KIP-81: Strategic PNK Sale to Kleros Cooperative

[0xAlex]

KIP-81: Strategic PNK Sale to Kleros Cooperative

Date: 2025-10-29
Author: Kleros Cooperative

Context

The Kleros Cooperative uses PNK tokens for two main purposes in its operations: providing liquidity on exchanges and offering incentives to contractors and other participants in the ecosystem.

• Liquidity: The Cooperative maintains deep liquidity for PNK through on-chain liquidity pools (Uniswap and Swapr) and off-chain commitments via CEX (around 3.5M PNK on BitFinex at the time of writing this proposal).
• Reserve for Incentives: PNK is used to incentivize contractors by aligning their efforts with the protocol’s long-term success, to fund user incentive programs (such as Scout Incentives) and to cover other small PNK-denominated expenses.

As shown in the latest Treasury Report from September 2025, the Cooperative holds a total of approximately 85.5 million PNK, divided between 79.5 million allocated to liquidity provision and 6 million held in reserve.

Unlike many projects in the Web3 ecosystem, Kleros did not mint its entire PNK token allocation upfront, but chose to do it in rounds. This approach aligns incentives with the traditional startup model, where funds are raised, goals are achieved, and subsequent funding rounds follow, fostering sustainable growth and accountability. This is why, at different times, the Kleros DAO has voted to mint PNK tokens to fund Cooperative operations when reserves began to run low.

• In January and February 2020, a minting was voted and executed in the context of the second token sale. On that occasion, 150M were minted and sold for ETH to cover Cooperative expenses and 50M PNK were minted and transferred to the Cooperative.
• In June 2020, another 200M PNK were minted and transferred to the Cooperative to cover expenses in PNK.

The PNK reserve in the hands of the Cooperative is currently nearly depleted which motivates the current proposal.

Moreover, this proposal aligns with the team’s long-term plan to progressively decentralize operations and place them increasingly in the hands of the DAO. A first major milestone was achieved in February 2020 with the decentralization of the Governor.

This proposal marks another significant step forward. If it is passed (and the purchase is subsequently approved by the partners of the Kleros Cooperative, the legal entity that owns the non-PNK assets) the DAO will, for the first time, have its own funds to allocate. Establishing an ETH treasury can strengthen community-driven initiatives by incentivizing contributors and funding high-impact projects.

Proposal

This proposal requests Kleros DAO’s approval to mint 100 million PNK for a proposed sale to the Kleros Cooperative, with the Cooperative’s decision to be made during the next General Assembly.

The purchase price will be the one in effect at the time this proposal is approved by the Cooperative during the General Assembly (if previously the DAO vote and Futarchy test are succesfull ofc). The sale will be conducted in ETH, with payments potentially consisting of a mix of ETH, wETH, and wstETH, depending on the Kleros Cooperative Treasury’s current asset allocation.

The following four points will be enforced if the proposal passes:

1. PNK Sale from Kleros DAO to Kleros Cooperative

   The proposal introduces a new model where the Kleros Cooperative purchases PNK from the DAO, rather than receiving it for free as in previous rounds. This brings the following benefits:

   • For the Cooperative:
     The sale will provide the Cooperative with the PNK needed to sustain its operations (including paying contributors, funding user incentives, and managing liquidity) while allowing it to focus on protocol development and gradually transfer ecosystem growth initiatives to the DAO.

   • For the DAO:
     The transaction establishes a DAO Treasury funded with the received ETH (and/or wETH and wstETH), enabling PNK holders to finance grants, ambassador programs, and growth initiatives. All funding proposals will be subject to a Futarchy test (explained below) to ensure they have a positive impact on the value of PNK.

   • For the Kleros Protocol:
     This marks a step toward progressive decentralization. The DAO gains greater autonomy in ecosystem development, while the Cooperative continues to focus on core technology. The result is a more sustainable, open, and participatory governance model that attracts new contributors and strengthens the protocol’s long-term resilience.

