[BIP-XXX]: Funding Proposal for Silverlight

Service Providers Funding Proposals
1

Service Provider Name: Silverlight

Leader(s): Andrew Forman

I have spent the last 5 years consulting with top tier crypto exchanges and digital asset banks on strategy and product development. I understand the challenges that financial institutions face when they try to deploy capital into defi. As a defi contributor, I’ve been a trusted member of the sushi community and worked on operations for a large defi proprietary trading desk (+$300m AUM). In both experiences, I’ve focused on developing products that interface with existing AMMs.

Background

Balancer has emerged from the first wave of defi as one of the strongest protocols in terms of usage and treasury. The vision for Balancer going forward is to become a platform for others to build on. Given a future in which defi is the back-end for large swaths of the internet and financial industries, it is possible for Balancer to become critical infrastructure for a huge number of businesses and end-users.

To help achieve this goal, I propose a service organization committed to the development, execution, and coordination of the platform strategy. Functionally this org will be focused on product development and project management.

In talks with Balancer contributors and community members, they’ve highlighted the current gap between the platform vision and execution. Those discussions have resulted in 3 primary observations:

1. Market segments and partner value proposition requires

There is near unanimous agreement around the platform vision, however contributors and ecosystem participants struggle with defining user segments and detailed value propositions. There are more one-off examples of teams building on Balancer than clear user segments. Will spend time on user interviews, business development, and research around financial / internet trends.

2. Teams are organized functionally, products are cross-functional

Balancer seems to serve three primary needs for users; a token liquidity service, a developer platform, and an asset management tool for strategies and structured products. And products are organized around pool types and smart contract features that have been added over time. We will focus on serving as a cross-functional layer across functional teams.

3. Service provider model could be improved through cross-team coordination

Balancer service providers have aligned functionally, which I believe is the best organizational model and aligned with other leading fintech companies. However, functional alignment (ie. engineering & RD are separated from integrations and marketing) creates the risk that no single individual or team is responsible for cross-team project execution and accountability. As part of this role Silverlight will manage coordination between service provider entities and report project updates to the Balancer community.

Roles & Responsibilities:

Silverlight is accountable to the Balancer governance participants and is expected to deliver regular updates to the community. I’ve had a good working relationship with the other SP entities so far and expect that to continue.

Activities:

The current expectation is that work will focus on the following activity areas:

  1. Manage metrics and tracking of Balancer products/programs

    a. Analyze product and project initiatives for value produced and report on impact metrics to the Balancer community.

    b. Support product research and supporting evidence for product success metrics.

    c. Analyze success/failure of projects and partnerships, including development of project based metrics.

  2. Facilitate cross organizational project execution

a. Partner effectively with other service provider orgs to accelerate Balancer projects and product development.

b. Define planning process, execution process, and communication process. And test processes for iterative improvement.

c. Build relationships with users, partners, and other industry participants that could contribute to Balancer objectives.

90-day work plan

Activities Outcomes
First 30 days - Organization set-up including defining operating mandate, policy and procedures. Meet with users, balancer, teams, ecosystem participants. Product strategy report including analysis of target user segments and value propositions.
First 60 days Conduct product specific analysis and organization of product portfolio. Define output and input metrics for the Balancer product suite. Product development roadmap and key success metrics for development teams.
First 90 days Facilitate Balancer projects across service provider organizations. Revised project management framework and meeting cadence

Fees & Compensation:

This compensation covers the above activities. Additional proposals can be submitted with additional scope and associated costs.

Entity set-up Month 1 - 3 Month 4 - 6
$15k USDC (One-time costs) $40k USDC. 2500 BAL locked into veBAL for one-year $40k USDC. 2500 BAL paid out immediately

*Each 3 month period is a one-time payout.

Contact Information:

Name: Andrew Forman
Discord: Andy 4pool#2486
https://twitter.com/andrew_forman

Pledge to abide by the DAO’s Code of Conduct (or link to your own):

Pledge to abide by the Accountability Guidelines:

Domains of Operation:

Key Objectives & Success Metrics:

Length of Engagement & Budget:

ETH Address to Receive Funds:

Link to SLA (if going through the Foundation:

2 Likes
2

Thank you for posting this proposal.

Based on following criteria, I personally think this proposal doesn’t fit in the current Balancer SP landscape for 2 main reasons

Strategic impact of any external consulting entity is most likely very low

Orb and Maxis already consist of talented and most importantly people that are highly familiar with the inner workings of Balancer. They are all working hard on strategic partnerships and meaningful integrations work. We are meeting every quarter to discuss our strategic focus and align work. So we are already doing what you are suggesting, with Orb in the lead doing a great job.

