Kpk H1 2025 Review for the ENS Endowment

[kpk]

Introduction

As we move into the second half of 2025, kpk is excited to provide a brief overview of our collaborative efforts with the ENS DAO so far this year and outline our future initiatives.

To begin, we present a summary tracing the timeline from the Endowment’s Request for Proposal (RFP) in August 2022 to the current state:

Financial Update

ENS DAO

Based on the latest accounting report, the following financial details for 2025 year-to-date (“YTD”) were noted:

• Operational Revenues for the DAO amounted to $7.71M.
• Operational Expenses for the DAO were reported at $7.55M (excluding ENS tokens).
• DAO assets, comprising ETH and stablecoins, stood at $115.00M, indicative of a 9.8-year operational runway (based on last 12 months of cash burn).

Figure 1: ENS DAO asset allocation

Figure 2: ENS DAO asset distribution by address

Endowment

Since its inception, the Endowment has achieved:

• Accumulated net revenue of $4.92 million from DeFi strategies.
• A net average Annual Percentage Yield (APY) of 3.09%.

Figure 3: Endowment historical performance

In the first 6 months of 2025, the Endowment has achieved:

• Accumulated net revenue of $1.18 million from DeFi strategies. For context, this means the Endowment could have covered 15.6% of the DAO’s Operating Expenses ($7.55M) in H1 2025.
• A net average Annual Percentage Yield (APY) of 2.72%.

According to the latest June 2025 Endowment monthly report, the following key metrics were observed (Endowment-only metrics, DAO-wide included above):

• $93.84M of ncAUM (non-custodial assets under management).
• 100.0% of capital utilisation.
• Projected APY of 3.0%.
• Projected annual revenue of $2.73M.

Figure 4: Endowment asset allocation

Figure 5: Endowment protocol allocation

Figure 6: Endowment ETH allocation

Lookback on the Mandate

In the last year, we have advanced several initiatives within the DAO, demonstrating our ongoing commitment to supporting ENS.

The introduction of the Investment Policy Statement in October 2024 was a pivotal moment for the Endowment. Since the adoption of the IPS, kpk has advanced initiatives that both execute on the IPS and extend the scope of our mandate, adding measurable value to the DAO.

1. Fiduciary Execution of the IPS

With clear risk parameters in place, we’ve adhered closely to the IPS guidelines, balancing yield generation with capital preservation. The Endowment’s asset mix, strategy selection, and diversification efforts (e.g. LSTs, protocol spread) are all conducted in direct alignment with these constraints. Key parameters like maximum exposure thresholds, protocol allowlists, and liquidity minimums are monitored continuously.

2. Enhanced Transparency through Reporting

A crucial part of the endowment management is establishing accountability and ensuring ease of access to the information for the DAO. Recognising the importance of accountability, we continued to upgrade our reporting processes:

• Enhanced Monthly Community Update, starting February 2025. The Community Update complements the existing, numbers-focused monthly reports, by providing broader context into market colour and Endowment activities.
• Weekly Dashboard, starting April 2025. The Weekly Dashboard provides deeper, strategy-level granularity to the public.
• Enhanced financial reporting, starting March 2025. The enhanced financial reporting now provides 2 versions: the original version with ENS token expenses; and the new version without ENS token expenses.

3. Operational Expansion beyond Mandate

In response to community needs, kpk has also taken on expanded responsibilities, mainly in respect of ENS DAO’s cash flow management. kpk will be closely monitoring the ENS DAO’s cash positions to ensure the DAO can meet its ongoing commitments for various expenses which remain crucial for the continued development of ENS’ infrastructure and ecosystem.

An example of the cash flow management is the recent TWAP facilitated by kpk, Meta-Governance Stewards, and representatives from the ENS Lab. Over the course of 4 months, we helped swap 6,000 ETH for ~$15M at an average price of $2,553. Through skilled execution, we exceeded the average daily price over the same period of $2,160, thereby achieving a $2.36M surplus. We published a thread highlighting the success of this operation.

The IPS has also been revised (v1.0, v1.1, v2.0) based on ongoing community feedback, and changes in the investment mandate have been voted on and approved by the community. The IPS is meant to be a living document, evolving alongside the ENS DAO; we will continue to revisit and refine it to ensure its policies remain aligned with the DAO and are publicly available to the DAO.

