Solutions To AADAO Systematic Issues That Led To Alleged Misconduct

Disclaimer This article discusses the conduct of AADAO’s former project manager, who remains innocent of all alleged claims until proven otherwise in a court of law within their jurisdiction. All claims made here about the project manager are entirely conjecture and not my own words but paraphrases from AADAO’s Oversight Committee. Identification: rMalakaib Change Log: • 10/31/2024 reworded point 3 in AADAO 2024 Key Takeaways for increased clarity . Intro This analysis will decouple the structure in 2023 and 2024 to derive more actionable and detailed insights as to AADAO’s efficacy and systematic issues. The below article will only focus on AADAO 2024 but I’ve also included a LINK to a longer detailed read on AADAO 2023 structure and lessons learned. On a personal note, this feedback is meant to be constructive, with the goal of bettering a community I love, the Cosmos Hub. AADAO 2024 Key Takeaways • Centralization of power in the Project Manager : The 2024 AADAO structure centralized decision-making authority in the Project Manager, leading to conflicts of interest and undermining the separation of powers within the organization. • Checks and balances…

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@rmalakaib thank you very much for your thorough analysis. Largely in agreement with your observations and findings. However, your analysis of AADAO’s oversight dynamics requires important corrections, as there are a number of critical misapprehensions I wish to address for the record. rmalakaib: • Oversight committee limitations : While the oversight committee helped prevent total collapse, its reliance on the Project Manager for compensation and operating budget weakened its independence and ability to provide meaningful checks on authority. • Conflict of interest and structural failures : The lack of independent oversight, especially Oversight Function was Challenged by GM & Core Contributors First, regarding the suggestion that the Oversight Committee’s independence was compromised by the GM’s control over our respective compensation - this characterization is inaccurate. And I must strongly disagree. Our oversight capabilities, and our willingness to exercise checks and balances were not hindered by how or what we were/are paid. Or as to who set our pay. Rather, the challenge to effective oversight stemmed from the contributor team’s resistance…

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rmalakaib:

For performance-based compensation to pass, the Oversight Committee must sign off.

In our view, it’s insufficient to have Oversight Committee sign-off. In fact, that’s what AADAO wanted us to do. For us to sign off.

However, our read/interpretation of proposal 865 (all the attendant communications in Forum) suggests that all bonus methodologies and their associated KPIs must be fully disclosed to and approved by the community. As oversight members, we maintained this position firmly - our role isn’t to rubber-stamp how ATOM bonus pool will be utilized.

Instead, our responsibility is to ensure complete transparency about bonus structures and mechanics. To be clear, with respect to bonus policies and ATOM distribution, oversight’s job is not to approve, but to ensure the community approves of the resource utilization.

rmalakaib:

Sub DAOs should always have an oversight committee.

AADAO and all its subDAOs are subject to oversight from the Oversight Committee.

The AADAO consists of following subDAOs: Operations, Grants, Strategy, Oversight

Technically – Oversight is structured as a subDAO due to administrative reasons related to staging and distributing approvals and vetos in DAODAO. That said, it should be – and will be made explicitly clear, that Oversight is not subservient to the parent DAO or any of the subDAOs.

rmalakaib:

The oversight committee should not be within the organization it is overseeing.

There have been conversations regarding establishing oversight as an independent DAO, wholly separate from AADAO; which authority to exercise oversight over AADAO and any persons/teams receiving community pool funding. Do you have any thoughts on such proposal?

rmalakaib: The oversight committee should receive performance compensation and operating budget from the main DAO, not the subDAO it oversees. Are you saying the payments to oversight members should be made directly from the main/operations wallet, and not from the StratComm SubDAO wallet? I shared how oversight salaries are disbursed in Transparency Report 7 , and planned changes to disbursement mechanics. Oversight Salary Disbursement Current Salary Disbursement Process: The Strategy Committee’s multi-signature wallet currently funds Oversight members’ monthly salaries. Imminent Changes to Oversight Salary Disbursement: AADAO is developing a more autonomous payment system to enhance Oversight’s independence and impartiality: • Annual Funding: The Strategy Committee’s wallet will replenish Oversight salaries once a year, unconditionally. • On-Chain Vesting: DAODAO’s on-chain tools will manage salary vesting. • Independent Compensation: This approach separates Oversight members’ pay from AADAO’s regular budgeting and payroll processes. Creating this self-sustaining compensation structure will: • Strengthen governance integrity. • Ensure Oversight…

