MAGIC Monero Fund

Updated 2021-12-01

Background

Multidisciplinary Academic Grants in Cryptocurrencies (MAGIC Grants) is a 501(c)(3) nonprofit organization. It can conduct a variety of qualifying charitable activities, which notably include the following:

  • Creating educational materials
  • Purchasing and distributing educational materials
  • Supporting the “maintenance of public infrastructure”
    • “Public infrastructure” in this case refers to major public cryptocurrency networks
    • “Supporting” refers to research, development, node operation, and security testing, among others

Monero is widely-distributed and leading public cryptocurrency payment infrastructure (the Project). Because it is so decentralized without a company or foundation behind it, Monero would benefit significantly from a side nonprofit such as MAGIC Grants. The MAGIC Monero Fund will issue grants for various qualifying needs in the Monero ecosystem.

The Monero Research Lab (MRL) was established in 2014 to investigate Monero’s limitations and areas for improvement. While MRL has evolved over the years, it has largely been composed of researchers who individually receive per-project or quarterly donations through the Monero Core Community Crowdfunding System (CCS).

MAGIC Grants’s Competitive Advantages

MAGIC Grants is well-positioned to offer a MAGIC Fund for this Project. MAGIC Grants’s main advantages include the following:

  • Cryptocurrency-supportive board, with MAGIC Grants’s three board members having 10+ combined years of experience with cryptocurrency communities.
  • 501(c)(3) public foundation status.
  • Full tax deductibility of donations as allowable by law, regardless of asset (eg: USD, BTC, XMR, NFTs, stock).
  • Full ability to convert donations to a less-volatile asset (such as fiat currency) for making payments in whichever means is preferred by the contractor or employee.
  • Established nonprofit since 2018, with US bank and exchange relationships.
  • Previous experience supporting various projects.
  • Willingness to accept cryptocurrency donations, make cryptocurrency investments, and make payments in cryptocurrencies.

Case Studies and Previous Success Stories

MAGIC Grants has previously engaged with cryptocurrency communities on several occasions with great success. These include:

These were successful, with the necessary funds being raised and the desired work being completed in a timely manner.

Important Project Relationship Clarification

MAGIC Grants does not and can not represent the view of all Project community members, nor the Project as a whole.

MAGIC Fund Overview

MAGIC Grants envisions a separate MAGIC Fund which is used only at the discretion of a Project community-elected MAGIC Fund advisory committee. These funds will function as restricted funds, which can not be used by MAGIC Grants for any purpose other than as decided by the MAGIC Fund advisory committee or as explained in this document. This has the advantage of MAGIC Grants board members not using the MAGIC Fund for projects exclusively of their choosing.

MAGIC Grants expects that the MAGIC Fund will be used for improving the Project ecosystem. However, funds can be used for any purposes that the MAGIC Fund committee deem appropriate, subject to additional restrictions (if any) listed in Appendix A. In every case, funds must be only spent for qualifying charitable purposes.

MAGIC Fund Voter

MAGIC Fund Voters will be individuals who MAGIC Grants deems to be influential, knowledgeable, and productive members of the Project ecosystem. These voters may be added or removed at MAGIC Grants’s discretion. For example, MAGIC Grants may remove inactive Voters.

MAGIC Fund Voters will anonymously vote during election time for the relevant open committee positions, ideally with a condorcet voting method. The voters may also be asked to occasionally provide feedback through other votes, which the committee may treat as binding or non-binding in its discretion. MAGIC Grants may additionally request votes on various topics.

MAGIC Fund Voters are not required to be public figures, they receive no compensation for their voluntary duties, and they do not need to disclose anything to MAGIC Grants for their participation, except as noted in Appendix B.

MAGIC Fund Committee

Any details in Appendix C supersede the relevant paragraphs in this section.

The MAGIC Fund Committee is an important group of individuals elected by the MAGIC Fund Voters (or selected through another process described in Appendix C). This committee will vote on the distribution and investment strategy of the MAGIC Fund.

The details of the number of committee members, term length, and voting schedule will be determined by MAGIC Grants.

The number of members in the MAGIC Fund Committee and the election cycle is noted in Appendix C.

MAGIC Fund Committee resignations or removals will initiate a special election, for which the newly-elected member will serve the remainder of the resigning or removed member’s term.

