Rage Jelly 2.1 - RageFund: Non Dilutive Project Based Funding

part 1 in a three part series exploring the ragequit mechanic in DAOhaus / Moloch V3 governance. The series includes RageFund, RageFork, and RugQuit

TLDR

A DAO member can use the RageQuit mechanic with alternate receiving address to directly fund a project without full DAO consensus. So they are burning a partial amount of their stake in one DAO to fund a project that may be independent or have multiple aligned parties.

This keeps funds in full custody of the funder and does not offload the responsibility to the DAO. It does not dilute the DAO because shares are burnt in the funding, in turn stabilizing the share to treasury backing ratio. Finally it creates a handy accounting tool for DAOs to recognize successes through rPGF.

Having more tools in our tool belt is a super power and I think this tool of RageFunding probably works best in conjunction with more traditional dilutive proposals.

Problem

Currently DAO funding proposals smell like one of these: retroactive request for funds, responses to RFPs, employer/employee compensation, minority special interests or (and maybe most times) garbage griffs. This requires some amount of soft governance or delegation around filtering inbound proposals, setting ground rules or collectively approving RFPs. It creates a lot of overhead and ends in a strong centralizing force to the people willing to do it.

Once funded the resulting transfer of funds from the DAO treasury dilutes all members.

It’s hard to fund a project from multiple DAOs, individuals and aligned parties. I mean this could be accomplished through token launches, but this is a lot of overhead for most early projects and public goods.

The DAO has custody over the relationship and it’s hard for a DAO to collectively manage accountability.

Framing

  • A project proposal that is not centralized to a single DAO

  • Can be funded by many interested parties - by many DAOs or individuals alike

  • All funders have ragequitable stake (something like Loot)

  • Project executors have agency to execute but little or no exit (something like a small Share stake).

  • Ragequitable stake means funders can RugQuit and pull funding (reverse RageFund maybe)

  • RugQuit keeps executors accountable

  • Project stakeholder accounting is a handy on chain method for retroactive reward distribution or spinning into a future DAO.

  • Funding a project is non dilutive and stabilizes share values in funding DAO.

Assumptions

  • This will not end up with free loaders hanging in the DAO and doing nothing, while active participants burn all their power on RageFunding good things.

  • Rugquit does a better job at holding teams accountable than traditional methods.

  • Individual custody is better than collective custody in some cases.

  • Retroactive rewards would counteract the freeloaders

  • Multiple parties can find enough alignment to support projects

  • It’s not too complicated to try and people will pay attention.

  • People actually care about getting shit done and this whole space isn’t just a speculation circle jerk of ponzi chasing free riding psychopaths

Experiment

How does it work into the last 2 Rage Jellies (1.1, 1.2) and FOG. Basically it goes something like this, want to hear it? Here it goes.

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  1. DAO prioritizes high level OKRs through token weighted signal sessions.

  2. Anyone creates independent project proposals (empowered by Champions) to fulfill some key result.

  3. Project spec has a small executor team and well defined milestones.

  4. Ragefunders from multiple DAOs signal through RageFunding

  5. Once the project hits some threshold (and below some reasonable cap), some funds are released and the executor team can begin completing milestones.

  6. If threshold is not met then members can reverse RageFund back into their respective DAOs

  7. If milestones are not being met members can reverse RageFund (or RugQuit)

  8. When all milestones are complete then funding has been hopefully converted into something that brings value to the space, or at least the aligned parties

  9. If it brings value, the project team (executors and funders) are rewarded with retroactive rewards from multiple DAOs and projects involved, this could include governance tokens or capital tokens. All participants can now RQ or reverse RageFund

  10. Alternatively or in conjunction, the project may spin out into its own initiative, already bootstrapping initial members.

Inspired by

by @stellermagnet

and by

by @ameensol

and by the Yetter experiments of

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