Establishing the Tracer Development Fund


The Tracer DAO is, and always will be, decentralised.

With Perpetual Swaps, a dnAMM and Pool Swaps all planned to launch in the coming months, the DAO is in a position where it needs to efficiently onboard more high quality developers and advisors, and otherwise allocate TCR resources to effectively grow the Tracer ecosystem. It’s increasingly clear that there needs to be some level of expediated and coordinated decision making such that the execution of the Tracer project remains efficient, responsive and competitive within the market, while staying true to its vision.

An initiative that some established DAOs have implemented successfully is a “development fund” (for example, Yearn, Sushi and Reef). The problem usually solved by a development fund is the ability for large (in terms of membership and activities) and decentralised DAOs to efficiently allocate tokens to growth opportunities and operational expenditure. In these cases, development funds have been particularly successful for onboarding talent ( One problem aimed to be solved by Yearn’s development fund was ensuring that it would have enough YFI and protocol fees to appropriately compensate talent. Tracer DAO is now in a position where it can get development resourcing right from the start.

In order for a development fund to be successful, a line in the sand needs to be drawn between:

  1. Those decisions that fall within the remit of the development fund; and
  2. Those decisions that do not fall within the remit of the development fund and; therefore, require a formal DAO Proposal and voting process.

As discussed in this Discourse post, Tracer DAO’s Proposal and vote period is currently 4-9 days. As the Tracer DAO continues to grow, in both membership and activities, it will become increasingly important for the DAO to do certain things without a 4-9 day delay.

It is important to acknowledge that, in a decentralised system such as Tracer DAO, the need to “do certain things” more quickly needs to be carefully balanced against Tracer DAO’s need to remain completely transparent to its stakeholders, and responsive to the demands of those stakeholders.

All that said, this EOI relates to Tracer DAO commencing a Development Fund.

The following parties offer their services to the DAO in order to create and manage the Development Fund, via a 4/7 multisig:

  1. Raymond (Co-founder) of Mycelium;
  2. Ash (Co-founder) of Mycelium;
  3. Pat (Co-founder) of Mycelium;
  4. Michael and Vance (Founders) of Framework Ventures;
  5. Richard (CEO) and Aaron (Research Associate) of DACM;
  6. Balder Bomans (Managing Partner) & Mathijs van Esch (Investment Manager) of Maven11; and
  7. Jane Lippencott (General Partner) of Distributed Global.

Collectively, these parties will be referred to as the Development Fund Managers or Managers .

This EOI envisages that the remit of the Managers will be decisions involving growth opportunities and operational expenditure related to the the long-term development of Tracer DAO and Tracer, including:

  1. Engaging contractors and new team members of Service Providers, to perform certain services on behalf of the Tracer DAO. For example, developers and auditors;
  2. Engaging professional services to support the operational and strategic decision-making of the DAO. For examples, lawyers, accountants marketing professionals, etc;
  3. Engaging advisors to support operational and strategic decision making of the DAO; and
  4. Cash reserves to cater for situations where the Development Fund needs to exchange TCR for non-TCR tokens (particularly USD) to support the aforementioned activities of the Managers.

Additionally, innovative solution ideas were raised within the most recent ‘Tracer Drop’ call with RMIT Tracer Drop Episode #04: Development Funds. These ideas will be further explored using the Development Fund and implemented where deemed suitable. Ideas included:

  • Granting funds (TCR tokens) to ‘philanthropists’ to execute solutions for certain problems;
    • This effectively combines a typical ‘Grant’ model with the long-term incentive structure of venture finance; and
    • These ‘philanthropists’ in time will receive reputation for their work and will become trusted to deliver future work.

Resourcing the Fund

The Managers will not receive any remuneration for the provision of these services.

The following tokens will be transferred to a multi-sig controlled by the Managers:

  1. 160,000,000 TCR Tokens (16% of TCR total supply).

At this time, it is expected that the Development Fund will be used will be used to further the initiatives explained above in accordance with the following proportions:

  1. 50,000,000 TCR (5%) contractors and new team members of Service Providers;
  2. 50,000,000 TCR (5%) professional services;
  3. 30,000,000 TCR (3%) advisors; and
  4. 30,000,000 TCR (3%) cash reserves.

Long-term development vs. short-term development

We note that, above, we mentioned that the Tracer Development Fund intends to incentivise efforts towards the the long-term development of Tracer DAO and Tracer.

To incentivise efforts towards the short-term development of Tracer DAO and Tracer, we also think that it would be appropriate to separately consider a form of “Grants Fund” for Tracer DAO. This is something that we will continue to think on, but we would be interested to hear the discussion about a Tracer “Grants Fund”.

Next Steps

In order for this EOI to take effect, a Proposal must be commenced by a current DAO member and that Proposal must succeed.

We encourage the discussion of this EOI in the comments below.

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It strike me as odd that only 3/7 of the multisig signer for this development fund are devs, with the rest being VCs. I personally think the devs should have more power in who they want to hire and how they want to spend the dev fund.

For reference, the yDev signers are all devs or ops.

I misunderstood the intention of the fund. IMO this behaves more like a growth fund than a dev fund. The proposed configurations are fine as is for a growth fund.


@Beepidibop As per your message in the Discord, happy with the name change to Growth Fund > Development Fund. As I also mentioned, the ‘Growth Fund’ title opens us up to other avenues we could explore.

We could add community based funding to the list of decisions for the multisig to execute on as this was something that was in the works for a recommended proposal in the future. As an example this could look like incentivising a Community Team to help grow the Tracer protocol by getting more involved with Ecosystem initiatives. Alternatively, an additional fund may be created for Grant/Community/Ecosystem initiatives.

Additionally, we could add in certain marketing/talent attraction initiatives to the list.