TEMP CHECK: Cancel Current Grant & Replace with Reduced Grant

Shutter DAO DAO Proposals
1

Temp Check

Cancel the current monthly recurring grant to brainbot gmbh, and replace it with a reduced monthly recurring grant.

Context

In response to the Annual Review and Spending Audit Proposal, Decent Proposal 60 vote, and resulting discussion, brainbot pledged to create a new proposal to cancel the current monthly recurring grant and simultaneously propose a reduced grant.

brainbot initiated a discussion regarding Shutter priorities moving forward in the Shutter Forum to ensure the reduced grant is optimized for Shutter DAO 0x36ā€™s priorities.

brainbot is now posting this temp check to collect Shutter DAO 0x36 feedback on 3 options for a reduced monthly recurring grant.

Process & Timeline

  • March 17: Post temp check on the Shutter Forum

  • March 17 - 23: Feedback and refinements

  • March 24: Put temp check to a vote on Snapshot Vote

  • March 27 - April 6: Additional feedback and refinements

  • April 7 or April 14 (depending on the governance cycle/sprint calendar): Put final proposal to a vote on Decent

  • April 10 or 17: Execution of transactions to cancel the current grant and create a new, reduced grant

Options

Overview

Option Focus FTEs Runway in Months Runway Ends
1 Encrypted Mempool 4.5 40 July 2028
2 Shutter API 5 36 March 2028
3 Encrypted Mempool + Shutter API + Cryptography Research 7.5 30 Oct 2027

Option 1

Focus: Encrypted Mempool (Ethereum L1, Gnosis Chain) - our ā€œmoonshotā€ goal, which is highly complex (technically and politically) but would create tremendous revenue and impact if successful

FTEs: Ramp down from 12 FTEs to 4.5 FTEs (from July 2025 onwards)

  • Dev: 3.2 FTE
  • Business: 0.5 FTE
  • Admin: 0.8 FTE

Key Roles:

  • Dev: Keypers, Encrypted Mempools on Ethereum L1 and Gnosis Chain
  • Business: Minimal (0.5 FTE, focused on long-term partnerships)
  • MarComs: None
  • R&D: None (except R&D related to encrypted mempools)
  • Legal: None
  • Admin: Minimal

Runway in Months: 40 (see assumptions below)

Runway Ends: July 2028

Streaming Schedule (USD thousands):

Month Apr May Jun Jul Aug Sept Oct Nov Dec Jan Feb
Amount 150 130 118 97 81 81 81 81 81 81 81

Option 2

Focus: Shutter API (focus on encryption/decryption) - the most immediate and concrete opportunity to onboard clients and earn revenue

FTEs: Ramp down from 12 FTEs to 5 FTEs (from Jul 2025 onwards)

  • Dev: 2.2 FTE
  • Business: 1.5 FTE
  • MarComs: 0.5 FTE
  • Admin: 0.8 FTE

Key Roles:

  • Dev: Maintain Keypers, Develop Shutter API revenue infrastructure, Support Shutter API clients
  • Business: Acquire Shutter API clients via developing prototypes and B2B direct sales
  • MarComs: Marketing for the Shutter API and for clients
  • R&D: None
  • Legal: None
  • Admin: Minimal

Runway in Months: 36 (see assumptions below)

Runway Ends: March 2028

Streaming Schedule (USD thousands):

Month Apr May Jun Jul Aug Sept Oct Nov Dec Jan Feb
Amount 150 138 124 108 93 93 93 93 93 93 93

Option 3

Focus: Shutter API + Encrypted Mempools (includes both Option 1 and 2 above)

FTEs: Ramp down from 12 FTEs to 7.5 FTEs (from August 2025 onwards)

  • Dev: 3.2 FTE
  • R&D: 1 FTE
  • Business: 1.5 FTE
  • MarComs: 1 FTE
  • Admin: 0.8 FTE

Runway in Months: 30 (see assumptions below)

Runway Ends: October 2027

Streaming Schedule:

Month Apr May Jun Jul Aug Sept Oct Nov Dec Jan Feb
Amount 152 140 140 135 120 120 120 120 120 120 120

Fixed Costs

All proposals include fixed costs:

  • Tech Infrastructure: Hosting, SaaS, etc.
  • Design agency: Engage Relate Studio on a minimal ad hoc basis
  • PR agency: End current contract with Luna PR in July 2025
  • Conferences: Speaking engagements only (no sponsorships)
  • Overhead (office, payroll, etc.): Reduced proportional or cut to minimum.

Shutter DAO 0x36 Runway Assumptions

  • Runway starts in April 2025
  • Shutter DAO 0x36 limits other expenses to $25,500 per month (recent average)

Platform

Snapshot (If passed, this proposal will not trigger an on-chain transaction.)