2. Exclude PNK Held by the Kleros Cooperative from KIP-66

   The Cooperative maintains a neutral stance in case resolutions and does not stake PNK in the Kleros Court. Therefore, the PNK already held by the Cooperative, as well as the tokens minted and sold under this proposal, should not be considered for the Juror Incentive Program.

   Accordingly, this proposal amends KIP-66: Long-Term Juror Incentive Program. Previously, the formula for calculating s(i): Percentage of total PNK staked in month i considered all PNK in the Total Supply. Under this proposal, all the PNK directly held in Cooperative multisigs or controlled via smart contract (like PNK in Uniswap LP) will be excluded from the Total Supply part of the formula, as the Cooperative will not stake any of these tokens.

3. Futarchy Safeguard for Proposals Requiring Funding from the DAO

   Earlier this year, the DAO approved KIP-76 – Futarchy-Based Governance Rule for PNK Minting to prevent any minting proposals that could erode PNK’s value. The current proposal, which establishes an ETH Treasury, carries the risk of attracting actors seeking to extract value through low-quality funding proposals. To mitigate this, we propose extending the Futarchy test from KIP-76 to all proposals requesting DAO funding.

   Going forward, in addition to DAO minting proposals, any proposal involving new DAO funding from the Treasury must satisfy both of the following conditions:

   • a) Snapshot Vote: Approval by a majority of PNK holders via Snapshot.
   • b) Futarchy Test: Demonstrated positive impact on PNK’s price via Futarchy.fi.

4. Treasury Protection via a “No-Buyback Rule”

   The goal of this proposal is to establish an ETH Treasury for the Kleros DAO, dedicated to funding initiatives that deliver net-positive, long-term value to the Kleros ecosystem. Proposals that pursue a short-term strategy—such as using the ETH Treasury to purchase PNK—are explicitly prohibited.

Details

The strategic sale of PNK to the Cooperative will proceed as follows:

• The DAO will mint 100M PNK and send them to Kleros Cooperative Safe (eth:0xE979438B331b28D3246f8444b74caB0f874b40e8).
• The Cooperative will transfer ETH (and/or wETH and wstETH) to the Governor smart contract address controlled by the DAO (0xe5bcea6f87aaee4a81f64dfdb4d30d400e0e5cf4).

Means

To ensure alignment with Kleros DAO’s governance principles, this proposal will follow the futarchy-based governance rule established in KIP-76 and a formal approval from the Cooperative:

• Snapshot Vote: The proposal must be approved by a majority of PNK holders via a Snapshot vote.
• Futarchy Test: The proposal must demonstrate a positive impact on PNK’s price via Futarchy.fi.
• Cooperative Approval: The Kleros Cooperative, a legally registered entity under French law with its own governance structure, will review this proposal. It will be discussed and put to a vote during the next General Assembly in mid-November. The proposal can only proceed if it is approved by the Assembly.

Only if these three conditions are met will the Governor Contract execute the minting of 100M PNK, which will then be transferred to Kleros Cooperative’s Treasury, so the ETH can be transferred from the Cooperative multisig to the DAO.

Voting Options

• Yes, approve the proposal
• No, rework the Proposal

[zebras.glimmer3o]

i want to see a list with the pnk transactions + description of the cooperative to understand how the cooperative spent all the pnk

[zebras.glimmer3o]

the cooperative has so much eth why not pay incentives just in eth? no pnk sell pressure and if users want to buy pnk they can do so

the incentive should be bound to the added value. how much would project x pay to users who add their contracts and token to the list? 10$ ? 50$? the projects should pay users for this work. its like the blue check mark on twitter.

kleros provides free service to those block explorers. the block explorers could help kleros by putting a verify now button next to contracts and addresses

i agree with @greenlucid

give more power to the dao. let the dao make the decision to pay the pnk incentives and how much.

power to the dao!

and by the way

why can’t the dao manage all the funds? gnosis dao is doing it already

[greenlucid]

This deal makes no sense for PNK holders.

If the Cooperative wants PNK, they can just buy it like everyone else, through a TWAP or market orders, not mint themselves a discount. That’s what they’ve been doing historically, and it worked fine. Why stop now?

