A Message to the Decentraland Community, DAO Council, and Future Executive Director

[JasonX]

Once again having Unlimited VP does not resolve the issue of low governance participation.

The purpose of this incentive is to incrementally increase VP among participants. In fact, there is already an ample amount of VP in circulation. It appears that the council has not fully understood the underlying factors contributing to low governance participation, nor is the problem due to a lack of VP.

Crucial negative impacts to be considered for VP rewards:

1- Risk of Power Concentration:
Without limits, high earning participants (Whales) may accumulate excessive influence, potentially overshadowing the contributions of smaller members and leading to oligarchic control.

2- Gaming the System:
The pursuit of unlimited VP might encourage behavior focused on reward accumulation rather than genuine, constructive contributions, undermining the quality of participation.

3- Vote Buying and Collusion:
Unlimited VP may increase the risk of strategic alliances or collusion among high earning members, distorting governance outcomes and reducing democratic (Decentralized) balance.

4- Disadvantage for Early Investors
Early adopters who spent significant amount of funds on acquiring/purchasing Land, Mana, Select L1 Skins, and Names now face an uneven playing field. Newcomers can quickly amass comparable VP through active participation alone, undermining the value of early high risk investments.

Our Current VP Distribution

1 Land = 2000 VP
1 Name = 100 VP
1 Mana = 1 VP

L1 Wearable VP Collections:

1. Community Contest
2. DCL Launch
3. Exclusive Masks
4. Halloween 2019
5. MCH Collection
6. Xmas 2019

Mythic = 1000 VP
Legendary = 100 VP
Epic = 10 VP
Rare= 5 VP
Uncommon = 1 VP

Over the years, dcl team have made it extremely easy for anyone to participate in the DAO by providing multiple ways to attain VP. Therefore, I don’t believe we need to make VP unlimited, as what we have is more than sufficient for genuine participation.

[jar0d]

@MetaRyuk

A good example of this issue is the recent POI proposal to remove a POI that had no scene and was listed for sale. Despite clear logic behind the proposal, it failed to meet the required VP threshold due to low participation from large VP holders.

To be fair, if we just reverted the VP requirements that existed prior to everyone thinking Esteban would delegate them forever, we could remove and add POIs

[MetaRyuk]

Agreed. Hopefully, we can attract enough VP holders to pass a proposal and revert the requirements to the previous one.

[MetaDogeisme]

@MetaRyuk

The VP reward system does not dilute the value of MANA or LAND. Instead, it delegates VP to active participants in the ecosystem. The purpose of this incentive is to gradually increase VP for participants, enabling them to engage in governance proposals without relying on whales, who rarely participate.

If you mean the VP rewarded to the users are from the existing VP holders, then its not dilute, but if you generate VP out of nowhere, that is dilute. It would make better sense if you can encourge exsisted VP holders to stake their VP to receive incentives (like MANA, which is sth valuable), and then give their VP usage right to those active participants. But ofc, more challenges on the technical side and fund side.

@MetaRyuk

Regarding Incentives for Contributors

I agree that contributors to the Decentraland ecosystem should be incentivized. This is an area where the future ED may introduce new ideas and strategies to ensure fair and meaningful rewards. My incentive suggestion was meant to tackle the current lack of VP participation issue.

Cool!

@MetaRyuk

The 20-year fund allocation plan I mentioned refers specifically to server costs, not manpower expenses. I consider a worst-case scenario where the DAO treasury depletes significantly, potentially leading Opcore members to leave due to financial uncertainty.

By setting aside funds solely for server operations, Decentraland would remain accessible and functional, even with limited manpower. This would ensure the platform’s survival and continuity, regardless of short-term financial challenges.

My understanding is that the cost of server operations is lower than what the DAO has spent on salaries for former squad members and community proposals. Setting aside funds for this should not pose a financial challenge.

This is good intention, but I dont think this is a priority?

[MetaRyuk]

@MetaDogeisme

This is good intention, but I dont think this is a priority?

Looking at the current market condition, in my opinion, it is.

