PROPOSAL PROCESS

LFTCoin DAO is launching its community-led governance via a formal proposal process based on the one implemented and proven out over time by Ethereum’s EIP system.

PROPOSAL CATEGORIES

There are three main categories an AIP (LFTImprovement Proposal) can fall under: Core, Process, or Informational. Core proposals have two subcategories, Brand Decision and Ecosystem Fund Allocation. Proposals that are being resubmitted must be classified as such.

CORE: ECOSYSTEM FUND ALLOCATION

Proposals for how DAO funds should be utilized.

CORE: ECOSYSTEM FUND ALLOCATION (RESUBMISSION)

Resubmitted proposals for how DAO funds should be utilized.

CORE: BRAND DECISION

Proposals for anything the DAO attaches its name to, including projects and collaborations.

CORE: BRAND DECISION (RESUBMISSION)

Resubmitted proposals for anything the DAO attaches its name to, including projects and collaborations.

PROCESS

Proposals for making a change to a process or implementation. Examples include procedures, guidelines, changes to the decision-making process, and changes to the tools or environment of the DAO or Foundation.

PROCESS (RESUBMISSION)

Resubmitted proposals for making a change to a process or implementation. Examples include procedures, guidelines, changes to the decision-making process, and changes to the tools or environment of the DAO or Foundation.

INFORMATIONAL

Proposals for general guidelines or information for the community.

INFORMATIONAL (RESUBMISSION)

Resubmitted proposals for general guidelines or information for the community.

PROPOSAL TEMPLATE

A proposal typically includes:

• Abstract - Two or three sentences that summarize the proposal.

• Motivation - A statement on why the LFTCommunity should implement the proposal.

• Rationale - An explanation of how the proposal aligns with the LFT Community’s mission and guiding values.

• Key Terms (optional) - Definitions of any terms within the proposal that are unique to the proposal, new to the LFT Community, and/or industry-specific.

• Specifications - A detailed breakdown of the platforms and technologies that will be used.

• Steps to Implement - The steps to implement the proposal, including associated costs, manpower, and other resources for each step where applicable.

• Timeline - Relevant timing details, including but not limited to start date, milestones, and completion dates.

• Overall Cost - The total cost to implement the proposal.

The author can add additional fields to any template if necessary to fully communicate the intentions, specifics, and implications of the AIP Draft.

Proposals that did not make it through the respective approval process and are being resubmitted should also include:

• Link to original proposal

• Reason it was not approved

• Changes that have been made and why it should now be approved

The author can add additional fields to any template if necessary to fully communicate the changes made and the intentions, specifics, and implications of the resubmitted AIP Draft.

PROPOSAL PHASES

PHASE 1: AIP IDEA

An AIP Idea is submitted as a post in Discourse and must receive moderator confirmation that it complies with DAO-approved guidelines before it appears to the community. The person or people submitting the AIP Idea will be referred to as the author or authors (please note that multiple members can work together on an AIP idea, but it should be submitted only once). The AIP idea informally gathers comments via Discourse for seven days. The author cannot edit the original post — if the author wants to propose changes to the original idea, they must do this via the comments.

PHASE 2: AIP DRAFT

Once the seven-day feedback window has passed and a moderator closes the Discourse topic, a moderator will send the author the proposal template and next steps for submission and voting. They may also suggest a proposal category, if not already specified in Discourse.

The author will fill out the template, incorporating any Discourse feedback that helps the idea better serve the DAO. The author can add additional fields to the template if necessary to fully communicate the intentions, specifics, and implications of the AIP Draft. The moderator may also inform the author of incorrect or missing information that needs to be changed or clarifications that need to be made. If the author does not respond to those moderator requests within 30 days, the AIP Draft will be automatically rejected.

When the moderator confirms an AIP Draft complies with DAO-approved guidelines, they assign a number to the AIP for identification purposes throughout the rest of the process. From this point on, the AIP is referred to as “AIP-#: (Name) - (Category)”. For example the first AIP is “AIP-1: Proposing the DAO - Process”.

