PIP-62 - Velora Governance Task Force

[Mehdi]

I view this initiative as a long-term investment for the DAO. There is no doubt that SEEDGov’s roles and activities have positively impacted both the DAO and its governance processes. Approving this proposal poses minimal risk to the DAO, particularly given SEEDGov’s past contributions, which have demonstrably increased DAO activity. We sincerely admire their dedication and efforts.

That said, I have reservations about whether these efforts will directly translate into improved protocol revenue or positively affect the $PSP token’s short-term price performance. This is where the DAO assumes a more speculative risk. While the initiative holds clear long-term value—as an investment in the DAO’s infrastructure and maturity—its ability to yield short-term protocol performance improvements remains uncertain, even with the Protocol Growth Working Group (PGWG) involved. This is an area we should explore experimentally and monitor closely.

Regarding the compensation structure, the 1.8% revenue-share model, capped at $15,000 per quarter, offers valuable budget predictability, which I value. However, I’d like to raise a few concerns and invite corrections if I’ve misinterpreted any details:

1. Based on current protocol revenue— $1.26M over the last 90 days—the 1.8% performance fee already exceeds the $15K quarterly cap. Given that this initiative prioritizes long-term benefits over immediate results, I propose delaying performance fee payments until the second quarter. The full payments would still be honored, just deferred by one quarter.

2. Since the $15K cap was already reached last quarter, there’s a risk of incentive misalignment. If protocol revenue grows—potentially due to SEEDGov’s efforts—the current structure limits their marginal incentive to drive further growth. as You’ve expressed interest in the positive performance of our token, so I suggest subjecting the performance fees to a vesting schedule, akin to delegate compensation. This could better align SEEDGov’s incentives with the protocol’s long-term success and ensure fairness relative to other DAO actors, such as delegates.

@SEEDGov

In other words, if we achieve the desired impact, with the performance amount in PSP token our incomes can increase (with a cap) according to the increase in the protocol’s revenues, i.e. without increasing the proportion or share of the DAO’s expenses to its revenues, and with the low cap (which is achieved with an increase of only 10% of the protocol’s revenues) our performance incomes will not increase much even if the protocol’s revenues do.

3. Lastly, could you elaborate on how you calculated the 10% figure? Based on my calculations and the mentioned dashboard, protocol revenue was $3.1M over the last 12 months, making 1.8% approximately $55,800 annually—or $13,950 quarterly, close to the $15K cap. It seems an increase of 7-8% in annual revenue (to ~$3.35M) would push the quarterly fee to ~$15,066, hitting your max cap, not 10%. Clarification here would help.

Overall, my concerns center on the performance fees and their calculations. I’d welcome any additional details to address them.