Summary
By nature of their work, major participants and service providers (MPs-SPs) to the ecosystem are exposed to potential regulatory and legal liabilities. This proposal helps manage that risk. The Ecosystem Council is a group of active MPs-SPs to the Balancer protocol. The Ecosystem Council will be delegated the administrative task to seek independent legal counsel to confirm use of any funds from the self-insurance fund are used as intended to cover unbudgeted litigation costs and government fines incurred as a direct result of commissioned work on behalf of the Balancer ecosystem.
Detail
When the Foundation was incorporated and approved through a governance vote to serve Balancer, a self insurance fund of $500,000 USD was created (currently held by the DAO Treasury in BAL).
This proposal is to revise the use of that fund and its total amount by adding an additional $750,000 USD and its reach to protect the broader Balancer ecosystem, supporting MPs-SPs: Balancer Labs and the main service providers approved by governance: Balancer Foundation, Balancer OpCo, Orb Collective, Balancer Maxis and Balancer Grants.
Before any disbursement from the self-insurance fund to any applicant, the Ecosystem Council will consult with independent legal counsel who will verify a litigation cost and/or government fine directly related to Balancer work under an agreement with an expectation for coverage of such costs and it is not eligible under any other insurance coverage. The funds will be directly moved from the DAO Treasury multisig to recipients directly, or through Balancer OpCo, without additional governance vote.
Ecosystem Council
The Ecosystem Council at this time has representative MPs-SPs from the Balancer Foundation, Balancer OpCo, Orb Collective, Balancer Maxis, Balancer Grants and Balancer Labs. The Ecosystem Council meets to coordinate as needed on ecosystem plans. This formation was referred to in [BIP-1] Operating Framework for Balancer DAO as part of accountability mechanisms:
“There will be an internal monthly meeting with mandatory attendance by at least one representative of every actively funded SP. The goal of this meeting is to ensure all SP’s are strategically aligned across the ecosystem. Ideally each SP should keep their representative the same month to month”
If this proposal passes
The $500,000 already allocated to the Foundation would be augmented with an additional $750,000 and those protected by the fund would be expanded as mentioned above. The total $1,250,000 USD funds will be held in BAL earmarked in Balancer DAO Treasury until dispersed.