Hatch Tribute - Deep Dive

What is the Hatch Tribute?

The Hatch Tribute specifies what % of the funds raised by the Hatch are not redeemable. All other funds raised will be able to be redeemed by TECH Token holders.

  • If the Commons Upgrade occurs, the funds from the Hatch Tribute will go to the Funding Pool to create public goods for the field of token engineering and fund DAO Operations via Conviction Voting.
  • The Hatch Tribute is effectively a tax levied on the Hatchers to be allocated fund TE Public Goods
    • A high Hatch Tribute will guarantee extra funds go to the final Commons’ Funding Pool to support TE projects but may dissuade Hatchers to contribute and likely mean a smaller Hatch.
    • A low Hatch Tribute will allow the Hatchers to be able to opt out of the Commons Upgrade with more of their funds, if they don’t like the plan, and likely lead to a larger Hatch.

So what do we need to decide?

  1. What Information should we use to determine the Hatch Tribute?

Note: This post was updated to reflect the 2 part launch, originally the Hatch Tribute was the funds sent to the Funding Pool that is governed by conviction voting.


Socialism vs Money back Guarantee

What is the Hatch Tribute (%)?
The Hatch Tribute (%) defines the percentage of the total funds raised that cannot be removed from the Hatch by individuals who wish to exercise their RageQuit rights.

Implications & Parameter Options
The Hatch Tribute (%) is measured as a percentage, and you will have the option to set this parameter between 0 and 100.

The Hatch Tribute % is one of the more contentious parameters to be voted on, and has significant implications on the incentives for funding by Trusted Seed Members.

The Implications of a high Hatch Tribute % is that it establishes a social contract between Community Backers and Community Builders that if you decide to fund the Hatch, you fully support the project regardless of its end-form. The benefits of this are that we maintain consensus within the HatchDAO, and force members to “come to the table” regarding conflicts associated with Commons Upgrade parameters. The downsides to a high Hatch Tribute % is that it does not give flexibility to Community Backers who may disagree with the parameters of the Commons Upgrade, reducing their willingness to RageQuit, and therefore increasing the probability for internal conflict. A social contract such as this also disincentivizes the amount of funding that Community Backers are willing to risk in instances where Commons Upgrade parameters are not to their liking, and may result in less funding than initially anticipated.

The implications of a low Hatch Tribute % is that it provides flexibility to Community Backers who are providing a significant source of funding to exercise their RageQuit rights, and forces Community Builders to “come to the table” to search for compromises regarding conflicts associated with Commons Upgrade parameters. This also increases the probability that Community Backers will be willing to contribute a larger sum of funds to the Hatch, knowing that they have the ability to redeem those funds if the Commons Upgrade parameters are not to their liking. A downside to a low Hatch Tribute % is the possibility of Community Backers to wield their power of funding to influence Commons Upgrade parameters.

Suggested Range
The Hatch Tribute should be carefully considered, and we suggest a range between 0-50 percent.

Related Parameters to consider when defining the Hatch Tribute (%):
Membership Ratio (wxDai/CSTK)
Minimum Goal (wxDai)

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