Two updates here:
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For S8, the role of the Budget Board is to propose budgets for missions already scoped by the Foundation. But fully agree with your assertion @GFXlabs that future versions should have some concept of a BATNA / alternative use of funds.
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Immediately after posting we were advised that we should limit the proposal to just S8 and include detail on the split among the three proposed categories of Retro Funding, ie, Onchain Builders, Dev Tooling, and OP Stack Dependencies. We will preserve the original post but offer an updated version shortly.