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Without a leading entity nor a prior group of token holders, we need to find other ways to incentivize contributions. To solve this problem, Seer will use retroactive public good funding1:
  • Anyone can start contributing without asking anyone (permissionless contribution).
  • A part of the token emission is allocated to reward contributions. The DAO governance (where voting power is proportional to token holding) evaluates the contributions of different entities and splits the minted tokens between those.
  • Some contributors may need to be paid and make purchases before completing their work. To do so entities can sell tokens representing shares of their future rewards. Those tokens act as a prediction market on the allocation the DAO will give for a particular contribution.
Here is a concrete example. Let’s assume two entities, a developer group (DG) and an individual contributor who is working in community management (Alice). DG needs funding to build the first version of Seer (pay developers, audits, hosting costs), to do so they mint 1 000 0000 DG1_SEER tokens. It allocates 300 000 tokens to their members (working as developers). They sell 700 000 of those tokens on the open market for 700 000$ and use the funding to pay their expenses. Alice, on the other hand is providing a smaller contribution, working only part time as a community manager and thus doesn’t need prior investment. At the end of the first year of operation, the DAO decides to allocate 70 000 000 SEER tokens to DG, 3 000 000 SEER to Alice and 27 000 000 SEER to other entities. Alice is paid directly and people with DG1_SEER tokens (developers and investors) can redeem them for 100 SEER tokens each. The advantage of this system are the following:
  • Anyone, small or big, can start contributing without having to make a proposal first. This removes a barrier of entry to contributions.
  • Rewarding contribution after the fact is easier and less subjective compared to the grant model. It gives an advantage to builders having some demonstrable achievements to show instead of people who are good at communicating on their grants and playing DAO politics. There is still some subjectivity involved, but the subjectivity is only on the appreciation of the results, not on the potential of delivery.
  • As it doesn’t require an approval beforehand, there is no need for contributors to dox (reveal their identity) themselves in order to increase the credibility of their grant application. It rewards work, not credentials.
  • There is no top-down entity planning the whole project development, making the project more resilient. However, individual contributor organizations can have the organization they believe to be the most efficient, which can be bottom-up or top-down, allowing them to have the speed of execution they require.

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References

Footnotes

  1. Retroactive Public Goods Funding — Optimism (2021) ↩