Dear Community,
The Grant Support Squad was created to support the grantees in achieving their goals and taking care of the DAO treasury.
After thoroughly reviewing this project, the Grant Support Squad wants to communicate that we recommend to the Revocations Committee (@bay @dax @maryana @MetaDogeisme) revoking its vesting contract due to multiple issues that have arisen during the project’s development, notably shifts in the project model, legal and compliance uncertainties, and unmet deliverables.
According to your governance process, the Revocations Committee, the only body responsible for revoking grants, will analyze this case.
This triggers an automatic pause of the Grant’s vesting contract, executed by the DAO Committee, but in this case, it will not be necessary because the Vesting Contract is paused.
The arguments behind the recommendations are the following:
- Project Model Clarification: It took a few back-and-forth emails and two meetings (onboarding and check-in) to clarify the project Model, which is distant from the original proposal.
This fundamental shift, initially described as a ‘predict-to-earn’ model and later transitioning to a ‘raffle’ system, raises concerns. We appreciate the Grantee´s confirmation that the project will solely develop a raffle system and not involve a ‘predict-to-earn’ model.
The significant alterations from a ‘predict-to-earn’ to a ‘raffle’ system not only led to confusion but also raised concerns regarding the project’s consistency with its original proposal. Such fundamental shifts suggest a need for greater clarity and stability in project planning and execution within the DAO framework.
- This triggered a second problem: Legal and Compliance Assurance.
The legalities surrounding the project, especially in compliance with gambling laws and Decentraland’s content policy, are of utmost importance. The Grantee´s acknowledgment of not running gambling activities and the commitment to adhere to legal standards, including signing an affidavit and indemnity letter, it was a positive step forward.
Also, The foundation legal team recommended signing a KYC document for purposes that have been received.
The project’s navigation through legal complexities, especially concerning gambling laws and adherence to Decentraland’s content policy, represents a positive but challenging aspect of operating within Web3 environments. The requirement for KYC documentation and adherence to legal standards, including the signing of affidavits and indemnity letters, highlights the critical importance of legal compliance in virtual space projects.
- For that reason, the grantee mentioned that they will be implementing a Smart Contract
-staking contract- to prevent bot attacks. How? The user needs to stake 1 $MANA to participate in the raffle event.
They sent the first audit, and our internal advisor found the issue pretty easily, in 3 min an issue. The contract has a variable called phase, and asked the grantee How you can change its value because once the contract is created, the value is locked
Later the grantee deployed a new smart contract (without a new audit).
We recommend to pay for an audit using Trail of Bits, Quantstamp or any other well-known firm, but the grantee mentioned that it was out of budget.
After that, the grantee provides a walk-around removing the smart contract part and replacing it with wallet screening.
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Building the Scene: The grantee showed the progress of building the virtual scene for the gaming exhibition, with different floors and functionalities of the scene, including live streaming and interactive elements.
This goal was achieved according the roadmap. -
Acquiring Users: The Grantee explained their network in the Chinese gaming industry and their collaboration with gaming projects, that could bring users to Decelentraland. It´s a good opportunity.
But, the grantee mentioned that the number of unique users to onboard for each event will be lower than they promised according to the proposal (24.000).
The project’s potential to attract users through its network in the Chinese gaming industry is promising. However, the revision of expected unique user numbers points to the need for realistic goal setting and the establishment of specific, achievable KPIs.
- The company behind (SILICON MOUNTAIN LIMITED) was created on 01/24/24, which means that the DAO with these funds could be seen as seed fund capital. This is risky in terms of legality because the DAO is not a legal entity, but this is a problem for the future.
Conclusion:
Given these observations, the recommendation to revoke the grant’s vesting contract reflects a prudent approach to managing the DAO’s resources and treasury, ensuring that funded projects remain aligned with Decentraland’s values, legal frameworks, and community expectations.
Further recommendations to the Revocations Committee:
Given that the grantee has shown a willingness to address all concerns and has made progress in the development of the scene, we believe there is room for the Revocations Committee to review the project and evaluate the possibility of its continuation, considering that there are several issues that need clarification:
- Define with the grantee achieve KPIs
- Define with the grantee how they will avoid the Bots
- Ask the grantee to Present the marketing plan
- Clarity on Purchasing the prizes, gaming peripherals, and shipping costs for prize distribution.
Last but not least, we recommend paying the 1st month that corresponds to GOAL 1, which was achieved.