This proposal updates the VeBetterDAO allocation and reward structure to enhance fairness, sustainability, and proper distribution of resources. The changes ensure that rewards are aligned with engagement, dApps remain competitive, and incentives drive long-term ecosystem growth.
Key Changes
Cap all non-user reward DAO withdrawals at 20% of the weekly allocation.
Cap dApp allocations at a maximum of 2x the amount received in the previous round.
If a dApp is capped, it will receive B3TR only up to that limit, ensuring controlled and sustainable reward distribution.
Provide dApp Endorsers 5% of the dApp’s weekly allocation, distributed proportionally based on their endorsement points (up to 100 total per dApp).
Endorsers will only receive 5% of the actual allocation distributed to the dApp, making endorsements more valuable for dApps with higher user-voted allocations.
Reduce Treasury allocation from 20% to 15%.
Allocate 5% of the total weekly rewards to GM NFT holders, distributed proportionally based on total minted NFT tiers rather than a fixed per-NFT model.
Motivation
These updates ensure that VeBetterDAO remains fair and sustainable by addressing concerns related to reward hoarding, incentive manipulation, and passive accumulation.
This proposal:
Aligns rewards with engagement, ensuring dApps that actively contribute to the ecosystem receive a greater share of allocations.
Encourages strategic endorsements, where endorsements shift toward dApps with strong user engagement and higher voting rewards.
Prevents stagnant dApps from passively accumulating B3TR, as capped allocations will reduce endorsements for underperforming dApps.
Introduces a scalable GM NFT reward system, ensuring rewards are fairly distributed based on the NFT tiering structure.
Reward Allocation Mechanism
dApp Allocation Caps
A dApp cannot receive more than 2x the previous round’s allocation.
If a dApp reaches its cap, it will receive B3TR only up to that limit, preventing any single dApp from accumulating excessive funds.
This ensures that the ecosystem remains dynamic and that rewards favor active participation rather than passive accumulation.
Endorser Rewards
Endorsers receive 5% of a dApp’s weekly allocation, distributed proportionally based on their endorsement points (up to 100 total per dApp).
Since Endorsers receive a percentage of the actual allocation distributed to the dApp, they are more likely to endorse dApps that earn higher user-voted allocations.
If a dApp is capped, its endorsers will only receive their 5% based on the actual B3TR distributed, creating a market-driven endorsement model.
This encourages endorsers to align endorsements with dApps that are most likely to receive significant quadratic voting rewards, reinforcing an ecosystem where endorsements follow engagement.
GM NFT Holder Rewards
5% of the total weekly allocation will be distributed among GM NFT holders.
Rewards will be based on the total number of minted GM NFT tiers, ensuring a proportional and fair distribution rather than a flat per-NFT model.
Example Calculation:
If there are 100 GM NFTs, with 50 Tier 1 (1 point each) and 50 Tier 2 (2 points each), the total tier weight is 150 points.
The 5% weekly allocation will then be distributed proportionally, meaning Tier 2 NFTs receive double the allocation per NFT compared to Tier 1 NFTs.
This ensures that GM NFT rewards scale dynamically with the ecosystem, maintaining sustainability as more NFTs are minted.
Expected Impact
Encourages fair reward distribution, ensuring active contributors receive a greater share of incentives.
Prevents excessive fund accumulation by teams, requiring dApps to engage users actively.
Everything sounds great Data. Thankyou for such a great proposal. My main question would be on this “Cap all non-user reward DAO withdrawals at 20% of the weekly allocation”. How would this be actually implemented? Is it writtten into a smart contract?
Cap all non-user reward DAO withdrawals at 20% of the weekly allocation.
I would personally prefer a 25% withdrawal cap of non-user rewards vs. 20% cap. This would still allow for 70% user rewards + 5% endorser rewards per week, and allow a little more flexibility for small teams that have other expenses and costs associated with their projects.
Other than that, really great proposal!
