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What is a Funding Round?
In Prysm, a funding round is a period of time in which contributions can be deposited into a Squad by both current members and new members. Contributions to the squad are only allowed during a funding round.
Funding rounds, along with pay outs, are โ€œequity changingโ€ actions that modify the percent ownership of members within a Squad. Read more about member equity to dig deeper on how these calculations work.

Why do we need funding rounds?

A funding round is necessary in order to recognize the updated value of existing funds in your squad when raising new funds. For instance, when the value of your Squad goes up (due to the price of ETH going up or the floor price of invested NFT collections increasing), new contributions from new or existing members should take this updated Squad valuation into account.

Why canโ€™t I just deposit directly into the Squad?

Funding rounds elevate Prysm Squads from a standard multi-signature Gnosis SAFE deposit experience. In a Gnosis SAFE, anyone can deposit into the SAFE at any time. The issue with this is that equity cannot get accurately calculated unless Gnosis SAFE owners manually track contributions and valuation via spreadsheets. Prysmโ€™s funding round feature improves on a standard Gnosis SAFE by automating all of this, allowing your Squad to accurately track equity ownership and fairly recognize new contributions.

What are the steps involved in a funding round?

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.