I want to preface this by stating that I am responsible for ~100k Voting Power & I am not associated with the Foundation; therefor I am not going to be a true deciding factor within SNS votes.
With that being said, I believe that dApps requesting to utilize the NNS-SNS framework, and in turn gain access to unprecedented network level funding, should be able to showcase that they’re fit for this responsibility.
There have been multiple discussions regarding how this is actually displayed, with the DFINITY Foundation & Dominic Williams even creating their own set of criteria;
While there are many similarities, I do not feel as though these criteria’s completely align with what I’ve been looking for, so I‘ve decided to publish my own for complete transparency regarding my voting & analysis practices.
Main Net dApp
Is the dApp live and operational? Has the development team demonstrated technical competence specifically regarding the Internet Computer Protocol?
This helps assess the readiness of the project and the team’s ability to work within the Internet Computer ecosystem.
Is the dApp fully on-chain, meaning both the front end and back end of the protocol are hosted in Canister smart contracts?
This ensures that the SNS DAO can effectively govern and make changes to the smart contracts it is meant to control.
Does the dApp rely on third-party dependencies, such as off-chain providers, fee-gated APIs, or other mechanisms that rely on intermediaries? If so, is there a plan to transfer these dependencies to Canisters and the SNS? Additionally, is there a plan to fund these mechanisms independently, without solely relying on the SNS Treasury?
This can be utilized to determine the dApp’s self-reliance and its ability to minimize vulnerabilities and attack vectors.
Can the dApp, in its current form, be considered a complete product that fulfills its intended purpose? If the development team were to suddenly stop building, would the dApp still be able to function and achieve its objectives?
This helps assess the maturity and independence of the dApp, indicating whether it is ready for an SNS Decentralization Sale.
Is the protocol open source?
If the protocol is not open source, it limits the ability of the community to review, verify, and contribute to the code, creating a dependency on the core team. Open sourcing the protocol encourages transparency and allows for community-driven improvements.
Has the team provided a clear white paper that details the protocol comprehensively? Additionally, is there technical documentation available that explains the underlying mechanisms, functionalities, and concepts of the protocol?
Thorough documentation aids in understanding the protocol’s technical aspects and facilitates the onboarding of developers and contributors.
Is there an insightful overview of the tokenomics provided? Is token allocation responsible & proportionate?
Transparent tokenomics help stakeholders understand how the token functions within the protocol and its potential implications. Lack of transparency in tokenomics & allocations may raise concerns and lead to questions regarding the project’s long-term viability.
Can the team clearly articulate why the SNS is the ideal decentralization solution for their application at this time?
Given the significant funding and responsibility associated with SNS DAOs, it is important for projects to be able to walk through their choice to use the SNS DAO Framework and explain why the timing aligns with their development stage. This aims to ensure that projects are considering the long-term goals and benefits of utilizing the SNS, rather than the short-term liquidity available.
Is the team publicly known within the ecosystem? Do they have a visible presence in the crypto community or relevant industry events?
Transparency in team identity helps establish accountability and builds trust between the development team and the community. Even if certain circumstances prevent full doxxing, having online pseudonyms and personalities associated with the project can provide a greater level of transparency, and in turn, trust.
Is the team’s dynamic transparent? Do team members openly communicate and collaborate with the community?
Transparent team dynamics foster trust and demonstrate a commitment to community involvement and engagement. It is important to ensure that the team is not operating in a way that could compromise the project’s integrity, as evidenced by the Solana DeFi TVL Overcount late 2021, in which the same development team was found responsible for 90% of the DeFi ecosystem.
What is the team’s track record and experience in the relevant field?
Assessing the team’s background, expertise, and previous accomplishments can provide insights into their ability to successfully execute the project. It is beneficial to consider the team’s relevant experience in areas such as blockchain development, decentralized governance, and the specific domain the project operates in.
Has the team made notable contributions to the ecosystem or relevant projects?
Assessing the team’s reputation and their previous contributions can give an indication of their dedication and understanding of the ecosystem.
Proof of Valuation
Has the team shown comparable raises within the industry sector?
Evaluating similar raises in the sector can provide a benchmark for determining whether the valuation of the dApp aligns with industry norms. Significant deviations from comparable startups’ valuations may indicate overvaluation or undervaluation, although it is important to consider other factors as well.
Does the valuation accurately address the current and potential market shares?
Assessing the relationship between the dApp’s valuation and its market share within the ecosystem is crucial. If the dApp’s valuation significantly exceeds its current and potential market share, it may create an unprofitable environment, particularly for early-stage seed investors. Valuations should be realistic and aligned with the available market share within the sector.
Has the team provided transparency regarding the valuation? Is the valuation method disclosed, and is the math behind it available for review?
Transparent disclosure of the valuation methodology and the calculations helps the community perform due diligence. Providing access to the valuation details allows stakeholders to assess the accuracy and validity of the valuation and make informed decisions.
Is a security audit necessary for the application?
While not every application may require an audit, it is crucial for applications that handle sensitive user data, funds, or have other potential vulnerabilities.
Has the code received at least some degree of review? Are there feasible in-ecosystem alternatives for conducting a security audit?
While potentially more comprehensive, out-of-ecosystem audits may not be feasible for everyone, exploring affordable and viable alternatives within the ecosystem can help address security concerns. Options such as utilizing blast services provided by platforms like Anvil / @infu or raising funds via crowdfunding specifically for audit purposes can be considered. Ensuring that the code has undergone some level of review is important. Whether its peer reviews, community audits, or code inspections by experienced developers - while not as comprehensive as a formal security audit, it helps identify potential vulnerabilities and improve the overall quality of the code.
Is there transparency and disclosure regarding the security measures taken?
The project should provide clear communication about the steps taken to address security concerns, including any code reviews or audits conducted. Transparency helps build trust and allows the community to assess the security measures in place.
One of the most contentious aspects of SNS proposals is the community fund and its allocation. When projects request a significant percentage of their sale to be represented by the community fund, it naturally attracts greater scrutiny. The controversy arises because the community fund lacks a personified voice and relies on the advocacy of those who vote on its behalf and participate in its decision-making.
While it is important not to engage in gatekeeping, it is equally crucial to exercise responsible stewardship over the “treasury” entrusted to the community fund, and in turn the NNS for the purpose of fostering ecosystem growth.
Considering this, when a project sets its community fund allocation to 0%, I will personally be less critical of the evaluation process, as it is typically subjective in nature. I believe that the market should have the freedom to determine the valuation of a project on its own; if the necessary information is provided and the Community Fund is not involved, there is no reason why the market cannot make informed decisions based on their own assessments.
In conclusion, I want to emphasize that my intention in sharing these criteria is not to engage in gatekeeping but rather to promote transparency for those who have entrusted their voting power to the Accumulators Neuron. Additionally, this framework offers a valuable personal standard for analyzing SNS projects beyond the obvious flaws that may be immediately apparent. I am open to answering any questions that seek clarification on my stance regarding any of these criteria, and I am willing to make edits to the list if there are aspects that should have been included or removed in hindsight. However, I firmly believe that these requests are reasonable when it comes to network-level funding, and it is only natural that substantial funding requests are subject to high levels of scrutiny.