Thank you to Collective Feedback Commission members, @spengrah and @jackanorak, for feedback on early drafts and input into the design process of the Budget Board.
Season 8 & 9: Budget Board Charter
This Charter outlines the structure and responsibilities of the Budget Board and its participants. The initial Season 8 & Season 9 Charter was authored by the Foundation, with input from the Collective Feedback Commission. In future Seasons, it will be authored and maintained by the Optimism Budget Board (if renewed).
*Please note that while we reference Season 8 & 9, the Board’s term will run from May 1st, 2025 - May 1st, 2026. Starting in Season 8, all Councils and Boards will transition to 12-month terms to promote greater continuity and standardization.
The Budget Board exists to bootstrap critical infrastructure and frameworks to enable the Collective to make sound financial and economic decisions (see “Economic Policy” in the System Diagram). It is composed of high-context members, with a well balanced mix of relevant skillsets.
The Budget Board is an important step towards decentralization, enabling decisions previously made by the Foundation to be made by the community, in a governance-minimized, data-driven way. The Budget Board will bring the Collective closer to the Decentralization Milestones shown below. Over time, we expect the role of the Budget Board to be reduced as their work should enable many of these decisions to be made algorithmically (subject to human adjustment or override).
Boards are advisory and are not delegated final decision-making power. The Board will have proposal rights over budgeting decisions but all proposals must still be approved by the Token House and/or Citizens House, as relevant. It is at the Board’s discretion to take input and/or proposals from the community into consideration when authoring their proposals.
Season 8 & 9 Goals
Financial Framework and Data Infrastructure Development
- Ensure the Collective has access to the data, models, and / or other financial infrastructure needed to conduct the rigorous analysis necessary to make comprehensive and cohesive financial decisions
- This infrastructure should support automated or algorithmic decision making over time
Budgeting Advisory
- Propose annual Token House and Citizens’ House spend
- Provide opinions on the Foundation’s budget (Within the Intents and annual budget report)
Collective Reward and ETH Staking Management
- Maintain the Collective Reward Framework, updating the suggested OP per Impact Rating at the start of each Season
- Establish the process for ETH Staking decisions to be made by, or on behalf of, the community
Season 8 & 9 Responsibilities
- Determine what data, models, or other financial infrastructure are needed to conduct the rigorous analysis necessary to make comprehensive and cohesive financial decisions
- Build, or commission third parties to provision, the infrastructure identified above
- In many cases, the Foundation may provide the initial version of a framework (like the Collective Reward Framework) to be maintained and iterated on by the Board
- The Board may solicit the input of other Councils, Boards, or Commissions in their selection process but will have ultimate decision-making authority to select teams chosen to build infrastructure, as necessary
- Use the above mentioned resources to propose:
- Governance Fund Mission Budgets for Token House approval (previously done by Foundation)
- Retro Funding Mission Budgets for Citizens House approval (previously done by Foundation)
- Note that the Foundation will continue to propose Mission scopes
- Overall DAO Operating Budget
- Individual Councils and Boards will then propose individual Operating Budgets from the DAO Operating Budget, subject to Token House approval
- The Board will provide their opinion on all individual Council and Board Operating Budgets before they move to a vote
- All proposals should be designed so that voters understand the comprehensive impact on the Collective’s financial position and should include the resulting implications for risk, reward, runway, and/or any other relevant financial metrics
- Provide opinions on the Foundation’s budget (Within the Intents and annual budget report)
- Update the Collective Reward Framework, updating the suggested OP per Impact Rating at the start of each Season
- Design a process by which the management of ETH Staking is transitioned from the Foundation to the Budget Board, to be run in Season 9/10 (timing dependant on the additional structures required to support this transition)
Structure
Signing Structure
- The Budget Board is advisory in nature and therefore will not operate a multisig wallet.
Sub-committees
- There will be no sub-committees or specially designated roles in the first iteration of the Budget Board. If the Board wishes to add sub-committees based on practical learnings, they may do so next term.
Participants
The Board should be comprised of members with the characteristics outlined in the “eligibility” section below.
The Board will consist of 7 total members, including a Board Lead.
- 3 Token House Representatives
- Representative does not need to be a Token House delegate but is accountable to Token House and therefore should make recommendations with the Token House’s interest in mind
- 3 Citizens’ House Representatives
- Representative does not need to be a Citizen but is accountable to Citizens’ House and therefore should make recommendations with the Citizens’ House’s interest in mind
- See the list of proposed members for the Genesis Cohort here, subject to Ratification in the relevant House
- Note: Membership model may change in future iterations
Cohorts and Election Terms
- Members (including the Lead) may be appointed by the Foundation for an initial term, but are subject to alternative selection methods, such as election, thereafter. The initial term of the Budget Board will be 12 months, beginning May 1st, 2025.
