CIP: 24
title: Continued funding for development services - Service Agreement No 2
author: @c3rnst
status: Draft
created: 2023-03-06
Simple Summary
This proposal asks for 6,000,000 USDC to be allocated to the service provider Nomev Labs, covering the execution of the Services on a consumption basis, for the period of April 2023 to and including February 2024.
The requested sum should be paid out of the KYCed 14.75M USDC raised and set aside by CoW DAO in February 2022 for the service provision of the development of the CoW Suite.
Overall, this will leave a total of 2,749,876 USDC KYCed funds at CoW DAO’s disposal (of which 2.2M currently in use by CoW DAO’s Core Treasury Team, cf. passed CIP-19 proposal here, 0.5M currently in CoW DAO’s Solver Bond and the remaining 49,876 USDC in the CoW DAO’s Daughter Safe).
Please find here the link to the passed proposal of the first Service Agreement (CIP-6) covering the period from 1 March 2022 to 28 February 2023.
Motivation
Our continued motivation is to fulfil CoW DAO’s vision of a decentralised future where digital assets can be traded in a fair, efficient and reliable manner among people and communities around the world. Trades must be securely protected, no matter who the user is.
We consider this CIP critical to ensure ongoing development and refinement of the CoW Suite and for keeping a competitive edge within the decentralised exchange ecosystem, including strategic pivots.
The past year in a nutshell
A significant amount of work has gone into the past year and the team is really proud to successfully close the first Service Agreement:
- First and foremost, servicing users with better than the best prices, a total of 15 million USD surplus was created during this year.
- The past year, in review, saw a big uptick in user engagement, builders and contributors to the CoW Protocol. To name a few, the solvers grew to a number of 16 in production, ensuring better prices for users and increasing the robustness and decentralisation of the protocol.
- The Grants Sub DAO was created, launching the CoW Protocol Grants Program to foster the CoW ecosystem, with already more than 15 grants distributed.
- The CoW Protocol trading volume in the past year was 13.575bn USD worth in assets on Mainnet (plus 28M USD worth in assets on Gnosis Chain). Assets that were protected from MEV.
- CoW Protocol’s market share grew to surpass Matcha and Paraswap to become the second largest DEX aggregator in the past year.
- Team members grew 90% within the first year - starting off at 19 members, the team grew to 36 - a rapid growth that was critical to ensure competitiveness and market growth in the DEX landscape.
- CoW Protocol went through a brand unification exercise, extended presence at many conferences and Hackathon, growing the CoWmunity.
- CoW Swap saw through the integration of Limit Orders and a Native ETH flow (that does not require users to manually wrap their Ether anymore), two critical pieces in improving the user experience (cf. Limit Order Dashboard and ETH Flow Dashboard).
- With the recent shift in focus on DAOs and their protected trading needs, ENS DAO already confirmed this need when selling 10k ETH (~16.3m USD) via CoW Swap at the beginning of February, protecting 81k USD worth in MEV (here is a link to the trade). Multiple other DAO trades are in preparation.
- The team delivered on the initially prepared roadmap part of CIP 6, improving price estimates, execution speed, support for more liquidity sources, decentralising the solver set-up and defining their rules of the game.
Everything developed, decided and spent was and is done with CoW DAO’s and its users’ benefit in mind! Check out this dashboard for more.
The past year in a nutshell - financials
With the fee for services awarded last year, we kept running the Services beyond 28. February 2023, and will do so until depleting our funding (est. mid April 2023), prolonging the Services covered under the first Service Agreement.
Looking at 1. March 2022 to 28. February 2023 a total of 5M USD were spent on:
| Estimated | Actual | |
|---|---|---|
| Team compensation | 3.3m | 3.41m |
| Third party development services | 0.8m | 0.81m |
| External tooling | 70k | 216k |
| Network fees (gas) | 120k | 64k |
| Business development | 150k | 314k |
| Expenses (e.g. business travel etc.) | 120k | 28k |
| Operational (legal, accounting, bank accounts): | 100k | 160k |
| Provision for tax purposes: | 1.4m | 0.3m |
With a remaining 1,000,000 USD per 1. March 2023 and considering an overlap of half a month in funding to ensure continuous liquidity, we are asking for the effectiveness of this Service Agreement by 1. April 2023.