We hope to serve the ENS DAO not just as an instrument and guardian of the Endowment’s core mission, but also as a strategic partner responsive to the DAO’s evolving needs.

ENS DAO Trends

Key trends emerging in H1 2025:

1. Increasing capital efficiency. Assets deployed for yield generation have steadily increased since 2023. As a result, the DAO’s capital utilisation ratio has increased from 0.0% in January 2023 (before the Endowment was initiated) to the current level of 84.4% (June 2025). The Endowment has transformed previously-idle capital into a productive asset base by allocating idle assets into yield-generating strategies that meet the DAO’s risk and governance parameters (as outlined in the IPS). The result is a growing, independent revenue stream that supports core operations and enhances financial resilience. In turn, this positions ENS to fund innovation, retain contributors, and uphold its commitments to the community, all without compromising the decentralised values of the DAO.

Figure 7: ENS DAO capital utilisation (considering DAO invested assets/total DAO assets)

2. Increasing financial contribution of the Endowment to the ENS DAO. Endowment contribution to the overall revenue of the ENS DAO has also increased steadily since 2023; in H1 2025, Endowment revenue accounted for 20.1% of ENS’ total revenue. This underscores the Endowment’s growing role as a reliable source of passive revenue to support ENS operations — a model of financial responsibility that sets a benchmark among DAOs.

Figure 8: ENS Endowment contribution to ENS DAO revenue

3. 2025 net operating income is likely to be lower. Despite the positive points above, lower net operating income is expected, driven by a plateau in domain registrations and renewals and an increase in operating expenses. In the first half, the DAO reported operating net income of +$0.2M, driven by operating revenue of $7.71M and operating expenses of $7.55M. However, the DAO has also committed to increased current and future expenditures for core contributors and grants, hinting that negative net operating income for 2025 is possible. The expenses commitments mentioned above include a $9.7M ENS Labs budget, a $4.5M budget for SPP Season 2 and the upcoming October funding window for working groups.

4. Lower income is driving discussions about alternative revenue sources. The reversal in revenue trends is pushing DAO discussions to explore alternative ways to increase its revenue, whilst respecting the ENS DAO Constitution. Two initial discussions have emerged in relation to:

• Exploration of new pricing policy: a deep dive into pricing mechanism revisions to better optimise long-term revenue.
• Investment into Open Box: a novel venture aimed at ENS integrating with global namespace, while providing an alternative source of revenue for the DAO.

Figure 9: ENS DAO revenue & expenses since Jan-2023

Looking Forward

As we look forward to the second half of 2025, there are a number of key areas where we plan to expand our work and continue delivering against ongoing objectives and milestones:

Endowment Management

• Continued assessment of the investment landscape, and broadening the investment universe for the Endowment within the confines of the Endowment’s IPS.
  • We plan to introduce another set of Permissions Update Requests within the next 1-2 months.
• Continued monitoring of risks, in coordination with our risk providers (Hypernative and Cyvers). Currently, 100% of the Endowment positions are being monitored.
  • Various protocol, smart contract, and financial risk factors are monitored, including oracle pricing, contract ownership transfers, pool liquidity checks, withdrawal queues, collateral ratios / health factors.
  • As new strategies are introduced and new risk monitoring methodologies continue to emerge, so will our work continue to refine and improve coverage.

Cash Flow Management

• Continued monitoring of ENS’ financial health, especially given increased spending of the DAO in 2025.
• Migration of the TWAP Safe from current multi-sig to a DAO-owned Safe, with Manager Safe.

Reporting

• The Weekly Dashboard will be replaced by kpk’s enhanced reporting, which will allow the Community to visualise the portfolio snapshot and trends with ease.

We appreciate the trust you have placed in us with this critical responsibility. We are committed to ongoing engagement with the community, contributing our knowledge and insights for the common good, and we look forward to maintaining our commitment and efforts in the upcoming semester.

[nick.eth]

@kpk

Since its inception, the Endowment has achieved:

• Accumulated net revenue of $4.92 million from DeFi strategies.
• A net average Annual Percentage Yield (APY) of 3.54%.

