[AIP-76] 12-Month Ecosystem Fund Streamlining Proposal

[philjfry]

Summary

This proposal seeks to streamline the Aura Ecosystem Fund’s operations by setting up 12-month contributor streams funded directly from the Aura Treasury. This will replace the ad-hoc funding approach currently used to cover shortfalls in bribe revenue and remove the need for repeated small transfers between the treasury and ecosystem fund.

Background

The Aura Treasury currently holds approximately $5M in assets.

Historically, the Ecosystem Fund has covered monthly contributor costs using proceeds from voting rounds.

In May, a shortfall in bribe revenue was recognized, and $60K of supplemental funding was allocated to the Ecosystem Fund with the intent of covering the gap over the next six months.

However, voting round revenues continue to fluctuate, making it difficult to forecast the exact amounts required to consistently fill shortfalls. This uncertainty has led to the need for small transfers between the Treasury and Ecosystem Fund, adding operational friction.

Proposal

We propose:

1. Funding Stability: Allocate the full 12-month cost of contributor stipends to the Ecosystem Fund in a single transfer from the Treasury.

2. ETH Transfer: On approval, transfer $370k worth of ETH from the Treasury to the Ecosystem Fund.

3. Stream Setup: The Ecosystem Fund will deploy these funds into 12-month streams for contributors.

4. Revenue Redirection: All revenue from Ecosystem Fund locks will be returned to the Treasury going forward.

This change will stabilize contributor funding, simplify operations, and allow the Ecosystem Fund to operate without constant treasury top-ups.

Rationale

• Operational Efficiency: Reduces the need for multiple small treasury transfers.

• Financial Stability: Guarantees contributor stipends for 12 months regardless of bribe revenue fluctuations.

• Treasury Health: Maintains treasury inflows by redirecting lock revenue back to the Treasury.

Vote Options

• FOR – Transfer the ETH to the ecosystem fund.

• AGAINST – Maintain the current approach.

[0xRichter]

FOR for the reasons mentioned. Would also be interested in seeing what strategies could be used for reinvesting the proceeds from voting rounds in order to secure future funds for the protocol

[DocMuscle]

FOR. It will ease operational kinks and improve efficiency while improving treasury health and allowing us to explore possible treasury investment strategies.

[miesz_ko]

AGAINST. This proposal decouples protocol funding from protocol performance misaligning incentives between all stakeholders. The proposal could be improved by:

1. at the very least stating the level of efficiency improvement; are we talking hours, days, weeks per year here? Anything lower than several days is not worth it imo.
2. and add a commitment to monthly report de the deficit or surplus between voting round income and the 12-month fixed stream

[CircleSquare]

Bit of a weird proposal - complaining about once a month admin work? It also seems like you’re granting yourselves a call option here… Suppose costs are fixed at 370K USD p.a…. It sounds like you’re going to place 370K USD worth of ETH in the streams. If ETH rises, everyone in the stream will be getting paid more (because it’s stuck in the stream as ETH and god forbid the admin work associated with changing that). If ETH dives, everyone on the payroll will be getting less and then you’ll come back here and ask for top-up. I’m not against paying the protocol workers for keeping the sausage machine turning (and I might be misinterpreting things), but this just seems weird to me. So uh, against. Not that it will matter.

[jameskbh]

I support the proposal, as it will bring more predictability and, as a possible side effect, if thr new deployments (like hyperEVM) brings the incentives market up, the Treasury will receive more than it upfronted.

[SecondSetMaze]

Thanks for this proposal, Fry!

@philjfry

In May, a shortfall in bribe revenue was recognized, and $60K of supplemental funding was allocated to the Ecosystem Fund

In this May shortfall proposal, “Supplemental Funding for the Aura Ecosystem Fund” it was stated that the ecosystem monthly cost is $20,720.

@philjfry

The Aura protocol is currently operated and maintained by a group of dedicated contributors and infrastructure partners. The current total fixed monthly cost of running the ecosystem stands at $20,720.

$20,720 x 12 = $248,640

but this proposal has $370K being transferred to cover the 12-month cost.

@philjfry

ETH Transfer: On approval, transfer $370k worth of ETH from the Treasury to the Ecosystem Fund.

That’s over $120K more than what seems to be required. Why?

Also, AIP-71 Proposal for Long-Term Funding of the Aura Ecosystem included regular reporting of expenses for transparency.

@philjfry

Transparency: We’ll establish a framework for regular reporting on AEF expenses to enhance transparency.

Have there been any reports on expenses since Dec, 2024 (aside from the May shortfall AIP)? Apologies if I missed them. I miss a lot.

Thanks for reading!

[philjfry]

Thanks everyone for the thoughtful feedback, I wanted to address a few of the points raised:

1. Budget clarity
The current monthly budget is $30,720. This covers a team of 7 (across marketing and development), along with some infrastructure costs. To put this in context, this is a very lean budget compared to other DeFi teams of similar size.

2. Transparency and reporting
You’re right that we can do more here. We’ve already discussed providing better visibility around reporting, and I’ll be looping back with the contributors to put something more structured in place. Expect to see improvements on this front going forward.

3. Efficiency gains
The efficiency gain here isn’t just about raw hours, but about removing unnecessary overhead and tricky situations. For example, there have been months where bribes were materially lower than what was needed to cover stipends, creating stress and short-term uncertainty. This new approach avoids those situations and gives contributors confidence that their work is sustainably supported. That stability itself is a meaningful operational improvement.

[SecondSetMaze]

Thanks very much Fry for getting back with this additional context. Much appreciation and gratitude to our septet keeping Aura marketing and development churning.

I recall - from back in Dec, when an expenses outline was last shared - that the Aura rewards streaming was costly. The monthly total amount you share here does appear quite lean for everything.

Respect for acknowledging the room for improvement in reporting.

Since discussions are already underway, I suggest pausing this 12-Month Funding Proposal until after the reporting structure is in place and the first AEF revenue/expense report is published. I would enthusiastically support this proposal at that point.

The example offered with your efficiency/overhead point is real. Having confidence and a sense of stability makes all of us more comfortable and works most efficiently when it flows in both directions.

Let’s supply vlAURA voters (and those who delegate) the confidence and certainty of knowing that items included in ratified proposals like AIP-71 receive follow-up and are enacted.

Once the reporting framework and first report are published, we can revisit this 12-month Proposal. I am certain that there will then be no barriers standing in the way of a positive vote that brings sustainable support to the hard-working team.

Thanks again for your collaboration

[miesz_ko]

@SecondSetMaze

I suggest pausing this 12-Month Funding Proposal until after the reporting structure is in place and the first AEF revenue/expense report is published.

Couldn’t agree more here!