da3vid.eth

Summary:

With the departure of myself and David, who have historically kept the DAO in compliance, paid taxes, and maintained the off ramps, I believe now is the time to return the CityDAO Treasury funds to Citizens pro-rata.

After failing to pass 7+ proposals 4, I see no path forward for us to agree on a reasonable way to spend the money, and keeping millions of dollars in a multisig leaves it vulnerable especially over a long period of time with multisig members cycling in and out.

I will be leaving the multisig, closing the bank accounts, off ramps, and CityDAO social media accounts, discontinuing to pay taxes our properties, and completely removing myself out of the operation of the DAO.

The most responsible path forward is to return the funds to the Citizens who contributed them.

The claim will be about $320 per NFT according to my napkin math from this post 10, but that is heavily dependent on ETH fluctuations.

Implementation:

Upon passage of the CIP, any Citizen may volunteer to be a part of the Return of Funds Task Force. They will decide on an implementation mechanism and have a budget of $3,000 to develop and audit a smart contract as necessary and pay legal fees for any research needed into dissolution.

The most likely scenarios are either an airdrop to return the funds or a smart contract that lets Citizens claim their share of funds are options.

TImeline:

Upon passage of the CIP, the Return of Funds task force will convene and develop a mechanism to return funds and initiate the process within 30 days.

I propose we start the world’s first crowdfunded compute cluster in Wyoming to take part in the AI revolution and earn income for the DAO.

TLDR

It’s time to do something big to bring CityDAO back to the forefront of the conversation and bring new life and energy to the DAO, and we are uniquely positioned to pull off building a large cluster of GPUs in Wyoming.

We have capital, land, and a Wyoming-based legal entity. And at ~6 cents per kWh, Wyoming has just about the cheapest electricity in the states, making it the perfect place to do this.

Budget:

Total proposed budget: $600,000 USD

• $500,000 - Purchase 300 Nvidia GeForce RTX 4090s (and potentially other GPU types)
• $70,000 - Servers, equipment, other setup costs
• $30,000 - Legal and misc expenses

Business Model

I believe this could generate about $30k / mo for the DAO treasury. Here is the full breakdown of the unit economics 27.

Upon passage of this proposal, Scott will lead implementation of the effort, setting up a fund with CityDAO LLC as the main limited partner and Scott (and potentially others at his discretion) as a General Partner. The DAO will spend $600k for shares in the new fund, and be paid quarterly dividends from the operation of the GPUs. The fund will have a standard 2/20 management fee model. The GPUs will earn revenue by being put on Runpod or a similar service.

Benefits to CityDAO

• A consistent income source for the treasury. These GPUs have an estimated payback period of 12 months and after that generate mainly profit.
• Status and reputation - the first cluster will be called the CityDAO Compute Cluster, and as the first crowdfunded compute cluster will be a hit on Twitter and a real contribution to the AI and crypto communities.
• Compute - having a bunch of compute is cool - we can let citizens use it at a discount and even train our own models on it.

Benefits to Citizens

• Access to a CityDAO Compute Cloud shared server Citizens can use to do things like host websites, run code, etc.
• Potential for discounted or free compute allocation (depends on the economics and will be considered depending on how fast the GPUs are paying off)

Why should we do this?

• Timing - This is the perfect time to start the world’s first crowdfunded GPU cluster.
• New energy and purpose - CityDAO needs an ambitious new project to rally around. The DAO can build tooling and projects around the cluster. Maybe we can all go to Wyoming and visit!
• Wyoming connections - We are uniquely already set up to operate in WY and I recently got connected with a Wyoming-based datacenter with just about the cheapest electricity anywhere - 6 cents per kWh that set up all the infrastructure to run GPUs.
• Future of AI - Demand for compute is projected to increase a lot over the next decade.

Risks

• I want to be transparent that it’s hard to predict the future and demand for compute or our specific GPU type could decrease.
• One reason 4090s are so appealing is they are underpriced in the market because Nvidia’s terms of service require they be used by consumers, not in data centers. One large risk here is that they somehow start enforcing this provision.
• AI may be in a bit of a bubble and demand for compute could decrease.

Updates - 2/13/24

• I’m lowering the ask to $600k - still enough to start up the cluster and run the experiment and a much smaller percent of the DAO treasury
• At the time the cluster goes live, Citizens will each get a free CityDAO Compute NFT to commemorate the moment.