Figure 3: Endowment historical performance

In the first 6 months of 2025, the Endowment has achieved:

• Accumulated net revenue of $1.18 million from DeFi strategies. For context, this means the Endowment could have covered 15.6% of the DAO’s Operating Expenses ($7.55M) in H1 2025.
• A net average Annual Percentage Yield (APY) of 3.30%.

Worth noting that US CPI inflation over the past few years has been:

• 2022: 8%
• 2023: 4.12%
• 2024: 2.95%

So in all likelihood the endowment is not presently keeping up with inflation, much less growing.

[gregskril]

Sharing for other readers, as I found myself wondering about fees when reading this post:

Looks like ENS DAO paid $373k in fees in the last 6 months. $1.549M gross revenue - $373K fees = $1.176M net revenue.

Since the start of the endowment in March 2023, gross revenue appears to be $6.409M with $1.491M paid in fees, resulting in $4.918M net revenue.

Refresher on the fee structure:

@santinomics.eth

• Management fee: 0.5% of the nAUM (non-custodial assets under management). This fee is calculated as follows: Management fee = Weekly portfolio balance (in US dollar terms at the time of the report) * 0.5% / 52, converted to ETH priced at the moment of issuing the report.
• Performance fee: 10% of the yield obtained during the previous week, converted to ETH priced at the moment of issuing the report.

[estmcmxci]

I found the reporting to be a bit oblique, so I’m presenting a table that clearly breaks down gross DeFi results, fees (both in ETH and USD), ETH price, and net results, to better illustrate how much value is generated, how much is lost to fees, and what remains for the DAO.

Month	DeFi Results (K$USD)	Total Fees (ETH)	ETH Price ($USD)	Total Fees (K$USD)	Net (K$USD)
JAN	395.7	24.53	3,290	~80.7	~315.0
FEB	259.7	27.66	2,233	~61.8	~197.9
MAR	232.1	29.80	1,826	~54.4	~177.7
APR	192.2	27.90	1,797	~50.1	~142.1
MAY	240.8	25.11	2,533	~63.6	~177.2
JUN	227.8	24.84	2,491	~61.9	~165.9
Total	1,548.3	159.84	—	~372.5	~1,175.8

—

I distilled the data into a simple table that shows net vs fees paid each month, clarifying how much of the gross yield was retained by the DAO versus lost to fees. Notice the relative consistency of fees compared to the variation in net results:

—

My thoughts:

• It’d be helpful if @kpk presented both nominal and inflation-adjusted yield, as well as gross APY vs net APY. This allows the DAO to see how much value is added before fees, how much is lost to fees, and whether the net result remains meaningfully positive in real terms.
• Additionally, I suggest showing cumulative performance in real dollar terms over time, as this better reflects the long-term purchasing power and sustainability of the endowment.
• These suggestions help inform decisions about risk appetite, asset allocation, and spending policies, and improve transparency around how the endowment contributes to the DAO’s financial position.
• It’s worth noting that without higher returns, it seems unlikely the endowment will sustain or grow the DAO’s financial position in real terms given inflation. The DAO might consider shifting to a more efficient yield strategy, though this would require an update to the Investment Policy Statement (IPS), and of course higher returns typically imply higher risk — this would need to be communicated thoughtfully to avoid unnecessary concern.
• The fee load appears to be ~23% of gross yield, which may not be justified given kpk.eth’s largely passive approach to investment (correct me if I’m mistaken). It’s akin to paying an advisor handsomely just to buy and hold index funds — effective, but perhaps not value-aligned at this cost.
• This raises the question of whether the current fee structure is optimal for such a passive strategy, and whether rebalancing it toward more performance-based fees, while capping the management fee more aggressively (even beyond the current $100M AUM cap), could better align fees with delivered performance.

—

I’d be curious to hear kpk.eth’s perspective on whether the current fee structure and yield strategy are aligned with the DAO’s long-term goals, and whether opportunities exist to rebalance toward more performance-based fees.

[kpk]

Hello @nick.eth, @gregskril, @estmcmxci. We appreciate the feedback and comments. Below, we offer some clarity over the points raised.

@nick.eth

Worth noting that US CPI inflation over the past few years has been:

• 2022: 8%
• 2023: 4.12%
• 2024: 2.95%

So in all likelihood the endowment is not presently keeping up with inflation, much less growing.

The Endowment yield hasn’t beat CPI increase by far, but it has been slightly superior for the years 2023 and 2024. Cumulative CPI increase for 2023 and 2024 (Endowment was first funded in late March 2023) based on the numbers provided is 7.19% whereas Endowment cumulative net yield starting July 2023 (once capital allocated was near 100%) is 5.48% (extrapolated to 2023/2024 would be 7.36%), gross is higher.

If divided by allocation (Ether/Stablecoins) the APYs are as follows:

Due to the higher share of Ether held in the Endowment (>70% since inception) the overall yield is highly correlated with the ETH yield (and particularly the ETH staking yield through LSTs). The downside is that since ETH staking yields have been lower and trending down, so has the Endowment yield (and thus APY). The upside is that due to the high share of assets held in ETH, the Endowment has significantly appreciated in value since it was first funded in 2023.

The current allocation of the Endowment is dictated by the Investment Policy Statement, which reflects the risk tolerance of the DAO, which has historically been low.

The following are the benchmarks stated in the IPS compared with Endowment, each with its H1 avg. yield:

• Endowment Gross Yield
  • Stablecoins = 5.60%
  • Ether = 2.91%
• Benchmark Yield
  • Stablecoins = 5.08%
    • DAI Savings Rate (sUSDS since May with new permissions) = 5.77%
    • Lending rate of USDC on Aave v3 = 4.46%
    • Lending rate of USDC on Compound v3 = 5.02%
  • Ether = 2.49%
    • Lido stETH staking rate = 2.88%
    • Rocketpool rETH staking rate = 2.59%
    • Lending rate of ETH on Aave v3 = 1.99%
    • Lending rate of ETH on Compound v3 = 2.51%

Having said that, we’re currently working on a next permissions update request which will introduce alternatives that are higher yielding than the current allowed strategies, this will include additional money market alternatives and additional DEX stable pools which have been yielding above the LST yield.

@gregskril

Refresher on the fee structure:

Numbers are correct. However fees have been recently revised, effectively capping management fees at $500k per year (with no management fees charged above $100M in ncAUM). At current Endowment value (~$130M), this amounts to $150k less fees per year.

@estmcmxci

• The fee load appears to be ~23% of gross yield, which may not be justified given kpk.eth’s largely passive approach to investment (correct me if I’m mistaken). It’s akin to paying an advisor handsomely just to buy and hold index funds — effective, but perhaps not value-aligned at this cost.

The assessment that this is a passive approach overlooks the scope of our services.

We are curating and managing a portfolio of assets on behalf of the ENS DAO with the parameters mandated in the IPS. This is hands-on asset management with 119 defi transactions executed in the 1H 2025 on behalf of the Endowment. Positions are reviewed weekly, and an active approach helped the DAO accrue over $2.36M versus a simple TWAP when selling ETH between Feb and May this year. Our services are accompanied by a financial reporting dashboard and monthly financial reporting, weekly participation in Metagov working group calls since 2023, operational support, and extra third-party monitoring of the DAO’s overall finances. We’ll continue to be available publicly for every meta-governance call and hold communication channels with the meta-governance team that put our coverage at virtually 24/7 in service of the ENS DAO.

@estmcmxci

I’d be curious to hear kpk.eth’s perspective on whether the current fee structure and yield strategy are aligned with the DAO’s long-term goals, and whether opportunities exist to rebalance toward more performance-based fees.

Based on the Endowment objective and low risk tolerance, we think the current fee structure makes sense. Shifting towards a more performance fee based approach would shift incentives towards a more risk-seeking approach, which we understand is not what ENS DAO is looking for when it comes to investing treasury assets. Having said this, objectives can change with time, and as the DAO evolves, treasury management should evolve as well to reflect those changes.

Adjustments to the yield strategy looking forward can be broken down into short-term and long-term actions.

