A Better Treasury System

[XyloDrone]

Hey Folks,

I’ve conducted an analysis of all things mentioned in this post, let me try to sum these up and add my own suggestions, as Ordum is building solutions for parts of this user journey and we’d be happy to expand our scope if additional features are in the interest of the community.

Let’s start from the beginning as @rich mentioned: what is the treasury for and for whom does it need to be optimised for.

@rich

We should be very clear as to what certain developments aim to optimise, for who and what purpose, since these problems are all part of a bigger picture wrt to driving ‘intelligent adoption’ of the underlying tech/resources/funding, rather than just creating incentives that independently optimise for one narrow but specific outcome.

@shawntabrizi has opened the initial post with this answer:

@shawntabrizi

Ultimately, the Polkadot treasury is the one way that the Polkadot network can reach its hand out into the real world, and make things happen. The treasury is quite a unique feature of Polkadot compared to the last generation of chains.

If we can make sure that the treasury is easy to access for the Polkadot community, it will ensure that we will be able to fund and support growth and development of our ecosystem.

Based on this response, I think we need further segregation and project references to demonstrate to new teams what the treasury is looking for (eg. Events, media…).

Let me share a user journey map which documents:

• Off chan processes
• On chains processes
• Different groups/users involved in the process (delegates / delegators , community, fellowship, applicants)

Now let’s sum up all the pain points everyone mentioned and see where they create friction within the user journey:

Let’s breakdown every step and address problems / solutions:

1. Understanding of Blockchain / crypto currency (For an example, we can have a Polkadot educational site where a new user can generally learn about blockchain. One of the issues we are facing is this GENERAL lack of education and understanding of what cryptocurrency is, let alone what DOT/KSM tokens are used for. The general public needs to comprehend the utility behind our tokens… and stop perceiving them as purely an investment / security - which clearly they are not. This would increase participation and voter turnout if our current holders / investors are interested in doing so, they just did not know).

2. Understanding of the Paraverse technology and functionalities; Substrate, Rust, Pallets etc—> I believe we are tackling these with the educational content that keeps coming out(academies, videos quizes etc) as well as plenty of builders programs which we wish to aggregate within Ordum and guide potential applicants to relevant programs and grants within the ecosystem. There will be a steep learning curve but we can tackle this friction with time and links within a dash board to relevant educational information. Also; we need 1 place for all of our documentation, currently it is a bit scattered.

3. Understanding the treasury system and submissions

Our system is quite complex and we have 3 types of grants(+ NORMAL grants lol ). In my honest opinion, the new Polkadot site explains very well how all of these work. If we link in our dashboard the relevant docs and videos, this would probably be very clear(would need data to confirm, it’s obviously an assumption). There is also a question here to be raised. Do we want to make our treasuries available to non crypto people? Eg. what if someone wants to build a power grid in a third world country?

I would personally like to see more examples of different types of projects such as events etc.
Additionally, it could be helpful to have a more detailed list of projects the treasury is interested in funding, as well as a detailed breakdown of the active bounties so that projects are directed to the right place (eg. Why go to the ksm/dot treasury if there is an events bounty? And if the events bounty rejects an event I think the treasury should do so as well and vice versa. This protocol would prevent bad actors).

@burdges

We also need some lower bond for doing applications however, like maybe 1%, and separately some process for reducing the bond further. In practice, this process would mirror the community work required to ensure a proposal gets approved anyways.

Bonds could be lower for cheap projects, but I think for very high amounts it should be relatively high just to prevent spam (not personally sure what this price be. Possibly just on Polkadot and not on Kusama as it currently stands).

4. Idea - I think this is self explanatory lol

5. Application
   I have to admit, filing out those google docs templates feels like torture and that whole process feels like a crime against humanity. On that note, I agree here with Rich and Shawn here;

@ale

Treasury must incentivize capable teams to apply and apply for grants: the experience should be efficient and pleasant, the least bureaucratic as possible.

@rich

For proposers: a blank sheet of paper is harder to fill out than a few boxes which trends towards proposer apathy / missing info / administrative time suck.

We need to make our template much more UX friendly, precise, with boxes(lol). Within Ordum, each grant issuer / foundation would be able to custom build their own boxes(lol again xD) for each program and grant. Filling out a non UX friendly, hardly legible and low customisable template with serious, academic content is off putting. This needs to change. Now.

