Home / Contents / Donations / News / Contact
░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░
░░░░░░░$$$$$$$\░░░$$$$$$\░░░$$$$$$\░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░
░░░░░░░$$ __$$\░$$ __$$\░$$ __$$\░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░
░░░░░░░$$ | $$ |$$ / $$ |$$ / $$ | $$$$$$$\░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░
░░░░░░░$$ | $$ |$$$$$$$$ |$$ | $$ |$$ _____|░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░
░░░░░░░$$ | $$ |$$ __$$ |$$ | $$ |\$$$$$$\░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░
░░░░░░░$$ | $$ |$$ |░░$$ |$$ | $$ | \____$$\░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░
░░░░░░░$$$$$$$ |$$ |░░$$ |░$$$$$$ |$$$$$$$ |░░░░░░░░.project ░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░
░░░░░░░\_______/░\__|░░\__|░\______/░\_______/░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░
░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░░
Over the course of this study we conducted a number of interviews. We will add summaries here as the interviewees begin to approve the summaries and learnings from those interviews and wish to be named in the study. We are still producing formal summaries.
The interview with Sov(https://x.com/sovereignsignal), Head of Grants Grants in the Grants Lab Organization at Gitcoin (https://gitcoin.com), provides an in-depth look into the structure, challenges, and best practices for running grant and bounty programs within decentralized autonomous organizations (DAOs). Sov’s experience spans across various roles and responsibilities in the web3 ecosystem, emphasizing the importance of transparent, sustainable, and community-driven funding mechanisms.
Sov’s journey into the DAO space began with his involvement in the crypto industry in 2017. After facing financial setbacks in the market crash of January 2018, Sov shifted his focus to community service, leading a local food bank from near-bankruptcy to financial stability through effective grant collection and management. This experience in traditional grant processes set the stage for his later work in the web3 grant ecosystem.
He started documenting and researching various grant programs during the last bull market, which led to consulting roles and eventually a full-time position at Gitcoin. Sov currently leads the PGF workstream, managing Gitcoin’s grant programs and driving development for the Allo protocol and Grant Stack.
Critical Structural Elements:
Innovative Models:
Gitcoin’s experimentation with different funding mechanisms has led to successful models like the quadratic funding used in Gitcoin Grants. However, not all experiments have succeeded. For instance, a voting mechanism allowing users to vote against projects did not yield the desired results.
Common Bottlenecks:
Overcoming Challenges:
Gitcoin has shifted from charging fees for community rounds to separating grant operations from services aimed at creating sustainable cash flows. This allows them to maintain a strong brand while developing their products and services.
Community Involvement:
Community involvement is fundamental to Gitcoin’s operations. Building in public and maintaining active forums for discussion and feedback are central practices. This transparency helps in gathering valuable insights and maintaining legitimacy.
Examples of Effective Collaboration:
Gitcoin’s forums are a hub for strategy discussions, feedback, and transparency. This approach fosters a participatory environment where community members can actively contribute to decision-making processes.
Effective Governance Structures:
Gitcoin emphasizes internal governance and public transparency. Decentralizing the Treasury and involving the community in decision-making are key strategies. Gitcoin also participates in the governance of other DAOs, such as Optimism, using delegated tokens to influence decisions aligned with their expertise.
Ensuring Transparency and Trust:
Transparent decision-making processes, clear eligibility criteria, and public disclosure of fund allocation and outcomes are fundamental practices. These measures help maintain trust and credibility within the community.
Essential Technologies:
Gitcoin relies heavily on its own tools, such as Grant Stack and the Allo protocol, to manage grant programs. These tools are designed to streamline processes and ensure efficient management of grants and bounties.
Streamlining Distribution Processes:
The development of EVM-based tools ensures compatibility with the most widely used network standard in crypto. Gitcoin focuses on continuous improvement and scalability of their tools to meet the evolving needs of the ecosystem.
Common Pitfalls:
Examples of What Didn’t Work:
The failed voting mechanism in an early grants round highlights the importance of testing and iterating on funding models.
Ideal Grant Program:
An ideal grant program should be community-governed, transparent in its processes, and clear in its decision-making criteria. It should publicly disclose fund allocations and demonstrate the return on investment for funded projects.
