This SIP (Seeds Improvement Proposal) proposes to change the global proposal funding mechanism to one of liquid dynamic fund allocation by vote.
Seeds delivers perpetual funding to leaves, regardless of which organizations are included in the beginning, regardless of what direction any of the DHOs are taking, regardless of individuals who may come and go.
We are therefore building a growing living financial system which takes care of itself.
Currently individual proposals are made against the funding pools- It is very hard to assess whether or not the funding will be used successfully - it takes a lot of time to do due diligence both before a proposal is voted in, and during the proposal evaluation phase. All citizens have to do this due diligence, but, since it’s so much work, citizens generally vote on what they like / don’t like, and don’t evaluate. There is a lack of accountability.
The voting model will work better in a regional environment, where everyone knows each other, and at minimum 144 citizens vote on local projects
But in the global context, the current model cannot not scale to millions of users - either the funding will need to be kept restricted such that no more than about a dozen proposals can pass each round - artificially restricting funding - or the number of proposals will become unmanageable.
The Seeds harvest will continuously deliver newly minted coins to recipients that are being dynamically voted on by citizens. The % of vote determines the % of funding.
Continuous funding will ensure that the existing Seeds funds constantly stream towards regenerating the planet and towards growing the value of the Seeds network.
Focusing funding on organizations - which then can fund projects as they see fit, and install their own mechanisms for accountability - removes the burden on voters to do due diligence and follow-up due diligence on every project they are voting on.
Any citizen can at any time re-allocate their existing vote points from one project to another, or a percentage thereof. The length of time a vote remains with a project is counted. Citizens who don’t vote have no impact.
The weight of a Citizens input is determined by their contribution score. Each Citizen gets “Funding tokens” = to their contribution score to distribute amongst their preferred organisations. E.g. A Citizen with an 80 CS would get 80 tokens and if they give 50% of the budget to 1 org that org would receive 40 tokens.
Staying longer in one vote is rewarded by the vote having more weight. This has many benefits - may consider this in the future or even right away. [TBD]
Slow release: when a citizen selects different %'s only N tokens move over each day causing it to take N time to fully reflect a vote change. (TBD, not as necessary with seasonal resets).
Any Seeds organization can apply for this funding - we envision the Hypha DAO to apply for this funding, and any other DAO/DHO organizations can apply as well. Any number of DHOs can be funded. Having a Seeds organization account is the only hard requirement. [TBD] Perhaps - only reputable organizations?
Each project gets funded by the share of votes they’ve received, receiving an equal share of the harvest. E.g. 50% of the votes means the project gets funded with 50% of the harvest. Harvest gets paid out each new moon and full moon.
To prevent gaming the system, an organization or project must receive more than a 10% [N%] of total votes. Less than that, nothing is paid out. This is to discourage and not reward spamming or other forms of coordinated fraud while also doubling to ensure that organisations can recieve a meaningful revenue stream, rather than it being split so thin that it becomes meaningless to many, rather than useful to a fewer set (max 10), Citizens always retain the power to adjust this as our revenue stream fluctuates so we can meaningfully share revenue.
The goal of the system is to encourage projects to take as much as they need, but not more. Organizations can set a maximum threshold which makes it more likely they get funded. Leftover funds are … (TBD)
Every 3 moon cycles all votes are reset to prevent stale votes from being given out or stale projects to keep receive funding. This means citizens have to recast all their votes every season at minimum (following the quarterly sessions to inform voters.
Pro: Removes stale projects and stale voters
Con: Added friction for citizens
Can probably be solved very neatly with our vote delegation system
Pairs well to do sense-making with decision making so that voters participate in or watch the seasonal “Regenerative Roundtables” and then update their votes.
Further, this pattern of setting votes each season will give much more stable streams to organizations (as most votes will likely happen once after the Roundtable and stay until the next).
Flagging a DHO/Org (using the standard Flag threshholds) makes it ineligible to receive funding (if N flags are given) for policing DHO’s that are no longer active or otherwise fraudulent.
At golive, the harvest is calculated from the QEV (qualifying economic volume).
Before that and until they run out, we can use the gift.seeds seeds that would normally go to proposals to be voted on, and instead give them to DHOs which then give it to proposals and projects to be voted on.
Some DHOs may not need more than a certain amount - they should be able to set a ceiling. Setting a lower ceiling should then create some rewards to encourage all DHOs to take what they need but not more.
Some DHOs may have minimum funding requirements - they should be able to set a minimum, below which their project isn’t worth pursuing.
This need to be thought out carefully, hence TBD
As a map and guideline, we can look at how block producers are rewarded in EOS and Telos - votes vote in the top 21 producers, which get to produce, awards are delivered based on number of votes. Instead of block producers we would have DHOs / DAOs which work on various elements of Seeds.