Please describe your proposed solution.

Typically token founders reserve a large percentage of tokens for themselves while selling the remaining tokens at a significant mark up. If that large founders' percentage of tokens was not taken then what novel mechanisms could be implemented to incentivize community members and fund treasuries?

Project Catalyst is good for funding large projects ($10K+ USD). A related proposal DAO-NET: Small Developer Funding is good for funding small projects (<$1K USD). This proposal seeks to fund projects in between ($1K - $10K USD), while using a participation to earn model to encourage DAO members to vote on which projects to fund.

The process works as follows:

1. Proposers submit proposal ideas
2. DAO-NET members vote for proposal ideas
3. Sponsors use a smart contract to fund proposals in exchange for DAO tokens
4. The more votes for a proposal the more DAO tokens the sponsor receives (ie the cheaper the token purchase becomes incentivizing popular proposals to be funded)
5. DAO-NET members who vote for a proposal that gets funded also receive DAO tokens (incentivizing voters)
6. Finally the DAO-NET Treasury also receives DAO tokens whenever a proposal gets funded
7. There are no initial tokens and tokens can only be minted at a fixed amount when a proposal gets funded.
8. The ratios of DAO Token disbursement is 1 token for Sponsor = 1 token for Voter = 2 tokens for DAO-NET treasury. This is equivalent to 75% of initial tokens being held in reserve by the founders although instead of a few whales holding that reserve, 25% of the reserve is spread among the DAO-NET voters and 50% is used to fund DAO-NET growth (the distribution of which is determined by DAO-NET voters).

DAO tokens will be used to pay voting and other transaction fees and transfer value within the DAO-NET community through Babel Fees, which gives them inherent value.

This is the third funding attempt for this very novel and paradigm shifting DAO funding tool, which will provide Cardano a distinct advantage over Ethereum in the DAO race.

Feedback from previous rounds was that the process description was too confusing due to the level of detail so this round I have attempted to streamline the description. If anyone wants more detail then they can view the previous two proposals which are conceptually the same despite some naming changes ( DAO-NET: Development Funder and DAO-NET: CryptoFusion Funder).

Please describe how your proposed solution will address the Challenge that you have submitted it in.

This proposal provides 3 major tools, each of which provides a huge advantage over Ethereum for attracting new DAOs.

1. A simple, rapid DAO project funding process for mid size ($1K-$10K) projects.
2. An incentive program for DAO members to participate in the DAO project funding process.
3. A steady DAO-NET treasury income that is redistributed to member DAOs on a daily basis based upon community votes.

With significant personal and collective incentives for DAO participation, this proposal should be a killer app for attracting new DAOs to Cardano.

What are the main risks that could prevent you from delivering the project successfully and please explain how you will mitigate each risk?

The main risk for successful project delivery, due to the complexity of the smart contract, is the possibility of a security vulnerability in the code. To mitigate the risk, the smart contract will undergo an accredited third party security audit.

Post delivery, there is a risk in implementation that the value of DAO tokens may not be sufficient to incentivize market participation.

The primary method of infusing value to DAO tokens is to give them utility which is intended to be accomplished through the creation of a sidechain in which transaction fees are paid using DAO tokens at a lower rate than normal ADA transaction fees on the main net. The development of a sidechain is a major undertaking and is being done in stages, the DAO-NET & A2T Sidechain Design proposal was funded in Fund 8 to address this issue.

The secondary method for increasing value of DAO tokens is to make a market for them by easily interchanging with other cryptocurrencies by integrating with DEX and Automated Market Maker platforms, the DAO-NET: DAO Token Market proposal was funded in Fund 8 to address this issue.

Please provide a detailed plan, including timeline and key milestones for delivering your proposal.

Sept 2022

• Prototype proposal submission process
• Prototype voting token minting and voting process

Oct 2022

• Prototype free market proposal funding process

Nov 2022

• Prototype voting token burning/DAO token minting process

Dec 2022

• Test Development Funder process on Testnet

Jan 2023

• Third Party Smart Contract Audits

Feb 2023

• Launch Development Funder on Mainnet

Please provide a detailed budget breakdown.

Based upon 6 month timeline above

2 Plutus Developers ($4000 each/month):$48,000

Third Party Smart Contract Audit: $10,000

Lead Developer ($1,000/month): $6,000

Product Manager ($1,000/month): $6,000

Total: $70,000

Please provide details of the people who will work on the project.

