eckoDAO: Treasury Overview
Intro
eckoDEX offers end-to-end decentralised trading on the Kadena network. The open-source software and smart contracts that comprise eckoDEX (the “eckoDEX Protocol”) have been deployed on-chain and are immutable, enabling trading of Kadena assets in a truly decentralised, non-custodial, peer-to-peer manner. Maintenance and updates to the protocol are directed by the community through the DAO. In turn, the eckoDAO non-profit Association (the “Association”) was formed to foster the growth and development of the eckoDEX Protocol and the surrounding ecosystem. It is dedicated to establishing an effective DAO governance framework through which the votes of token holders are implemented.
Part of the Association’s duties includes proactively managing the DAO’s treasury, and continuously assessing and modifying our strategies MoM to ensure financial stability and expansion. The purpose of the Treasury is to ensure funds necessary to maintain and grow the ecosystem, through a grant program, community initiatives, marketing, and other value-adding initiatives. We have implemented a number of cost-cutting measures over the last six months to guarantee the ecosystem’s expansion and longevity. This article provides transparency to our financial position and treasury management procedures, with the intention of fostering a community dialogue about the future of ecosystem products and how the resources are best utilised. Through this article, we intend to demonstrate our dedication to responsible financial management and the long-term success of ecosystem protocols.
Budget
As of January 2023, the eckoDAO treasury has a balance of approximately $3 million USD, made up of 62% volatile crypto assets and 38% stable coins.
eckoDAO determined to withhold from selling a substantial amount of KDA during the most recent market crash. This choice, which was made to avoid higher market volatility, has impacted our outlook for the Treasury. However, our longer-term prospectus on Kadena will always be positive so we continue to hold. Our Treasury is strong and we have taken steps to ensure its longevity despite the recent market decline.
This budget will allow us a runway for the development process for 1.5 years, and our top priority remains to release the DAO portal and ensure its safe usage for the community. The DAO portal will improve and formalize the process for community input and control over changes to the Protocol and treasury-funded initiates. Thus, the DAO portal will ensure a decentralised and transparent organisation that benefits all members.
Business expenses
The information provided regarding our expenditures is based on our predictions for the year 2023 and is an estimate subject to change based on current market conditions and prices. We will take all necessary precautions to adjust our plans and ensure the longevity of the DAO.
Estimated monthly expenditure: 150,000$ PM
This budget includes allocations for various functions, including Engineering, Marketing, Administration, Legal and Business Development. We will break down these expenses further in the following sections and provide a comprehensive overview of how the funds are being used to support the growth of DeFi on Kadena.
This breakdown will provide a better understanding of where the funds are being allocated and how they are contributing to the organisations overall success. It is important to note that this headline expenditure is derived from both recurring and non-recurring expenses which include Audits, and legal expenses. The budget will continue to be reviewed and optimised on a regular basis to ensure that we are making the best use of our resources while always keeping the best interests of the community in mind.
Non-recurring expenses such as legal, audit and business admin scale down proportionally to our roadmap to decentralisation. These types of one-off expenses only occur when needed, and the monthly expenditure figures for 2023 might be skewed.
DAO personnel: 20%
Includes expenses related to the operation of the Association, such as costs associated with the 3 members of the non-profit board, DAO contractors, and freelancers. These costs may include items like salaries for board members, fees for contractors, and payments to freelancers for their services.
Engineering: 70%
Engineering cost is a financial expense incurred in the process of designing, developing and maintaining a product or system. It includes expenses related to ongoing engineering and development, such as Service Level Agreement (SLA) costs with external vendors like KUSH and KaDefi, contracts with Architech and individual contractors, and code audits. Currently, more than 15 individuals at various contractors are involved in providing Engineering services to eckoDAO, eckoDEX, eckoWALLET and eckoGOV.
The highest weighting of our monthly expenditure currently lies in these engineering costs and further to our decentralisation plan, aside from maintenance and community proposals, the cost basis can be restructured over time.
Internal: 5%
Internal costs are the expenses incurred by an organisation in the pursuit of maintaining and operating its day-to-day operations. These costs encompass a wide range of expenses, including but not limited to, operational costs that are vital in ensuring a smooth and efficient functioning of the business and administrative processes.
External: 5%
External costs are the expenses incurred by an organisation in relation to its interactions and dealings with external entities. These costs encompass a wide range of expenses, including but not limited to, marketing, legal, administrative and business development. These expenses may include, for example, costs associated with legal fees for drafting and executing contracts, expenses related to marketing and advertising campaigns and business development
DAO Treasury
The DAO treasury, which as of this date consists of 250,000,000.00 KDX, is an important aspect of the eckoDAO ecosystem. These tokens are designed to be used at the discretion of the community through the DAO to further the protocol’s development and growth.
The DAO treasury is critical in ensuring the protocol’s long-term sustainability and success. This year, we will formalise community control over the use of the KDX treasury through our DAO portal, allowing community members to propose and vote on various initiatives to be funded by the treasury.
The KDX treasury can be used for a variety of purposes, including project development, marketing support, and employee compensation at the discretion of the community. We hope to foster a culture of transparency, accountability, and community participation within the KDX ecosystem by utilising the treasury in this manner.
Our goal is to establish the proper governance and financial structure that protects the treasury and allows the protocol to function for a long period of time. We believe that by working together as a community and effectively utilising the treasury, we can ensure the KDX protocol’s continued growth and success.
Rebalancing
Rebalancing our portfolio of risk and non-risk assets is a risk management and treasury optimisation strategy we implement in our runway analysis. By adjusting our available assets based on our market forecasts, we can ensure that we’re not overly exposed to any type of asset, reducing overall portfolio risk.
By maintaining the desired level of diversification we can ensure that our development milestones are reached and we’re prepared for market events.
Conclusion
Our initial goal has always been formalising community input and control through the DAO and releasing a gas-free decentralised exchange on the Kadena blockchain. Next to creating X-Wallet out of the need for a functional non-custodial wallet, we will continue to provide the essential foundational DeFi architecture for KDX holders and our decentralised ecosystem. We will continue to work to deliver on our goal of creating more accessible and efficient decentralised platforms for our community.
We are dedicated to ensuring that the Treasury funds are used efficiently and effectively to continue to drive the path of decentralisation of the DAO, and we will always prioritise the community’s best interest. With this budget, we are confident that we can achieve our goal and the community’s vision.