Grants Council Operating Budget S7

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Proposed Council Lead: Gonna.eth
Proposed Operating Budget: 400,000 OP + X (-210,000 OP compared to Season 6)

Contact Info: gdhannte@gmail.com

Previous Work and Qualifications

Community Contributions:

Relevant Work Experience:

  • Delegate since OP governance inception.
  • Member of the first committee.
  • Grants Council Reviewer during Season 3.
  • Reviewer and Ops Manager during Season 4 and Season 5.
  • Appointed Grants Council Lead for Season 5
  • Elected Grants Council lead for Season 6.
  • Govnerd in Season 5.
  • Govner Maintainer in Season 6.
  • Active participant in RetroPGF processes:
    • Bagholder since RetroPGF 2.
    • Consistently voted on every Retro Funding.

Council Charter

  • Link to existing Charter on Github
  • Link to PR request for the Charter

Plain English Summary of Changes:

  • The Milestones and Metrics Committee has become an independent council, reducing the Grants Council’s scope.
  • The Superchain Subcommittee has been dissolved, as its functions are no longer required in Season 7.
  • Audit reviews have been shifted to the Developer Advisory Board (DAB), removing the need for the Audit Subcommittee within the Grants Council.
  • The new structure prioritizes TVL metrics exclusively, aligning the Council’s focus with the Season 7 Intent.

Breakdown of Council Operating Budget

Key Changes:

  1. Scope Reduction:
  • The Milestone and Metrics Council became an independent entity.
  • The Superchain Subcommittee has been dissolved.
  • Audit reviews have shifted to the Developer Advisory Board (DAB).
  1. Reserve Budget:
  • Reserves will only be utilized if application demand exceeds current reviewer capacity or operational needs arise during the season.
  • A 50,000 OP reserve is included to scale resources by adding one GrantNerd and one Final Reviewer if application demand exceeds expectations.
  • 70,000 OP reserve is for grants specifically designed to enhance Council operations (e.g., knowledge management platform, front-end, developer contributions, etc)
  1. RetroFunding Budget
  • The Grants Council will not participate in Retro Funding.
  • 50,000 OP reserve designated for algorithmic retroactive compensation. This algorithm will be designed and approved by the elected Grants Council members later in the season, ensuring fair and transparent distribution based on measurable contributions.

Proposed Member Compensation:

  • Lead (1): 35,000 OP (same as Season 6).
  • Operations Specialist (1): 15,000 OP
  • GrantNerds (3): 20,000 OP each
  • Final Reviewers (4): 30,000 OP each
  • Reserve for Additional Reviewers (2 Members): 50,000 OP.

Budget Summary:

Role Compensation per Member Total Compensation
Lead 35,000 OP 35,000 OP
Operations Specialist 15,000 OP 15,000 OP
GrantNerds (3 Members) 20,000 OP 60,000 OP
Final Reviewers (4 Members) 30,000 OP 120,000 OP
Reserve (2 Members) - 50,000 OP
GC enhance reserve - 70,000 OP
RetroActive reserve - 50,000
Total 400,000 OP

KPIs for Season 7

  1. Net Promoter Score (NPS):
  • 7/10 for all applicants at the submission stage
  • 7/10 for rejected applicants at the final decision stage
  • 9/10 for accepted applicants at the final decision stage
  1. TVL Growth:
    Assuming the average ETH price is $3,500, we can revise the TVL projections in ETH terms as follows:
  • Conservative Estimate ($5.5/OP): 15,714 ETH
  • Average Estimate ($23.3/OP): 66,571 ETH
  • Optimistic Estimate ($34.6/OP): 98,857 ETH
  1. Quality Applicants Supported:
  • Ensure fewer than 5% of qualified applicants are “unable to be supported” due to budget constraints or operational limitations.

Justification for Budget Decrease

  • The proposed budget is significantly lower than Season 6’s 610,000 OP due to reduced scope:
    • The Milestone and Metrics Council operates independently in Season 7.
    • The Superchain Subcommittee no longer exists.
    • Audit reviews are now handled by the Developer Advisory Board.
  • The streamlined structure focuses solely on delivering high-impact grants aligned with TVL growth metrics.

How Governance Participants Can Measure Impact

  1. Cycle Reports: Publish detailed reports for each review cycle summarizing:
  • Number of applications reviewed.
  • TVL metrics driven by approved grants.
  1. End-of-Season Retrospective: Assess the impact of grants awarded on Superchain TVL growth and provide recommendations for future improvements.

