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Decentraland DAO changes its vesting contract for grants

Decentraland DAO changes its vesting contract for grants from second-by-second to 30-day installments

Proposed by Yemel in late December last year, this proposal formed part of the packet of governance proposals passed at the tail end of 2022 to overhaul the methodology of the DAO. Collectively these proposals outlined an improved operational structure and enhanced the long-term efficacy of the Decentraland DAO.

The proposal changed the vesting contract from a linear one that paid second-by-second to a regular 30-day payment. Another core part of the proposal introduced the ability for the Decentraland DAO to pause the vesting contract and, in exceptional cases, revoke it.

The old vesting contract had a one-month cliff and then released the agreed-upon grant second by second until the end of the contract. The new model releases funds monthly, giving the DAO greater control over the grant distribution.

Yemel stated:

The linear vesting model is a simple and elegant method to distribute funds over time, however, it might be too optimistic and generate some caveats around the revocation process.

The grants program remains one of the best vehicles for pushing forward the DAO’s mission, but unfortunately, it has been exploited numerous times. The new vesting contract allows the DAO to pause the grant if a project fails to communicate progress or the reported progress does not match the initial grant proposal.

The new vesting system pays out retrospectively, meaning grantees receive the funds after the work is done. And this encapsulates the purpose of the proposal well: to give the DAO greater control and monitoring abilities over projects that receive grants to ensure that teams deliver what they received funding for, and if the case they do not, the contract can be halted. This also makes it less likely that the DAO has to revoke grants.

Tudamoon commented on potential sell pressure:

Will this cause issues with price fluctuation of MANA? Will people be able to speculated that sell-offs will occur near this time? Could this cause issues?

But given that MANA must always be swapped to stablecoins at some point in the duration of the contract, this is a non-issue. Overacrhcingly this proposal gives the DAO better control of its purse strings and improves the operation and general monitoring of grants. A solid bureaucratic stride for the DAO.

The proposal passed with 66 votes in favor (11,004,376 voting power) with no opposition showing how widely accepted the measure was amongst DAO members.