Community Treasury: An experiment in Loot funding

When building the Loot Exchange, we wanted a community-operated treasury that could allocate any royalties that were collected. So we created one:

It is a Compound-style on-chain voting system that uses Loot balances for governance (one vote per bag). It’s deliberately limited in scope. It does not attempt to be “the DAO”, but rather is just “a DAO”. At this point in time, it’s sole function is managing a treasury of royalties collected from Loot Exchange.

Technical Implementation

The Treasury and Governance contracts are a fork of the NounsDAO, with some small modifications to account for the fact that the core Loot contract was not designed for voting:

  • No delegation support
  • No checkpointing

In order to prevent voting twice with the same tokens, each vote is tied to a particular token id. This has a couple of downsides:

  • It is inefficient for large token holders to vote (gas usage increases per token). But in a way, having a tax on whales can be seen as a good thing (helps to democratize voting)
  • You can buy unused tokens after a vote has begun. Given the limited liquidity and high cost per bag, the risk should be fairly low

Although the changes are minimal, they still are unaudited, so if anyone would like to take a look, that would be greatly appreciated.


In order to encourage action, we’ve set the initial thresholds reasonably low:

  • VOTING_PERIOD: 19710 blocks (3.42 days)
  • VOTING_DELAY: 13140 blocks (2.24 days)
  • PROPOSAL_THRESHOLD: 0.1% (8 bags)
  • QUORUM_VOTES: 2% (160 bags)

Of course, these thresholds themselves can be changed through governance.


The NounsDAO contracts have the concept of a vetoer, who’s only power is to veto proposals. We retained this capability, just in case, but plan to burn it or transfer to another address, depending on the community’s wishes.

Use of Funds

This is the fun part. How funds are spent is completely up to the community. The team behind Loot Exchange does not even hold enough Loot to create a proposal! But we do have a few ideas on how the funds could be put to use:

  • Gitcoin-style matching pools
  • Retroactive public goods funding
  • Allocation to a new loot project with high fixed costs
  • Buying $FLOOT
  • Allocation to all loot owners
  • Allocation to other more specialized treasuries

One challenge will be supporting community development, without picking winners or interfering with the bottom-up nature of Loot. While difficult, it feels like a challenge that should at least be experimented with.

Hopefully this post can kick start a conversation on the best way to put royalties to use.


I was only allowed 2 links in the main post, so here’s some more: