Shimmer Community Grant Committee

Shimmer Community Grant Committee

Boosting the Shimmer Ecosystem as a community

This proposal was created by a group of community members who care about the Shimmer ecosystem’s development and the network’s success. We have met every Tuesday and Thursday in the IOTA Discord general voice channel, and all these topics have been publicly discussed, and the proposal was developed and fine-tuned in these meetings. Core contributors have been: @Deep_Sea @AndyW @gman @overclocked @Werner @TonyO2 and many others that took part in the calls and added context to the proposal.

You can watch all recordings of those meetings here: https://youtube.com/playlist?list=PL5joP0FyJQU4eKPWfQWradNVjMIPq86ID

Please read carefully and leave comments and suggestions in this thread.
The selection process for potential committee members will be introduced in the next days.

If you like the idea, please show your support at the end of this post here

Simple summary

The Shimmer Network will start with an allocation of 181.362.051 SMR to a community Treasury. This is 10% of the total token supply of the Shimmer network and can be a powerful tool to support the successful and sustainable growth of the Shimmer network and, through the developments in Shimmer, also the IOTA network.

Optimally using these funds to create a flourishing Shimmer ecosystem and increase the value of the Shimmer tokens needs an efficient approach. Managing funding requests, evaluating if those requests should be sponsored, distributing funding, and tracking that the provided funding has been used in the proposed manner are crucial to the success of such a program.

These tasks need to be handled by a dedicated group of individuals who act in the community’s best interest and can allocate sufficient time to this critical work. We have seen in many other projects how successful a community treasury can use a committee-based structure to boost adoption and growth in a project if the funds are managed professionally.

In establishing a Shimmer grants committee, we propose to follow successful grants management programs, mainly Aave grants, Polygon DAO Grants and Bankless grants.

Please watch the recording of our Bankless Townhall session, where they explain the Aave system: https://youtu.be/D_epzJC0Ap4.

2.) Abstract

The 10% community Treasury funds currently have no structure, and no rules are defined to guide how and if the community should use them. Not using these Tokens to support growth in the Shimmer Ecosystem would result in a massive loss of opportunity for the Shimmer community.

As there is an immediate need to support teams, create outreach and marketing campaigns and incentivize builders to make Shimmer a successful network, we need to establish an organization, rules, and guiding principles to use the community funds to support the growth of the Shimmer network as soon as possible.

The Shimmer community will be the biggest token owner in the Shimmer network. With this, there also comes a responsibility to actively do something for the network’s success, creating a win-win situation for all participants.

3.) Motivation

After researching and reviewing how other communities have bootstrapped a token treasury and brought measurable growth and adoption into their ecosystem through a committee-based Grant program, we believe this is also the right approach for the Shimmer community to start its journey in supporting valuable builders and initiatives in the network.

We need a committee of knowledgeable and trustworthy members with the time, skills, and resources to bring the community funds to the best use.

Otherwise, if we leave any grant application to a lengthy proposal process and a community vote, we don’t think the needed incentives for builders and community growth can be established.

We would, therefore, not be able to get Shimmer to the same level as our competitors in the DLT and Web 3 space. Other networks like Aave, Uniswap, and Compound have similar systems and successfully bootstrapped their ecosystem.

Builders’ teams constantly look to where they find the best conditions and see the most significant chance of growth and success for their applications before allocating their resources (time, knowledge, workforce).

Shimmer and IOTA need to be on the same level as those competitors to convince builders, which can facilitate the Shimmer protocol’s technical growth and adoption. Without sufficiently easily accessible incentives, Shimmer cannot compete in the current market against projects that get support from big VC funds and have access to funding in the 2-3-figure millions.

Some examples are taken from Kappys proposal that initiated the launch of our community treasury:

Those programs have often not brought the effect that the community hoped for because the execution was done poorly or they have been set up to incentivize the wrong growth metrics (like focusing purely on TVL).

Also, many grant-giving entities have done very little due diligence on the grant receivers, and follow-up processes have been poor or non-existing.

We believe it is now time that the community takes action and executes what is needed to increase the adoption and value of our networks. For a long time, it was an ongoing critique that the IOTA Foundation did not do enough marketing, outreach, etc.

The community can now take care of those points with this grant program and the proposed committee structure.
Such a program can support community members in creating the needed outreach and awareness in the broader crypto space.
Attending conferences and events, producing campaigns, sponsoring hackathons, etc., are now possible. We need engaged community members to take on those opportunities and a grant program that can quickly fund such initiatives.

There are hundreds of great opportunities to bring more developer teams and applications into the project. Now is the time to act and enable growth through well-placed incentives and initiatives.

We, therefore, propose the following setup to manage the Shimmer Community grant program leveraging a budget supplied from the Shimmer community treasury:

4.) Specification

Mission:

A community-led committee-based grant program to support the Shimmer network and empower its ecosystem

4.1) The Committee

The committee will initially be set up with five members.