[HPrivakos]

@MetaRyuk

By setting aside funds solely for server operations, Decentraland would remain accessible and functional, even with limited manpower.

What servers are you talking about? Catalysts or the servers running the builder, marketplace, dapps, hosting the screenshots, etc…?
Catalysts can be run for less than 200 usd/month each, less than 20k/year for 10 catalysts
The dapps hosting cost is way higher but could be reduced with some optimizations and by moving out of AWS.

[MetaRyuk]

@HPrivakos

What servers are you talking about? Catalysts or the servers running the builder, marketplace, dapps, hosting the screenshots, etc…?
Catalysts can be run for less than 200 usd/month each, less than 20k/year for 10 catalysts
The dapps hosting cost is way higher but could be reduced with some optimizations and by moving out of AWS.

Yes. All that you mentioned here. Essentially anything that involves electricity to power the platform to continue running. I don’t have visibility to the costs so your input is important should the ED decides what I suggested here are worth implementing.

[JasonX]

If you knew it would save money, why hasn’t this been done already?

[LandlordDao]

Hi @MetaRyuk
Thank you for sharing so many constructive insights and suggestions. I truly appreciate your perspective. At the same time, I have some suggestions that I hope will be helpful to you:

1. Optimizing MANA Asset Allocation
   I propose that we sell a portion of MANA assets at an appropriate price to acquire other assets for DeFi participation. All DeFi-generated revenue will be used to cover salary expenses, ensuring the sustainable development of the ecosystem.
2. Employee Equity Participation Model
   We aim to implement an employee equity participation model. If you are passionate about Decentraland (DCL), why would you sell MANA for a monthly salary? My proposal is:

• Use MANA as the primary payment tool within the DCL ecosystem, without relying on USDT or DAI stablecoins.
• Starting now, those who purchase LAND and participate in the DAO will be considered DCL DAO shareholders and will receive revenue dividends.
• LAND is chosen as the equity model because of its limited supply and scarcity, ensuring long-term value growth.
• Note: Early LAND holders who did not participate in the DAO governance will not be eligible for dividends.

3. Salary Distribution Optimization

• The salary distribution process can be adjusted to: MANA → LAND shares → Dividend income (passive income) → Liquidity release, ensuring a stable economic cycle while strengthening the long-term confidence and benefits of holders.

[Zino]

Hi @LandlordDao .
I want to jump principally into point 2.
It’s a great idea to consider a revenue dividend to the shareholders, however, don´t forget that the DAO is not a legal entity. If you start to talk about revenue dividend, it could be considered as a private company. Also, it´s not a good idea to constitute the DAO as a legal entity, because could trigger more legal i complications than solutions.

Also, I don´t think that the Executive Arm should have a revenue model in this first stage. It could operate as a foundation. In other words, the Exc. ARM should be a nonprofit company, meaning that the revenue generated should be reinvested.
After the first period, the EXc. ARm could be moved forward to another legal entity, such as a private company, and start distributing revenue, but I think that this early stage should be used to manage in an effective way part of the treasury, to consolidate the work groups that deploy products useful to DCL.

[LandlordDao]

Hello Zino, thank you for your feedback and thoughtful insights. I have learned a lot from this discussion.

Regarding revenue dividends, I acknowledge that my previous wording may have caused misunderstandings due to translation errors. I fully understand your concerns. Since the DAO is not a legal entity, directly discussing “revenue dividends” could raise compliance issues. However, what I actually meant was that we can adjust the terminology, incorporating it into the ecosystem incentive mechanism or governance rewards, as frequently discussed by the community. My proposal is to treat it as an incentive mechanism, rather than a traditional dividend distribution, to uphold decentralization principles while minimizing legal risks.

Regarding the revenue model for the executive team, my point was that, for example, all members of the Core Unit or teams that may receive funding in the future should have MANA as their primary form of payment. Whether they choose to hold or sell MANA is entirely their decision. Ideally, if they choose not to sell, that would be even better, as they can then participate in the ecosystem incentive mechanism I mentioned, gaining more long-term benefits and restricted liquidity