MAGIC Fund Committee members are not required to be public figures. If for any reason the MAGIC Fund Committee members are to receive compensation for their duties, they are required to submit information as required to MAGIC Grants. Any elected member may optionally forgo compensation (if applicable) for this requirement to not apply, but MAGIC Grants may still require disclosures for the enforcement of its policies. MAGIC Grants will determine what documents need to be provided.

MAGIC Veto Powers

For legal reasons, the MAGIC Grants board shall have a non-overridable veto on any decisions (including but not limited to grant disbursement and investment decisions) of the MAGIC Fund committee. This veto may only be used in the following cases (to be determined in the board’s sole discretion):

  • Any decisions that would not be allowable under MAGIC Grants’s charitable purpose.
  • Any decisions that would pose a high sanctions, money laundering, or terrorist financing risk.
  • Any decisions that would violate applicable laws and regulations.
  • Any decisions that would violate MAGIC Grants policies, including but not limited to MAGIC Grants’s Non-Discrimination Policy, Conflict of Interest Policy, and Investment Policy.
  • Any decisions that would provide improper disbursement to committee members, including those that violate the restrictions in Appendix D.
  • Any decisions that would violate the restrictions in Appendix A.

If the MAGIC Grants board determines (in its sole discretion) that any MAGIC Fund committee member has materially violated any MAGIC Grants policies, or is a compliance or legal risk to MAGIC Grants, MAGIC Grants may immediately remove the relevant committee member.

MAGIC Fund Committee Impeachment

If MAGIC Fund Voters wish to impeach an elected committee member, they can call for a special vote. Three quarters of all MAGIC Fund Voters must vote for the committee member’s impeachment (for clarity: not three quarters of just the voter turnout). Should this threshold be met, the MAGIC Grants Board shall evaluate the situation and determine in its own discretion whether to remove the committee member or not.

Fund Disbursement Requirements

MAGIC Grants will assist with the proper disbursement of funds. In general, funds must be paid after completion of relevant contract work, or with controls as required by law. Contractors will be expected to sign a contract that covers the scope of work and payment terms. MAGIC Grants will provide this contract.

As required by law, contractors and employees will be required to provide certain documents to MAGIC Grants. This information will not be shared publicly or with the MAGIC Fund Committee to the extent allowable by law. MAGIC Grants will determine what documents need to be provided. MAGIC Grants may be legally required to publicly disclose compensation that meets certain criteria; please ask the board for specifics if this applies.

Grant Applications and MAGIC Fund Use

The MAGIC Fund Committee shall decide how to use the MAGIC Fund, including the application process and deadlines (if any) for grant applications. MAGIC Grants encourages consistency for most grants while still allowing for agile grants as appropriate.

The MAGIC Fund Committee should require at least 3 votes to approve grant disbursements and investment decisions. A committee quorum requires at least 3 committee members to be present. These can be changed by the board (for example if a larger committee is desired). The board may optionally use a binding or a non-binding election to collect feedback on potentially changing these thresholds.

Selected MAGIC Fund investment decisions must comply with the MAGIC Investment Policy. MAGIC Grants allows MAGIC Funds to have wide discretion over their own investment policies so long as they are compatible with MAGIC’s Investment Policy.

Compensation for MAGIC Fund Committee Members

The MAGIC Fund Voters must explicitly vote to change the amount of compensation allowable to MAGIC Fund Committee Members for such compensation to be made available from the MAGIC Fund, and limits (such as hourly rates) must be established in the vote. MAGIC Grants will veto any disbursement that does not meet these predetermined guidelines. Committee members may optionally forgo compensation, though this should not be expected or pressured in any way. MAGIC Grants may be legally required to publicly disclose compensation that meets certain criteria; please ask the MAGIC board for specifics if this applies. MAGIC Fund Committee Members may elect to have their due compensation paid to another entity, subject to MAGIC Grants board approval.

The initial level of allowable compensation and restrictions are listed in Appendix D.

Approximate Time Commitments per Year

Position Annual Hours
MAGIC Fund Voter 5 hours
MAGIC Fund Committee Member 150 hours

Meeting Minutes

The MAGIC Fund Committee should provide meeting minutes to MAGIC Grants and to the public. Committee members may use pseudonyms in the meeting minutes if preferred. These should be available on the MAGIC Grants website within 60 days of the committee meeting.

