[DRAFT PROPOSAL]: Moving to a Grants Council

The lockup here is a 1-year cliff

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Return of the Councils

Councils are a step in the right direction. There was too much conflict between members and committees in making decisions. Instead empowering individuals to be on grant councils and trusting their decisions, removes a lot of the obstacles involved.

Along as there is a clear path for reviewers to be off-boarded if necessary, then this is a good step forward. We want to clarify that if reviewers arenā€™t pulling their weight, then other team members or token holders should be able to follow an outlined process to remove them.

Accountability

Using a tool like Questbook for public accountability will help here. Itā€™s a public and transparent tool for everyone to track grant updates and see grant distribution. They are free to use and can be split into sub-committees as mentioned in the proposal. You can see it being proposed in Compound too.

Misc

Grant reports

Since the council will be voting on grants instead of token holders, they should provide reports that inform the community on the protocol, what they hope to achieve and why they were funded simply and concisely. If OPLabs has a template in mind, it would be great to share it.

Transparency

Aave, balancer, and Uniswap have good processes to keep grant information transparent. We should take inspiration from them. Documenting processes and grants in one place such as a notion page or questbook would be a good start.

Delegate compensation

Is a 1-year cliff fair? 50% released after 6 months, and the rest released after another 6 months.

Itā€™s a privilege to be paid retroactively, but waiting one year is a long time. Organizations like ours donā€™t have an issue with this, but this might deter individual delegates from getting involved.

Process

I agree with @lefterisjp here. Some form of grant waves would be easier, so both proposers and reviewers have a concrete plan to follow. Season 2 was a bit messy when it came to reviewing grants.

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I also think this is not correct. Delegates do work now and they should be compensated for their service now. If I gave my employees their salary with an 1-year lockup I would not have any employees.

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No one raised it earlier, so I assumed people were in support of it. I was trying to find a middle option. Ideally, I would prefer to see all members paid monthly similar to a salary, or when the season is complete (similar to Season 2).

I donā€™t see the need for any lock up.

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Iā€™ll add to this process weekly calls for proposers to talk about their projects and plans.

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While I think this council is a good idea, we need a proposal filter. We should act like a Congress, with elected Representatives to filter the proposals, and an elected Senate to bring their expertise when the final proposal is ready and needs to be overseen by experienced people in the field.

I would like to see this council as a house of representatives, engaged with the projects, giving feedback, reaching out to developers, and pushing optimism forward.

And then people like SNX Ambassadors, Linda, Quix, Katie, Scott, Polynya, Lefteris, and basically all the big delegates to work as a Senate that gathers on the last week, reads very well-polished proposals passed by the representatives and give their pass to vote or to come back to representatives.

Iā€™m trying to include big brains here without wasting their precious time.

About these 2 things:

As a committee member, Iā€™ve worked 3 to 4 daily hs on this because Iā€™m passionate about public goods and I feel is the only way to progress as a society. But passion doesnā€™t pay the bills sadly. The ā€œ1-year lockupā€ should at least be 1-year vesting with monthly unlocks. 833 OP to 1000OP monthly unlocks and 2000 OP to 6000 OP last unlock sounds better. Even if they donā€™t sell, they can LP, yield, farm, etc while working on this.

On the other side Iā€™m trying to figure out how this will work:

Ok perfect I make a hackathon proposal, (the last one here in Argentina by The Graph had 40 devs if Iā€™m not mistaken). I get funds approved on January 2023, and I receive 20k $OP, awesome! but

  • I canā€™t use them for 1 year?
  • do I coordinate the hackathon for 2024?
  • What does it mean locked? do you vest them in a contract? do you send it to my multisig and I have a 1-year restriction not to sell them?
  • If I use $OP as a hackathon price do I send the prices one year later?

Lastly, EthernautDAO got a developer grant approved to maximize the number of developers building on Optimism. And this is what the Builders sub-committee will be doing. But someone has to promote this thing. My job since this grant was approved is to look for projects that want to be native or integrated with optimism, reach out and say ā€œHi we can pay one of your devs to train a new dev (web2 senior) and you can use this new build force to integrate your project to Optimismā€ and we are having amazing positive feedback from this projects and starting to coordinate everything but someone has to go and nock this doors. Call it marketing, integrator, or partnership searcher I think is missing on the builderā€™s committee.