The futarchy.fi market signaling a better price would break the assumption that this proposal is a negative, although truth is, that price can be manipulated by whales or “strong responders”, as it’s a niche product.

The DAO already minted PNK for the Coop once, but the DAO doesn’t have real governance capabilities to hold the Coop accountable for anything. Why would the Kleros DAO gift the Cooperative an allowance again?

The sale will provide the Cooperative with the PNK needed to sustain its operations (including paying contributors, funding user incentives, and managing liquidity) while allowing it to focus on protocol development and gradually transfer ecosystem growth initiatives to the DAO.

If we as a DAO were able to decide what user incentives get funded and which don’t, that would be interesting. But that entire power is delegated to the Cooperative. I don’t agree Curate Incentives should continue. I consider them to be a waste of resources. The only way I can hold the Cooperative accountable for that waste, and other perceived wastes is to refuse this KIP. If the Cooperative wants to fund waste, they need to assume the costs themselves, not export it to all PNK holders.

This proposal is creating a private ask of freshly minted 100M PNK. If anyone wanted to dump 1000 ETH into buying PNK at the time I write this, you’d only get 45M PNK. For 3.5M$ worth of ETH. This KIP idea means the Coop wants to buy 100M PNK for 2.9M$.

Evidently, if the Coop were to buy this amount during a TWAP, it would likely be a better price, since the “shadow liquidity” would trigger. PNK would enter liquidity or be sold as the price is more attractive for holders to exit.

———

Unless there are ways for the DAO to cancel incentive programs, or significant actions the Cooperative takes (like certain products), this is a No. As it stands right now, the Cooperative has all the power and it’s just asking for more extra spending, whereas the DAO has no way to hold the Cooperative accountable for anything.

[KlerosJuror]

”If the Cooperative wants PNK, they can just buy it like everyone else, through a TWAP or market orders, not mint themselves a discount.”

Agreed and seconded.

[greenlucid]

@KlerosJuror

If the real goal is to give the DAO an ETH treasury, then the DAO should accumulate ETH from productive activities such as arbitration fees, integrations, partnerships, or attracting new external contributors who purchase PNK to gain governance influence. It should not dilute existing holders to move assets between two entities that are already aligned.

I don’t think it’s a bad idea for the DAO to mint PNK to fund itself. It would be nice for Kleros DAO to be able to hire contractors and get things done without the Cooperative. I’m in favor of the Kleros DAO getting funding.

But, that PNK shouldn’t be necessarily awarded in a private ask only the Cooperative can access. If the DAO wants to dump PNK to fund itself, it should be done in a TWAP so everyone (Coop and other PNK interested buyers alike) can buy. Cooperative has already been in a privileged position, and it has virtually all the resources already.

I would support an alternative proposal:

• Mint less (maybe 20-30M PNK to start with)
• It’s sent to a wallet that can initiate a TWAP operation, selling 1/60 of the bag daily, over 2 months.
• Then the Cooperative has to compete against other potential buyers, and the DAO gets a better price (which will benefit the Kleros DAO, and thus, PNK holders)

Something like this can credibly get a better valuation in futarchy.fi, because it signals the first instance of the DAO getting real funding outside of Coop control.

The con of this alternative proposal, is that the PNK minted and sold this way would count towards the juror rewards.

The pro is that if the Coop buys and spends PNK in activities that could be considered wasteful (such as Curate Incentives), at least the Coop is not generating an external negativity via dilution of holders.

---

EDIT: Just to be more exhaustive, if no one other than the Cooperative was demanding PNK during the period, KIP-81 and my proposal would be close equivalents, since the Cooperative could initiate their own TWAP buying PNK over the same duration. (minus swap fees, of which the Coop is a major Liquidity provider anyway), the buying and selling pressure would cancel out and the ETH would enter the wallet whose assets belong to the DAO.

If the demand for PNK was higher, then the Coop would have to pay a bigger price over the period. If it was lower, the Coop would get a discount over the quoted price in KIP-81. Essentially, my proposal is “just make it an auction”.

