For the past 8 months, a key topic in the Centrifuge DAO governance has been Treasury Spending and Resource Allocation. As discussed in Governance Call 27, input from DAO members is needed on the direction of Treasury spending.
The four questions below have been designed as a temperature-check relating to potential areas and objectives of our treasury spending. The first three questions are polls that you can vote on - for the last one, please provide your answers in the comments. Feel free to expand on your answers to the polls as well.
What areas do you see as critical in terms of allocating funding? You can select up to two options.
Protocol development
Grow Adoption
Increase utility
Awareness, Education, and Community
0voters
Do you support milestone based funding (project based proposals are only paid on completion of milestones)?
Yes
No
0voters
How will we make good decisions about a range of complex proposals?
Token holders should utilise expert opinions proposals produced by a group (i.e. a Treasury Advisory Group) to help them decide on which proposals
Token holders should do their own research before voting on every proposal
0voters
What else would you add to this proposal and/or process?
The results of these polls will be discussed in depth in the upcoming governance call (26th June).
I think these objectives are safe enough to try, more interesting, what kind of weighting system could be developed to assess how proposals meet the objective?
I like the idea of milestone based funding, but at the same time my bias is to design for âlight processesâ without heavy bureaucracy: what are the best examples of seamless milestone funding that people have seen cc @0xjulcaesar@ImdioR ?
I would like to see methods for accountability being very well researched - a lot has happened on this topic out there in DAO-land that we can draw from
Interesting Poll, I have following points to be add:
1)
I think if you have indicated what percentage of funding should go for the respective options would give a better picture as all Growth, Utility, Development and Awareness are important but each should get a minimal allocation in a year on overall budget
2)
Milestone based sounds interesting and safe approach for the projects, its more complex in execution and attracting right resources when there is too much demand in market or scarcity. So this needs to be taken on case by case basis in my opinion.
3) Engaging or bringing more community members to the DAO is also a question that we might need to spend time to discuss.
Is there anyone who has a clear idea of how Centrifuge Trasury could be used for Education purposes? @sirj You mentioned this option. Did you mean awareness I guess (based on the last Indi 500 event ) or I`m wrong? @bella_rwa Do you have any thoughts on how Centrifuge Treasury could help to group the Community?
The best milestone-based funding right now we can find on Arbitrum, OP and even on OpenGov (Polkadot).
What is coming to my mind, are Novawallet funding (100,000 DOT for milestone or even retroactive funding of 1,000,000 DOTs), polkassembly etc. Even if right now I see that they are switching to the retroactive funding right now.
I agree that milestone-based funding could be more bureaucracy-heavy, but at the same time milestone-based funding avoids retro-active funding issues, such as:
Retroactive funding could be applied only to the individual\group\projects who already have some recent past deliverability.
This could be a barrier\a problem for a new entry group without any previous funding history who would like to apply for funding from 0.
On the other side. How the CFG Protocol can be sure that the individual develops the thing that will be useful for the protocol before, that they will ask for funding?
This is a double-edged sword.
I do think that we are still in the early stages of making a complex milestone season grant program.
Not only in terms of the size of the CFG Treasury, but also in terms of participants.
These four options are merely discussion points for now and nothing is written in stones. I agree that all of these options have an importance in the future of the protocol and it is very subjective which one(s) is/are the most important ones to prioritise. If you were to put some percentages to the distribution of the funding across these areas, how would you do it?
I personally donât think there is a right or wrong in this context of how the funding should be paid out and rather than restraining ourselves to one way of doing it, I also think this should by considered by the DAO on a case to case basis.
This is a good point! I would personally add active community members, rather than just going on a campaign and bring new people to our DAO. Donât get me wrong, I am not trying to exclude anyone or saying we should limit ourselves in any way; I am just saying quality over quantity.
In your opinion, where would be a good place to start looking for new DAO members?
@ImdioR all three awareness, education and community. From my time at the Indy 500 I found that we need to get awareness out there which goes hand in hand with education. Being aware is step 1, understanding what it is, how to use centrifuge and be part of the community is step 2 and leads to maximum value.
I believe that total democratization at Web3, isnât working. It was experimentally tested within different projects but most of them are dead now.
Instead of " No expertise and idea but have tokens to decide " Iâd go for " Letâs choose a group of experts who will decide on behalf of us and make the process transparent"
Democratization of Working Groups >>>> Democratization of Individuals
Every one of them valuable. However, since Centrifugeâs approach is kind a unique and succesfull, âAwareness, Education, and Communityâ could rocket us to the moon especially now. It is essential to expand the community and make people talk about us.
I genuinely believe that this is crucial and already proven work. But Iâm not talking about retroactive funding. Its about avoiding retroactive funding. In this way we can lower the entry barrier, encourage the successful and eager contributors while keeping our Treasury safe.