Retro Funding

The Grants Council will not participate in Retro Funding as an applicant due to the inherent difficulty in measuring its impact. While the allocation of grants is a significant contribution, the results often take at least a year to materialize, and even then, the impact is indirect and difficult to quantify. Retro Funding is designed to reward contributions with clear, measurable outcomes, aligning with its data-driven evaluation framework. By focusing on its forward-looking mandate to allocate resources proactively and drive TVL growth, the Grants Council ensures its role remains distinct and avoids competing for funding in a program where its contributions are not easily comparable to other applicants with more direct, measurable impacts.

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Thank you for crafting this comprehensive overview of the Grants Council operating budget for S7 @Gonna.eth! In the KPIs section, one aspect that stood out to me was the suggested approach to TVL growth:

  1. TVL Growth:
  • TVL impact will be measured in ETH across eligible metrics: Total TVL, Stablecoin TVL, Wrapped Asset TVL, and Bridged Asset TVL.
  • Baseline Goal: Achieve a TVL growth equivalent to at least 1% of the total season budget (~27.5 ETH at current rates).

From my perspective, the way this metric’s goal is currently framed raises questions about how the Collective will be able to measure the impact of individual grants and benchmark against best-in-class performers, as it makes the measurement process more difficult to normalize by grant amount.

Rather than setting the TVL growth target based on a fixed percentage of this season’s total budget, I would suggest adopting a per-OP TVL multiple approach for impact measurement and goal-setting, which would allow the Collective to standardize this process across grants and seasons.

For reference, the data team at OP Labs conducted an in-depth analysis of the effectiveness of previous growth grants in driving TVL growth. This included a review of the TVL generated per OP across Seasons, which ranged from $5.5/OP to $34.6/OP, with an average of $23.3/OP. Thus, using this data as a reference point to define this Season’s TVL growth goal could help establish a clearer framework for measuring the downstream impact.

Disclaimer: I work for the Optimism Foundation, but views are my own.

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We are an Optimism delegate with sufficient voting power and we believe this proposal is ready to move to a vote.

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Thank you, Gonna, for taking the time to put this proposal together. We’re excited about the changes for the next season and how the council’s restructuring has been approached, incorporating lessons learned from past seasons. As part of our commitment to the Feedback Commission, we’d love to share some thoughts and reflections.

Could you please clarify what X refers to?

After reviewing the table, we noticed the total is 370,000 OP instead of 390,000 OP. We kindly suggest correcting the extra 20,000 OP.

We are optimistic that the restructuring of the Grants Council, which includes reallocating responsibilities to the DAB and establishing an independent Council for Milestones and Metrics, represents a strategic shift toward decentralization. It is encouraging to see how the retrospectives from the DAB and GC teams have played a role in this realignment, promoting closer collaboration.

The same roles for season 6 Grants Council Operational Budget were:

We’d like to make a small clarification to gain more context, as your input is important to us. During Season 6, the Lead role was initially set at 30k OP. However, due to specific circumstances and the fact that Bunnic enthusiastically stepped up to take on the role of Ops Manager, 10k OP was allocated to this position. From what we understand, 5k OP of that amount went to the Lead for supporting the new role as part of their training. This means the Lead’s total compensation for S6 was effectively 35k OP, even though this wasn’t the original plan.

Our question is, looking ahead to this season, will the Ops Manager role continue in a training phase, or will it now function as a fully independent role?

About the reflections:

The introduction of a specific role to cover this need is a great improvement facing the needs of this new season.

Regarding this:

Adjusting the roles of new reviewers into two categories—one with greater expertise in general grants knowledge and the other with a more technical focus—is a great move, and the budget allocation for each makes a lot of sense too.

We also believe it’s essential to encourage more responses and insights from applicants, as highlighted in the reflections from Season 6:

Given that there will be more input and interaction, it seems reasonable and logical to expect a slight drop in the Net Promoter Score (NPS): 7/10 for S7 compared to 9/10 in S6, as outlined here for S6:

Renaming to grant applicants feels like a great step forward! It allows us to better understand their pain points and improve the processes.

Could you please provide a rationale behind the projected number of applications expected to be in demand?

In Season 5, there were 548 applications, and in Season 6, based on what we gathered from the forum, the Grants Council reviewed 557 proposals. Of these, 221 were declined, 336 were voted on, and 133 successfully passed governance (you can check the details here).

Looking ahead to this season, as we move to a single intent, what’s your high-level estimate for the volume of proposals to review? Additionally, how do you foresee managing the workflow with responsibilities now distributed to other structures like DAB and M&M?

On top of that, we would like to hear your thoughts on the BD role idea you mentioned in the GC retrospective post. We are interested in your perspective on the decision not to pursue that role further and how you plan to address the problems you addressed in the Season 6 Grants Council Final and Retrospective Report.

