[BIP-20] Funding Proposal for Orb Collective The Balancer Foundation is pleased to share the

[BIP-20] Funding Proposal for Orb Collective

<p><em>Authored by Tristan, Sean, mkflow, and Xeonus</em></p>
<h1>
<a name="summary-1" href="#summary-1"></a>Summary</h1>
<p>As a recap, on 13 April 2022, a <a href="https://forum.balancer.fi/t/proposal-incorporation-of-the-balancer-foundation/2989">proposal <span>19</span></a> was brought to the BalancerDAO (or the “DAO”) to incorporate the Balancer Foundation (or the “Foundation”). The Foundation provides the DAO with an additional mechanism for executing work, furthering Balancer’s decentralization goals, and building resilience across the Balancer Ecosystem.</p>
<p>The Balancer Foundation is a traditional legal entity that is directed by the DAO. It helps create a sustainable environment where many groups of people can participate, and provides, among others, two primary benefits:</p>
<p>It allows the DAO to operate at a larger scale and engage with service providers who require formal contracts. In addition, for example, it intends to establish a banking relationship to pay for certain service providers that do not accept crypto.</p>
<p>It encourages further decentralization for the Balancer Ecosystem because this entity, at the direction of the DAO, can leverage other teams to execute work that can further the adoption of the Balancer Protocol – for example, it could engage business development or tech providers.</p>
<p>In short, the Balancer Foundation acts as an agent for the BalancerDAO in the structure of the traditional business world.</p>
<p>The Balancer Foundation operates within a formal environment (The Foundation Companies Act) in the Cayman Islands and thus brings protection and certainty that comes with formal organizations.</p>
<p>Running a Foundation Company comes with certain real-world costs and financial reserve requirements. These are laid out below, first in summary and then in detail for reference.</p>
<h2>
<a name="specification-foundation-expenses-and-reserves-2" href="#specification-foundation-expenses-and-reserves-2"></a>Specification - Foundation Expenses and reserves</h2>
<p>This proposal is created to seek funding for the Balancer Foundation for four quarters, effective April 2022 running through March 2023, and a self-insurance reserve.</p>
<h3>
<a name="foundation-expenses-3" href="#foundation-expenses-3"></a>Foundation Expenses</h3>
<p>The summary below reflects the proposed budget for these four quarters, to be sent in quarterly payments from the DAO. Each quarter an update will be provided via Discourse. If budget changes are requested they will go to a snapshot vote. If no changes are requested, this proposal will serve as the governing decision.</p>
<p>The Foundation’s fiscal year runs January to December, so April / May /June is the second quarter of fiscal year 2022, although it is the first quarter for which funding is requested.</p>
<ol>
<li>Q2 FY22 - USDC 32,941 - actual expenses incurred through the end of May 2022 and forecast for June 2022 - immediate payment requested</li>
<li>Q3 FY22 - USDC 67,919 - for transfer 25 June 2022</li>
<li>Q4 FY22 - USDC 67,969 - for transfer 25 September 2022</li>
<li>Q1 FY23 - USDC 78,384 - for transfer 15 December 2022</li>
</ol>
<p>The table below shows the applicable expense line items by quarter. Descriptions for each line item are included under the “Detail” section further below.</p>
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<h3>
<a name="foundation-self-insurance-reserve-4" href="#foundation-self-insurance-reserve-4"></a>Foundation Self Insurance Reserve</h3>
<p>As part of this proposal, we are asking BalancerDAO to hold the equivalent of US$500,000 as a self-insurance reserve, earmarked for a year and to be revisited after a year. The reserve can be maintained in BAL tokens given current market conditions, but must at all times be available to the Foundation should it be needed, and must be maintained at an equivalent value of US$500,000. More on this reserve requirement can be found in the “Detail” section below.</p>
<p>Note: the proposal is for funding at the Balancer Foundation level, it does not include funding for:</p>
<ol>
<li>Balancer OpCo Limited, the British Virgin Islands (BVI) subsidiary and operating company that will house the front-end development team for BalancerDAO,</li>
<li>Other third-party service providers to the BalancerDAO, such as Orb Collective and Kolektivo Labs.</li>
</ol>
<p>Proposals for funding these three entities will follow separately.</p>
<h1>
<a name="eth-address-to-receive-funds-5" href="#eth-address-to-receive-funds-5"></a>ETH Address to Receive Funds:</h1>
<p>0x3B8910F378034FD6E103Df958863e5c684072693</p>
<h1>
<a name="detail-6" href="#detail-6"></a>Detail</h1>
<p>For reference, please see below descriptions of the individual line items.</p>
<h2>
<a name="annual-secretary-fee-7" href="#annual-secretary-fee-7"></a>Annual Secretary Fee</h2>
<p>Under Cayman Law, a foundation company must at all times have a secretary who is a ‘qualified person’ (i.e. a person licensed or permitted under the Companies Management Act to provide company management services). The secretary has a duty to ensure that the company complies with applicable Cayman Islands legislation governing anti-money laundering and counter-terrorism financing.</p>
<p>Neither the secretary fee nor the registered office fee includes the preparation of minutes and resolutions. The Foundation will prepare these for typical matters but might seek assistance from Campbells if complex matters arise.</p>
