Iām glad that @katie and @forrest are teeing up a major unaddressed elephant in the room - the poor outcomes of the distribution process to date. A lot of the structural concerns in my view are related to this core symptom. Iāve been writing a much longer piece of research on this point [edit: nvm this got really long], but I do want to say that Iām largely in line with their conclusions, which include more selectivity on grants, more time to deliberate, more reporting, staging, and general accountability, etc. Some sort of budgeting (which should start to seek inflows of capacity, to the extent itās possible) is more than appropriate as well.
I do want to note ā because I think some of these postmortems are obliquely referring to a large grant proposal currently on the table, Velodromeās (i.e., my protocolās)āthat the wrong thing to do is to have a knee-jerk response to large grants (assuming theyāre well-scoped) and say, āWell, we need to close the purse.ā Doing that just kills whatever momentum youāve just spent too much to get. You can say Iām speaking out of bias, but hear me out hereāIām trying to make what I think is an important point that I happen to be really attuned to bc of my experience.
Where I disagree with @forrest is that itās not that Governance has given out too muchāitās that weāve given an enormous amount to a lot of not-fully-baked grants while lacking an ecosystem-wide thesis on what to grow and when to grow it. If I had to make a totally non-data-backed guess, my hypothesis is that proposals representing 70-80% of the OP shouldnāt have been granted at all, not just scaled back. (Iāll be testing this hypothesis soon with a more detailed analysis.) Reporting would have helped with some of this, but primarily itās for averting or surfacing malfeasance. Staging helps to redirect some OP to more promising ends and lends some teeth to enforcement, but the vast majority, iām guessing, just never should have been granted in the first place.
Itās actually a bit surprising to me that nobody here has explicitly said, āMaybe in hindsight, many of these grants we approved actually werenāt that well defined.ā Delegates who were more prominent figures during the first few cycles should take a hard look at their earlier recommendations and walk back through the logic in approving what they did. I know Iāll plan to do the same for the later cycles. There are already a couple I think I botched. This is underappreciated reflection for this period.
Iām giving this tough love because the saddest part about this mass distributionās outcomes (and, to be clear, the vast majority came before committees) was that they were entirely avoidable.
People whoāve been around for a while, for instance, know how some of these things end: retroactive airdrops (exit events), user incentives (sibyl risk, low per-wallet appeal), liquidity mining on low-DAU projects (siphoning by team or last-ditch effort to grow runway)āstuff Iāve been calling out from my very first day in the forums, and Iām sure I wasnāt alone.
What Iām getting at is that there is no ārightā cap on all grants: you need to match the asks to an intended outcomeāa well-defined bet that you and the proposer intend to see play out. You can and should add jet fuel with some big bets, just like OP Labs did to great effect with PoolTogether (beloved user hoover), Velodrome (flashy tentpole liquidity sink), and AAVE (blue-chip liquidity magnifier). But you donāt take a scattershot approach in grants, giving out a few hundred k here and there; you work with projects to refine their grants until they promise real results. And when you see a path to growth, you fund for precisely that growth.
And this goes back to my first comments re committees, during the start of what several individuals here have marked as a downturn in vibes: there need to be in some capacity specialists whose focus is specifically on these grants. There is just too much to do. These are difficult questions, and thereās a lot to follow up on. These specialists need to outline a systemic growth thesis, they need to follow an actual cooperative due diligence process, and they need some limited executive power to make and enforce rules to speed up an otherwise bogged down process. One such example is reporting; there was a whole thread in June discussing the need for follow-up reporting, and nobody managed to get a framework together.
People reacted violently to my suggesting as much in June because perhaps they interpreted what I was saying as that people without the necessary expertise to take on these roles lacked the aptitude or intelligence or something. Of course thatās not true! What Iāve said is that being charged with giving out millions of OP requires some clear direction, experience, and knowhow; itās inherently a technocratic thing, and I do think that ecosystem protocol teams have a lot to offer in experience, perspective, and news. Even better, though, are known subject matter experts from throughout crypto, and Iād love to see about getting a few more involved (weāre lucky to have several as delegates and more than a few on committees).
To be clear, Iām not talking about committees now, nor am I saying I or anyone in particular fits this profile! No idea what structure we will/should take, and yeah I agree that the system we have isnāt the best fit (agree with @StrategicReserveās suggestion to look to RDs and look forward to getting thoughts from @katie and @GFXlabs on applicability) ā but I think this is a principle worth seriously considering.
Weāre all here because we believe in the potential of the Collective to be a self-sustaining community, one that can recycle this first round of grants and ensuing economic activity into new capacity to do ever more interesting things. Realizing this vision is a lot more likely when we knock out some low-hanging fruit early in our processes, avoid pressure to over-distribute, andāmost importantlyābe informed and active.