One of them is the Program Lead and, besides reviewing funding requests, takes care of all administrative tasks and reporting and coordinates the committee members’ work.

  • The lead also promotes the program, identifies directions for funding, and has a thought leadership role in guaranteeing the program’s success.
    Roles can be adapted, and the number of members can be changed through governance votes if there is demand.
  • Further, an important part is ongoing coordination with the second ecosystem funding program run by the Tangle Ecosystem Association to ensure effective alignment in the goals and directions of the community grants program. This will be one of the Tasks for the Programs Lead

The 4 Grant Reviewers will process funding applications part-time and ensure that the lead acts in good faith and is effective in the role.

  • The committee operates a 3 of 5 Gnosis multi-signature wallet that requires 3 out of 5 signatures for a payout of funds.
  • The committee members will select one of the four reviewers as the co-Lead. The co-Lead acts on behalf of the committee lead in cases of sickness, holidays, or leaving. If the Lead leaves, the co-Lead continues the operation and organizes an election of a new lead by a community vote.

This committee will serve for a period of 12 months. Toward the end of this period, The committee will prepare an extensive report of the success, and the community can extend, adjust, or cease the program through a governance vote. Decisions to continue or end will have to be made one month before the current period ends to enable a graceful shutdown of operations or a transition into the next period. (Costs of operational shutdown need to be secured)

The community may replace members during the program’s period at any time through a governance vote.

  • This can happen either if committee members find they cannot dedicate sufficient time to the program or ask for a replacement or if the community has valid concerns about the motivation and professionality of a member or has any proof of fraud or betrayal.
  • Grant reviewers are free to leave the position based on the terms stated in their contract. A 4-week prior notice is usually required before leaving the committee.
  • Replacement positions will be offered to the runner-up candidates that have received the largest support during the committee selection process.
  • Members that leave the committee will be replaced in the Multi-Sig Wallet.
  • All committee members will do a KYC process and sign a legally binding contract with the legal entity.
  • All committee members must reveal any conflicts of interest in becoming a committee member. They need to reveal if they currently are or have been holding a position in any DLT project or have other connections to projects or teams that could cause a conflict of interest.
  • The Lead is not allowed to be in a paid position with any other Crypto project. A co-lead is also held to these higher standards.

Compensation:

Committee members must be sufficiently incentivized to deliver professional work to the community and not be targetable with bribe attempts by projects that ask for funding.

Compensation that is in line with industry standards needs to be set up to attract the most skilled members:

  • The lead should receive a salary of 70 dollars per hour paid in USDT for 30 - 40 hours per week.
  • The committee members should receive a compensation of 50 dollars per hour paid in USDT for 10 hours per week.

4.2) Funding Priorities

Funding objectives:

  • To increase the utility of the Shimmer network and attract new builders.
  • To promote Shimmer and make it more visible and attractive in the DLT space.

Target areas:

  • Applications and integrations (front-ends, Defi, Gaming, and other applications that use the Shimmer protocol on L1 or L2)
  • Incentivizing established successful projects from different ecosystems to deploy their application on the Shimmer network
  • Developer tooling
  • Incentives for Validators, Node operators, and infrastructure
  • Analytics tools and dashboards
  • Community Education
  • Marketing and outreach initiatives
  • Code audits
  • Events, Community meetups, and hackathons
  • Bounties

Guiding principles for funding decisions:

  1. A proposal must be relevant to the Shimmer network and its ecosystem.
  2. A proposal that segregates individuals, organizations, or communities based on sex, race, color, ethnic or social origin, genetic features, language, religion or belief, political or any other opinion, membership of a national minority, property, birth, disability, age or sexual orientation will be declined.
  3. The committee will prioritize projects with the highest potential and positive impact on the ecosystem compared to the received funding.
  4. Projects that can guarantee a backflow of capital/investment into the community treasury will be evaluated more positively.
  5. The proposer or team must be capable of delivering the proposed project. Evaluating this is the responsibility of the committee.
  6. All funded projects must be open source (under MIT or Apache 2.0 license). Projects in development must allow the grant committee to access any private repos for review and these projects will only receive 50% of the proposed budget untill they fully open-sourced their code.
  7. The requested budget must match industry standards for comparable tasks. If a proposal requests way above fair market value, the committee may either reject the proposal or cut the funding to settle at fair market value.
  8. If a project has already received funding from the Tangle Ecosystem association, it cannot receive funding from the Community Treasury for the exact scope of work again. But, the committee can grant additional funding for extensions or further developments of such a project.
  9. A proposal that creates any conflict of interest from members of the proposing team or committee members must be reported to the committee lead. Committee members with conflicts of interest are not allowed to process, comment, or vote on a proposal.
  10. Any attempts of Bribery or offer of future payments, token ownership or compensations / gifts of any form to committee members will lead to the immediate cancellation of a proposal process. Accepted bribes by committee members will lead to the immediate removal of the members from the committee.

