TE Grant Round 4 $TEC Distribution Proposal

TL;DR

This proposal is merely a logistical procedure to acquire $TEC tokens from the Common Pool for the distribution of grant funds for Token Engineering Grant Round 4 (TEGR4)based on the already approved TEC 2024 Priorities & Budget.

Proposal description

The TEC will soon be distributing $50k worth of $TEC tokens between the 32 projects participating within TEGR4. While the TEC has disclosed that it will be distributing these funds in $TEC as we have with all previous rounds, it has never specified the source from where the price would be derived.

At this moment, the TEC currently holds 97,000 $TEC (~$38k) in the Common Pool, which accounts for the majority of the tokens necessary for distribution. Use of these funds has already been approved in the TEC budget for 2024, which includes $50K in funding for QF rounds. Using these $TEC tokens from the CP greatly reduces complexity and avoids an artificial increase in price pressure on $TEC from making large purchases. With this move, it will only be necessary to purchase an additional ~$12k worth of $TEC.

In summary, we’ll be pulling $TEC out of the Common Pool and sending it to the TE Grants Program (TEGP) multisig (per the budgeted request that’s already been approved), and using the existing $25K in the TEGP multisig and incoming Gitcoin funds to fund the additional ~$12K in $TEC purchases. The remaining funds will then be used to accumulate $TEC for future rounds.

Proposed Actions:

  1. Withdraw 97k $TEC from the CP.
  2. Make an announcement that the distribution of $TEC will be based on the spot price of $TEC on the Secondary Market at time X.
  3. Make a purchase of $12k worth of $TEC (~3.59rEth) from the ABC.
  4. Distribute $TEC to the 32 projects based on the amount derived from spot price in step(2).
  5. Use half of the remaining $38k stablecoin from the TEGP funds to start purchasing and accumulating $TEC from the ABC on a recurring basis in preparation for following rounds.
  6. Monitor sell pressure from grantees on the secondary market.
  7. Once the majority of grantees have sold, use the remaining half of the 38k to purchase $TEC from the secondary market to match spot price derived in step(2).

Amount requested

97,000 $TEC

What does success look like?

  • All TEGR4 grantees receive their $TEC tokens on time, with clear communication about the price calculation.
  • Effective management of sell pressure to keep the $TEC token price stable during and after the distribution.
  • Have the possibility to start accumulating $TEC tokens to ensure funding is available for future grant rounds.

How will you share progress?

All progress can be followed here.

Team Information

TEC Coordination Team

Hey Bear! I would like to comment on two things here:

Make an announcement that the distribution of $TEC will be based on the spot price of $TEC on the Secondary Market at time X.

The SAMM price is extremely volatile, as the liquidity depth is very poor at the minute. You can check out in CoinGecko that it traded between 54 cents and 33 cents, even though the ABC has not shifted its price by nearly as much. Token Engineering Commons Price: TEC Live Price Chart, Market Cap & News Today | CoinGecko.

Instead, I would instead suggest getting the price directly from abcswap.xyz, or directly from the bonding curve (with conding)

At this moment, the TEC currently holds 97,000 $TEC (~$38k) in the Common Pool

Note, on the ABC, the price of TEC is:
1 rETH = 6653.5718 TEC, or 51.8 cents. This in turn amounts to 96,525 $TEC to be distributed; hence, no more needs to be purchased nor sold for this grant round - just the total currently in the common pool.

I hope this makes sense! I finished porting the Dune dashboard here this weekend for more information.

I have a third comment on this. This is a de facto increase on the budget of the Coordination Team. Would it instead not make sense for the coordination team to exchange part of the funds already received for TEC Tokens? If so, why not?

Hey Rex!

Thank you for providing this feedback. I think that makes a lot of sense. I’m looping @natesuits into the conversation as he’s been leading the definition of this plan and might have a better understanding of the different implications.

In regard to your other question:

I have a third comment on this. This is a de facto increase in the budget of the Coordination Team. Would it not make more sense for the Coordination Team to exchange part of the funds already received for TEC Tokens? If so, why not?

This request is to fund the TE Grants Program (QF grant round) directly as per the annual budget for the TEC previously approved. The funds that were previously released are for Coordination Team staffing expenses for a period of 6 months. The budget breakdown for both the TEC and the Coordination Team proposal is also in here.

The vote for this proposal is now live: Commons DAO