Retro Funding 4: Onchain Builders - round details

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Special thanks to @revmiller and @amy for review and feedback on this post as part of the Feedback Commission

If you have questions on the Retro Funding sign up, please see the FAQ below. If you re experiencing issues please contact us via the #retro-funding-discussion channel in the Optimism Discord

Overview

Retro Funding 4 will reward onchain builders who have deployed contracts to the Superchain and contributed to the success of Optimism. This round seeks to expand the reach and impact of the network by rewarding those building across the Superchain who have increased demand for blockspace and driven value to the Collective.

Timeline

Please note that all dates are preliminary and might change. This post will be updated to reflect future changes.

  1. Sign up: May 23rd - June 6th
  2. Application Review Process: June 6th - June 18th
  3. Voting: June 27th - July 8th
  4. Results & Grant delivery: July 16th

What impact will be rewarded?

Retro Funding 4: Onchain Builders will reward impact which has been generated between October 2023 - June 2024. Impact will be rewarded within the following topics:

  • Demand generated for Optimism Blockspace
  • Interactions from repeat Optimism users
  • Interactions from Optimism users with high trust scores
  • Interactions of new Optimism users
  • Open Source license of contract code

Eligibility Criteria

In Retro Funding 3, the Retro Funding sign up process saw a large influx of spam and low-quality applications. By setting stronger eligibility criteria in Retro Funding 4, the Foundation aims to provide clarity to builders and reduce the amount of human review required for spam and low-quality application. In addition, qualifying criteria reduce the number of applicants who have not generated sufficient impact to receive rewards (such as the below requirement of a minimum number of unique address interactions). The below eligibility criteria aim to strike a balance between broad inclusivity and sufficient requirements to allow for an operationally viable Retro Funding round.

Builders are eligible who have:

  • Deployed their onchain contracts on one or multiple of the following OP chains: OP Mainnet, Base, Zora, Mode, Fraxtal and Metal, and meet the following criteria:
    • Onchain contracts have interactions from 420 unique addresses during Jan 1st - May 1st 2024
    • Onchain contracts had their first transaction before April 1st 2024
    • Onchain contract had more than 10 days of activity during Jan 1st - May 1st 2024
  • Verified their onchain contracts in the Retro Funding sign up process
  • Made their contract code available in a public Github repo, for which ownership has been verified in the Retro Funding sign up process
  • Confirmed that they will comply with Optimism Foundation KYC requirements and are not residing in a sanctioned country
  • Submitted a Retro Funding application before June 6th, 2024 and comply with application rules

Round Sizing: 10m OP to reward Onchain Builders

Retro Funding 4 will allocated 10m OP to reward the impact of Onchain Builders. The OP token allocation for Retro Funding 4 should reflect the impact generated by onchain builders, as well as set a strong incentive for the continuous generation of demand for Optimism blockspace.
Below you find some considerations which informed the Foundation’s round sizing decision:

  1. Underallocation to Onchain Builders in Retro Funding 3: Previously, Retro Funding 3 allocated a total of 1.5M out of 30M OP to the top 20% of applicants who generated network usage. There has been strong feedback from badgeholders and community members that this allocation was too low and should be increased in future rounds.
  2. Growth in developer activity since last round: The Collective is focused on growing the number of active onchain developers. Developer activity, across the Superchain, has seen a large increase over the past six months. Thus, Retro Funding rewards to these types of contributions should increase to reflect this increase in impact.
  3. Collective sustainability: In Retro Funding 3, badgeholders have raised concerns around Retro Funding sustainability. Retro Funding currently relies on the Retroactive Public Goods Funding token allocation of 850M OP for rewards. In the future, Retro Funding will rely on surplus protocol revenue as the source of rewards. Currently, Total Collective Contributions (of surplus protocol revenue) fall short of what is needed to sustain Retroactive Public Goods Funding. Additionally, in Retro Funding 3, badgeholders raised points around the relationship of rewards to the sequencer revenue, to ensure rewards don’t exceed the sequencer revenue itself. By allocating a significant amount of OP to rewarding onchain builders, the Citizens’ House is incentivizing developer growth and increased network activity.