4.3) Application and approval process:

Easy and quick access to funding is essential to a successful grant program. Numerous examples in the space have shown that this is one of the most critical reasons teams consider when choosing a network.

The grants committee will discuss all Tier 2, Tier 3, and Tier 4 applications in a public meeting (weekly or once demand exists) of the grant committee in the IOTA / Shimmer Discord, where the community is invited to ask questions and observe the evaluation and decision-making process.

Proposing the following tiers and requirements:

As long as the market cap of Shimmer is low, we need to take a considerably more secure approach in the early stages. Therefore we should define a threshold based on the Shimmer market cap, which will lead to the halt of funding, the start of funding with low tiers, and the funding with normal tiers. \

  • No grants are given out as long as the Market cap of Shimmer is below 50 Million USD

  • Grants will be given out with low Tier values if the market cap of Shimmer is between 50 and 100 million USD

  • Grants will be given out with the normal Tier values if the market cap of Shimmer is above 100 million USD

  • Tier 1 - up to 5.000 USD: One reviewer handles the proposal and approves or declines it within 48 hours after submission. No KYC is required from the proposer. The reviewer will decide based on the provided data in the application and especially consider if the submitter has a positive history in our community.

  • Tier 2 - 5.000 - 25.000 / 5.000 - 50.000 USD: Two reviewers review the proposal. As a minimum, the Team lead of the applying Team must do KYC. The Team presents the idea in a video interview with two Grant reviewers. A minimum of two milestones will be defined, and payments will happen based on these milestones. After completing the KYC process, the committee will pay up to 50% of the requested funding upfront.

  • Tier 3: 25.000 - 100.000 / 50.000 - 200.000 USD: Same requirements as the previous tier apply. The whole Project Team must do KYC. Additionally, applications need approval by the whole grant committee. The Team is presenting the idea in an extensive live interview with the whole grants committee. A minimum of three milestones are defined, and payments happen based on these milestones.

    If the project is accepted, the program lead will assign one of the reviewers as a project steward. The steward is responsible for keeping close contact and doing regular (minimum every two weeks) checks with the project team. Milestones are reviewed by the steward and approved by the committee lead. After completing the KYC process, the program can pay 30% of the requested funding upfront.

  • Tier 4: Above 100.000 - 250.000 / 200.000 - 500.000 USD: Applications will be reviewed by the entire grants committee. Same procedure as in Tier 3. The final decision if the project receives funding will happen in a vote by all token holders.

    • Suppose the grants committee supports that a particular project shall be funded It forwards these applications to the community as a proposal in the governance forum and asks for approval by the community in a vote by all Shimmer token holders.
    • The proposal in the governance forum will be submitted by the committee lead and includes the project team’s full proposal and a detailed statement by the grant committee on why it recommends funding this proposal.
    • 2 weeks after publishing this funding request and recommendation, the Firefly vote will begin.

To establish transparency, the grants committee must present all Tier 2, Tier 3, and Tier 4 applications they consider for funding in a public grant committee meeting (weekly or once demand exists) in the IOTA / Shimmer Discord.

All decisions by the grant committee will be published without naming the individual grant committee members who worked on a proposal to avoid becoming vulnerable to potential complaints and attacks from declined projects.

4.4) Application and scoring process

The following details must be provided by the teams in an application questionnaire form:

Applicant Details

  • Applicant Name (Full names preferred)
  • Applicant Email

About the Team

  • Number of Team Members
  • Details per member (write about every Team member. Education and work experience, link to relevant portfolios)

About the Project (Write about your project - idea, use cases, process, goals and how it helps our ecosystem)

  • Project Name
  • Project Links
  • Project Details (Write details about your project - requirements, deliverables, and milestones - as detailed as possible.)

Project Goals (Write about what your team plans to achieve with this project)

  • Project Milestone 1,2,3,etc
  • Expected Milestone Reward in USDC (How much money would you need to achieve this milestone)

Funding & Budget Breakdown (How much money would you need in total and explain how you would spend this money if your application is accepted)

  • Funding Ask in USDC
  • Funding Breakdown (Write about how you plan to use the funds in your project i.e., marketing, developers, etc.)

Open source:

Other Information:

  • Telegram Handle: (All Team members)
  • Discord Handle: (All Team members)
  • Whitepaper (if available)
  • Pitch deck (if available)
  • GitHub repository (if applicable)
  • GitHub handles of Team members (if applicable)

Category?(Please put exactly: DeSci, DeFi, DAOs, NFT, Gaming, Enterprise, Metaverse, Tooling, Marketing, Outreach, Education, Event, Hackathon, Social, Other)

Grant evaluation scoring system:

Grant reviewers will use a scoring system to evaluate funding proposals.

