When the ETHSecurity Initiatives Round launched, we promised details on how the vote would work, and here they are! In November, ETHSecurity Badge holders will allocate 400 ETH to RFPs and Grants by voting. The vote uses “Blossom Budgeting”, a crypto take on participatory budgeting by our round operator Blossom Labs.
Up to 400 ETH to be allocated
ETHSecurity Badge holders vote
An Initiative needs 25% of its budget raised (pledges plus donations) by the time the vote starts
The maximum any one initiative can receive from TheDAO is $200,000.
It’s all or nothing. Either an Initiative gets enough votes to have its funding completed, or it does not get funding from TheDAO at all.
If Initiatives are not funded by TheDAO, they can still continue to raise funds until the end of January.
The vote opens in mid-November and runs for about three weeks
Badge holders vote pseudonymously from private addresses
Any funds from the 400 ETH the vote doesn't allocate stay in TheDAO’s treasury for future rounds
Since September, we’ve been accepting proposals for Ethereum Security RFPs and Grants (“Initiatives”), and in November, accepted Initiatives that meet their minimum funding goals will get on the ballot and become eligible to receive funding from TheDAO’s 400 ETH.
In order to get on the ETHSecurity Badge holders’ ballots, an Initiative needs to meet both of the following by mid-November (exact date TBA):
Rule 1: At least 25% of the total budget must be raised, counting pledges and donations together.
Rule 2: The remaining funding gap cannot be more than $200,000, the most TheDAO will give to any one Initiative.
An example: The Initiative to formally verify the Vyper compiler has a request of $600,000, so it needs to have received at least $400,000 in pledges and donations to bring its “ask” from TheDAO down to $200,000.
Initiatives that don’t meet these rules can still continue raising funds through the end of January on the initiatives page, but won’t get funding from TheDAO via Badge holder votes.
When voting ends, an Initiative is funded by TheDAO only if the votes behind it are enough to complete its remaining budget. Otherwise, it receives nothing from us.
Bigger asks need more votes. Because each Badge holder directs an equal share of the pool, an Initiative asking TheDAO for more money needs support from more voters. That’s why fundraising shouldn’t stop once an Initiative qualifies for the ballot: every dollar pledged or donated reduces what Badge holders need to cover, making the Initiative easier to fund.
To go back to the Vyper example, if it reached $400,000 in pledges and donations, it would still need $200,000 from TheDAO. At current ETH prices, that would likely require a minimum of 18% of voters to support it as an S-Tier Initiative (more on how voting works below).
Pledgers and individual donors can keep backing Initiatives during the vote. Every pledge or donation lowers the amount an Initiative needs from TheDAO’s pool, making it easier to pass.
Backers can donate to Initiatives directly through the Dapp at https://initiatives.thedao.fund. They can also pledge to an Initiative through a signed commitment. Pledged money is only collected if the Initiative becomes fully funded, and we are excited to promote backers generosity whether they pledge or donate.
If you or anyone you know wants to make a pledge to an Initiative, send an email to info@thedao.fund so we can set it up.
Anyone can make a donation or a pledge at any time, from now until the end of January. Every wei donated goes to the specific Initiative’s multisig, and will be paid out to teams as the milestones for that Initiative are completed.
Both pledges and donations go toward the 25%, and both lower what the Initiative needs from Badge holders’ votes.
The 200 ETHSecurity Badge holders make up the eligible voters who determine how TheDAO’s 400 ETH will be spent.
Every ballot directs the same amount of ETH. The pool is divided equally among the Badge holders who vote, so if all 200 vote, each ballot directs about 2 ETH; if 100 vote, each ballot directs about 4 ETH.
Badge holders sort Initiatives into tiers:
S-Tier: the Initiatives the voter thinks are the most important to fund
A-Tier: great Initiatives that would be good to fund
B-Tier: good Initiatives that are worth the money but not a high priority
Voters should leave Initiatives they don't think are worth the money off their ballot.
The Blossom Budgeting algorithm distributes funding in iterative passes. It considers S-Tier first, then expands to A-Tier, and finally B-Tier. An Initiative is funded once the ballots backing it collectively have enough unallocated funds to cover everything it still needs.
The algorithm comes from the Expanding Approvals Rule for participatory budgeting by Haris Aziz and Barton Lee, published at AAAI 2021. Sem (@404ouch) from Blossom Labs, the round operator, modified the algorithm slightly to fit this round, building the voting mechanism under the name “Blossom Budgeting”. Blossom's interactive walkthrough explains the algorithm in detail, step by step.
The main alternative we considered was ranked-choice voting (RCV). But for allocating a shared budget, no matter what type of RCV you choose they all have the same property: a coordinated majority can determine the entire outcome.
For example, if 51% of voters all submitted the same ballot, with RCV, that voting bloc would allocate 100% of the funds, leaving the other 49% of voters with no influence over how the pool is allocated.
In Blossom Budgeting, every voter is responsible for an equal share of the budget. So if 51% of voters share the same priorities, they direct about 51% of the pool, not 100%. The other 49% still direct their share toward their own priorities.
For example, if 5% of voters all put a niche post-quantum Initiative in their S-Tier, they steer about 5% of the pool, roughly $55k today. That could be enough to fund it even if no one else votes for it.
When voting closes, TheDAO’s 400 ETH will be converted to DAI, and the exchange rate received will determine the final dollar value of the pool. Blossom Budgeting will then calculate which Initiatives can be fully funded based on the ballots.
Once fully funded, each Initiative will receive its budget in stablecoins held in a multisig that pays out as milestones are completed.
Any funds left unallocated from the 400 ETH pool stay with TheDAO to be used for future funding.
While we intend to keep the parameters described above, we reserve the right to modify them if it is needed. Our funding for this round is in ETH, while Initiative budgets are in dollars. If the price of ETH goes below $2,200 or above $3,500, or if external funding for Initiatives comes in unexpectedly low, we may adjust certain parameters (e.g. the 25%, the $200k cap, etc.) in early November, before the vote opens. These are the challenges of working with volatility and uncertainty!
Pledge: Want to pledge, or know an org that should? Email info@thedao.fund.
Donate: Donate directly at initiatives.thedao.fund.
Running an Initiative? Raise pledges and donations from aligned supporters before mid-November to qualify for funding from TheDAO.
Have an idea? Proposals can be submitted through January at initiatives.thedao.fund/submit
Questions? Ask @Snakeagram (Jake), @Cotabe or @griffgreen on Telegram.
Let's get to work securing Ethereum!