Donations from MAGIC Fund to MAGIC Grants

Should the MAGIC Fund Committee decide to donate funds to MAGIC Grants, such a decision must be approved by a MAGIC Fund Voters majority vote. This does not include payments of fees levied by MAGIC Grants on the MAGIC Fund.

MAGIC Fund Fees

MAGIC Grants may impose fees on the MAGIC Fund. These are described in the MAGIC Fund Fees document. They may be changed from time to time as described in the document.

Fund End of Life

The Fund can be closed and the remaining assets given to MAGIC Grants or another entity under any of the following independent conditions:

  • The Fund has no remaining assets or a negative balance. MAGIC Grants may close the Fund with 30 days’ notice if not rectified in that time.
  • If applicable, the Fund has fewer assets than the minimum annual fee 30-60 days before the next minimum fee is due. MAGIC Grants may announce at least 30 days before the fee is due its intention to close the Fund, giving the committee a chance to determine how to disburse the remaining assets before the fee is charged.
  • MAGIC Grants issues a notice at least 1 year in advance that it wishes to close the Fund, giving the committee a chance to determine how to disburse the remaining assets.
  • The committee votes unanimously to close the Fund. MAGIC Grants may optionally also require a Voter majority vote.
  • The committee votes by majority vote to “split” the Fund into several Funds. This is intended for major Project changes or splits (eg: Bitcoin/Bitcoin Cash). MAGIC Grants may optionally “freeze” the existing Fund while it is determining how to allocate assets among the two new Funds. MAGIC Grants may deny the formation of new Funds, preventing the “split” in effect. Should MAGIC Grants agree to “split” the Fund, Voters must agree by majority vote to 1) close the existing Fund, 2) open two (or more, as applicable) new Funds under new charter documents, and 3) vote to approve the allocation of assets among the new Funds. The new Funds will then undergo the typical Fund startup processes of selecting Voters and electing a committee, subject requirements listed in those new Fund charter documents.

Renaming the Fund

The committee can vote by majority vote to rename the Fund, which must be approved by MAGIC Grants.

Changes to this Document

Unless other restrictions apply to the relevant sections, the committee may modify this document by majority vote. MAGIC Grants must approve the changes, and it may require a Voter majority vote to approve the changes even if this is not explicitly required by the existing language. Unless waived by MAGIC Grants, proposed changes should be announced publicly at least 30 days in advance of the change.

Should any portion of this document affect the legal standing of MAGIC Grants, MAGIC Grants may change the relevant portions without any other approvals and without notice.

MAGIC Grants Existing Board

Link

Contact Information

MAGIC Grants: info@magicgrants.org

MAGIC Monero Fund (emails all committee members): MoneroFund@magicgrants.org

Appendix A - Restrictions on Grant Disbursements

In addition to all the normal restrictions on grant disbursements, this MAGIC Fund shall have the following additional restrictions on grant disbursements:

  • None

Appendix B - MAGIC Fund Voter Modifications

Modifications to MAGIC Fund Voters:

  • MAGIC Fund Voters must provide a name (or pseudonym) and valid email.

Appendix C - MAGIC Fund Committee Members and Elections

Initially, there will be 5 committee members. All 5 are elected by the MAGIC Fund Voters. The most-voted-for 2 members will initially serve 2 year terms, with the next-most-voted-for 3 members will initially serve 1 year terms. From then on, the elections will be for 2 year terms. The election process is shown below for clarity:

  Year 1 Year 2 Year 3 Year 4
Committee Members up for Election 1,2,3,4,5 3,4,5 1,2 3,4,5
Committee Members Not up for Election   1,2 3,4,5 1,2

Appendix D - Committee Allowable Compensation and Restrictions

The amount allowable for committee member compensation is the lesser value of the restrictions imposed by Parts A and B:

Part A: This is the compensation allowable to committee members by Voters (modifiable by board-approved Voter majority vote):

  • Term: Monthly
  • Amount: $0
  • Maximum amount per month: $0
  • Maximum amount per year: $0

Part B: This is the compensation allowable to committee members by the MAGIC Grants board (modifiable by the MAGIC Grants board only):