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What is a Funding Round?
A Funding Round is a period of time when funds can be deposited into a Vault so that members receive ownership stakes for their contributions. Equity stakes are based on the current Vault Valuation and how much contributed in the current round.
Both current members and new members can participate in a Funding Round.
Contributions to receive Vault Equity are only allowed during a Funding Round.
Funding Rounds, along with Exits, are “equity changing” actions that modify the percent ownership of members within a Vault. Read more about members' Vault Equity to investigate how these calculations work.
Funding Rounds
A Funding Round is necessary to correctly represent everyone's ownership stakes as new contributions enter the Vault/wallet.
For instance, when the value of your Vault goes up (perhaps due to the floor price of an NFT you collected increasing), new contributions from new or existing members should be accepted at the latest Vault Valuation to keep equity fair for all members.
Funding Rounds elevates a standard multi-signature Gnosis Safe with clear equity tracking based on contributions. In a Gnosis Safe, anyone can deposit into the Safe anytime. The issue is that equity cannot be calculated accurately unless Gnosis Safe owners manually track contributions and valuation with spreadsheets. Lore (previously Prysm) automates this, and the Funding Rounds mechanism is a key component.
A Funding Round involves three primary stages:
At the end of a Funding Round, the squad should have new contributions with updated equity ownership for each member to account for these contributions.
Only Signing Members can open and close a Funding Round.