Author: StakeDAO Association
Preamble
This proposal serves as a formal request for a half-yearly grant (“Grant Proposal”) from Stake DAO for the period of H2-2026 (July 1st to December 31st, 2026) in continuation and recognition of the governance proposal (SDGP-32) and the previous Grant proposals (SDGP-62, SDGP-56, SDGP-48 and SDGP-39) previously adopted by Stake DAO.
The StakeDAO Association (“Association”), established as a pivotal entity within the Stake DAO ecosystem and based in Zug, Switzerland, aims to further support the development and growth of Stake DAO through specified services aligned with Stake DAO’s strategic objectives.
Review of the previous grant (H1-2026)
For H1-26, StakeDAO Association was awarded a USDC 962,000 grant for the purpose of achieving certain milestones. Here is a recap of the outcome for those milestones:
| Milestone | Budget ($) | Status |
|---|---|---|
| New Tokenomics Rollout (M1) | 125,000 | Successful |
| Lending Product Rollout (M2) | 100,000 | Successful |
| Identifying New Growth Opportunities (M3) | 50,000 | Successful |
| 5-Year Anniversary Celebration (M4) | 45,000 | Cancelled |
| Product Uptime & Maintenance (M5) | 250,000 | Successful |
| Votemarket Incentive Flows & Balancer Leadership (M6) | 65,000 | Partially successful |
| Business Development & TVL Growth targets (M7) | 150,000 | Unsuccessful |
The new SDT tokenomics were successfully deployed in April 2026, with the launch of vlSDT and a smooth migration from veSDT (more than 80% migrated within weeks), the adaptation of Stake DAO’s governance framework (SDGP-66), and the launch of the vlSDT boost marketplace, shipped in June. The lending vertical was rolled out with a full user interface, a monitoring dashboard with automated alerts, and dedicated liquidation bots. New growth opportunities were identified and consolidated into a mid and long-term development strategy, which shapes the milestones proposed below. Finally, the 5-year anniversary celebration of Stake DAO was cancelled following the downturn in the market and the need to be cautious with spending, heading into a bear market.
H1-2026 was nevertheless marked by two security incidents. In March, a peripheral proof bridging mechanism on Votemarket was abused on Arbitrum and Base, leading to approximately $176k of user rewards lost, of which 80% were recovered through a white-hat agreement with the identified attacker; affected users were made whole within 24 hours through an ex gratia distribution approved by governance (SDGP-65), made on a voluntary basis and without any admission of liability. In May, a compromised deployer key which had retained legacy owner rights on the vsdCRV cross-chain contract was used to forge an unbacked mint; the backing was secured quickly, limiting the loss to the liquid vsdCRV supply on Arbitrum, approximately $88k, and an ex gratia compensation plan was approved by governance (SDGP-70) and executed, in each case without any admission of liability on the part of the Association. Those incidents triggered a deep overhaul of the Association’s security posture: review and transfer of all privileged accesses across the whole contract stack, rotation of all signer keys, continuous ownership and invariant monitoring by automated agents with automated pause and per-vault solvency triggers, extended monitoring coverage to key integrations, upgraded on-call response, per-function Timelock delays, and pre-audit automation on the development process. Aside from these incidents, product uptime remained above the 95% target throughout the period.
On the Votemarket side, incentive flows remained steady and Votemarket continued to outperform competing platforms, but the objective of becoming the leader of the Balancer vote incentive market, although achieved, was voided by Balancer’s decision to sunset veBAL. This milestone is therefore considered only partially successful.
In terms of business development, TVL in Stake DAO strategies grew to approximately $141m by the end of Q1. However, the May incident, combined with a broad market downturn, led to a sharp drop in TVL, which ended the half-year at approximately $70m. The $200m target was therefore not reached. Encouragingly, the situation stabilised in June (-9% MoM after -45% in May) while Stake DAO’s share of CRV inflation and OnlyBoost BD penetration (76.5%) recovered markedly, but rebuilding trust and TVL remains a central objective of the H2-2026 period.
Financially, the DAO remained profitable over the period despite the exceptional losses linked to the incidents, with a positive comprehensive result (treasury, SDT holder distributions and Association combined) of approximately +$282k for H1-2026. Approximately $358k was returned to SDT holders over the period through veSDT/vlSDT distributions and buybacks. Costs remained under control, with a normalised monthly cost base of approximately $105k at the end of the period, excluding the payment of the 2025 incentive program.