Scoring Category
Scoring Qualities Outstanding (4 points) Good (3 points) O.K (2 points) Needs Improvement (1 point) Missing or Extremely Low Quality (0 points) Score (out of 4)
Relevance to the Shimmer/IOTA Ecosystem The project is very relevant to the Shimmer/IOTA Ecosystem and exclusively builds on the Shimmer Network. They may currently have an MVP on Shimmer already. The project is relevant to the Shimmer Ecosystem and either builts exclusively on Shimmer or plans to deploy later onto IOTA Mainnet as a second instance. The project is somewhat relevant to the Shimmer/IOTA Ecosystem, and the Shimmer network is a main network of choice, but not the only one. The project treats Shimmer as one of many chains and doesn't seem loyal to the Shimmer/IOTA network. The project shows no signs of Shimmer development or doesn't seem to be faithful to building on Shimmer.
Plan and Funding Model The team has clear, realistic expectations on their milestones and how the funding will move the team closer to these goals. They follow the expectations of the grant system. The team has somewhat clear, realistic expectations on their milestones and how the funding will move the team closer to these goals. They somewhat follow the expectations of the grant system. The team has clear, descriptive expectations of their milestones, but they are not entirely realistic. The team has a semblance of expectations for their milestones, but they are not realistic. The team has no clear vision of what funds would be used for.
Execution Several critical steps have already been taken toward their project goals. This could be seen in the form of a significant MVP, high traction, etc. Some critical steps have been taken toward their project goals. Their MVP is currently being built with signs or some sort of traction. Initial critical steps have been taken (interesting website, socials, etc.), and it seems like a decent project, but extremely early. Initial steps taken are poorly executed or sloppy. If there are socials (Twitter, Discord, etc.), their following looks inorganic (fake). The team has taken no steps to execute their project.
Verifiability and Quality of the Team Team is doxxed, and backgrounds can be easily verified. The team is also high quality and seems capable, trustworthy, and ready to take action on the project. The Team is somewhat doxxed, and backgrounds decently easy to verify. They are trustworthy. The team is somewhat doxxed, but may be a little difficult to verify background information. They are more trustworthy than not. The team is somewhat suspicious and hard to verify. The teams' background and information cannot be verified or is fake.
Overall Quality/

Originality of the Idea

The project is unique and would greatly impact the Web3/crypto ecosystem. The project would significantly impact the Web3/crypto ecosystem and is decently unique. The project would somewhat impact the Web3/crypto ecosystem as a whole and is somewhat unique. The project would have little impact on the Web3/crypto ecosystem as a whole and is somewhat unique. The project/idea is a copycat or extremely weak.
Total: x/20

A project should reach a certain score to be eligible for certain funding Tiers:

  • Tier 4(Funding budget 200.000 - 500.000 USD) - required score minimum 17 of 20
  • Tier 3(Funding budget 50.000 - 200.000 USD) - required score minimum 15 of 20
  • Tier 1 & 2(Funding up to 50.000 USD) - required score minimum 13 of 20

The scoring system is a guideline for reviewers. We understand that it may not always be applicable to all kinds of different projects that apply.

For certain projects, we reserve the ability to place them into different tiers even if point scoring disagrees. Still, this scoring system should apply to the majority of projects.

4.5) The Budget

We propose this:

  • The Budget for the committee spending during 12 months is 15% of the SMR community Treasury tokens.
  • 15% of 181.362.051 SMR will be 27.204.307 SMR available for the committee to spend on grants and cover all costs.
  • The committee will need to operate a MultiSig Wallet, starting with fractions/ monthly allocations of SMR tokens from the TEA wallet to the Multisig.
  • The committee will pay monthly salaries in stablecoin USDT or USDC to the committee members and will be responsible for handling this.
  • Once a project has been approved for funding, the committee will convert the amount of Shimmer tokens that the project needs into USDT so that the funding of this project is guaranteed. Market volatility should, therefore, not have an impact on project funding.
  • The needed legal costs and expenses around the setup of the Swiss GmbH and the implementation into the Tangle Ecosystem Association will be covered by the community funds held in IF custody.
  • Any excess funds left in the Committee’s MultiSig Wallet towards the end of the 12 months period will be sent back to the Community Treasury wallet by the committee members in case the community decides not to continue the program.

4.5) The legal entity

The committee members will need legal status to be aligned with all regulations and operate on safe, legal grounds.

We propose to set up a Swiss GmbH subsidiary of the Tangle Ecosystem Association and either employ the committee members or contract them as individual service providers.

It will make it possible to have a regulated and lawful grant-giving committee that can be held accountable and operates under a transparent and regulated status. The Gmbh will be obligated to pay taxes and follow all regulations of Swiss law.

All committee members will therefore be legally KYC’d and known to the GmbH and can be made responsible if any misbehavior should occur.

Details of this setup will need to be worked out over the coming weeks with our legal advisors.

