# Annual Review and Spending Audit Proposal

Shutter DAO DAO Proposals
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Annual Review and Spending Audit Proposal

Summary

This proposal aims to conduct a comprehensive review of the DAO’s expenditures to evaluate past initiatives, pinpoint areas for improvement, and ensure accountability across all funded projects. With substantial funding already allocated and the DAO’s treasury at a pivotal midpoint, this review will enhance transparency and inform future decisions. By analyzing expenditure effectiveness, we can celebrate successes, address challenges, and strategically plan future allocations to bolster the long-term sustainability of the Shutter Network.

Background

The DAO has directed significant funding toward diverse initiatives, including grants, marketing, and a substantial budget for development, research, and business development (BD). While some efforts have thrived, others have not met expectations after $2 million in funding, prompting questions about resource efficiency. Key points include:

  • The current financial runway indicates the DAO may not sustain operations beyond one more year.
  • No significant Shutter releases have occurred since at least May 2024, if not earlier.
  • Despite a dedicated BD budget, traction remains minimal.
  • A marketing agency was engaged, yet awareness has not noticeably increased.
  • Numerous grants have been distributed, but transparency is lacking, and the impact of some funded initiatives is not clear.
  • Progress on certain funded projects has been slower than anticipated.

Given varying opinions within the DAO about project outcomes and a slowdown in the L1/L2 ecosystem, this is an ideal time to assess past spending and optimize future resource allocation.

Proposal Details

Conduct an Annual Review:

  • Analyze all major DAO-funded initiatives from the past year.
  • Identify successes and areas needing improvement.
  • Evaluate the effectiveness of grant-funded projects.
  • Document fund allocation and their resulting impact.

Audit Expenditures Over $5,000:

  • Scrutinize all initiatives and activities exceeding $5,000.
  • Determine if objectives were met and funds were used efficiently.
  • Suggest measures to ensure underperforming initiatives align with goals.

Engage DAO Members:

  • Include the community in the review process for varied insights.
  • Solicit feedback on enhancing grant and initiative selection processes.
  • Promote transparency and shared accountability.

Temporarily Pause Further Payments, Grant Disbursements, and stream claims:

  • Suspend new payments and grant disbursements until the review is complete.
  • This ensures we conserve the treasury while reviewing the impact of different funding, aligning future allocations with the DAO’s priorities—especially given the runway is very limited right now.
  • As an alternative to an immediate vote to pause streams, we request that all parties refrain from drawing additional funds until this proposal’s vote concludes.

Expected Outcome

Once completed, funding and initiatives will resume with a refined strategy, ensuring resources are allocated efficiently and effectively to support the DAO’s mission. The review will deliver:

  • A detailed report on past spending, spotlighting successes and areas for growth.
  • Practical recommendations for future funding decisions.
  • Enhanced accountability for grant recipients and service providers.
  • Streamlined processes for approving expenditures.

Next Steps

  1. Issue an RFP : Release a Request for Proposals to engage a qualified individual or entity from the community to lead the review.
  2. Set a Budget : Allocate up to 25 days of work at 9 hours per day and $130 per hour, beginning once all materials are provided.
  3. Compile Findings : Deliver a thorough report to DAO members.
  4. Host a Discussion : Facilitate a community session to review findings and refine spending strategies.
  5. Update Processes : Establish a more transparent and robust funding approval process based on insights and community input.

Content of the Report

The review report should include:

  • Spending Breakdown : Allocation details across development, marketing, BD, and research.
  • Financial Runway : Projected operational duration based on current funds and spending.
  • Proposal Overview : How many proposals have been created, which entities or businesses have benefited, and how many of all proposals directly relate to Shutter Network, the DAO, and its tokenholders.
  • Token Sales : Scope of token sales by initial team members and advisors with free tokens.
  • Development Progress : Code contributions, release frequency, and software advancements.
  • Activity Impact : Outcomes of funded initiatives on the Shutter Network and DAO objectives.
  • Funding Verification : Confirmation of full disbursements without unexpected conditions.
  • Initiative Review : Quantity and impact of proposals on the network and treasury.
  • Development Metrics : GitHub commit analysis, release frequency, and grant-funded code delivery, maintenance, and network benefits.
2 Likes
2

Thank you for a good proposal.

