Budget Management Schemes
- As the DAO grows (more people , more budget), there are more opportunities and ideas popping around
- There is an increasing need in prioritization between many good ideas
- Signaling Scheme – Work in Process – we can start “manually” until it’s ready
- Proposal – Define a budgetary framework to guide proposers which proposals are valuable by the DAO and will have high chances of passing.
Genesis is maturing slowly but surely, and we see more and more activity taking place – a lot more engagement from community members, more social interaction, more events carried out by community members to spread the word of DAO’s and Genesis in different locations, and overall new and exciting ideas, integrations and research proposals.
We are also heading towards the next phase of Genesis DAO – Genesis1.0, being an ecosystem fund, that aims to improve the adoption, UX, and architecture of collaborative networks as well.
This step, discussed in this blog post is a big milestone and an exciting shift to a DAO in which not only individuals take part in a collaborative network, but also organizations – these organization will invest and stake funds out of the expectation to get the best ROI on this investment – not just in terms of profit on the capital invested, but rather out of expectation that this funds will be best used to develop the eco-system they need to take their project forward.
Prioritization – the hardest part is deciding what NOT to do…
Enters scarcity, and budget and funding are a scarce resource, and will not last forever. ”Treat it as it was your own business” is a good way to judge intuitively if you want to upvote a funding proposal.
The beauty and uniqueness of a DAO is that there’s no central authority making decisions, and it’s up to each member to propose and vote on things they care and think are valuable. But with great power, comes great responsibility– each member who participate in a DAO, as well those who are just “watching”
and therefore, Genesis members, serve like the board of directors of Genesis who control how budget is being spent.
Metrics based decision making, How to decide?
When deciding how to make a budgetary decision, there is a consistent and everlasting tension between short to long term: Companies, governments and other organizations always need to prioritise between short term consumption / spend, to investment in stuff that will only show value in the far future, and which is crucial to the long term growth. In a DAO like Genesis, which is still in its infancy and does not have a proven long term business model to make it sustainable for the long run, There might be great proposals that could benefit the project in the long run, but first the DAO needs to make sure it will exist in the long run , and therefore budget request should first prioritize ideas that help the DAO generate it’s own sustainable existence, out of the assumption that a ‘grant DAO’ is not going to work for eternity.
Based on Genesis 1.0 Mission and Objectives that will be published by Eric and Kate, the below is a practical way to decide if a proposal is aligned to what Genesis want’s to achieve:
Questions to ask:
If this proposal passes,
- How – Does it significantly contribute to drive adoption and usage to Alchemy?
- When - Does it have an immediate / short term impact
- What – Are the specific use cases this proposal will enable
- Who - Are the users that will directly see the value driven by the implementation of this proposal and will increase Alchemy’s adoption?
Enters Signaling Scheme —> The Budgeteory Framework
How can we calibrate the DAO towards alignment of budget deployment ? (and - we don’t need to wait for this scheme to be live, we can agree on it “manually” for now…)
Signaling Scheme, a proposal raised by ApeUnit that already been funded, is a method aiming to create soft consensus. Once this feature is ready, every DAO can signal a set of rules, guidelines and values it approves, that can serve as “ground rules” for day to day operations.
Back to budgeting, the DAO can decide to signal a framework, a budgetary envelope within it operates. For example:
- How does the monthly budget is allocated to various focus areas
- What are the ground rules (such as – DAOstack employees that are already being funded by the project are not allowed to ask funds for them self
The Proposal - Define the budgetary framework for Genesis
Expected outcome - a framework that helps proposer know what is the expected information needed, and make them already ensure the proposal is aligned to the DAO’s priorities as its being built into general rules (“budget framework” / “objectives”) that the DAO pre- approves
As a first step, every proposal should specify how does it support the 4 decision metrics specified above: How , When, What, Who.
Then, I’m proposing to define 4 key budgetary buckets. Each proposal, will have to define on which budget bucket it is being suggested and #tag it using the new tagging feature in Alchemy.
Product and Tech (70 percent of funding)
Features, modules, interfaces, integrations, research implementation, stack improvements (70 percent of funding)
Proposal that fit in this bucket help support the increase in Alchemy’s usability and increase the number of users that can drive value from using Alchemy
Research (10 percent of funding)
Use Cases, Security, Governance Modules, Staking, Cryptoeconomics and funding modules are all areas for people to contribute and help improve the knowledge as a basis for later implementation
Ecosystem (15 percent of funding)
Activities that increase the brand awareness, Explaining the concept of DAOs, and help onboard developers by creating better documentation, improve developer tools, education, marketing, developer events, etc…
Other (5 percent)
Wild card - ideas and projects that don’t fit any of the above, open for community creativity and imagination
Kate will soon publish a blog post that deep dives into these categories explaining more in depth what kind of proposals are included in each one, and how this is all connected to Genesis 1.0 mission.
I invite Genesis community to comment and discuss the method, as well as key buckets we would like to split the funding, in order to create a clear and aligned view for all members on which areas Genesis wants to invest it’s budget.
If this proposal passes, the next step will be to develop the mechanism to facilitate this method, This will include:
- Proposal template
- Tracking file to allow transparency on the available budget on each category