ATX DAO V2 - pt. 2: Revenue Project Incentive / Internal Grant Program

SamPadilla

Working doc

Proposal to Establish a monetization incentive as follows:

1. There will be a special type of proposal for monetization/revenue projects. Any project in any guild that may bring revenue to the DAO will fall under this category.

1.1These proposals are subject to the same eligibility and scrutiny process outlined in #6.

1.2 These proposals must outline:

1.2.1 The guild under which they would operate
1.2.2 The team working on this idea (name and eth addresses)
1.2.3 How many epochs will take to execute the project (or an MVP of the project).
1.2.4 Budget needed, including:

1.2.4.1 Expenses
1.2.4.2 Compensation structure outlining:
a. Contribution distribution among team members in the project. This may be either a flat rate or a percentage of revenue generated.
b. How much each team member should receive at the end of each epoch while the project is live.

2. All the revenue generated via these projects, with the exception of any revenue share models specified in the proposal (see 1.2.4.2), will go to the treasury of the DAO.

3. DAO members working on these revenue projects become ineligible to receive compensation in the giving circles during the epochs while the project is live.

4. During every in-person meeting, while a monetization project is live, an update on the project is due.

4.1 The team members executing the revenue project will update the DAO members on progress, collect feedback, and discuss any strategic redirections necessary.

4.2 After the update, all present DAO members will vote on the continuation of the project.

4.3 A simple majority vote (51%) is needed to ensure the continuation of the project.

4.4 If the project passes the vote, the team members executing the revenue project will receive compensation for the work done on the previous epoch as outlined in 7. a. ii. 4. b. ii. and the project will continue for another epoch.

4.5 If the project fails the vote, present DAO members have the right to vote to veto compensation for the previous epoch. This is designed to prevent revenue projects that are dropped by their teams during that epoch (i.e. no work was done during the previous month) from being compensated.

4.5.1 A compensation veto vote must pass with a supermajority of 69% of members present.
4.5.2 For cases where the percentage of members present is not a round number, the supermajority threshold will be rounded to the next integer if the decimal part of the number is greater than or equal to .5, and rounded down otherwise.
4.5.3 If there is no vote to veto compensation or if the vote doesn’t pass with the needed supermajority, the members executing the revenue project will receive compensation for the work done on the previous epoch as outlined in 1.2.4.2.b and the project will be terminated.

See Part 1 for the rationale.

tlogs-eth

This is awesome Sam! Thank you so much for all your hard work on behalf of the DAO. In my opinion, a funding mechanism is going to really accelerate growth.

Item 4.2 jumped out at me, ‘after the update, all present DAO members will vote on the continuation of the project.’ I realize we want to incentivize attendance, but perhaps voting / funding could happen on-chain? Or on discord? Maybe in a very short window during / right after a meeting? This would allow for further discussion in discord & Twitter spaces etc during the short voting window.

Also, DAO members will be able to continue participating and staying up-to date while traveling or missing a meeting for whatever reason.

I imagine a fully on-chain implementation of this could work a bit like Nouns DAO’s prop.house, but there are obviously technical limitations.

SamPadilla

Yeah this emphasis on the in-person member meeting is very deliberate. We are trying to incentivize attendance as I believe this is our super power compared to other DAOs.

A few things to clarify tho:

Initial funding approval will not be during the in-person meetings. For a revenue idea / grant to be approved it will need to follow the same process of on-chain voting described by part 3.
The only thing members will be voting on during the in-person meetings would be on the continuation of these projects once they have been approved.

RobertoTalamas

A few of questions:

1) How will non-revenue generating projects will be handle under these guidelines?

2) What if a project does not require monetary/human resources or a budget from the DAO? I can foresee events where most of the work can be outsourced to partners while only using the DAO's brand to engaged the crypto community. I good example of this scenario is the Consensus hackathon from earlier this year. Our entire contribution to the event was our brand.

3) For events like SXSW or Consensus where payment is due upon completion of the event, how would statement 4 work? For example, 4.4 would break because members would not be able to receive compensation during each epoch. Additionally, what happens if the members decide to veto the event while it's under development? Big social events tend to be multi-month endeavors that require upfront payments which can become problematic if the community decides to kill the event before its completed.