[zebras.glimmer3o]

why buying pnk in the first place? just denominate the incentives in USD and pay in eth. if you would ask incentive recipients they would probably most like that anyway

if there are any evidence that users are more likely to participate because incentives are denominated in pnk please show that. also please show how likely incentive receivers sell their pnk.

i think reward recipient like kleros and its more real if they buy pnk with their usd or eth incentives. this would show more pnk support

@greenlucid

i would only agree to minting and selling to the org if they commit to be fully transparent about their previous and ongoing pnk spendings. they need to clearly list how much they will spend the pnk on. they put 150% of eth in a smart contract and receive 100% pnk for 6 months and if they fail the dao receives 150% of the funds.

[0xAlex]

@zebras.glimmer3o

i want to see a list with the pnk transactions + description of the cooperative to understand how the cooperative spent all the pnk

While we can’t disclose an exhaustive list of transactions for privacy reasons, the Kleros Cooperative spends the vast majority of its PNK on:

1. Contractor incentives
2. Compensation for rebalancing of LP positions on CEXs
3. Other incentive programs ( Curate, Fellowship, Schelling Game for Conference etc.)

@zebras.glimmer3o

the cooperative has so much eth why not pay incentives just in eth? no pnk sell pressure and if users want to buy pnk they can do so

We believe it’s critical to incentivize all Cooperative contractors by paying a substantial part of their compensation in PNK. This approach attracts and retains talent through a three-year vesting schedule with a one-year cliff—a standard industry practice that aligns long-term incentives and allows contractors to join the juror pool if they choose.

@zebras.glimmer3o

give more power to the dao. let the dao make the decision to pay the pnk incentives and how much.

power to the dao!

This is already happening: the major PNK incentives for the Juror Incentives Program was approved from the DAO (via KIP-66: Long-Term Juror Incentive Program and KIP-78: Amendment of KIP-66 Long-Term Juror Incentive Program) with PNK minted from the DAO (instead of from Cooperative Treasury as it used to be in the past.) With this proposal, the DAO will be able to give incentives in ETH for any proposal that is bringing value to PNK holders (pass the Futarchy test)

@zebras.glimmer3o

why can’t the dao manage all the funds? gnosis dao is doing it already

We closely monitor developments across the ecosystem’s various DAOs, with the ultimate goal of achieving full decentralization for the Kleros Protocol—provided it never compromises the Cooperative’s core mission.

From its founding, the Kleros Cooperative has operated as a non-profit dedicated to a single purpose: building and advancing the Kleros Protocol. We recognize that true protocol resilience demands decentralization, which is why this proposal progressively shifts greater authority to the DAO.

That said, Kleros is not yet prepared for complete decentralization. We still need broader adoption, and the only safe path to full decentralization is a gradual, progressive transition. This is a long journey, and we are actively engaged in all the key forums and expert associations in the field, such as BlockchainGov and SEEDGov.

Moreover, substantial work lies ahead, particularly on Kleros v2 development and game theory research where the Cooperative and its contractors remain the most efficient structure for driving progress.

@greenlucid

This deal makes no sense for PNK holders.

If the Cooperative wants PNK, they can just buy it like everyone else, through a TWAP or market orders, not mint themselves a discount. That’s what they’ve been doing historically, and it worked fine. Why stop now?

As PNK prices rise, market purchases become increasingly unsustainable for the Cooperative. Securing a large PNK allocation now ensures operational stability for the next several years for the Cooperative.

We firmly believe that sourcing PNK from the DAO—rather than open markets—empowers the DAO and enables a broader range of stakeholders to propose initiatives that grow the Kleros Protocol and so increase value for PNK holders.

@greenlucid

The futarchy.fi market signaling a better price would break the assumption that this proposal is a negative, although truth is, that price can be manipulated by whales or “strong responders”, as it’s a niche product.

Any whale attempting to manipulate Futarchy markets creates immediate arbitrage opportunities for traders. This is precisely why prediction markets are powerful tools for price discovery.

@greenlucid

The DAO already minted PNK for the Coop once, but the DAO doesn’t have real governance capabilities to hold the Coop accountable for anything. Why would the Kleros DAO gift the Cooperative an allowance again?