PHASE 3: AIP ANALYSIS REPORT

The AIP Draft is reviewed by a project management team engaged by LFT Foundation who will provide an AIP Analysis Report to ensure costs, steps to implement, legal considerations, third-party review requirements, potential conflicts of interests, and any further implications have been identified. Given that AIP authors may be submitting drafts with little to no resources, this service for the DAO community ensures that DAO members have enough information about proposals to make informed decisions when voting.

PHASE 4: AIP MODERATION

The AIP Draft + Analysis Report (DAR) Package is reviewed by a team of moderators and either approved or not approved based on whether it adheres to the DAO-approved guidelines. If approved, it becomes a Pending AIP and moves to Phase 5. If not approved, it is eligible for resubmission, except in cases of violation of the law or reasonable suspicion of fraud or other misleading information.

PHASE 5: POST-MODERATION TAGGING

Pending AIPs that have passed AIP Moderation are tagged as “Straight to Vote” or “Needs Administrative Review.”

The “Straight to Vote” tag is given to a pending AIP whose costs, content, and implications are considered straightforward and of no risk to the well-being of the DAO. Any Pending AIP that is tagged as “Straight to Vote” will skip to Phase 7.

The “Needs Administrative Review” tag is given to a pending AIP whose costs, content, or implications are considered complicated or a potential risk to the well-being of the DAO. Any Pending AIP that is tagged as “Needs Administrative Review” must go through Phase 6.

PHASE 6: ADMINISTRATIVE REVIEW

For Pending AIPs that have been tagged with “Needs Administrative Review,” the Board, serving in an administrative capacity, will determine whether clarification or action is required before moving a Pending AIP to Phase 7. If clarification or action is not needed, the Pending AIP is tagged as “Approved for Voting” and proceeds to Phase 7. If the Board decides to return a Pending AIP for further clarification or action, they must provide a clear explanation of why and tag it as either “Return for Clarification” or “Return for Reconstruction.”

Reasons to tag as “Return for Clarification” may include but are not limited to:

• Cost to implement unclear/not able to be calculated

• Would use more than 5% of the DAO treasury

• Conflicts with another proposal

Reasons to tag as “Return for Reconstruction” may include but are not limited to:

• Proposal is at odds with the mission/values of the DAO

• Proposal is at odds with the well-being of the DAO

• Violations of law, or against advice of counsel for LFT Foundation

• Reasonable suspicion of fraud or other misleading information

PHASE 7: LIVE AIP

Drafts that have passed their respective approval processes will become Live AIPs on Snapshot during the next Weekly AIP Release, which is when new AIPs are released in batches Thursdays at 9PM ET. Once live on Snapshot, Live AIPs are open to voting until Weekly Voting Close, which is at 9PM ET on the Wednesday following their release. Moderators are the only ones that can post AIPs to Snapshot because they must confirm that each one has gone through the correct approvals process.

PHASE 8: FINAL AIP

If a Live AIP has not gotten any votes or is tied by the Vote Close Time, it will be tagged as “Stalled” and be eligible for Resubmission. In all other cases, Live AIPs are moved to one of two Final AIP categories. Rejected Final AIPs can be resubmitted via the appropriate Resubmission Template if the author contacts a moderator. Accepted Final AIPs move into Implementation.

PHASE 9: IMPLEMENTATION

For Accepted Final AIPs, implementation will begin based on the steps outlined in the AIP template. The project management team engaged by the LFT Foundation is responsible for making sure this happens, but is not responsible for doing it themselves.

PROPOSAL CONFLICTS

If a suggested proposal directly conflicts with a proposal that is currently up for vote, the second proposal should not go for a vote until a decision is made on the first proposal to avoid approval of opposing requirements.

A suggested proposal that directly conflicts with another approved proposal cannot go to vote for three months after the original proposal has been implemented to avoid wasting community assets.