Revisiting Grant Payments: SHU vs USDC

Shutter DAO DAO Proposals
1

Background

We’ve previously discussed the composition of grant payments in our forum. In those discussions, we decided to include a SHU component with vesting for grants. However, recent market conditions and community feedback suggest it’s time to revisit this decision.

Current Situation

The value assigned to the SHU token by secondary markets and DEXs is currently quite low. This situation creates several challenges:

  1. Large amounts of SHU are required to create a meaningful grant component.
  2. This leads to further dilution of the SHU supply.
  3. It potentially impacts governance disproportionately.

Proposal: Stablecoin-Only Grants

Given that the Shutter DAO 0x36 currently has a significant supply of stablecoins, I propose we consider using only stablecoins (USDC or USDGLO) for grant payments. This approach offers several advantages:

  1. Provides immediate, stable value to grant recipients.
  2. Preserves the SHU token supply.
  3. Simplifies the grant process.

Considerations

While moving to stablecoin-only grants solves several issues, it does present a new challenge:

  • Loss of Future Alignment Incentive: By not distributing vested SHU, we lose a mechanism to incentivize long-term alignment between grant recipients and the Shutter ecosystem.

Questions for Discussion

Your input is crucial as we navigate this decision. Please consider the following questions:

  1. Is the alignment incentive provided by vested SHU important enough to warrant its inclusion despite current market conditions?
  2. If we move to stablecoin-only grants, how else might we encourage long-term alignment with grant recipients?
  3. Should we consider a hybrid model where the majority of the grant is in stablecoins, with a very small SHU component?
  4. How might this change impact different types of grants (e.g., development grants vs. marketing grants)?

References

Previous discussion on grant payments

SGX proposal thread

Thanks in advance for the participation.

1 Like
2

I believe it makes sense to pay some partial (small) amount of each grant as kind of a “bonus” in SHU tokens even if the exchange rate is bad at the moment. The coins shall probably be vested for 1+ year to encourage long-term commitment.

3

Good one, intelligent. Now that time has passed and market has crashed, maybe convert the Shutter Treasury in GNO/ETH and other projects that are vital to the Shutter Project, in order to surf the wave together when they actually get Shutterized.

4

These are valuable points to ponder about.

At least having a small part in SHU tokens benefits engagement, long-term alignment, and voting power distribution. Perhaps using a vesting contract where you can delegate.

This should be numerically proportional to the USDC provided in the grant.

It’s better to do the proportion using the number than the value because if we use value, more and more tokens will be distributed, and the token price tends to drop.

Example: 10k USD grant and 10k SHU (or if 50% is decided, then 5k SHU). Example using value: 10k USD grant and ~250k SHU (or if 50% is decided then 125k SHU)

So, if we decide to continue to distribute SHU tokens, we should decide how much SHU should be distributed per USD.