DAO Grants Program - New Tiers & VP Threshold

by 0xd11a019a70986bd607cbc1c1f9ae221c78581f49 (Yemel)

Linked Draft Proposal

DAO Grants Program - New Tiers & VP Threshold

Summary

Redefine the tiers of the DAO’s Grant Program, making it more flexible and secure.

Abstract

Currently the grants program allow the following Tiers:

• Tier 1: Up to $1500 USD in MANA (1M VP + 7 days) - One Time Payment
• Tier 2: Up to $3000 USD in MANA (1M VP + 7 days) - One Time Payment
• Tier 3: Up to $5000 USD in MANA (1M VP + 7 days) - 3 Months Vesting
• Tier 4: Up to $60,000 USD (2M VP + 14 days) - 6 Months Vesting
• Tier 5: Up to $120,000 USD (4M VP + 14 days) - 6 Months Vesting
• Tier 6: Up to $240,000 USD (8M VP + 14 days) - 6 Months Vesting

This proposal simplifies all six categories and redefines the VP threshold required to access such grants. It also makes it more flexible by allowing the grantee to define the duration of the project and the payable currency (MANA vs stablecoins).

Motivation

The DAO’s grant program is one of the best vehicles to help grow the Decentraland ecosystem. The current tiers structure was approved by a community vote almost a year ago, and now is a good time to review the results and propose improvements.

By reviewing the results of one year operations , some conclusions can be drawn:

• The tiers 1, 2, 3 represent 2.5% of the money granted.
• Tier 6 represents ~60% of the money granted, with an acceptance rate of 27%.
• The tier 4 is the most easily approved one, with an acceptance rate of 45%.
• Voters generally abstain from expressing their decision if the current result is aligned with their preference and the threshold has been achieved.
• Grantees almost always request the maximum budget allowed in the tier.
• Many projects requested funds for a scope longer than 6 months.
• The VP involved on grants has steadily increased over time, and it’s likely that only highly contentious grants get voted on by more voting power.

For this revised version of the Grants Program, the following changes are proposed:

• Adjust the minimum VP threshold required to pass a small-tier grant.

• Make the VP threshold variable based on the requested amount; the more money you need, the more VP is needed.

• Allow more flexible vesting schedules to support different kinds of projects (longer and shorter than 6 months).

Specification

A new scheme of two tiers is recommended:

Lower Tier:

• Up to $20,000 USD, payable in stablecoins or MANA using a Vesting Contract, or a one-time payment (after 30 days).
• Vesting duration can range from 1 to 6 months.
• Votation period: 2 weeks.
• Votation threshold: 2M VP.

Higher Tier:

• From $20,000 to $240,000 USD, payable in stablecoins using a Vesting Contract.
• Vesting duration can range from 3 to 12 months.
• Votation Period: 2 weeks.
• Variable votation threshold, using the formula: 1.2M + TOTAL_BUDGET * 40VP/USD .
  • E.g. $60,000 USD requires 3,600,000 VP
  • E.g. $120,000 USD requires 6,000,000 VP
  • E.g. $240,000 USD requires 10,800,000 VP

Impacts

The proposed changes to the tiers scheme will have the following impact:

• Simplify the grant program into only 2 tiers.
• Increase budget for one-time payments up to 20k in MANA or USD.
• Allow flexible project roadmaps (shorter/longer than 6 months).
• Incentivize conscious budgeting by raising the VP threshold based on $$.
• Increase the minimum VP threshold required to pass a grant.

There are two parameters of this model that could be easily changed over time in contrast to the current tiers system, allowing for more flexibility and a quicker iteration of this structure over time as participating VP increases. Those are:

• The 2M threshold on the lower tier
• The slope of the threshold on the higher tier (currently set to 40 VP per USD requested)

Participation over time could be monitored and changes in these parameters could be proposed in a future governance proposal.

Implementation Pathways

The Governance Squad should implement the following changes:

• Update Decentraland documentation.
• Display and validate new thresholds based on budget.
• Update the grant submission form to reflect new options.

These changes are all feasible and can be developed in one or two weeks.

Conclusion

The proposed change aims to adjust the required VP thresholds, aligning them with current standards of participation in the DAO.

Making the VP threshold variable based on the requested amount will encourage the grantees to be more mindful of their budgets.

Also, removing the limitation of 6-month vesting and allowing grantees to define the duration of the project would make it possible to fund short-term goals such as conference sponsorships and IRL gatherings; and also year-long initiatives that are considered core to the operations of the DAO.

Vote on this proposal on the Decentraland DAO