Hi Michal
Thank you for this post, will provide some thoughts below.
- This proposal is a request to fund Nethermind’s cryptographic research for the next 28 weeks, for an investment of 700,000 DAI (50% upfront, 50% later)
- This research is a continuation of Phase I of the research proposal, with results here and here
- The overall project is scheduled to cover four phases of research:
- I: Survey the literature relating to identity and attestation schemes
- → II: Survey the literature relating to oracles, token-curated assets, prediction markets, Sybil, and white-labeling-protection mechanisms (we are here)
- III: Design solutions for assuring a good quality set of operators and economic security of the protocol
- IV: Implement the proposed solution presented in Phase III
- The overarching goal is to assist Lido in creating and maintaining a permissionless and high-quality validator set mechanism
- Phase I was executed at an effective rate of 25k DAI a week, over 6 weeks
- Lido has invested 150k into this project thus far, but token holders should not weight sunk costs into their decision-making
- Phase II continues to use the same effective rate of 25k DAI a week, over 28 weeks.
I have no doubt that researching, developing and implementing a solution to maintain a permissionless and high-quality validator set mechanism is a costly and time-consuming exercise. The level of technical expertise required is probably very high and therefore very scarce and therefore also costly.
We have no comments as to the technical merits of this proposal or its results thus far, which appear remarkably successful and well received. However, what is perhaps missing from this proposal is a sense of what the whole project might entail economically for the DAO, end-to-end.
Phase II clearly establishes that research alone will continue to cost the DAO 25k a week. However, we do not understand how much more research is needed in future phases, nor what additional costs might have to be incurred to implement a technical solution.
Overall, we definitely appreciate sequencing a complex project such as this one as, in the long-run, it could help the DAO manage the risk of investing in a complex enterprise such as deploying a permissionless and high-quality validator set mechanism. However, for this to be true, the DAO would have had to have at least an 80% confidence interval estimate for the midpoint of a range of possible costs and time-spans for the total project.
Could we kindly suggest that the Nethermind team give us a lifetime estimate for the total cost of the project, from the current proposal through to implementation? I understand that some Phases are path-dependent on prior phases. However, we don’t believe it is the right approach to make these requests piecemeal, as the DAO will slowly digest what could well end up being a multi-million DAI research and development expense over the next few months.
| Cost | Time | Context | Stage | |
|---|---|---|---|---|
| Phase I | 150,000 | 6 weeks | Research | Completed |
| Phase II | 700,000 | 28 weeks | Research | Proposed |
| Phase III | Development | TBD | ||
| Phase IV | Implementation | TBD | ||
| Implementation Expenses | Implementation | TBD | ||
| Phase V? | ||||
| Total Capex | ||||
| Ongoing (if any) | Annual | Maintenance |
Without this information, I cannot imagine how token holders could take an informed decision regarding continuing to support such a project if it aims to wind along through various additional phases and implementation.
Thank you for your help in bringing this data together, please let us know if we have missed this information somewhere