Title: Project Mentorships: Economic Model
Authors: Alejandro Santander
Date: 26/10/2023
Introduction
The EthernautDAO is committed to fostering value in the Web3 space by bridging the gap between nascent projects and expert mentors. This proposal outlines the economic structure that will underpin these efforts, ensuring transparency, fairness, and sustainability.
Distinctive Non-Profit Status
At the core of the EthernautDAO’s philosophy is its non-profit status. This distinction sets it apart from traditional for-profit investment funds, which primarily support projects to amplify their worth and generate profit. The EthernautDAO’s mission is more altruistic, focusing on nurturing intrinsic value within the Web3 ecosystem rather than chasing profit margins.
Central to this mission is the commitment to adequately compensate the mentors who are the backbone of the DAO. These individuals, with their vast experience and knowledge, play a pivotal role in guiding partner projects towards success. Their efforts are invaluable, and the DAO ensures that they are remunerated fairly for their contributions.
While the primary focus is on mentor compensation, the EthernautDAO is also acutely aware of the efforts of its active participants. This includes the council members and other emerging roles, all of whom invest significant time and effort into the DAO’s activities. As such, a portion of the funds managed by the DAO is judiciously allocated to cover operational costs, ensuring the smooth functioning of the organization.
The DAO’s Treasury
The DAO may use a variety of means to build up a treasury that can be used to compensate its mentors and sustain its operations. These methods can be grants, the creation of digital contents, and remuneration from projects in particular deferred asset agreements.
For the DAO to be eligible for community grants, the type of projects that it chooses to support ir important. These projects must be mostly public goods. However, this is to be specified in another proposal. Also, for the DAO to remain eligible for grants, it must only use its funds to support work directly. I.e. its mentors and its projects.
Over time, the DAO’s treasury could witness substantial growth, possibly through mechanisms like SAFE agreements. It’s crucial to emphasize that this wealth accumulation should benefit the DAO’s treasury exclusively and not its founders or community members. With such financial growth, the DAO must explore innovative avenues to fulfill its mission, ensuring its resources are devoted solely to this purpose.
Project Ad-hoc Agreements
Projects will enter bespoke agreements with the DAO. In exchange for mentorship, projects might offer equity or other assets. Immediate compensation in non-deferred assets, such as USDC, is not a primary concern for projects.
The DAO will handle the non-deferred compensation of mentors, ensuring timely and fair remuneration.
Projects have the flexibility to establish additional deferred compensation agreements with mentors, separate from their primary agreement with the DAO.
All off-chain agreements between the DAO and projects will be mirrored on-chain, ensuring transparency and security. For instance, a SAFE agreement might be encapsulated within an NFT.
All agreements will be time-bound, typically spanning 6 months. At the end of this term, both parties have the option to renew the agreement.
In the beginning phase of a partnership with a project, the DAO will allocate one mentor. Depending on the evolving needs of the project, more mentors might be provided in subsequent iterations of the agreement.
Mentor Compensation Streams using Grateful
The primary mode of non-deferred compensation from the DAO to mentors will be through Grateful subscription streams. These streams may be of stable coins, or of other tokens as well, eg. $OP. The DAO reserves the right to halt any of its subscription streams with mentors, especially in the event of unforeseen complications or disputes.