The funding cycle for Genesis. The monthly budget for Genesis is the ETH equivalent of $15K USD (at the time of writing this, that’s 89ETH per month). The funding will come into Alchemy Earth/Genesis on a weekly basis (when we are more certain that alchemy is stable we will want to transition to monthly) the calculation will be based on the ETH/USD rate at the time of every TX, those values should add up to 15k by the end of the months.
Proposers need to consider this when both making proposals and voting. Right now the protocol lets us go into debt and then when more funds are distributed proposals that haven’t been paid out are paid out first.
In this thread let’s discuss what this means for the DAO - a logical step would be for us to utilise a soft governance protocol : if your proposal is more than the funding that is available then don’t submit it, or break it up. We may also need the ATF or another group/role (the Catalysts) to flag to the group if Genesis goes into debt. Thoughts?
Thoughts from Matan
In a next version of the protocol i’d like to change it so that the DAO cannot get into debt — proposals asking for more than what there is in the wallet are rejected —> and then community members will be more aware of finiteness of resources and will have to choose between proposals. I think it’s actually pretty urgent.
Until then, we need to create a similar off-chain policy. That is, let’s try to adopt the culture that we use what we have more or less, so that when there’s no fund left we don’t propose, and when there’s just as much left and many proposals we prioritize and try (individually) to upvote just the best ones within budget.
What do you all think?
I suppose, here we should take into account the long-term view also. For example, there is a proposal that is very interesting and will become important in some time in future, but right now there is no urgent necessity and no enough funds in the budget. Does it mean that one should not propose and that the community shouldn’t know about it? Maybe there can be a long-term queue with such postponed proposals. And they will effect (1) the road-map of the DAO (2) and the business-plan.
We can imagine a situation where there is a queue of proposals covering the DAO funding for several years ahead. And it can be great to have sustainable and accountable business-plan. Investors will have a clear understanding of the road ahead, so will have the team and community.
This does not mean that this queue is a debt-road. There is no obligations of DAO at the moment, just a plan of proposals covering the monthly (yearly) budget. With a possibility to move such proposals between months (maybe?).
@Kate allowing the DAO to get into debt is pretty unavoidable.
If for example the DAO wallet contains 50ETH and I submit two proposals for 30 eth each, at the time of submission they are both well below the dao holdings, but if both will pass, they will be able to be paid out.
I think that proposals should not take the current balance into account (to a reasonable extent). Since we know there is a recurring flow of funds (weekly / monthly) I think it is ok to be able to plan ahead (i.e. if there’s 5 eth in the wallet, and I need 10, I think there’s nothing wrong in submitting this proposal knowing that next week we’ll get 20 eth more).
Moreover, if a proposal is truly valuable, the dao could consider “saving up” until it has enough funds to execute it.
I agree with @alexz - this seems rather line a line of credit that traditional organizations have.
However, what about DAOs that do not have a recurring stream of ETH? Will they also be able to do into debt, or is Genesis an exception in regards to this?
So first of all not all daos have to distribute funds to their members. But those that do need to do it, will need to find a source of income. e.g. The dxDAO could decide to start charging a fee in order to fund its proposals…
DAO Budgeting 101 research below: