Incorporating the Nem Community Fund


#1

The nem community fund is growing rapidly, and many good companies are being awarded funding. It works well-ish in its current form, however it could be greatly improved and doesn’t really scale too well in its current form nor is it very sustainable.

Some idea’s i have been toying with include:

Making it more sustainable/self sufficient by acting more as a VC fund which takes some amount of equity in the funded companies. Given it would be a non profit in the sense that there are no shareholders, returns from equity ownership could be divided up between various initiatives aimed at adoption and sustainability of the entire nem ecosystem.

It would allow the community fund itself to employ full time staff dedicated to specific areas from proposal approval pre-public announcement, milestone reviews, due diligence and investigation prior to funding, networking, development manpower for funded companies and so forth.

Some profits could be fed back into the fund to replenish NCF capital for future investments.

Some could be allocated to supernodes in order to increase the sustainability of that programme until it becomes sustainable in its own right through some other mechanism (Think AI running side by side with nodes and pays for idle resources or a decentralised high speed exchange or something like that).

Some could go towards development efforts by employing full time devs that can be contracted out to companies in need or to focus on other nem ecosystem infrastructure like mobile wallets etc.

Incubators for funded companies are also a possibility.

Given the entity would be acting purely on the behalf of the community and nem ecosystem, transparency would be key, so a financial report/summary could be released once a year keeping the community in the loop and allowing questions to be asked if needed. This would also help maintain integrity within the entity and hopefully prevent abuse. Ultimately the entity should aim to be answerable to the community, even if only in a symbolic manner.

However, this all would require the fund being controlled by a legal entity (a non profit company akin to the foundations structure but with a very different mandate) and that i think would of course require the approval of the community.

There are not any reasons i can think of why proposals couldn’t still be put before the community for voting in most cases unless the company applying for funding has some specific reason why it can’t do this (releasing info to competitors etc.).

If you have any criticism of the idea, idea’s you want to contribute, or if you would generally support the idea, please leave a comment and give your two cents.


#2

I aggree something needs to happen and the fund taking some equity in the funded projects sounds like a great idea actually.
Another problem that needs to be solved though, apart from sustainability, is that there are too many projects to keep up with and there aren’t enough people voting. People don’t have time to do due dilligence on so many projects and we also don’t get the votes to fund projects because there aren’t enough interested people. The nem community imho, if it exists at all, is way too small for this kind of thing.

I don’t know what the solutions are but something definitely needs to happen.


#3

This could be a good idea if done properly, and figured out in all its kinks and details. There’s no room for error imo, but the result could be well worth it.

I think @memario raised a great point though, many times the community doesn’t vote, doesn’t care, or doesn’t know about any of these projects. So I think that’s just as important as managing the community fund when dealing with these projects.


#4

Only 2 projects can go voting at the same time. Besides there are not more than 3/4 projects in the forum at the same time looking for feedback.
Some people prefer to waste time in telegram complaining about when moon and lambo, others use that time to read the proposals, give feedback and vote. So I think it’s not a problem of the number of proposals.
Btw Last 3 proposals didn’t get enough votes. Only a few got the yes.
Now there is only Rocket shoes through the voting.
8 days left. Enough time to read deeply the proposal, give feedback and vote.


#5

My point is that I don’t even think everyone registered in this forum + telegram make up the neccesary 3%. The community aint big enough imho. you’re not going to get enough interest every single time.
I for example try to read every proposal and ask questions but lately I’ve been very busy and when I’m around I’d rather just chill on telegram and read up on what’s new, not do due dilligence on some project that doesn’t wow me at face value (I’m sorry to say this but most projects really don’t).


#6

Where can we see how much XEM has already been allocated to community funded projects?


#7

http://chain.nem.ninja/#/search/NAFUNDDWQUHMIKPV2JUH2VNCYEAQX3O7QKHECZUV

the amount in was the initial creation of the fund: 306m and 291m left so roughly 15m xem has been distributed since its creation.


#8

Is there any way we could incentivize project voting without causing any spam? Could we create a system where we delegate other (more experienced) people to vote on our behalf, for those who aren’t knowledgeable enough but would still like to participate? I think that way more people could be involved in the decision making process without actually being present… and they could change their delegated choice whenever they wanted to. Does that inevitably lead to corruption?


#9

I dont think that would be possible. Importance or balance would have to be given or lent to the delegate, and nem network doesnt support this.


