Scholarship DAO

A Scholarship DAO is a type of decentralized social group devoted to the task of raising money for education tuition. The advantages of using a DAO structure to support this goal include

1. Transparency assures accurate accounting of overhead.
2. Transparency deters corruption.
3. Decentralization promotes personal ownership in the group.
4. Openness encourages participation.
5. Reputation incentivizes positive contributions.

Overview

A Scholarship DAO (SDAO in this context) uses the REP salary scheme of DGF to motivate people to do jobs that contribute to the scholarship fund. The money that is brought in is then given later for scholarships—like savings.

Example work: young students work (mowing lawns, e.g.) to earn future scholarship money that is at least the amount earned (minus DAO overhead) in present value, because they earn REP that is paid out when they go to an approved educational experience, such as a college, trade school, or verified mentor. The money received is at the value they put into the DAO, because the donors will be more likely to consider students who participate when deciding where to distribute their donations.

Non students can also work or donate directly to the fund to get REP for deciding where their proportion of the money goes. Donor REP and student work REP is the same, because it gives the same $ to the Scholarship DAO, so it has the same power for deciding where the money goes. The main difference is that, presumably, the student will use most of their REP to give the money to themselves.

The main value proposition for this structure is that it can accurately account for the money, so the system can be set up so employers can agree to accept jobs devoted to this scheme, knowing it will serve the good of their communities.

Examples

• When a student walks up to your yard and says they will mow your lawn for $50 that will be paid to this social program instead of directly in the child’s pocket, you can feel more confident that your money is going toward a good cause.
• A hot dog stand at a sports stadium can be set up with volunteers that are donating their time to serve the community. The stadium and the volunteers can be more confident that their work is serving their values because of the transparency of the decentralized scheme. They know exactly how much is spent on overhead. They will also feel ownership in this scheme as they see exactly how their money is spent, because they have control over who gets their money, down to the granularity of giving it to a friend or themselves, as long as it is going to an institution approved by the DAO.
• Donors can delegate the responsibility of distributing their donations to DAO members who have proven their probity in distributing money wisely in the past.

Mechanism

A Scholarship DAO (SDAO in this context) uses the REP salary scheme to motivate people to do jobs that contribute to the scholarship fund. The money that is brought in is then given later for scholarships—like savings.

Example work: young students work (mowing lawns, e.g.) to earn future scholarship money. That scholarship money will amount to at least the amount earned (minus DAO overhead) in present value, because they earn REP that is paid out when they go to an approved educational experience, such as a college, trade school, or verified mentor. The money received by participating students may be greater than the value put into the DAO, because donors will be more likely to consider students who participate when deciding where to distribute their donations.

Non students can also work or donate directly to the fund to get REP for deciding where their proportion of the money goes. Donor REP and student work REP is the same, because it gives the same $ to the Scholarship DAO, so it has the same power for deciding where the money goes. The main difference is that, presumably, the student will use most of their REP to give the money to themselves.

The main value proposition for this structure is that it can accurately account for the money, so the system can be set up so employers can agree to accept jobs devoted to this scheme, knowing it will serve the good of their communities.

Initiation of a Scholarship DAO

How does it start? This is the most difficult step to explain. It starts as an entirely charitable fund. Donate money to a scholarship treasury and get REP. When the first person gets a REP token, they decide how the salary for that token is going to work. E.g., any money the REP token earns is given as a scholarship to a worthy recipients. The scholarship is distributed programmatically, in whatever increments and rate the donor chooses.

When the 2nd person gets REP it’s because they brought money to the Scholarship DAO. That money goes to the older donor's REP salary which goes to the older person’s scholarship recipients. When the 3rd person brings in money, they get REP instead and the money is split between the previous two people to give to their chosen causes. How REP expires or attenuates is determined by the DAO according to REP tokenomics principles. For example, a DAO may choose the protocol that dictates a REP token expires once its initial present value is distributed to scholarship recipients. Alternatively, REP may expire later to encourage older members of the DAO to participate.

Governance

Proposals for how much of the treasury is given to which student can be made by anyone with REP or oREP. Voting for the proposal eats your REP and that percentage of the existing fund is given to the student. That lost REP loses its power to actively distribute funds to scholarships, but it is not erased--it becomes old REP, or oREP which may be used to bring attention to new proposals. UIs may choose how to prioritize proposals for consideration according to oREP suggestions. This means each individual donor has the power to decide how to value oREP in their view of proposals. However, functionally, the vast majority of users will use default settings.

Safeguards can be implemented (or not) that dictate what a scholarship recipient needs to do to unlock the money. These are in the form of standardized SCs the DAO approves. People shouldn’t engage SCs that are not socially attested as secure and trustworthy. Eventually certain colleges will go through the effort of approving official SCs they’ve authorized. Then students can automatically unlock their money if they go to that college. In the beginning, however, there will be simpler systems in place for unlocking their money—an agreed upon time and amount, e.g., with delays if they don’t provide proof of passing grades. In the beginning we will assume people are not cheating the system, and will only add more sophisticated safeguards as history or prudence demands. A simple delay until they are of the predicted age to go to college should be sufficient in the beginning.

Non-students can donate time or money to getting REP that is used to decide how their REP salary is spent in the future on students. A website is designed to facilitate the collective weighted-democratic decisions on how to distribute that kind of money. It can be as simple as giving all the money you donated to your specific friend or it can also be given to a general fund that gives randomly to approved students that have been selected by other means. REP can be used to facilitate that decision of who is in the pool and what is their priority for the random money.

See Also

• Social DAO
• Poverty Relief DAO
• Community policing
• Social harmony