CIP-76: Continued funding for development services - Service Agreement No 5

Governance
3

@karolak, thank you for the post, I think I can give more context here. These are fair questions, and the Core Team agrees that long-term alignment between contributors and tokenholders is key. A few important clarifications and context points:

1) CIP-62 vs. the current request

CIP-62 established a reserve of 80 M COW, earmarked for ecosystem purposes and treasury management through 2028. Those tokens are not a liquid pool directly available for contributor grants or operational use. In practice, they remain under DAO governance (through the Treasury team) and are not part of the Team Grant Allocation Committee’s mandate. The funds were requested for the future funding of the DAO, as per:

  1. Develop of new CoW product - 42M COW- These tokens were earmarked to OTC deals, raising funds, token trading to ensure more treasury (stables) for the operations of the DAO.

    1. At the time, the token price was 0.59 usd, which equated to 24.8M USD.
    2. The treasury was engaged by several OTC opportunities, but which required steep market discounts and low commitment on supporting the project.
    3. Given the subsequent price drop, the treasury team assessed it was not in the DAO’s best interest to sell those tokens at the under 0.59 USD mark.

  2. Defense reserve completion - 5.5.M COW - These tokens were earmarked to be sold in the market and top up the defense reserve.

    1. Given that the enforcement environment and lower risk, the tokens were not all sold, the earmarked amount of 5M USD was accumulated.

  3. The remaining allocations were either fully deployed (e.g. new POL positions), or are to be deployed (e.g. partnership deals that are contingent on contractual terms).

The 100 M COW top-up requested here would replenish the existing Team Grant Allocation - a specific, contributor-focused pool that has been in place since the original spin-off from Gnosis DAO. Roughly 26 M COW remain uncommitted from the initial allocation, and with many of the original grants reaching full vesting, a refresh is needed to sustain and attract long-term contributors. This is a lower amount than the attribution at TGE (15% at the time), and to be allocated to a growing number of Core developers.

2) Why not fund team incentives via buybacks or revenue?

The DAO’s current revenues and ETH/USDC reserves are already earmarked to cover operational expenses and growth initiatives, including protocol development, audits, infrastructure, and integrations. Using those revenues for continuous buybacks would directly reduce the DAO’s ability to invest in growth - the Core Team identifies itself with the view being discussed on discord here.

Moreover, having contributor alignment incentives denominated in the same token as the DAO’s , aligns long-term value.

3) On buybacks and value flow

We fully share the view that sustainable value should accrue to tokenholders. Buybacks, staking, and other value-capture mechanisms remain key topics for the DAO’s Treasury and Tokenomics Working Groups, and can certainly be discussed as a separate discussion - as is happening both in Discord and internally.

However, it’s important to separate operational funding from tokenomics decisions - the former ensures the DAO can continue executing, the latter determines how value is distributed once generated.

Given the importance of this topic to the community, we propose to add the research of value distribution as a roadmap item for 2026, to share thoughts on it between Q1 and Q2 2026.
Note: Given current partnership agreements and mechanism redesign, Q1 roadmap is already considerably filled.

In summary / TL:DR

  • CIP-62’s tokens (under management by the Treasury Team) are not earmarked for Core Contributor grants and alignment;

  • The 100 M COW request extends the contributor alignment program, not operational funding and is a lower request than the allocation on TGE;

  • In our view, operational revenue should in the short term support growth and product delivery, not token repurchases above the level currently performed; and

  • The DAO retains full discretion to later adopt buyback or yield programs once core funding stability is secured.

  • The Core Team suggests to add the design of a value distribution mechanism to this Service Agreement.

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