Proposal: Grant Transparency & Fund Recovery

VeBetterDAO
1

:receipt: Grant Transparency & Fund Recovery Proposal

Summary:

This proposal introduces new requirements for all dApp grant applicants to improve transparency, ensure responsible use of treasury funds, and strengthen trust in the VeBetterDAO grant process.

Proposal:

1. Cost Breakdown Requirement:
All dApp proposals must include a clear and detailed explanation of how the requested grant amount was calculated. This should include estimates, justifications, and any relevant assumptions or references.

2. Spending Plan Disclosure:
Each proposal must outline how the grant funds will be allocated across budget categories (e.g. development, marketing, audits) and provide an estimated timeline for delivery.

3. Overfunding Prevention & Fund Recovery:
As targets for each tranche are hit, dApps are to provide an expenditure report in order to receive funds from the following tranche. The amount of unspent funds will be deducted from the following tranche to prevent overfunding.

Rationale:

This proposal ensures fair and transparent use of DAO resources, discourages overfunding, and enables voters to make more informed decisions. It reinforces the values of accountability, sustainability, and trust in the grant process.

Implementation:

These requirements will be integrated into the dApp submission interface and grant review workflow:

Proposals missing a cost breakdown or spending plan will be ineligible for voting

A standardized reporting template (below) will be required between tranches to qualify for continued funding

:clipboard: Standardized Grant Expenditure Report Template (Draft)

Project Name:
Name of the dApp/project

Grant Recipient(s):
Team name and wallet address(es)

Tranche Number:
e.g., Tranche 1 of 3

Date of Report Submission:
DD/MM/YYYY

:white_check_mark: Milestone Completion Summary

Milestone Goal:
Brief description of the objective for this tranche

Was this milestone achieved?

Yes

Partially

No

Evidence of Completion:
Links to GitHub commits, product demos, dashboards, audit reports, etc.

:money_bag: Expenditure Breakdown

Development ā€“ Smart contract work ā€“ $2,000
Marketing ā€“ Twitter campaign ā€“ $500
Audit ā€“ Security review ā€“ $1,000
Services/Tools ā€“ Hosting, APIs ā€“ $200
Other ā€“ Legal/ops ā€“ $300
Total Spent: $4,000

:coin: Unspent Funds Summary

Total received for this tranche: $5,000
Total spent: $4,000
Unspent amount: $1,000
Return method: e.g., deducted from next tranche or TX hash to treasury wallet

:speaking_head: Notes or Challenges Faced

(Optional ā€“ use this section to share blockers, learnings, or changes)

Thanks for taking the time to read this proposal. I welcome any and all criticisms/concerns that aims at encouraging overall grant transparency and preventing overspending from the DAO Treasury.

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Iā€™d add detailed description of changes as itā€™s the new requirement for proposals (not sure if itā€™s active yet).

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I can definitely add that. Good shout! Thanks Morb

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I think it could be better if foundation also provide something like dashboard for dApp that requesting for funds with milestone checkpoint, and it shows publicly so every step is recorded and transparency is showed up, but keep in note, this is just my personal opinion.

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Thanks for your feedback! I think this would be a great addition looks-wise, but I just feel like it might be a bit too much for this proposal. I also donā€™t know how difficult that would be to implement, and this proposal is something Iā€™d like to go live sooner rather than later.

The main thing that Iā€™d like to tackle with this proposal is simply that grants are requested with clear estimated expenditure expectations accompanied by a plan regarding what the grant will be allocated towards.

I think dApps needing to submit a report before each tranche is unlocked would be good enough, especially since everything can be traced on the Blockchain.

It would be up to the foundation then to verify the reportā€™s claims before the next tranche from the treasury is released.

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UPDATED VERSION 16/06/2025

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Iā€™ve now included an updated version of the proposal based on your suggestion. If you have anything to add Iā€™d love to hear it!

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This level of transparency and accountability is long overdue. Itā€™s exactly what we need to protect the treasury and elevate the quality of dApp proposals. Great proposal @Plunk I will make sure to get the word out whenever this drops!