This isn’t a gift or a grant, as it used to be in the past —it’s a purchase of PNK

@greenlucid

If the Cooperative wants to fund waste, they need to assume the costs themselves, not export it to all PNK holders.

It’s the opposite: the Cooperative recognizes that the DAO can serve as an effective decision-making body for funding certain activities, such as growth initiatives.

If the proposal passes, future Curate incentives will be funded with PNK purchased from the DAO using ETH. The Cooperative retains full sovereignty over its treasury. At the same time, we acknowledge that stakeholders hold diverse perspectives. An ETH-denominated DAO treasury could fund alternative incentives or complementary growth programs.

@greenlucid

This proposal is creating a private ask of freshly minted 100M PNK. If anyone wanted to dump 1000 ETH into buying PNK at the time I write this, you’d only get 45M PNK. For 3.5M$ worth of ETH. This KIP idea means the Coop wants to buy 100M PNK for 2.9M$.

The intent was never to mint PNK for the Cooperative at a discount. The TWAP mechanism was proposed to simplify execution, as market prices fluctuate between proposal posting and on-chain execution.

Any sophisticated actor seeking 100M PNK would not execute a single market order but would instead use strategies like TWAP to minimize slippage and price impact. To eliminate any perceived “discount,” we now propose executing the PNK purchase using the price of PNK when the proposal is approved by the Cooperative during the General Assembly (and ofc only if the DAO vote and Futarchy test pass). We will updated the proposal in that sense and this price will be shared in this Forum, by doing this the Cooperative will acquire 100M PNK at a similar price than any sophisticated stakeholder trying to source it from regular markets. Again this isn’t a grant or a gift but a purchase denominated in ETH.

@KlerosJuror

Past token mints in Kleros history were used to bring external capital and new participants into the system. This proposal would be the first mint that introduces no new backers, no new strategic contributors, and no new demand-side liquidity.

Past token mints were granted to the Cooperative without involving new participants (if we exclude ICOs where tokens were sold by the Cooperative for ETH). This time, it’s a purchase—one that confers strong legitimacy on the Kleros DAO and equips it with real agency through an ETH treasury.

@greenlucid

But, that PNK shouldn’t be necessarily awarded in a private ask only the Cooperative can access. If the DAO wants to dump PNK to fund itself, it should be done in a TWAP so everyone (Coop and other PNK interested buyers alike) can buy

Any other stakeholder interested in a similar kind of deal can submit a proposal in the Kleros DAO; there is no blocker about this.

@greenlucid

I would support an alternative proposal:

• Mint less (maybe 20-30M PNK to start with)
• It’s sent to a wallet that can initiate a TWAP operation, selling 1/60 of the bag daily, over 2 months.
• Then the Cooperative has to compete against other potential buyers, and the DAO gets a better price (which will benefit the Kleros DAO, and thus, PNK holders)

Thank you for suggesting this alternative approach. However, we don’t believe it’s viable. Purchasing such a small amount of PNK wouldn’t secure the Cooperative’s long-term operational needs, nor would it build a Treasury large enough to fund meaningful growth initiatives for the DAO.

@greenlucid

Cooperative has already been in a privileged position, and it has virtually all the resources already.

The Cooperative has been building this industry since 2018 and when it comes to the DAO it holds no special rights. Any PNK holder can propose that the DAO mint new PNK and transfer it to their wallet with a grant setup or a purchase as is the case here.

PNK holders naturally hold differing views on this matter. Those who believe it makes no sense are free to vote against the proposal—that’s precisely why we’re bringing it to governance for open discussion.

[zebras.glimmer3o]

i think you should be able to make a list of your pnk spendings and your plans how you will spend them. you don’t have to disclose private informations.

make a list like: we spend pnk on

• team
• • (address) received total x amount
• juror incentives
• • (address) received total x amount
• curate incentives
• • (address) received total x amount

this is blockchain data anyway but makes it clear how you spent it

provide a plan how much and for what you will spend the pnk you want to buy from the dao

so most of pnk goes to team members. please make the list and plan as mentioned above

don’t buy 100m at once. you can buy if it passes 10m each month for the current price and the dao should buy with 50% of the eth - pnk to put 100% into dao owned liquidity eth-pnk.