Future round sizing

The Foundation will size Retro Funding 4 & 5, and will proposes round sizes for Retro Funding 6 & 7, to be ratified by the Citizens’ House. In the future, this process will gradually transition to be more community-led, which may involve the creation of a Budget Board, or similar, in future Seasons. Round sizing decisions are currently informed by the amount of impact observed within the Collective, considerations for incentivising contributors to take action, and sustainability of Retro Funding rewards. In the future, these decisions should be made based on a framework which takes a number of established measurements and criteria into. We invite Data NERDs to explore measurements and criteria which will inform governance participants to make informed budgeting decisions in the future.

Voting design

Retro Funding 4 experiments with Metrics-based Evaluation, with the hypothesis that by leveraging quantitive metrics, citizens are able to more accurately express their preferences for the types of impact they want to reward, as well as make more accurate judgements of the impact delivered by individual contributors.
In stark contrast to other Retro Funding experiments, badgeholders will not vote on individual projects but will rather vote via selecting and weighting a number of metrics which measure different types of impact. You can find out more about prototypes and explorations that informed this design here.

Impact metrics
All Citizens will be asked to vote in Retro Funding 4 and will be invited to actively shape and input on the design of impact metrics via discussions on the forum as well as a workshop. More details on the process of selecting impact metrics and their design will follow soon.

Voting interface
Opensource Observer is leading the development of impact metrics and relating infrastructure.
The Agora team is building the voting API for Retro Funding 4, with the team building the voting interface being selected via a Foundation Mission Request. The Foundation will provide designs and specs for the voting interface and will invite badgeholders to participate in user testing and user experience research.

KYC & Grant delivery

The Optimism Foundation is making active improvements on the KYC & grant delivery process. Grants will be streamed to recipients over 100 days, following the announcement of results and approval of KYC. Superfluid is providing infrastructure for the streaming of Retro Funding grants.

Updates on Retro Funding 4 Implementation

Below you find relevant forum posts which go into depth on the implementation of different components of the round.

  1. Retro Funding 4: Application process - Overview of how projects will sign up and apply to the retro round
  2. Retro Funding: Application Review Process - Process by which applications are reviewed to enforce eligibility criteria and application rules
  3. Retro Funding 4: Deliberative process on the definition of profit - the definition of profit, within the impact = profit framework, via a deliberative process
  4. Retro Funding 4: Voting Experience - overview of the voting experience and its components

FAQ

When will grant disbursements happen?

Retro Funding 4 will conclude in June 2024, following KYC approval, tokens will be streamed to you over 100 days via Superfluid.

Where can I ask questions?

You can ask questions in the Optimism Discord in the #retrofunding-discussion channel.

What happens if my application violates the Application Rules?

If badgeholders find that you violate the Application Rules listed above, your project will be disqualified from participating in this round of Retro Funding. You will be able to apply again for future rounds.

Where can I nominate projects?

Theres no nominations process in this round, instead projects sign-up directly. So remind your favourite projects to apply!

Why do I need Farcaster to sign up for Retro Funding?

You will need Farcaster account to sign up for Round 4, if you don’t already have a Farcaster account, you’ll need to make one. Your Farcaster account isn’t just a sign-in method for Round 4, it’s also your Optimist Profile and will be used for future Retro Funding applications and other interactions with the Optimism Collective.

