Over a year, 100s of PRs, and US$1mil of funding later, Peel continues to ship juicebox.money.
When we started Peel, we had no idea where we were going, how long it would last, or if Peel was even worth starting in the first place.
Like JuiceboxDAO, it has miraculously worked out reasonably well. And like JuiceboxDAO, Peel might not be the best template for budding service DAOs and other projects. This article discusses Peel's treasury design and how we might improve it going forward.
Origins
When I stumbled into JuiceboxDAO in November 2021, JuiceboxDAO had managed to raise some million dollars in a few days. Maximum hype. Peak dopamine.
Back then, all contributors - including folks building juicebox.money ("Frontend") - received payouts directly from the JuiceboxDAO treasury.
But there were a few problems looming in JuiceboxDAO and Frontend:
- The frontend team needed to grow, quickly.
- Frontend didn't feel we had enough 'organizational autonomy' - lacked the flexibility to onboard and trial prospective contributors quickly.
- JuiceboxDAO voters lacked sufficient insight into day-to-day frontend ops to make an informed decision on individual contributor payout proposals.
A few months later, Frontend decided to break off from JuiceboxDAO. Peel was born.
Peel continues to receive a bi-weekly payout from JuiceboxDAO. Individual contributors then get paid directly from Peel's treasury.
Initial treasury design
We've rocked the same treasury design since day 0 (excluding changes to payouts). The following outlines Peel's treasury design:
| Parameter | Value |
|---|---|
| Cycle duration | 7 days (with a 3-day edit deadline) |
| Initial token issuance rate | 1,000,000 tokens |
| Issuance decay rate | 1.5% |
| Redemption rate | 60% |
| Reserved rate | 50% |
The initial reserved token allocation was as follows:
| Recipient | Amount |
|---|---|
| peri.eth | 16.66% |
| aeolian.eth | 16.66% |
| johnnyd.eth | 16.66% |
| jasonz.eth | 16.66% |
| torvusbug.eth | 8.33% |
| peel.eth (Peel multisig) | 25% |
The current state
Token distribution
The following illustrates the current distribution of Peel tokens.
This immediately reveals some positives of the current design:
- JuiceboxDAO has almost 50% ownership.
- Early Peel contributors have more ownership than those who joined later.
- Future "investors" would get fewer tokens than JuiceboxDAO (if they paid the same amount as JuiceboxDAO)
Treasury
Peel has 87.2141 ETH (US$150,351 as of 2023-06-19) across the Juicebox treasury and its multisig wallet.
No ETH has been redeemed from the treasury to date.
This might speak to the benefit of the steep redemption rate (60%). Or Peel token holders' belief in the future of Peel. Or simply that Peel token holders don't feel the need to write down their Peel holdings. Or some combo of all this.
Reflections
Funding cycle duration
I think a longer funding cycle time would have served us well.
A short funding cycle allowed us to change the payout limit with high frequency. On one hand, this allowed us to add contributors quickly and more quickly support payout increases for existing contributors. On the other hand, as a team that lacked experience in growing a team, some decisions may have been made too quickly.
Similarly, a cycle configuration every other week meant that the governance and admin burden grew. This takes time to manage and support. Time that would have probably been better-spent shipping code.
A longer funding cycle duration would have forced us to slow down, work within immutable limitations, and make decisions about payouts with more information and context at our disposal. It would have allowed us to spend less time mucking around with payouts and more time building.
Importantly, payout frequency should still mimic a standard payroll or contractor milestone arrangement; paying out all funds upfront instantly disincentivizes contributions.
If it were possible, a 3-month funding cycle that allowed for weekly payouts may have been ideal for team cohesiveness, productivity, and ultimately JuiceboxDAO's investment into Peel.
Given this isn't possible on the Juicebox protocol, a 2-week or 1-month funding cycle might give us some of the stated slow-down benefits while keeping payouts at a reasonable (admittedly, less) frequency.
Payouts
The multisig has too much ETH in it. Most of that ETH should be in the Peel treasury instead.
We should have been more specific with Peel's infrastructure expenses and only paid the multisig what we needed to.
Reserved tokens
We should have had a policy for adding contributors to the reserved list. Even something as simple as "Contributors on recurring payouts immediately get 2% of the reserved tokens" would have been better than nothing.
Some contributors have missed out on tokens because of this laziness and lack of oversight.
Revenue and token issuance
Peel's only source of revenue is its payout from JuiceboxDAO.
If Peel started taking fees from other projects (for example, via an opt-out 2.5% payout), we might need to consider token issuance more closely.
The beauty of Juicebox is that paying fees isn't paying into the void; fee payers get an opportunity to participate in the service. But we would need to make fee payers (other Juicebox projects) feel like the additional Peel fee is 'worth it' by some measurement.
Initially, simply making the fee yield more Peel tokens (thus more redemption value) seems logical.
In the future, Peel might have to give some other utility to its token. Some ideas are:
- Time-limited homepage visibility for the project.
- Inclusion in Juicebox's newsletter.
- access to token-gated juicebox.money features.
- some form of token-driven governance.
- a token-curated registry of some sort.
Future iterations
A future Peel treasury might look something like this:
- Funding cycle duration: for Peel's next payout proposal, lock the Peel cycle for 1 month.
- Payout: Make the Peel multisig payout equal to our actual infrastructure expenses, with some reasonable buffer.
- Reserved rate: Reduce from 50% to 10% => make payments yield more tokens
- Reduction rate: reduce from 1.5% to 0.69% => this results in 30% decay over 1 year (with weekly FCs), making future investment more attractive while still retaining some level of FOMO.
Redemption rate: increase from 60% to 95% => Make tokens worth more, while retaining some incentive to hodl. - Reserved list: give Juicebox 2.5%. All current Peel contributors get an equal split of the rest.
Other related action items:
- Move as much of the Peel multisig ETH into the treasury as possible.
- Convert all remaining Peel ETH to USDC.
- Immediately convert future payouts to Peel's multisig to USDC, to avoid currency risk.