H2-26 Grant request
For H2-26, the proposed focus will be on rebuilding trust and TVL after the May incident, developing Votemarket v3 as a decentralised incentive-distribution platform, growing the curation vertical, further hardening security, and increasing the automation and decentralisation of the protocol.
Amount Granted: The Association hereby requests a grant amount of USDC 672,000 (“Grant Amount”) designated for the execution of the milestones further described below (“Grant Purpose”).
Milestones
The Grant Amount shall be paid to the Association in six (6) instalments to perform the following milestones (“Milestones”):
| Milestone | Budget ($) | Target date |
|---|---|---|
| Votemarket v3 development (M1): a new iteration for Votemarket which will not use cross-chain interactions and be able to expand beyond vote incentives, leveraging zero-knowledge technology to provide a trustless, decentralised, modular incentive infrastructure. | 120,000 | Dec-26 |
| Growing the curation vertical (M2): new partnerships with DeFi projects and integrations with institution-facing players, targeting $50m of curated assets under management | 160,000 | Dec-26 |
| Security hardening (M3): launch of a public bug bounty program, hardening of automation and key-management processes, reduction of the protocol’s attack surface through targeted product sunsets, and extension of monitoring coverage | 30,000 | Oct-26 |
| Automation and decentralisation of the protocol (M4): moving governance further on-chain and exploring keeper solutions to reduce in-house automation needs | 60,000 | Dec-26 |
| Developing growth venues for Stake DAO, including the expansion of the curation vertical, and exploring new product ideas. (M5) | 34,000 | Nov-26 |
| Maintain a high level of uptime of Stake DAO’s product and user interface (>95%), including community management and legal watch (M6) | 250,000 | Dec-26 |
| Ensure steady business development efforts focused on rebuilding trust, with an objective of $100m TVL in Stake DAO strategies (M7) | 150,000 | Dec-26 |
The Milestones are funded by the Grant Amount together with the Association’s existing balance, as detailed under “Use of funds” below.
Payment schedule
The Grant Amount shall be distributed in six (6) monthly payments to the Association per mutually agreeable arrangements. The payment schedule is shaped to not request unnecessary funds from the DAO, with the Association maintaining only a minimal cash buffer throughout the period. Below is the initial version of the payment schedule:
| Date | Payment (USDC) |
|---|---|
| July 2026 | 42,000 |
| August 2026 | 129,000 |
| September 2026 | 159,000 |
| October 2026 | 134,000 |
| November 2026 | 134,000 |
| December 2026 | 74,000 |
Use of funds
This grant is significantly lower than the previous one, for two main reasons. First, the H1-26 grant included a $307,000 incentive program rewarding the 2025 performance; for 2026, the team incentivisation (if any) will be distributed in January 2027, and therefore will be part of the H1-2027 grant request. Second, limited exceptional costs are expected for the period. The implied monthly spend (~$134k) exceeds the normalised $105k cost base mainly due to audit and one-off legal costs concentrated in the period.
Below is a detailed breakdown of the expected use of funds.
| H2-26 budget | USD |
|---|---|
| R&D | 575,000 |
| Association staff | 28,000 |
| Tooling | 20,000 |
| Legal & Accounting | 86,000 |
| Audits | 75,000 |
| Taxes | 10,000 |
| Others (events, etc.) | 10,000 |
| Total | 804,000 |
| Current association balance | (132,000) |
| Total requested grant | 672,000 |
Association Autonomy
The Grant Proposal does not create a principal or agent, employer or employee partnership, or joint venture between the Association and Stake DAO.
The Association is free to decide upon the way to carry out the execution or fulfillment of the Milestones set forth above. The Association retains its independence in achieving these Milestones, leveraging either internal capabilities and resources or engaging suitable third parties as auxiliary persons.
No regulated services; no fiduciary role. Nothing in this Grant Proposal, nor any activity performed by the Association in connection with the Milestones, shall be construed as (i) the provision of regulated financial services, investment services, asset management, portfolio management, custody, brokerage, placement, underwriting, investment advice, or financial intermediation, in Switzerland, the European Union, or any other jurisdiction, or (ii) the creation of any fiduciary, trustee, agency, or similar relationship vis-à-vis any user, token holder, or third party. The Grant Amount constitutes non-reciprocal funding for the development of the Stake DAO ecosystem and does not constitute consideration for, or an inducement to acquire, any token, security, or other financial instrument.
