Ladies & Gentlemen, we present you our Fund 3 proposal which aims to significantly improve Cardano’s DeFu system. I have reduced the scope of the Fund 2 proposal from a detailed report to a medium-high level report which allows me to reduce the $ fee by 79%.
Given that Cardano’s current success is based on scientific methods and a research first driven approach, does it not make sense to research other decentralised funding systems which have been successful?
If you think this is important then please do give it a kudos on ideascale and vote for it later.
Some key questions we had before:
Kris Urbas: How does it help to encourage DEVs and Dapps to be built on the Cardano?
ICO Research Group: Great question!
Personally, I am more interested in making sure we have a good system in place that funds proposals which help ADA increase in value relative to things like USD or BTC. So you could say I am not truly addressing the problem statement that IOHK have created.
However, If I had to answer your question, it would be this -
If we have funds leaking out into weak proposals due to a flawed system design, then how are we going fund quality proposals that truly “encourage DEVs and Dapps to be built on Cardano” in a way that creates value for ADA holders?
Funding proposals means that ADA gets sold off into fiat currencies which increases the sell side pressure on Cardano. When the price goes up (through funding quality proposals), it garners attention similar to the parabolic rise of Bitcoin & Ethereum in 2017 which pulled in all the finance guys like myself into the space to investigate.
Currently, there is little to no incentive to be on ideascale conducting due diligence on every proposal, especially by people with the necessary skills/experience who can do a good job.
Hope that helps answer your question.
Kris Urbas: I understand now, I think this is very important for the ecosystem even if not directly related to the current fund goal, thanks for the explanation!
shapiro21: What metrics are you going to use to gauge the success or failure of a funding process? Do you have any general metrics in mind?
ICO Research Group: Nice question.
With some proposals, you will be able to track a direct correlation between the price of ADA and the success of a proposal. Think of Uniswap as an example, it encourages people to buy ETH to make transactions so the value of ETH goes up. We can see the amount of ETH uniswap uses, uniswap accounts for 20% of all the Tx fees on Ethereum. If we fund proposals like this you could say the funding process has been successful (assuming the financing cost is significantly lower than the value created for the network).
Some proposals will have more of an indirect effect. For example, the proposal brings more people into the Cardano eco-system to hold ADA in perpetuity because holding ADA provides increasing utility to the holder. It is harder to track directly how these proposals make the value of ADA go up and requires more qualitative judgement.
There are issues with the current funding process and they will become more prominent as the system grows. However, they have been solved before in the prior decentralised funding model, but I can elaborate on that topic further if this proposal gets funded.