#10

NEM has more than 200K followers on twitter, thousands in the different telegram groups, reddit, bitcointalk, blogs, youtube channels, instagram ,facebook and so on.
If somebody wants to incentivate votes has to be the guys behind the community proposals. They have to do marketing, encourage community, create conversation, convice the community why they deserve the vote.
If there is a nem fan out there and doesn’t know about community funds, projects it’s their fault. I think if you are member or blockchain supporter, you have to follow what that blockchain is doing.


#11

That’s a fair point but I’ve seen projects really push for votes and be very open to questions. That one project where you can save-up money using nem, those fellas basically lived on telegram and still nothing.
Maybe we can’t delegate the importance and therefore the vote, but we might be able to delegate some of the due dilligence ? Maybe we could elect proper community representatives that give projects ratings and then people can choose to either vote based on that or still do their own due dilligence. It would at least get the people to vote that don’t want to vote willy nilly but also don’t have the time to read all the proposals.


#12

We could simply have a vote to determine trusted representatives, like the US house of representatives. That works really well and everyone is very happy about it!


#13

I don’t know about voting, that may complicate things unnecessarily, but maybe something simpler would be more efficient, like any individual having the possibility of choosing to entrust someone else.

In any case, the community fund request proposals have been updated in the meantime, check them out here:

https://nem.io/community-fund/ 7
We have been heard!!

"Tier 1: USD 0 - 40k
Grant proposals will be submitted directly to the Community Fund Committee and approved internally. Grants will require no equity or token allocation, repayment, or community vote.

Tier 2: USD 40k - 150k
If a total of at least 1% of the importance of the NEM blockchain votes in favor of the proposal and the vote passes with a 65% majority, then the vote is considered accepted by the community. Otherwise, it fails.

Tier 3: USD 150k - 800k
If a total of at least 2% of the importance of the NEM blockchain votes in favor of the proposal and the vote passes with a 65% majority, then the vote is considered accepted by the community. Otherwise, it fails.

Tier 4: USD 800k - 5 million
If a total of at least 3% of the importance of the NEM blockchain votes in favor of the proposal and the vote passes with a 65% majority, then the vote is considered accepted by the community."

And I think this is the better solution in the end, of course with future modifications.


#14

It does make sense, my question would be what % of the community is active enough and really votes in these?


#15

From what I’ve seen so far, 2% is easily achievable. Even 3% can be easy to reach with some spamming. I think the most important thing imo is not that people don’t necessarily care enough to vote, but that people don’t know what they’re voting for - which can be in itself just as big of a problem.


#16

That’s the concern, for a company to put tons of effort and thought into it and then get funding or not based on the whims of disinterested community members seems unfair


#17

@RafiGlantz Yes, this is also one of our big concerns. 3% seems like a big target to hit, considering we have no visibility on the # of active members on the forum, much less on the # of those who actually vote…


#18

You’re right up to a point, 3% can be achieved with enough involvement and presence on all mediums (forum, telegram, reddit, twitter, etc.). Incentives also help a lot with marketing to voters, but most importantly, a project with strong fundamentals and solid proof of concept is hard to ignore, and it really shows when people consider the vote. And, come on, a team asking for hundreds of thousands of dollars or even more than that should put in the necessary effort in making sure they reached absolutely every person possible. And trust me, 3% is easily obtainable then.


#19

i agree, 3% is not so difficult to reach for bigger companies with impressive or flashy proposals combined with a bit of spamming; but we haven’t simply made it easier. We lowered the POI but we also in turn upped the barrier to entry by making business plans mandatory, implementing milestone restrictions and shifting committee vote to before public review/vote opposed to after. The POI is lower, but reaching voting stage is much… much harder - and likely to get harder as demand for funding increases.

This is a better methodology imo to allow for smaller projects with a lot of merit but little ‘fire power’ compared to larger companies that may already have many employees. Also, as the demand increases, so too will the committee reviews become more and more stringent, indirectly creating competition between proposals and therefore increasing the standard and valuation accuracy. the goal was never to simply fund everything, we want quality over quantity. :wink:

Getting funding from NCF should be seen as a stamp of approval, much in the same way getting VC funding is. If we want to achieve this, there has to be a high barrier to entry and only be awarded to the best companies after stringent review. We are also investigating expanding the scope of the community fund, however a legal entity is needed in place for this to happen, hence the origins of this thread :slight_smile:


#20

It’s not that difficult to reach, but if I’m looking at the right numbers 3% is only 250 people-ish…How do you reach all of the people here effectively?