The easiest way to sign up for a Farcaster account is via the [Warpcast](https://warpcast.com/) app, which acts as a wallet to easily manage the keys of the newly created account. Upon sign-up, Warpcast currently charges a $7 fee to rent storage on the network. As a decentralized social network, Farcaster content is not stored on centrally controlled servers, but rather in Hubs, which are a [distributed network of servers](https://docs.farcaster.xyz/learn/architecture/hubs). Each unit of storage buys 5000 casts, 2500 reactions and 2500 follows. For those who prefer to register a Farcaster account via contracts directly, this can be done via the [ID Registry Contract](https://docs.farcaster.xyz/learn/architecture/contracts). Storage can be rented via the [Storage Registry Contract](https://docs.farcaster.xyz/learn/architecture/contracts). There are alternative Farcaster clients beyond Warpcast that also support account creation and storage renting.
Can I apply with two different projects?

Yes, one person can apply to two different projects, so long as there is no overlap in the work. You will need to complete the sign-up flow twice.

Does my project need to be on OP Mainnet?

Nope! It can be on OP Mainnet but it doesn’t have to be. Retro Funding is expanding to support the Superchain! If you’ve deployed contracts on the following OP chains, and meet the other criteria, you’re eligible for Retro Funding 4: OP Mainnet, Base, Zora, Mode, Frax and Metal.

Are Superchain projects (e.g. deployed on Base or Zora) eligible?

Yes, all projects that provide impact to the Optimism Collective (which includes the Superchain) are eligible! These specific chains are eligible for Round 4: OP Mainnet, Base, Zora, Mode, Frax and Metal.

Can individuals apply or just projects?

Individuals are also welcome to apply! As long as you’ve deployed contracts that meet the application criteria.

Can artists get accepted for Retro Funding?

Yes! So long as the artists deployed their own contracts on one of the qualifying OP Chains and meet the application criteria.

Can a team that has gotten a grants council grant, partner fund grant, mission grant get Retro Funding?

Yes! As long as you’ve deployed your contracts on one of the qualifying OP Chains and meet the application criteria.

Do I need to report my Airdrops and past Retro Funding grants under Grants & Funding?

Nope!

I can't verify my contract because it was deployed by a factory?

Please verify the deployer of the factory. We will automatically capture all contracts deployed by your factory.

Are Token sales considered as Funding?

Yes.

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is Superfluid going to be used with vesting? If so how long will the vesting be?

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See the “KYC & Grant delivery” section :slight_smile:

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I love the way OP is experimenting with better defining “impact”. The work from OSO is shaping up really well.

Working to make the RF4 results as objective as possible (based on criteria, instead of on popularity or notariety of a project) is great.

For badge holders that may have projects in a particular round, should we exclude them from the criteria selection process… or find a way to reduce Conflicts of Interest? If I create small, but highly engaged on chain communities - I may vote to lower the value “number of users” has versus “number of engagements.”

:thinking: Perhaps it will wash out in the end with enough badge holders… I do want to make sure as a badge holder I understand how best to support the initiative while trying to leave my bias at the door as a potential grantee as well.

Second question -
Over what time period will we be evaluating impact? Is this round focused on funding for the impact specifically between RPGF3 and RF4? Or, how far back in time should retro impact be evaluated on?
One example scenario - If I had big impact a year ago, and my project is less popular, is that as impactful as a new project that has huge impact today, but no impact 6mos ago? Perhaps the scoring criteria will include date timelines too?

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Really love the metrics chosen.

Curious if there details will be released on how each it determined, especially the “high trust score”?

To me it seems like it’s important that badgeholders know how these are calculated, yet of course if the metrics are gameable in any way then it leaves the door open for malicious actors to target them.

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Curious if there details will be released on how each it determined, especially the “high trust score”?

Yess! Lots more info to come on impact metrics, including surveys and workshops with badgeholders to shape them

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Thanks for the detailed info about RF4. Amazing work.

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Really love the effort at moving past popularity contests towards more math!

