Proposal: Llama <> Aave


Like the classic novel from Charles Dickens, I think that a Ghost is needed to take us on a journey through the past, present and future needs of the DAO and evaluate this proposal.


Matt was kind enough to summarise what Llama has done for the DAO to date, so I think it’s only fair that we all evaluate their performance.

Llama’s proposal is broadly broken down into:

  • Treasury Management and Analytics
  • Growth
  • Risk Underwriting and Liquidity Analysis

From a control standpoint in a TradFi firm no one individual should be;

  • Making investments
  • Accounting for them
  • Executing them

Llama’s proposal is essentially suggesting we trust them to do just that. It is frankly absurd to say trust us to do the risk analysis on our own investments.

Broadly the content is pretty much unchanged from the various “vision” and “strategy” documents they have produced in the last year. The question is if they were not able to execute on it then what has changed?

I think the major blocker is that we as a DAO haven’t agreed on what Treasury management even looks like and what our vision is. Sure we want reporting and dashboards but do we even want to give individuals control over the treasury and making investment decisions?

Until we have a discussion about our Treasury objectives it seems ridiculous to even discuss having a 2.5m Treasury management contract.

As a DAO if we truly want to decentralise and potentially spend $2.5m for operations, I think we really have to assess what our needs are?

Based on the work Llama have done outside of Treasury it is clear we would benefit from;

  • DAO Operations to manage growth, partnerships & governance (1-2 people)
  • Finance/Treasury members to prepare reports, forecasting, payments, limited investment work (2-3 people)
  • Data scientist to maintain and improve dashboard (1 person)
  • Junior Dev to help with AIPs and low level eng tasks (1 person)

We then have to support:

  • Gauntlet and Chaos should be leading risk work, and any future contracts should push them to include analysis on new listings
  • BGD are handling dev work
  • Aave companies provide additional support with their resources

Before the DAO commits to any further spending I would want to to see a detailed cashflow and spending forecast prepared, ideally by our Treasury managers who are paid to do it, and we should then vote as a DAO on how much budget we want to allocate to each area. Heck I will even throw a burn model together myself now, spoilers alert we’re losing $33.9m before we even consider stkAAVE emissions:

+$18.25m revenue (50k/day)
(-) $16.3m Aave Companies
(-) $12m Grants (ARE WE SERIOUS???)
(-) $10m BDG
(-) $3.3m Chaos
(-) $8m Gauntlet
(-) $2.5m Llama

I think everyone feeding on the soon to be carcass of this DAO needs to realise this is not a never-ending money pit! The bull market is well and truly over and AAVE is not a $5bn cap token. We simply cannot have the burn rate that we do in the current environment if we want to survive.

Treasury managers at a minimum should be assessing the impact of spending requests in proposals and giving the community guidance on whether they are affordable!

We should hold contributors accountable for spending requests and enforce transparency around contractor costs. I believe people should be paid well for their work and companies should make profits, but who is getting what should be clear. This holds true for all proposals whether its Aave Companies, BDG, Gauntlet or Llama.

My intention is not to dismiss entirely of the contributions that Llama and particularly Matt Graham have made to this DAO. Matt particularly seems to be one of the most active members of the community and would definitely support him coming on with the DAO fulltime in a Growth/Operations type role if he ever wanted.

But that does not mean that Llama deserves a $2.5m sweetheart deal, in an uncompetitive process after submitting an unsolicited bid. Especially given the track record of delivering ok but rather mediocre work, and a focus more on asset listing and proposing ideas than executing on treasury work.

Some questions I have for Llama about their bid;

  • Who is Llama? What are your backgrounds outside of Llama?
  • How many full time employees do you have? What are their roles? How many are dedicated to Aave?
  • Have you raised Venture Funding? Do those same VC’s vote on Aave proposals?
  • For fairness would you abstain from voting on proposals that you benefit from?
  • How do you manage conflicts that arise between Aave and your work with other DAOs?
  • How did you arrive at the $2.5m quote? How much of this is profit for investors?