[fortu]

@greenlucid

I don’t agree Curate Incentives should continue. I consider them to be a waste of resources

The efficacy of the Curate-Scout Incentives was previously discussed in July on the Curate Telegram channel. Since the topic has come up again, I’m posting an overview here for the benefit of forum users, sharing some data showing why these incentives are useful and necessary.

Unplugging the Curate incentives now is a risk on several fronts. Here are some of the reasons why we are funding this program and how they pay off

• More activity: We keep the court active (hundreds of cases this year). Curation court is the main source of disputes across both v1 and v2 beta.

• Safety: More disputes can bring more jurors, and I’m not talking about whale wallets being there only for the juror incentives. Even “small wallets” who want to try the Kleros court can stake there. They also reduce the risk of whale wallets (farming their juror incentives) potentially controlling the court.

• Expanding the database: Ramping up submissions has led to collaborations with top partners. In the short term, for Kleros’ image, this is priceless. In the long term, we keep providing them with a large amount of data monthly. These partnerships can also be used as a leverage to motivate beginners to submit for the sole reason of being present on these platforms.

• New opportunities: Time has been invested in developing a new interface to simplify submissions with the new Scout interface. Incentives can help attract new users who are not familiar with Curate. Unplugging now would waste months of the team’s work on this.

In summary, this investment keeps the court more secure and serves as a marketing strategy to bring users, which can be seen as an advertising cost(not only for Curate, but for Kleros in general).
Over the past six months, we’ve already made significant adjustments to how these incentives are structured and distributed, and we plan to continue optimizing and even completely change them.

A few additional points, updated as of today:

• In the July discussion, we mentioned that we were steering toward a strategy of having more entries while tightening the criteria. As planned, we increased monthly entries, and in the last two months, we did not even fully use the monthly pool (less than 300K PNK per month were spent) while reaching an all-time high in submissions (see attached image).

• According to the points raised, Curate incentives are described as the main source of spending, when in reality they represent only a fraction. To give an order of magnitude one year of Curate incentives ≈ 15 days of juror incentives (by the DAO).
  This comparison does not include initiatives related to contractor incentives, partnerships, airdrops, and marketing campaigns financed by the Coop. All these activities are important for Kleros;

For all readers, I understand the concerns related to this spending, as it is one of the few (alongside juror rewards) that has clear documentation. However, It needs to be emphasized that, despite how it may appear in this forum, Curate incentives likely account for less than 1-2% of PNK’s yearly spending (cumulative), yet deliver some of the most positive and, most importantly, measurable performance outcomes.
Moreover, these incentives are not static; they will continuously evolve and adapt to market conditions, potentially undergoing complete transformations (e.g., shifting to pure advertising if more effective). Instead of merely reducing them, I’d rather advocate for getting feedbacks on different ways of spending to encourage participation.

In conclusion, I believe that ALL the planned spending related to this KIP are more than justified and will pay off in the long run.

[clesaege]

Please make sure to read the proposal. The cooperative doesn’t even buy PNK at a discount, it’s at market price (with a TWAP).

And obviously the PNK bought is to be used for Kleros ecosystem (PNK part of workers comp and incentive programs).
Both of those should be in PNK because:

• Importance of “default“: People are way more likely to keep the PNK they get than to buy PNK with the $ they would have gotten in a $ denominated incentive system.
• Workers by having part of their comp labelled in PNK get aligned incentives to Kleros success.

Historically, the cooperative just asked for PNK grants. Now that it is well funded and the DAO now posses more mature tools, I think it would be good for the DAO to get a treasury of its own. Keep in mind that the alternatives to the proposal are:

• Ask a grant instead of a purchase.
• Shut down a significant part of cooperative operations.

The initial idea was to ask a grant as it used to be done previously. And this would still be a reasonable proposal. Note that if it were to be a grant, it could come with conditions on spendings.

