[1RC] 1inch Community Grants Program

0xBaer · May 13, 2022, 8:52pm

Simple Summary

A permissionless and transparent grants program to provide grants to Internal and external projects thus fostering the growth of the 1Inch network.

Abstract

This proposal aims to kickstart the 1Inch community grants program with a yearly budget of 2 million through a committee of 7 elected by the 1InchDAO. The members will be elected for two seasons (6 months ) through the already established governance process of the DAO. The committee will have a Lead who will be compensated 75$/hr for their work.

Motivation

The 1inch Community treasury holds more than 11.3 Million in assets which the DAO collectively owns. As the ecosystem develops the community has to give grants to different projects to foster healthy growth and increase participation. The existing Proposal lifecycle which the grants have to follow through has a minimum of an 18-day cooling-off period once it enters Phase 3. This approach is of course functional when dealing with a significant change to the DAO as a whole but a relatively smaller grant which has minimal impact on the treasury or the DAO shall take a different path, but shall be vetted by the quality and deliverables by an educated group. From a voter’s perspective, we tend to develop ‘Voter Fatigue’ really quickly as we have to vote too often.

Specification

The proposal tries to establish a Community/ DAO owned Grants Program with an Initial $2 Million yearly budget that will have the ability to distribute grants in the following Categories:

Public Good projects
Education and community development
Research and Analysis
Ecosystem Development.

The 1inch Grants Program shall be administered by a committee of 7 elected from the 1InchDAO through Snapshot voting. For ease of planning and budgeting, the grants program will align its operations into Seasons, Which are three month periods that run alongside fiscal quarters. All the projects funded through the Grants program should be made as a forum post on gov.1inch.io and shall be vetted by the Grants Committee.

Quarterly Budget:

Maximum quarterly budget of $500,000

Budgets and caps will be evaluated & adjusted every 6 months.

Grants Committee

The Grants Committee of the 1Inch grants program shall consist of 7 members with a multi-sig where the Grants Committee members as signatories. The main motto behind establishing a Grants Committee is to have a qualitative screening of funded projects thus ensuring the sustainable growth of the 1Inch ecosystem.

At the beginning of the season, the Grants Committee will receive a maximum allocation of $500,000 through the 1InchDAO governance process. The Funds allocated from the 1Inch treasury shall be distributed to the Multising owned by the Grants Committee.

The Grants Committee shall allocate funds to external projects and Internal projects which are collectively owned by the DAO according to the Funding requirements established internally. Any funds which are not allocated at the end of each season shall be retained with the Grants committee and could be put into the pool for the upcoming season.

Operational Specifications of GC

The GC shall have a Lead and Reviewers, The Committee Lead is the person responsible for organising the schedule and ensuring the smooth functioning of the Committee.

The grants Committee meeting should have a quorum of 5 members and decisions should be passed with a ¾ majority of all voting members.

Committee Lead Key individual responsible for organising the program and ensuring that things move smoothly and efficiently. Serve a 6-month term and can resign at any time. The committee will elect the Lead from within the group of 7 reviewers

Reviewers: Process applications, weigh in on discussions surrounding budget planning, ensure that the lead is acting in good faith and is effective in their role, and will operate a 4 of 7 multi-sig which disburses funds to grantees. The reviewers will also hold the program accountable for its goals and objectives and return. Serve a 6-month term and can resign at any time.

Elections to the Grants Committee.

Members of the Grants Committee are elected by the 1InchDAO through Snapshot Votes. The Grants Committee members will have a tenure of 2 seasons (6 months). Anyone can self nominate themselves once GC nominations are open on the forum or the method through which nominations are collected. The nomination should include Name/Discord handle, reasons for applying and the qualifications. Any candidate who has received more than 20 votes and with a 60% in support shall move on to a snapshot vote for a final decision from the DAO.
The grants committee is expected to set internal governance guidelines and KPIs and adopt measures to have a transparent environment. The Grants committee can not unilaterally change the specifications of [1IP-8] without following the established proposal lifecycle guidelines.

Recalling a Grants Committee: If the DAO realises that the Grants Committee as a whole or any individual member isn’t fulfilling their duties a motion to recall the grants committee shall be put and follow the guidelines established in the proposal lifecycle.

Genesis Grants Committee

The Nomination period for 1 week will be open upon the approval of this proposal. The Election period for the GC commences once this proposal moves to snapshot for the final decision. (Link for self-nomination).

The Genesis committee will have 7 members out of which 3 are reserved for the 1inch foundation or members sponsored by the foundation.

These three seats will only have a reduced tenure of one season. (3 months). This reservation of seats and reduced tenure is only applicable for the genesis election.

Grants Committee Compensation

The Grants Committee lead will have to allocate a minimum of 30 hours per week to make an educated decision on projects and run the committee as a whole. This proposal aims to implement the DAOverse standard of 75$/hr. The compensation formula ($75/hr)(30hr/week)(52week/yr)

The compensation can be paid in lump sums every season or monthly bases from the DAO treasury.

