MIP-21 Merit Circle Grants

Authors

DAO Core Contributors

Summary

The Merit Circle DAO consists of large quantities of talented individuals all having their expertise in their respective fields. For the purpose of stimulating these individuals to step up and contribute to the Merit Circle DAO, we propose that the DAO forms a committee that is granted the right to offer relatively small grants that will allow these developers/creators to focus on their project for a brief period of time. This period is meant to quickly figure out whether there’s product market fit, and whether the project requires additional funding.

Abstract

The Community Research Grant offers enthusiastic members in our DAO a chance to pitch in and help contribute towards the development of the Merit Circle ecosystem. The idea of this program was born out of a response to the overwhelming amount of interest shown by community members in adding value to the DAO. With such an international group of backers, members and project founders; we noticed the large pool of untapped skills and expertise that is waiting to be unleashed.

We’ve seen multiple proposals pass our governance inbox in the last couple of months. Some are well thought out and well written; others are onto a good idea, but maybe a bit immature. This program aims to give that little push in the back to bring your thoughts into reality.

The goal here is to create an environment that lowers the threshold for community members to contribute to the DAO and in which great ideas are presented in a form that respects the idea’s true potential. To make things clear, we’re looking at two different kinds of grants here;

  1. Research grant: The grant is set at a maximum of $10,000 per applicant, which will be distributed by the DAO to researcher(s), for the expenses that are incurred while working on their project’s proposal. The intent for this grant is to lead up to a larger proposal, on which the community will vote. This will be for proposals exceeding the limits of this grant.

When publishing the grants and thereby opening up for applicants, we will be sharing a more elaborate breakdown of expectations for these applications. However, to illustrate the expectations, and why in some cases a budget might be required to draft a proposal, please see below;

  • Each application should include a breakdown of the required budget, which will be made public

  • Each applicant will write weekly, bi-weekly or monthly progress reports dependant on the project and its complexity

  • Each accepted application will either lead up to a proposal on the governance forum, or an explanation why the project doesn’t seem fruitful after the research process

  • When the aim of the application is to create a new product for the Merit Circle DAO, we will advise you to create a prototype to properly illustrate your product. This will be an important indicator of the capabilities of the applicant.

It must be clear that the budget will not be granted for the person merely writing the proposal. The budget is there to spend on external working hours creating a prototype, graphic design or any kind of work the applicant is not able to do themselves.

  1. Development grant: The grant is set at a maximum of $25,000 per applicant, which will be distributed by the DAO to developer(s), for the expenses that are incurred while working on their project.

In some cases, building a product does not require a large budget. However, to compensate for the time and effort spent by the developers, we do wish to provide a grant. This grant will be used for the complete development of the product, and will not (always) require a further proposal.

Examples of projects which could be eligible for a development grant:

  • Development of a treasury dashboard
  • Integration into a certain protocol or game
  • Development of a specific feature for the gaming platform, Sphere or any other Merit Circle DAO product
  • Creation of an extensive series of research reports
  • Realization of physical items to distribute among MC community

When publishing the grants and thereby opening up for applicants, we will be sharing a more elaborate breakdown of expectations for these applications. However, to illustrate the expectations, and why in some cases a budget might be required to draft a proposal, please see below;

  • Each application should include a breakdown of the required budget, which will be made public
  • Each applicant will write weekly, bi-weekly or monthly progress reports dependant on the project and its complexity
  • Each accepted application will either lead up to a proposal on the governance forum, or an explanation why the project doesn’t require a full proposal

Applications for the grant will be initially screened and vetted by a newly formed grant committee consisting of various contributors to the Merit Circle DAO. Having every single idea pass through the official governance channels (forum, snapshot voting) will not be efficient and distract from what we’re trying to achieve with this streamlined program through which DAO community members can contribute to the DAO.

For optimal transparency however, there will be a clear public overview of which parties have received a grant, and we’ll aim to update frequently about these projects. Additionally, various research grants will lead to an official MIP, in which the community gets the opportunity to vote on the proposal.

Grant committee
We are proposing the following DAO community members to be part of the Grant Committee, the committee responsible for approving or rejecting grant proposals.

  1. Sad Cat Capital (Consistent DAO Contributors)
  2. Douwe (Xeric)
  3. CitizenX (Investors)
  4. Giga (DAO Research firm)
  5. Orange Pill

To ensure a decentralized view and a fresh pair of eyes every now and then, we propose to re-elect the members of the committee every 12 months through a proposal. However, the proposed DAO community members of the committee will have the liberty to remove or replace any committee member through a unanimous vote. These decision should be announced on the governance forum.

