I think the biggest thing that we are missing in a mutual grants focus is that we have workstreams currently thinking about how to create revenue, but no plan on how to invest in their unique knowledge.
Workstreams which have been efficient and properly managed their treasury would be great candidates for building for profit businesses on top of the protocol.
The current expectation is that revenue from a workstream should go to the DAO treasury, but a less considered option is that it could be kept by the workstream and contractually seen as a SAFE/SAFT type investment allowing the workstream to spin out a subDAO or corp that is profitable AND dependent on grants/project/passport protocols.
Why is this better? At the end of the day, for-profit businesses using the protocol will have incentive to pay for the sustainability of the protocol. Giving the DAO more runway doesn’t have the same effect.
Imagine we are building a city. We want people to move in, but there are no grocery stores or gas stations. We could subsidize the businesses to startup when they will be at a loss, but hoping more people will move in when the necessary services are there. My suggestion is that we encourage our workstreams to spin out for profit businesses.
If we can create a model to successfully spin out for profit businesses, we will:
- Extend runway by having less contributor salaries in the DAO. Workstreams are incentivized to get their own revenue and become sustainable.
- Use SAFE/SAFT investment to keep stake in ventures (We could sell this if it discourages competition in the future)
- Shift GitcoinDAO internal public goods funding to be fully governed by GTC holders. As workstreams spin out they create an aqueduct to partially fund the main program and partially fund GitcoinDAO specific needs.
Protocol fees could go back to the DAO treasury or to an aqueduct which drives continuous GTC token holders decisions on the program and which protocol public goods to fund. It doesn’t have to be that no revenue goes back to DAO treasury, just that workstream generated revenue could be used as investment rather than extended runway. Think about it, if we need the extended runway cause there aren’t for-profit businesses using it already, we probably already lost…
Most importantly, we need to reset our essential intents ASAP. They weren’t designed for staying forever. They should be updated every 6 months or so. This conversation has a little more of my thoughts on the essential intents. November CSDO Digest - #13 by DisruptionJoe