This proposal formally engages Cloudless Labs (formerly Fluence Labs) to continue development of the Fluence platform. Cloudless Labs is uniquely suited to develop these features and others, to also increase awareness of Fluence and to drive adoption.
Determination of benefits:
Fluence requires additional development before it is a fully functional network:
The network should add staking functionality to provide trust
The network also should add Docker integration to support a wider range of use cases than is possible with WASM.
Adding GPU support is important to address the fast growing AI market.
Terms:
Cloudless Labs will be paid $400,000 per month to cover operational expenses
Marketing expenses will be reimbursed as incurred with a cap of $250,000 per month
Fluence DAO will make a one time payment of $1,000,000 to reimburse Cloudless for expenses involved in setting up the DAO
Fluence DAO will grant Cloudless Labs 20 million FLT and will grant and additional 5 million FLT for achieving each of the following three Deliverables
Deliverable 1: Staking for hardware
Deliver network scalability required for onboarding up to 10,000 CPUs and enabling staking for new hardware.
Build UX for FLT holders to discover staking availability and stake tokens to hardware
Develop ability for the Fluence platform to support other execution runtimes alongside WebAssembly to enable customersā workloads in Docker containers.
Deliverable 3: GPU support
Add compute marketplace features for GPU hardware. Enable staking for GPU hardware and ability to rent it from the marketplace by customers.
Funding process:
Upon approval, the $1 million one time payment and six months (two quarters) of the $400K monthly payment ($2.4 million) will be transferred to Cloudless Labs.
Upon approval, 20 million FLT will be transferred to Cloudless Labs
The DAO governance committee will be responsible for determining the successful completion of the Deliverables
Additional payments of $1.2 million per quarter will be transferred by the DAO at the beginning of each quarter.
Where does one vote? Have you considered splitting up the proposal into seperate asks?
Couple questions:
Deliverable 1: UX for FLT staking, Iām looking forward to this, but Iām curious if thereās more information on if staking to hardware generates yield, if at all? Or is it purely a basis of open monetary market-driven trust based on resources? Can you get staking to prevent recieving resources from bad sources of capital? Can hardware operators use this money for to borrow against to build out their provisioning? Will this create opportunities for slashing bad behviour or downtime?
Deliverable 1: Deliver network scalability - what is the current load on the market in the present? Should the idea be to enable decentralized provisioning of compute (like ETH 1.0 Miners), like community workshops, centralized distribution of parts, etc.
Is Cloudless Labs open to community members developing a role in the community with the DAO?
Will these 20m FLT just be sold on the market? Donāt you think there will be a lot of pressure on the price then? At such a stage of project development and price behavior, wouldnāt it be easier to find an investor who would purchase such an amount of FLT? For example, instead of an airdrop the developers could find an investor + conduct a larger round at IEO and this money would definitely be enough for a year of development and would not create a big pressure on the price. I just want to hear an answer from the team, because this is very important. If at this stage you sell 20m FLT to the market, even if gradually, then this will impact the price.
Yields will be clear after it is launched publicly. The pre-staking campaign starts next week. The mechanism of how staking will work is described here.
Providers will be able to specify addresses that are eligible to stake to them if they are not open to receive the stake from anyone.
Staked money are not available for providers for use. But we have some ideas around how to help providers be pre-paid / pre-funded so it is easier to start the business.
Slashing initially is very limited. Need to reach network maturity to enable fully functional slashing.
We agree that selling 20 million even gradually would impact the price, and we do not think the current price is attractive to be selling. If this proposal passes, Cloudless Labs will have sufficient cash to fund operations for over two years so will not need to sell tokens to fund operations. Additionally, the owners and investors in Cloudless Labs hold significant tokens and so are aligned with the community. We have also received interest from outside investors who would like to acquire FLT from Cloudless, but we do not think the current price is attractive to sell.
Please see the service agreement document, which captures my original proposal and accomodates the legal and compliance related off-chain requirements.
We agree that selling 20 million even gradually would impact the price, and we do not think the current price is attractive to be selling.