The selection of the committee above has been done based on the input and contributions of these individuals to the Merit Circle DAO since the very beginning. Decisions will be made based on the majority of committee approving, or rejecting the proposal. Each application can expect a brief summary of the committee’s thoughts as an an answer on their application.

Wonderverse
To facilitate this system, we will be utilizing the software built by Wonderverse. This allows for a nice and transparent manner of handling applications, sending payments and keeping track of everything that’s occurring. A more detailed breakdown will be provided once this system goes live.

Motivation

As mentioned above;

“This program was born out of a response to the overwhelming amount of interest shown by community members in adding value to the DAO. With such an international group of backers, members and project founders; we noticed the large pool of untapped skills and expertise that is waiting to be unleashed.”

We’re extremely proud to see how the Merit Circle DAO has attracted the attention of so many talented individuals. Ever since the emergence of the DAO, the DAO has received lots of support from its community members in all means imaginable. Some wrote extensively about Merit Circle and its future, others developed tools to support the DAO’s NFT collection Edenhorde, made a treasury dashboard, helped structure the DAO’s gaming operations and hosted community events, to name a few.

Within our communities we’re seeing daily chatter from supporters talking about new ideas, existing projects and their possible improvements. Incentivizing these people and beyond to afford themselves to exclusively focus on a solution that could bring additional value for the DAO is something we truly believe can make a difference.

Long-term value to the DAO.
As an additional motivation, simply imagine the value that a couple decent proposals can bring to the DAO. Xeric for example, accepted in MIP-15 by the DAO is far exceeding the required budget. In this case, the spent budget is 50,000 USDC in exchange for 50% of the equity. With the aims of a funding round for Xeric, the equity held by the DAO will be of substantial value.

Budget

To fund this grant system, we are requesting an ongoing budget of up to 150,000 USDC per quarter. This amount will only be utilized when ideas are approved by the committee, if not, the funds will not be transferred out of the DAO’s treasury. Unused funds from one quarter will not be transferred to another quarter, the maximum amount this system can deploy per quarter can not exceed 150,000 USDC.

Payment will be made after the application is accepted as a one-off payment.

Rationale

Beneath, we have compiled a list of questions that might be asked after going through the proposal above.

Why do we need a system like this?
Building the Merit Circle DAO, we’ve realized the value in multiple distributed and autonomous contributor teams consisting of many talented individuals. Allowing these developers or creative individuals to in general devote time to the DAO will bring significant value towards the DAO, we’re convinced. Without this structure in place, we’re already seeing tons of inbound from creatives interested in building things for the DAO. This structure will function as a boost to that inbound, and increase our overall output.

Is funding really necessary for a proposal?
Analyzing the various proposals we have received over time, there’s a clear difference between those that have been published after a brief epiphany by its author, or those who have gone through various rounds of feedback and include extensive research.

Often so, proposals sometimes benefit from external research or knowledge, asking an expert to weigh in or doing additional research. All these factors cost time and money and therefore, a small budget can definitely make a difference.

What will be the criteria to receive a grant?
When we open the grant system, we’ll see what kind of applications we receive allowing us to set certain criteria. In the initial phase, we do not wish to limit ourselves through these harsh limits but there will be some important factors that we’ll take into consideration strongly.

  • Value: what kind of value can the project bring towards the Merit Circle DAO in the short term, mid-term and long term? Is this in balance with the requested budget?
  • Timeline: is this project realizable in a realistic timeframe? In other words, has the applicant thought through the project?
  • Team: Who’s behind the application? Does this person or group of people have it in store to complete the project as described in the application?
  • Feasibility: Is the project realistic or is it far out of scope? This takes into account all the above factors?

Does this mean that I can’t publish proposals directly anymore?
No. Anyone can still publish a proposal at any given time directly on the governance forum. We are always open to proposals, but this system is merely in place to make everything easier, more streamlined and stimulate quality proposals.

Copyright and related rights waived via Creative Commons CCO

3 Likes

Meow,

Thank you to the @DaoCoreContributors for another proposal, and thank you for nominating Sad Cat Capital as one of the community members to volunteer for the “Grant Committee”.

Just to briefly introduce ourselves; since the DAO’s inception over 12 months ago, we have been active community members, and have tried to help to shape the DAO through proposals we believe have a positive impact.