The Reviewers would probably commit around 5 -10 hours a week but will be less time than that of the lead.
This proposal isn’t suggesting any compensation during the initial stage but the DAO could review this once the committee has commenced.

Project funding lifecycle

The Grants Committee can request proposals from the community during the Season. The projects that are interested in getting funded shall make a forum post on gov.1inch.io and run an initial temp check. This process will follow the Phase 3 of the proposal lifecycle described in the governance documents of the DAO. If the proposal is passed the Grants Committee shall add it to their Agenda for the review meeting.

The criteria and method for funding are up to the discretion of the Grants Committee

Rational and Governance Implications of this proposal.

This proposal won’t have any significant impact on any of the protocols managed by the DAO.

This proposal rather establishes a social committee to make quality decisions on the funding of projects simultaneously reducing the problem of voter fatigue. The 1Inch Community Grants program could be considered as a decentralised version of the 1inch Foundation grants but utilises the DAO treasury and is of course accountable directly to the DAO.

The governance risk associated with establishing the committee is having malicious members on the committee. This risk is mitigated by having a multi-sig of 4/7 threshold and funding the Multisig in chunks of 500,000$ per season.

Conclusion

If this proposal passes the DAO will establish a brand new committee to make decisions on the funding of projects. This will have a financial implication of 500,000$ for funding projects plus compensation for the committee.

Genkai.Shogun · May 14, 2022, 5:15pm

Hey @0xBaer ! Good to have you here

I think Grants are Best utilized & crucial for assigning the Code development task if DAO wants to Develop something of it’s own . This is also important for the next proposals i’ve been thinking & building as it would need More Dev Insights & Feedback . Like DAO Dev Bidding Structure etc.

Moreover , All the last proposals i’ve witnessed are like in perfect Complement to each other

0xBaer · May 16, 2022, 9:17am

@Genkai.Shogun, awesome thanks for that.

I still need some quality discussion about the following topics.

compensation for Reviewers

selection of projects and the procedure for the selection.
I sort of left this out in the proposal and thought of giving the committee the power to come up with their own guidelines. It’s just one man’s opinion so we need to do a little bear and Bull analysis on this one.

RoundElephant · May 17, 2022, 1:55pm

Very interesting proposal @0xBaer! Here are my comments:

Compensation

I was wondering if the member compensation is going to be on top of the $2M annual budget or taken out of it.

One committee lead at 30hr per week + six committee members at 10hr per week is ~$350k a year in salaries. So, if it is ~15% of the annual budget (not crazy high but something we should keep in mind).

Transparency

What is the plan to create a high level of transparency? Some ideas I had:

Weekly committee meetings that are public – They can explain why certain grants were awarded or denied (hopefully there is a way to do this that doesn’t come across as a public shaming for denied grants proposals).
A public Notion page that allows DAO members to see notes on major actions taken by the committee: fund transfers, grants awarded, grants denied, meeting notes, etc…
Some sort of KPI so that the community members have a way of evaluating committee performance (important if we are to have that recall function).

Participation

Members of the Grants Committee are elected by the 1InchDAO through Snapshot Votes. The Grants Committee members will have a tenure of 2 seasons (6 months) and cannot hold the office for more than 2 consecutive terms…

The Genesis committee will have 7 members out of which 3 are reserved for the 1inch foundation or members sponsored by the foundation…

These three seats will only have a reduced tenure of one season. (3 months). This reservation of seats and reduced tenure is only applicable for the genesis election.

I’m a little worried about the level of commitment here. It’s hard to get 7 members to comment on a proposal, I imagine it’d be harder to get them to commit to 5-30 hours a week. The paid aspect might make this a lot easier to achieve, but the fact that the committee members have such a short maximum tenure means we might rapidly run out of viable candidates who a) know enough about 1inch to be good Grant committee members and b) haven’t already served on the committee. Also, I feel that systems work better if there are veterans with working knowledge plugged in (as opposed to a complete shake up/growing pains every 6 months).

With the recall feature, I don’t know if we necessarily need term limits. Thoughts?

0xBaer · May 17, 2022, 8:44pm

Thanks for the comments @RoundElephant

Regarding compensation, i have only calculated the compensation for the committee lead which will be about 27k per year, this was considered as an extra allocation from the DAO. If we are to pay the reviewers too then we could take that from the 2M allocation.

I tried the approach of Minimum Viable Bureaucracy with varying levels of success along this proposal. So just trying to put the most essential things needed for smooth functioning of the committee.

The proposals askes the Committee to meet with a quorum of 5 out of 7, but haven’t specified how often because i didnt had a picture of initial engagement of the community. And wasnt sure how much proposals needed to be reviewed during the initial phase.
But i guess we should have once in a week governance/ops meeting for the committee. What do you think if we leave it up the the genesis committee to iron out other detiles?

And regarding meeting with the applicants it should happen in the discord which would be open for every to attend. I dont think that public shaming would a huge issues, as the Committee wont be defaming anyone but rather point out the flow in the application or check if the DAO would benefit from their proposal. In my opinion every applicant should be open for such criticism and many have an idea which what they are dealing with.