It is bad for the applicant due to a straining process, while the delegators / delegates and community will have a tough time reading these due to low legibility. We have summaries on Polkassembly / Subsquare / Commonwealth. We should have clear guidelines for TL;DRs so delegates/delegators and the community can quickly read the summary and additional details if needed to make a decision(eg. problem, solution, amount, category).

@rich

For voters: makes comparison hard when comparing two proposals on a like for like basis this effects voter engagement, participation and confuses overall sentiment.

(we can also hint here to voters that there are multiple proposals in the same Origin they can vote for, so they can choose which one they prefer)

I’d also like to touch upon Shawn’s other two points regarding guidelines:

@shawntabrizi

For example, if the beneficiary has no identity, we can suggest that the user creates an on-chain identity for the account.

—> we can add these guides within Ordum and were thinking of doing so

@shawntabrizi

If the beneficiary has little or no reputation, we can put a warning if the user is asking for too mach funds. Otherwise, we can suggest to the user an upper limit based on their history and reputation.

@ale

Improvements in the area of reputation, progress tracking, and impact assessment of the treasury proposal with on-chain data

We are capable and interested in adding all of these to Ordum. One of our research milestones focuses on the interaction of non-transferable, reputation based NFTs, smart contracts and DIDs / wallet addresses. So we will be working on the reputation system which will be displayed in an applicant’s profile. Since we are building on Phala, I think it would be good for applicant / grant recipients to be able to showcase when, by whom and to what extent have they been funded in their road maps. Each grant issuer would be able to mint their reports as non-transferable, reputation based NFTs which would be bound to the teams wallets or DIDs. We can continue the discussion and see which metrics would be beneficial to this system.

—> on the other side, we can add warning signs to the community for teams asking for high amounts with a low delivery score. But we must be very careful here, as this might have ethical consequences. In terms of plagiarism, we could implement machine learning to compare the published proposals with existing ones (like we have for academic papers in universities etc) and flag them for plagiarism or some kind of non-compliance. Again, touchy subject, we would have to be careful here.

@shawntabrizi

• Starting Spend
• Reoccurring Spend
• Final Spend

We can add this as a drop down when applying for a grant within Ordum.

@shawntabrizi

Additionally, we could potentially simplify UI/UX by combining the behaviors of bounties and proposals under a single unified process.

—> as well as all funding types and builders programs.

6. Evaluation & 7. Voting

Again, I very much agree here with Rich and have raised the same issues regarding proof of chaos; our users should not be “bribed to vote”. I can understand entities issuing non transferable NFTs to voters… but tradable… IRL this would be considered bribery.

@rich

Making governance voting easier is definitely something we should aim for and simple more proactive UX/UI is important, but it can also optimise for dumb decisions - aka, there should be some time cost to making a good decision and that should be implicit in the design principles.

Other projects such as Proof of Chaos also aim to create incentive systems for encouraging voters - an idea that’s both brilliant in its simplicity, but also potentially dangerous in its current design… e.g. you earn an NFT for voting, but that NFT is not necessarily non-transferable, and so might be tradeable, which leans into the emergence of financial incentives which abstract away the actual ‘vote’ as the purpose of the interaction, ultimately making the system dumber over time.

When seen this way, we can also understand voter participation as an entertainment problem. Yes we want to get people to swipe easily, (tinder for governance) but we also need to make proposals more engaging, so people will stop and read / listen / watch and make decisions in a proactive way - delegating their intelligence, as well as their vote.

On that note, I disagree with the Tinder interface (it already dehumanised people, let’s not bring it into something as serious as voting. If linked with proof of chaos then people will just press vote to get NFTs. However, I think there should be quizes around technical referendums which grant awards for some kind of completion and comprehending knowledge, rather than the vote itself). I think Nova Wallet has an amazing governance integration. Let’s face it, most people don’t know that there are motions and proposals out there that they can vote on. With mobile notifications and such a slick UI, everyone can easily be reminded of what is going on.

@rich

Put more simply - when we start with the idea that no proposal is final, or correct, or cannot be improved, then we begin to design different systems, optimising for advancing coherence between proposers and also voters. who we should aim to move towards contributors and even co-creators of proposals.

I agree with this statement. Until we put an idea out there and get constructive feedback on how to go on about some things, gather information and data in the fields that we are not experts in or exposed to… then we simply do not know what is out there. Hence why we should let the community speak and give feedback. And perhaps this is where something like proof of chaos comes in… to incentives those giving constructive feedback.