To date, we have authored three separate proposals (MIP-6, MIP-7 and MIP-20), as well helping to contribute to numerous proposals put forward by the @DaoCoreContributors. We have also tried our best to comment on all proposals put forward, and share our thoughts, opinions and voting intentions where relevant. Our aim from the start has been to bring as much value to the DAO as we can.

MIP-6 set out a robust framework for the DAO to de-risk a certain portion of funds from each investment made, and allows the DAO to anticipate how liquid investments are dealt with before an investment is even made. We put forward this proposal to help minimize financial risk for the DAO, and also to improve efficiency surrounding investments.

MIP-7 focused on how the DAO utilizes profits for the Treasury, and started the burning process for tokens which increased Merit Circle’s Fully Diluted Value (FDV), and were also contributing to bloated tokenomics which weren’t truly representative of Merit Circle. Since then, 330m MC tokens have been burned (130m through MIP-7, and 200m through our final proposal MIP-20).

Our most recent proposal MIP-20 focused on one simple objective - burning 200m MC tokens which were sitting unused in the Community Incentives wallet. To date, no tokens from the Community Incentives wallet had been used for any proposals, and were slowly getting burned each month regardless. Instead of delaying the inevitable, we believed it best to burn the tokens all at once and use the event to celebrate one year since the DAO launched.

We will continue to write and support proposals that we believe will improve the Merit Circle DAO. As community members ourselves, we believe the MC community has a lot to offer the DAO, and that talented individuals should have the chance to build something of value to the DAO.

While we support this proposal, we want it to be clear that our aim is to keep the DAO as decentralized as possible. The community members that are included in the committee put forward by this proposal will be used to take an initial look at grant proposals before they reach the final voting process, simply to ensure that they satisfy the quality threshold for proposals. This is so that the DAO isn’t burdened by constant new votes, or spammed with low quality proposals. If a proposal meets the quality threshold then it will pass to the DAO for a vote by all community members. The DAO and Merit Circle community should always have the final say on which proposals pass and receive funding, and we want as many people engaged in the final voting process as possible!

We look forward to seeing what the community can build!

Signed with left paw,

Cat Catto
Sad Cat Capital

4 Likes

Very grateful for this initiative to launch Merit Circle grants.

These grants provide much-needed funding for innovative and creative projects that can benefit DAO. By investing in these projects, DAO will be able to attract more talent and creative ideas that can drive further growth and development. The grants also provide an incentive for members of the community to come together and collaborate on projects, which is essential for collective progress.

Very excited to see what the future holds for our community with the help of these grants.

3 Likes

Hey everyone! This is Andros - one of the co-founders of Wonderverse. For a bit of context we’re the work operating system for web3 teams and have worked with over 350 orgs like Gitcoin, dYdX, BanklessDAO, Radicle, etc.

We’re very excited to be supporting Merit Circle grants - more than ever we need transparency and accountability for funding in our space and it’s great to see Merit Circle leading the charge here. We work very closely with our partners so imagine us as an extension to the DAO as we build software that supports the ecosystem!

4 Likes

Awesome :clap: :clap: :clap:

MC continues to show others how a proper DAO can be run.
Looking forward to this becoming a reality.

1 Like

GM,

Thank you to the @DaoCoreContributors for a well written proposal, and and thank you for nominating giga as one of the community members to volunteer for the Grant Committee.

giga is all about supporting the growth of tier-1 DAOs and newcomers. That’s why we’re thrilled about the Merit Circle Community Research Grant initiative. It’s a fantastic way for enthusiastic members of the DAO to get involved and help out with the development of the Merit Circle ecosystem.

As proposed members of the Community Grants Committee, we’re excited to see all the great ideas that are submitted through this program. By lowering the barrier for community members to contribute, we’re creating an environment that encourages innovation and respects the potential of each and every idea.

We’re fully behind this initiative and can’t wait to see the positive impact it has on the Merit Circle ecosystem.

3 Likes

Echoing @Sidsel,

We’ve been long-time lurkers, contributing publically, but mostly privately directly with the MC team. It’s great to see a well-thought-out proposal that is aimed at the people not trying to raise $millions, just to get their idea off the ground.

We think this is good for Merit Circle and the gaming community overall, and are ecstatic at being nominated to contribute to this initiative.

Long live MC.

3 Likes

Definitely reduces the barrier to getting ideas from the community off the grounds with minimal risk to the DAO. It’s a yes from me

1 Like

Grants are quite a good idea. Making it possible to propose useful or potentially useful things and get quick support and some budget makes a lot of sense. What I don’t like is delegating the decision making from DAO to committee - creates unnecessary risks and probably expenses (external audits should be necessary in that case). The less trust is required - the more reliable system is.
So instead I would keep the voting for DAO and let the committee to review, recommend & put for voting any interesting suggestion (small proposals can even be grouped into one vote). With attached recommendations from committee the approval from DAO might be quick and not necessarily limited by 10k/25k/150k.
Also I think that applicants should not be anonymous.

