Thank you @joeri.btc for your thoughtful and principled critique of SIP-031. It is rare to see such a clear articulation of the tension between visionary goals and the structural mechanisms used to pursue them. Your concerns are not only valid but deeply relevant. They point to an urgent need for a treasury model that upholds the foundational principles of the Stacks ecosystem, decentralization, integrity, and accountability, not just in language but in structure.
The individual allocation treasury model is a direct answer to the problems you identified. It does not revise the current structure of SIP-031. It replaces it entirely with a model rooted in user-level consent, decentralized allocation, and automated feedback mechanisms.
Below, I will respond to your critique point by point and show how this model solves or structurally prevents each of the issues you raised.
1. Legal and Regulatory Structure
You are right to point out that SIP-031 introduces legal exposure by consolidating control over new emissions in a centralized treasury committee. This resembles the kind of discretionary allocation and managerial effort that can trigger securities regulation under the Howey Test and MiCA classifications.
The individual allocation model avoids these risks entirely.
There is no committee. There is no promise of profit. There is no pooling of capital under centralized discretion. Emissions are fixed or capped and are allocated proportionally to individual STX holders. Each participant must explicitly choose to either fund ecosystem categories or burn their share.
If no action is taken, funds are held in a neutral time-locked account for six months, after which they are distributed by smart contract through either a market-driven merit queue or public auction, both with transparent and non-custodial rules. No entity manages capital on behalf of others.
This structure eliminates any centralized managerial body, thereby removing the key legal elements that resemble a security or collective investment scheme.
2. Governance
You correctly note that SIP-031 introduces a powerful Treasury Committee with no term limits, no elections, and no enforced transparency. This is incompatible with decentralization.
The individual allocation model eliminates the need for governance over others’ funds. Each STX holder governs their own proportional share. No one votes on behalf of anyone else. No majority can override individual choice.
This eliminates the need for elections, term lengths, conflict of interest frameworks, or audits. Accountability is built into the design. If a proposal fails to gain support from individual allocators, it receives no funding. If a user disagrees with all options, they can burn their share entirely.
This is not governance. It is ownership.
3. Economic Architecture
Your economic critique of SIP-031 is essential. It shows how funding projections depend on assumptions about token price, behavior, and committee efficiency. The absence of defined unlock paths, emission caps, or feedback mechanisms leaves the system fragile and unpredictable.
The individual allocation model is emission-disciplined. Only the portion of the scheduled emission that is explicitly funded enters circulation. If 50 percent of STX holders fund initiatives and 30 percent burn their share, then only 50 percent of the emission is released into the market, and 30 percent is permanently removed from supply. The remaining 20 percent, from holders who take no action, is placed into a time-locked holding contract for six months. During that period, the original holders still have full control and may choose to fund or burn their share at any time.
If they fail to act by the end of that window, their unclaimed allocation is automatically repurposed through one of two structured, decentralized mechanisms:
- The Merit Queue, which allocates funds to pre-submitted proposals ranked by signaling tokens. These signaling tokens are non-transferable and can only be earned by users who have actively funded or burned in previous cycles. This ensures that only committed, engaged participants influence the direction of repurposed funds. The funds flow from the top ranked down, until the funds are depleted, if there are leftovers they are burned.
Or
- The Public Auction, where verified builders bid STX for the right to claim unallocated funds. Bids are paid in STX and are burned, creating real economic cost and commitment.
This design means that when users remain inactive, their capital is not frozen or lost, it is passed into the hands of those who have proven their commitment. Passive holders, by not acting, implicitly delegate their influence to active participants, who earn the right to help guide unused funds toward productive initiatives. The result is a treasury that never stalls, remains aligned with those who care enough to act, and reinforces growth through responsibility, not politics.
Here is a Diagram of how the individual choice treasury system looks
+------------------------+
| Annual STX Emission |
| (e.g., SIP-031) |
+-----------+------------+
|
v
+------------------+------------------+
| |
| STX Holder Proportional Share |
| (based on % ownership) |
+------------------+------------------+
|
+----------------------+----------------------+
| |
v v
+-------------------------+ +----------------------------+
| Choose Funding Targets | | Burn My Allocation |
| % to Dev, Marketing... | | -> Reduces supply |
+-----------+-------------+ | -> Prevents dilution |
| +----------------------------+
v
+----------------------------------------------+
| Funds Distributed via Smart Contracts |
| (Based on Individual Choices, Not Votes) |
+----------------------------------------------+
If No Action(funding or burning) is taking in 6 Months:
|
v
+--------------------+ or +----------------------+
| Merit Queue | | Public Auction |
| Based on Signaling | | STX bids are burned |
+--------------------+ +----------------------+
|
v
+----------------------------+
| Remaining STX is Burned |
+----------------------------+
4. Control and Framing
You are absolutely right that SIP-031 lacks participatory mechanisms. There is no real path for STX holders to influence how capital is used beyond soft feedback or public discussion. It is a design of discretion, not distribution.
The individual allocation model inverts this entirely.
Every STX holder controls their share directly. You do not participate in a vote. You act. You decide whether to fund development, marketing, grants, or none. No majority can dilute your judgment. Your capital moves only with your consent.
This creates a truly decentralized treasury. Not one based on token-weighted elections or delegated committees, but on direct economic action. It introduces decentralization not just as an idea, but as the system’s core operating logic.
5. Sustainability, Return Mechanisms, and Resilience
Your final point addresses something few treasury proposals confront honestly. Once the money is spent, where does it go? How is it recovered, recycled, or reinforced?
In the individual allocation model, no permanent capital commitment is made unless a user chooses it. Treasury capital cannot be wasted because it is never distributed without explicit support.
If a proposal fails to gain traction or meet its deliverables, it ceases to receive funding. If users stop allocating, emissions slow. If users burn their share, the circulating supply contracts. All of these are not exceptions but normal outcomes. They are how the system remains self-regulating.
In addition, both the merit queue and the auction are selective mechanisms. The merit queue only funds proposals that have active signaling support from users who have previously funded or burned. This rewards only builders with demonstrated backing. The auction requires bidders to burn STX to compete for access to unallocated funds. This converts potential waste into long-term value by reducing supply.
No central party can restart the process or override user disinterest. The system decelerates naturally when it fails to deliver value. That is how it stays resilient.
Final Thoughts
You are absolutely right to hold SIP-031 to the highest standards. The risks you describe, legal uncertainty, centralization of power, lack of accountability, fragile economics, and absence of structural feedback, are real. They do not just weaken the proposal. They threaten the legitimacy of the entire ecosystem if ignored.
The individual allocation model addresses these issues not by promising better governance, but by removing governance where it does not belong.
It does not ask anyone to trust a committee. It asks each participant to act.
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