Please read all this as constructive feedback I would love to express all these ideas with positive vibes but I am not an English native speaker as you can see. :heart:

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In agreeance with decreasing the lock-up period / providing a vesting schedule instead. Personally would support more of a rolling 3 week vesting schedule after each voting cycle has passed to receive payment for council members.

Per Dhannteā€™s suggestion on a Congress-esque structure, I think it would be great to involve delegates not on the Grants Council in this manner. Instead of having the Council decide which proposals to review, non-Council delegates would be able to have a higher threshold requirement for general support / against for passing along a proposal to the Council. This would require a larger majority of delegate support and actively involve them in approving proposal review. A maximum amount of support votes could be implemented.

ie. There are 10 proposals requesting review. All non-Council delegates have 5 ā€œsupportā€ votes per cycle. Delegate A may support proposals 1,2,3,4,6. Delegate B supports proposals 2,4,7,8,9. Delegate A can whip support and have Delegate B drop their support for proposal 9 and instead support proposal 1.

Delegate A receives more backing to pass proposal 1 to the Council and Delegate B receives Delegate Aā€™s support on a different proposal to back next cycle.

Regardless of final method, itā€™s definitely important we focus on not spreading our Council too thin and having too many proposals to review and approve per cycle. I think non-Council delegate will play a key role in that sense and oversight for the Council.

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Thanks for putting this together. We are still in an experimental stage so its good to give all options a fair trial.

I am concerned that this could lead to a decrease in participation as "protocol upgrades, inflation adjustments, treasury appropriations / Foundation budget, and Director removal " proposals are few and far between. I am not denying the importance of those votes just the frequency in which they occur. I realize there is also the important role of oversight on the Council by non-Council delegates and hopefully this will encourage frequent constructive participation by community members and delegates.

One suggestion would be we add one reserve/substitute reviewer per sub-committee. This will come in handy when a conflict of interest arises or if a council member is unfit or unavailable for a cycle.

Another would be

Increase the responsibilities by phrasing it~ commit to spend roughly 2 hours a day on these responsibilities.
Coz it wouldnā€™t be helpful if reviewers are MIA for 4 days of the week as itā€™s there roll to provide feedback, answer questions and respond to comments.

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The idea was that anyone could self-nominate. There are a relatively small number of delegates with >0.5% voting power. Additionally, some people have mentioned it may be beneficial to have outside experts on the Council, and they may not have significant voting power. This is a flexible parameter though, so if delegates disagree, letā€™s discuss!

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Thanks for the early feedback on this everyone!

In terms of the three week voting cycle, we suggested a 3 week cycle to keep things consistent for proposers, but it will ultimately be up to the Council to decide if grant waves would be a more effective approach.

We hear you on the lock-up limitations and are working on ways to address your concerns.

On concerns about non-Council delegate activity, in addition to engaging on other high importance proposal types and high leverage decisions such as establishing grants council budgets, membership, renewal, and scope, there will be a multitude of other activities the Token House is responsible for in future Seasons. Grants are just the beginning.

Stay tuned for updates shortly!

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Thanks @Bobbay_StableLab for your comment and for introducing Questbook to the Optimism community. Hello everyone, I am Harsha, Co-founder, Questbook, and I will share how Questbook aligns with the vision of this process.

Accountability

Questbook offers a Web3 native platform that allows for the development and ongoing management of grants programs, including those focused on transparency and community, like with Optimism. With our platform, all actions happen on-chain, and all our code is open-source.

Making Milestone-Based Payouts

Using Questbook, you can make grant payouts once the proposer achieves the milestones defined by the lead/reviewers or by the proposer.

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Transparency and Reporting

Each councilā€™s performance can be publicly viewed and audited using rich dashboards. You can also Increase community membersā€™ participation to keep grant programs accountable (measured by the number of people looking at the dashboard and participating in voting)

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Past Engagements

We have engaged with various kinds of organizations since our formation. We have built a platform that grows community involvement and streamlines the grants management lifecycle. You can read a bit more about the different kinds of organizations we have worked with in this article.

One area we have commonly seen as challenging for Foundations and DAOs to address is transparency and accountability. Decentralized governance revolves around the potential that these networks can unlock. In practice, solving these kinds of challenges and building solid systems is very difficult. We have developed an approach we call Delegated Domain Allocators (DDA). We have begun working with Protocol DAOs (most notably our work with Compound, proposal. This approach could help provide a structure that balances community participation, proposal oversight, and transparency.