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Hey Plunk,

Thanks so much for putting together a well-thought-out proposal on grant transparency. Itā€™s clear youā€™ve spent time thinking through both the pain points and how we can raise the bar across the board. These are exactly the kinds of conversations weā€™re excited to see in the community.

We really like the spirit of your suggestions, especially the emphasis on cost breakdowns, expenditure reporting and keeping the community informed throughout the grant lifecycle. Weā€™ll definitely take these into consideration as we continue to evaluate and refine the program.

That said, updates to the process will need to be rolled out gradually. Weā€™re still learning what works best for VBD and want to give applicants time to adapt as expectations evolve.

On the Foundationā€™s end, weā€™ll kick things off with a basic quarterly report starting end of Q3 2025. This will include awarded grants, approved milestones, and payments made. Weā€™re also encouraging applicants to be more transparent with budget breakdowns and to avoid over-asking. (Feel free to ask for this info directly when proposals are shared on Discourse, weā€™d love to see more community<>project interaction.)

For now, weā€™re keeping the process a bit more flexible in these early stages to lower barriers and attract more builders and founders to VBD. That said, weā€™re still upholding a baseline for quality. Anyone who makes it to the voting stage has shown relevant experience, community involvement, or a clear passion aligned with Vechainā€™s goals. The final decision and DD remain with you/our Vefam.

We love seeing proposals like yours that push us to be better. Keep them coming, and thanks again!

With love and thanks,
The Foundation Team

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Hey Team,

I really appreciate the time you took to write a response to my proposal! Itā€™s really important that we hear from all sides, and not just that of the community.

I completely agree with you that itā€™s important that updates are rolled out gradually, as the grant process is still in its very early stages. However, I donā€™t look to change much with this proposal. I donā€™t see this as a barrier to entry for dApps in any capacity. Let me explain why:

The way things currently are, dApps do not need to outline what theyā€™re going to be spending their funds on. This leaves the doors wide open for dApps to request the maximum amount of allocation without needing to show any reasons as to why. In my opinion, this should be the very first question asked (and answered) when someone is requesting free money.

You mentioned that this could be questioned on Discourse. Leaving this all for discussion on Discourse means that the onus would be on someone from the community to copy and paste their question each week. Not everyone checks Discourse on a weekly basis - most users never use it. Thereā€™s also a good chance that these questions wonā€™t even get answered. If a dApp is not required to declare their estimated spending, why should they? Especially if it could dampen their chances of getting their grant approved. This is exactly what my proposal is trying to achieve - to force dApps to provide this information.

If a dApp cannot provide an estimated expenditure report for any reason, or if they feel that this is too much of an ask, what does that say about the dApp as a whole? Any dApp that wishes to be successful would have a good idea as to what their business costs will be. This shouldnā€™t be an issue for any dApp who have their heads screwed on and their intentions in the right place.

This isnā€™t to say that the dApps who get through the grant process arenā€™t trustworthy or deserving of a grant. Itā€™s just that, in my opinion, itā€™s a no-brainer that someone should have to explain what theyā€™re going to be spending their grant money on. This would be a very big deciding factor as to whether a dAppā€™s grant proposal gets my vote.

Iā€™d like to ask you what you feel is the drawback to this, specifically? I struggle to see how this could be anything but positive for everyone involved. dApps that have an estimated expenditure report would:

  • Improve their overall organisation within the business.
  • Increase transparency.
  • Increase trust within the community, who are essentially the gatekeepers to whether funds from the treasury are released.

Thanks again for your response, and I look forward to hearing your counter-arguments to my points.

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Hi Plunk,

Thanks for the thoughtful response. We definitely agree with your view that requiring more transparency is a small but meaningful step toward holding projects more accountable. Weā€™ll be sure to incorporate your suggested template fields into our transparency reporting going forward.

Interestingly, some of the requirements you raised are actually things we already assess and rationalize internally. Itā€™s just become second nature to us, so we didnā€™t realize the community would benefit from seeing that level of detail too.

On the topic of grant amounts and expenditures: most applicants do provide cost breakdowns when they first apply, usually by category (e.g. development, marketing, community, operations) rather than by milestone. Internally, we tend to focus on core development costs needed to deliver the first working version of their dApp on VeBetterDAO. (We trim funding requests that go beyond this $ amount, unless thereā€™s a clear and necessary link to user growth.) This forms our baseline, and itā€™s usually tied to user numbers to ensure real utility.

