Opening discussion on principles for Pocket DAO payments and pricing

The Pocket DAO is moving towards increasing clarity around its priorities and now has available a wider range of mechanisms with which to fund different types of contributions. But today, there is still not much alignment or consistency in the way we discuss, price, and fund different types of DAO proposals.

This document aims to open discussion on an overarching set of goals and principles through which the Pocket DAO can reach further alignment and thus reduce friction. It is our hope that through these discussions, areas of alignment can be reached and further ratified to create norms and expectations that make operating the Pocket DAO treasury much simpler and more efficient.

Treasury Management is a shared responsibility of the decentralised group of governors we know as DAO voters. These are the sole stewards of the Pocket DAO treasury. PNF’s role is to act as a credibly neutral steward in helping to execute the will of these voters.

Here, we outline a set of potential Goals for the operation of the Pocket DAO treasury.

Goals of Pocket DAO treasury management:

  • Maintain and operate a safe and capture-resistant treasury
  • Allocate the resources within its treasury in line with its stated priorities and to maintain ecosystem health. Resources are not limitless so, by definition, priorities mean areas to which resources will be allocated before others.
  • Minimise discretion in the way the treasury is operated such that the same type of program or contribution is rewarded consistently
  • Ensure accurate, consistent, and timely distribution of payments that support builders and grantees to meet their own obligations
  • Do all of the above in the simplest and most efficient manner possible, such that complexity does not become a friction to wider participation

Principles for Operating the DAO’s treasury:

  • The DAO prioritises the use of its treasury towards its strategic objectives. As such, the DAOs priorities should be discussed and agreed upon on a semi-regular basis.
  • Noting the above point, it seems important that the DAO maintains X months/years runway at all times so as to ensure continued viability and to ensure there is sufficient treasury to invest in it’s priorities. Without setting the bounds of this further, we suggest not to spend over 10% of the treasury or any agreed budget on a single proposal unless particularly strategic to do so.
  • The POKT utility token has experienced price volatility. This is a shared risk between the DAO and its contributors to both the upside and the downside. Note: This says shared, not equal.
  • It’s not possible to answer every edge case in advance, so a set of clear and agreed principles can create the norms and expectations that allow us to minimise the areas in which discretion is required
  • And because we are pragmatic about the fact we can’t answer everything and that these questions are complicated and evolving, we will review the agreements here on a regular and recurring basis (i.e. quarterly)

Principles for pricing and payment of proposals, grants, and contributions:

  • One-off or weekly payments

For the efficiency of batching transactions and creating clarity and consistency to the DAO and contributors, one-off or weekly payments will be made at the most recent 7-day trailing average POKT price each week. For example, transactions are batched on a single cycle each week, and the average price will be calculated between Sunday to Saturday each week, regardless of the time of transaction. This means a grant or proposal allocated on a Monday or a Wednesday will both be paid at the same price, provided they land in the same week. Weekly governance transactions will be calculated and batched at this same POKT price.

  • Recurring monthly grants/payments (i.e. Sockets)

Grants that provide for monthly or recurring payments should be paid at the consistent 30-day trailing average price for that month. That is, Project A and Project B would both have the same POKT price calculation for work delivered in the same month. Further, a project commencing 2 weeks into May would be paid for those 2 weeks at the same 30-day trailing average price of POKT as a project that was operating for the full month of May.

  • Service provision (POPs and RFPs, Bounties)

POPs (RFPs) and Bounties are an express call for the Pocket DAO to receive the capability it needs to execute on some (priority or defined) activity. Because of this, the Pocket DAO will often be the price taker in these scenarios and need to agree on this “proactively” before work commences. For this reason, the Pocket DAO should expect these types of payments to be agreed based on the prevailing POKT price at that time of the proposal. A USD figure should not be given. Ultimately, the risk of the price fluctuating is a burden we all bear – the DAO takes the risk of the price going up just as the contributor takes the risk of the price going down.

  • Retroactive Public Goods funding

Retroactive Public Goods will increasingly be paid out to builders and contributors who create in the public good on top of Pocket. By their nature, these are contributors who are building in the long-term interests of Pocket. For this reason, it should be expected, where reasonable, that RPG funding requests and rewards should have a vesting period of 3-12 months for payment. Agreements related to vesting should be agreed in POKT. Ultimately, the risk of the price going down is a burden we all bear.

  • Retroactive funding requests

Pocket is transitioning away from large, retroactive funding proposals with an increasing clarity and focus on prioritising resource allocation to a set of defined priority areas. For this reason, we think the DAO can set an expectation that any large and unforeseen retroactive funding proposals should be expected to:

  1. Use and abide by the Impact Framework as the primary means of requesting funding
  2. Agree that any retroactive funding request should, where reasonable, have a vesting period of 3-12 months for payment

DAO Payments Calculation and Frequency

  • Payment Calculation

For items priced with the 7 or 30 day trailing average price, we use the Average Closing Price from

  • Payment Frequency

POKT Governance Transactions are completed on a weekly basis and payments will be made at the same frequency.

