Community participation is wrongly interpretted as vote on everything. Many grants DAO use the same model to run, what becomes, an inefficient grants program. Here, after working with a dozen grant programs in the ecosystem, I’ll lay out how you can have a grant program that is both efficient and community driven.
Delegated Capital Allocators
The grant program must be divided into specialized grant programs, each with its own budget. This could be for various verticals like NFTs projects, DeFi, Infrastructure, Dev Tooling etc. Each of these sub-grants-DAOs should be led by an allocator. This allocator has absolute control on how to disburse the grants. No 10 member grant committee that needs to sign off, no dozens of people the allocator needs to consult before disbursing the grants. One person calling the shots on all the grants in their vertical.
It is unfair to expect a single person to know how to evaluate a grant application across all verticals. It is unproductive to involve too many people whose signoff is required before the grant application can be accepted.
No confidence motion
But then, where is the community participation - you’d ask. The community has only one decision it can impact - but a very powerful one. The community can decide to replace the grant allocator. If you think someone is the right person to run your protocol’s Grant Program in India, but the community in India disagrees - they can start a no confidence motion and replace the allocator.
The only catch is the person who’s initiating the no confidence motion, should have certain credentials - which is set by the parent grant program.
Once the community member has the right credentials to start a no confidence motion, they must vote by saying “If X is replaced by Y as the allocator for this grants-sub-DAO, I commit to buying $1000 of protocol’s token and lock it up for 100 days”.
The job of the grant programs is to incentivized builders to build on top of their protocol. When more people build on the protocol, the value of the protocol increases - often reflected in the token price.
So, if someone thinks that the replacement of the grants allocator is in the best interest of the protocol and builders, put your money where your mouth is. If you think the token is going to be more valuable because of the allocator change, it also makes sense for you to buy the tokens at the current price.
The person voting has 2 parameters to alter the weight of their vote - the amount of tokens they commit to buy, and how long they’re willing to lock - giving an opportunity for a person with lesser capital to compete with someone with access to larger capital.
Questbook implements this model so that any grants program can start running a futuristic grants program and attract builders through the bear market. To launch one, reach out to us on twitter
If you want to learn more and discuss the technicalities, feel free to DM us