4.6) Program success metrics

Measurable criteria:

  • Growth in the number of grants applications received quarter-over-quarter
  • Growth in the number of projects, ideas, and events funded
  • Growth in community engagement (e.g., increased activity on Discord, Forum, Twitter followers, etc.)
  • Growth in community rewards distributed from the program towards Shimmer token holders
  • Growth in Shimmer market capitalization that is driven by applications/projects funded via grants (e.g., increased TVL in the EVM Chain, active addresses in the Shimmer network and the EVM Chain, value transferred, and unique addresses due to apps funded by grants)

Subjective criteria:

  • Improved sentiment and goodwill within the community
  • Improve the Shimmer and IOTA protocol’s brand and positioning in the market.

The committee will provide reports on these metrics every six months.

5.) Rationale

This proposed structure is based on the very successful Aave grants program (original proposal in Aave forum). It also took inspiration from other programs like the Bankless grants and the Polygon DAO grants program.

They all work with committee-based structures and different Tiers of funding that make it easy to apply for small grants but increase the due diligence of higher-tier financing.

Looking at the list of successful sponsored grants and events from Aave should show very clearly where we need to arrive with our grants program:

https://aavegrants.org/funded-grants

https://aavegrants.org/list-of-sponsored-events-community

Do you support this proposal?
  • Yes, i support the idea
  • No, i don’t think we should do something like this
  • Yes, i support, but request some changes to the idea (see comments below)

0 voters

17 Likes

First of all, I would like to thank all the contributors to this proposal. It must have really taken a lot of work to create such a polished piece.

What caught my eye is the proposal to establish a limited liability company - GmbH. If the committee members are employed there, the limited liability company is the first one liable. In addition, the managing director to be appointed would be liable in a special way. Who should take this function?

The next issues would be the authority to issue directives, termination rights, disposition of DAO capital and so on. I am not sure if this is necessarily in line with DAO governance. Has anything like this been tried before and is there any experience there? What is the view of others on this?

10 Likes

I support the proposal, but I wanted to add that one of the task that should be on the schedule is that there will be a engagement in becoming more exchanges listing SMR, even if there has to be paid a listing fee. IMHO listing on Binance, Coinbase and other major exchanges will be very positive for the awareness and price development of SMR. If this is already in the proposal and I didn’t see this topic, forget my reply. :wink: Let’s make SMR and IOTA a really BIG thing!!

6 Likes

Hey, thanks for the kind words and your Questions.
The idea of setting up this GmbH as a subsidiary of the Swiss Verein was brought up by our Legal Advisor Dr. Byan Mienert, and is a commonly used practice in DAO Operations in Switzerland, where the “Mother” is set up as a Swiss Association or Federation, and the GmbH acts on the operational side.
I suppose the best-suited Person to become the Director of the GmbH would be the elected Programm Lead.
Here is some more info about the Swiss GmbH model:

Registration & costs

  • Minimum share capital of CHF 20.000, which must be fully paid at the time of the registration (Art. 773 OR). This is a difference with German law, where a partial payment is possible.
  • The costs for the notary and the commercial registry are around CHF 2.000. Attorney costs must be added for the draft of documents, in particular Gesellschaftsvertrag and Geschäftsführeranstellungsvertrag (Here we can use the bills of WalderWyss as an example).
  • The company’s actual site (Verwaltungssitz) must be in Switzerland.
  • One person is enough to register the GmbH.
  • The costs of having personnel in Switzerland are relatively high: salary, additional 13-month salary, and social contributions.

GmbH as part of the Association A GmbH can be a member of a Swiss association, and the association can also be the founder of the GmbH. It is also possible to set up a non-profit LLC (gemeinnützige GmbH), as in Germany.

I think that, very likely most of the reviewers would rather go into a service provider contract with the GmbH given their only part-time contribution. Potentially only the Lead and Co-Lead would become full employees.

7 Likes

It will definetly be possible for the committee to distribute funding to a proposal that would integrate Shimmer into an exchange. There will always be a high listing Fee need to be paid for this, but it is surely something that can and should be utilized from the Treasury funds.

2 Likes

Nice to hear. Yeah it definitely costs some money, but this will pay off several times in the future when being listed on Binance, Coinbase and so on. :wink:

2 Likes

Ah ok. First of all, thank you for your answer. I am not yet clear from what the GmbH should pay the salaries. Because the GmbH does not own the DAO assets. If the DAO transfers the assets, are there tax issues for sure? If it is transferred, the DAO has no access to it anymore. Unless the GmbH consists of all SMR holders as shareholders(Gesellschafter), according to their bags, which in addition are constantly changing. :sweat_smile:

These are the questions that arise when dealing with something as new as DAOs. What I want to say is that it is not clear to me how the DAO, the assets of the DAO, the GmbH and the powers - who has control over something on the basis of what - can be combined :face_with_peeking_eye:

I must admit, of course, that i do not know swiss company law very well, nor do i know how they handle DAOs. I am only halfway familiar with it in germany.