In that case why you asked for 20 millions FLT?
If this proposal passes, Cloudless Labs will have sufficient cash to fund operations for over two years
Again, why you ask for 20 mils FLT in that case? You can do it after ~2 years.
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Two years. Lets do some calc:
Cloudless Labs will be paid $400,000 per month to cover operational expenses
Marketing expenses will be reimbursed as incurred with a cap of $250,000 per month
Fluence DAO will make a one time payment of $1,000,000 to reimburse Cloudless for expenses involved in setting up the DAO
1M + 0.4M * 24 + 0.25M * 24 = 16.6 mils
(24 = month in 2 years)
Not bad.
But, from the proposal it is not clear for how long Cloudless Labs will be paid 400k & 250k.
Now, 20M FLT is 5 mils with the current token price, or 20Mils with 1$ price. It is aligned with 16.6 mils cash that you would have. So, why you ask for tokens? You already have some, but vested until Feb/March 2025.
As an important partner for the Fluence DAO, we want Cloudless Labs to be aligned with the success of the DAO and to be able to participate in that success. We think token compensation is fair as the cash component of the agreement is designed to only cover the costs of Cloudless Labs.
As far as I understand Cloudless Labs already have (in vesting) 200M FLT tokens, so what is the reason for 20 mils more? Sorry, but I dont get it at all
I donāt see any ample arguments for Cloudless getting even more tokens within such a short liquidity horizon (no lockup) since the team and private market investors control most of the supply (also practically controlling the DAO decision-making at this stage). Since Tom indicated that thereās no intention to sell the token at this price and thereās no immediate need for cash to cover its burn rate, it makes sense to postpone this proposal at least until next year.
Could you please elaborate on the statement made by Tom, as I might not understand the format of the deal correctly: āIf this proposal passes, Cloudless Labs will have sufficient cash to fund operations for over two years and will not need to sell tokens to fund operations.ā In that scenario, what will be the source for the DAOās $400,000 monthly operational, $250,000 monthly marketing, and $1 million 1-time payment to Cloudless Labs, other than selling $FLT? Does the DAO already hold cash on the balance of the trust? Otherwise, the initial statement seems contradictory.
If Cloudless Labs does need cash to scale operations, the only meaningful format of the deal, in my opinion, is selling FLT in the secondary market through an OTC with vesting imposed, thus aligning incentives: Cloudless Labs gets upfront cash and thereās no short-term possible inflation given the vesting.
Also, being frank, the overall ask structure for the expenses seems extremely high (given the specification in the proposal). A $650,000 extra monthly burn rate seems excessive given the teamās current capacity (considering the information regarding the team, their profiles, the number of people, and their geographic location).
The $1 million payment for setting up the DAO also seems extremely high. Iāve worked on setting up DAO structures (special purpose trusts/foundations) across Gibraltar, Panama, and Seychelles, and the cost for the groundwork is nowhere near the $1 million figure.
I believe Cloudless Labs is already āāmore than well-alignedāā by holding 20% of the supply at a valuation of around $250 million (with the price of FLT at just $0.25). If any additional tokens are allocated on top of that (which I personally see as nothing but greediness), I believe it is fair to have them in a vesting schedule similar to other investorsā and team tokens, with a lock-up period (and not liquid).
The team has been building Fluence since 2017 and the original Cloudless Labs allocation was compensation to that team for the work done over the past 7 years in getting the protocol launched. That allocation remains locked.
The additional allocation has a few purposes including supporting staking if necessary, potential marketing initiatives, financing and allocation to additional team team members and contractors, and there is no plan to sell any tokens in the foreseeable future. Given the 15 day turn around time for DAO proposals, Cloudless Labs can act far faster in response to opportunities and is aligned with long term token holders.
The ongoing work in developing Fluence is significant and will require both cash and token compensation to attract the best talent, but those tokens will vest over years as with the existing team tokens.
Also note that the $400k is the monthly and the additional marketing funds are only to reimburse if spent.