When it comes to how precisely funds are spent, we allow some flexibility, especially when teams overdeliver or drive value at the end of the day. Any ā€œunspentā€ funds in that case are often seen as a reward for delivery and commitment to VeChain. That said, milestone reviews are enforced, and if deliverables or user metrics arenā€™t met to a satisfactory level, we withhold the funding until issues are resolved. Hopefully that gives the community confidence that grant funding isnā€™t just handed out with no strings attached.

One thing weā€™d love your (and the communityā€™s) input on,

How do you think we can improve the grant proposal form? What exactly would you want to see, and at what level of detail?

When designing the current format, we tried to balance conciseness with readability for voters. Often, the original grant proposals come with more detail, but as we iterate with project teams, we sometimes condense or omit info we assume is understood in a bid to standardize formatting but may actually be helpful for voters to see.

If you have specific suggestions for improving the proposal fields or structure, please do share with us. And again, we encourage more community feedback at the Discourse stage, where questions can help us strengthen each proposal before it goes to vote.

Thanks once more for this constructive conversation.

Best,
The Foundation Team

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Hey Team,

Thanks so much again for your detailed reply. It has definitely shed some light on the important behind-the-scenes information of the grant process that many of us are missing. Itā€™s reassuring to hear that many of the concerns Iā€™ve raised are already part of the Foundationā€™s internal review process.

From the outside, as youā€™re aware, none of this prior diligence is visible, and as such itā€™s difficult for voters to feel confident without seeing your rationale explicitly laid out. I think that itā€™s crucial that this information is provided to the community. This doesnā€™t just build trust, but it also builds a stronger sense of involvement from the communityā€™s side. The more involved the community feels, the more likely that the community will participate.

Each week we are seeing more and more comments on grant proposals that outright reject the grant process, and are voting ā€˜noā€™ as a result. This is a huge problem that I truly believe that this proposal would help to reduce. For instance, the B3TR-back idea within this proposal would provide a sense of control within the community, knowing that, if the dApp has over-asked, that not all is lost as this would be returned back to the treasury. I appreciate your idea of leaving the unused B3TR as a reward for the dApp, but once again, this would dissuade users on voting ā€˜forā€™, as users already fear that too much money is being taken from the treasury (I do not currently share this view).

One could argue that the proofs of invoices/receipts from each dApp could be faked, and thatā€™s a possibility, but people will always try to cheat the system - especially when money is involved. If all of this is documented on Discourse, for example, it would build pressure from the dApps, who would be liable to scrutiny from the community, as these invoices and receipts can be checked by anyone who wants to analyse them. Otherwise, we would just have to take their word for it.

For example, I have spotted comments from community members who assume that the grant money is being sent out and that nothing is being done with it, or worse - that itā€™s being ā€˜dumpedā€™. Having enforced public spending reports provides a great opportunity to prevent those types of concerns that can be extremely damaging to the entire grant process.

My proposal isnā€™t trying to overhaul how grants are managed, nor is it about doubting the Foundationā€™s due diligence. Itā€™s about reinforcing the values of transparency and decentralization that the DAO model is beautifully built on.

I can see how this is something that could be incorporated voluntarily, without the need of a proposal, and itā€™s great to know that youā€™re willing to go that direction. Having said that, having this formalised via a proposal means that this would create a consistent and enforceable standard for all grant applicants throughout the dAppā€™s grant lifetime, and not just something that can be applied or omitted at discretion behind the scenes. If thereā€™s no set rule in place, such as what a proposal provides, then it canā€™t truly be enforced.

I really would like to emphasize that this does not come from a place of distrust with the Foundation or the grant process. It comes from a place of ensuring clarity and transparency through strict, enforced written rules, before distrust has a chance to rear its head.

Whilst I donā€™t have specific suggestions for improving the proposal fields or structure, I leave the floor open to any other community member who has suggestions that theyā€™d like to share.

Once again, I sincerely thank you for your thought-provoking response, and I hope you can see why I believe that a concrete proposal is necessary for these rules to be put in place.

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