2 Likes

Ah, I know what you mean.
So actually, there is not yet a DAO in this sense. The Committee will receive a budget from “the community” consisting of all Shimmer token holders of 15% (proposed) of the total community Treasury.
So if this proposal were implemented and agreed upon in a vote of all token holders, the committee would be granted access to those 15% Shimmer tokens.
Currently, the assets are in the custody of the TEA (because no smart contracts are available yet). Once we would have a decision on the proposal, the TEA will transfer an amount of SMR tokens in the control of the MultiSig Wallet of the committee.

These tokens will be used to pay out grants and cover all operational costs of the Committee. Likely, in the beginning, it would be monthly or quarterly allocations until we have the needed Governance contracts tested and ready in Shimmer EVM to hold all the community tokens. Once we would have these contracts deployed (like compound governor or open zeppelin governor) and the mechanism in place that only Shimmer token holders can control these Tokens through governance votes, those community tokens (the other 85%) would be transferred from the TEA into this governance contract which would lead to fully decentralized control over the tokens.

They would be secured by smart contracts and could only be moved by a governance vote of the token holders.
So the committee only operates with a budget held in their own MultiSig Wallet with tokens given to them by the community and can use this budget as described in the proposal.
The rest of the community tokens (85%) are first held in the Swiss Association and, later on, transferred into the control of the Shimmer token holders (which you then could call a DAO)

1 Like

I’m fine with this ideas. Might be I didn’t find it in the text above but I would like that someone does a 1 to 1 annual meetings for evaluation purposes like in the corporate world. To make it clear not only the builders should be evaluated as well as the new team.

Kind regards,

Stephan auf der Horst

You mean an “in person meeting” like a “Generalversammlung”? Interesting idea tbh, dont know if this would be needed and the community willing to pay for all the travel expenses. We are in a web based world dealing with DLT’s - not everything needs to be done in the “old corporate ways”, but that’s just my opinion here. Propose a budget for something like that and it might happen

We actually had some interesting discussions about how to evaluate an exchange which would include how much of a global reach they have. The great thing about this Framework is anyone could propose not just a project, but any activity in which to use the funds. So a community member can submit a proposal if they find an exchange opportunity. As well, this will certainly be something I would think the community looks into.

At today’s price ($0.089 / SMR) the 15% annual would be just over $2.4 million. This should be enough to fund projects, as well as, have a couple hundred extra to maybe work with an exchange or two.

2 Likes

Hi, greetings from germany and many thanks to all the people dedicating their time and energy to this amazing project!

My additional thoughts on the proposal are as follows;

  1. In my opinion the committee should also have the task to attract additional influx of capital to the treasury within the scope of their legal possibilities. Solely relying on the growth of Shimmers market cap and drain the fund until its empty seems to be not very sustainable for a significant and long-lasting support of the ecosystem, especially in this market environment.
    I am not familiar with the legal circumstances of this kind, but maybe its worth to look into things like granting loans at favorable interest rates in addition to funding, attracting new investors or organizing crowdfunding campaigns to boost the treasury.
  2. Like discussed above the payment procedure of Commitee members should be clear from the start. I doubt that professional employees are going to accept the offer if there are uncertainties in the payment process.
  3. I also would recommend a more hawkish approach in the granting of funds. There should be KYC-Processes even in Tier 1. I understand the importance of a simple and low-threshold funding, but even 5000$ is much money and there should be some sort of identification apart from easily fakeable contact data. If the funding candidates are serious, a KYC-process for that money is not too much to ask. Also every funding project even on Tier 1 should be documented and publicly visible.

I hope you find these ideas useful and I am looking forward to your feedback!

1 Like

No I don’t mean that. I’m proposing a kind of one to one performance appraisal meetings for each member for the committee. Just to proof the quality of the work of the committee members. This is quite usual in bigger organisations also for people in charge of budget.

So all the stuff about things like Liquid Democracy is out, and it actually becomes a regular organization. For me one of the main question is now what role the community actually has, and how. Maybe I simply missed it, but it seems to only state that there will be options to have a vote. But how will that vote go? Who can start a vote? If the governance votes needs to be started through this forum, and there is a close relation between those deciding here which votes are allowed to go through and the ones running the organization, well then it is a clear issue. Or they could be even the same people. Maybe this is intended to be defined later, but to me it seems more important than the salary negotiations.

Talking about the salary negotiations: The exact value you can discuss about of course, but especially if we are talking about a fulltime job you need proper compensation. Does the Shimmer DAO really require 2 FTE running it though? If the Shimmer DAO already needs this, how many FTE would the the IOTA DAO need? 5? Especially since every committee member is allowed to disburse $5k without questions asked, it is not like every projects needs to be discussed by everyone. At the current price a minimum of 10% of the first-year DAO funds are going to be used for committee member expenses. Honestly, 2 FTE for just the small DAO seems a lot to me. And those are just the ones employed for entire year by the DAO, is there also an option to pay some experts if the committee members needs more input in a field they are not familiar with?

