Community Fund Processes: USD Pricing

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Community Fund Processes: USD Pricing

This forum post addresses the issue of Community Fund payouts denominated in NEAR tokens. Going forward, all prices will be discussed in USD, then converted to a NEAR amount when submitted to the Community Squad DAO and other DAO verticals. Our intention is to avoid problems caused by the volatility of NEAR used in compensating ecosystem contributors.

Phase 1: Off-Chain Discussion

There has to be sufficient discussion before a proposal is approved by the Community Squad. Ecosystem participants will need time to review forum posts and relevant materials in order to fairly assess the value and importance of a given proposal.

During this phase, all price discussions will be in dollars ($USD).

Phase 2: On-Chain Proposal

After multiple days of discussion, without lingering / unanswered questions or any objections from the community, a proposal would be submitted to the appropriate DAO vertical, e.g. Community Squad DAO.

The proposed amount in USD should be converted to NEAR using the price when submitting. Please include the rate in your proposal description! You can refer to CMC, CoinGecko, etc.

Phase 3: Review and Voting

Council members will review the proposal discussion and make their decisions within the respective voting period. Lack of discussion is a valid reason to ignore / reject a proposal.

If the NEAR price in USD significantly decreases while the proposal is being reviewed, participants could submit another proposal to cover that difference.

What’s next?

Looking ahead, we are planning to introduce a v2 Community Squad DAO, and other DAO verticals will be adapting to leverage new capabilities. For example, managing a diversified treasury with stable tokens like nDAI / nUSDT and other cryptocurrencies on NEAR.

We could also introduce roles for any contributors, enabling more involvement by the community. The purpose of NEAR Community Fund is to drive adoption. We intend to leverage open-source applications to reward contributors (especially builders) for helping our ecosystem achieve sustainable development and growth.

Please reply with any thoughts! Your feedback is much appreciated :slightly_smiling_face:

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Hello,

speaking as a council member of the Incubadora DAO, a DAO occupied with supporting artists and creating ways in which they explore their work and are rewarded in a fair and sustainable way, I very much support this idea.

This allows the members of my community to focus on the quality of their proposals, in creating a fair ecosystem in which everyone can thrive, and less in the financial risk/reward the fluctuating markets offer.

I know and agree that 1NEAR = 1NEAR, but I am, unless someone puts forth an incredible argument against it, FOR this idea.

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For this idea too.

However, I think that a contribution bonus (e.g. a percentage of the requested amount put on top) should be considered - The contributing community is one of the forces driving NEAR ecosystem forward and they should be rewarded with a little extra for doing so IMO.

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One idea that I saw others doing is not to use the USD price in the day, but the last 30 days average, reducing even more the volatility. For proposals that request a high amount of USD it will be better for both NEAR and the proposer.

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Loving the diversified treasury idea!

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Looking forward to these developments!

I have a question about the timeframes for the proposal + conversions.

What is the specific timeframe within which a proposal can be made (to whatever DAO is appropriate for the context) and how+when is the price conversion calculated for that proposal? Given price volatility the answer to this question will make a considerable difference.

Thanks!

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We don’t have a standard timeframe. That depends on the DAO norms. For any proposals to the v1 Community Squad DAO, there must be time to answer questions & address concerns.

Price conversion is calculated upon submitting the on-chain proposal because you can’t change the amount afterwards. Off-chain proposals would be priced & negotiated in dollars.

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hello all,

a few insights I gathered from the first month of this transition. They are, by no means, exhaustive, nor I have a great suggestion about moving forward. With the move to Astro I hope the process will be a bit more streamlined and easy to control.

From what I can see, there are a couple of options when ‘converting N to $’:

  • When the funding is requested the conversion is established and all payouts should, during that month, be made in according to the Near values agreed. That means that fluctuation can either increase or decrease the dollar value, but never the Near coin value. So, the ‘risk/reward’ belongs to the individuals. In this case, individuals risk getting more money than they asked for proposals, or less, and it is their perceptions that should be accounted for. The DAOs funds are easier to manage.

  • When the funding is requested the conversion rate is not established and all payouts should, during that month, be made in according to the Dollar values agreed. That means that fluctuation can either increase or decrease the Near coin value, but never the Dollar value. So, the ‘risk/reward’ belongs to the collective. The individual always gets his efforts rewarded in Dollar, but there is the risk, actually, of the DAO running out of funds. The DAOs funds are more difficult to manage.

  • I agree that this process can be managed intra-DAO, so no need to implement changes to the Verticals, this is primarily a gathering of intel, so others can reflect on their specific cases.

