Hi community! We wanted to share some important info regarding budget allocation for our Grants Program.
Intro
Yesterday the Grant Support Squad reported an error in the GovApp (governance.decentraland.org), where the Remaining Budget Allocation for the Platform category wasn’t being correctly calculated. The Governance Squad reviewed the issue and found that this Pull Request from August 17, 2023, which was related to the release of the Legislator DAO Badge, introduced a bug that affected the process responsible for calculating the outcome and performing specific actions when a Proposal ends.
Assessment
What Happened: When a proposal ends, our system runs a process to decide whether it’s approved, rejected, or needs manual intervention. For grants, if approved, it deducts the grant amount from the allocated budget for that category. With the release of the Legislator DAO Badge, we added a new step to check if the proposal falls under the Governance category. If it does, we award the badge to the author and co-authors. However, this new step caused problems.
The Issue: During the check for proposal type, the coauthor’s lookup method failed, disrupting the process. Because the task of deducting funds followed the badge award, the interruption prevented us from subtracting allocated funds from the category-allocated budget. Consequently, several approved grants, all of which happened to be from the Platform category, didn’t reduce the budget, causing, at the moment, a total Grant budget overspend of 1% and a Platform category-specific budget overspend of 38%.
What We’ve Done: We’ve fixed the problem and recalculated the budgets. However, the Platform category’s overspend means no new Platform Grant proposals will be published due to insufficient funds. It’s essential to note that since the quarter isn’t over yet, the total budget overspend may increase if new Grants from other categories get approved during this Q.
Potential Solutions
We asked the Grant Support Squad for advice on how this situation could be remediated. They have presented a few options with pros and cons, and together we decided to open a Poll to gather your sentiments. With that feedback, we’ll execute the best option available for Q4.
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Subtract from Platform Category Q4: subtracting from Platform Q4 category the overspent budget in Platform Category Q3.
Pros:
– This is consequent with budgetary restrictions.
Cons:
– Impacts the Platform budget directly, when this could have happened to any other category too. -
Revoke the Grants: This consists of revoking the 2 last Grants that passed from the Platform Category.
Pros:
– Respect the limits of the Grants Program
Cons:
– It would create trouble for the grantees that passed, as they started working in September. This was a technical fault and not theirs. -
Balance with Q3 remaining funds from other unspent categories: Allocate the remaining funds from the unused budget from Q3 (other categories) to balance this overspending in the Platform category (as this could have impacted all categories, and it was a coincidence that they both were Platform grants), and take from Q4 Platform budget the rest.
Pros:
– Mitigate the impact on Q4 Platform Funds with funds not claimed from current Q3.
Cons:
– We’ll need to wait 15 days after Q3 closes, to execute a subtraction from the Platform category of Q4 with the funds that were covered by the total remaining funds of Q3. -
Subtract Total Budget Overspent % in Q3 from Q4: After all Grant proposals requesting money from Q3 total budget, the % of total overspend will be calculated and that same % will subtracted from the total allocated budget in Q4.
Pros:
– Given that this is going to be percentage-based instead of nominal value (If 10% of the Q3 budget was overspent, then 10% of the Q4 budget will be subtracted), we won’t be penalizing the Q4 budget that will be lower than the Q4 budget due to the MANA price down.
– Since this will consider the total allocated budget, it won’t affect any category in particular.
Cons:
– We’ll need to wait 15 days after Q3 closes, to calculate the Q3 overspend % and recalculate the total available budget for Q4 -
Don’t do anything: The DAO treasury assumes the error and no changes are made to the Q3 situation or the Q4 Budget Allocation
Pros:
– No impact on DAO’s future plans
– No impact on current Grant projects
– Easiest implementation path
Cons:
– We would be spending more money than stated in previous governance proposals of budget allocation.
The Grant Support Squad decided to disregard a potential option, which was to subtract the funds that were not claimed from Q1 and Q2 in the Platform Category, under the argument that it would mean going against current governance proposals. They recommended making definitions for the present and for the future. Still, it would be not good for governance procedures to use past Qs funds without going through a binding governance proposal first. The GSS also does not recommend the revocation of the Platform Grants that passed in the Platform Category, since they are already working and also have commitments and expenses to assume.
Call to action
We encourage you to vote on this poll to give us a community signal in order to execute the best solution according to the sentiment of the DAO.
We are sorry about the impact that this issue caused and we are committed to implementing whatever solution the community deems more suitable for this situation.
GovSquad & Grant Support Squad members