VeBetterDAO: Optimizing Weekly dApp Allocation to Encourage Innovation and Growth

VeBetterDAO
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Background & Purpose

Recently, some low-quality dApps in the VeBetterDAO ecosystem have claimed the minimum allocation, then exited while keeping the tokens, without contributing to the ecosystem. This has resulted in inefficient fund utilization and has disadvantaged truly innovative and active dApps. To ensure that resources are allocated to high-value and growth-oriented projects, we plan to adjust the Weekly dApp Allocation mechanism, promoting a more competitive and sustainable ecosystem.

Current Minimum Allocation Mechanism

Currently, VeBetterDAO distributes dApp allocations as follows:

  • 30% is allocated as a minimum allocation, equally distributed among all eligible dApps to provide baseline funding.
  • 70% is distributed based on community voting, allowing popular dApps to receive higher rewards.

While the minimum allocation was initially intended to help new dApps during their early stages, some projects have exploited the system by claiming funds without updates or long-term commitment. To prevent resource inefficiency, we propose eliminating the minimum allocation and replacing it with a more effective support mechanism.

Optimization Plan: Removing Minimum Allocation & Introducing VBD Grant

To address these issues, we propose the following changes:

  1. Remove the minimum allocation, ensuring that only actively contributing dApps receive funding.
  2. Introduce VBD Grant to support new dApps, providing initial funding to projects with real potential.
    • VBD Grant will be subject to community voting, ensuring that funds go to high-value projects.
    • The Foundation will establish a structured Grant program, ensuring a fair and transparent selection process.
    • The Grant will provide a fixed, limited amount of startup funding, preventing abuse while encouraging dApps to enter the competitive ecosystem.
  3. The 40% allocation from the X-Allocation Pool will now be entirely distributed based on votes, motivating dApps to engage in development and community activities to earn support, rather than relying on guaranteed funding.

Key Benefits of This Change

  • Prevents low-quality dApps from exploiting the system, ensuring more effective resource allocation.
  • Encourages dApps to compete based on innovation and community support, fostering a more dynamic ecosystem.
  • Ensures fairness through a structured Grant program managed by the Foundation, enhancing transparency.
  • Optimizes the use of DAO funds, allowing higher rewards for impactful dApps.

This adjustment will help build a more sustainable and innovation-driven VeBetterDAO ecosystem, ensuring that funding is directed toward projects that contribute to long-term growth.

4 Likes
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Can you share more details of the grant? new apps rely on the minimum allocation to get through the 1st few weeks or so

1 Like
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It was designed to give new X2E apps a bootstrapping boost. Now with more and more X2E applications joining VBD, it’s the right time to remove basica allocation and motivate good X2E apps to perform to gain the support from community.

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Good idea. How will this impact the max allocation?

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The max cap is 20%.
QF is based on number of voting wallets + square root token amount.
High tier dApps will receive a bit more than before.
Low tier dApps will receive less.

dApps needs to keep improving to get more votes.

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Following the recent proposal to remove the minimum allocation in VeBetterDAO, an important question arises—how can we ensure that promising new projects still receive the early-stage support they need to thrive?

Without initial visibility or incentives, high-quality dApps may struggle to gain traction in their critical early phases, ultimately limiting ecosystem diversity and growth.

To address this challenge, we propose strengthening two vital pillars of support:

:compass: 1. Visibility for New Projects

Ensuring that innovative dApps are brought to the community’s attention through featured placements, AMAs, or dedicated community showcases.

:money_bag: 2. A Structured Grant Funding Channel

Introducing a clear and transparent Grant Program to support early-stage development, rewarding ideas with real potential to contribute to the VeChain ecosystem.

:hammer_and_wrench: Proposed Grant Program Flow

Step 1: Application Submission

Projects apply for a grant by submitting relevant information, including a business plan, team overview, and value proposition.

Step 2: Review & Shortlisting

The Grant Team, comprising Foundation members and subject matter experts, evaluates submissions and engages with strong candidates to refine proposals.

Step 3: Community Voting Preparation

Once approved, the VeChain Foundation purchases the necessary B3TR tokens to bring the grant proposal into the VeBetterDAO voting stage.

Step 4: VOT3 Holder Vote

VOT3 holders vote on the proposal.

  • If approved, funds are released from the treasury.

  • For milestone-based grants, remaining funds are held in the Foundation wallet and released based on project deliverables, with ongoing oversight by the Grant Team.

:puzzle_piece: Milestone Flexibility: Making Grants Developer-Friendly

Some smaller teams may worry that traditional milestone expectations—such as high user counts—could be difficult to meet early on. To address this, we propose a multi-dimensional milestone evaluation framework that provides more flexibility while still ensuring accountability.

:pushpin: Sample Milestone Criteria (applicants may propose a combination):

  • Product Development Progress: Alpha/beta version online, core features completed, smart contracts audited, etc.

  • Community Growth: Early user traction, community activity, feedback mechanisms.

  • Ecosystem Integration: Collaborations with other VeChain dApps or real-world use cases.

