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Decentralized Treasury Model

Decentralized Treasury Model

by Cryptoguard

May 14, 2021

1 PART

3 contributors

Completed

Summary

This proposal introduces a new decentralized treasury model to support, promote, and expand Particl into a stronger-than-ever ecosystem. This will be accomplished by raising both the yearly staking reward rate and the developer block rewards, which will now be referred to as the "treasury block rewards". All the treasury block rewards will then be automatically deposited, by the protocol, into a Treasury Fund.

Anyone can claim funds from the Treasury Fund to support initiatives by publishing proposals on the CCS and get them approved by the stakeholders using on-chain voting.

Rationale

As of November 2020, after slightly more than three years, the Particl Foundation has run out of the funds it raised from community donations and, as such, has left the Particl project with no funds to work with.

With today's fast-paced and rapidly evolving blockchain industry, any serious project needs to ensure it has enough funding to support its ecosystem, promote its product(s), and grow its community.

To address this critical issue, the Particl team has consulted with a few advisors and community leaders and put together a proposal for a new decentralized treasury model that, if approved by the Particl stakeholders, would bring enough funding to self-sustain the project at current prices, boost community resources, and provide a brand new legal entity to support the project.

The Treasury Model in Detail

  • Proposed yearly coin emission rate: 8%
  • Proposed treasury block rewards: 50%
  • Proposed total yearly staking rate (APR for stakers): 4%

This proposal suggests increasing the yearly coin emission (staking) rate from 2% to 8% for two years and then decreasing it by 1% every two years until it reaches 6% and stays at that level. Every time the network stakes a block, 50% of the block rewards would then be redistributed to stakers and the other 50%, into the Treasury Fund to fund, support, promote, and grow the project. That amounts to 4% of the total circulating supply every year.

This brings the yearly PART coin emission (staking) interest (APY) to a minimum of 4%. Because APY depends on how many coins are staking on the network, the true APY always ends up being higher than its minimum rate. For example, if 50% of all the PART coins are staking on the network, the staking APY goes from 4% to around 8% yearly.

  • Note: Once the yearly coin emission (staking) rate reaches 6%, it will remain at that level for as long as no other CCS proposal gets pushed and approved by the community.

Self-Sustainability

This proposed treasury model is all about self-sustainability. Indeed, after the team claims funds from it, it will provide enough funding to cover salaries for the core team, pay for all related expenses, and fund various promotional budgets at current (and lower) PART prices.

It also gives the extra resources required to expand the team with more talents and add more expertise to the table. More details on the internal restructuring of the team and how it intends to claim and use those funds will be provided in a separate proposal if and after this proposal is approved.

During its first year, the Treasury Fund would earn an average of 39,166 PART every month. At current price levels, this is sufficient to sustain the project and fund various initiatives to take Particl to the next level. The proposed model is viable down to a PART price of around $0.50.

Of course, the Treasury Fund exclusively gets funded with PART. An increase in the trading value of the coin would then make the incoming treasury fund claims more valuable in fiat, allowing the team (and anyone else that claims funds from it) to expand further, fund more initiatives/programs, stimulate the community to a greater degree, and accelerate the growth of the entire ecosystem even more.

Proposal Approval and Treasury Governance

Particl stakeholders will have the final say over the governance and allocation of funds towards initiatives.

To claim funds from the treasury, the Particl team, and any other party wishing to do so, will need to publish CCS proposals explaining the nature of the claim, how the funds are intended to be used, and what to expect in terms of deliverables. Then, the proposal will go into a voting period and will need to be approved by the stakeholders.

To favour flexibility, there are no set guidelines or rigid rules regarding what to put in such proposals. The only requirement for any proposal owner, aside from the fact that it needs to benefit the Particl ecosystem directly, is to make their proposal as straightforward as possible and to convince the stakeholders to vote in favour of the proposed idea.

  • To learn more about Particl’s on-chain voting system and how to submit and vote on CCS proposals, refer to this Particl News blog post.

Timeframe

Because this proposal requires a protocol consensus vote (major change in the protocol), its voting phase will last for 10,080 blocks.

Parties Involved

At every block, the protocol automatically deposits funds into a 3-of-5 multi-signature address managed by a few members of the Particl team. Each signatory has agreed to execute payouts according to the results of proposal votes.

Here are the signatories tasked with managing the treasury fund.

  • Tecnovert
  • Gerlof van Ek (Crz)
  • Cryptoguard
  • Dasource
  • Imran

FAQ

Q: Is the 10% Foundation donation being eliminated when the treasury model goes live? A: Yes, the treasury model completely replaces the previous funding model.

Q: What happens to the treasury funds while they are not used? Are they staking? Do they vote on proposals? A: Unused treasury funds simply remain untouched in the Treasury Fund. They are not put up for staking or being used to vote on proposals. Any coin in the Treasury Fund cannot be used, transacted, or staked without the approval of stakeholders.

Introduce a decentralized treasury model and treasury fund

To be paid: 100% (1 PART)

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