Here’s some thoughts on the metrics

We should separate out wallets with txns on other chains but not on Optimism so far from completely new wallets. Reason being we want wallets active on other chains to also start becoming active on OP

I’d also be curious into the math on sybil resistance, will the amount earned in retro funding by spamming txns be greater than the cost of these txns? The new initiative by gitcoin passport to remove stamps and rely on sybils through onchain analysis is helpful to prevent this without adding user friction, as are methods like those used by trusta labs

This feels in some ways like something that should get added only if it has met a threshold for the other parameters. in the future, it would also be cool to reward builders that explicitly fund their dependencies using something like drips, so that retro funding for onchain builders can simultaneously fund the other core infra projects we’ve been supporting so far in earlier rounds.

Im not sure how we can properly separate out these 2. The list of prior retropgf recipients and badgeholders that @Lindsey got together for the jokerace selecting projects is certainly useful. Would also consider donors and projects from gitcoin grant rounds, octant public good stakers, wallets that were eligible for any of the OP airdrops that occured and ENS holders. Curious to see the approach you take for this one! Number of txns a wallet has made over time is also important, but it feels like these will always be a whack a mole where we need to stay ahead of bad actors.

Would this be fully calculated by OSO & OP, or would projects be expected to track this themselves and provide a number? We’d ideally not want to reward projects that talk themselves up more than those who are understated and humble.

Might not need to but i would keep an eye out for those projects only meeting this bar because of the time period from April 18th (announcement of the post) to May 1st (end period for eligibility). Since rules are announced they might start self transacting.

I am surprised that in the justification for 10 million OP, no reference was made towards the onchain fees generated by onchain builders.

Even if it is not equal or higher than the number, it would be useful to have a statistic like “in the last 6 months 5 million OP was generated, this round is sized at 2x higher than breakeven”.

This is perhaps my favorite change in the retropgf experiment. Its honestly much harder to be neutral about selecting project A vs project B, than making it one level removed and just deciding on metrics that would then flow downstream.

I would still like an expert committee to walk through the implications of each metric and how it would impact funding. Having badgeholders publicly share their analysis for how they voted would be of great help

Love these changes overall, great job in undertaking such a radical overhaul of the program!

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I have raised this concern before and also take this logic into consideration when I vote. When measuring impact, we should definitely consider the past value that a project has extracted from the DAO. It’s possible that a project has a high transaction count compared to others simply because it has already received funding from the DAO, while others have not.

Secondly, I would like to see a note on the time duration considered in this round.

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Seeking for clarification here.

For N projects/builders applied for the upcoming round, there will be at least N * 5 definite traceable onchain/opensource datapoints right? Or are there qualitative factors in play here?

And the only differentiating factor in the voting process seems to be the impact variables and weights of impact variables assigned by badge-holders.

So if we were to take it to the extreme, if all badge-holders agree on the same impact variables and assign the same weights, citizen house’s role simplifies to selecting a cutoff score while maintaining the budget constraints?

If such extreme case will happen, how do we ensure independent valuation amongst badge-holders? Or maybe “collusion” amongst badge-holders is not a concern?

Selecting impact variables may seem straightforward for badge-holders but assigning weights may be more difficult. What constitute as an optimal weight? As @LauNaMu pointed out in the Funding the Commons event, people have hard time recognizing exponential values.

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Reading through and spreading the word already, this is amazing for builders.

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I believe this is a great design in terms of supporting builders retrospectively which can be an encouragement factor for many devs. Though the point of “Public Goods” is contentious this seems a good correction to the narrative.

I think this has to be fair for those who did not receive any grants in terms of growth or builders and still created a project and had on-chain contributions. The weight for their contribution to blockspace demand should have more points than the former ones.

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I believe it’s important to recognize the valuable contributions of off-chain builders (who don’t deploy a contract on-chain) like educational projects and individual contributors who provide quality value to Optimism and Superchain users. These builders have a significant impact on the ecosystem, and acknowledging their efforts can help incentivize further growth and development. By recognizing and rewarding their efforts, we can encourage more people to contribute to the ecosystem and ultimately help it reach its full potential. So, what do you think about making sure that these off-chain builders receive the recognition they deserve?

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Hello here are our questions for the onchain builders round of retro PGF…

In the past rounds teams building on the OP stack were given an ample amount of time to accomplish the set guidelines.

Guessing this is due to the nature of time constraints and lack of proper prior planning after the last round ended.

Many builders had been waiting to hear about the guidelines for this round but the cutoff of May 1st is too short of notice to pivot into a position that will qualify a project.

It would be great :+1: if there was more than enough time to accomplish these KPI requirements if there was foresight into the situation for teams who have dedicated their time & resources to building on the OP stack.

One :point_up: thing that feels like it is missing in the retro PGF program is any sort of track record or accountability program for the grantees that receive funding from optimism.

We know that it’s not mandatory to track or determine how the funding should be spent from the retro PGF ecosystem. But it is still a very important task to be accountable for the funding that is received.

That being said, is there any sort of System that is set in place to take into account the projects that use their funding from the previous round to help fund their endeavors going into the next round.

Is there not any extra merit that is given to the teams that have used their funding from retro PGF to build in the ecosystem?

And is there any sort of accountability for those that take funding and choose to develop their projects on other chains that are not part of the OP stack with the funding they receive from optimism through the retroactive public goods funding mechanism??

When we first learned about this program, it had always occurred to us that using the funding that you received and putting it back into the development of your project would end up getting you more funding in the future rounds that you are part of.

That is something that we are not seeing any information regarding as far as the way that the OP is being used from retroactive public goods funding, or if any of the teams are reporting how the funding is being allocated…

A great tool that we have used and would like to recommend for the retroactive funding Grantees is the grantee accountability protocol. Also known as GAP by karma HQ built by @mmurthy and team.

We believe that this tool would help to provide clarity for badge holders when looking at projects for this upcoming season. This tool has also been integrated directly into the platform Gitcoin to help the history of Grant funding through their ecosystem. We would love to see this tool integrated with Agora cc @zcf @yitong and hope the idea is utilized in a way that relieves the badge holders from extra work during the round.

We are very excited for the season of retro PGF and will be following along as the application phase approaches.

This is just a few random thoughts that occurred when reading over the guidelines and digging in a little bit deeper that we thought maybe helpful. Looking forward to the future and building on optimism have a great weekend!

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I am sure your point is valid, as these are narrow scoped Retro Funding Rounds the current one is focused on supporting one set of builders and that doesn’t mean other set of builders have not contributed.

Infact many offchain builders are the reason why Optimism has this wide reach. They will be considered in the upcoming round for sure.

Infact on personal note, most of my contributions are off-chain some are like providing a faucet for devs on testnet of a superchain and there around ~10k transactions from it. This is valuable too, but it will have it’s own round when it will find its space.

Stay optimistic :blush:

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Very excited to see RPGF4 come to fruition, and being focused on our onchain economy is a great next step. I am seeking some clarity on this section here:

Are projects required to meet all the above-mentioned criteria to be eligible? Or is it more of a case where you are rewarded for each passed criteria point?

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Yes, let’s see what the Optimism Foundation will do for other types of contributors.

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I really like all the criteria listed, however if all of them need to be meet at once it will be a restrictive selection, then quite a few projects will be rewarded. New projects contributing less impact will have to wait for the next builder round (next year ?) to have enough impact, and untill there selection criteria might show even higher standards. This might discourage new Optimism builders that arrived few months ago.

Also, this Builder retro Funding looks centered mainly in dApps and quantitative measures of smart-contracts interactions. May I suggest to consider something like the dApps & Apps main round Gitcoin round 20 where builders may contribute innovative solutions or even user-centric enhancements (in the Retro Funding context all this should be centered on Optimism, of course) ? That way not only dApp devs would be rewarded but builders in a wider sense. I am not suggesting to reward everybody, but to reward different levels of impact by builders (not only dApp devs).

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