<p>These fees are due in January each year.</p>
<h2>
<a name="registered-office-and-registrar-of-companies-fees-via-campbells-corporate-services-cayman-8" href="#registered-office-and-registrar-of-companies-fees-via-campbells-corporate-services-cayman-8"></a>Registered Office and Registrar of Companies fees (via Campbells Corporate Services Cayman)</h2>
<p>Annual registered office and registrar fee – US$2,915.12, which consists of:</p>
<ul>
<li>
<p>Registered Office fee of US$ 1,495.00</p>
</li>
<li>
<p>Beneficial Ownership Reporting and Register Maintenance Fee of US$225.00</p>
</li>
<li>
<p>Economic Substance Notification Fee of US$125.00</p>
</li>
<li>
<p>Registrar Annual Return Fee of US$853.66</p>
</li>
<li>
<p>Supplementary Registered Office License Fee of US$91.46</p>
</li>
<li>
<p>Sundry Disbursements of US$125.00</p>
</li>
</ul>
<p>Includes:</p>
<ul>
<li>
<p>providing the registered office and registered agent</p>
</li>
<li>
<p>maintaining the statutory registers</p>
</li>
<li>
<p>preparation and submission of annual returns</p>
</li>
<li>
<p>filing economic substance notifications</p>
</li>
<li>
<p>maintaining the UBO register and reporting on the same</p>
</li>
</ul>
<p>These fees are due in January each year.</p>
<h2>
<a name="additional-campbells-corporate-services-costs-9" href="#additional-campbells-corporate-services-costs-9"></a>Additional Campbells Corporate Services costs</h2>
<p>Any legal advice that may be requested from time to time will be charged on a time spent basis. Any additional corporate requests (for example, requests for certificates, certified documents, updates to registers, filing changes, mail forward, etc – these are all in addition to the annual fees) will also be charged separately.</p>
<h2>
<a name="governancesupervisory-services-10" href="#governancesupervisory-services-10"></a>Governance/Supervisory Services</h2>
<h3>
<a name="non-executive-director-and-supervisor-responsibilities-11" href="#non-executive-director-and-supervisor-responsibilities-11"></a>Non-Executive Director and Supervisor Responsibilities</h3>
<p>Under the Foundation Companies Act, 2017 and the Memorandum and Articles of Association of the Balancer Foundation, the Foundation is required at all times to have at least one Supervisor who is able and willing to supervise the management of the Foundation Company.</p>
<p>“Supervisor”, for a foundation company, means a person, other than a member, who under the foundation company’s constitution has an unconditional right to attend and vote at general meetings, whether or not the person has supervisory powers or duties.</p>
<p>The non-executive director responsibilities are:</p>
<ul>
<li>To act as the Chairperson for the purposes of board meetings (to the extent the other board members do not wish to have this rotated to them), to delegate matters to the company secretary, and to ensure appropriate board packs and documents are prepared by the secretary or relevant Foundation officers or employees or contractors</li>
<li>To act as the Supervisor for the Foundation and to carry out the tasks of the Supervisor under the articles of association of the Foundation</li>
<li>To work with the wider board of directors to:
<ul>
<li>set the direction for the foundation and its business with the board of directors;</li>
<li>set an agenda for board meetings;</li>
<li>further the growth of the Balancer DAO as appropriate</li>
</ul>
</li>
<li>Along with other board members to select and remove directors where appropriate</li>
<li>Along with other board members, oversee efforts to support and grow the Balancer ecosystem including seeking funding and setting budgets, establishing the Foundation’s efforts to further its mission</li>
<li>Along with other board members, oversee the Foundation CEO, the Foundation and the BVI subsidiary</li>
<li>Where necessary to execute contracts and agreements for the Foundation and BVI Subsidiary with or in the stead of the executive director</li>
<li>Set the tone to involve the Balancer ecosystem in developing long-range programs to support and increase all types of contributions to Balancer projects</li>
<li>Set the tone to harmonize the ecosystem working with the board, the service providers, and projects and adjacent foundations to find opportunities to collaborate and reduce confusion.</li>
</ul>
<h3>
<a name="community-board-member-duties-12" href="#community-board-member-duties-12"></a>Community Board Member duties</h3>
<p>The Directors have ultimate responsibility for the management of the Foundation. In particular, the Director’s responsibilities will include:</p>
<ul>
<li>
<p>complying with all reasonable requests, instructions and regulations made or given by the Board (or by any duly authorized committee thereof) and give to the Board such explanations, information, and assistance the Board may reasonably require</p>
</li>
<li>
<p>attending all meetings of the Board in person or by video/phone; provided that the dates of such meetings have been communicated to the Director by the Company or its corporate secretary, as applicable, with reasonable advance notice; and provided further that the Director may not be able to attend a meeting due to illness or incapacity or any other reasonable circumstances;</p>
</li>
<li>
<p>bringing independent judgment to bear on issues of the DAO, strategy, policy, resources, performance, and regulatory matters;</p>
</li>
<li>
