Delegation of operational work like payroll management is something that is commonplace among organisations. Each vertical that is important to the organisation often has a working group of its own to make it easier for the org to be able to reach its goals.
DAOs and web3 organisations are no exception to this. Working groups in a DAO are committees of people who may or may not have multisig safes of their own to which budgets are allocated. These will have their own signers who will approve or reject transactions.
For an operator working in a DAO, managing all these working group safes and their budgets can become very time consuming and mentally draining. The cost of mismanagement can become very high, possibly resulting in hundreds of thousands of dollars in losses as the DAO’s treasury and team grows in size.
There has been a recent emergence in the space of a new kind of structure in which these working groups have autonomous qualities of their own – they are referred to as SubDAOs.
These entities have the capability to further decentralise governance, make quicker decisions, and reduce the burden of operational workload of those managing the DAO.
Introducing Parcel’s Squads and Budgeting
With this release, we aim to make it much easier for each working group (aka squad) to request budget allocations to their safe and make this process easier for the allocator:
- Track and coordinate budgets, payrolls and transaction details of each squad
- Each squad can request budgets from their parent safes. The process of approval is the same as it is for requests by individuals.
There are different ways in which DAOs structure their working groups, for instance:
- mStableDAO fragments its protocol governance process by allowing its working groups to form subDAOs
- Gitcoin has workstreams which are working groups that specialise in certain areas of collaboration
- Aavegotchi has Guilds which are sub-committees of players within their ecosystem
All of these structures (and more) can benefit from our Squads and Budgeting feature. It helps operators who handle multisig safes of a DAO be able to easily delegate payroll management tasks to the respective working groups.
How This Feature Works
There is a dedicated tab on the Parcel platform from which squads’ safes and their budgets can be accessed and tracked. Each budget will be listed under the respective seasons (timeframe) during which they were created. We make it easy for squad leaders to quickly switch between the DAO’s main safe and the squad safe.
Operators can now easily delegate admin work to the leads of different working groups and save a lot of time and energy.
Under the Squads tab, the Overview section will give a summary of the aggregate treasury value of squads’ safes and the various requests that are pending. It also lists the safes of squads and all the transactions that were made with this feature.
The Budgets section will list all the active budgets and the requests that are pending to be approved by signers. Within this section, users can keep track of ongoing budgets, budget requests, pending payments and historical budget requests and disbursements.
Each DAO can set a duration for each season and a limit for how much can be spent on budget allocations for each season. Budget requests are made by the working group before the start of each season. These requests are then approved or rejected by the multisig signers.
Budget requests can be made by squads in two ways:
Fixed budgets are lump sum payment requests made from the working group to the DAO. They are basic one-time payment requests similar to individual requests that contributors make, but in this case the request is made collectively by the respective squad.
Requests are then approved or rejected by the multisig signers of the DAO’s safe. Squads can also add a file along with the request to provide proof that the required task for compensation was successfully completed by the squad.
Milestone-based budgets allow squads to request incremental payouts based on customizable milestone events. Budgets are made based on the achievement of milestones that each working group sets for itself.
Each budget can have multiple milestones, the completion of which will be a requirement for the compensation to be made to the contributor.
Same as with fixed budgets, squads can attach a file that can act as a proof that the milestone has been achieved. There is also a section that can let squads add custom KPIs that they can set for themselves to add concrete targets to the milestone.
Signers of the parent safe also have the option to request proof of work or changes to the milestone-based request along with comments attached. This can then be followed up with a response by squad owners in the transaction tab that has a dedicated messaging section to have discussions about the proof of work file.
Multisig signers have the ability to approve or reject the completed milestones at their discretion, so for instance, if they are not satisfied with the proof of work they can communicate within Squads messaging tab to the respective working group leader why it was rejected and what needs to happen before the milestone is approved.
Once budgets are approved, signers of the parent safe will have to create a transaction and disburse the requested amounts to the squad safes.
These pending items can be viewed under the To Be Paid section in the budgets tab. Transactions that have already been sent out will be marked as completed. You can then select the ones that have not been completed yet and send them all at once as a batched transaction on Ethereum.
This saves signers a lot of time and money as transactions are made all at once and this requires less gas fees.
Approval and rejection of requests with Snapshot
To keep the process of budget allocation transparent and accountable to the community members, we’ve enabled responses to requests made using Snapshot votes!
To access this feature, all you have to do is connect your DAO’s Snapshot space to the treasury safe via Parcel, and the community members can then decide to approve or reject a budget request.
How our partners at Developer DAO have been using our Squads and Budgeting feature
This feature was initially released in closed private beta, and has been accessible by contacting us on our Discord. Contributors from Developer DAO decided to test out our new Squads and Budgeting feature with their DAO.
Since then, we’ve been in touch with Kempsterrr, who is Developer DAO’s ‘Coordination Operator’, to get some feedback about it.
On how it helps Kemp as a DAO operator, he says,
‘The main benefit for me as an operator is pushing the admin out to the teams. What I mean by this is rather than the treasury signers having to ensure all budgets are correctly requested and sent each month, it moves that to the teams and if they want to receive their budget they have to submit their request etc.’
This release lets working groups go through the process of deciding the budget that they will require for their teams and make requests to the operators accordingly.
Kemp prefers that his DAO uses milestone-based budgets:
‘We’re only using milestones to break the Seasonal budget down into months, rather than actual milestones. This is so our budget process can have some accountability by design.
i.e. folks are not automatically sent their entire season budget, they get it a month at a time. This means that if they’re bad actors, the DAO can refuse to issue the next month’s budget.’
How can you get access to this feature?
Our new Squads and Budgeting feature is still currently in private beta while we continue to get feedback from our users and partners who are testing it out. To ensure we provide the best possible user experience for everyone, we plan to keep iterating and improving this feature until we feel it is fully up to our quality standards and ready for public use.
If you’d like to get access to the private beta release before then, drop us a message on our Discord in any channel to let us know – we love building together with our community. Our team will be in touch with you as soon as they can to help get you started.