I agree with much of this post, especially in spirit, and have some nuanced views I’ll express below;
1. Retroactive vs Upfront/seed funding
Why not both? In some cases, I think we should retroactively fund valuable work, but in other cases, I think we should seed it. With the caveat of seeding teams/individuals with track records of delivery.
While retroactive funding sounds good in principle and can work in some instances, it does require the risk of time, effort, and money. Not only that, the contributor is in limbo for three months or more post-delivery. With the limit of 10 funded proposals per cycle, there is a risk that retroactive funding requests could get pushed to 180 days or more.
Where it makes sense
- Contributor side projects, small-medium size
- User rewards for Ajna Integrated products and services.
Where it doesn’t make sense
- Larger projects
- Services (BD & Marketing)
- Infrastructure
I believe seed funding is fundamental to getting valuable projects off the ground in some cases. I agree that new teams without track records shouldn’t be funded. My preference is to grant seed funding to proposals that commit to paying it back in some way. One example of this is the Shorty proposal which commits to:
reinvest revenues in providing liquidity on AJNA, and market making the AJNA token on DEXes
This or buy and burn, or buy and return to the treasury with product revenues are welcome terms I encourage teams to consider.
2. Grant Sizing & Market Context
I am so glad you brought up grant sizing and the current market context, I’ve been pretty worried about this, especially for the first grant cycle. For this reason, I’ve been advocating behind the scenes for prioritizing a Market-Making proposal.
Unfortunately, any lockup commitment in a grant will have to be self-enforced. I don’t know if the Ajna Foundation will enforce the breach of terms on funded grant proposals. What do you think @Doo_StableLab?
Reducing the amount of AJNA disbursed this first cycle isn’t a terrible idea but will have limited effect. For context, a maximum of
7,308,186 AJNA will be distributed and likely sold (at least in part), while 25% of all investor tokens, ~60-70,000.000 AJNA voting will become unlocked (unclear how much will get sold, if any). One way or another April 7th will be a significant day in the AJNA market.
What I was thinking of recommending is an LP & withdraw strategy or a collateralize and borrow strategy if liquidity remains so thin. Curious what others think about this and the recommendation by OP to try to self-limit grant rewards.
3. Accountability, DAO Processes, Grantee and Voter Support Functions
On functioning well;
The reason we want teams with track records is so that we don’t have to rely on secondary accountability functions. Getting paid to do something in public and not delivering serves as a good enough accountability function. Pair that with a good track record and you get execution.
At MakerDAO it was not as simple as an upfront cash problem. It was 21 teams, 10 directions, and no strong leadership; ie, an inefficiency problem. I think only one team really failed to deliver and ran away with some money. It was a group with an unproven track record who failed and decided to leave disgracefully without returning their remaining funds. 90% of the time getting paid up-front did not result in lack of results.
A part of the recipe for a successful grants program is general communication quality and the grantee and voter support functions. Grantees benefit from having their hands held, getting adequate feedback, and being supported during their execution and post-execution phases. Voters benefit from communicating and aligning on funding desires and decision-making criteria. I think the Supportive LLC and Stablelab proposals cover the two areas well (though I still have to give stablelab some more in depth feedback, and I also hope to receive more feedback on my own.) I think these support functions are worth funding, but should be nailed down so they can be executed efficiently.
Getting back to my main point; I agree with you that we should avoid complicated, involved DAO processes and keep complexity low. But we shouldn’t throw away the grantee and voter support functions altogether. There’s a healthy balance we must strike here.
4. Open-ended projects and scopes
Agree that grants should be awarded to proposals with well-defined deliverables and scopes.
Single vs multi-goal, I am torn about. On one hand single goal makes a lot of sense, it allows voters to be more specific with their decisionmaking. We like modularity. On the other hand, there’s a 10-proposal limit per cycle. I was (and still am) considering splitting the Supportive grant into two, one for infra/community, and another for Grants and BD. I decided to merge them because of the 10 proposal limit and the relative cost of each side of the scope. @delegates, please leave a comment on my proposal what you think I should do!
5. Funding Core infrastructure through grants
What separate process did you have in mind? If not grants, where would that funding come from?
As of January 1st, I currently fund much of this infrastructure (not security tooling). I will never hold these assets hostage or use them as leverage for my own gain. In fact, I commit to transferring them to the relevant party if my grant is not approved or renewed.
6. Not being a DAO, keeping complexity low
Whether you like it or not, the Ajna Grants program is managed by a decentralized group of entities and individuals. The level of complexity is drastically lower than for example, MakerDAO, thanks to the immutability of the protocol and the limited scope of the Grants Program. Our job, as delegates and token holders, is to make the program perform well by making good funding decisions. The complexity of our activity here is capped.
Politics will happen naturally. It’s a dirty word but the truth is that all participants have their interests and perspectives. The engagement we do around this program should be rooted in one guiding principle–Make Ajna More Successful. If we depart from that then there may be some bad outcomes. But if we stick to it I think we have a real shot at converting the treasury into tangible benefits for the protocol and its users.
Thanks for the thoughtful post!
Happy Monday 