Service Agreement
I.a Services
- Code development and design based on the roadmap (cf. 1.b);
- Continuous improvement of the existing product and user experience;
- Executing relevant user research and proposing roadmap adjustments based on its findings;
- On behalf of CoW DAO, hosting relevant interfaces, upkeeping and housekeeping of forum.cow.fi;
- Assisting the CoWmunity in the promotion of the CoW Suite, including at and for conferences and with promotional materials;
- Fostering collaborations and partnerships on behalf of CoW DAO;
- Any other assistance and advice that may be provided by the team’s expertise, e.g. computer engineering, design as well as relevant project management and accounting services;
- Facilitating solver onboarding, vetting and assisting with payouts on behalf of CoW DAO;
- Ensuring system security, providing development operations and security personnel. Per need, driving bug bounties for CoW DAO’s settlement (incl. via Grants DAO);
- Engaging the CoWmunity in the decision making process using the regular governing mechanism;
- Engaging with interested parties in outlining a potential next fundraising round on behalf of CoW DAO with alignment on KYC needs (to be decided);
- Effective outsourcing to specialists and external parties.
Other Services may be included in further CIPs for CoW DAO to decide upon separately (they can but must not lead to additional funding requests, dependent on scope, timing and efforts).
I.b Development roadmap
The roadmap is decided by the CoW DAO by means of improvement proposals and forum upon suggestions from any interested contributor. It’s the responsibility of CoW DAO and its members to propose and decide the way forward - we want to comply with this ethos: it’s important to keep this roadmap flexible to adjust to community voices and successful proposals, changing competitive environments as well as improving and changing technological advancements.
We propose that the next 3 months will be dedicated to the following items and features:
- Customer Order Interaction
- Partially fillable orders
- Automatic indexing of smart contract orders
- Node diversity and trade quality monitoring
- The interface’s features will include other wallet integrations, hard cancellations, bundling Safe transactions, partial fills, improving limit orders experience and significant improvement of the technical code and SDK (software development kit)
- Confirming or iterating on a DAO-user focus
- Re-evaluating the effectiveness, transparency and trust-minimization of the CoW governance platform
Features that might follow after the improvements mentioned above are in place:
- Adding support for EIP2612 (allowing gasless approvals);
- Deployment on selected Layer 2s;
- Canonical batches;
- Improving the Batch Explorer and adding more information;
- Adding more information to the CoW Swap UI (eg user surplus, trading charts etc., subject to user research).
I.c Budget
From 1. April 2023 - 29. February 2024, the USD budget estimate comprises the following significant positions:
| Cost Centre | Estimation (USD) |
|---|---|
| Team compensation (aggregate) | 3,850,000 |
| Third party services | 1,030,000 |
| Events & Travel | 180,000 |
| Network fees & testing | 170,000 |
| Hosting | 108,000 |
| External tooling | 35,000 |
| Office | 27,000 |
| Tax provision | 600,000 |
| Total | 6,000,000 |
These categories are estimated to include the following positions:
- Team compensation - Includes total compensation of team members for the entire year.
- Third party services - Includes all outsourcing providers and financial intermediaries & banking fees as well as third party development providers.
- Events & Travel - Covers relevant presence in conferences, business development events as well as team meetings.
- Network fees & Testing - Includes estimates for funds spent by running tests on new features and developments, gas as well as funds spent for user testing, incl. some internal buffers.
- Hosting - Covers mainly DevOps related expenditures (AWS and nodes).
- External tooling - Covers softwares and subscriptions.
- Office - Includes fees supported for temporary rental of spaces.
- Tax provision - lump sum provision of 10% for potential tax costs (unforeseen and relating to various tax categories)
Accounting provisions (such as tax provisions) that are dissolved, arising in a positive cash-flow, will be reinvested in line with CoW DAO’s vision of a decentralised future and mission of enhancing the CoW Suite. Dissolved provision, buffers, left over funds from CIP-6 (est. 380’000 USD by 1. April) as well as other financial decisions in the upcoming year may prolong the estimated length of the Service Agreement.
