# A Fractal Funding Model for Small Communities and DAO's

**Imagine a village** with a single **Community Chest** - a shared fund where everyone's contributions go (work credits, taxes, donations). From this Chest, the community decides to support broad areas of village life:

1. **Dedicated Domain Allocation (DDA)**

* The Council meets and agrees how to split the Chest among "domains" such as Infrastructure, Food & Supplies, Health & Safety, Education & Culture, and Transportation.
* Each domain gets a fixed percentage (e.g., 30% for Infrastructure, 20% for Food & Supplies, etc.), always totaling 100%.
* If villagers feel a domain needs more or less, they propose adjustments (possibly via **conviction voting** where the longer and stronger the support, the more sway it carries).

2. **Dependency Graphs & Weights**

* Within each domain, committees further divide their slice among sub-domains or projects - again by simple percentage weights.
* For example, the Infrastructure allocation might be split 60/40 between "Buildings & Roads" and "Water & Power."
* Those sub-slices can then be split further (e.g., "Building Repairs" vs. "New Construction"), using exactly the same weight-based rules.
* This "fractal" process works identically at every level: percentages always flow down the tree, ensuring clarity and consistency whether you’re at the village level or the smallest working group.

3. **Self-Curated Registries**

* At the leaves of this funding tree sit **registries** - on-chain rosters of people doing the work.
* Each registry (say, the Repair Crew) votes internally on who belongs and how to reward them: full-time villagers might get 1× credit, half-timers 0.5×, with multiplier for months of service.
* This keeps each group accountable to its own standards, while the Chest only needs to know the overall percentage flowing to that registry.

### **How It All Fits Together**

* **Community Chest (DAO Treasury):** The single source of truth, holding all funds.
* **DDAs (Domains):** Top-level "budget accounts" like in town-ledger accounting - allocate the Chest by domain.
* **Dependency Graphs & Weights:** A recursive budgeting rule: every node (domain, sub-domain, project) splits its share by percentage.
* **Self-Curated Registries:** Department-level "expense accounts" where members and payments are governed by those doing the work.

By modeling our village’s funding as a **nested dependency graph**, we achieve:

* **Transparency:** Every villager can trace coins from the Chest down to each carpenter or gardener.
* **Flexibility:** New committees or projects slot in naturally - just assign weights under the relevant domain.
* **Democracy + Meritocracy:** The whole village adjusts domain budgets, and each working group fine-tunes its own rewards.

In short, this fractal funding model turns a simple Community Chest into a **scalable**, **transparent**, and **self-governed** system - perfect for a small village or a global DAO alike.

### Potential Weaknesses & Unanswered Questions

As with any governance design, there are areas to watch closely and questions to explore:

* **Cognitive & Administrative Overhead**: Tracking and voting on multiple percentage rebalances could overwhelm contributors.
* **Budget Drift & Inertia**: Established splits may become entrenched, and conviction voting might reinforce outdated priorities.
* **Registry Fragmentation & Gatekeeping**: Self‑curated groups risk becoming closed circles, making it hard for newcomers to join.
* **Adjustment Frequency & Process**: How often should domain budgets be rebalanced? What parameters (decay rate, thresholds) govern conviction voting?
* **Registry Onboarding & Exit**: What’s the exact on‑chain mechanism for joining, leaving, or dispute resolution within registries?
* **Emergency Fund**: Is there a rapid‑response allocation for crises, and how do we prevent its abuse?
* **Tooling & UX**: What dashboards or interfaces will make this system accessible to all participants?

We’d love to hear your thoughts:

- What do you see as the biggest risks or gaps?
- Which questions matter most to you?
- How would you tweak the model to address these challenges?