[zebras.glimmer3o]

why is it so difficult for you to disclose your pnk spending and make a pnk spending plan?

i guess 90% goes to the team cause the 200k in pnk per month for the curate incentive can’t be the reason.

so how much does the team holds? please disclose how much pnk different team addresses hold without names

you don’t have to disclose private informations.

make a list like: we spend pnk on

• team

• • (address) received total x amount

• juror incentives

• • (address) received total x amount

• curate incentives

• • (address) received total x amount

this is blockchain data anyway but makes it clear how you spent it

provide a plan how much and for what you will spend the pnk you want to buy from the dao

@clesaege

Importance of “default“: People are way more likely to keep the PNK they get than to buy PNK with the $ they would have gotten in a $ denominated incentive system.

thats great so just buy pnk for them with the coop eth (actually the eth of the dao). this proposal gives me the feeling that the team wants to grant themselves even more pnk. how much pnk is enough? 1% of total pnk per team member?

[fortu]

@KlerosJuror

If Curate genuinely delivers value by lowering coordination costs and providing decentralized verification, then external teams, protocols, and companies should be motivated to adopt it and fund their own participation.

According to this statement, advertising should not exist, as all “good” companies would be expected to organically acquire their users. This view feels somewhat extreme, considering that the most successful companies invest trillions in advertising, and startups ( especially in Web3) allocate significant resources aiming at long-term growth, in terms of years.

Organic growth is certainly one of the key objectives, but an abrupt interruption of funding would likely hinder, rather than accelerate, that process.

@KlerosJuror

This isn’t about shutting anything down—it’s about ensuring resources are being deployed where they create the most long-term value for the protocol. If we take this as an opportunity to reevaluate and refine the roadmap for Curate, I think it could strengthen both the product and the ecosystem.

The optimization process began in April 2025, and the results in terms of activity and new partnerships speak for themselves. Since then we

• Spent less

• Increased most of the metrics: more submissions, more interactions, more curators, more jurors, more partners.

Someone could ask: Would cutting them abruptly truly benefit the project, or would it risk halting the progress achieved so far?

This cost represents only a small fraction of total expenditures (such as juror and team incentives) but produces measurable and valuable outcomes.

Given that I support all ongoing optimization measures, it’s fair to ask whether cutting roughly 3M PNK per year would actually strengthen Kleros or rather, slow down a process that is already delivering results.

I believe we all share the same goal: doing what’s best for the project and ensuring its long-term success.

Significant changes have been implemented since April 2025, and I encourage you to verify them directly, through our social media updates, Klerosboard, Dapplooker, and the Curate and Scout dapps.

@KlerosJuror

The Cooperative should be focused on marketing, partnerships, and driving natural adoption.

When you refer to “marketing,” I believe that is precisely how these incentives should be understood: as a strategic marketing investment designed to strengthen adoption and the protocol itself. Replacing them with traditional spending, such as more sales staff or platform ads, may not deliver the same cost-to-benefit ratio as it would cost significantly more. Right now we are aiming at gradual and measured expenses.

This model, with only one expense, has brought us not only new partners but also more activity.

That said, the incentives you see today are in constant evolution. We transitioned from static three-month renewals to monthly renewals to monitor performance and promptly make adjustments
In the future they could still change entirely, and by “entirely” I mean they could take a different form than simply subsidizing submissions.

I agree that keeping static incentives without changes to the product or the incentive structure is never a good idea. These incentives will continue to evolve with the ultimate goal of bootstrapping a self-sustaining use of Scout .

@KlerosJuror

For example, if 300k PNK allocated for incentives hasn’t been fully claimed, then this is a proof you don’t need any tokens from us. And also is a signal that the incentive model or the messaging around the product may need to be rethought.

The unclaimed tokens reflect exactly what the model aims to achieve: spending less while preserving impact. It’s not a signal of failure, but of healthy optimization and continuous testing. Each cycle helps us assess performance and refine parameters, which may lead to reducing expenses further or, if results justify it, increasing funding to strengthen Curate’s growth.