The Association acts solely as a service provider supporting the Stake DAO ecosystem and does not take possession of, control, or discretionary authority over users’ assets.
Purpose and Limitation of Use
As described in the Milestones, the Grant Amount shall fund research and development (R&D) initiatives aimed at enhancing Stake DAO’s decentralized finance (DeFi) products and services, encompassing new product development, user experience enhancements, security auditing, and risk management, as well as the operation and maintenance of the existing product when needed.
The Association understands and acknowledges that the Grant Amount shall be exclusively used to execute the Milestones defined within the Grant Proposal.
Internal regulations shall be in place to address any misuse of the funds, ensuring that all activities funded by the Grant Amount shall directly contribute to the specified project and the broader Stake DAO ecosystem. Any portion of the Grant Amount not applied to the Grant Purpose during the period shall be retained by the Association and netted against its next grant request, consistent with the treatment of the current Association balance set out under “Use of funds” above.
The Association will use commercially reasonable efforts to achieve the Milestones; however, the Stake DAO ecosystem is subject to technological, market, governance, third-party protocol, and security risks, and the Association does not guarantee any particular financial performance, TVL level, token price outcome, or absence of exploits. For the avoidance of doubt, the financial targets referenced in the Milestones (including the curated AUM and TVL objectives) are good-faith objectives and not guarantees of outcomes or of the conditions of the Association’s entitlement to the Grant Amount.
The Association shall not knowingly use the Grant Amount in a manner that would cause a violation of applicable sanctions, anti-money laundering, anti-corruption, or counter-terrorism financing laws, including Swiss sanctions measures and (to the extent applicable) EU/UN measures. In particular, the Association shall not, directly or indirectly, make the Grant Amount available to, or for the benefit of, any person, entity, or jurisdiction that is the target of applicable sanctions. The Association shall maintain reasonable internal checks for material counterparties and service providers engaged using the Grant Amount.
IP Ownership and Source Code Publication and Licensing
Subject to any third-party components and dependencies (including open-source libraries and external protocols) which remain subject to their respective licences and terms, the Association shall become the sole owner of any intellectual property rights in and to any kind of work products that have been or will be created in the context of this grant.
The Association acknowledges its role in holding and managing intellectual property rights within the Stake DAO ecosystem.
All backend and frontend code developed as part of this grant, including smart contracts and web interfaces, will be published on a designated public GitHub repository. The software will be licensed under an open-source license (such as the BSD License, the MIT License, the Apache License Version 2.0, or any other license approved by Stake DAO), promoting transparency and accessibility. For avoidance of doubt, such publication is intended to grant the Stake DAO ecosystem and its community a perpetual, worldwide, royalty-free right to use, copy, modify, and distribute the Work Product in accordance with the applicable open-source licence.
Reporting Obligation
In line with the commitment to transparency and accountability, the Association will include details regarding the Grant Amount and its utilization in its monthly activity reports. This report will be prepared in accordance with the governance proposal’s requirements, ensuring the Stake DAO community is fully informed of the progress and outcomes of the funded initiatives.
Conclusion
This proposal, structured in accordance with both the strategic goals of Stake DAO and the legal guidelines provided, represents a comprehensive plan for utilizing the requested grant to achieve significant advancements within the Stake DAO ecosystem. The Association commits to fulfilling the outlined objectives with the highest standards of transparency, efficiency, and accountability.
Vote
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For (Yes): Approve the H2-2026 grant of USDC 672,000 to the StakeDAO Association, according to the payment schedule and used for the execution of the Milestones as described.
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Against (No): Reject the proposal.
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Abstain: Take no position.
| Parameter | Value |
|---|---|
| Forum debate period | 3 days minimum |
| Voting period | 7 days |
| Debate and vote | Sequential (debate first, then vote) |
| Quorum | 15% of total vlSDT supply |
| Approval threshold | Simple majority (>50% of votes cast, excl. abstentions) |
| Anticipated execution | If the quorum and approval threshold set out above are met |