- The Grants Committee has been dealing with several challenges that may be an existential threat to the DAO
- The GC mandate is unclear
- The GC has trouble attracting and retaining members
- The seasonal funding process is difficult and contentious
- There is no indication of how GC is performing
- This temp check seeks DAO feedback on potential solutions to the above problems
- Defining a GC and Department purposes in the Constitution
- Adjustment of GC quorum and compensation
- Defining who should be able to request grants
- Moving projects to ad-hoc funding (not seasonal)
- Reducing scope and adopting new tools for guild funding
Grants Committee has existed since Season 1, and has gone through several iterations since its inception. The current form of the Grants Committee is governed by Section 4.6 of the BanklessDAO Constitution, and has broad authority to set the DAO’s funding processes (which are detailed in the Grants Committee Handbook).
Having served as Grants Committee Lead for 3 seasons, I (and every other GC member) have received feedback from many different DAO members and groups on how we could improve the grants process. Due to the complexity of the system, it has so far been impossible to reconcile all feedback into an actionable plan. In addition, any changes to the process could result in negative contributor sentiment, which could lead to the loss of contributors.
It is for this reason that the Grants Committee seeks to gather consensus from the DAO. This Temp Check will present many potential changes to our grants process, along with pros/cons of each change. Please read through it carefully and vote thoughtfully. The Grants Committee will reconcile feedback gathered here (and elsewhere) to improve the grants process to the best of our ability.
Note: The polls below are all open, and will be used to gauge the DAO’s sentiment, not make final decisions. The GC’s goal is to optimize long-term pursuit of our mission, not short-term contributor sentiment.
This section lists challenges the Grants Committee is facing, prompting some of the questions in the Temp Check.
Everything stems from purpose, and a lack of a clear purpose means different GC/DAO members have different ideas of what the GC is meant to accomplish. This leads to confusion, arguments, and different GC cohorts aiming at different goals.
The current Grants Committee purpose (as stated in Section 4.6.1 of the BanklessDAO Constitution) is: “This Committee is responsible for vetting all funding proposals and ensuring funded organizational units provide ongoing transparency.”
- This purpose appears simple on the surface, but it makes no mention of WHY the Grants Committee exists (i.e. why are we disbursing funding at all?) which means every Grants Committee member has their own criteria when voting for funding proposals
- The lack of “why” also means it’s difficult for the Grants Committee to set KPIs for ourselves, which is unacceptable when we ask every other DAO group to submit KPIs for themselves.
- This purpose gives the GC a lot of RESPONSIBILITY, but the AUTHORITY is vague.
- Example: Some people have said they don’t believe that “vetting” is the same as approving/rejecting requests (i.e. they believe the GC isn’t allowed to reject funding proposals that have passed forum quorum)
- Example: Funding proposals also come with the inherent expectation of permission to use the Bankless brand, but this isn’t an authority given to the Grants Committee.
I believe that setting a clear purpose will help bring direction to all other challenges the DAO is facing.
- We didn’t achieve quorum for the entire month of August - this means that we could not vote or take action on any proposals.
- We currently have 5 active members, which means every single member needs to attend every single meet to achieve quorum this season (unlikely).
- Fewer GC members available means more work for those who are left, worsening the problem.
- Very few members of Grants Committee ever seek re-election.
Being a member of the Grants Committee is a difficult, time-consuming, complex job. We need to take steps to reduce the effort related to being a GC member or increase the compensation to attract more talent. This challenge is an existential risk to the DAO. Our Constitution doesn’t allow us to distribute funding without a GC quorum.
- It takes ~6 weeks to run our current seasonal funding process, which means we are running our seasonal funding process for HALF of the season.
- During this time, GC members are under a great deal of stress as they try to provide guidance to projects and accountability to the DAO.
- It’s easy for some DAO units to escape scrutiny during this process, leading to uneven treatment and funding.
It’s an impossible task to deep-dive into 25-30 projects, especially when GC members are dropping out mid-season. Usually GC members and DAO contributors have good intentions, but the time-limits and stress lead to negative outcomes and vibes, which is the opposite of what we actually want to achieve through our grants process (i.e. progress + fun). The good news is that there is a lot of room to improve here.
Is this cohort of GC better than the last? Are we any closer to achieving BanklessDAO’s mission after disbursing tens of millions of BANK? Is our grants process improving? It’s not possible to easily answer these questions. Partially this is due to not having a strong, long-term purpose (i.e. north star), and partially this is because the GC has no reporting requirements.
The Grants Committee is a funded DAO unit, just like any other. If we don’t hold it to the same standard as other DAO units, we cannot systematically improve it.
A draft purpose statement: “The Grants Committee disburses BanklessDAO resources to encourage long-term pursuit of our mission”.