Updates - 3/5/24

• Location: Upon passage, we will do a search for the best data center with the cheapest electricity pricing instead of being tied to Wyoming. For example, states like Texas and Arizona might be better since they have more data center infrastructure already built out.
• Marketing reel: We will take videos and create a marketing reel documenting the process to post on Discord and Twitter

Update - 3/8/24

• Added Risks section
• Added Citizen Benefits section
• Diversify beyond 4090s and purchase other GPU types

Earn income from our WETH treasury and contribute to decentralisation

The treasury has 656 WETH that has been sitting idle for over a year.

This CIP proposes creating 20 x 32 ETH CityDAO validators to earn yield on our treasury, whilst also contributing to the decentralisation of Ethereum.

Income We could be earning 28.8 ETH ($55k) per year on our current treasury (640 x 4.5% APR).

Decentralisation By creating CityDAO validators, instead of using LIDO stETH, we’re helping decentralise the validator set. Lido currently controls over 30% of all Ethereum validators.

Risk We currently hold ETH and there is no additional ETH exposure risk. No smart contract risk. By running our own validators, we don’t have any smart contract risk with a liquid staking token.

Slashing risk. Validators will be run by a trusted Node Operator with historic experience.

Withdrawals The beaconchain now allows for withdrawals, when we need to sell ETH, we can withdraw validators in 32 ETH lots or all at once.

There is currently no exit queue to withdraw validators, but this could change in the future and we should plan for withdrawals ahead of them being required.

Node Operator The CityDAO Node will be operated by Reeves (proposal author) who has been running community validators for years. Reeves was a facilitator and Gnosis Signer of the CityDAO Dev guild when it existed, and worked on the Parcel-0 Land NFT.

Costs Initial Hardware Costs: $1,500 USD to purchase dedicated hardware for CityDAO.

Commision: 10% of income to the Node Operator to cover running costs (maintenance, power and internet). This is the same commision that is charged by Lido if we were to use stETH. Rocketpool has a 14% commision.

TLDR

The purpose of this CIP is to create a more inclusive CityDAO Council and to fund the Community Team, which will make sure we have engagement across multiple communities. This CIP will last for 6 months, followed by democratic, open elections. The quorum for this CIP is 500 votes and the requested total budget is $107K. This CIP combines both a council CIP and the community team CIP, which is why the budget is high.

Why is this needed?

For the past year, CityDAO has had some very important problems that we cannot fix without authorization by the community through a CIP. The main problems can be explained in three categories: administrative, legal and taxes.

Administrative:

Our multisig wallet has members who are no longer part of the DAO. This is not safe. Our quorums make it too easy to request large amounts of money and only require 51% approval from voters, no matter how much money is requested. Our voting allows for certain individuals to control the votes. Our international communities do not have enough representation. We have no process for complaints and grievances, which has led to negative behavior on the discord. This destabilizes our community and makes it harder for citizens to get involved with CityDAO. How to make sure that people who are paid to do work do not get paid unless they accomplish their work.

Legal:

We don’t have clarity on what CityDAO can do to earn money as an American DAO LLC. Without this, we keep spending money without making any money. We don’t have anyone who can legally sign contracts on behalf of CityDAO for our events, partnerships, or for when we hire independent contractors for work.

Taxes:

We need to pay our taxes and send out the proper forms from the American IRS to anyone who gets paid more than $600 per year. We need a CPA (certified public accountant) to handle some of these tax issues.

The proposed City Council 2.0 would include the following seven people: Blackacres, David, Nico, Ming, Lupei, SimplePixel, Serkan

Blackacres North American (NA) community communication Advisory board communication lead Handling and filing taxes including CPA oversight and paperwork Clarify the charter (GROUP) Clarify how an NFT holder confirms their citizenship for forum likes Clarify Snapshot voting to refine algorithmic quorums and/or implement quadratic voting Human Resource Management (GROUP) Complaint and grievance process

David Work with outside counsel to handle legal issues in CityDAO Clarify who can sign contracts on behalf of CityDAO Clarify the charter (GROUP) Clarify how an NFT holder confirms their citizenship for forum likes Clarify Snapshot voting to refine algorithmic quorums and/or implement quadratic voting Human Resource Management (GROUP) Complaint and grievance process Hiring and dismissal of independent contractors Dismissal of council members and other DAO members from groups Clarification on DAO tool access

