Decentraland DAO revises the tiers of the grant program

Authored by Yemel, this proposal constituted another member of a larger group that passed in late December 2022, upgrading the methodology and operational efficiency of the DAO.

This proposal revised the tiers for the Decentraland DAO's grant program. Broadly speaking, it streamlined the tier system, replacing the six old tiers with two new tiers. Additionally, it introduced more maneuverability regarding project length and the option for recipients to choose their preferred payment method: stablecoins or MANA.

Yemel outlined the two new tiers:

Lower Tier:
- Up to $20,000 USD, payable in stablecoins or MANA using a Vesting Contract, or a one-time payment (after 30 days)
- Vesting duration can range from 1 to 6 months
- Votation period: 2 weeks
- Votation threshold: 2M VP

Higher Tier:
- From $20,000 to $240,000 USD, payable in stablecoins using a Vesting Contract
- Vesting duration can range from 3 to 12 months
- Votation Period: 2 weeks
- Variable votation threshold, using the formula: 1.2M + TOTAL_BUDGET * 40VP/USD

Introducing a simpler tier system does two things primarily. Firstly, it encourages grantees to be more conscious of their budgeting. One of the key findings from Yemel’s grant analysis was that grantees nearly always request the maximum allocation of funds for the tier, and a majority of all the funds assigned by the DAO came from tier six requests:

Tier 6 represents ~60% of the money granted, with an acceptance rate of 27%.

The attachment of voting power to capital allocation represents one of the nicer, more subtle elements of this proposal. The more money grantees request, the more engagement they must have from the DAO- helping to address the issue of voter abstention when the current result rests in line with their preference.

Secondly, this new tier system and its increased flexibility allow the DAO to support a more diverse range of projects. Removing the six-month vesting period enables shorter and more extended projects to receive funding, meaning the DAO can now sponsor things such as real-life meetings and more complex initiatives that will help push the DAO forwards over a longer time frame.

The vote passed on December 28th, 2022. It had 69 votes in favor (11,125,724 voting power) and 1 vote against (1 voting power).

This proposal acknowledges the efficacy of the DAO’s grant program for evolving the Decentraland ecosystem, reviews the past year of operations understanding what worked and what didn’t, and introduces an improved model that will foster mindfulness from grantees, participation from DAO members, and enhance the overall financing capabilities of the DAO.

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