<p>providing advice and direction on all matters affecting the Company, including, but not limited to, adherence to terms set forth in the Articles;</p>
</li>
<li>
<p>planning, developing, and enhancing the future strategic direction of the DAO</p>
</li>
<li>
<p>sharing responsibility with the other director(s) of the Company for the effective management of the Company</p>
</li>
</ul>
<h3>
<a name="ceomanagement-duties-13" href="#ceomanagement-duties-13"></a>CEO/Management duties</h3>
<p>The Chief Executive Officer (“CEO”) is responsible for the day-to-day management of the Foundation, which includes the following roles:</p>
<ol>
<li>Liaising with the board on all budgets, project proposals, and matters particularly as it relates to service providers including the BVI subsidiary</li>
</ol>
<ul>
<li>Reporting to the board in a timely manner on all matters of importance including financial status, funding projections, policy setting, planning, program operations, employee matters, and the long-term health of the ecosystem.</li>
<li>Providing adequate materials and analysis to assist the board in making decisions on all matters of importance.</li>
</ul>
<ol>
<li>Manage Finances and Service Providers</li>
</ol>
<ul>
<li>Overseeing all financial management of the Foundation, including budgets for Board approval, grant, and funding administration required by either the Foundation or other supporters. Possessing thorough knowledge of all funding sources and required records.</li>
<li>Maintaining and adapting the organizational structure and systems capable of meeting the needs of the Foundation in carrying out its mission.</li>
<li>Overseeing BVI subsidiary operations including staff and logins as needed (Twitter, GitHub, Discord). Contracts with BVI for service providers.</li>
<li>Setting up and administering the Foundation’s bank account</li>
<li>Setting up and managing token custodian</li>
</ul>
<ol>
<li>Involving the board, ecosystem participants, service provider staff as needed in developing organizational goals, a strategic plan, and projections for supporting the Balancer mission through service providers (Orb Collective Inc and BVI subsidiary) and the community.</li>
</ol>
<ul>
<li>Overseeing vendors &amp; others involved in actively seeking software and product developments and funds as needed.</li>
<li>Ensuring that the Balancer projects delegated to service providers and the ecosystem have clear objectives that are within the scope of the resources and mission of the Foundation.</li>
<li>Overseeing the gathering, analysis, and reporting of data illustrating the work accomplished by service providers to manage performance and deliverables</li>
<li>Reviewing program evaluation results and developing and executing strategies for continual improvement.</li>
</ul>
<ol>
<li>Compliance</li>
</ol>
<ul>
<li>Responsible for all necessary filings, responses to inquiries, management of AML Compliance vendor, and other Cayman Foundation compliance and risk-related matters</li>
</ul>
<ol>
<li>and such other services reasonably related thereto as may be requested by the Foundation.</li>
</ol>
<h2>
<a name="legal-counsel-14" href="#legal-counsel-14"></a>Legal Counsel</h2>
<p>The Foundation may from time to time require advice on matters of Cayman law. It is hard to estimate this cost as it could vary considerably depending on the item. We have inserted a placeholder for each quarter. For clarity, this refers to the legal team rather than the corporate services team.</p>
<h2>
<a name="self-insurance-15" href="#self-insurance-15"></a>Self Insurance</h2>
<p>It is typical for an organization to obtain insurance to protect itself against the legal, regulatory and operational risks, as well as to protect the directors and officers from personal liability for carrying out their duties. We have not seen reasonable insurance for organizations of this nature in the market, hence the need to self-insure.</p>
<p>We are asking for $500,000 based on the costs of defending Balancer in the event of a regulatory inquiry, class action or other lawsuit or vulnerability to the ecosystem. The self-insurance is based on recent DeFi matters within the last 12 months which have cost on average $100,000 monthly to defend. It is important to note, that we have excluded any reserve for payment of damages, fines, or impact on users.</p>
<p>Since this is a reserve and not an expense, the Directors may assess in the future that a lower reserve amount becomes sufficient and propose changes to the DAO. We are asking that the DAO bookmarks these funds to hold for self-insurance.</p>
<h2>
<a name="bank-fees-16" href="#bank-fees-16"></a>Bank Fees</h2>
<p>The Foundation is working to establish a bank relationship that we are advised could take approximately 6-8 weeks once the application is complete and submitted. This line item is an estimate/placeholder for monthly fees</p>
<h2>
<a name="accounting-software-17" href="#accounting-software-17"></a>Accounting Software</h2>
<p>Estimate for monthly software subscription fees.</p>
<h2>
<a name="domain-hosting-email-document-management-solution-18" href="#domain-hosting-email-document-management-solution-18"></a>Domain hosting, email document management solution</h2>
<p>Minor operating budget to cover the above and related items.</p>

[BIP-20] Funding Proposal for Orb Collective

[BIP-14] Funding Proposal for the Balancer Foundation

[BIP-55] Funding Proposal for the Balancer OpCo

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