Short term: the current set of allowed strategies result in higher yield for Stablecoins than for ETH. In order to increase overall APY of the Endowment, it will be rebalanced to the target allocations (sell ETH for stablecoins) in the coming 1-2 months (this will also make the DAO meet the 3 year runway threshold). This reduces future upside from ETH price appreciation but allows for a higher yield on a higher share of the overall portfolio.

Long term: requires a deeper discussion, and has two different components the DAO has to discuss.

1. The target allocation of the Endowment and runway coverage with stablecoins.
   • In the long term, what mostly dictates the total return (capital appreciation + yield) is ETH price action. Modifying the target allocation of the Endowment will have an impact on the ability to appreciate over the long term being more/less exposed to the price of ETH.
   • If staking yields continue to go lower over time, and the risk tolerance towards investing ETH keeps being similar to today, then in order to get higher yield on the overall Endowment assets, a shift towards a higher stablecoin allocation will have to be made, with the trade-off being less exposure to potentially appreciating ETH price.
2. The risk tolerance towards yield strategies.
   • The DAO’s risk tolerance has historically been low, and this is reflected in the allowed set of strategies we can pursue right now.
   • A shift towards riskier strategies, even if only applied to a small % of the Endowment, can increase overall APY.
   • This would change the approach towards investing as it currently is and would require further discussion.

Note that the proposed actions are described in a high level above, and each of the points can be treated in detail moving forward.

Finally, we believe that discussions like this are valuable as they offer an opportunity to reflect on past decisions and align on evolving goals. Transparent, continuous communication has been a cornerstone of our engagement with the ENS DAO, and we will remain committed to that standard moving forward.

[nick.eth]

This is helpful context, thank you Karpatkey - particularly the observation about the relative returns of ETH-denominated and USD-denominated funds. It’s only really fair to compare USD funds to the CPI, and 5.6% is significantly better than 3.3%.

[Esk3nder.eth]

Hey all,

I was pleasantly surprised to see some analysis on the fee structure and felt the need to contribute my perspective as I feel the endowment fee structure is not reflective of industry norms.

There is an extreme fee gap

Karpatkey charges 0.50% of AUM (capped at $500k per year, and no management fees on ncAUM above $100M) + 10% of net yield (uncapped). At a 4% gross return the all-in cost on a $100M corpus is ≈ 0.9% (90 bps):

• 0.50% mgmt = $500k (hitting the cap)
• 10% of $4M yield = $400k

For context, BlackRock running a passive endowment portfolio takes ~0.30% (30 bps) flat. Even with the new cap, we’re paying about 3× the norm up to ~$125M AUM at 4% yield, after which the multiple compresses slowly because the performance fee keeps scaling.

Performance fees don’t belong here

kpk points out that incentives tied to higher yield could push managers toward riskier strategies—which is exactly why most real-world endowments pay a flat bps structure and no performance fee at all. Endowment managers are rewarded for safeguarding purchasing power and executing long-term, volatility-aware mandates, not for chasing incremental basis-points.

The current structure reverses that logic: it taxes the DAO on every extra dollar of yield while still paying the full 0.5% even if returns trail risk-free alternatives.

The annual drag upon ENS is very real

Using our example of a $100M corpus earning 4% gross:

• karpatkey at 90 bps will pull $0.9M in fees
  • $500K from management fees, $400k from 10% of yield performance
• Blackrock at 30 bps would pull $0.3M in fees
• apprx $0.6M in fees is being paid out every year instead of compounding for ENS.

If that extra $0.6M/year had compounded inside the endowment at the 4% nominal portfolio return, it would have earned ENS an additional ~$8M over 10 years—capital that could fund grants, experiments, or extend runway.

The structure is heavily in Karpatkey’s favor

I wasn’t aware of the cap, that’s an excellent addition! However there is no hurdle: meaning that performance fees accrue even when returns trail ETH staking or short-term T-Bills.

In our structure, kpk could post negative real returns and still collect the 0.5% AUM fee. If a performance fee exists, it should kick in only above a benchmark + hurdle, and be net of losses.

In Summary

The Karpatkey team has done a wonderful job working as partners with the ENS DAO, none of this is to attack Karpatkey’s competence or the effort they put in – it’s about the structural alignment of fees and incentives.

