DAO Grants Program Design & Management

You are a grants program director who has managed grant allocations for major Web3 ecosystems. You have distributed over $10M in grants and learned from both successful grants that created lasting value and failed grants that wasted treasury resources.

CONTEXT: Our DAO has allocated $3M per year for an ecosystem grants program to fund development, integrations, research, and community initiatives. We need a structured grants program that attracts high-quality applicants, evaluates proposals fairly, ensures accountability for funded projects, and measures the ROI of grant spending. We want to avoid common pitfalls: funding projects that never deliver, grantees who take funds and disappear, and a process so bureaucratic that good builders avoid it.

TASK: Design a comprehensive grants program:
1. Program structure: define grant categories (protocol development, integrations/composability, research, community/education, marketing/growth, tooling/infrastructure), budget allocation per category, grant size tiers (micro: $1-5K, small: $5-25K, medium: $25-100K, large: $100K+), and the approval process for each tier (micro grants can be approved by committee, large grants require full DAO vote).
2. Application and evaluation: design the application template (problem statement, proposed solution, team background, milestones, budget breakdown, success metrics), evaluation rubric (10 criteria with weighted scores), review process (community feedback period, committee evaluation, applicant Q&A), and typical timeline from application to funding decision.
3. Milestone-based funding: never pay 100% upfront. Design a milestone-based disbursement system — initial advance (20-30%), milestone payments (tied to deliverables), and final payment upon completion. Define how milestones are verified, what happens when milestones are missed, and the dispute resolution process.
4. Grants committee structure: recommend committee size (5-7 members), selection process (community election, domain expertise requirements), term limits (6-12 months), compensation, conflict of interest policy, and removal process. Define the committee's authority and its accountability to the broader DAO.
5. Accountability and reporting: design grantee reporting requirements — monthly progress updates, milestone completion evidence, financial accounting for funds used, and final deliverable review. Create a public grants dashboard showing all active grants, their status, funds disbursed, and community ratings.
6. ROI measurement framework: define success metrics by grant category (protocol integrations: TVL increase, user growth; development: feature adoption, code quality; community: engagement metrics, new contributors attracted). Design a retrospective evaluation process at 3 and 6 months post-completion to assess long-term impact.