Maybe a report scheme could work. They could report in a basis, then contributors gather them into a newsletter or mirror article.
Optimism is my fav. Here are few links to give an idea:
Cliche but Hackathons would work. Maybe series of events with local blockchain communities at different Universities (I personally founded one and we did this kind of events which had unique outputs 3 years ago.) Or collaborations with ReFi projects within the RWA topic.
The question is not directly towards me but wanted to chime in.
Other DAOs (co-marketing campaigns, collabs, active contributions,)
Bounties (low conversion rate but works)
AMA series (this one is also cliche but really useful at narrow topics like RWA to gather like-minded people)
Contests & Campaign Platforms like Zealy, GalxeâŚ
Improving protocol awareness is a tough job especially reaching out to users that are not already in crypto. Some ideas for educational/awareness proposals (would need some research on feasibility/costs):
Get an ELI5 tutorial on what Centrifuge is on Coinbase Learn
Use some CFG to incentivize tasks on platforms like Robinhood Learn or Rabbithole
Milestone-based grants are useful and should definitely be used where appropriate. This type of grant requires more time and overhead since someone would need to negotiate the milestones on behalf of the Centrifuge DAO. Milestones can vary based on the typology of the proposal, so this implies the person assessing them needs to have good domain-specific knowledge. To optimize timing and avoid slowing down the governance process too much, I propose we use this type of grant only when the amount of CFG requested is => $50k.
I think a very good model here is Aave where there are various expert groups whose goal is to provide feedback (or propose stuff) so that token holders have enough information at their disposal to make an informed decision. These groups need to be compensated in some way since they provide a valuable service to the DAO.
Interesting fact.
Polkadot Treasury decreased from ~40M DOTs up to ~25M DOTs in just a couple of months.
Daily income in March: ~ 41,500 DOTs
Daily income in April: ~ 37,000 DOTs
Daily income in May: ~ 16,000 DOTs
Daily income in June: ~ 11,000 DOTs
Right now Polkadot Treasury is spending much more faster than the Treasury is funding.
This is a classic example of what will be the result without the diligence in Treasury spending.
I hope that TRAG - Treasury Resource Allocation Group - can help to prevent a situation like this.
Well I see that there should be minimum allocation of yearly funding to these campaigns, No hard and fast rules but larger portion of allocation goes to ones that are on priority and after finding right partners to deliver. I would put minimum of 15% and max 45% just to make sure that one kind is killing other area again its just a subjective this can be discussed during the governance call. If not utilized then towards the last quarter we can re allocate or run a different type of campaign if none of the amount gets utilized.
I absolutely agree on what you say it should go on case to case basis else many people can just game it to take advantage
I think wee should look beyond the regular places, I have spent more than 3-4 years in space and retaining interest is key for DAO. While some incentivization can get attention of people on shorter time span. I see some communities in NFTâs for instance are more active in feedback and speaking what is in mind than in DAOâs.
Main reason being there is much equal distribution of voting power and I feel that speaking to some founders can get ears to learn or communicate more about Centrifuge as for now many people have difficulty in understanding the utility of token and how they can contribute to the DAO if they want to
Credit quality and credit stucture are vital to look at cloesly. Place a high priority on understanding the underlying risks, especially the risk of adverse credit events and recovery. Focus on structure with high potential recovery value.
Thank you for putting together this proposal and poll to gauge the communityâs sentiment on treasury spending and resource allocation. Itâs crucial that we, as a community, provide input and direction to ensure the treasury funds are utilized effectively to drive the growth and success of the Centrifuge ecosystem.
Iâm pleased to see that the majority of voters believe growing adoption and increasing utility should be the critical areas for allocating funding. These two aspects are essential for the long-term success and sustainability of the project. Protocol development is also a key area that deserves attention and funding to ensure the platform remains competitive and innovative.
Itâs great to see unanimous support for milestone-based funding. This approach ensures that funds are released only upon the completion of predefined milestones, promoting accountability and ensuring that the projects deliver on their promises. This will help maintain the integrity of the treasury and ensure that funds are not wasted on projects that fail to meet their objectives.
Regarding the decision-making process for complex proposals, I agree with the majority that token holders should utilize expert opinions and proposals produced by a dedicated group, such as a Treasury Advisory Group. This approach will provide token holders with the necessary insights and information to make informed decisions, while still maintaining the decentralised governance structure.
To further enhance this proposal and process, I suggest considering the following:
Establish clear guidelines and criteria for evaluating proposals to ensure consistency and fairness in the decision-making process.
Implement a regular review process to assess the progress and effectiveness of funded projects, allowing for course corrections if necessary.
Encourage collaboration and partnerships with other projects and communities to foster innovation, share knowledge, and expand the reach of the Centrifuge ecosystem.
I look forward to the upcoming governance call, where we can discuss these results in more detail and work together to refine our treasury spending and resource allocation strategy.
) or I`m wrong?