  • From what I can tell, either there is a mechanism to dilute the risk between both the individual and the collective, or the risk should lie in the individual. I say this because, if the value in NEAR is not fixed, then a different problem arises:

  • If the members of a DAO perform the conversion from N to $ ‘when’ they are creating a payout proposal (instead of that conversion rate being fixed ‘for the month’), then we are engaging in a system that can, and will, reward ‘similar’ activities with ‘greatly different’ N rewards. :point_right:

  • :point_right: Apart from the fact that this does, indeed, push individuals into ‘selling’ a bit more, that is not the issue I’m trying to content with. That would be a personnal choice, so I have nothing to say on that. The issue that worries me can be called ‘the limbo’, also known as ‘council has not voted yet’ (a bit of humor to lighten it up). Huge fluctuations when a proposal is still pending lead to disparities in N and dollar values, and no agency for the individual. Two individuals can create their payout proposal, for the same task, 24h (e.g.) apart and get different N values and different $ values, with no way of adjusting this.

  • :point_right: I believe the shared individual risk (of all individuals in a DAO) is reasonable, but not disparities for members of the same DAO.

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I’m a little concerned for the potential that a bounties price will be listed at X value, but when the bounty proposal goes through The same near the DAO got has fallen in value and they can no longer cover the full bounty. What do we do in these situations?

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I dont understand why we cannot ask for funding in NEAR, given we are working on NEAR blockchain, and the DAOs have NEAR on their wallet. I asked for funding in USD just because I had to, but I really prefer to ask and to build a project in NEAR, given that is NEAR that we are using, not USD. Why to have valuation and devaluation and risky projects, if we can have a stable value in NEAR coin? If I asked for 2 NEAR for doing something, the price of NEAR in USD do not matter, so the flutuations also do not matter, if we do this way.

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Prior to submitting a request, the proposers can adjust the amount of NEAR in line with the USD valuation. These proposals should be reviewed ASAP to mitigate volatility

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If you request funding in NEAR on day 1 and then the value of NEAR falls substantially then you might be in a position in which you can’t fulfill the proposed work because the value of the NEAR requested doesn’t cover it.

Proposals are still paid out in NEAR, and you can expose yourself to the volatility as long as you wish by holding it (but it should be utilised for whatever the funding proposal is for, of course).

However, to streamline the whole process and create an even more welcoming and straight forward process for Web2 users (and beyond), USD denominated funding has been implemented.

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Are we moving away from DAO’s submitting monthly budgets and instead to individual bounties? if so this makes sense. if not then the DAO is holding NEAR for up to a month before passing that on to individuals and that seems like a lot of risk.

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It depends on what the funds are for. If it is to pay the work of people that work on near blockchain, using near, so the volatility does not matter. If I asked 2 Near for build X, so whatever the price of near, I will receive 2 NEAR. And for me, NEAR is important, because I want mint on NEAR, collect on NEAR, pay other people on NEAR, and not in USD.

The problem here is for near to get more value. If I asked for some USD, thinking that I would receive x amount of NEAR, so if NEAR goes up, I will receive less NEAR that what I intended.

I think this USD conversion is only good for people that are not working completely inside theblockchain, people who must pay for services outside NEAR.

And to pay on NEAR, the DAOs will always know how much they have and how much they can fund.

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Guilds will propose funding in USD and the Community Squad DAO (or whichever DAO is funding them if applicable) will request funding from the NEAR Foundation (in NEAR equivalent, and likely some buffer).

@shreyas @jlwaugh

Tagging James and Shreyas as they likely have more clarified insight on this atm.

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The inverse is also true. We’re moving to USD denominated funding for the reasons laid out in the above OP by James.

Ultimately:

I hear you on the front in regards to appreciation, but that can still be found by holding it yourself if you are awarded NEAR for building x.

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Maybe it would be interesting to know what the proponent of the project wants, dont you think? In my case, I prefer to build a project in near and receive in near, whatever the value of NEAR in USD. Some others might prefere to build it in USD. Why not allow for freedom? In my case, I am building projects on NEAR because I want to use NEAR coins and develop NEAR blockchain and NEAR stores (like Mintbase). Some other person might be interested in USD to something else. Just a suggestion here. I will not insist in this topic. <3

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Most projects require funding to achieve the goals specified in their proposals. USD denominated funding actually works to ensure this since there is no exposure to downside volatility.

If, as in your example, you had to use NEAR as part of a development (e.g opening a store for 8N in Mintbase) then that would still be accounted for :100:

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Yes, I know. In fact my project has a part in NEAR and another one in USD. But it is ok, I was just making a suggestion.

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For sure, and please do keep the suggestions coming :muscle:

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