If the DAO's Scout submits an investment proposal that uses the Escrow component for your investment application, it usually means that you have already agreed with the investors on the release rules of the Payback Token (usually your project's token) and have decided to use the DAOSquare Incubator's Vesting module to automatically release the Payback Token to the investors. In this case, you need to promptly complete the Escrow Payback Token operation after the investment proposal is successfully submitted.

See How To Apply A Funding for details on token-based investment applications using Escrow.

What Is Payback Token

View the Payback Token section in Escrow for a detailed introduction to the Payback Token. In short, it is the Token promised to the investors in your investment deal with the investors.

How Does Escrow And Vesting Work

Before you complete the Escrow Payback Token action, it is necessary to understand how Escrow and Vesting works. The workflow of Escrow and Vesting in different models of Venture DAO varies. Check out the How it works in Escrow for more details.

Who To Escrow

In the DAOSquare Incubator, the person (wallet address) who perform the Escrow is called the Approver.

Typically, the Approver is a representative of the applicant for the investment (startup). When a token-based investment proposal using Escrow, Scout needs to specify the Approver by inputting a wallet address. This means that only the specified wallet address can perform Escrow, which is to avoid spam attacks.

In addition, the Payback Token balance of the Approver (wallet address) cannot be less than the Maximum Funding Goal required in the investment proposal, otherwise, the investment proposal will fail.

When To Escrow

For Vintage and Collective DAO, the timeframe for Escrow is from the successful submission of the investment proposal to before the execution of Start Voting. For Flex DAO, the timeframe for Escrow is from the successful submission of the investment proposal to before the end of the fundraising period. Therefore, once the investment proposal is successfully submitted, the Approver can handle Escrow.

Start Voting is a manually executed transaction and can only be triggered by the Governor of Vintage or a Member of the Collective. Therefore, you can communicate with the DAO to ensure you have enough time to handle the Escrow.

How To Escrow

Step 1: Check Escrow, Vesting and other relevant Settings

You must carefully review the Escrow and Vesting Settings of the proposal before approving the payback token to ensure that all Settings are consistent with your agreement with the investor, such us fund receiver, token price, investment amount, vesting schedule, etc. You can view this information on the proposal's voting (Vintage, Collective) or fundraising page (Flex), as shown below:

Step 2: Approve Payback Token

After checking the escrow information, you can move to the Escrow operation module on the voting page (Vintage, Collective) or fundraising page (Flex) of the investment proposal, as shown below:

When the Approver's wallet is connected, the Approve button is activated, allowing the Approver to trigger the Approve transaction.

The Approve action includes two transactions. This aims to prevent the Approver's approval from being used for other investment proposals of this DAO or other DAOs.

Step 3: Keep Payback Token Balance Enough

For The Vintage/Collective DAO

After the Approver has approved Payback Tokens, it is required to maintain enough payback tokens in the wallet (corresponding to the Max Funding Goal) before executing the Start Voting transaction. This ensures that sufficient Payback Tokens are transferred to the Escrow contract when the Start Voting transaction is executed, allowing the proposal to enter the voting period. If the quantity is insufficient, Start Voting will fail, causing the investment to fail.

For The Flex DAO

After the Approver has approved Payback Tokens, it is required to maintain enough payback tokens in the wallet (corresponding to the Max Funding Goal) before triggering the execution transaction when fundraising period ends. This ensures that sufficient Payback Tokens are transferred to the Escrow contract when the Execution transaction is executed. If the quantity is insufficient, the investment will fail.

If The Investment Is successful

The Vesting for this investment will be created (an on-chain executable Vesting Schedule for this investment) and release Payback Tokens from Escrow for this investment to investors according to the rules of the Vesting Schedule.