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Cosmos_Nanny:

Oversight’s own compensation or the fact that the GM set our pay rates had influenced our oversight effectiveness is patently fals

Hey Thank you for your feedback, I’m reading through it now and will have a full response shortly

Seeing as you have a greater knowledge base of AADAO than I do, I will strongly consider your thoughts. I will state that I read every available document from AADAO, and I do mean everyone, it is possible I’ve made an error as you state.

With that said, I don’t believe my conclusion to be non-sensical. I hope my article atleast serves to question whether we’ve structured AADAO correctly.

I do believe that I’ve also miscommunicated, I don’t think that “Oversight’s own compensation or the fact that the GM set our pay rates had influenced our oversight effectiveness”. In a moment I’ll try to elaborate more clearly.

@Cosmos_Nanny , I appreciate your patience with my response. I was out with family. Thank you for reading and responding with such thorough, relevant feedback!! INTRO You are exactly right, I have mischaracterized the PM’s influence on the Oversight Committees effectiveness. This was not my intention. It was not that I misread the source material, but I poorly conveyed that specific point. I apologize, and I fully agree that the PM’s power over bonus methodology does not apply here. The objective of the poorly worded mischaracterization was to display exactly what you mention here: Cosmos_Nanny: The Controller explicitly communicated to the GM that Oversight members would not and should not qualify for performance-based ATOM bonuses if the rationale for performance bonus distribution is tied to “direct value” creation for ATOM (Feb 2024). Contrary to repeated mischaracterizations, the Controller’s series of logic questions about the bonus methodology, generated a rhetorical argument highlighting the inherent conflicts in the GM’s proposed system, not to lobby for Oversight’s inclusion. Only an idiot or a malicious actor would distort the Controller’s…

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I entirely agree with you here. The quote above refers to the check that enabled the Oversight Committee to “ensure complete transparency about bonus structures and mechanics.”

Thank you for asking; I’m an avid supporter of an independent Oversight DAO that the Cosmos Hub entirely and directly provisions. In short, for the Cosmos Hub to EFFECTIVELY scale/support/grow Partial Set Security, Grants Program, Venture Funding, and more, an independent Oversight DAO is required. Just as a collateral dept position protocol, like Sky Protocol, is only as effective as its liquidation engine and only as integral as it is free from corruption, so too are DAOs. Background Allow me to explain: the objective of any well-functioning government is to effectively and efficiently delegate resources to achieve a defined mandate. While easier said than done, a governance system must, like Sky Protocol, have an enforcement mechanism to remove bad actors to maintain the system’s integrity. The cognizant skeptic would emphatically state that not all bad actors can be removed, to which I’d reply, “You are exactly correct.” That is why we have separations of power, checks and balances, and multilateralism in governance today. The Point In order for the Cosmos Hub to scale further, an independent Oversight DAO whose authority is to ensure corporations, DAOs, community…

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Response To First Question: Cosmos_Nanny: Are you saying the payments to oversight members should be made directly from the main/operations wallet, and not from the StratComm SubDAO wallet? I very much love the imminent changes to Oversight Salary Disbursement!!! While I still hold that the Oversight Committee should receive their funding directly from the Cosmos Hub (Main DAO) because of the potential for the PM to withhold funding, I believe the solution your team found solves this problem. Ideally, though, the Oversight Committee is entirely independent of the DAO it is overseeing. Understanding that my suggestion would require extensive changes and proposals on-chain, the imminent changes sufficiently address most of my concerns. Additionally, elections for oversight members should happen in a ranked choice voting system . Response To Second Question: Cosmos_Nanny: Can you clarify what you mean? On which subDAO – or do you mean an advisory committee structured as a subDAO consisting of “voters”? How might the “voters” be determined, and by what process? Of course, the passage “A Sub DAO Committee of voters should have multiple liaisons…

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