Author: huh.eth, Maqq

Last updated: 5/26/2022

This document lists all the different ways initiatives can be funded at Orange DAO.

During Season 0, all tokens allocations and spending was passed through the proposal process. While the proposal process is highly flexible and is a DAO primitive, feedback gathered from the DAO clearly indicated that we needed different processes to fit different needs.

In addition to the free-form proposals, Season 1 Treasury committee identified a few more funding pathways to reduce friction for known spending and provide guidelines around compensation sizing.

Process Design Philosophy

The Orange DAO compensation and budget process follows these simple philosophies:

  1. At the heart of all requests is the need to present the request to the DAO. Therefore all spending is some form of a proposal that requires the DAO to approve. Grouping and templating makes the process easier to understand.
  2. Grouping requests into an omnibus budget (a collection of many smaller requests) reduced proposal fatigue and allows for more eyes to review the whole picture.
  3. The responsibility and oversight for spending rests primarily with the Requester, then secondarily to one of three Permanent Committees. When challenged on the risk/reward/ROI of a budget line item, the Requestor must defend it, followed by the Committee that oversees it.
  4. Accountability means no projects can be orphaned outside the Committee system and each Committee is responsible only for the teams, programs, and subcommittees its taken responsibility for. This segmentation approach limits the number of nodes/stakeholders each Committee must communicate with in order to come up with a budget.
  5. All spending is capped at a max token amount. If a pool of funds is exhausted, or if a program goes over budget, it is not the responsibility of the DAO to cover the difference. The DAO must avoid creating uncapped liabilities. The liability for covering any shortfall rests with the Sponsor of the program or project. One practical example of this is to issue stipends rather than accept reimbursement.
  6. The budget primitives must be easily to understand and scalable.

Note: Avoiding dark patterns

  1. Centralization risk

    Centralizing payment decisions to fewer people can result in irresponsible spending, favoritism and corruption.

    Solution: “T-shirt sizing” compensation (5k/15k/30k $ORANGE) makes it more difficult to pay irresponsibly as payment decisions are limited to fewer outcomes. Team leads will also have risks with behaving irresponsibly (reputation and reduced chance of being re-elected).

  2. Pork barrel

    Everyone seems appropriately concerned that just having a budget should not be reason enough to spend.

  3. Lack of communication or coordination resulting in unfunded work

    Decentralization and empowering individual decision-making creates potential conflicts for people doing work but being limited by the pool of tokens to reward work. This should be sufficient incentive for members to coordinate their efforts to ensure that there is a pool of tokens that can compensate them for work.

Compensation 1.0 Pathways

1. Proposals

Proposals remain the primary and most flexible ways DAO members can submit requests for tokens and a catchall process.