For those who have been emotionally and time invested in Tezos have by now realised the constant bickering of the ‘TF not providing enough grants’ (which is not entirely true) to support dapp growth in the ecosystem. It has come to light that grants may not be granted, not only due to a difference in the direction from the TF but mainly down to regulatory reasons that the TF does not want to get involved in DeFi projects which could raise eyebrows with the SEC and other financial organisations around the world. In other words, funding Defi projects is risky due to regulatory reasons and reasons as to why the TF cannot always adventure down these routes.
Currently, we also have a project ‘Homebase’ which hosts DAO’s on Tezos to fund projects. These DAO’s are expected to be funded by the community. Currently, I see an issue with this, it is that the Tezos community is not wealthy enough to fund many ventures.
We also have Liquidity baking that has increased inflation by 2%, and despite the innovative idea, the incentive programme has not proved to be successful. This brings me to my endpoint.
If the Tezos community is struggling to source funds, and the TF is not able to venture into DeFi as much as it would like to; there should be an on-chain funded DAO, which is funded by the baking rewards of tezos - this does not mean we have to increase inflation, but merely reallocate approx 1% of staking rewards into a DAO wallet, governed by Bakers. Projects/peoples would then submit proposals on-chain and bakers would have to vote for these proposals on-chain.
This would allow for projects to request for funding from the community, for little things, such as; community managers. To bigger problems that we are facing, such as; dev grants for DeFi projects and even Liquidity with trusted/known projects.
This is not a big ask, I have seen this accomplished on another chain:
If we redirect only 1% of baking rewards, this could result in a $36m yearly grant at this rate and if Bakers are finding the pool too large, they could propose to vote the left-over XTZ in the DAO wallet.
I believe this will lead to a better decentralised community also.