[DAO:9d24f9c] Limit Fund Appropriation to Grant Proposals

Governance
1

by 0x76fb13f00cdbdd5eac8e2664cf14be791af87cb0 (Matimio)

Linked Pre-Proposal

Limit monetary allowances to Grant proposals

Summary

Restrict appropriation of funds to established Grants Framework.

Abstract

This proposal calls for limiting fund appropriation from the Decentraland DAO to the established Grants Framework.

  • This framework comprises six (6) grant tiers, ranging from $1,500 USD in MANA to $240,000 USD in stable coin, with increasing voting power thresholds for each successive grant tier. Grants over $60,000 USD (Tiers 4-6) are distributed via a six (6) month vesting contract, with a one (1) month cliff period.

Motivation

A recent proposal For Decentraland Daily Active Users: MANA incentives for USDC-ICE LP appropriated $1mm USD in MANA from the Decentraland DAO. The funds were appropriated through a Binding Governance Proposal, as the needs of the request could not be met under the parameters of the existing Grants Framework. This is neither explicitly permitted nor prohibited under current DAO rules.

This proposal catalyzed discussion around two key questions:

  1. Is it legitimate to appropriate funds outside of the established grants framework, for example, through binding governance proposals?
  2. Is the established Grants Framework adequately designed to fully deploy DAO funds for all purposes of the DCL community - particularly for special projects that require more flexible distribution models. A past proposal to Join the Blender Development Fund is another example of a model that is difficult to fulfill within the established framework.

The first question could be immediately resolved with a stop-gap measure, while the second question, which will likely take more time and forethought, is discussed and workshopped further.

Thus, as demonstrated by support for the initial Pre-Proposal poll to Limit monetary allowances to Grant proposals and discussed in the Monetary Allowance Working Group, there is enough community consensus to move forward with a stop-gap measure to prevent future appropriation of DAO funds for projects and initiatives outside of the established Grants Framework and specifically prohibiting the appropriation of funds through the use of Binding Governance Proposals.

In the interim period, should this proposal advance to a Binding Governance Proposal, Core Units of the DAO and DAO Community Members will address the fundamental structure of the Grants Framework, as part of a wider process to ensure and increase the robustness of our overall governance and grant-making structures.

Specification

Restrict fund appropriations from the DAO to the established Grants Framework, specifically prohibiting the use of binding governance proposals as a means to receive DAO project or initiative funding.

  • The payment or compensation of “Committee” positions are excluded from this restriction, including but not limited to the “DAO Committee” and “Wearables Curation Committee.”

Outside of appropriating funds for compensating duties that are fundamental to the operation of the DAO on these core committees, the Grants Framework is the only mechanism for requesting and receiving DAO funding.

Conclusion

Since our DAO’s inception we have increasingly adapted to changing circumstances, and we will need to continue doing so in order to develop a governance system that is agile yet robust and can withstand the test of time. This proposal is a stop-gap measure to close a potential loophole in our governance and grant-making process as long term solutions are workshoped and implemented. Ongoing structural discussions include:

  • Expanding the Grants Framework to include a dynamic granting tier that accounts for special requests exceeding existing tiered funding and timeline.
  • Addressing issues with VP distribution and utilization to balance power between “whale” and “regular” community members.
  • Increasing diversity and long-term sustainability of the Decentraland treasury.

VOTING OPTIONS

  • Yes: Restrict appropriation of funds to established Grants Framework, prohibiting use of Binding Governance Proposals
  • No: Do not make any changes to the status quo, leaving room for funds to be appropriated through Binding Governance Proposals

This proposal was prepared by the Decentraland DAO Facilitation Team as part of its engagement with the Monetary Allowance Working Group

Vote on this proposal on the Decentraland DAO

View this proposal on Snapshot

3 Likes
2

Thank you @Matimio for raising this concern!

I think the DG vote was a complicated issue. I have the upmost respect for the team, but I also think the use of the funds was sub-optimal. On the other hand, I was in full agreement with the Blender support initiative – I don’t think the creators use any other 3D CAD software to build wearables for our platform…

I think this restriction is unnecessary, so I voted no on it. The binding governance proposals require more (or the same) voting power than the grants. I do believe we need to act to continuously adapt to the circumstances as our DAO evolves, including:

  • Seriously analyzing some sort of quadratic voting mechanism (which requires something like Proof of Humanity or the privacy-respecting HumanBound tokens)
  • Increase the required VP to approve grants and/or governance proposals
  • Mechanisms to prevent corruptions and bribes in the different squads/working groups (unfortunately I don’t have ideas for how to do this!)

Even though I’m against this proposal, I completely support the decision if it passes. Thank you again for such a well written exposition of the case!

2 Likes
3

Currently, binding governance proposals needs 6M VP while 240k USD grants require 8M VP.

I think it’s good to prevent grants through binding proposals, but we need clear rules on how funds can be used through binding proposals.
How do you differentiate 50k going to Blender versus 50k going to DG.
Some initiatives might require funding from the DAO quicker than a grants (within a couple weeks rather than 6 months through grants).
Fundings like the one DG got should not happens anymore IMO, but it’s hard to put a clear and hard limit on what should and should not be allowed.

2 Likes
4

Limit Fund Appropriation to Grant Proposals

This proposal is now in status: PASSED.

Voting Results:

  • Yes 97% 2,574,353 VP (63 votes)
  • No 3% 82,155 VP (2 votes)