Saturn DAO is not just a collection of protocols, computer code and smart contracts on a blockchain. It is the community of people: investors, traders, business owners and researchers that breathe life into the protocols and make it great.
We have previously stated that one of the goals of our project is to establish a new way of creating an internet company, an on-chain DAO that can use its profits to pay its investors and workers to continue growing and ensure prosperity for everyone involved. Combining the scale and global reach of the Internet with the blockchain's ability to program money and coordinate people in a trustless way, DAOs will inevitably emerge as a more efficient and more scalable form of organizing a business.
To that end, the DAO needs to not only be concerned with voting for protocol changes and paying its investors, but it also needs a way to coordinate its roadmap and pay developers, marketers, researchers and everyone involved, allowing stakeholders to reinvest money into DAOs continued success.
DAO Roadmap Funding
Every new beginning needs a spark of creativity and lots of blood, sweat, and tears in order to survive the tough first years and blossom into something of value. Early on, this burden fell on the Saturn Network team. We have published our roadmap, stuck to it, and requested funding for this work from our community of investors.
Our work sets a precedent for how a crypto protocol can be funded. As the era of multimillion dollar ICOs is finally behind us, we can reflect and see that whilst funding is mandatory for any business, perhaps huge lump sum investments may not be the best way of funding projects as it lacks accountability.
Instead, incremental funding is a great way to present the final goal, draw up a tactical roadmap on how to get there, and request funds to attain certain milestones. This also allows investors to vet the team and ensure they will stick to their roadmap through thick and thin.
Throughout the years of Saturn Network's existence, we have demonstrated that this approach works and produces sustainable results.
However, this approach is not scalable long term. Having only one team do all the work limits the creativity and diversity of the community, and a successful internet business needs a way to scale its development without centralization.
How do we combine the best of two worlds - having a roadmap with incremental funding along with scalability that comes with decentralization of who is doing the work? Our answer is proposal driven development with funding provided by stakeholders of the Saturn DAO.
Proposal driven development
The purpose of proposal driven development is proper capital allocation. Just like with a traditional company, the default mode of spending is to pay out the profits as dividends to its stakeholders. However, it is also clear that projects with potential may benefit from additional work done to it, being maintenance of a profitable business or investment in new features and new growth.
Anybody with a cryptocurrency wallet can submit a proposal for what work they can do for the DAO and how it will be beneficial to the stakeholders. A proposal needs to describe what work will be done, how it will benefit the DAO and the value of the stakeholders, and what kind of funding is needed to make it happen.
DAO stakeholders can then vote to approve proposals that they like. Once a proposal gets enough votes, it automatically gets funded and the DAO can track its completion.
Two types of funding
Just like in a traditional business world there are many ways of engagement between interested parties, so can a DAO have multiple ways to fund its work. First of all, it is worth pointing out that a DAO can pay for its work in any token that exists on its blockchain. It can be ETC or STRN on the Ethereum Classic chain, or it can be ETH, DAI, USDT, LINK, WBTC or any other token on the Ethereum chain.
Furthermore, every proposal must specify the type of funding that is needed - either a one time lump sum payment, or a streaming payment. A lump sum payment represents a greater risk for the DAO, as there is little control over how the funds are being spent, and thus it will probably be reserved for either relatively small investments, or for community members with enough trust and reputation among the DAO stakeholders. Streaming payments offer more control, flexibility and can better align incentives for some of the long-term tasks, such as funding a long term marketing contract, community management work or server hosting. We envision that streaming payments will radically increase the chances of a proposal getting funded, and thus that more work will be done with the goal of growing the DAO leading to its long term success. You can read more about the streaming payments protocol in a dedicated article linked below.
Long term success of a project depends on proper capital allocation. One of the most important jobs of DAO stakeholders is evaluating whether they should extract some of the earned profit back as stakeholder dividend, or whether they should use the profits to reinvest into continued protocol growth.
In order to have a scalable and prosperous future for Saturn DAO, we will integrate proposal funding mechanisms right into the protocol. This way, anyone can apply to work for the DAO, and Saturn Token stakeholders can vote to approve the new hires and fund this community roadmap.
Together, we will build the best crypto protocol that goes beyond just a DEX, and the wisdom of our community will guide our way into the bright future.
Future is bright!
New to Saturn Network?
Read more about Saturn Protocol V2 below, an upcoming major exchange protocol upgrade which will bring token to token pairs, automatic market making, DAO activation, dividend payments and much more!