DFIP Spotlight: Improving the Handling of Community Fund Proposals (CFPs)

The DeFiChain community has proposed a significant improvement aimed at bolstering transparency, accountability, and integrity in handling Community Fund Proposals (CFPs). 

This latest DeFiChain Improvement Proposal (DFIP) introduces structural adjustments designed to align CFP standards with those of DFIPs, reflecting a mature and responsible approach toward decentralized governance.

Raising the Bar for Governance

Currently, CFPs only require a 50% approval rate from Masternodes (MN), creating inconsistencies and potential vulnerabilities in fund allocations.

This new DFIP proposes to elevate the approval threshold to 66.67%, harmonizing it with existing DFIP standards.

Such a change ensures that only proposals with broad and solid community support receive funding, safeguarding against insufficiently vetted projects.

Structured Milestone-Based Payments

A cornerstone of the new DFIP is introducing structured payout models.

Any CFP requesting more than $3,000 must establish tranche-based or milestone-driven payouts. Funds will now be distributed based on clearly defined and reported milestones, offering better oversight and encouraging diligent project execution.

The Governance Special Interest Group (SIG) will assess these milestone reports, providing Masternodes with informed recommendations on future payouts.

Mandatory Quarterly Reporting

To enhance transparency and accountability, CFP recipients must provide quarterly status updates.

These reports must include detailed breakdowns of fund usage, allowing the community to monitor progress closely and ensure responsible financial management.

Strengthening Community Engagement

Another innovative change mandates proposals to be publicly posted on Reddit at least 21 days (approximately 60,480 blockchain blocks) before voting commences.

This enforced pre-voting discussion period facilitates meaningful community engagement, feedback, and scrutiny, preventing hastily made decisions and reinforcing transparency.

Maintaining Proposal Integrity

The DFIP maintains the existing 1% submission fee relative to the requested amount, balancing accessibility with responsibility.

While the implementation of these measures poses initial challenges—particularly regarding the enforcement of structured payouts and pre-voting discussions—they offer significant long-term benefits, from improved governance standards to more prudent fund management.

Conclusion

This DFIP introduces structural improvements to how Community Fund Proposals are handled, ensuring that funds are allocated responsibly, with clear reporting and accountability.

By aligning CFPs with DFIP approval standards and enforcing pre-voting discussion, this proposal strengthens the integrity of DeFiChain’s governance.

Take part in shaping the future of DeFiChain governance by reviewing proposals and casting your vote on DeFiscan.