The “ADAO – Plutus Token vesting dapp” proposal addresses Dapps, Products & Integration challenge by creating a smart contract based token vesting DApp. The DApp will be open source, free to use and highly auditable. Before this DApp, there is no easy way to verify the vesting schedule. The vested tokens are normally allocated by Devs. With this DApp, the process will be automated and auditable with the vesting schedules in token allocation. This could provide the prototype to other projects to use the dApp when doing private sales tokens and build trust between project owners and the investors which surely will drive the interest in adoption of Cardano dApps. Hence, the proposal fits the challenge very well as it would increase number of dApps and nourish the ecosystem with new use cases. The proposer cited risks of this project as the developers getting sick and lack of interest which they have proper ways to mitigate these risks.

Sadly, in other ecosystems, we have seen many cases where after an ICO, IDO, or crowdfunding event there are often large sell-offs by the founders or the early investors as soon as they are available to the public, resulting in a sharp fall in the price of the token, and almost always affecting retail investors. This is where a proper vesting strategy by the founding team becomes relevant. Thus, vesting is one of the keys to creating a successful tokenomics design. The team preparing this proposal is focused on presenting an alternative to future startups that will allow founders to offer the community a secure vesting schedule based on a previously tested smart contract. BeiSince this tool would be open source and free to use for different projects, it would have a great potential for adoption, as long as the community understands the importance of a feature like this within the Tokenomics of a new project and makes it a minimum requirement for new projects to be considered serious.

Vesting schedule is one of the important things used to help teams focus on making a great project after crowdfunding. Instead of receiving the entire token, the teams will receive the token after a vesting schedule period set by the project founder. However, there are many projects where the token price is always “pump/dump” or even Rug Pulls when the token is released without investors knowing. The reason for this is that the token release is centralized or semi-decentralized, not the decentralized model that blockchain defines and the Cardano network wants. This is not a new idea but it is still consistent with reality, it will have more options for genuine blockchain projects for investors to feel secure with the project they pursue.

This proposal attempts to solve the ever growing problem between trust and decentralization by using a 'Plutus smart contract dapp built to enable customizable token vesting where issuers can deposit tokens and specify the parameters around a specific spending schedule'. As more and more projects are built on Cardano, the need for a trustless system of fund allocation is needed to prevent any bad actors (sometimes referred to as "rug pulls") so that investors and creators alike never fear this type of action or loss taking place. Having many Cardano NFT projects representing themselves as DAOs, there's only one that I am aware of that uses Github as a source of complete transparency with transaction history to it's holders. This solution to that extra effort from a DAO or similar project or community by enabling a seamless trust with public transparency through smart contract interoperability on Cardano Dapps and protocols, would allow for greater adoption from users looking for such a solution not seen on any other blockchain. The impact rationale of token vesting dapp that is open source and free to use is a 4, based on the unforeseen audience of users but with the proper education of such a tool available, a significant rise in impact could take place in the coming years.

This proposal will attempt to address a very common problem on vesting tokens within the Cardano Ecosytem. If the challenge is to develop more useful dApps and help people to feel comfortable using Cardano as we drive more adoption then this certainly addresses the challenge of that.

The proposal has an important paragraph which I will quote a few lines from here that show how it addresses the challenge:

"Vesting tokens is a powerful instrument to build trust between a project team and their investors or users. The project teams want their users to feel comfortable that they will not immediately dump tokens on them, essentially using them as exit liquidity. To mitigate that risk the dev teams state that certain tokens will be released over time, but if we are relying on the dev teams to do as they promise, it will always leave open the possibility of them not following through and accessing their tokens whenever they wish…." For these reasons I gave five stars and I believe it clearly addresses the challenge.

The team views project success as having a vesting tool that would allow the team to lock their tokens based on the set schedules. This could become the standard practice of developers token being vested, reduce the risk of the investors and make Cardano safer and more transparent. The team provides the quantitative metrics e.g. 4 developer teams decide to use the tool within 3 months of being launched. They will host at least 4 twitter spaces to educate the community. The project will be open sourced and trackable via GitHub. I appreciate that the team will share project expense on catalystaudit.com The team has clear, understandable and effective solution (ADAO-plutus token vesting dapp) that addresses the problem (lack of automated and auditable vested tokens) with measurable definitions of success.

A good description of success is provided by the team, which addresses all of the project's expected impacts in the medium to long term. The team presents a good practice, setting up a website where the details of the expenditures of the proposals funded in past cycles are reported. This is great given how little information IOG is providing at the moment. Additionally, 3 key metrics are proposed. The first one would be to monitor the number of development teams using the tool, with an initial goal of 4 teams in the first 3 months after launching the tool, as well as the execution of 4 twitter spaces with the objective of communicating and educating the community in general about the usefulness and necessity of this type of tool, and the last one for supposed commits to GitHub of the corresponding repository or repositories. The tool is expected to be completed by the end of August. Therefore, by November the community could expect an update from the first development teams that decide to use this tool.

The proposed audit project is based on the following parameters:

1. Number of teams that utilize the tool: with this parameter, it cannot help the community track the development of the project, it only supports tracking after the project has been deployed (another development teams using this tool only when it is released only).
2. Education around the need for this type of tool: communication and promotion of the product to the community is necessary but I don't see how the project team will do it (they may have groups in Facebook or Telegram or channels on Youtube but not mentioned here)
3. Github Activity: Github update activities are necessary with these type of projects, however as mentioned about the project members are not clear so updating the correct project milestones to Github according to the timeline or not is still difficult to check
4. Expense monitoring: sharing information about project costs is verifiable if the project team is working on schedule.

As mentioned above, the roadmap and it's milestones can be seen taking place already in preparation for funding through the Github link provided in order to track the progress being made. The proposer understands the clear risks and challenges involved with successfully solving the problem presented here, but does not foresee any major delays occurring. The definition of success will be clearly transparent to the Catalyst community by the use of these references and the funds will also be allocated in a publicly shared monitoring source done by CatalystAudit.com. The educational twitter spaces planned to be held (4 minimum scheduled TBD) will help ensure that the community is aware of the solution being available. The overall success of the proposal may not be seen immediately but as a first standard of it's kind on Cardano, it could and will eventually build stronger trust between project developers with their communities as well as show others what full decentralization on chain looks like. The rationale for auditability is a 5 based on the monitoring of progress and expenses if and when funded.

When looking at the potential success and measuring the progress of the proposal, there are clear metrics provided to measure such as "…An initial goal of 4 teams incorporating the tool within 3 months of its release.." is one of them. Additionally, there is a pretty detailed timeline and task list of the items to be completed to make the proposal a success. Lastly I believe there will be monthly Catalyst progress reports in which this will be monitored. Therefore I believe there is sufficient information to audit the growth of this.