Finally, when taking a general look, there is a 39.34% reduction in the budget compared to the previous season. This decrease is partially due to the reduction in scopes and the reorganization of responsibilities toward other structures. To get a clearer understanding of the actual reduction, we’ve consolidated the budgets of the migrated entities for a more accurate assessment. You can see the whole analysis below:

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Imagen 9-12-24 a las 13.312280Ă—818 186 KB

By doing this, we aim to understand the overall expenditure for the Grants Council in a broader context. While roles have been reorganized across various entities, the expenses persist.

When considering the roles per season, with the proposed changes, the Grants Council would go from 21 members to 9. However, if we normalized the numbers, including +4 members from Milestones and Metrics and +2 for the DAB which have been moved out from the GC, the total number of members in roles would be 15, representing a reduction of -28.57%.

Regarding the 11.4% salary increase for the lead and 50% increase for the Ops Coordinator, we’d like to ask about the expected workload for this season. Considering that the council has been reduced in size and some responsibilities have also decreased, what is the rationale behind those increases?

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Thanks for picking up the math error, this happens when you make changes to the personal doc but not to the forum.

I do not plan to train the next ops. Nominee eligibility criteria are described in the charter and the 15k OP goes straight to the elected person.

During Season 5, we had open-ended mission requests, which resulted in a significant volume of applications. In contrast, Season 6 utilized scoped mission requests with more targeted criteria, leading to fewer applications. For Season 7, I plan to return to open-ended grants with a single focus on increasing the TVL of the Superchain. While narrowing the scope to a single metric may reduce the number of applicants, the open-ended nature of the mission requests is expected to attract a broader range of projects.

The rationale behind allocating 50,000 OP as a reserve is to ensure we can handle unexpected demand without requiring a second Token House vote. Historically, the Grants Council has consistently utilized the minimum resources necessary, as shown in previous seasons. This reserve reflects a cautious approach, balancing preparedness with fiscal responsibility.

Estimated volume: 500

Internally, responsibilities are well-defined. The Grants Council will provide the Developer Advisory Board (DAB) with backend access to review applications submitted to the GC, as we successfully coordinated during the last season when the DAB reviewed all preliminary applications. The Milestone and Metrics Council has been operating almost autonomously for the past two seasons, with my involvement limited to addressing ruling-related questions. I do not foresee an increase in coordination workload but rather an improvement in transparency for the Token House, clearly delineating who is responsible for each aspect of the process.

I am pursuing the idea of a business development (BD) role but taking a different approach based on observations and reflections since the retrospective. While I initially proposed a single BD during the reflection period, experiences from other ecosystems have shown that this approach can be limiting. A single BD often becomes overwhelmed, receiving anywhere from 100 to 500 daily pings, depending on the ecosystem, making it impossible to provide personalized, white-glove treatment to everyone.

Instead, my approach is to distribute this responsibility among the GrantNerds as a group. Each GrantNerd will take ownership of the projects they bring into the program, offering tailored guidance while collectively addressing broader questions and concerns in a public manner. This shared responsibility ensures that applicants receive the support they need without overburdening a single individual, while also maintaining transparency and scalability as the ecosystem grows. This approach not only balances workload but also leverages the diverse strengths of the group to better serve the ecosystem.

The increase in workload justifies the adjustments for the Lead and Operations. During the last season, these roles shifted from part-time commitments to full-time responsibilities, involving extensive coordination within the Grants Council and across the broader ecosystem. This included collaboration with the DAB during preliminary reviews, working with the Foundation’s growth team, guiding chains to ensure they felt supported, overseeing fair and legitimate applicant treatment, managing equitable work distribution, keeping the Collective informed with weekly reports, and ensuring every GC milestone was met on time.

Even during the reflection period, the workload has not diminished. We continue to address KYC questions, coordinate grant delivery with the Foundation, and rely on Bunnic to produce databases on demand for both the Foundation and the Grants Council. Additionally, tasks like designing the charter, budget, and internal operating procedures were never part of the original scope. However, over the past 15 days, we’ve been working intensively to understand every aspect of Season 7’s design, holding constant meetings to coordinate its deployment without clarity on whether this effort will be rewarded.

Part of the increase is due to the emergent workload observed last season, which ended up being much higher than projected (and is expected to maintain a similar pace). The reduction in Reviewers will not significantly reduce the workload. In fact, the separation of GrantNerds and Final Reviewers will require more internal coordination, and it is anticipated that there will be many more exceptions due to the white-glove/handholding work GrantNerds will undertake. Coordination of tasks with other Councils, the DAB, and the Foundation also heavily relies on Ops. The delegation of certain responsibilities outside of the Grants Council to other groups requires greater coordination and operational support as well.

This ongoing commitment and significant time investment reflect the evolving scope of these roles and justify the proposed increases in compensation.

