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Dominant Assurance Contracts

Dominant Assurance Contracts

TL;DR:

Dominant Assurance Contracts (DACs) incentivize contributions to public goods by making it a win-win for early funders. If the project gets funded, the public good is delivered. If it doesn’t, funders get refunded with a bonus. The result: people have a dominant strategy to contribute.


Originally proposed by economist Alex Tabarrok, DACs are designed to overcome the public goods dilemma—where individuals benefit from others funding a good but hesitate to contribute themselves. By guaranteeing a return with upside if the project fails, DACs remove the risk of early support and help launch collective action.


Onchain, DACs are especially powerful because smart contracts can:

  • Collect and hold funds in escrow
  • Track progress toward a funding goal
  • Return contributions with bonuses if the goal isn’t met


The bonus (sometimes funded by a sponsor or treasury) acts as an insurance policy and an incentive. When implemented well, DACs align individual rationality with collective benefit.

Best For

  • High-impact public goods that struggle with early traction
  • Campaigns needing critical mass to justify launch
  • Environments where trust or risk aversion blocks early funding
  • Funding experiments with game-theoretic framing

Good At

  1. Encouraging early contributions
  2. Reducing risk for first movers
  3. Solving collective action problems
  4. Creating strong incentives to fund public goods

Dependencies / Requirements

  • Smart contracts that can hold, refund, and disburse funds
  • A clear funding threshold and timeline
  • Bonus pool (funded by treasury, sponsor, or pre-set logic)
  • Transparent criteria for project success/failure

Not Good At

  • Long-term or recurring funding
  • Projects with ambiguous outcomes or costs
  • Use cases where bonus funding is hard to secure
  • Environments with very low engagement

Who Should Use It?

  • DAOs or communities trying to bootstrap funding for a new initiative
  • Public goods projects that have clear costs and benefits
  • Ecosystems wanting to experiment with economic incentives for early contributors
  • Protocols offering bonus-backed funding commitments via smart contracts

Example Use Cases

  • A community launches a DAC to fund a local mesh network: if the goal is hit, the network is built; if not, contributors get refunded with a 10% bonus
  • A DAO backs early contributors to a new tool with a DAC—either the project gets built or contributors earn a return
  • A public goods coalition creates DACs to kickstart regional mutual aid projects with low initial traction