Staking and Payment Locks
In this stage, fellowships stake tokens for commitment, while initiators lock fees and payments. Smart contracts secure interests and build trust in PoLN.
In the realm of PoLN's operational dynamics, this phase serves as a foundational checkpoint, ensuring both initiator and fellowship commitment.
By mandating staked assets and locking payments, it infuses the ecosystem with accountability, while safeguarding the interests of all participants.
Purpose of Staking
Staking is not just a formality within the PoLN protocol. It serves a multi-fold purpose:
Skin in the Game
The staking mechanism is designed to ensure that fellowships are genuinely committed to the success of a project.
By staking $POLN tokens, they are essentially putting their resources on the line, signaling their confidence in the successful execution of the project.
Potential Rewards
Upon the successful completion of the project, fellowships retrieve their staked amount and earn the protocol fees as their reward. If the project fails, they risk losing their entire staked amount.
Deterrence against Malfeasance
Staking serves as a deterrent against any potential malicious intentions or lackluster commitment from the fellowship.
Their direct financial stake in the project's outcome ensures that they remain incentivized for the project's success.
Dynamic Staking Amounts
While there is a minimum staking requirement of 10% of the total project fees set by the initiator, fellowships can choose to stake any amount above this threshold.
By staking higher amounts, fellowships might portray a heightened level of confidence and commitment to the project, potentially influencing the initiator's bid selection process.
Fellowship's Staking Commitment
If a fellowship, after winning the bid, fails to stake the agreed-upon amount within the specified period:
The initiator is alerted and has the discretion to choose an alternative fellowship or await the initial fellowship's compliance.
The initial project bid by the fellowship is considered void or cancelled.
Here too, the conditions and repercussions of not meeting the staking commitments should be mentioned in the contract between the fellowship and the initiator.
Initiator's Fee Payment & Fellowship Member Provisioning
Once a fellowship's bid is accepted and they've staked the requisite $POLN tokens, the onus shifts to the initiator. The initiator must promptly address two vital financial commitments: covering the protocol's fees and setting aside the payment for all fellowship members.
To ensure transparency, trust, and security within PoLN's ecosystem, both these sums are locked into a smart contract-based escrow system. This escrow acts as a trust-establishing mechanism, confirming to fellowships and members that the initiator has genuinely committed the funds. Furthermore, the escrow operates based on set project milestones, allowing for incremental releases of funds as progress markers are achieved.
In cases of disputes or disagreements, this neutral financial holding ground ensures neither party can unilaterally access the funds without due resolution. By locking in both the fees and the members' prospective payments, PoLN not only guarantees the availability of funds for fee distribution at the project's culmination but also solidifies the members' trust, knowing their due remuneration is secure.
In addition to covering the primary project funding, initiators are required to contribute a 2% protocol fee in $POLN tokens, calculated on the total project cost. For successful project completion, this fee is distributed as an extra reward to fellowship members, incentivizing their commitment. In the event of project failure, the fee is redirected to the DAO, supporting essential platform operations and development. This dual-purpose fee aligns incentives, ensuring that all parties have a vested interest in the project’s success.
Timely Provisions by Initiator
Post bid acceptance, the initiator has a grace period (e.g., 7 days) to provision the fellowship members' payment and pay the required PoLN fees.
Should the initiator fail to meet these obligations within the set timeframe:
The project is marked as "Aborted".
Fellowships are notified that the project has not commenced due to payment failures.
The stipulations surrounding such scenarios should be explicitly outlined in the contract between the fellowship and the initiator.
Upon the project's status being marked as "Aborted," the fellowship can retrieve its staked amount without any penalties. The project then reverts to its original state, and if no action is taken, it will eventually be discarded after the specified deadline.
Staking Protection, Assurance, and Release Mechanisms
In the PoLN ecosystem, the staking and payment mechanism is intelligently designed to secure, assure, and fairly compensate all involved parties:
Security via Smart Contracts
Both the fellowship's staked tokens and the initiator's locked fees, inclusive of the provisioned fellowship members' payment, reside securely in blockchain smart contracts.
This setup safeguards funds, ensures transparent financial commitments, and upholds the integrity of all transactions.
Assurances for All
Fellowship members are assured of payment upon successful project completion, promoting trust and dedication to quality delivery.
Fellowships are motivated by the possibility of retrieving their staked tokens upon project success, reinforcing commitment.
Initiators visually represent their commitment with locked-in funds, emphasizing genuine project intent and ensuring fellowships of their seriousness.
Fair Distributions Upon Completion
Protocol fees, once locked, are released and distributed amongst fellowship members based on pre-agreed ratios when the project concludes successfully.
Fellowships see their staked $POLN tokens unlocked and returned, marking successful project execution.
Fellowship members receive their due payment as per agreed-upon milestones or invoicing schedules, ensuring timely and fair compensation for services rendered.
Handling Project Duration Exceedance
Completion & Success Acknowledgment
If a project is approaching or has exceeded its original duration but all parties are in agreement with the work's quality and direction, the current project should be marked as successfully completed.
This allows for the distribution of the locked funds: fellowship members receive their fees, the staked $POLN is returned, and the initiator obtains its reward.
Initiating a Continuation Project
In cases where more time is required to achieve the final goal or to continue with new phases, a new project should be initiated.
The initiator can create a follow-up project that can be seen as a continuation of the previous one.
This "sequel" project can be templated from the previous one for efficiency, with adjustments made to reflect the new scope, duration, and conditions.
Transparency & Transition
The transition from the original to the continuation project should be seamless and transparent. Notifications should be sent to all involved parties to ensure clarity.
It's advantageous as this process reduces the risks associated with longer projects and ensures regular assessment and rewards distribution.
Benefits
By treating the need for extra time as a new project, both the initiator and the fellowship can regularly reassess conditions, preventing any potential drift in objectives.
This structure also ensures timely payouts, rewards, and a consistent sense of accomplishment and progression for all parties involved.
Project Failure Scenarios
When a project does not achieve its desired objectives or fails, the following mechanisms will come into play:
Distribution of Protocol Fees
If the project is deemed a failure, the entire protocol fees paid by the initiator will be distributed among the broader community rather than the fellowship.
Loss of Fellowship's Stake
In the event of a project's failure, the fellowship's staked $POLN tokens are burnt, representing a direct financial loss to the fellowship.
Initiator’s Reward
The initiator does not receive their reward in the case of project failure.
These measures aim to maintain the integrity of the system, hold fellowships accountable, and ensure they remain genuinely committed to the projects they decide to undertake.
Dispute Resolution
In the initial stages of the PoLN protocol, disputes between the initiator and the fellowship will be handled based on a predefined set of guidelines and criteria.
These criteria will serve as a framework to determine the release or forfeiture of locked funds. They could include, but are not limited to:
In the future, as the PoLN ecosystem matures, there is an aspiration to integrate a decentralized arbitration system.
This would involve community members or designated arbitrators who, in case of disagreements, would weigh in based on evidence presented by both parties. This system would not only bolster the trust within the community but also ensure more fairness and decentralization in the resolution process.
This phase primarily focuses on ensuring financial security and fostering trust among all participants, thus ensuring smooth project execution. In essence, the goal is to provide flexibility while ensuring fairness and transparency. This safeguards the interests of both the initiator and the fellowship in cases of project duration extensions.
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