ERC Endowment Discussion

Context: The concept for creating a ERC standard for endowments came out of recent discussions surrounding creating sustainable funding mechanisms for Ethereum development. By analyzing traditional funding mechanisms for public goods, there is a desire to explore if an endowment structure is adaptable to using tooling that has been developed by the Ethereum community for the benefit of the Ethereum community.

Preliminary conversations have suggested an experiment of a DAO structure that invests into a DeFi platform to accrue interest while also making regular distributions to projects.

Areas for further research include:

  • how would we go about selecting the DeFi platform? Suggestions have included Compound and Dharma.
  • Would these platforms allow a DAO onto their platform in the first place?
  • How long would we need to lock funds into the DeFi platform for?
  • Determine periods at which funders can enter and exit the DAO
  • There was discussion about forking the Moloch DAO code. What modifications would need to be made to ensure it meets whatever funding movement restrictions the DAO implements? Specifically the “ragequit” functionality
  • How would projects apply and be selected for funding? We would also need to compose standards to regular review/diligence of projects.
  • How regularly would funds be distributed to projects?
  • What is the target principle amount to get into the DAO and what should the target interest rate be?
  • How do we decentralize the power of the movement of funds and determine who should hold that power?
  • Does the DAO have any reporting requirements to its investors?

Please feel free to add additional questions as well as answers to this discussion.