The Budget Board is providing the following draft to the Collective in advance of making its advisory proposal for the DAO Operating Budget. The final proposal will be provided on June 12. The Budget Board will take into consideration any comments from the community.
[DRAFT] Budget Board Advisory Proposal for the DAO Operating Budget for Seasons 8 and 9
TL;DR
- Proposes a DAO Operating Budget ceiling of 2,300,000 OP total for one year (Seasons 8-9)
- Represents approximately 25.8% of trailing twelve-month (TTM) Collective Revenue
- Adds a 0.8% margin above a 25.0% benchmark to provide flexibility for council leads to propose budgets tied to credible growth or sustainability theses
- Council leads may consider allocating part of their budgets retroactively based on performance
Budget Details
| Metric | Value |
|---|---|
| TTM Collective Revenue | 6,621.9 ETH |
| ETH-OP Median Rate | 1,346.4 |
| Budget Ceiling | 2,300,000 OP |
| % of TTM Revenue | 25.8% |
| Budget Board Infrastructure | 80,000 OP (separate from above) |
Note: ETH-OP rate uses a historical median from May 31, 2022 - June 3, 2025.
Strategic Rationale
This proposal sets a ceiling for DAO operating expenses over the coming year, replacing the prior season-by-season approach with a more stable framework tied to trailing protocol revenue.
For reference, the Season 7 operating budget—when annualized—represented 23.7% of annualized Collective Revenue as of May 2025. We view this as near the high watermark for DAO spend relative to revenue.
Using TTM revenue gives a more stable and normalized view of protocol performance. While it results in a slightly higher nominal budget, we believe it offers a better benchmark for ongoing budgeting decisions.
Given the early stage of the Collective, it is appropriate to err on the side of enabling growth. At the same time, we expect operating spend to decrease as a share of revenue over time.
This budget was also constructed with runway in mind. If Missions spending remains consistent with Season 7 levels, the Governance Fund maintains approximately 7 years of runway under this proposal, without decreasing the operations budget.
That leaves the Collective with ample room to experiment, grow, and move toward protocol-sustainable operations—without pressure to curtail operating capacity prematurely.
Illustrative Runway Analysis
Note: The Budget Board has not yet reviewed the Missions Budget. A full Missions Budget proposal is expected by July 2, 2025.
| Metric | Value |
|---|---|
| Gov. Fund Remaining | 162,581,692 OP [A] |
| Illustrative Annual Allocations | |
| Operating Budget | 2,300,000 OP |
| Gov. Missions Budget | 21,000,000 OP |
Total Annual Budget: 23,300,000 OP [B]
Years of Budget: 6.98 [A/B]
Budget Glidepath
The Budget Board envisions a long-term decline in the percentage of revenue allocated to DAO operations:
| Year | % of TTM Revenue |
|---|---|
| Year 1 | 26.00% |
| Year 2 | 21.88% |
| Year 3 | 18.75% |
| Year 4 | 15.63% |
| Year 5 | 12.50% |
This is a directional target, not a hard cap, and will be revisited based on performance and protocol evolution.
Room for Execution
The additional 0.8% above the 25.0% benchmark is intentional. As the Collective transitions from ad hoc budgeting to a structured Budget Board process, it is important to allow council leads space to propose budgets that build on established initiatives and advance credible growth or sustainability theses.
As this is the first full-year budget, we recommend reviewing the trailing six-month Collective Revenue before Season 9 to determine whether the budget remains appropriate for the DAO’s needs and strategic direction.
Leads are also encouraged to reserve a portion of their budgets for retroactive rewards tied to performance and outcomes. We will refer to this as a Retroactive Allocation, to clarify that it comes from the Governance Fund and not from the RPGF funds.
Implementation
- Ceiling: 2.3M OP governs DAO operations across Seasons 8 and 9
- Allocations: Council leads will propose budgets within this ceiling
- Discretionary Buffer: Leads may allocate retroactive rewards from the Retroactive Allocation at their discretion, within the 2.3M OP cap
- Review: Budget Board will evaluate spend and impact following Season 8
Counter-Theses
The Budget Board believes that Collective Revenue is the best metric for assessing budget intensity over the long term; however, the Collective should consider counter theses in forming future budgets.
- Revenue volatility: The Collective operates in a highly volatile industry, and revenue is dependent on endogenous and exogenous factors. If revenue declines in a given trailing twelve-month period, the Collective should consider whether there is a relationship between the DAO operations and the decline. For instance, if revenue declines due to a preventable security incident within the remit of one of the Councils, the Collective should consider to what extent the budget should be adjusted (up or down). Similarly, if revenue increases dramatically, the Collective should scrutinize whether the increased revenue warrants an increased budget. In Seasons 8 and 9, volatility may be addressed by the Midpoint Adjustments process in January 2026. In mature form, the DAO operations should provide leverage to the Collective, in line with the prescribed decline in operating budget relative to the Collective revenue over time. The Budget Board and the Councils will aim to formalize KPIs for the community to assist in assessing budget questions in the future.
- Retroactive rewards: The Collective has a long term goal of incentivizing impact through retroactive rewards. Retroactive rewards enable councils to make localized decisions about certain tasks that might require additional incentives above the baseline as well as to determine whether performance merits incremental rewards. In recent seasons, councils have begun experimenting with localized incentive allocations, and the Board believes that this process should be formalized through the Retroactive Allocation. Deference should be given to the leads as to what percentage of an individual council’s operating budget should be designated for baseline operations and what allocation should be used for the Retroactive Allocation. With limited data, we offer soft guidance for an 80%/20% split of baseline relative to Retroactive Allocations.
Budget Board Infrastructure Request
The Budget Board requests a one-time allocation of 80,000 OP to support data analysis, operational tooling, and other services required to evaluate budgets and spending effectiveness. This is a standalone request and is not included in the 2.3M OP ceiling or calculated as a percentage of Collective Revenue. As the Budget Board is at its inception, the needs of the Board are not yet well known. Should this allocation be unnecessary, the Board recommends that any unused amounts return to the Governance Fund.
Questions for the Future
As we look forward to future budget processes, we will apply some basic questions to this framework on a retrospective basis, including:
- Did councils stay within their allocations?
- Did the revenue-indexing approach provide appropriate stability?
- Was the 0.8% flexibility buffer sufficient?
- Did the Retroactive Allocation enable consistent proportionality of incentives relative to the requirements and impacts of the tasks performed by the council / board?
Conclusion
This budget reflects the Collective’s current operating scale and maturity. It enables execution, supports growth-oriented initiatives, and reinforces the long-term need for efficiency. With a clear ceiling and structured discretion for leads, it provides a solid foundation for Seasons 8 and 9.