Perhaps this entire proposal (specially Section 4) should only apply to projects that require monetary resources from the DAO. These may include direct investment from the treasury in the form of grants/budgets or time from paid operators like Megan or Mason. If no upfront investment is required, all members should have the freedom to pursue revenue generating opportunities without the need of constant monitoring. Access to the community as well as the DAO's brand/name should be part of the core benefits members get when they purchase an NFT. The last thing we want to do is create unnecessary bureaucracy that may stifle innovation across the DAO.

SamPadilla

RobertoTalamas

Addressing the last point:

Perhaps this entire proposal (specially Section 4) should only apply to projects that require monetary resources from the DAO. These may include direct investment from the treasury in the form of grants/budgets or time from paid operators like Megan or Mason. If no upfront investment is required, all members should have the freedom to pursue revenue generating opportunities without the need of constant monitoring. Access to the community as well as the DAO's brand/name should be part of the core benefits members get when they purchase an NFT. The last thing we want to do is create unnecessary bureaucracy that may stifle innovation across the DAO.

I agree. And that is the exact use case I envisioned for this section: Revenue projects that use resources from the DAO.

I see this section as a "permission to centralize operations, have dedicated compensation, and use DAO resources for a possibly revenue generating project". That is why I see member oversight as an essential aspect of this. Basically: What are you doing with the people's money.

Now, if a project doesn't:

Use DAO resources
Needs to centralize operations within a small group
Wants to pay the people executing it separately
Then I don't think it needs to follow this model.

Most other contributions fall well within the giving circle part of the proposal. And keep in mind that proposals that fall under the scope of this structure are still a thing. Anyone can propose anything they want, this is just a vehicle/framework to propose and incentivize people to use our resources to build sustainable revenue streams.

Only nit pick I have: I do think that using ATX DAO's brand on a large scale should be something that requires approval from the DAO. I see this as one of our biggest assets, and making sure the community at large is aligned to using our brand for something seems important.

Maybe more clarity and discussion around what warrants a proposal is needed?

MeganKay

Roberto raises a good point, similar to one I have had with projects spanning multiple months. What if the epoch just serves to capture any projects completed during that time period? No payment due until completion (like most contractor jobs) which would incentivize the team to carry things across the finish line. This way, people could engage in parallel projects that have different start/end dates. @SamPadilla

SamPadilla

Yeah really good points @RobertoTalamas and @MeganKay. Addressing by parts:

1) How will non-revenue generating projects will be handle under these guidelines?

I think non-revenue-generating projects would simply not fall under this guideline (item 4 revenue incentive) and just fall under the giving-circle.

2) What if a project does not require monetary/human resources or a budget from the DAO? I can foresee events where most of the work can be outsourced to partners while only using the DAO's brand to engaged the crypto community. I good example of this scenario is the Consensus hackathon from earlier this year. Our entire contribution to the event was our brand.

Here I think it would just be either a proposal to "use ATX DAOs brand for XYZ" and then the person who wrote the proposal or drove this forward could submit this as a contribution to the giving circle.

3) For events like SXSW or Consensus where payment is due upon completion of the event, how would statement 4 work? For example, 4.4 would break because members would not be able to receive compensation during each epoch. Additionally, what happens if the members decide to veto the event while it's under development? Big social events tend to be multi-month endeavors that require upfront payments which can become problematic if the community decides to kill the event before its completed.

This is very true. So two points here:

4.4 breaking:

We can change this to make it clear that for projects where compensation is due at completion, this vote would only be for continuation or not of the project.

Additionally, what happens if the members decide to veto the event while it's under development?

On this, frankly, I think that if members change their mind on supporting a multi-month project hallway through it, the DAO should indeed pull out. Ultimately that is the will of the members. That is why this kind of proposals need to be well discussed and deliberated upon. The community needs to be aware of the financial and brand commitment going into this and be aware of the impact that killing a project would have.
But I still think that if they vote to kill it, it should be killed.

MeganKay

SamPadilla This works! I like that the voting is just for continuation of the project. And if members vote to kill a project, they can also make a determination if the effort put in to-date deserves anything from the giving circle or not. That would also make sense to me.

RobertoTalamas

SamPadilla nailed it! Thanks for the all the clarification on the above.

Yup, 100% with you on DAO approval to use the ATX DAO brand. Definitely our biggest asset.

Agreed on adding a bit more clarity and discussion around what kind of projects require a proposal.

I think as simple as adding this part from your point above to the proposal should suffice.

Now, if a project doesn't:

Use DAO resources
Needs to centralize operations within a small group
Wants to pay the people executing it separately

Then the project does not require a proposal