Voting Options

Vote ā€œOption 1ā€

OR

Vote ā€œOption 2ā€

OR

Vote ā€œOption 3ā€

OR

Vote ā€œNoneā€ if you do not support any of the options

OR

Vote ā€œABSTAINā€ if you do not have an opinion but want to help the vote reach quorum

2 Likes
2

Whereā€™s the poll? Havenā€™t seen it on Snapshots

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Hi @middleway -

Quick answer:

1 Like
4

18K per FTE seems very high. I understand there usually is some markup on stuff like this, but 18k is high nonetheless. Iā€™d like to see how you land on this number. I know itā€™s not very common to discuss salaries in Germany, but maybe disclosing the mean or average salary of the people that would be on the teams would make sense in this case.

2 Likes
5

Hi @czepluch -

Thanks for your question.

The average cost per brainbot employee is approximately ā‚¬9,000 per month. This figure includes employer contributions to health insurance, pension, etc. This figure is also pre-tax.

Also, please keep in mind:

6

What do you mean pre-tax? Why do you mention that specifically? Isnā€™t that how you always talk about salaries in distributed teams?

So you propose that thereā€™s a 100% markup on the costs of each FTE basically? That sounds like a lot. I donā€™t know what else brainbot is spending money on and I donā€™t think itā€™s any of our business to know, but I would suggest that they try to cover those costs through other work.

I am currently just sharing my initial thoughts and ideas, do with it what you want.

1 Like
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At this stage, we believe it would be beneficial for Brainbot to provide more detailed information about the proposed budget items. The current funding stream proposal lacks sufficient transparencyā€”potentially even less than previous proposals. For example, weā€™d appreciate clarification on key points such as (in additional what czepluch has asked):

What specific tasks will each Full-Time Equivalent (FTE) employee be working on?

Why is there significant spending concentrated at the beginning of the timeline?

How will delivery and success be measured?

Each of these options has implications for the DAOā€™s long-term sustainability, and greater visibility into these details would help members make informed decisions.

If there is any ad-hoc cost, it should be request via RFP over a DAO process

Additionally, Brainbot BD has been working on encrypted pool adoption for over two years. It would be valuable for the team to share more insights, including first-hand experiences, lessons learned, and the challenges encountered. Specifically, how do you anticipate roadblocks evolving, and what strategies do you foresee to address them? This context would strengthen confidence in the proposal and its alignment with the DAOā€™s goals.

Lastly, given this also implies a future roadmap choice, the commenting period should be longer than 1 week

8

Regarding Option 1, the encrypted pool has been in development for some time. Given this, weā€™d like to understand why it still requires significant additional resources, particularly in the first few months of this proposal. Could the team provide more insight into what specific work remains and why this phase demands such a high investment?

Additionally, we believe it would be fair for this proposal to include a level of detail comparable to other submissions. For instance, proposals like Blockful and others request a funding range of $10,000 to $15,000 yet provide substantially more granular information about their plans.

9

That is 2x mark up for 18k per FTE

10

Edited the response to include commenting period.

11

Hi @Loring, thank you for posting this and keeping the community informed.

Iā€™m curious to know if Brainbot has other engagements besides working on Shutter. Is Shutter Brainbotā€™s only engagement or does Brainbot work with other companies as well?

1 Like
12

I am not commenting on behalf of BrainBot, but I think @Loring is mentioning all the social contributions the employer is paying; the employer has to pay something like 20-25% of the on-paper salary to match the social contributions. more here

13

Option 3 maintains the status quo, which ensures continuity, but it also comes with a significant financial burden. The Shutter API has strong revenue potential, but execution is keyā€”this requires a focused BD and marketing strategy, which is currently not our most substantial area.

More importantly, we need to ensure long-term sustainability. DAOs in their early stages require a leadership figure or structure (similar to ENS and Arbitrum) to drive the vision forward.

Currently, Brainbot is acting as an external service provider rather than a true core contributor, leading the DAOā€™s strategic direction.

We need to ask: Should Brainbot be given a stronger leadership role? Or should another structure be put in place to take the front seat?

While Option 3 gives us the most comprehensive approach, we must also consider its financial risk. A phased approach might be a more balanced and sustainable path forward, starting with a focus on the API while maintaining core development.

14

Is this also true for people employed but not living in Germany?

15

Intro

Thank you for all your questions.

I have answered most of them below. I will answer the remaining questions soon.

Please share any additional comments, suggestions, or questions below.

Office Hours Question

In the Office Hours call on March 20, @5pence asked me to clarify whether a new reduced grant could be revised after 6 months, so brainbot and Shutter DAO 0x36 can review and revise the roadmap and budget as needed.

Yes, brainbot would be willing to propose a 6-month grant or an 12-month grant with an expectation that we will review and revise after 6-months.

Topic Questions

I made a couple errors here - one on the calculation and one on the EUR to USD exchange rate. Apologies for any confusion.

Here is a more complete breakdown of average employee costs based and overhead:

Option Average employee cost Fixed costs as a percentage of total costs
Current $10,666 29%
1 $11,333 37%
2 $12,600 32%
3 $12,000 25%

The average employee cost depends on which employees are retained (and which are terminated) in each option.

The overhead as a percentage of total costs is within industry averages. It is inversely proportional to team sizes - which makes sense.