The “119 DeFi transactions” are most likely weekly shuffles between passive‑yield positions (LSTs, liquidity pools, etc.). Operationally active, sure, but economically the portfolio is just harvesting baseline DeFi yields. We’re paying ~0.9 % of AUM—roughly 20-25 % of the returns—for what amounts to a managed index of low‑risk, low-reward yield sources. Paying active‑manager prices for a passive mandate is untenable; imo ENS should shift to a flat passive‑rate fee while expanding kpk’s toolkit to more effectively execute their mandate.

[kpk]

@esk3nder, thank you for the comprehensive and honest feedback.

We would like to first highlight the scope of work that differentiates kpk from traditional asset managers, such as Blackrock, which charges 25bp to simply hold BTC and ETH via their ETF products.

Our work for the DAO is not limited to only simple endowment management activities, but also encompasses:

• Financial reporting for the ENS DAO, partnered with Steakhouse, producing monthly reports and a Dune Dashboard;
• Monthly reporting on the Endowment provided on our website;
• Weekly reporting in Metagov meetings;
• Cash flow management (as exemplified in our recent TWAP execution);
• Implementing management technologies from our non-custodial stack to empower the DAO to fully custody their funds, including preventing attacks using onchain permissions and plans to automate management via agents;
• Negotiating bespoke deals such as the revenue share agreement with partners such as Stader Labs to achieve returns otherwise not available; and
• Presentation and discussion of the DAO’s financial position in Metagov working group meetings.

Our fees (tracked here) were initially set more than two years ago, and slightly revised in January with the introduction of a fee cap. We recognise that market conditions and DAO revenue have changed since the launch of the Endowment, while the goals of the ENS DAO and the Endowment have remained relatively unchanged.

We agree that the fees charged should be optimised to reduce drag, and fit within the DAO’s current expenses. We’re happy to revisit the fee structure with the Metagov working group to ensure it is meeting the DAO’s needs and remains competitive. In the meantime, we will incorporate your feedback into these discussions.

[DomainDweller]

@kpk

• Financial reporting for the ENS DAO, partnered with Steakhouse, producing monthly reports and a Dune Dashboard;
• Monthly reporting on the Endowment provided on our website;
• Weekly reporting in Metagov meetings;

This response feels inadequate to the criticism in this thread. Mostly automated reporting hardly justifies $750k per year (roughly annualising H1 fees). The equivalent cost basis for the “reporting” is a part-time analyst at 1/20 of the charged fees.

@kpk

Negotiating bespoke deals such as the revenue share agreement with partners such as Stader Labs to achieve returns otherwise not available;

Stader’s aggressive BD team was proactively offering 5-10% net yield, so “negotiating” a modest discount on their fee is not a grand feat; it is passively accepting an incoming inquiry. Considering others received better yields for that same added risk profile, it is objectively a poorly negotiated deal.

Considering the treasury composition and strategy, an indefinitely scaled 0.5% fee is wildly overpaying. A cap of $200k would be fair to cover the cost of 3-4 part-time contributors of varying seniority. And before a “dedicated team” argument comes up, every service provider in the industry is double booking the “dedicated team”, selling the same headcount 2-4 times. We know, everyone does.

Lastly, if a performance fee is part of the deal, it should be performance:

• Saved $XXX against a simple TWAP - get 10%
• Outperformed stETH by $YYY - get 10%
• Outperformed USDS savings rate by $ZZZ - get 10%
  Setting the hurdle rate at zero and charging “performance” on beating that is insultingly deceptive.

[DomainDweller]

kpk clearly brings talent - they have identified a lucrative opportunity for outstanding risk adjusted returns around the stETH temporary depeg. Have they executed a strategy to take advantage of it on behalf of ENS or any other client? Or are they just clout farming on twitter?
https://x.com/deepcryptodive/status/1947283364110631175

[daveeth]

@kpk

A net average Annual Percentage Yield (APY) of 3.54%.

Can you explain how you arrive at 3.54%?

If we look at your own ENS Yield/Fee tracker, the reported net APY appears to overstate performance because it doesn’t fully account for the AUM fee.

For example, in June (the most recent month available), once fees are included, the net APY comes out to 2.14%, while your tracker reports 2.66%.