This is a long-term process, and disrupting it prematurely would only undermine the effort to make incentives more effective and sustainable

@KlerosJuror

As discussed in my earlier post, the continued need to subsidize Curate participation is not evidence of future success but rather a sign that outreach, product positioning, or business development needs to be strengthened

Questioning a 3.6M PNK annual expense as reason for rejection seems a bit unusual,especially considering some expenses mentioned in this thread which are significantly higher. Today, the cost-benefit ratio of these incentives is favorable, and cancelling them would risk undermining momentum and damaging the protocol.

It’s also worth noting that DAO-approved juror incentives [which account for a 2200% higher monthly expenditure than curate incentives] could be subject to the same reasoning.
Yet they both remain essential to ensure participation, trust, and the long-term health of the ecosystem.

TLDR:

It seems that we agree on:

• Ensuring optimized use of funds and avoiding waste

• Aim for a long term organic growth

Scout incentives had remained static for years. If this discussion had taken place in March 2025, your reasons would have been on point.
However, since April 2025, the Cooperative has implemented significant improvements that are already showing measurable results (all verifiable through official Kleros sources). These changes fully align with what we are discussing here.

[zebras.glimmer3o]

i also don’t think it makes any sense to stop the incentives for curate as it is a great flagship project good to show off the usefulness of kleros. its also not as expensive as the huge juror staking rewards. 400k or so vs 6mio

[clesaege]

@zebras.glimmer3o

i think you should be able to make a list of your pnk spendings and your plans how you will spend them. you don’t have to disclose private informations.

This is done in the cooperative yearly reports: https://kleros.io/coop/

Also note that historically, we also saw a bunch of people opposing minting in the comments while the proposals were voted with 80-90% of Yes. So I wouldn’t be too concerned before the vote.

[KlerosJuror]

The proposal would be significantly strengthened by making the 100M PNK mint granular. The funds should be segmented, with releases tied directly to achieving specific, measurable milestones defined by the DAO.

Key Structural Changes

1. Structured Release Schedules: Break the total mint into tranches (e.g., quarterly or semi-annually) across four main categories:

   • Core Development: Released on hitting roadmap milestones (e.g., Kleros 2.0 deployment).

   • Ecosystem/Growth Initiatives: Released only upon verification of pre-defined success metrics (e.g., new integrations, juror growth).

   • Strategic Innovation/Reserve: A dedicated pool for high-potential, creative projects, requiring separate Mini-KIPs.

   • Liquidity/Treasury: Immediate tranches for bolstering the non-PNK treasury.

2. List Known Initiatives: Explicitly list the current high-priority initiatives (e.g., DeCom integration, KIP-77 follow-up) and the exact, measurable outcomes required to unlock their designated PNK portion.

3. Leverage Kleros Enforcement: A key selling point of Kleros is enforcement. Define a mechanism where the DAO can submit a Dispute to a Kleros Court if the required milestones are allegedly unmet. The Court would rule on the factual question of whether the conditions for the PNK release were satisfied, thereby using the protocol to enforce the DAO’s agreement on fund disbursement.

This approach provides greater transparency, accountability, and alignment between funding and value delivery.

[clesaege]

@KlerosJuror

The proposal would be significantly strengthened by making the 100M PNK mint granular. The funds should be segmented, with releases tied directly to achieving specific, measurable milestones defined by the DAO.

Sure, but in this case it should be a grant, not a sale at market prices.
I thought that the sale was a great way to give the DAO more operational power. But a conditional grant is also something I’d support.

[zebras.glimmer3o]

great overview

it says

• rebalance -69mio what does that mean?
• total pnk 764mio but on etherscan it says total 805mio

[zebras.glimmer3o]

are you more team dao or team coop?

[KlerosJuror]

No, I have to disagree with reframing this as a grant.

The granular, milestone-based structure is about accountability, not changing the nature of the transaction.

It needs to still be the trade, with proper contracting. The milestones and structured releases are the terms of that contract, ensuring the DAO gets what it’s paying for.

This is a sale, and the conditions are just prudent terms for that sale.