If your grant is rejected, is there any way you can have another member look at it? (Granted they likely will cover each other, but still). How is it determined which member looks at what request? Especially since up to $5k they can fully decide themselves, it could be problematic if someone just picks all requests from friends.

But for me my first paragraph is the most important, what the actual role of the community is here. How does that work. Who decides what can be voted on? How will elections even work? As in, one token, can vote for one person? And then the 5 with most votes win? But then it could be someone gets his seat with 80% of the votes, the remaining 4 sets each got 5% of the votes, while maybe from that 80% group most would prefer someone else as second choice.

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Is it possible to reduce the salary for this kind of job? Many people from the community are working by free in many spaces like Discord, Reddit, Twitter, Telegram, etc. Helping to others in a lot if stuffs.

Of course im not saying they have to work by free but take in mind what i said above

Thanks

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Good questions Scissors, I’ll try to answer what I can and I’m sure Phylo will jump in also.

The role of the community here is to:

  1. Conduct a community vote to accept, modify, or reject this framework. This is currently the Phase I proposal that Phylo has submitted. The framework was developed by the community and the IF working together.

  2. The communities role is to submit any governance proposals regarding the Shimmer ecosystem to include the Shimmer Treasury committee. That means, if the committee doesn’t do a good job, or someone wants to modify the framework at a later date, a community member simply needs to submit a governance phase I proposal.

    *NOTE: In the governance forum, which is where we are discussing now, as long as “any” post follows the guidelines, which basically state the posts relate to the Shimmer ecosystem and don’t incite harmful comments or support illegal activities, then all posts are allowed. The moderators will only reject a post if it doesn’t meet the guidelines but in no way “choose” what posts are allowed or not. The community, through clicking the heart (ie: Like) button will decide whether a posts moves from Phase I to Phase II and ultimately Phase III, a firefly vote using Shimmer tokens.

Regarding employees and salary negotiations note, there will only be one FTE. That will be the Program Lead working 40 hrs. We originally discussed having all the reviewers only work 5 hrs per week, which still stands; however, there then lies a risk. If the lead simply disappears for whatever reason, there would be a big shock to the Treasury proposal funding process. The lead ultimately will be in charge of managing all of the project process sheets, relations with lawyers, book keepers, etc. If he or she was to simply disappear, the whole process would come to a halt until a new Program Lead could be voted for by the community. To mitigate this one reviewer will act as a “co-lead” to mitigate that risk. The co-lead will support and learn the leads process to step into that position in case the Lead drops out.

*Note: The co-lead would only keep things moving forward until the community votes in a new lead.

As for the other reviewers, they would only work 5 hrs a week, but that is also only if there are proposals that require reviewing. If there are no proposals then the reviewers will not be accuring billable time and won’t be incurring costs. Just roughly analyzing running costs for the employee team, plus extra for administration (ie. book keeping, lawyer fees, and Swiss GmBH), the amount would be $350,000 to $500,000 per year. With today’s $SMR price in relation the 15% allocation, this would be around $2.4 million USDT and thus leave $1.9 to $2.1 USDT in proposal funding.

We have also talked about experts during our discussions. Specifically, I see it involving developers for code review. For instance, preferably the reviewers that get appointed have experience in areas of which proposals will be submitted. If not, the committee can hire a consultant. Personally, I think it would be good for the team to get a list of developers and subject matter experts from the ecosystem who are willing to work on an hourly basis as a consultant if needed.

If anyone’s grant is rejected they can resubmit their grant proposal at the next time interval. I believe it is one season, or one quarter. Note, it is only Tier 1 in which one reviewer is involved. Every tier after either requires two or more reviewers, the whole committee, or the community.

I think we should also note that if anyone from the community has a grievance or feels the committee is acting in bad faith, they can simply use the Governance Forum and submit a Phase I proposal to address this. If the community supports community members grievance then the treasury committee would act accordingly to the communities suggested resolution. This also includes if a proposal is rejected. Anyone can still come to the governance forum and submit it there. If the community supports such a proposal then the committee would represent the communities wishes.

As for the voting process I believe it is articulated somewhere, and I will ask Phylo to provide a link, specifically the steps as to how the community votes for the committee members. The group discussed having submissions go through Discourse here. The community would then short list the reviewers in a Phase II poll. The final members would then be confirmed by the community in a Firefly vote. For the program lead I believe it was suggested to vote for that position directly in Firefly.

The role of the community is to use the Governance Framework (ie: Discourse) to either accept, modify, or reject proposals. So for instance, if this framework is accepted, that does not mean it can never change. If the community feels it should be modified at a later date, that community member simply needs to submit a proposal through the governance channel here in Discourse. If the community supports this and approves it through a final vote, then such modifications would be implemented by the committee team. Another example would be, that if after one year the community may simply decide the committee is doing a horrible job and suggest a completely different framework in which to manage Treasury DAOs funds, then the community can submit that proposal. If the community votes to support this idea then the Treasury committee would be disbanded and a new framework adopted. What I do think is important so that we can attract a quality program lead is that we as a community should support to give the committee a one year commitment. Particularly, for the program lead position as they will be quitting their current job to fill this position on a fulltime basis. Still though, every year the community would need to vote to either extend or disband the Treasury committee, as well as, what percentage of funds the committee will manage for the next year. Ultimately in the end it is always the community that decides on how to manage and use the treasury funds.