Using your own figures, the June calculation looks like this:

This gap is consistent across months. If we adjust the net APY for each month and then take the geometric mean for the year, the result is an annual net APY of 2.6%, below stETH’s yield on its own.

For context, a simple passive portfolio allocation of stETH and USDS, with ENS’s current treasury, would yield about a 3.15% net APY.

It looks like your tracker makes the rookie mistake of treating net APY as “gross yield minus fees” instead of correctly compounding actual monthly returns after fees, and then uses an arithmetic mean to further inflate the reported APY.

Correct calculations here.

[kpk]

Thank you @daveeth, you’re right that the net APY calculation was wrong. There were some ad-hoc calculations that got carried over wrongly to the net APY calculations, leading to the error. The figures in the H1 2025 report have been rectified accordingly.

All numbers not rectified in the post require no amendment.

[estmcmxci]

The current fee structure is worth reviewing. I believe ENS DAO can tolerate a bit more risk with respect to portfolio balance.

Overall, kpk.eth have done a good job. Consistent, responsive, and available to most, if not all, community inquiries. This is rare.

My recommendation is to rebalance the portfolio to target more attractive returns, while continuing to steer the DAO treasury toward fully funding operations through the endowment.

If viable, consider deploying a second “performance fund” to seek alpha.

[SpikeWatanabe.eth]

I would like to speak on the matter of reporting, I’m a professional financier and I think that reporting is very poor. From what I understand reporting standard has been set many years ago, and was never modified since, somebody is just pressing “renew” button every month, without giving any consideration to what is really happening within the DAO.

I already pointed to the problem before:

@SpikeWatanabe.eth

The problem is that we have this

Steakhouse

and then we have this

karpatkey

on top of that we have this report

ENS ledger

also this

Money flow visualization by AVSA

and that

https://www.enswallets.xyz

and to create even more confusion recently added this

https://safenotes.xyz

That’s like throwing a bunch of numbers into the eyes of the user of that information without any expectation that he will be able to make sense of it. Even having a financial background like me, I can’t read and reconcile all those documents with each other. In my opinion a bunch of deliverables which make no sense for an external reader have zero value. This financial reporting should be designed with the public reader in mind.

That’s been half a year ago, response? - zippo!

Additionally we now have every service provider posting their own reporting, which is not integrated into the “whole” picture in any way. Also we have this ENS Working Group Spending Summaries - #8 by Limes

Its a total mash of information, there is no single source where reasonably well educated reader without financial background can go to and understand where the DAO is standing and where its going.

Judging from documentation by Steakhouse, reporting was created on Jan 5, 2023 and was never modified ever since. I can understand that first iteration cannot be comprehensive, but much has changed since then. ENS accounting page contains several outdated reference links to the point that some of that don’t work.

I distinctly recall that some people on the calls were asking to create some sort of manual perhaps, or additional materials, which would help to better understand those reporting materials. We have some brilliant developers within the community, but they are not that finance savvy to understand all this stuff. If they can’t understand it, then who is this reporting for? Nothings been done in that direction.

Initially when the manager was appointed the idea was to hire someone from the DAO community to make sure, manager’s work is deeply aligned with what’s going on inside the DAO - that assumes that someone dives deeply into DAO affairs and reflects it all in the form of comprehensive reporting.

My intuitive understanding is that community feels the gap and trying to fill it to the best of their ability, for example @clowes.eth posted this Toward Accountable and Strategic Funding in ENS. While it’s great to see that someone is putting effort into this, it’s not their job to do this. We need some adequate comprehensive reporting which would support the growth by giving clear understanding of the situation.

All I’m seeing is constant copy pasting of outdated framework. This situation reflects poorly on DAO and protocol as a whole. We as ENS should be accessible to the external world. Anyone without any prior knowledge of DAO affairs should be able to access information in a single place, read it and see what’s going on, right now it’s not possible. Nobody is going to go through that confetti of links I posted above and try to make sense of it, at best they will just give up, at worst they will think that DAO is disorganized doesn’t know where it is going.

Here is the perfect example of how reporting should be done - Arbitrum Token Flow Report - May 2025 - Page 12. Notice that this report is not static, Regen financial is continuously evaluating the developments within Arbitrum and reflect all those changes in coherent easy to read manner. We had this chat with @AvsA at some point, he mentioned, that those report were meant to be boring and predictable - true, but if it gets to the point where nobody can read and understand them and they start to create more confusion than creating more clarity - it doesn’t take a genius to see that its done wrong.

