[ARFC] Cancel Llama Service Provider Stream

[benhoneill]

Llama Stream Response

Without commenting on the original contract or value remaining in the Llama service provider stream, I do think there are two points that are import to flag for a more meta discussion.

1. Service provider contract structure

In the Llama service provider proposals approved by the DAO in 2022, the community negotiated a 6-month cancellation option. This gave the community the flexibility to bow out if the initial proposal was not fulfilled, but left an amount of ambiguity on what those options would be.

@Llamaxyz

Note that Aave DAO has the ability to cancel Llama’s contract and stream after a 6-month period. We will provide a detailed report on our progress that should give the community sufficient information to make that decision.

When Llama provided their 6-month update there was no push-back and no discussion of a cancellation. Seeing as service provider proposals do not include the many pages of standard legalese of traditional B2B contract, there is no concept of termination for cause or for convenience defined and it is left open to interpretation.

AIPs as contracts a nascent legal field without sufficient case law, but this should be used as a case study to enhance the explicitness of expectations from service providers and provider contractual rights of cancellation periodically if they are not upheld. We should take this as an opportunity to formalize a DAO service provider ToS that is included in all funded AIPs which clarifies expectations and rights of each party to minimize ambiguity.

2. DAO issued RFPs vs. Service Provider Proposals

As is expected with large contracts at traditional institutions, the DAO should build competitive markets around its needs so that it gets the best service at the best price. As @fig mentioned, we should break down the existing llama contract to understand:

1. What the DAO needs new partners to continue providing
2. How much it should pay for those services
3. What teams it should approached to “competitively bid” on that work

Some different work streams that the DAO could benefit from a diversity of providers are FP&A/Accounting, treasury management, protocol partnerships and TVL growth, among others.

For example, the community should hear pitches from teams like Llama, TokenLogic, Messari, Steakhouse, Gallifrey Labs, and others to handle the FP&A/Accounting aspects of the proposal.

TokenLogic has shown that they are a dedicated and beneficial service provider, and one that likely has a long-term place within the DAO, but we should not discount the benefits of a competitive bidding process to:

1. Better understand the DAO’s needs (must haves, nice to haves, etc.)
2. Compare different providers on an equal platform and ensure it is receiving the best proposal (not just cost, but quantity, too)
3. Define expectations of the specific provider more clearly
4. Bring in a diverse set of contributors and participants to continue decentralizing work done on behalf of the protocol

I would be happy (and eager) to work with @fig and other delegates to propose a more formal process for this for community review and approval.

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Separately, there is an additional $500k of “KPI-based bonuses” that needs to be reviewed for payment in accordance with the AIP.

@Llamaxyz

The KPI-based bonus is paid at the end of our 12-month contract based on the accomplishment of deliverables listed in our proposal. 70% of the bonus will be in USDC and 30% will be in AAVE.

• $0 on completion of 70% or less of deliverables

• $250k on completion of 71-90% of deliverables

• $500k on completion of 91-100% of deliverables

Alongside the conversation to terminate the engagement, the DAO should determine what amount of this bonus scheme should be paid, if any, with a detailed accounting of deliverables. @llamaxyz, can you provide a breakdown on where these stand?