@olanod

Feedback on proposals is not always very meaningful/sufficient or agile and I don’t blame anyone for it, on one hand proposals can be very diverse and it’s unreal to think the few people participating in discussions will be experts on every topic, also reviewing proposals is a very time consuming activity that requires reviewers to spend hours or even days to gather all the context necessary to give an educated opinion, the council system falls short as we currently don’t have enough members that can be full time devoted to treasury topics. The W3F grants experience feels more mature even if it’s more cumbersome for applicants, I think the treasury should learn from their experience and try to replicate it in a decentralized manner.

I think we should have relevant sub-daos and bounties set up for evaluating projects within their expertise. I am sure that all councillors in the past needed to vote on something which was not their area of expertise. In my opinion, those providing feedback should be incentivised and compensated, ESPECIALLY if they are experts in their own rights. We need their help to shape better proposals. These could also be groups to which we delegate our votes to (eg. Shokunin Network could put forward and evaluate \ give feedback to public goods, VR projects, etc). I am not saying these should be official bodies like councils, nor that their opinions can sway the vote, but they provide relevant and quick feedback on the proposals relevant to their fields. These “experts” can be ranked the same way as the fellowship, but let’s say the group consists of UX/UI experts.

@shawntabrizi

• We can submit the proposal into a public review draft, which is handled off-chain, and allows people to get fast feedback before officially making the submission on-chain.
• The entire proposal can be turned into a well defined format, and uploaded to the chain using the preimage pallet and on-chain metadata. See Metadata for proposal and referendum by muharem · Pull Request #12568 · paritytech/substrate · GitHub

Once the applicant is ready to submit the proposal on chain, we can enable this in Ordum with a simple UI when they are ready with their draft.

One thing from my perspective that is missing is some kind of timeframe to signal that the proposal is ready to go on chain or some kind of notification that says: OK FOLKS YOU HAVE ENOUGH INFO GO AND SORT THIS OUT. Not sure how to automate this, but would be good to do so, as it would take a lot of responsibilities from other people… but I differ.

Payment execution, accountability(I’ve broken the solutions for this down above so I won’t comment further on it) and volatility -

a. Accountability —> resolved with reputation management, DIDs, non transferable NFTs

b. In case the payment is a reoccurring spend, I suggest that we have an X amount of time until it lasts, then the spend of the teams gets re-evaluated and adjusted based on metrics and delivery success ratio.

c. We either create or use existing web3 accounting software or on chain / off chain statements and databases to see how the funding was spent

d. If someone from the community sounds the alarm that the funds were given to back actors, we should be able to put the proposals up again for a vote, have AMAs, look into data etc to clarify situations —> then add this to the rep score.

e. Build custom pallets for payment systems so we can automate this process but also block it

f. Stable coins - this is erm… a touchy subject, especially in regards to the Luna crash, aUSD de-peg, questionable affairs by USDT etc. If we would to issue our own algorithmic stable coin, we would have to keep in mind that regulators will probably put a giant magnifying glass on us . The other option would be to use USDC (which I am not a fan of for certain reasons, but I have my reasons to believe that it won’t ever de-peg) and/or encourage teams to use a preferred stable coin or which one NOT to use.

g. It was mentioned elsewhere that is up to the team to decide what they do with the grant finances, however, I would personally prohibit them from using these funds in defi etc, just to prevent, erm the loss of funds.

Report + 10. credit -

a. Once a milestone is complete the team will be able to submit these via Github and/or Ordum UI for evaluation (the grant issuers can define the template on their side of the UI)

b. if the team had any changes to the milestones they can mention it here and adjust accordingly

c. I think the sub-daos, delegators and community should together evaluate the proposal they voted on or consulted on

d. Each treasury / foundation / grant issuer mints a non-transferable NFT with the report that is bound to the address of the applicant. This would be displayed in the Ordum profile section or an entity can enquire to see it if needed.

11. Analytics
a. We can define specific parameters and scrape data from the chain and reports(and we have some awesome tools already out there for this purpose)

b. We’d need to define KPIs by which we measure treasury impact in order to see what the project success rate it

Right. So I think this kind of sums it up. I won’t refer further to Shawn’s UX/UI post as I think we need to define the overall architecture of these systems and how they interact together. After all, we discussed 3 different things:

• treasury
• governance
• designing dapps for both

I’d love to hear your feedback above on the user journeys and the summary… and once you do share your thoughts I’d personally be very eager to:

• design the information architecture
• we at Ordum can conduct technical research and actually build this in cohesion with other projects
• design the UI
• Build with the help of treasury backings

Thanks for your time, I hope we can all work together to make this experience amazing and our ecosystem even better.