To @elcaliffo’s note, I would just change X-node language to be inclusive of all nodes (Economic and X-node). I also haven’t done the math for how the GM NFT reward structure would play out, but at first glance it seems more fair and better balanced than the current system.
To me the amount an xnode is given by the app should be at the discretion of the founders and agreed with the endorsers. This amount should be based on how much effort the xnode holder is making in promoting the app, using the app, suggestion features etc. An “automatic” payout just seems like a tax on the app.
Xnode holders who contribute nothing to the app and just “in it for the return” - founders have the right to boot them and look for more active xnode holders.
In my opinion therefore some efforts are needed by xnode holders to be engaged with their app to get a reward from it - and that cannot be measured at contract level
Apps have their development/marketing budget to execute any marketing strategy they want. They can pay from their budget to influencers to promote the app.
From what I understand, what Data is offering - market driven endorsement, that will automatically put apps on their toes to create a better product/provide better services in order to keep functioning. I don’t see how node engagement in the marketing of an app will improve the quality apps provide to the user.
Not sure 100%, how it works, but it looks like there’s a surplus of endorsement points. Is that correct?
Is there a way to calculate, how many endorsement points there are and how many there will be after the changes in nodes?
For this to work demand for endorsement points needs to be higher then the supply of points. If that is the case, apps will be forced to look for extra revenue streams and make sure they attract voters.
I’m not a node holder, not involved in development of any app. Regular degen from the community here.
Yes this could be written into the contract. The rewards contract has a “bucket” in the contract for each app. The amounts in the bucket are updated for each withdrawal. So for my proposal each app would get 3 buckets.
Bucket 1 - 70% for user rewards
Bucket 2 - 5% for endorser rewards
Bucket 3 - 25% team use which includes the current items: team allocation share, marketing, development, other
The reason the automatic endorser payment is included in the proposal is to treat endorsers in a similar way as app VCs. A current issue we are seeing/anticipate seeing is how to promote and incentivize great working apps, while demoting and de-incentivizing poorly working apps.
Creating a structure where the endorsers are automatically granted a 5% allocation:
Directly aligns endorser points with community votes with quadratic power for rewards
Endorsers are financially motivated for their apps to increase their reach to new users and expand the user base for an increase in votes/users based on the quadratic power
When combined with the app allocation limit of 2x to prevent stockpiling of rewards, if an app does not participate in the dao by rewarding users, the endorser does not receive a payout from that app. This will further incentivize apps to be user driven in their rewards or risk losing their endorsement in the DAO.
Why - for clicking a button? Seems nuts that apps should “have to pay a tax” for that - sure im all for endorsement to keep standards high. But really up to 5% of the weekly allocation - thats more than some founders make who put in all the effort!
What i propose is that all GM Node holders endorse apps - that the wider community does this - and is “tax” free. Yes xnodes ROI is a pittance - but to tie ur earnings to the success of an app where u put in 0 hrs effort to make it a success … thats just a tax
Please run ur numbers too 5% of weekly allocation is like a 2x->10x increase to some apps of their endorser rewards - and as such these apps will use their treasury to vote against
Bundling multiple changes into a single proposal makes it difficult to evaluate each aspect on its own merits. Some stakeholders may support certain adjustments while opposing others, which can make reaching a consensus more challenging.
I believe each of these areas should be discussed separately to ensure a balanced and well-informed decision-making process.
My initial thoughts about 2 and 3:
GM NFT Holder Rewards
There is already a voting reward multiplier in place to incentivize GM NFT holders. Allocating an additional portion of rewards to them seems unnecessary.
Endorsements
This aspect is more complex. IMO, VeBetterDAO should encourage innovation, allowing new projects to experiment, succeed, and even fail without artificial constraints.
Again, it should be noted Node holders are already rewarded with free GM NFT upgrades and additional voting reward multiplier comes with the GM NFT.
On the other hand, incentivizing node holders to back only the most successful projects could reduce opportunities for emerging dApps.