I personally think Silverlight is proposing work that is already been done by other SPs.

Financial compensation is too high

You are probably aware that most service providers, in particular Orb are cutting costs left and right: Orb Collective November 2022 Update

Our DAO simply can’t afford „irrational“ costs. Given this proposal you are asking for

  • $95k USDC
  • 5000 BAL corresponding to $28.5k

over a period of 6 months as a single person as far as I can see from your specification. That would correspond to $247k per annum - we simply can’t afford such costs as it stands right now for strategy work.

One might say the work you do will pay back x-fold but I am in general very skeptical about such services as the measure of success is extremely hard.

Lastly, I personally haven’t interacted with you or saw you active in this forum, Discord or other platforms. I know you interacted with Balancer in Bogota and seemed very knowledgeable of the space. Therefore, I am curious why you are proposing now and why you chose Balancer? :sweat_smile:

These are my personal views and others disagree. Let’s start a dialogue and see where it goes. I just want to make you aware of the current constraints I see for this proposal to realistically pass.

If it comes to a vote, I will abstain as I am part of the foundation.

Edit: fixed link

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Hi Xeonus. Apologies for not reaching out earlier. I’ve been impressed by your treasury reports. I have had lots of conversations with many Balancer contributors and have been tracking the forum / discord quite closely. I’ve found from previous experience it’s better to learn about a protocol ecosystem before trying to be active contributor.

I was approached about this role by Blabs and Orb. In talking with them, they saw a gap for product and project management. Further I believe there are opportunities for Balancer to grow relative to peers in ways that are not being completely capitalized today. As a developer myself, it’s not clear to me the reasons I would want to build a product on top of Balancer. By organizing the products into a cohesive developer platform, I hope the work of Blabs and Orb can get the market traction it deserves.

Balancer is interesting cause it can be used by defi developers and institution capital. I’ve had several conversations last month with firms that are exploring Aave and other protocols. I want to be able to help drive that institutional capital to Balancer.

On costs - I hear you, but as I spoke with lawyers about the entity set-up and other business costs I would incur I added to the total. A drawback from the SP model is missed cost efficiencies.

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Would be interesting to hear Blabs and Orb’s perspectives on this

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Hello, @Andy4man. Thanks for the proposal.

We have seen in workgroup sessions led by Orb some demand for better communication between teams, project management and strategic alignment. So I guess, your proposal is very welcome. I’m sure @immutbl can provide more info on the matter and give some context to this approach you mentioned.

Thank you for clarifying this. I believe we are seeing teams being very mindful of expenses across the board, as the DAO is already over-spending on service providers (essentials, that run on salaries). Wouldn’t it be the case of being a contractor/employee under another entity (Orb or OpCo, probably), to reduce these business costs?

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Yeah totally fair question. My perspective is to think about the upside of this approach. If this goes well and I’m demonstrating tangible impact to the DAO, then it may make sense to add other people in the future. Think about it as a $15k bet that I can help build a group with its own product/business niche within the protocol. It should result in a clear delineation between Blabs, Orb, Maxis, Silver; which is my understanding of the envisioned SP model.

Also I think separation improves accountability to the DAO, especially in cases when I would report on outcomes/results of a cross-team project between Blabs, Orb, Maxis, etc.

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Thanks for the proposal, @Andy4man!

My understanding is that Andy is proposing to serve as a full-time contributor to Balancer, rather than an external consultant. @Andy4man maybe you can clarify this point?

This is correct-- project management and cross-team coordination are a big missing gap today in the Balancer ecosystem. This is leading to insufficient project planning, scope creep, unforeseen delays, missed deadlines, and misalignment of expectations and information across teams.

From our Q3 and Q4 retrospective analyses, our biggest takeaway has been the need for a project management specialist who owns the responsibility of coordinating between each of the teams that touches a project from start to finish. It’s really hard to get big projects done right without that and we’ve been doing the best we can in the meantime, but the process is not operating at the level we want it to. We’ve seen symptoms of this with the development of Managed Pools and Boosted Pools.

Thanks @Xeonus, I appreciate this. I’ve been happily stretching beyond my Orb CEO duties to lead our ecosystem product roadmap process, but I’m not able to do it to the full extent that’s needed to actually ensure that the goals we’re setting and the projects we’re developing are being executed all the way through.

That’s definitely a full-time job. In my view, the requirements of this job are an intersection of: deep understanding of Balancer protocol, high level vision of the AMM and DeFi space, experience with building large-scale projects involving diverse contributors, great communication skills, being highly organized. @Andy4man if you agree with this characterization, maybe you’d like to share with the community a bit about your relevant experience that ties into these elements?

