Back in February of 2020 the Decentraland DAO was launched, giving the community control over the metaverse via a voting platform for decisions and proposals.

DAOs (or decentralized autonomous organizations) are still new governance systems, and there are many ways in which their implementation and usage can be improved. Decentraland’s DAO is no exception. This article will touch on a few examples of how the DAO should be improved, with a focus on community funding and grant proposals.

The DAO’s MANA reserve

When the DAO was first created, it was allocated 222 million MANA (equaling roughly 10% of the total supply) through a vesting smart contract. This MANA is scheduled to be vested over a 10 year period, starting in February 2020. You can view the vesting contract here.

Much of that MANA is available now. On top of this initial MANA supply, the DAO recently approved a change to how Marketplace transaction fees are handled in an effort to give the DAO somewhat of a revenue for the benefit of the DAO at large. Previously, a 2.5% fee for every transaction in the Marketplace was automatically burned (it was transferred to a null address, effectively removing it from circulation). Now, all of these transaction fees are collected and transferred to the DAO. You can see this in action over on EtherScan.

What is all this MANA for?

The DAO’s MANA is at the disposal of the community to help fund the development of features and content for the Decentraland platform.

This could take the form of rewards for creative competitions or grant funding for larger projects undertaken by individual or group contributors, as the community decides.

Why hasn’t it been used yet?

Simply put, while other features of the DAO are fully operational, the current implementation of the DAO lacks in particular a functional and secure method of submitting and approving grant proposals.

Grant funding through the DAO has already been eloquently proposed on the Forum, and it’s frequently discussed in Discord. It’s clear that democratically allotting MANA to community-approved Decentraland developers and creators is a top priority for the community, but what work has to be done in the DAO in order to make this a reality?

Steps toward grant funding in the DAO

Before grant funding can be successfully implemented in the DAO, there are a couple prerequisite improvements that should come first.

The DAO needs to be easier to use

DAO’s are confusing to begin with. Add in unfamiliar lingo and a complicated UX, and all of a sudden the effort needed to understand how to use the DAO keeps many people (especially new users) from engaging. Before the community’s MANA can be democratically dolled out to artists and developers, it needs to be guaranteed that this MANA is allocated in a fashion that is truly democratic.

The DAO needs to be cheaper

Gas fees are expensive. With a transaction fee required for every vote submitted, there’s room to increase participation. To that end, the DAO’s use of Ethereum transactions should be reevaluated so as to avoid any unnecessary barriers. The DAO is intended to enable the community to voice it’s opinion, and every voice within the community should be heard.

The DAO needs to approve changes to the protocol

As further discussed below, any change to the protocol of the DAO needs to be approved by the DAO itself. The community has the final say on any change to the platform and the protocol.

What’s being done?

In order to help the community make decisions regarding the use of this MANA and to improve the UX of the DAO, the Decentraland Foundation is writing an RFC (request for comments) that outlines a set of changes and additions to the DAO’s current implementation that should fix these problems. This RFC will be published on the Forum where the community can discuss the pros and cons of the suggested changes. After a comment period, the final resulting implementation will be voted on in the DAO, and if approved, the development work will begin.

Some suggested improvements

In anticipation of the full RFC, here are a few of the suggested changes that would greatly improve the success rate of grant funding through the DAO.

Redesigning the DAO’s interface

The very words used to label and describe actions within the DAO need to be rewritten and expanded on to make the user interface friendlier. More descriptive tool-tips should be added, and a comprehensive tutorial should be built to walk new users through the DAO’s interface.

Restructuring the proposal flow

The tie between the Forum and the DAO needs to be more clearly established within the very UI of the DAO. For example, before submitting a proposal for grant funding, users should be directed to the Forum to present their idea before “bubbling it up” to the DAO.

The DAO also needs to supply feedback and follow-up notifications for both proposers and voters. Currently, there’s no way to subscribe to updates on particular issues, making it difficult to stay engaged and up-to-date.

There also needs to be a more clearly defined outcome for proposals that lead to any action on the platform or in the smart contracts. When a proposal is complete, the DAO’s user interface should reflect that any resulting actions are completed.

Adding new proposal categories

First and foremost would be the addition of a grant proposal flow! This proposal category would give the community the access it needs to the DAO’s MANA, and it would allow everyone to contribute to the decision making process behind both minor, one-off compensation for contributions along with longer-term funding for bigger projects.

The DAO should also include a survey category that proposers can use to gather information. Writing successful proposals demands a clear understanding of what the community values in the platform.

Adding off-chain voting

Not all votes in the DAO need to be conducted on the blockchain, especially votes intended only to gather information in advance of a proposal. Surveys and polls are some of the best ways to identify what the community wants and needs from the Decentraland platform, so to maximize participation, these should be held off-chain through a platform like Agora (Decentraland’s previous voting tool) or Snapshot. The results could then inform a proposed feature change, feature request, or grant.

Integrating off-chain voting will ease the economic strain on DAO participants, without sacrificing the security and autonomy provided by Ethereum for proposals leading to changes in Decentraland’s smart contracts or use of the DAO’s MANA.

Next steps

The RFC outlining the new DAO implementation should be published within the next few weeks, at the latest. With the community’s input through the forum (and subsequent approval in the DAO) work on the next iteration of the DAO can begin!

Follow Decentraland on Twitter for more updates regarding grant funding and the DAO’s decision on these changes.