- This sets Grants Committee up to disburse all resources, not just BANK (e.g. the Bankless brand).
- States WHY we are disbursing grants, i.e. to pursue mission. This will make it easier to set KPIs for Grants Committee.
- Current: “This Committee is responsible for vetting all funding proposals and ensuring funded organizational units provide ongoing transparency.”
- Proposed: “The Grants Committee disburses BanklessDAO resources to encourage long-term pursuit of our mission”
- Something else (I’ll comment below)
Currently the GC needs a quorum of 5 people. This has been difficult to achieve in the bear market. Instead, how about setting a quorum based on a simple majority of elected members? (i.e. 4/7, 4/6, 3/5, 3/4)
- Current: 5 people
- Proposed: Simple majority of elected members
- Abolish quorum (i.e. no minimum number of GC members required to disburse funds)
- Something else (comment below)
One way we could encourage more people to apply for the Grants Committee is to increase the compensation. This could take the form of BANK or stables. To ensure that GC members are earning their compensation, we could tie compensation to specific deliverables in the grants process.
GC current compensation is 3,846 BANK/week for reviewers and 6,250 BANK/week for leads, plus a 250K BANK seasonal coordinape.
- Yes, GC should get more BANK
- Yes, GC should get more BANK and/or stables
- No, keep the current compensation structure
- No, they should be compensated less than they make now
During a discussion about member-leveling, one approach is to strengthen L1/L2 rather than restrict Guest Pass. One way to do that would be to require that people be L1/L2 to submit proposals. This would not only make L1/L2 more attractive, it would also ensure people who submit proposals are somewhat value-aligned with BanklessDAO.
- Guest Pass and above
- L1 and above
- L2 and above
- It should depend on how much BANK is being requested
- Something else (comment below)
The seasonal funding round is essentially a shortcut for DAO units to get funding, and was introduced in S1 before we had a difference between guilds/projects/departments. When projects are guaranteed funding every season, they are incentivized to use up BANK before the end of the season. In fact, average BANK/project consumption has increased by 49% since Season 6.
In the An Idea for Team Taxonomy forum post, I introduced the idea of ad-hoc project funding (as opposed to seasonal funding for projects). This would greatly reduce the amount of work GC has to do around seasonal funding time and also require projects to gain DAO consensus every time they ask for funding and in turn encourage them to utilize their BANK more effectively and concentrate on outcomes. This has been shown to work in projects that decided against seasonal funding, like Bounty Board, Governator, and Bankless Card.
- Something else (comment below)
Member-Based Guild Funding was rolled out in Season 6, and in the 3 seasons since, we’ve seen a dramatic decrease in guild/department funding. While guild/department funding went up by 3.7% from S5->S6, in Season 9, guild+department funding is 26% less than S6 highs. Guild funding by itself is 45% less than S6. From this perspective, member-based guild funding has been a success.
Unfortunately, although it was also meant to reduce the amount of work the GC had to put into the seasonal funding process, it has actually increased the work significantly. Many guilds have indefensible/undocumented “active member” counts, which requires GC members to do time-consuming deep-dive audits to figure out how many members a guild truly has. Some bDAO community members are part of 4+ guilds, meaning the DAO is paying guilds 4x to keep these single members around.
One solution to this issue is to reduce the scope of guilds. Instead of rewarding guilds for active members, we could give them a fixed weekly amount to be a “landing place” for new BanklessDAO members, and that’s all. Guild members who wanted to create educational or onboarding efforts could seek funding from GC as projects. This would greatly reduce the work of the GC and also encourage guilds to teach members how to go through the grants process.
Another solution could be to adopt decentralized tools for guild funding. For instance, we could use Gitcoin’s grants stack or Snapshot to allow members to signal support for guilds and disburse funding using a simple formula rather than audits.
- Reduce the scope of guilds
- Adopt decentralized tools
- Both of the above
- None of the above (comment below)
There has been little scrutiny of Departments. Their S9 funding is 6% higher than S6, but we actually added a new Department (Department of Governance), so, in general, the change in spending has not been bad even without scrutiny.
That being said, just like the Grants Committee itself, it’s difficult to understand the progress and status of these DAO units. Although they provide seasonal accountability posts, bDAO members have different ideas of what Departments are responsible for. I believe that this is due to a lack of defined purpose. You cannot improve without a goal.
I propose that each Department has a purpose defined in the Constitution. This would give each Department direction and scope and allow them to set and report on KPIs to the DAO.
- Something else (comment below)
- Gather DAO feedback (this temp check).
- Reconcile feedback within the Grants Committee and document changes to the grants process.
- Ratify the above documentation with a GC vote.
- Notify the DAO of changes before the next grants round starts (Nov 11).
- Create bDIPs for any required changes to the Constitution (i.e. quorum, compensation, department mandates).