In addition to our work around the DDA concept, we have helped Ecosystem DAOs, like Polygon DAO, develop and scale their grants program over time. While the DDA approach is interesting, it is no longer required to use our platform.

We would welcome the opportunity to engage with this community and its stakeholders to discuss how our experience and platform may be valuable and help build greater accountability and transparency while allowing for a streamlined approach that scales with community engagement.

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The 0.5% filter on this council will only concentrate more power and will leave behind many hard working users, more than 10 ex committee members wonā€™t be able to apply.

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The council should, I believe, have a blend of experts/builders and empowered delegates, with a dedicated number of seats for each role. The 0.5% filter seems reasonable for said delegates, as over time protocols will (and should) accrue more of a say over OP governance.

OP governance is currently bureaucrat heavy; some community members with very little voting power and debatable experience have an outsize voice and influence. Itā€™s important community members have a say, but not at the expense of protocols who have bet their future on Optimism (SNX, as an example). To note: delegates who do not meet the threshold can always campaign (and should attract delegations if their work was worthwhile) or simply buy OP!

A possible compromise here could be to have one seat for a non-expert, below-threshold ā€œdelegateā€, thus mitigating votepower as a vote influence for that particular seat.

Interesting wording. Anyway, protocols and projects can listen to community members (aka users) or not, If community members arenā€™t welcome donā€™t expect them to stay. After all, protocols are irrelevant without users and thatā€™s probably why many protocols/projects/teams/whatever need grants and incentives to exist.

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See also : CGP 2.0 - Delegated Domain Allocation by Questbook - Proposals - Compound Community Forum

The compound ā€œcouncilā€ for running their grant program CGP2.0

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Based on community feedback, the following updates have been made:

  • The one-year lock up on Council rewards has been removed
  • In regards to builders grants, added: ā€œIf access to upfront capital is a blocker for applicants, Optimism may put them in touch with alternative resources to support teams in this position.ā€
  • Added: ā€œThere will be a multitude of other activities non-Council delegates will be responsible for in future Seasons.ā€
  • Added the following Council responsibilities:
    • ā€œfilter and process all grant applications. Every grant applicant should receive a response, even if their proposal will not proceed to Council review.ā€
    • ā€œensure ongoing Council operations and performance are transparent to the communityā€
  • Edited: ā€œthree week cycleā€ to ā€œregular cyclesā€

This is not a final version. The Reflection Period officially starts on 11/17/22, so there is plenty of time for additional feedback. For example, an open question for additional discussion:

  • As the Council is currently designed, there is no eligibility requirement for members to hold >0.5% voting power. Should any of the Council positions require >0.5% voting supply for eligibility?
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I am inferring that the filtering process for grant applications that will be defined by the council determines what proposals ARE and ARE NOT reviewed correct?

My concern here is lack of transparency in that filtering process as we all know that proposers are going to want to know exactly why their grant did not even make it to council review.

This problem was accounted for in Season 2 as everyone knew you have to get 2 delegates with >.5% voting power to approve your proposal before it moved to an official review/vote

Is there a way we can explicitly state that there needs to be transparency in whatever this filtering process ends up being?

Suggestion: modify the statement to:
*ā€œfilter and process all grant applications. Every grant applicant should receive a response, even if their proposal will not proceed to Council review. If the proposal does not proceed to Council review the reasoning for this decision should be included in a public response to the grant applicantā€

Logic for why the >0.5% voting supply was an appropriate requirement in Season 2:
I saw the logic in requiring at least one person on each committee to have >.5% voting supply as this was loosely tied to the requirement of proposals needing two delegates with >.5% voting supply to approve the proposal before it moved to an official review/vote. It only makes sense for the people paying the most attention to have the required voting supply available needed move these proposals through that approval gate.

Logic for not including >0.5% voting supply as an eligibility requirement in Season 3:
I logically do not see a reason to include >.5% voting supply as an eligibility requirement for any of the council positions as these are positions you are elected into, based on your merits, by a group of your peers. Putting additional restrictions on these elected positions may disqualify the best candidate. Effectively the amount of voting power you have has no bearing on how well you are able to do your job in season 3.