We should definitely have a notion page with all infos regarding decisions, meeting minutes etc. So that it will be as transparent as possible.

Individuel KPIs for the reviewers are also another thing which the committee could come up with.
Because we dont have a predefined work hours for each person as it could vary from 5 to 10 hours.

This close was added to avoid a potential monopoly of someone members in the committee and give everyone a chance to get elected. My thought was some might be too popular and others dont bother to vote them down and wont give others an opportunity to develop their skills.
I also thought that the DAO will be bigger enough in 12 months thus giving new members an opportunity to join.
Moreover the proposal is structured in a way that there is always enough experienced people in the committee to guide new contributions, - with some seats which have to be re-elected within the first 3 months in the genesis committee - Unless the entire committee is recalled by the community ofcourse.

0xBaer · May 20, 2022, 1:36pm

further things which I haven’t considered in this proposal are

the potential legal liabilities associated with the GC and their members, without a legal entity this could be considered as a general partnership (which the dao already is)
the GC cannot make legally binding service agreements, NDAs, or any kind of contract as there is no entity to sign the said contract. Basically, if the GC ever needs to do anything outside the world of crypto it would be more or less unable to do so.
we cant hold others liable for a breach of contract as the GC cannot actually sign contracts and there is no entity to have been wronged.

Possible Solution: GC should reduce all their activities to on-chain, contracts should be smart contracts and should be funded based on KPIs.

a must-read proposal from dYdX gov : Snapshot

Roxan · May 20, 2022, 3:57pm

If Someone is popular then imo it’s not gonna be right to kick 'em out . I mean if he’s communities fav then he should be on that Seat as long as he wants to be if he’s contributing hugely . Infact , Increase the no. of seats instead , once there is enough list of candidates willing to join committee instead of kick - Relection .

This is an Area wheremight even need intervention of 1inch Legal Counsel

If you increase Dao seats it will Help those skills even more as now they’ll have seniors that gonna support them in decision Making .

You Actually reminded me of that ’ Thor ’ Movie Scene

0xBaer · May 20, 2022, 9:11pm

thanks for the comment @Roxan, there might be some technical problems if we simply increase seats, the committee will, of course, will be too big and thus harder to get condenses (won’t be better than making decisions on a community call) another factor will be the economical feasibility. the current proposal takes about 15% of the initial allocation so it’s not ideal.

To @RoundElephant and your point, I’m not a huge fan of over-regulation, so if it’s not a real problem to address now then it shouldn’t be there either.

Indeed, we need legal counsel, anyways, we will only be going in on-chain contracts for the foreseeable future, there isn’t anything against that and there are some interesting ways for the GC contributors to protect them from legal liability, which needs proper due diligence.

0xBaer · May 23, 2022, 7:51pm

@Roxan @RoundElephant, let’s do a quick temp tech to finalize the proposal. From the initial suggestions, I understand that:
There is a divided opinion on

Why don’t we remove the term limit and follow an emergent way and let the committee and community come up with solutions for the problem as they occur?
and let’s make it clear that GC can’t change the technicalities of this proposal without going through a normal governance process of the DAO.

Should the term limits for GC be removed and Follow the MVB approach

Yes, just do it.
Yeah but we need KPIs for the GC
NO, we need a clear approach.

0 voters

RoundElephant · May 23, 2022, 10:23pm

Regarding compensation, i have only calculated the compensation for the committee lead which will be about 27k per year, this was considered as an extra allocation from the DAO.

Committee lead would be more than $27k/year if we go off the numbers in the original post:

($75/hr)*(30hr/week)*(52week/yr)= $117,000

You may have gotten the $27k number from Wolfram since it gives a funky answer if you type it in there: ($75/hr)*(30hr/week)*(52week/yr)= - Wolfram|Alpha. Seems like it correctly calculates the $117k number then goes off the rails by dividing it by the number of hours in a year to get the average value of $13.36/h – it then applies this to an 8hr/day, 5 day/week, 50 week/year to get the incorrect cost of $27k.

Everything else you said in this comment makes sense to me. Thanks for the explainer!

0xBaer · May 24, 2022, 1:47pm

The proposal is changed to Phase 3.
incorporated most of the suggestions in the proposal.

some of the edits:

Removed term limit for the members.
Added a link for self-nomination,
PS: the nomination period will only start if this moves to the next stage.

A clarification for the compensation for the Committee.

SO Now the Real temp Check!

Should we Go on with this Proposal and launch a GC

Yes (let’s build the Grants Committee)
NO, (I don’t like the specs of this proposal)

0 voters

RoundElephant · May 25, 2022, 8:59pm

Dug up some Grant proposal examples from other DAOs that have passed and are live & functional:

dYdX – dYdX Grants Program Launch

Balancer – Establish the Balancer Grants DAO

0xBaer · May 25, 2022, 9:06pm

for further read.