Nico Taking notes on meetings Summarize round-ups Keeping things in check on that we’re on topic at meetings Community (GROUP) Cross channel communication across communities Help out with community calls, especially with NA and China areas. Hosting Twitter (X) Spaces Strategic operations (GROUP) If someone proposed something and didn’t follow through, should they still get paid? The work people say they’ll do and what they actually do should be documented and shared with the DAO. How can we ensure accountabilities for passed CIPs Assist with strategic communications about the long term development for CityDAO - what are we building?

Ming CN community communication Wechat group management and public account management IRL meetups in China Translate newspapers and round-up into Chinese Partnerships and communication with other CN DAOs DAO TALK Twitter Space Strategic operations (GROUP) Develop operational and marketing plans Plan CityDAO branding activities

Lupei Thai community communication Translation and content tailoring in Thai community IRL meetups in Thailand (as needed) Community operations (GROUP) Making sure everyone in the DAO has the same information Community activities / projects management CityDAO contest organization Publishing newspaper Twitter(X) management/access.

SimplePixel Co-lead Turkish community communication Management of partnerships with Turkish DAO/web3 organizations IRL events in Turkey Community operations (GROUP) Management of community activities and projects for overall DAO Hosting TR Twitter spaces CityDAO contest organization Strategic operations (GROUP) Clarifying the CIP process Making a clear template for the creation of CIPs Clarify the charter (GROUP) Clarify how an NFT holder confirms their citizenship for forum likes Clarify Snapshot voting to refine algorithmic quorums and/or implement quadratic voting Marketing / Events (GROUP) Figure out what upcoming events are happening globally and locally Make a CIP and work with others on an events budget Sponsorship & event participation for Turkish Community

Serkan Co-lead Turkish community communication Co-hosting biweekly Discord TR community calls Translation of newspaper and round-up into Turkish Community (GROUP) Representing the First & Founding citizens Connecting and gathering info about active/passive citizens on Discord & Twitter Strategic operations (GROUP) Research other DAOs about success / failure

Advisory / CityDAO Assembly (non voting): Anyone with more than 50 Citizen NFTs or any Founder NFTs. Being a member of the CityDAO Assembly provides streamlined access to the council and community team, which includes efficient feedback, communication, development of ideas and assistance in turning ideas into viable CIPs. This will be implemented after discussion and after main priorities are accomplished.

If any council member misses more than two meetings without explanation, they will be removed from the council. They will not be replaced until the next election. Voting on all issues within the council will require 4 of 7 votes to pass, except that choosing members of the multisig will require unanimous council approval.

RESPONSIBILITIES

City Council 2.0 is meant to accomplish very specific goals. Each of these goals is directly tied to the effectiveness of CityDAO. The planned goals are as follows:

Month 1-3

How to confirm citizenship for likes Adjusting quorums Update Charter Operations Clarify the process of CIP creation → Forum → Snapshot Making a clear template for the creation of CIPs Clarify how an NFT holder confirms their citizenship Ensure that only verified citizens are able to “like” CIPs on the Discourse forum Clarify Snapshot voting to refine quorums and/or implement quadratic voting Who posts Snapshot votes when the 20 like threshold is reached Clarification of DAO tool access Clarifying access process for Twitter & Discord Taxes and CPA relationship management and organization Appoint the 8-person multisig, remove non-participating members, and make clear rules

Month 3-6

Legal Establishing contact with outside council Making sure there is a clear pipeline for legal questions to be answered Who can sign contracts CityDAO treasury payments from projects Using NFTs as compensation to citizens Maintaining or hiring people to maintain the DAO tools including Discord, Discourse, Snapshot, Website, Notion, and Twitter

Human Resource Management Make rules for how members are removed in the future Establishing and enforcing regulations for behavior on Discourse and Discord Establishing a complaint and grievance process for CityDAO citizens

BUDGET BREAKDOWN

Council Members: $1500 per member per month ($63,000 total) Lawyers, Accountants and Other Professionals: $12K total Council Fund (only used for bounties and hiring): $20K total Community Fund : $12K total