DAO Funding Guidelines

Governance DAO Proposals
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DAO Funding Guidelines

NOTE: These guidelines may change as we experiment and learn how best to bootstrap and support Decentralized Autonomous Organizations.

Harmony is committed to seeing 10,000 DAOs operational on the Harmony blockchain network by 2026. This is an ambitious goal but we are firm in our conviction that decentralized organizations will be the #1 mechanism for employment and wealth creation in the near future.

Our conviction is tangible and you can see it through our DAO Grant Fund.

As part of our $300M Ecosystem Development Fund, we have committed $50M USD for bootstrapping DAOs and accelerating the creation and deployment of tooling to support those DAOs.

It is still early days for those who DAO but we are excited about how much we have learned and how far we have come in just a few short months.

We invite you to join us. As our core team member @lij has said;

“It doesn’t matter if you didn’t go to an expensive university or if you are just in high school. The price of admission in Web3 is passion.”

But, as with all new endeavors, prudence insists that we learn to crawl before we walk, and walk before we run.

And so - with that in mind - we have the following guidelines that will be used for funding DAOs on Harmony.

The DAO Bootstrap Grant: Minimal Considerations

Reminder: The $50M Fund for DAO grants is a subset of the larger Harmony Ecosystem Fund. All recipients of these grants are required to support the Harmony ecosystem in one way or another.

As a reminder, lifetime grants for DAOs are capped at $1M. Not all DAOs will receive $1M and some (hopefully most) will find a mechanism to fund themselves without a grant fairly early on in their development.

Amount: $75K USD

NECESSARY MILESTONES:

  1. Mandates: 3 mandates. Specific. Precise. Each mandate to have two sub-clauses to provide further clarification on these mandates. All three mandates and their sub-clauses should fit within a tweet.

    1. EXAMPLES:

      Developer DAO:
      Support -       Resolve daily issues on forums & channels, drive weekly meeting agenda
      Bounties - Prioritize bugs & features with task management & contributor retention
      Advocacy - Hold workshops & events, content marketing with talks & blogs

      Basic DAO:
      Timesheets -       Help contributors track work hours & deliverables in public
      Payroll - Setup paid challenges, wallets, streaming payments & taxes
      Reviews - Follow up performance feedback for bonus or penalty, rage quits, or kicks.

  2. Deliverables: Looking forward for the next 3 months only, identify key deliverables directly tied to the mandates of your DAO that you will be focused on accomplishing. Be specific. Chart, in steps, how you will get from where you start to delivering your goal.

  3. Metrics: Quantifiable and verifiable. List the “stretch goal” metrics that you and your DAO will be using to measure your impact in furthering your mandate. Low bars of success indicate a certain level of disengagement, while high bars and stretch goals indicate confidence in yourself and your community to accomplish that about which you are passionate.

  4. Governors: List the 9 governors that will start your DAO. NOTE: As we have said in the DAO Funding Guidelines (Guidelines for Harmony Grants) being a governor is not about having a part-time job. Think about your three mandates and try to find passionate individuals that have the skillset and expertise to help you accomplish those goals.

  5. Gnosis Safe Multisig Wallet: Establish a multisig wallet that requires 5 out of the 9 governors to approve the disbursement of funds.

  6. Schedule the Next Election: DAOs are not kingdoms. The initial governors do not rule by divine right, nor are they supposed to be “Governors-for-Life”. DAOism is about community. About passionate participation in projects. It is vital that we have a regular rotation of community members experiencing the responsibility of managing the DAOs treasury.

Having these “Mighty Six” in place as the proposal goes live on talk.harmony.one will greatly speed the initial bootstrapping of the DAO. Please note - and we cannot say this strongly enough - a DAO must find its own path to self-sustainability. The grants from Harmony will assist in getting the ball rolling and the community organized, but it is no substitute for determining a mechanism for recurring revenue. Please keep that in mind.

Additional Funding

Over the first 3 months, the DAO will execute against its mandates and become operational.

Under consideration right now amongst the DAO Operations team, is what milestones and objectives are necessary for additional grants.

The initial framework is that an additional $100K+ grant is anticipated after the first term. During that grant phase, and to qualify for the next grant phase, the DAO should publish a plan to make the DAO self-sustaining. After which, additional grants can be made available.

More details about these tiers of funding will become available as the DAO Ops team builds additional clarity in them.