When Shutter DAO was created, my concern was that there was no transparency on the spending and burn rate, especially regarding Brainbot and team size as it is the largest cost element. It looks like we have come to this.

ShutterDAO probably needs to cut the burn rate a lot, and this report is unlikely to help. While I don’t necessarily agree with the audit details presented here, it would still be useful to learn lessons to see if anything could have been done better and could be done better in the future.

3 Likes
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Hi guys, As always I appreciate the effort that has gone into this proposal. I need to give it more thought but at the moment I am inclined to vote against it for the following reasons:

  1. I feel like the project is making progress with Gnosis integration, pushing for eth encrypted mempool etc. It is slow but then again this was always going to take time especially when it comes to changes to the ETH L1.
  2. The SHU price is down, makes me sad. ETH price is down and pretty much every other crypto project is down. I am on a bunch of discords where every one wants the devs to do more, more marketing, hunt down the sellers, quicker development. Crypto is highly volatile, startups are highly volatile, put the two together and expect pain in the short and possibly long term especially given the uncertainty in the macro environment.
  3. The treasury is small, audits can be hugely expensive, most of the expenses are public anyway along with the votes and discussions leading up to approval.
  4. The terms of the audit are too broad covering everything from DAO processes through to analysing github commits, this will likely take a significant amount of time for little appreciable benefit. Do we envisage an output being developers have to increase the frequency of their code commits? Or asking people to buy back tokens they have sold or not to sell tokens in the future?
  5. We have spoken about things like the funding approval process in the past, I feel like it is open and transparent. I would be happy to participate in any discussions about how it can be improved.

I guess my main feeling is that I would rather see the DAO take positive action that generates benefit rather than trying to find fault with things that have already happened.

If there are issues that need to be analysed, it would be better to break them down into components such as a DAO process review, marketing etc. Some of these questions and issues can most certainly be addressed internally through conversation within the DAO rather than funding external auditors or at the very least, we should take that approach first.

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Support completely, we need to take a look at what was done to date and decide how to move forward, i only wish we initiated this earlier. Will definitely vote yes, thank you for proposing!

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Brainbot operations are not transparent at all and when you ask them direct questions they refuse to provide details. We gave money directly to BrainBot and will be pursuing accountability and full transparency from their side for sure!

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Compared to other expense, this is rather a small one. Probably less than 10% of DAO’s 1 month expensive or 1% of 1 year’s runway. I know this might sound surprising

I would also like to point out the Gnosis integration was pretty much already there technically and BD wise before this DAO even existed. This might sound new to new members

The fact is no one want to do this but if you read some proposal and check against what has delivery then you would be wondering where does 2 million dollar has gone

I do agree the content of review/audit should be more detailed. But I do not think it is meant to check any code commits

2 Likes
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Directly start a proposal on cutting down burn rate could be a solution

3 Likes
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Dear Shutter Team and Stakeholders,

As we approach a pivotal moment in Shutter’s journey, I am compelled to address a proposal critical to the survival and future success of our startup, now one year since its inception. Over the past year, we’ve operated with an ethos of openness, fairness, and unwavering trust in our team. However, the time has come for all involved—team members, investors, and community stakeholders—to provide their candid feedback on this proposal. I must admit, I’m surprised by the limited commentary thus far, given its significance.

Proposal Overview and Expected Outcomes

This proposal aims to realign Shutter’s operational and financial framework to ensure sustainability and efficiency. Based on my observations, the response to this initiative will likely split along two lines:

  1. Opposition from Non-Delivering Beneficiaries: Individuals currently funded by the DAO, who have enjoyed substantial financial support without delivering commensurate results, may resist this proposal. Their opposition would stem from the potential loss of a lucrative income stream that, until now, has lacked rigorous accountability. This group has benefited from an overly generous structure, and change threatens their status quo.