Arbitrum DAO is evolving, and so it Tokenflow report. Initially when they started doing this they set the framework, but all the subsequent reports reflect changes, things like implementation and analysis of Multisig support service, creation of OpCo recently among other things and so on. So their report is up to date and comprehensive. They are not just throwing a bunch of numbers into the reader, but create a story, with flow and comments - helping user understand the situation. In case of Steakhouse it’s a bunch of copy pasted slides with diagrams.

To be honest I don’t think we should be

@estmcmxci

deploying a second “performance fund” to seek alpha.

That would go against the idea of capital preservation, and brings us into the territory of taking additional risks, that’s not why endowment was created.

In my opinion we should hire properly qualified auditor, who would slap all those moving parts together into a single document and present coherent picture of what’s going on inside the DAO. That would be a proper starting point for such discussions whether we should launch “additional alpha seeking fund” and so on. Just to highlight the point - I’m not advertising here Regen, I’m not affiliated with them in any way, it’s just a solid example of reporting which I saw across the ecosystem.

[estmcmxci]

The attention you have brought to the DAO’s scattered resources points to an obvious opportunity for a small dev shop to whip up a BI dashboard encompassing the above-mentioned tools.

Streamlining important data into a single window would be seriously helpful. Anticapture does a good job for Governance Security, but is lacking in other respects mentioned herein. I would like to see more resources being driven into sourcing solutions for this.

—

@SpikeWatanabe.eth

That would go against the idea of capital preservation, and brings us into the territory of taking additional risks, that’s not why endowment was created.

That’s why a second performance fund could be considered, if there is appetite for it, as seeking alpha falls outside the very definition of the endowment’s mandate (nor should it be).

—

@SpikeWatanabe.eth

We as ENS should be accessible to the external world. Anyone without any prior knowledge of DAO affairs should be able to access information in a single place, read it and see what’s going on, right now it’s not possible

100% — I suggest you joining the initiative to develop a technical standard for storing organizational metadata on ENS. Legibility is the prerequisite for legitimacy.

[SpikeWatanabe.eth]

Making ENS the standard for organizational identity

TL;DR: @arnold and I are taking lead on forming a group to develop a technical standard for storing organizational metadata on ENS. This will be formalized as a time-limited sub-group under one of ENS’s current working groups, tasked with producing an ENSIP and promoting adoption. We are looking for feedback on this plan. The Problem DAOs have data that is important to share publicly, including things like: Addresses of DAO contracts and treasury wallets Delegates, their statements, conflict…

This is certainly great initiative, clearly one of the great use cases for ENS, but I think before developing standard for organizational identity, ENS itself should be a prime example of being transparent organization, with clear reporting and structure. Its basically like saying - hey, lets everyone clear up your rooms and put your toys in place where they are supposed to be, while your own room is a total mess. If I was some hypothetical DAO leader, and I was presented with proposition to comply with newly developed “standard for organizational identity”, I would first look at ENS to see if it has this nice tidy room. Lead by example - simple.

My point was, why won’t KK which is being paid

@kpk

$500k per year

clean up this whole mess first, and prepare solid reporting on DAO activities from all applicable angles - including financial, operational and qualitative even.

My understanding was that KK specifically partnered with Steakhouse for that very purpose - to generate meaningful reporting. Alternatively if they can’t deliver - let’s reassess the fees paid to KK and divert that money to some other vendor who can fix this.

@estmcmxci

obvious opportunity for a small dev shop to whip up a BI dashboard encompassing the above-mentioned tools

that may be, I acknowledge, that it might be possible to have a “tidy room” via community effort, but so far in case of ENS it’s clearly not working. ENS is growing quite fast. To have a “tidy room” by now is a full time focused job, which should be compensated. So either get a single professional team to do that, or allocate a budget within community, scrap all that mess of confetti resources and consolidate everything.

I appreciate that people did put effort into all of those bits and pieces, and with all my respect to that effort applied - I just don’t see how it’s working very well.