Capital allocation

Signals can be used as a capital allocation mechanism. Token holders lock governance tokens behind funding proposals they want to see capitalised. Because locked tokens cannot simultaneously back multiple initiatives, every allocation decision carries opportunity cost. The result is a ranked signal of where the community wants capital deployed — something binary yes/no votes on individual proposals cannot produce.

RFP evaluation

A DAO creates a board scoped to a specific RFP. Service providers submit initiatives describing their approach, timeline, and cost. Token holders lock tokens behind the provider they want to see selected. The first proposal to cross the acceptance threshold wins the RFP.

The release timelock is the critical parameter. Setting it to match or exceed the RFP duration means a supporter cannot back one provider, wait for acceptance, reclaim tokens, and redirect them to a second. Every token holder must decide upfront which bid they believe in.

Pre-funded programme

A DAO earmarks a fixed budget (e.g. 100,000 USDC) for ecosystem development and creates a board that stays open for a year, pre-funded with the full amount. Each accepted initiative receives a capped payout (e.g. up to 30,000 USDC). Anyone can submit a proposal at any time. When a proposal crosses the acceptance threshold, it gets funded and clears the board. The remaining budget stays available for future proposals.

This replaces the conventional quarterly funding round — collect proposals for a month, vote, allocate, repeat — with a single governance decision that produces a year of autonomous prioritisation. Proposals are evaluated on their own merits as they arrive, rather than being batched into artificial deadlines.

This configuration uses a release timelock of zero (immediate release) and a low decay rate so that participation stays fluid across a long time horizon.

Discretionary budget

A DAO can allocate a fixed budget to a specific category — events, marketing, developer tooling, community programmes — through a single governance proposal that creates the board, funds it, and sets its rules on-chain. Once deployed, the board operates without further governance votes.

Anyone who wants funding submits a proposal with their request, scope, and deliverables. Token holders lock support. When a proposal crosses the acceptance threshold, it gets funded immediately from the board's pre-allocated pool. The remaining budget is visible on-chain at all times. When the budget runs out or the fiscal period ends, the board closes.

This matters because in most current governance systems, getting a 3,000 USDC event funded requires the same process as a 300,000 USDC protocol upgrade. That overhead discourages small-but-useful spending and rewards people who are good at campaigning over people who are good at executing. A dedicated board with a pre-set budget removes the bottleneck.

The model scales across categories. Each gets its own board with its own budget. The DAO makes a handful of high-level allocation decisions per quarter and delegates the rest to the community through Signals.

Reviewer incentives

Capital allocation suffers from a free-rider problem: everyone benefits from good allocation decisions, but evaluating proposals takes effort. Two mechanisms address this.

Bounties attached to funding initiatives reward the token holders who do the work of evaluating proposals and backing good ones. On acceptance, bounty payouts split between supporters, the protocol, and a treasury at configured ratios.

Early-supporter multipliers from the incentives pool reward participants who identify strong proposals before they become obvious. The first supporters of an eventually-accepted initiative earn a larger share of incentive rewards than those who lock later. This creates an incentive to do diligence early rather than wait for social proof.