I also see great value in having someone with such skills and experience diving into our product strategy-- how is each of Balancer’s product offerings performing, how is it being positioned in the market, how does it evolve over time. There currently isn’t enough bandwidth dedicated to that.

Decentralization creates expensive inefficiencies… I agree with Andy’s plan to operate within an independent SP, which adds to the resilience of the ecosystem. At the same time, I’m open to exploring anything that Orb could do that would support the goals of both Andy and the community.

Overall, I agree with the merits of the work that would be fulfilled according to this proposal and I think that the costs, per usual in today’s market environment, are the part that merits some debate and potential refinement.

1 Like
8

Andy,

I am glad to see someone of your caliber and experience interested in advancing the Balancer DAO. I think cross-team synergies are good, maybe not great, based on Jeremy’s judgement that product management needs improvement. We did have a restructure to the DAO and shedding of various participants, just 6 months ago. I do not think changes of this scale have ever happened in a frictionless way at any organization, but we are improving consistently imo. Something to consider is BLabs being a separate entity to some degree, so I am interested on their feedback here. The core question is what tangible value add you will bring, Balancer has several partners in the pipeline / in motion for yield bearing assets already, and there may be some tough decisions right around the corner regarding managed pools. My few open questions directed to you and the other stakeholders here are as follows:

  • Given the market likely contracting for the next 6-18 months, does it make sense to continue to invest in onboarding, and fast tracking external engineering projects (index coop for example)? This is 2 pronged, in that we will take on faster burn rate as a DAO, and will this increase in synergies pay that investment off during a massive market lull? Orb has made cuts, why should the DAO now do the opposite?

  • I feel as though the entity set up should not be a cost in Balancer’s scope, why should it? If this were to not work out in this trial period, could this entity the DAO would pay for just be parlayed into you working elsewhere with the initial set up covered? The only entities we have covered the costs of this far are Orb’s and the foundation and these came about from very unique circumstances during the restructure. For better or worse, the Maxis and Grants SPs do not have an entity like this right now, they both also propose one quarter at a time for comp.

  • Last question is more of an idea, would you come to our DAO update in January and speak with the SPs and any interested stakeholders? Another meeting time could make sense as the updates are usually jam packed but text can only go so far, if you will be a focal point for the DAO I think it is wild to have it come from just a forum post.

Relatively the comp is not so outlandish, I am skeptical of the size of the gap you would fill, but your work could be worth it and I am open to be convinced. If BLabs, Opco, and Orb endorse you wholeheartedly at this rate, and as a liaison / decision maker between all parties then you coming on board could be great. I look forward to hearing back from you and everyone else involved.

4 Likes
9

I share similar thoughts to those outlined by Xenous and ZenDragon. Only recently, we had a proposal to extend the runway and Orb cut their costs as Balancer is trying to conserve the treasury for long as possible.

I am curious about Blabs response, but if Blabs and Orbs do see you as a value add to the ecosystem, would you be willing to reduce your cost? Since its a trial period and with the Balancer’s state, I think it’s fair to ask for a reduced compensation that aligns more with the treasury.

3 Likes
10

Hey ZenDragon. You raised many good points so let me try to address them -

  • From a team perspective - Orb tried to throw engineering talent at the problem but the feedback from Orb, Blabs, and Moose (departed tech lead) were that what was actually needed is better alignment and organization. In my view this is misalignment is partially a strategy problem, when people have different views of where the ecosystem is going it is hard to stay aligned. My point in the proposal was that better project management is a two-fold activity: lining up teams and addressing the strategy gap. I expect to be collaborating with the other service orgs to refine the vision into detailed strategy and product considerations. By setting a better framework we can help make sure that contributor’s efforts are leading to clear outcomes.

    From a market perspective - Balancer (and the defi peers) were the winners of the last cycle. You finished with a sizeable treasury and you’re not declaring bankruptcy like cefi crypto firms. Balancer should be thinking about what the next 3 years look like and how to strength their position. I want to be facilitating a conversation with the other service providers to help put together proposals to the DAO on investing time and money. I expect that VC investment will pick up in 6 months and they’ll start funding projects that aim to compete with existing defi protocols directly.

  • On costs - I have many opportunities to work and build teams in this space. I would like to work with Balancer because I believe in the platform vision, I’ve started a good relationship with the contributors, and the community seems be a generally positive place. I costed this 6-month period based on what my time and efforts are worth. Additional costs were called out but not really the point here. I don’t expect this to be a one-time transaction and if I want to pitch a proposal in 2023 with an evidenced based plan to grow the protocol I hope that will be listened to by the DAO as well.

