifiable self-reporting to be the best form of initial insight re an accountability structure, and would be keen to have something standardized across WGs for this purpose. To date it seems as though the 3- or 6-month WG funding requests, and community approval of same via forum polls, is currently the only required reporting function other than those stated within individual WG proposals; I think there’s room for improvement here across the board.

In relative terms I find the reporting of IC accounts and wallet activities to be adequate, but will note that TWG does not hold public WG meetings, and as such there is no coverage in the newsletter other than highlighting forum posts. There is also a less-obvious path to contribution within this WG than others (EWG is similarly not public-facing, but does promote the Wizardry onramp).

I’m admittedly biased given that I manage a newsletter that attempts to curate the content of WG meetings, but I tend to find that having an opportunity for the community to engage at regular intervals can mitigate dissonance; the organizational equivalent of, “we vibin’ fam?” I’m speculating, but if there’s a sense that there’s not enough visibility and opportunity for feedback on TWG efforts, establishing a community call at regular intervals may help; effectively getting the regular bilateral communication levels up to those of other WGs.

Hoping these personal observations are helpful here; I’ve voted FOR and I’ll help support this WG in any way I can.

[Matthew_Graham]

Hi @mel.eth,

Just noting on the transparency side of things. We did include the below and intend to implement it soon.

@Matthew_Graham

• Representing F.Nest at community calls
• Hosting AMA sessions with the broader community

Regarding joining the F.Nest / hiring as such, we have onboarded a few folks this year with very specialised skill sets and some through referral basis, some plucked from the discord. If F.Nest intends to hire, we pass the request to TOCWG and put feelers out.

[Pepperoni_Joe]

Regarding transparency, across three verticals the F.Nest proposal has identified:

• 30+ initiatives that they will be delivering on
• 20+ Key Results / KPIs to validate the success of each vertical

In my eyes, this is the most comprehensive and results orientated proposal we have seen to date - and @Matthew_Graham has led the thinking on this new proposal template designed expressly to improve accountability.

This new approach is experimental. However, as Q1 rolls around, I’m sure F.Nest will be sharing updates on how they are progressing on the listed initiatives and tracking against their key results.

I think this discussion may have highlighted that more regular public calls could be helpful. Personally, I would love to see @prairiefi share more about the wizardry he is doing with the Operations Account, or @ElliottWatts to talk through the changes he is making to our reporting and accountability capabilities. More face to face dialogue is (nearly) always for the better!

On comp, as others have said… this is an issue… we all know it’s an issue… we are taking steps to address it as part of Index 2.0… stay tuned

[lee0007]

@Pepperoni_Joe

In my eyes, this is the most comprehensive and results orientated proposal we have seen to date

100%

@0x_Dev

Separately, some of this thread is also guilty of forum bombing and could have been done direct 1-1 or in small groups before landing here in this pretty pointy manner. I’m not sure it’s value-adding or looks good to observers.

Not weighing in here on “who said what” but to share a different perspective IMO constructive conflict is a sign of a healthy culture.

Conflict is an inevitable part of human nature. Dealing with conflict is a matter of interpersonal communication skills, it’s something we can all work on.

I feel that voicing a variety of opinions in a public forum also shows observers that we are

1. an engaged community
2. where every voice matters &
3. open to addressing concerns in a transparent way

On interpersonal conflict - A Poison Tree by William Blake

[sixtykeys]

Late to the party, but I am voting FOR. Fully in support of the Finance Nest, and their extremely comprehensive WG proposal. @Matthew_Graham and his team are currently the most active participants in Index Coop governance and are always striving to bring value to the DAO. @ElliottWatts makes reading financial reports a pleasure, and I’m especially a fan of the new video format, hoping to see more of that.
As has been suggested by others before me, a public facing call would be very welcome; just to give the broader community a high level understanding of what the Finance Nest is up to behind the scenes.

[LemonadeAlpha]

Moved comment to more appropriate post