I’d like to share my personal experience as a receiver of a retroactive grant. @bordumb did a great job laying out the mechanics above, and I’d like to compliment it with additional qualitative reasoning.
I’ve worked in the cryptocurrency space for years, and started contributing to DAOs in the last two years. I received a retroactive grant from Shapeshift DAO last year after voluntarily contributing time to test some of their infrastructure. Similarly, I wrote this guide to backing up GitHub repositories with Radicle to share with my partners in PSF DAO, and received a retroactive grant for my work from Radicle.
The nature of this retroactive funding is that it’s unexpected. It’s not about incentivizing people to do something (extrinsic motivation), it’s about rewarding and aligning those people who have already done something through intrinsic motivation. Equally important, it opens the door to symbiotic growth between the DAO and the receiver of funds.
Case in point: When I was playing with the ShapeShift infra, I was doing it for myself, and simply trying to contribute my findings to others, so that my efforts didn’t go to waste. Receiving the retroactive payment for my work, gave me greater incentive to participate in the DAO. It also allowed me to participate in governance votes since I also receive FOX tokens. It leveled me up as a participant of the DAO. It grew a symbiotic relationship.
The exact same thing happened with Radicle. I didn’t have any interest in participating in Radicle DAO when I wrote the article. I was simply trying to solve my own problems and share that solution with my friends. Receiving the retroactive grant ‘leveled me up’ in terms of participation with Radicle DAO. It encouraged me to investigate and participate at a deeper level in the DAO, and eventually lead me to do deeper research for Radicle DAO.
This ability to do retroactive funding is a feature that the cryptocurrency space has been lacking. It’s common to see excited, intrinsically motivated developers create amazing prototypes in the cryptocurrency space. But they almost always burn out as they are running on passion and have no funding. The projects don’t go anywhere, and are eventually forgotten. But if the right projects received a little bit of financial help, they could have made a big impact. I’ve seen this scenario play out several times through the years.
This is the specific use-case where I think retroactive funding could have a big impact. If the management can keep an eye out for those unique and unexpected opportunities; those intrinsically motivated prototypes that could benefit Radicle, and give the developer a little financial boost, then it helps everyone and can lead to a big impact.
I think my personal experience provides a good blueprint:
- When unexpected, creative, and beneficial (to Radicle) work is discovered, retroactive funding allows the managements to bring the people behind it into Radicle’s sphere of orbit, by encouraging greater participating and interest in the DAO.
- This builds up the available ‘brain trust’ of the DAO. It can lead to increasing the talent pool to draw from, for achieving goals in the Dependencies and Core Infra categories.