  • Go-to-Market & Communication: Clear marketing strategy, participation in community events or AMAs.

Projects may also submit a custom growth path during application, outlining realistic, measurable goals tailored to their stage and vision.

This design allows grants to be distributed in phases, aligning with each project’s development journey while avoiding one-size-fits-all expectations.

:bullseye: Key Benefits

  • Early Support for Builders: Helps innovative dApps gain recognition and funding before they can rely solely on votes.

  • Informed Community Decisions: Proposals are backed by business plans and reviewed by a qualified team, enabling voters to make better decisions.

  • Accountability & Milestone Tracking: Ensures transparency and measurable progress with flexible deliverables.

  • Ecosystem Growth: Encourages long-term innovation, rather than short-term opportunism.

:loudspeaker: Call for Feedback

We believe this framework strikes a balance between supporting new dApps and preserving the DAO’s meritocratic principles. It ensures high-potential projects are given a fair chance to succeed—without diluting the importance of community-driven decision-making.

We’d love to hear your thoughts:

  • Are there areas we could simplify or improve?

  • What should be the core criteria for grant eligibility?

  • How can we best promote and track supported projects?

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As a smaller team on the DAO, we echo the sentiment that traditional milestone expectations are too difficult to meet early on. Especially as we have gated our dApp more aggressively to combat the bad actors/farmers/etc. The initial terms are now outdated and not realistic at all for us.

We haven’t received any grant support from the Foundation thus far when we would really benefit from it, as a community-founded dApp.

For example, one of the initial goals was to have our alpha/beta version online. But it was just removed as a milestone instead of appropriately rewarded, since we already had it on testnet when we applied for the DAO.

I’m a little worried about relying solely on the grant program to support dApps while no guaranteed minimum from allocation. Could a more modest approach be a better solution than all-or-nothing? We are really putting a lot of pressure on the grant program working well for all dApps coming onto the DAO, when I don’t think that has been historically the case (a lot of bad actor dApps received grants).

2 Likes
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Hi MrWhittleman,

Thanks for sharing your thoughtful feedback — it highlights some key challenges small, community-founded teams are facing. Based on your concerns, here are a few measures we’re actively considering as part of the upcoming grant program and broader dApp support strategy:

  1. “Proven Traction Exception” Clause
    We’re introducing a clause that allows teams with prior ecosystem contributions (e.g. gated testnet use, anti-farming mechanisms, early traction) to receive retroactive credit during milestone planning. This helps ensure meaningful early work is not overlooked.

  2. Upfront Grant Payment
    Once the grant application is approved through community vote, an upfront payment will be released to support projects that successfully deploy on VBD and pass initial grant evaluation. This helps small teams with early growth costs, without reintroducing blanket minimum allocations.

  3. More Transparent Grant Process
    Eligibility and evaluation criteria will be communicated more clearly, and the Grants team will maintain check-ins to adapt milestones where necessary during execution.

1 Like
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[Proposal] Enhancing VeBetterDAO with Performance-Based Allocation and Strategic Grant Program

Summary

This proposal introduces two key upgrades to the VeBetterDAO funding framework:

  1. Update the weekly dApp allocation formula to 100% based on voting result. (Current: 30% allocated evenly + 70% based on voting result.)

  2. A structured Grant Program to support early-stage, public-good, or strategic initiatives that are not yet suited for competitive weekly votes.

Together, these changes ensure that VeBetterDAO remains community-governed, innovation-friendly, and strategically aligned with the long-term growth of the VeChain ecosystem.

Motivation

VeBetterDAO’s current weekly allocation model includes a base-level funding component for all eligible dApps. While this supports inclusivity, it reduces alignment with voter-driven principles and can distribute limited funds without merit-based justification.

Simultaneously, innovative projects in early development or those contributing to ecosystem-wide infrastructure often lack sufficient visibility to succeed in the competitive voting pool. To address both issues, this proposal introduces a two-track solution: 100% performance-based allocation for weekly rewards, and a complementary Grant Program for ecosystem support.

:bar_chart: Updated Weekly Allocation Structure

Current Allocation Structure

The weekly distribution from the X-Allocation Pool is currently divided as follows:

  • 30% evenly distributed among all qualified dApps

  • 70% based on each dApp’s share of votes in the weekly round

Proposed Change

100% of the X-Allocation Pool will be distributed based solely on the percentage of votes each dApp receives during the weekly cycle.

This approach strengthens the integrity of DAO voting, ensuring that only projects with meaningful community support receive rewards.

:bullseye: VeBetterDAO Grant Program

To balance this performance-based model and foster long-term innovation, the DAO will introduce a dedicated Grant Program, funded by the Treasury and facilitated—not financed—by VeChain Foundation.

