# ADA Litepaper

## 1. Introduction

**ADA** (Allo Domain Allocations) is a framework designed to streamline the distribution, governance, and accountability of dedicated funds toward well-defined goals. It incorporates:

- **Dedicated Domain Allocation** to ensure each pool of funds is exclusively used for a specific objective.
- **Expert Governance** using a Safe multisignature (multisig) model for transparent decision-making.
- **AI-Assisted Screening** to efficiently filter and improve applications both before and after expert review.
- **KYC & Compliance Attestations** to simplify regulatory and tax verification through reusable, auditable, on-chain attestations — ensuring eligibility while reducing administrative burden.

This litepaper describes the rationale, architecture, and workflow of ADA, illustrating how domain-specific funding pools can be managed to achieve measurable outcomes across ecosystems - from public goods and economic development to sustainability and social impact.

## 2. Background

### 2.1 Dedicated Domain Allocation

This funding structure earmarks capital for a defined sector, problem space, or initiative. It enhances accountability and predictability by ensuring resources are directed toward their stated purpose, minimizing competition with unrelated priorities.

### 2.2 Expert Governance & Safe Multisig

ADA leverages **Safe Smart Accounts** (commonly known as Gnosis Safes) to enable secure, collective governance of funds. Each Allocation Pool is managed by a panel of domain experts, with funding approvals requiring a multisignature quorum. This eliminates single points of failure, reduces bias, and produced fully auditable, on-chain record of every decision.

### 2.3 AI-Assisted Screening

Grant programs typically receive more applications than expert reviewers can meaningfully process. ADA integrates AI models to pre- and post-screen submissions, flag low-quality or misaligned applications early, and offer revision suggestions to applicants. This helps domain experts focus on high-potential applications, reducing administrative overhead.

### 2.4 KYC & Compliance Attestations

Managing Know Your Customer (KYC) and tax compliance processes is one of the most resource-intensive and legally sensitive responsibilities of on-chain grantmaking. ADA introduces a reusable, on-chain attestation model to address this challenge:

- **One-Time Identity Verification:** Applicants undergo a one-time KYC and tax compliance process via an approved verification partner.
- **On-Chain Attestation:** A cryptographically signed attestation is issued and linked to the applicant’s payout address.
- **Cross-Pool Eligibility:** This attestation can be referenced across multiple Allocation Pools, eliminating redundant verification for recurring applicants.
- **Donor Compliance Assurance:** By enforcing eligibility via verified attestations, donors can satisfy regulatory obligations without managing individual grantee compliance.

## 3. Problem Statement

Many funding programs face challenges such as:

1. **Diffuse Accountability:** Funds are often allocated without clear boundaries or transparency, complicating audits and impact measurements and making it difficult to ensure money is spent on its intended purpose. [^1][^2]
2. **Excessive Workload:** Experts are tasked with evaluating large volumes of applications, often with limited time and resources.[^3]
3. **Opaque Decision-Making:** Traditional funding decisions may lack visibility, leading to questions about bias or inconsistency.[^4][^5]
4. **Difficulty Measuring Impact:** Even after funds are disbursed, there may be no straightforward way to track whether projects meet their stated objectives. [^6][^7][^8]

ADA addresses these challenges by introducing an integrated approach:

- Domain-specific funding pools with explicit objectives.
- AI-assisted screening for efficient and consistent evaluation.
- Expert-led approvals via a Safe multisig.
- On-chain records to ensure transparency and traceability.

## 4. Proposed Solution: ADA

### 4.1 System Overview

ADA is built around **Allocation Pools**. Each pool:

- Defines a **clear objective** (e.g., "Clean Air", "Rural Connectivity", "Economic Development", "Open Science" etc.).
- Has a **maximum token limit**, preventing over-funding.
- Is governed by a **panel of domain experts** who review funding requests.
- Logs every decision, vote, and transaction on the blockchain for public verifiability.

### 4.2 Systen Flow
**Figure 1: High-Level Flow**

1. **Funding** enters the system from various sources (treasuries, organizations, individual donors).
2. **Allocation Pools** hold these funds, each with its own governance rules and objectives.
3. Funds can be distributed to **Bounties** (targeted tasks) or **Applications** (larger project proposals).

### 4.3 Project Application Lifecycle
**Figure 2: Application Lifecycle**
- **Project Submits Application:** Proposal outlines scope, budget, and intended outcomes.
- **AI Pre-Screening:** Initial check for completeness and alignment; applicants revise if needed.
- **AI Post-Screening:** Final AI scoring and summary of strengths/weaknesses.
- **Expert Review & Vote:** Domain experts examine the refined proposal and AI insights; vote to approve or reject.
- **Funding & Impact Attestation:** Approved projects receive funds; eventual results feed into Impact Attestations for long-term tracking.

## References

[^1]: https://www.gao.gov/blog/communities-rely-federal-grants-may-have-challenges-accessing-them
[^2]: https://www.netsuite.com/portal/resource/articles/crm/grant-management-challenges.shtml
[^3]: https://igxsolutions.com/resources/blog/top-challenges-in-grant-management/
[^4]: https://www.gao.gov/blog/communities-rely-federal-grants-may-have-challenges-accessing-them
[^5]: https://www.decisionlens.com/blog/implementing-transparent-funding-processes-for-science-technology
[^6]: https://ssir.org/articles/entry/prioritizing_impact_measurement_in_the_funding_of_social_innovation
[^7]: https://goodgrants.com/resources/articles/what-is-social-impact-and-how-can-you-measure-it/
[^8]: https://www.resonanceglobal.com/blog/measuring-social-impact-approaches-challenges-and-best-practices