For one off payments these will be processed in the week following their approval.

For recurring/monthly payments, these will be completed within the first one or two weeks of the month.

For example, a governance transaction taking place on the 3rd of the month is unlikely to capture all payments. They would be made in the following transaction (10th of month)

We welcome the community to pick up and discuss these principles to help us set expectations within the DAO, increasing transparency and clarity for participants, and to create further alignment that allows for simple and effective operations of the DAO treasury.


I would like to start with a “Thank You” for the below changes-

Its a step in the right direction in-

A) Bridging discrepancy between spending in stable currency VS earning in a weaker/volatile coin, the issue I have raised a few times lately given $POKT’s poor price action & the risk this might cause to the DAO treasury if price continues to suffer for an extended period.

B) This is another way for $POKT opians and I am only talking about those who are immersed in the ecosystem (not outsiders) and those who are uber bullish on $POKT at anytime, to have some more “skin in the game”.

I would encourage PNF & the DAO to not stop here and continue exploring ways to do $POKT denominated expenses internally, of course wherever feasible & makes sense.

In corporate finance terms- its for cash flow to continue to be able to fill the hole in the income statement.

Another recommendation is to maintain a portion of the DAO treasury in stable coins. But that is a future event when we are back to exuberance mode; will require good judgement of market cycles.

Thank again @b3n & PNF for putting this together. I am going to continue to repeat a few things I have said in the past, so please bear with me.

I would encourage PNF to think about phasing out Retroactive Funding.


It will continue to set precedents and seekers will continue to use those as justifications- just human nature and I don’t consider it right or wrong.

It has been a quarter since I first mentioned “precedent” and still there is almost never a moment when one wouldn’t find a funding request in the queue arguing based on precedents.

Sure, your proactive programs and some structure behind retroactive will help but it will be difficult for you to come out of this spiral if you keep retroactive in any form or shape.

Another important point-

I remember when PNF started, one of your endeavours was to unite and rally the community towards a common mission and goals. The community was quite divided, although feels like things have calmed down since then.

Pocket DNA is a guide/tool that will facilitate the above. However, you still have to cognisant to certain basics of why people collaborate & why they collide- the psychological aspects.

In the past few months, since I started paying attention to forum, as far as I can remember @Cryptocorn 's retroactive funding request is the only one that closed amicably. Please note that I used “amicably” and not “unanimously” , as the latter is irrelevant.

There were allegations, controversial remarks, personal attacks, at times totally unacceptable asks, etc…basically all very popcorn-worthy for any spectator. Such debates (altercations rather) can become big distractions and political.

You can argue- that’s how consensus building works in open source communities, DAO’s etc. Sure, but I am being very specific here.

Money is a very sensitive topic and specially when it comes to personal and individual pockets. We can’t have people go to battle over it every other day (as it has been happening) and then expect them to collaborate over common mission & goals from the DNA in tandem, detached from what’s happening to the funding request.

Just doesn’t work like that; we are humans and not machines.

Therefore the more you can minimise such altercations from happening right at the origin, fewer walls & blocks will get built within the community, and that would hopefully help your unifying endeavours.

Hence, my suggestion to rethink retroactive payments.

So what’s the alternative then to foster open source innovation?

Let’s find some answers in the closed sourced communities, in other words in the most successful firms that we will agree have done phenomenally well with regards to innovation.

They all have healthy R&D budgets.

I would encourage PNF/& or the DAO to explore having a separate R&D budget, use that for retroactive payments for innovations/contributions, gamify it by making it competitive, 1-x number of winners every 6 months or annually, let them present to the DAO for the DAO to vote & decide.


a) Fixed (meaning predictable) budget (for R&D) instead of open ended, helps the treasury.

b) Its not 1 (or a block) VS many in a battlefield, in fact there is no battle because its a contest where there are more than 1 participant hopefully. The winners are those that can convince the DAO of max value to the protocol.

c) The job gets done without all the drama & the detractors to unifying communities discussed above.

To end-

I have read comments from a few community members that they expect some recognition for ad hoc contributions in the community channels. Another suggestion I gave was to pick POKT Samaritans, basically reward the model POKT community members.

No application would be needed here, selected/handpicked by PNF (@Ming ) or by a committee on a quarterly basis. This will be a token of appreciation for those contributions (such as educating new members, answering Qs, constructively engaging, etc) in the community channels or elsewhere that are generally unmeasurable and therefore can’t be covered by other contribution programs in place but do carry some value.

As usual- take whatever makes sense and ignore the rest.

Thanks to PNF for having these discussions and taking feedback.