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# System prepended metadata

title: 'PropStream: A proposal liquidity protocol'

---

# PropStream: A proposal liquidity protocol


To allocate funds, proposals are put to a DAO vote on SnapShot or a committee vote in private e.g Ethereum or Uniswap foundation grants or a public quadratic vote e.g GitCoin grants. Committees carry their blind spots, QF is still a popularity contest (more so without Sybil resistance) and DAO voting has its own challenges around participation and collusion. We propose an alternative that leverages rich intellectual capital within the crypto communities by ***letting trusted community members manage fund allocation***. 

Anyone with credentials can become an allocator of a proposal stream. Capital to the streams is provided by LPs — treasuries and community members aligned with proposals are LPs. The amount of capital an allocator can manage is algorithmically decided based on whether their previous proposals have succeeded or failed. So each stream also has milestone evaluators to evaluate proposal progress.

# Example

A version in which there is a single LP (which is the treasury):

Proposal Stream: Developer Tooling
- Stream Allocator Credentials: Contributed to HardHat, Vyper and the like
- Milestone Evaluators: seneca.eth, animosa.eth, harveyheavens.eth, dambha.eth
- Total capital approved by treasury for this stream: 20 ETH
- Incentives:
    - 5% to allocators
    - 2.5% to PropStream
    - Milestone evaluators get paid hourly
- Algorithm:
    - start with 0.5 eth
    - increase by 2X eth if milestones are hit
    - decrease by X eth if milestones are not hit


# Key Considerations

* Individual expertise instead of collective blindspots
* Accountability instead of diffusion of responsibility
* Progressively increase or decrease stream budget

# Open Questions

* What algorithms can we use to increase/decrease allocator budgets?
* How to measure effectiveness of this model compared to others?
* What timeframe and budgets are apt for real first experiment?
* Which communities are best testbeds for this sort of experimentation?


