DAO Grant

Funding decisions are made through token-based voting on a blockchain, ensuring transparency and immutability. Proposals are submitted, debated, and voted on by the DAO's token holders or a delegated committee. This creates a permanent, auditable record of all grant allocations and rationales.

Grant funds are typically held in a multi-signature wallet requiring approvals from multiple trusted signers (e.g., committee members). This provides security against single points of failure and ensures disbursements follow the DAO's ratified decisions. Tools like Gnosis Safe are commonly used for this purpose.

To mitigate risk, grants are often paid out incrementally upon completion of predefined deliverables or Key Performance Indicators (KPIs). This aligns incentives, ensures accountability, and allows the DAO to halt funding if a project fails to meet its commitments.

Grants can be categorized by timing:

• Retroactive Funding (RFPs): Rewards for work already completed that provided public goods to the ecosystem.
• Prospective Funding (Grants): Provides capital upfront for proposed future work, requiring a detailed proposal and plan.

Grant recipients are usually required to provide public progress reports and financial transparency. This often includes on-chain activity verification, public code repositories, and community updates. Failure to report can result in funding clawbacks or exclusion from future rounds.

Many DAOs delegate proposal review to a grant committee or sub-DAO composed of domain experts. This body conducts due diligence, provides feedback, and makes funding recommendations to the broader token-holder community, increasing efficiency and decision quality.

Individual developers and small teams building public goods like libraries, SDKs, and core infrastructure. Grants fund their work, which benefits the entire ecosystem without a direct business model. Examples include protocol researchers, tooling creators, and documentation writers.

Established Layer 1/Layer 2 protocols and their DAOs use grants to bootstrap their own ecosystems. They allocate treasury funds to attract developers, fund integrations, and sponsor hackathons to increase network utility and adoption. Examples include the Optimism Grants Council and Arbitrum Grants Program.

Academic researchers, educators, and content creators focused on blockchain technology. Grants support long-term cryptographic research, the production of educational material, and the development of standards. This includes university labs, technical writers, and conference organizers.

Projects that improve DAO tooling, governance systems, and community coordination. This includes platforms for voting, delegation, treasury management, and contributor onboarding. These tools are critical for the operational health and decentralization of DAOs themselves.

Artists, curators, and cultural organizations using blockchain for creative expression and community building. Grants fund digital art installations, NFT collections for public benefit, and events that explore the intersection of technology and culture, often supported by cultural DAOs.

Non-profit initiatives and projects with explicit social or environmental goals. These grants fund work in areas like retroactive public goods funding (RPGF), climate solutions, and open data projects that leverage decentralized technology for broad societal benefit.

A Treasury is the on-chain pool of assets (e.g., native tokens, stablecoins) owned and managed by a DAO. It is the source of funds for all DAO Grants and operational expenses.

• Managed via multi-signature wallets or smart contracts.
• Funded through token sales, protocol revenue, or donations.
• Spending requires approval through the DAO's governance process.

A Governance Token is a cryptographic asset that grants holders voting rights in a DAO's decision-making processes, including the approval of grants.

• Used to submit and vote on grant proposals.
• Voting power is often proportional to the number of tokens staked or held.
• Examples include UNI (Uniswap), MKR (MakerDAO), and ENS (Ethereum Name Service).

A Proposal is a formal, on-chain submission to a DAO requesting a specific action, such as allocating a grant from the treasury.

• Typically includes a detailed specification, budget, and deliverables.
• Moves through stages: Temperature Check, Consensus Check, and final Governance Vote.
• Requires a minimum deposit or sponsorship to prevent spam.

Retroactive Public Goods Funding is a grant model that rewards projects for work that has already proven valuable to the ecosystem, rather than funding upfront proposals.

• Popularized by Optimism's RetroPGF rounds.
• Aims to efficiently allocate capital to underfunded but high-impact work like infrastructure, education, and tooling.
• Relies on community-nominated badges and voter committees to assess impact.

A Grant Committee (or Grant Council) is a smaller, often elected or appointed group within a DAO tasked with reviewing grant proposals, conducting due diligence, and making funding recommendations to the broader token-holding community.

• Helps scale governance by delegating expert review.
• May have the authority to approve smaller grants autonomously.
• Balances efficiency with decentralized oversight.