  • Absolutely! I have told the Maxis that I’m open to the community call, AMAs, etc. And if anyone wants to talk with me directly I’d be glad to chat and share more about myself. My contact information is above.

2 Likes
11

Thanks for your thorough responses @Andy4man

From my experience in traditional organizations I see following points that probably go beyond the scope of your proposal but are the root cause of why this proposal has been drafted in the first place:

  • Several entities try to improve the protocol but there is no common vision
  • To create a common vision one needs purpose
  • Who should facilitate / direct energy towards creating said purpose?
  • If the current SP setup cannot align and create value by a common value proposition, then the current setup has failed as there is no purpose

Therefore what we need:

  • Define an overarching purpose
  • Align all teams that they are building products that serve Balancers purpose. This would also mean ditching exotic ideas like Managed Pools as their current value proposition is beyond a realistic advancement of sustainability
  • Undergo a complete reorganization of SPs to optimally serve the identified purpose

If you think you can live up to that task and transform our current setup I am all up for it. But I think it takes more than just being a bridge between entities. It would mean for all of us to be open to a complete overhaul of our SP landscape. Otherwise this whole exercise is basically for nothing and only costs us money we don’t have.

3 Likes
12

To be clear, this is how I feel as well. I don’t mean to make it seem like our cross-team collaboration is in shambles. But we need to improve.

Here my intention was to point out the issues that we need to fix to level up our performance and maximize the talent we have, which I think would be solved with solid project management and coordination. IMO it’s actually kind of crazy not to have any true project manager for Balancer and it’s a testament to our contributors that we’ve held it all together without one.

I actually don’t agree with all of this…

  • Orb added engineering talent to the integrations team in order to solve our constraints in supporting/executing protocol integrations and unlocking protocol growth opportunities that were sitting on the table. The majority of that work does not depend on cross-team collaboration and in my view this is a different, unrelated matter.
  • Our process for developing the quarterly ecosystem roadmap has been A) inclusive of all full-time contributors and B) communicated clearly and often. I don’t see a problem with ecosystem contributors understanding what we’re collectively trying to achieve and being aligned, beyond having naturally diverse opinions and viewpoints.

The problem I see, which is where cross-team coordination and project management come in, is keeping everyone in sync amongst all of the moving parts involved in building/improving Balancer products/features. It’s very fluid and things are always changing.

Here’s a simplified, generic, hypothetical example:

Smart contracts team is developing a product that is estimated to ship in a month. Business development team is coordinating with partners aiming to integrate the product in alignment with their own projects’ internal goals/timelines. Design team is creating wireframes for the UI, which the front-end team is scheduling time to build. Integrations team is scheduling time to work on the pipeline of partner integrations. Marketing team is creating announcement content for each partner and designing an awareness campaign for the new product.

All of this is connected to a timeline shared across teams, with each team responsible for providing output at specific points on the timeline. Someone needs to be the owner of this project timeline, to ensure its timely execution. Inevitably, things will unexpectedly change along the way (partner changes their launch date, an engineering problem we thought would take 2 weeks takes 4 weeks, etc) and nimble decisions will need to be made on how to proceed. Each team needs to have up-to-date information so they can adjust their expectations and timelines. Someone needs to be in charge of updating the timeline, holding the full picture in mind, and keeping all teams in sync and keeping things organized.

I hope this example provides a glimpse into the coordination I’m talking about.

Regarding strategy, I think the opportunities to add value right now are in analyzing our product lines, user segments, the trajectory of the space looking ahead, bringing a fresh perspective to Balancer’s competitive edge. To me, this area is not as big of a pain point as what I discussed above.

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13

Hi, Andrew, perhaps you could speak in more detail regarding why it’s necessary to hire your future entity vs hiring yourself as an individual. This proposal includes a one-time 15K entity set-up fee (which is far outside market standards), and which shouldn’t be borne by Balancer regardless. Hiring yourself as an individual seems far more reasonable here, especially if standard salary practices are followed–trial period, biweekly/monthly payments, KPIs, etc., rather than full payment up front.

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15

The objective is for this role to support collaboration between SPs/Labs. Given that this role will look at the structure and processes of how Balancer operates and how products are delivered it was requested to be standalone.
The proposal and comp structure was very similar to the format used by Orb labs and others. Activities, overall costs, breakdown by period and expense type. That said, proposals should be developed for what is the right fit for the situation, that was the case here.

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Definitely see what you mean on collaboration and coordination. Tried to address these points in the revised proposal.