It is really great to see that several ecosystem teams have already handed over the control of their dapps to SNS DAOs. What’s even more exciting is that a lot more teams are gearing up for an SNS launch in the coming days!
This strong momentum also brings forth an important question regarding the effective utilization of the Neurons’ Fund (NF) for future SNS projects.
A couple of months back, DFINITY proposed guidelines (here and here) on how we planned to vote on the SNS proposals. In our voting guidelines, we suggested that the teams may request up to 10% of the total NF maturity pool and up to 33% of the maximum funding target of the SNS.
When proposing a SNS, teams can set minimum and maximum funding targets.
Recently, a few teams raised more than 60% of their funding from the NF, due to the fact that they are raising an amount closer to their minimum funding target.
We believe that if teams continue to rely on the NF for a significant majority of their funding then it may become difficult for the NF to support future teams. Hence, we plan an amendment to our earlier guidelines that the NF contribution may at most be 50% of the minimum ICP funding target in addition to up to 33% of the maximum funding target.
We also understand it may not be possible for teams to immediately switch to these new guidelines and thus we foresee using these new guidelines for DFINITY votes starting from Oct 1 thereby giving the teams sufficient time to evaluate their plans.
We welcome any suggestions or comments by the community.
This seems like a large window of time. Why not start voting IAW these guidelines today?
I don’t mean to question or challenge the foundation on their voting; it just seems like some projects may feel pressured to launch ASAP. IIRC there can only be one SNS proposal at a time. Could this lead to some contention when prioritizing projects in the near term?
How about inviting the teams to also disclose what they will do in short middle long term with the fund they collected and justify the total amount of it. Because right now this number seems at best random and at worse the more amount they think they can get from people without probably even needing it. Potentially wasting it and ending with no fund in no time.
To avoid this it would be interesting to have a % of this total amount raised locked for 8 years in a neuron. So that we are sure that the team have a minimum to survive and would be invited to give value to the token they created to have more bonus.
The stake is the following, do we want project that want an easy short term cash grab to join the space, or teams looking long term people that will have obviously better long term cash allocation.
I agree with justifying the valuation of the DAO, as all of my DD reflect.
The funds raised belong to the DAO, for the DAO to do with as pleased. Meaning, if they really wanted to, the DAO could decide to withdraw 100% of their ICP upon conclusion of the sale. It is the DAOs responsibility to determine how to responsibly utilize the funds acquired within the decentralization sale. I think it a slippery slope when the core team “assumes control” of the treasury & what they’d like to do with it (this isn’t to say there shouldn’t be some type of “game plan”, but I don’t think dApps planning to use 100% of funding is healthy either (as we have seen recently)).
While this is an interesting concept, that the DFINITY foundation themselves utilize, I don’t think it is realistic to universally apply this to all SNS DAOs.
Each will have a different risk tolerance, required runway, and level of contribution from core teams.
Additionally, to my knowledge, there is no public “Canister Controlled Neuron” feature, as DFINITY actively discourages the topic. As such, this would result in, presumably, a core team member, holding the keys for the neuron (internet identity) of the entirety of the DAO - which is a security risk to say the least.
However, this isn’t to discourage the thought / attempt. I’m just voicing current concerns w/ the concept.
I guess it depends how much runway each team has without the need to draw from the NF funds. Given it will be less than half the total raised, I think it would be fair to have some % locked up.
It would definitely discourage people to do an SNS raise in the hope of a quick buck, or to dump the price (not that it can go much lower right now).
Giving whole NF contribution as 8yr locked tokens is also interesting because it really would limit SNS to people that believed IC would be around and ICP would have value in 8 yrs. Good way to filter the trash imo.
It would also mean people would be discouraged from taking money from the NF if they couldn’t get proceeds for 8 yrs and would be forced to bring more people to IC to fund their projects. Another win win for IC community.
That said it could make SNS raises unavailable to small teams that need money to run short term.
thank you for chiming in. That’s a valid point, however, teams typically spend a long time creating their business plans and fundraising targets, so we want to provide them with sufficient notice.
To prevent people from acquiring the majority of their fund raising from a passive entity that doesn’t have its own voice, as it gets lumped in with the generation of the SNS itself.