The team
The team that plans to execute this Service Agreement and the development of the CoW Suite part of the Services, has been doing so, not only for the past year, but also before that as part of Gnosis and is dedicated to continue working towards making the protocol successful. We have carefully recruited and will continue to do so in the future. The leadership team is stable with Anna George on the product and Felix Leupold on the engineering side. The team consists of 36 full-time positions. The team’s expertise include roles such as cryptographer, mathematicians, user researchers as well as business development, operations and HR. Furthermore, we have built up a range of ecosystem, legal - and academic advisors who will help us achieve the success of the CoW Suite.
It is the intention to further decentralise the team with anyone who wishes to work directly for CoW DAO or a sub-DAO - this has been significantly driven in the past year by the creation of the Grants DAO. For the moment, it remains difficult - though possible - for single contributors to work directly for an unincorporated DAO. Together with CoW DAO, we will strive for decentralisation not only on product level but also to facilitate this on an operational level (e.g. by proposing for EORs (employers of record) or collaborative payroll DAOs to set up contractual relationships directly with CoW DAO via Governance Mechanism). It must remain a goal that working for CoW DAO directly should become easier.
II Terms of the Service Agreement
Validity
- This Service Agreement and any following Service Agreement is subject to the successful passage of the Governance Mechanism set in place by CoW DAO (and as defined in the implemented Participation Agreement or any updated version thereof).
- The commencing of the Services is effective per successful passing of the proposal, starting from 1 April 2023.
- There is no automatic extension or renewal of this Service Agreement.
- The agreement cannot be terminated within the 11 month period (1 April 2023 - 29 February 2024).
Compensation
- The fee for the Services described above is 6,000,000 USDC (six million USDC).
- The fee corresponds to an estimate of the sum of all costs borne by the performance of the Services starting 1 April 2023 and comprising an entire calendar year, based on a time and material basis.
- The costs incurred with the provision of the Services to be considered are the direct and indirect costs.
- If in doubt, the fee is considered to be split equally across calendar months.
- The Company may review the fee according to actual costs incurred on a monthly basis, proposing changes and amendments, which in turn will be subject to the Governance Mechanism and therefore approval by CoW DAO.
- Any request for changes or amendments will be accompanied by a justification of prior costs borne (time reporting).
Payment
- With the successful passing of the proposal CoW DAO agrees to a prepayment of the fee and is not subject to additional invoices.
- Unless Nomev Labs asks for further compensation due to incorrect estimation no detailed time report will be provided.
- The prepayment is to be transferred from CoW DAO’s daughter Safe at the successful passage of Phase II.
Scope
- Some of the line items mentioned in the budget may decrease in the future, some may increase over the coming year.
- If the Services substantially widen and Nomev Labs grows its team for this purpose, Nomev Labs will propose a further Service Agreement.
- If Nomev Labs may dissolve any accounting provisions (such as tax provisions), resulting positive cash-flow will be reinvested into the company, in line with CoW DAO’s vision of a decentralised future and mission of enhancing the CoW Suite.
Intellectual Property
- All rights related to works, new products and processes, or correction or improvement of products or processes already existing in the CoW Suite in addition to works, inventions or creations, designs or models, trademarks, trade names, logos, software, databases, domain names or other materials and know-how (including trade secrets), whether registered or not, and regardless of their patentability, registrability or fixation, that Nomev Labs, individually or jointly, has created or whose creation has provided during the Service Agreement to provide services that relate, directly or indirectly, to the business of the CoW DAO, (hereinafter, “Intellectual Property”), belong by origin and since their creation to CoW DAO in accordance with the CoW DAO’s Participation Agreement (the “Participation Agreement”).
- This effect occurs when the Intellectual Property is generated during the provision of Services by Nomev Labs, regardless of whether or not the creation, or the cause of the creation, of the Intellectual Property is, wholly or partially, directly or through a third party.
Miscellaneous (in no particular order)
- Profit. The company may incur a profit. Profits are to be reinvested into the company, in line with CoW DAO’s vision of a decentralised future and mission of enhancing the CoW Suite.
- Subcontracting. The Company may subcontract any portion of the Services to be performed under this Service Agreement and remains responsible for the obligations under this Agreement.
- Assignment. Nomev Labs Lda may at any time assign, mortgage, charge, subcontract, delegate, declare a trust over or deal in any other manner with any or all of its rights and obligations under this agreement.