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I am an Optimism delegate [Delegate Commitments - #65 by mastermojo ] with sufficient voting power, and I believe this proposal is ready to move to a vote…

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If we assume the average ETH price is $3,500, we can revise the TVL projections in ETH terms as follows:

Conservative Estimate ($5.5/OP): 15,714 ETH
Average Estimate ($23.3/OP): 66,571 ETH
Optimistic Estimate ($34.6/OP): 98,857 ETH

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Thank you for all the work in putting this together @Gonna.eth. We look forward to continuing to work together for the benefit of the entire ecosystem!

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Hello GC and thank you @Gonna.eth for putting this proposal together! As part of my role as a member of the Collective Feedback Commission, I’ve been asked to provide feedback on this Operating Budget proposal.

I will focus on the KPI’s for the Season:

1. Increase in scope for NPS
Appreciate that the Council is now moving to evaluate the NPS not only for grantees but also to applicants. This will give us more information on how to improve all builders experience through the Grant process.

I would suggest two changes: i) include an exit survey after a proposal is submitted, and another survey after a final outcome has been published for each proposal.

The goal here is to measure at least two points in the user journey of an applicant, by doing this the GC will have better information for improvements at each stage.

  1. Clarity and ease of the Submission Process (ask from Charmverse for 3-5 short questions to be triggered upon clicking on submit or add it as a final step in the submission).
  2. Quality of interactions with the GC during the grant review process and clarity of the outcome (include this survey as an email or in the forum post with the results).

ii)New split in NPS reporting based on the above:

  • 7/10 for all applicants at the submission stage
  • 7/10 for rejected applicants at the final decision stage
  • 9/10 for accepted applicants at the final decision stage

This split in data reporting will enable us to keep pushing for an outstanding score at the grantee stage (as achieved in previous seasons) and slowly ramp up for a similar results with applicants.
This breakdown shouldn’t represent an increase in overhead since the information can easily be split based on applicant status.

It is important to note that there is evidence in user satisfaction evaluation that for the final stage there will be timing bias and sample bias. TLDR; Accepted grantees scoring the GC after acceptance and in the questionnaire where they input disbursement info will naturally rate their experience higher. This is not bad, but we should be aware of it.

2. More Analysis on User Experience
I strongly agree with the feedback provided to the GC Season 6 Retrospective around expanding how we analyze and understand builder satisfaction;

I would suggest the GC to pilot including 2-4 open ended questions in each of the survey points mentioned above and conduct an AI-led Descriptive Discourse Analysis on the answers to identify:

  • Common themes (pain points or outstanding interactions in the process)
  • Applicant Sentiments (frustration, satisfaction, etc).

The analysis of this information could be conducted by the GrantNerds, the M&M Council, or someone else (SeedLatam in their Season Report?), but data gathering is best conducted by the GC as the owner of the process.

The KPI at this initial stage can be to have a response rate of at least 70% of all applicants to both surveys. Once we have more data, the GC can determine more granular KPIs.

The GC is part of the public perception of Optimism and the ease and support builders receive in the ecosystem, implementing better ways to measure and improve the quality of interactions builders have can drive better builder retention.

3. TVL projections
In addition to the Baseline Goal of TVL growth for all grants, I would suggest including the other component of this analysis as KPI.

As in:

At Program End Date (Or Latest) based on n Incremental TVL per Year / OP
75th Percentile $37.93 USD
50th Percentile (Median) $13.83 USD
25th Percentile $0.73 USD

*where n = all grants disbursed in the Season

This will enable a better evaluation per grant approved rather than an overall amount which could be skewed by just one outlier project (in this case both 25th and 75th percentile would be very very low).

Questions:

  1. I’m not sure I follow what you mean by “TVL metrics driven by approved grants” as part of the Cycle Reports. Could you please expand on it? I think it might be a breakdown of how many or which grants support each of these, but I’m not sure.

I hope this feedback is useful to strengthen the tools that the Grants Council has at its disposal to measure its efficacy and contributions to Seasons 7 Intent.

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I made some last-minute modifications:

First added proper KPIs for TVL

Second, I added 30k OP to the reserve specifically for grants aimed at enhancing Council operations.

This adjustment accounts for the fact that Charmverse, which previously relied on retro funding to provide platform services to the Grants Council, will no longer qualify under the new design. The use of these funds in Season 7 will require approval through a majority vote by the Council, and the allocated amount will remain locked for one year to ensure accountability.

Third, I like LaNaMu suggestions about splitting NPS scores added:

This changes need 4 delegate approvals below this comment to pass to token house

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I am an Optimism delegate [Delegate Commitments - #65 by mastermojo ] with sufficient voting power, and I believe this proposal is ready to move to a vote…

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