Community-Governed DUST Grant DAO

MIPNone
MPS0031
StatusProposed
CategoryEcosystem
AuthorsAlejandro Castillo
Created16-07-2026
RequiresNone
ReplacesNone

Abstract

Midnight’s token model dynamically generates DUST (a shielded, non-transferable network gas resource) to those holding the native asset, NIGHT. Because DUST continuously regenerates, passive NIGHT holders will routinely accumulate amounts of excess DUST capacity that remain will idle, hit its maximum generation cap, and eventually decay to zero if unused.

Simultaneously, active developers and companies building on the Midnight network will be in constant need of DUST capacity to run smart contracts, deploy applications, and subsidize user transaction fees.

Currently, the ecosystem lacks a formalized way to connect these two groups.

Because DUST is non-transferable, passive holders have no straightforward method to redirect their expiring gas capacity to active builders. This problem statement identifies the lack of cooperative allocation infrastructure to prevent network capacity waste and support grassroots projects.

Vision

The vision is an optimized, zero-waste Midnight network where idle transaction capacity is seamlessly routed to high-utility applications.

We see a future where excess DUST is collected, managed, and distributed by a community-governed DAO.

Within this framework, NIGHT holders have a direct, active say in determining exactly where these DUST grants are allocated, deciding which projects are most deserving of network capacity. This ensures token holders play a primary role in shaping ecosystem growth.

Problem

  • Wasted Network Capacity: Unused DUST generated by passive NIGHT holders sits idle. Once it hits its capacity cap, further generation stops. If the underlying NIGHT is moved, the DUST decays to zero. This represents a loss of potential on-chain activity.

  • Decoupled Supply and Demand: Active builders and companies require a continuous stream of DUST to power their protocols, while passive NIGHT holders sit on massive surpluses of decaying DUST they cannot utilize.

  • Non-Transferability Constraints: Because DUST is explicitly designed as a shielded, non-transferable gas credit, holders cannot simply send excess DUST directly to developers.

  • Lack of Allocation Infrastructure: The ecosystem does not currently have a decentralized mechanism to safely pool NIGHT, evaluate developer demands, and route DUST capacity to the projects that need it most.

Use Cases

Use Case 1: The Passive NIGHT Holder

An ecosystem participant holds a significant amount of NIGHT on Cardano. Their wallets are constantly generating excess DUST capacity that is currently going to waste. They want to support active dApp development on Midnight but do not want to sell their NIGHT or manage a gas delegation pipeline themselves.

Use Case 2: The Resource-Constrained Developer

A company has developed a high-utility data-protection application on Midnight. To onboard their first 10,000 active users seamlessly, they want to subsidize their users’ initial transaction costs. However, they do not generate enough native DUST to cover these high volumes and need a subsidized grant source to sustain their launch.

Goals

To solve these problems, we need to establish a dedicated, community-operated DAO to govern and distribute these resources. The goals of this DAO framework are:

  • Utility Pooling: Allow NIGHT holders to pool the DUST generation capacity of their assets in collective manner.

  • A DAO Entity: Establish a decentralized governance structure where community members hold a native governance token to vote on and distribute pooled DUST grants.

  • Structured Grant Tiers: Create standardized, predefined grant allocations (e.g., hobbyist, growth, and heavy enterprise tracks) to ensure orderly and transparent treasury management.

  • Continuous, Zero-Risk Delegation: Ensure that the underlying NIGHT pooled by the DAO remains entirely secure, while only the generated DUST “gestures” outward to builders.

Expected Outcomes

  • Creation of a DAO: A functional, community-owned and operated grant-delivery vehicle that acts as Midnight’s onboarding hub.

  • Zero Utility Waste: Excess DUST capacity that would otherwise decay is captured and converted into actual, productive on-chain transactions.

  • Accelerated Developer Onboarding: Companies and grassroots developers can easily apply to the DAO, secure a predictable gas runway, and launch dApps with zero upfront operational costs.

Open Questions

  • How can the DAO route generated DUST capacity to grantees?

  • What is the optimal governance parameters to ensure stable and efficient DAO operations?

  • How can we design the DAO’s proposal system to prevent malicious projects from draining the community gas pool for spam attacks?

None Identified

This MPS is licensed under CC-BY-4.0.