It’s great to see the initiative of Merit Circle grants program.

That can help & link more builders contribute to the web3 gaming industry & Merit Circle ecosystem.

Looking forward to the program go live.

Kata - one of the co-founders of dmgdata.
MC&Edenhorde believer.

dmgdata is a web3 digital marketing and data service provider.
dbrands is AI based web3 domain name aggregator and trading platform independently developed by dmgdata.

Get your web3 domain name and share your web3 identity with the world.

1 Like

Hi Timour,

We agree with the principle raised regarding trust minimization; it’s an important one and something that we should always work towards (the last few months in the crypto space have clearly shown us that). In our proposal we have sought to present a solution that enables our DAO to execute on grants in an efficient manner without excessive bureaucracy, whilst maintaining decentralization with adequate checks and balances in relation to the committee and treasury funds proposed used for grant purposes.

Firstly, it should be noted that the committee itself will not be sitting with the funds. The relevant funds (up to USD 150,000 per quarter) will remain within the DAO treasury (reserved for grant purposes) until transferred from the treasury to an applicant following (a) instruction from the majority of the committee to multisig to transfer funds to a successful applicant and (b) execution of transfer by multisig team (DAO may put brakes on future funding through governance if they see the need for that). Note that the grants committee will never directly have access to the funds reserved for grant purposes.

Secondly, we highlight that the maximum amount that can be utilized for grant purposes per quarter is USD 150,000, but only up to a maximum of USD 10,000 per applicant for a research grant and up to a maximum of USD 25,000 per applicant for a development grant. Anything above these amounts will require going through the wider community before instruction to the multisig.

Thirdly, and as also touched upon in the first point, the members are intended to be appointed by the community to serve for a one year period, but may be replaced by the community at any time before that. For instance, if the committee members fail to communicate adequately or stray too far in their mandate/objectives, the wider DAO community should intervene in the situation by revoking their endorsement. Likewise the committee members are also free to be relieved of their committee position at any time (e.g. if they find that they are not able to dedicate sufficient time to the program). Decisions made by the committee, information on the project and in general information concerning the grants program is intended to be conducted in a transparent manner (as described in the proposal) to ensure proper checks and balances.

The proposed model with a team of community/committee members is fairly familiar within the space. See for instance the structure of the grant systems for DAOs like Aave, dYdX and Uniswap all having grants teams/committees.

On the anonymous point; we are proponents of letting it be up to people to decide on how much they wish to disclose in terms of personal information. This we believe is in line with the ethos of the web3 space and MC being a gaming DAO; within the world of gaming, one can be oneself without being judged for personal characteristics or subject to prejudice in that regard. People can have multiple reasons for acting anonymously or under a pseudonym, and whilst understanding your point (thank you for raising it), the authors do not want to include a requirement for disclosing personal information to be eligible for a grant. Others may however feel similarly and we are interested to hear if others have the same views on this.

1 Like

Hi team!

Love the vision for this proposal. Just chiming in regarding the point of “Incentivizing these people and beyond to afford themselves to exclusively focus on a solution that could bring additional value for the DAO is something we truly believe can make a difference.”

I’d love to hear the community’s thoughts on tracking contribution through badges/tags. Through this, voters and other members will be able to see that user’s credentials and potentially have their voting power increased depending on their reputation.

Reputation and identity is becoming more prominent in the DAO space, and I’d love to have all your thoughts regarding it.

I’m part of a project that has these current functions that I’ve stated above and would love to see if there are any potential for further discussions!

1 Like

Hi @slimbokk,

Thanks for your comment and support on the proposal.

Reputation and contribution based governance is definitely an interesting topic that we are happy to learn more about. We assume that this topic could be discussed independently of this grants proposal, and therefore suggest that you open up a discussion thread regarding the topic where you can educate the wider DAO community on how something like this could be integrated into Merit Circle DAO governance, and potentially a grant system (should it be adopted through governance).

1 Like

The proposal is now up for voting here.

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As an engineer, it would be nice to see what kind of development projects are currently needed/wanted by the community/DAO in the form of a dedicated Request for Proposal (RFP) section in the forums.

I’d love to contribute in some way, but unsure as to what kind of projects.

Feel free to reach out.