- After the initial term, all members of the Budget Board may be approved by governance at the start of a new term. Approved members serve for the duration of their term and must be re-approved to serve in future Seasons.
- Representatives should only serve in one Council or Board position per term. There are no term limits for representatives, but they may be implemented in the future if the need arises.
Eligibility
An ideal Budget Board would be comprised of members with the following skillsets:
- Experience in financial forecasting and/or corporate budgeting
- Professional capital allocation and/or portfolio management
- Ability to inform Board decision making with data and/or automation
- Experience allocating capital to support public goods, supporting sustainable ecosystem growth, and/or building long term capital allocation systems
- Demonstrated ability to make accurate predictions
- Deep understanding of macroeconomic policy
Roles
Members
- Utilize and improve frameworks provided by the Foundation to holistically assess budgeting decisions and their impact on the Collective’s long-term financial position
- Maintain the Collective Reward Framework, updating the suggested OP per Impact Rating at the start of each Season instead of the Foundation
- Ensure the Collective has access to new data, models, and algorithms needed to implement a data-driven and comprehensive approach to financial decisions
- Maintain these tools
- Propose Mission Budgets (for both the Governance Fund and Retro Funding) to be approved by Governance (The Foundation will continue to propose Mission scope)
- Propose a Collective DAO Operating Budget to be approved by governance
- Provide opinions on each Council and Board Operating Budgets proposed under the DAO Operating Budget before it moves to a vote
- Provide opinions on the Foundation’s budget (Within the Intents and annual budget report)
- In order for the Board to put forward a proposal/recommendation, at least 4 Board members must sign-off, which necessarily requires at least one member of each House
Leads
- All representative structures must have Leads. The Lead is always a non-voting/non-signing member, so they remain focused on procedure and operations and may be considered unbiased as they don’t participate in decision making.
- The Board Lead’s role is procedural, communicative, and ministerial. It has limited ability to influence the substantive decision making by members or signing by key holders.
- The Lead may break a tie in the case that members cannot come to consensus or temporarily fill the role of a member who has resigned or been removed.
- The lead will execute the below responsibilities:
- oversee the provision and/or maintenance of external and internal information about the Board, and any other resources needed by the Board
- ensure coordination with any other Councils, Boards, Commissions, as needed
- facilitate coordination by scheduling and hosting regular Board meetings. It is suggested that meeting minutes or summaries be made available to the community
- prepare proposals and post to the forum within the required review period
- ensure proposals receive the required approvals to move to a vote
- exercise decision-making authority in the event that members cannot come to consensus on an administrative or operational matter
Resignation process
- If a member wishes to resign before the end of their term, they must appoint a replacement, subject to a simple majority approval of existing members, and communicate this change to the Lead at least 7 days prior to this change taking effect.
- The Lead will then adjust quorum/ signing thresholds as needed and communicate the change through the structure’s Communication Thread.
Accountability
- All Budget Board members are subject to Representative Removal as outlined in the Operating Manual. Removal votes will occur before the end of the next voting cycle. Please see Representative Structure Framework for additional details about edge cases related to removal.
- All representatives may be removed from their position for failing to uphold the responsibilities outlined in the relevant Charter or for failing to act with honesty, integrity, and transparency. If there is a vote to remove a representative, the Lead, or a simple majority of the remaining membership, may appoint a replacement for the remainder of the term.
- The Budget Board will conduct a retrospective at the mid-point and end of the 12-month term, which will be posted to the forum by the last day of the period.
- The Budget Board must be renewed in Season 10 in order to become a persistent structure. Persistent structures will be assumed to be renewed each term, delegates may submit Dissolution Proposals at the start of a new term if they believe a persistent structure is no longer fulfilling its mandate and should be discontinued.
Budget Board Budget
- Since this is the first iteration of this Board, the Foundation will cover the following operating budget for Season 8 & 9:
- Lead: 60,000 OP (30,000 OP per Season)
- Members: 40,000 OP (20,000 OP per Season)
- Total Foundation Stipends: 220,000 OP
- Infrastructure Budget: The Board may apply for an Infrastructure Budget under the DAO Operating Budget to support the creation of new financial infrastructure used to support decision making.
Iteration
All Charters, must seek governance approval for major changes to the scope, structure, responsibilities, or budget of the Charter.
It should finally be reiterated that the role of all structures are intended to be progressively and programmatically reduced over time, as its functionalities are no longer needed or can be effectively managed by other means. Ultimately, it is the goal of the Collective to reach a state of protocol and governance reliability that allows for the full and final dissolution of any non-essential structures.