Just mentioning it for the sake of clarity.

Some fixed costs are directly related to Shutter (and only to Shutter). Other fixed costs are related to brainbot generally.

Presently, brainbot only works on Shutter, and so all brainbot fixed costs are covered by the monthly recurring grant from Shutter DAO 0x36. Moving forward, brainbot will start work on additional projects, and so Shutter fixed costs will be covered by the new grant. Other project fixed costs will be covered by other projectsā€™ funding sources. And brainbot fixed costs will be split proportionally between the new grant and the other projectsā€™ funding sources.

I have updated the original post to include a breakdown of the number of FTEs by job category.

In each of the three options, costs decline each month until reaching a steady state in August 2025.

This four month transition period is needed due to brainbotā€™s contractual and legal obligations, which it incurred and maintained in our work under the monthly recurring grant, specifically: employee and contractor termination notice periods, and the remaining contract period with Luna PR.

brainbot will publish a document outlining technical milestones, decision making, lessons learned and a retro regarding Shutter the DKG and its integrations/products from 2023 to 2025.

The encrypted pool still requires significant additional resources because itā€™s not a simple add-on, itā€™s a deep, protocol-level integration that involves several layers of complexity:

  • Deep Integration & Collaboration: Unlike quick fixes (such as private mempools), this solution requires a fundamental redesign and tight collaboration across multiple actors (e.g., core devs, proposers, builders, RPC providers, validators and keypers). Implementing any in-protocol feature is inherently challenging and demands extensive coordination.

  • Cutting-Edge Research: The encrypted mempool remains at the frontier of blockchain research. Recently, influential figures like Vitalik Buterin, along with researchers from Nethermind and the EF, have been actively discussing and researching this topic, underlining both its potential but also that some of this is still in the research phase.

  • Decentralization/P2P comms challenges: Integrating two sets of decentralized operators (validators and keypers) introduces unique technical hurdles, such as ensuring robust peer-to-peer communication. These issues have already surfaced in real-world scenarios, for instance on the Gnosis chain.

  • Evolving Transaction Supply Chain: The constantly changing nature of the PBS transaction supply chain means that the system must be continuously updated and refined, as outlined in our encrypted mempool for PBS roadmap.

That being said, the encrypted mempool on Ethereum L1 seems needed more than ever. Just within the last week, weā€™ve seen two extremely critical front-running exploits. Vitalik has recently mentioned the encrypted mempool as part of his vision and weā€™re seeing a ā€œholy trinity of censorship resistanceā€ emerging: FOCIL, ePBS, encrypted mempool. Just after weā€™ve published our latest roadmap towards integrating an encrypted mempool in Ethereum, two more encrypted mempool proposals were made which are highly complementary to our proposal. With this roadmap proposal, the partnerships in place as well as the encrypted mempool deployed on Gnosis Chain mainnet, Shutter is probably better positioned than any other project in the space to execute on this vision.

If Shutter DAO 0x36 would like additional time to discuss this temp check, please let me know. I can revise the ā€˜Process & Timelineā€™ section (in the original post) accordingly.

Presently, brainbot only works on Shutter - encrypted mempools, Shutter API and use cases, and cryptography research. Moving forward, brainbot will start work on additional projects.

3 Likes
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A couple more questions and answers:

Office Hours Question

In the Office Hours call on March 20, @5pence asked which option brainbot would prefer - and why.

brainbot prefers Option 3. A few reasons:

  • Option 3 allows us to work toward our ā€œmoonshotā€ of Encrypted Mempools while also monetizing the Shutter API as quickly as possible.

  • Option 3 gives brainbot the opportunity to shift team resources between Encrypted Mempools and the Shutter API, depending on business traction and market conditions. Our current strategy is to dedicate the lionā€™s share of resources towards Shutter API in order to capture market share for simpler, application level use cases quickly, but this can change.

  • Option 3 significantly reduces Shutter DAO 0x36 costs and extends its runway. Starting in August, the grant costs would be approximately 50% of the current costs. (Cost reduction would be achieved by brainbot eliminating non-core positions, and distributing overhead between Shutter and other projects.) As a result, Shutter DAO 0x36 runway would be 30 months - lasting until October 2027 - which is significant and healthy.

Forum Question

Delivery and success metrics will depend on which option is selected.

A short summary:

  • Number of major chains with encrypted mempools & major dApp with a Shutter API integration
  • Number of encrypted transactions
  • Number of users protected by encrypted transactions
  • Value protected by encrypted transactions
  • Revenue generated
1 Like
17

@Loring, the voting option on Snapshot is weighted; how will the weighted results impact the final decision? or is it just for the votes to give more flexibility?

18

The weighted voting is just designed to give votes more flexibility - in case some members of Shutter DAO 0x36 are on the fence.

19

This is a good list of measurements:

What would be the target for each of these item?

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The targets for each metric will depend on Shutter DAO 0x36ā€™s priorities and our levels of funding.

I would recommend Shutter DAO 0x36 select an option. And then we can dive into details.