  • Funding Source: VeBetterDAO Treasury

  • VeChain’s Role: Facilitator for evaluation, milestone verification, and submission coordination

  • DAO’s Role: Sole funding authority via Snapshot voting

:wrench: Grant Program Flow

  1. Application Submission: Teams submit a business plan, technical roadmap, and value proposition.

  2. Review & Shortlisting: A Grant Team reviews submissions and refines strong applications.

  3. Grant Proposal Support: VeChain supports shortlisted proposals entering the voting stage.

  4. Community Vote: If approved, the DAO funds the proposal into a VeChain-managed wallet. The funds will be released based on the approved payment terms and milestones.

:puzzle_piece: Milestone Flexibility & Builder-Centric Design

Projects can define their own development paths, selecting from:

  • Product Progress: Testnet/Mainnet launch, contract deployment, audits

  • Community Growth: User activity, feedback channels, traction

  • Ecosystem Integration: Partnerships with other dApps, real-world impact

  • Go-to-Market: Scalable business/revenue model, marketing rollouts, events, community outreach

:small_blue_diamond: “Proven Traction Exception”: Prior contributions (e.g., testnet validation, gated access, early traction) may qualify for retroactive milestone credit.

:pushpin: Oversight & Governance

  • VeChain does not custody funds for its own benefit, but oversees milestone verification

  • Funds are DAO-controlled, returned to the Treasury if milestones are missed or projects are terminated

  • Transparency is ensured through clear criteria, milestone tracking, and community reporting

:three_o_clock: Program Duration & Review

:spiral_calendar: The Grant Program will be piloted for 12 months (until the end of Jun 2026), with review to assess:

  • Community participation

  • Impact on innovation and ecosystem expansion

  • Recommendations for continuation or revision

:compass: Upcoming Exploration: Lower-Threshold Grant Proposal Process

In parallel with the launch of this Grant Program, the DAO will explore a grant submission proposal process within VeBetterDAO, reducing the initial support deposit threshold. This potential enhancement may include submitting grant proposals with a lower VOT3 deposit requirement, easing the burden for proposal support.

This direction is already under active research. A separate governance proposal will be introduced if DAO and community feedback support its implementation.

1 Like
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I support moving to 100% allocation based on votes, but I suggest that the 30% evenly distributed among all qualified dApps should not be merged into the vote-based pool.
Instead, it should be redirected to the VeBetterDAO Treasury, with funds earmarked specifically for the grants program.

This approach would:

  • Avoid touching the core Treasury
  • Optimize a currently non-meritocratic allocation
  • Reduce the circulating emission of B3TR

It’s a win-win solution that supports innovation while maintaining long-term sustainability for VeBetterDAO.

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Thanks for the great suggestion.

I chatted with the tech team about the implementation. The current smart contract is designed to be flexible — the 30% evenly-distributed portion is a configurable parameter. By setting it to 0%, the system will naturally execute 100% vote-based allocation, without needing to rewrite or restructure anything.

Also worth noting: there’s a cap per dApp built into the system. If a dApp receives more than the cap, the extra goes straight back to the Treasury.

For this stage, keeping things simple helps us move faster without touching the core contracts or introducing complexity.

Appreciate you raising this — it’s exactly the kind of discussion we want around the proposal.

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I understand the need to move quickly without changing the smart contract right now — in that case, why not use the excess funds that return to the Treasury (due to caps) as the source for grants, instead of pulling from the Treasury itself?
The Treasury has already been reduced by 5% to fix the GM NFT issue, so using it again to patch another gap doesn’t seem sustainable.
Also, this proposal — as written — will increase the circulating supply of B3TR, and I’m concerned about how easily Treasury funds can be unlocked without a defined maximum cap for this new grant program.
I fully support the idea, but we should add safeguards to protect the long-term health of the ecosystem.

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Thanks a lot for the thoughtful feedback.

Just to share a bit more on what we will add to the proposal:

:white_check_mark: Grant Program Budget Controls

We’re setting caps to keep the program sustainable:

dApp Grants (for application builders): max $30,000

Infrastructure Grants (for ecosystem tools or public goods): max $50,000

:busts_in_silhouette: Grant Review Process

All applications will be reviewed by a cross-functional team from the VeChain, including contributors from Product, R&D, Marketing, and Operations. This ensures well-rounded evaluation and strategic alignment.

:chart_increasing: Milestone-Based Disbursement

Each approved grant will include custom milestones tailored to the project. Funds will be released only when specific deliverables are met. If the grantee fails to meet the agreed milestones, the remaining grant funds will be returned to the Treasury.

:bar_chart: Base Allocation Timing

We’ve also taken community feedback into account regarding the base allocation. To ensure a smooth transition, the allocation adjustment will be made after the Grant Program went live.

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:tada: This proposal has officially been posted on VeBetterDAO Governance:

:link: VeBetterDAO

A heartfelt thank you to everyone who contributed ideas, feedback, and support throughout its development. Your input has been invaluable in shaping a stronger, more inclusive future for the ecosystem. :folded_hands:

Let’s keep building together! :flexed_biceps:

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I won’t complain since I didn’t reply before this proposal was published, but respectfully please reconsider and stop supporting with foundation wallets. It will be damaging to the current structure of the DAO and feels rushed.

2 Likes