- Confidentiality: All information obtained privately (i.e. not via public discourse, such as blockchain transactions or on the CoW DAO Forum) shall remain the sole and exclusive property of the discloser (including CoW DAO and Nomev Labs Lda members).
- Definitions. Terms in this Service Agreement shall have the same meaning as in the Participation Agreement. In the event of any conflict or inconsistency between this Service Agreement and the terms of the Participation Agreement, this Service Agreement shall take priority as between them to the extent that is necessary to resolve the conflict or inconsistency.
- Affiliate. Nomev Labs Lda shall not be in any way seen as a member or affiliate of CoW DAO or any related party, only a Service Provider.
- Disclaimer. CoW DAO and Nomev Labs expressly disclaims all representations, warranties, guarantees, conditions and undertakings, including warranties of merchantability and fitness for a particular purpose.
- Limitation of liability. Nomev Labs Lda’s total aggregate liability for all and any claims arising under or in connection with this Service Agreement, regardless of form of action and whether in contract, tort, warranty, or other legal or equitable grounds (including in each case negligence), shall be limited to a maximum amount of USDC 50,000.00. Nomev Labs Lda shall not be liable for any actions taken by or on behalf of CoW DAO including Services and actions taken pursuant to this Service Agreement.
- Force Majeure. If the provision of the Services are affected, hindered, prohibited or made impossible in whole or in part by a Force Majeure, this shall under no circumstances be deemed a breach of this Service Agreement.
- Severance. If any provision of this Service Agreement is or becomes invalid, illegal or unenforceable, it shall be deemed modified to the minimum extent necessary to make it valid, legal and enforceable.
- Disputes. In the event of any dispute, claim, question, or disagreement, CoW DAO and Nomev Labs shall use their best efforts to settle the disagreement. To this effect, they shall consult and negotiate with each other in good faith (using the CoW DAO forum forum.cow.fi or any other Interface) and, recognising their mutual interests, attempt to reach a just and equitable solution satisfactory to both parties. Any such amicable decision to resolve a dispute shall go through the CoW DAO Governance Mechanism. If no agreement is found within 30 days, the disagreement shall be referred to and finally resolved by arbitration by one arbitrator in London, United Kingdom, under the rules of the London Court of International Arbitration.
- Governing Law. This Service Agreement shall be governed by and construed in accordance with the laws of England and Wales.
Execution
Safe Transaction Data:
{
"version": "1.0",
"chainId": "1",
"createdAt": 1679316432071,
"meta": {
"name": "Transactions Batch",
"description": "",
"txBuilderVersion": "1.13.3",
"createdFromSafeAddress": "0xcA771eda0c70aA7d053aB1B25004559B918FE662",
"createdFromOwnerAddress": "",
"checksum": "0x7b2e5cfc4705476f8e259a6b609c132df137011aea0f849453fbac312d6e2171"
},
"transactions": [
{
"to": "0xA1cb7762F40318ee0260F53e15De835fF001cb7E",
"value": "0",
"data": "0x6a761202000000000000000000000000a0b86991c6218b36c1d19d4a2e9eb0ce3606eb480000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000014000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000001c00000000000000000000000000000000000000000000000000000000000000044a9059cbb000000000000000000000000c498e8063c95b65d97fe9172bf952bf1c8d3333000000000000000000000000000000000000000000000000000000574fbde6000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000041000000000000000000000000ca771eda0c70aa7d053ab1b25004559b918fe66200000000000000000000000000000000000000000000000000000000000000000100000000000000000000000000000000000000000000000000000000000000",
"contractMethod": {
"inputs": [
{
"internalType": "address",
"name": "owner",
"type": "address"
},
{
"internalType": "uint256",
"name": "_threshold",
"type": "uint256"
}
],
"name": "addOwnerWithThreshold",
"payable": false
},
"contractInputsValues": {
"owner": "",
"_threshold": ""
}
}
]
}
CoW DAO main safe will execute a transaction from its daughter safe at 0xA1cb7762F40318ee0260F53e15De835fF001cb7E to send 6,000,000 USDC to the Safe at 0xC498e8063C95B65d97fE9172bf952bf1C8d33330