  2. Support from Committed Stakeholders: Those genuinely invested in Shutter’s protocol, business model, and token ecosystem will likely champion this proposal. Why? Because it promises to ignite a competitive, leaner approach to steering the project—potentially reducing the budget by 5-10x while achieving superior outcomes through heightened accountability. This shift would prioritize efficiency and tangible results over unchecked expenditure.

A Competitive Alternative

To demonstrate my confidence in this vision, I am prepared to submit a competitive offer to the market. I believe Shutter can thrive under a more disciplined, results-driven leadership model. I propose opening the floor for others to present their own bids—let’s elect the most efficient, capable team to lead us forward. This isn’t about personal gain; it’s about ensuring Shutter’s longevity and success.

Shutter’s Identity and Purpose

Let’s be clear: Shutter is a startup, not a government-funded NGO, nonprofit, or academic research entity. Our mission hinges on a viable business model where every dollar spent is tied to a clear roadmap and a tangible profitability plan. In our first year, investors and community members have shown extraordinary generosity—perhaps excessively so—by refraining from interference to allow the team to prove itself. That grace period has now ended.

A Call to Action

We stand at a crossroads. The decisions we make now will determine whether Shutter thrives or falters. I urge all participants to reflect objectively—admittedly a challenging task given personal stakes—and prioritize what’s best for the project. Please share your thoughts, critiques, and ideas. Silence at this juncture is not an option.

Thank you for your dedication to Shutter. Let’s seize this opportunity to recalibrate and build a stronger future together.

1 Like
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Hi @Ricosworksa -

Thank you for the proposal.

brainbot is pleased to see more active participation from you and other Shutter DAO 0x36 members.

brainbot will not be commenting on the proposal - or advocating for or against it - because we do not participate in Shutter DAO 0x36 governance.

We are (and have always been) transparent about our work for Shutter DAO 0x36 under the monthly recurring grant. Every month we publish an update for Shutter DAO 0x36, detailing: use of funds, team, research, products, and marcoms.

We would be happy to answer any questions or share more information upon request.

We welcome constructive feedback and suggestions. We are eager to work together with Shutter DAO 0x36 to make necessary changes and ensure Shutter Network is as successful as possible.

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Shutter is Brainbots making, you can call it what you want and try to mask it for whatever reasons but everything being done here is Brainbots doing. Brainbot signed agreements for funding, Brainbot received investment funds, Brainbot has the tech imho and Brainbot is responsible for the SHU tokens performance, marketing and BD strategies and execution. Now it is the time to stop any funding and only fund the analysis of the work done to date.

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Hi @acidbird -

Thank you for your comment. A couple replies:

Brainbot operations are not transparent at all

brainbot is (and have always been) transparent about our work for Shutter DAO 0x36 under the monthly recurring grant. Every month we publish an update for Shutter DAO 0x36, detailing: use of funds, team, research, products, and marcoms.

and when you ask them direct questions they refuse to provide details

A few days ago, in the Shutter Friends Telegram group, you asked for a list of brainbot employees working on Shutter. As a German company, brainbot is required to obtain permission from employees prior to sharing their data externally. I have asked brainbot employees if they give permission. I will have an answer shortly.

Were there other questions you previously asked which brainbot has not yet replied to? If so, please direct me to them.

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Hello, you had plenty of time and capital to make it right. Unfortunately, you (Brainbot) failed, all the further questions i asked will be answered during the future audit. Thank you.

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According to the dao treasury have left， I think it is “have to” cut the burning rate. And put the focus on something really benefit the project. For the audit perspective, I think detail can be further discuss. But I generally support the proposal.

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I believe we should maintain a balanced perspective here. Brainbot has been the primary contributor to Shutter, and their regular monthly reports have provided transparency on fund usage. Until recently, few concerns were raised about the DAO’s spending in our governance channels.

While examining our financials is healthy governance, we shouldn’t approach this as a blame-assigning exercise - that would amount to a witch hunt. Instead, we should focus on improving future resource allocation and right-sizing spending based on current conditions.

We all need to learn from the DAO’s past decisions to improve our governance for the project’s mission. All members share this accountability. If this review is motivated by finding fault rather than process improvement, I wouldn’t support it. Our goal should be strengthening Shutter’s sustainability, not division.

1 Like