— THE FOLLOWING SECTION IS UNDER REVIEW—

— DO NOT CONSIDER THE FOLLOWING “GOSPEL TRUTH”—

The DAO Operational Grant: Minimal Considerations

Amount: $100K+

NECESSARY MILESTONES:

  1. Decentralized Governance: The DAO has established all of the tooling and process for decentralization. They have a DAO Framework (i.e. DAOhaus, Colony, Orca, Aragon). They have completed the “Decentralized Governance Loop” (Proposal, Discussion, Vote, Execute, Report) 10 times. 3 to 5 of those loops must involve treasury expenditures excluding those regarding Governor Compensation. The Governors must have been subject to at least 1 re-election cycle. Votes must tally more than 30 unique wallet addresses to show the DAO has built a community.

  2. Report & Accounting: Prior to ANY additional funding. The DAO must produce a report for the prior funding period. The report will be in .pdf form and be available to download. In the report, they will list the following items:

    1. DAO Mandate
    2. Initial Formation Proposal
    3. Deliverables and Metrics from the initial funding request
    4. Report on the status of the deliverables and the metrics associated.
    5. New deliverables for the next three months, plus proposed metrics.
    6. Accounting of the DAO treasury must include:
      1. Income
      2. Payments including links to the community vote and how the payment is tied to the DAOs mandate
      3. Current assets on hand (including social channels such as Twitter, Discord, Telegram, etc. If the DAO has created content, list and link to that content)
    7. Current community statistics. Social channels with followers and engagement. Number of Governance Loops completed.
    8. Lessons learned during the prior term. Both positive and negative.

  3. Operations Plan: Taking the lessons learned from the prior term, write a proposal for how the DAO should operate in the following terms. Consider how to train and equip the community to participate in a more substantial way (i.e. new DAO tools, webinars on best practices for the DAOist, etc), how to manage and grow the existing treasury, and any ideas on how the DAO may become self-sustaining.

The DAO Operational Grant represents the trust the DAO has built with Harmony. This DAO is practicing what it could mean to be a participant in a decentralized future. The governors have shown that they are willing and capable of shouldering the burden of stewardship over the communities funds and that they have the savvy and commitment to bring the DAO to the next level.

NOTE: The DAO Bootstrap Grant is not enough to cover the maximum possible compensation for the 9 governors. This constraint will force the DAO to consider how they manage their treasury and how it should be deployed to achieve their mandates.

Just as the DAO Bootstrap Grant before it, these conditions are necessary but in no way sufficient to qualify for a grant. Said in another way, even if a DAO has completed all of the above tasks, they still may be denied a DAO Operational grant.

The DAO Expansion Grant: Minimal Considerations

Amount: Variable

NECESSARY MILESTONES

  1. Path to Self-Sufficiency: Through experimentation during the prior terms, the DAO has identified a mechanism to fund continued operations of the DAO. They must show details on projected income, projected expenses and a break-even point.

  2. Decentralized Governance: The Decentralized Governance Loops continue. Participation in debate and voting is increasing. Elections for governors continue. Votes governing treasury expenditures continue to be a significant percentage of the Loops performed.

  3. Report & Accounting: Same requirements as the Report & Accounting milestone for the DAO Bootstrap Grant

  4. Operations Plan: Same requirements as the Operations Plan milestone for the DAO Bootstrap Grant.

This grant parallels a “growth capital”-type of venture investment. The DAO has determined how they can become self-funding and know the deliverables and metrics they need to hit to get there.

Additional DAO Grants

Amount: Variable

By the time a DAO has deployed a combined treasury of somewhere north of $200K, they should have determined how to become self-funded and self-sufficient. At this stage, the DAO should not need additional operational funds.

However, where appropriate, additional grants can be made available for the right purpose for DAOs that have effectively shown their commitment to Decentralized Governance, Radical Transparency and Accountability, and Community Empowerment. The DAOs that will have the highest priority for funding are those that evidence true utility to the entire Harmony blockchain community.

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Are there any available resources that help find people to collab with?
I wouid like to start an Animal Rescue DAO but as of right now, it’s just me and the idea.

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That’s a good question.

On the Harmony discord, – Harmony – there is a “Join a DAO” room. That is a good place to start - but it is also a good idea to talk to people who are enthusiastic about Animal Rescue in general.

You will always find more valuable members of your DAOs by starting with those that are passionate about your mission than simply looking for people to fill a role. :slight_smile:

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