The Bee Fund
Problem:
One of the issues of moving towards a Dynamic Issuance scheme for the Common Pool is that Honey Distribution out of the Pool will be frowned upon by the biggest holders of honey, due to the fact that it will lead to dilution of their share. Specially towards projects with low expected return for the DAO.
This might lead to a stagnation of the common pool spendings.
Solution:
This issue is diminished by the implementation of Quadratic Conviction Voting at the Common Pool DAO.
This brings the contrary issue though, Honey inflows and a ROI for proposals might not be incentived enough.
So to solve for this newly created problem we create an Investment Fund, where HNY holders can stake their HNY and vote in which way their money will be distributed between the multiple projects that apply. The Fund will pay the Common-Pool a regular dividend from its revenue.
Details:
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The Bee Fund should be settled as a DAO with conviction voting, the threshold should be set rather high to make sure the grants are being rightly selected and approved by strong stakeholders.
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Each Applicant must go through a set of stages to apply for an investment, from providing a business plan, a thought out roadmap or prototype, transparency and diligency. Applications should have some sort of tribute or stake in the form of locked Bee Fund shares.
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ShareHolders must be expected to be active and approve the business proposals that are good for the DAO. Must take an active role in negotiating the terms and contracts to be submitted to Celeste.
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Business Plans must include how the Bee Fund will receive dividends back, must take into account that the projects will be more likely to pass if open-sourced. They must also expect to set clear and verifiable milestones to keep receiving tranches of honey from the pool.
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Bee Fund shares must be issued only by staking HNY (1:1) and if inactive/unlocked should have a week time-lock for removal to avoid tampering with Conviction Voting Proposals. Shares that are committed into a project must stay locked until they get slowly unlocked by the Dividends payed back. Locked shares can be individually tracked to each project invested in the past, by minting a separate token for when shares get locked. These Locked Shares or “Bee Fund Debt Tokens” become indeed subject to speculation and can be traded on Honeyswap to speculate on the ability of a project to pay back their dividends. The projects are expected to hold a share of these Tokens to increase their stake and thus trust in delivery and maintenance of the project until the initial investment is fully paid back.