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Hello and welcome,

I think we need to focus on the time each of these positions will involve, as well as, do we want quality people filling that position>

The program lead for sure will be a fulltime position and we (the community) need to compensate that person. Additionally the compensation needs to be aligned with industry standards for a similar position which the current salary is. If we want to attract a qualified and experienced person we need to at a minimum, offer a package similar to what is offered within the web3 industry.

As for the reviewers the same applies. What is to note though is that just because a reviewer is allocated five hours per week, that does not mean they have to use that time. The reviewers would only use that time allocation if there are proposals to be reviewed. Otherwise, the team would not be conducting reviews and incurring an expense. The co-lead would most likely use weekly hours but that would be the only two positions continuously incurring a weekly expense.

I also think there will be additional activities in which the community can help out. Primarily, the community can help communicate the committees activities to the community. Other activities in which they can help would be community subject matter experts help out with code review, DEFI application review, marketing plan review, etc. The committee I am sure would still love the support that any community members would provide.

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Additionally, I recommend watching the 20 minutes of this community call where Dr. Biyan Mienert explains a bit about the relation and advantages the Setup of a Swiss Association with a Swiss GmbH can have. The timestamp of the link brings you to the start of the discussion: 13/07/22 IOTA Governance meeting - legal entity Treasury DAO - YouTube @thezmb

Hey, thanks a lot.
To your questions:

  1. Yes, this will surely be possible. We did not want to include it as a “task” as we first would need to see the final legal form this would take. I don’t think the committee needs to actively work on making profits with its budget, but along the way, especially if Shimmers market cap rises. The committee has a lot of “unused capital” on Hand. It may make sense to put a part of this in low-risk yield opportunities. For this, we envision that the committee will make a proposal, and the community needs to agree on this (i.e., invest 10 million SMR in a portfolio of different yield aggregators on Shimmer EVM for six months). Agree that it makes sense to put this option and the process into this document already.
  2. Agree here; I will include the envisioned payment procedure in the next draft. We discussed that at the beginning, the needed capital to pay six months of salary for the Lead and three months of the compensation would be converted from Shimmer into a Stablecoin so that this budget is secured and distributed monthly.
  3. I Also agree with this one. We just discussed on Tuesday, and it seems that especially for US-based / Us citizen Teams, everyone that would receive any funding would need to do KYC, so it makes sense to make it a requirement for the lowest tier.
    We will have a notion page that lists all funding and expenses publicly. @Deep_Sea has created a draft version of this already. I am sure he can link this here.
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Hey, I think @Deep_Sea already gave a lot of great answers, so just some additions and clarifications.
The role of the community is as follows:
This proposal would be decided on in a vote that follows the process laid out in the Shimmer governance framework which means:

  • This is Phase 1: - we collect input and feedback and forge the final proposal. -
  • In Phase 2, a poll amongst the forum members here decides if this proposal is worthy of being put in front of all voters in Firefly.
  • If yes, it becomes a Firefly vote amongst all Shimmer token holders.
  • If accepted in Firefly, the proposal will be executed, and once things are set up, the 15% budget will be granted to the committee.

From this point on. The committee acts as described in the proposal.
The role of the community then is:

  • To decide on large spending (Tier 4) in a Governance vote through Firefly
  • To observe the committee’s work and act if things do not work out as intended, following the Shimmer Governance Framework process. This could be to stop the whole thing or replace individual committee members if they are unhappy with the performance or behavior of a member. As always, only a vote of Shimmer token holders would lead to executing such a measure.
  • There will be open meetings of the committee where they will present which projects receive funding, open visible documents where all spending and decisions will be documented.

This proposal aims to create an effective grant-giving entity that acts in the interest of the Shimmer network and its community. Therefore, the committee members could be seen as delegates representing the community’s best interest (A growing network value and activity in the network).

As JD stated already, only the Lead would be an FTE. Individual reviewers would be service providers and only paid on demand.

The decision of which reviewer will take on which proposal will be in the hand of the Lead. I agree that individual reviewers should not be able to “just pick their favorites.”.
Again, options to pay for experts should exist on a case-by-case basis, and JD made some great suggestions.
If a grant is rejected, it can be resubmitted, yes.
We will add those points (and others) in the next version of this proposal to clarify things.
The process to select the Lead and the Reviewers by the community is currently been worked on in this document: Grant committee selection process - Google Docs
Happy to receive more input here, and we will also publish that soon in the forum.