Product Manager**

• have a holistic understanding of the DAO-NET suite of proposals
• experienced in managing multidisciplinary teams in up to a dozen projects simultaneously
• ability to articulate and fluently translate between business and technical requirements
• able to manage large complex budgets
• experienced in hiring consultants and third party contract negotiations

Lead Developer**

• Full stack developer experience
• Plutus development, especially algorithmic DAO smart contract primitive
• Define technical requirements
• Integrate multiple software components into a larger solution

Plutus Developers

• Full stack developer experience
• Plutus development of smart contracts, Plutus Pioneer preferred

<u>Team</u>

Product Manager: Dwayne Collard - 20 years+ IT Consultant, Solutions Analyst, IT Manager, Veteran Community Advisor <https://www.linkedin.com/in/dwayne-collard/>

Lead Developer: Jude Ben - 9 years+ Software Development , Plutus Smart Contract Development , Cloud and Infrastructure Engineer <https://www.linkedin.com/in/judeebene/>

Plutus Developers: As part of previous DAO-NET funding, DAO Coders has been building a small pool of, currently 3, contractors. This work will be done by new contractors that will be added to that pool.

** Note that the Product Manager and Lead Developer positions provide technical direction and oversight of the contracted development team. These are not full time positions which allows for these individuals to participate in multiple projects, made easier since the projects are interrelated. These individuals managed the 4 successful DAO-NET proposals from Fund 7, all of which will be completed prior to funding release for Fund 9.

Of the 3 successful DAO-NET proposals from Fund 8, one is scheduled for completion prior to funding release for Fund 9 therefore even if all 4 DAO-NET proposals from Fund 9 are funded the management team has the capacity to deliver on all the projects.

If you are funded, will you return to Catalyst in a later round for further funding? Please explain why / why not.

DAO-NET's initial primary focus is to complement the Project Catalyst funding process by providing an alternative funding process that requires less overhead, takes days instead of months, focuses on small projects (under $10K USD) instead of large projects and provides a means for funding the day-to-day expenses of ongoing services.

While the eventual intention is for the DAO-NET ecosystem to be self-sustaining, initial funding for subsequent redistribution to eligible projects via community voting is envisioned to come from future Project Catalyst proposals in Funds 10-12. (See DAO-NET: Small Developer Funding proposal for an example of how these future funding requests will look).

If Project Catalyst future funding requests are not granted then the project has contingency funding plans however the adoption rate to grow the Cardano and DAO-NET communities is expected to be significantly slower.

Regardless of future funding, the DAO-NET ecosystem which has several minimum viable products, all of which are open source, will be available for the community to use and to build upon.

Please describe what you will measure to track your project's progress, and how will you measure these?

The DAO-NET ecosystem will be launched prior to Fund 9 funding release therefore throughout the development period of this new feature, DAO Coders will track the number of DAOs and the number of members in the DAO-NET ecosystem and report its trends in its Project Catalyst Monthly Report.

What does success for this project look like?

This proposal should be one of the most significant drivers of DAO growth and development in the Cardano ecosystem. Within 6 months of launch there should be over 10,000 members and over 100 DAOs in the DAO-NET ecosystem.

Within 6 months of launch, DAO-NET should be completely self-sufficient in terms of funding and not be submitting Project Catalyst funding proposals.

Within 6 months of launch, DAO-NET should be funding a daily average of over 2000 ADA in projects through this minting process and contributing over 4000 ADA to the DAO-NET Treasury for member directed redistribution to member DAOs. At current exchange rates of $0.46 that would be just over $ 1 million USD per year in additional funding for the Cardano ecosystem.

These estimates should be very conservative and represent a total Return on Investment of over 1500% within 1 year for this proposal.

Please provide information on whether this proposal is a continuation of a previously funded project in Catalyst or an entirely new one.

This proposal is a continuation of the previously funded projects:

Fund 7:

DAO-NET: DAO Deployment Platform

DAO-NET: Legal Defense DAO

DAO-NET: Multilingual Translation

DAO-NET: Auditor DAO

Fund 8:

DAO-NET & A2T Sidechain Design

DAO-NET: DAO Token Market

Merchandise Store Pricing in ADA (Selling online brand merchandise using ADA is one of the alternative fund raising mechanisms for DAO-NET and any member DAOs)

and is related to the Fund 9 proposals:

DAO-NET: Small Developer Funding

DAO-NET: ZKP Sybil Defense Service

DAO-NET: Voting Wallet Integration