Recommendations for Improvement:
Fostering a participatory environment, maintaining transparency, and balancing resource allocation are key recommendations. Engaging with other established grant programs and learning from their experiences can also provide valuable insights.
Paul Glavin(https://x.com/Paul_Glavin), a key contributor to the Gardens Project, shared his experiences and insights during an interview aimed at creating a well-structured, transparent, and sustainable grant and bounty program for the Internet Computer ecosystem. This initiative seeks to streamline the identification, funding, and execution of development projects, integrating iterative feedback mechanisms and community collaboration in a decentralized yet organized manner.
Paul’s journey into DAOs and bounty programs began with a focus on public goods funding, a domain he believes is the ultimate use case for cryptocurrency. His entry into the space was through platforms like Gitcoin, Giveth, and other side projects such as BrightID and the Token Engineering Commons. He found the conviction voting protocol used by 1Hive and its Gardens framework particularly compelling, leading him to contribute to the Gardens Project for over three years.
Paul highlighted the structural elements crucial for a successful grant and bounty program, emphasizing the importance of an open, decentralized approach. However, he also noted the challenges faced by 1Hive, such as leaderlessness and lack of coordination among contributors with differing visions. The governance setup of 1Hive, although resilient, struggled due to the misalignment of individual goals and the lack of a centralized decision-making authority.
Gardens, in contrast, maintained consistent support and active contributions, benefiting from a robust governance framework. Paul hopes that the launch of Gardens will attract more communities to use conviction voting, leveraging 1Hive as a platform for incubating and launching open-source software in the web3 space.
Paul cited several best practices and success stories related to conviction voting. Gardens’ conviction voting protocol has proven its reliability, handling a maximum TVL of over $40 million without any hacks or malicious proposals. The protocol’s design ensures that the more community support a proposal garners, the more likely it is to pass, encouraging a bottom-up construction of token treasuries.
The dynamic nature of conviction voting, with its logarithmic growth and decay of voting weight, promotes thoughtful decision-making among community members. This system ensures that proposals require sustained support over time, rather than immediate, fleeting votes.
One of the primary challenges Paul identified in the current grant and bounty systems is the lack of alignment among contributors’ visions. In 1Hive, the absence of a central leadership figure led to disorganized efforts and frustration among members. Paul suggested that having clear purposes for funding, guided by on-chain covenants or social contracts, can mitigate such issues. Additionally, an admin team for pre-reviewing proposals can ensure quality control and alignment with community goals.
Community involvement is critical in the governance and execution of grant and bounty programs. Paul emphasized that a cohesive working group with a dedicated project manager, similar to traditional company structures, tends to be more effective. Gardens and other successful projects have managed to support themselves through a combination of grant proposals, donations, and community-driven funding mechanisms.
Effective governance structures in managing these programs often include clear guidelines and transparent processes. Paul’s experience with Gardens showed that distributed decision-making, supported by mechanisms like conviction voting and Celeste for dispute resolution, enhances trust and accountability. The introduction of fluid proposals in Gardens allows for continuous support and funding, reflecting the community’s active engagement.
Technologies and tools essential for managing these programs efficiently include the Solidity-based conviction voting protocol and Celeste for dispute resolution. These tools ensure that governance processes are entirely on-chain, permissionless, and secure. The planned V2 of Gardens will introduce further improvements, such as multiple instances of conviction voting and different point systems (quadratic, fixed, capped, and unlimited), enhancing flexibility and scalability.
Paul pointed out several anti-patterns to avoid, such as insufficiently defined purposes for funds and the failure to maintain active proposal submission rates. The Token Engineering Commons faced challenges due to a lack of funding proposals, highlighting the need for a robust pipeline of projects to sustain community engagement. Additionally, ensuring that governance mechanisms do not overly restrict participants’ future actions can prevent frustration and disengagement.
In his ideal vision for a grant and bounty program, Paul emphasized the importance of flexible, bottom-up governance structures supported by reliable on-chain mechanisms. He recommended consulting with experts from BlockScience, Token Engineering Commons, and Gitcoin Citizens for further insights. Ensuring the scalability and sustainability of such programs requires ongoing community involvement, clear purpose alignment, and robust technological support.
Next: Findings