Constructing a Mutual Grants Committee

Background


Over the years, Gitcoin’s mission has grown and evolved to showcase the positive role web3 can play in solving the global coordination problems (please read this link in particular) we are all facing. In contrast to the pervasive doomerism that’s emerged in light of our declining institutions, we believe that we can still build a solarpunk future where creating positive externalities is not just the exception but the rule. As we continue to build this future, Ethereum can become a schelling point for the hopeful.

Historically, we’ve been doing this in an inside-out fashion, building the machine that builds the machine of web3 first by helping new intrinsically motivated contributors get paid to build an open web, then by helping maintainers get the funding they direly needed via quadratic funding experiments like Gitcoin Grants. But as the DAO and the ecosystem at large has evolved, the community has begun to think bigger about the role we can play in seeding new experiments; everything we are building involves playing infinite, multiplayer games.

Naturally, this has led many folks to think about how Gitcoin as an Impact DAO can form a true DAO of DAOs consisting of some of the most values-aligned projects in the space.

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Practically speaking, this overlapping DAO of DAOs is something Gitcoin has previously missed an opportunity to improve its own positioning through as well, by being unable to help grantees like Uniswap level up past smaller grants to larger forms of funding (often dilutive funding via VCs). Had we been able to do mutual grants then, some of these projects may have been able to avoid VC funding and instead form values aligned networks. In turn, we could imagine a more intentional relationship leading to a much larger amount of future public goods funding than what Uniswap currently provides (although we are grateful for what they do already).

The Journey So Far


To this end PGF has been pursuing small scale mutual grant agreements as opportunities emerge. Mutual grants as the name suggests are reciprocal grants of tokens for shared governance, with partners that are committed to working with Gitcoin via aqueducts, side rounds, or, more broadly, shared public goods related missions.

While these have largely been successful, there lacks a formal process or committee behind each one. As PGF seeks to scale the size of these agreements, it’s become clear that the DAO needs a better framework for evaluating a project’s relevance to our mission.

To fulfill this need, a few contributors have been starting first with a framework for how we might prioritize things like side rounds or mutual grants, based in part on a conversation here. In short, currently PGF measures:

1) Ecosystem Impact (e.g. Legitimacy): How much impact is a project likely to have in solving a key coordination problem in web3 and beyond, and will governance in their organization allow us to work to build something greater than the sum of its parts?

2) Strategic Relevance (e.g. GMV): How likely is the project to support the democratic, pluralistic vision we have for public goods funding and thus, as an example, increase GMV of grants 2.0 instances? If a project does not increase these measures directly, are there ways working together could increase them indirectly?

3) Execution Risks (e.g. Size of Deal): How likely is it that we’ve missed something / that we’re wrong about the future ability of a project to deliver? If we are wrong, how much does that impact us in the long run?

Here are some brief high level examples of how these considerations play out:

Example 1: Partnerships with groups like Wonder are likely higher risk than those made with a group like Uniswap who have a longer track record of impact in the ecosystem, and thus as stewards discussed should be for smaller amounts if any. At the same time, these projects are often willing to give more to public goods (as in the case of Wonder’s 1% aqueduct commitment).

Example 2: Although partnership with Radicle or Giveth would clearly be values aligned, pushing this forward would require much higher energy in terms of time for meta-governance and in terms of the amount we would have to request as a grant from those groups to properly engage in mutual governance. These are lower risk but also higher cost to execute.

Achieving a Pluralistic Vision at Scale


Where do we all go from here?

First, although the framework above is necessary it may not be sufficient, and PGF contributors want to work more closely to outline the “bar” for mutual grants moving forward. The general belief is that this bar has been met, but order of execution has been on a first in first out basis and could likely improve.

Second, prioritization is not a transparent and open process. Although PGF believes this process cannot be fully transparent for reasons noted here, they also believe now is the time for us to put together a committee that can review our prioritized recommendations in advance and have an active discussion with the workstream on a more frequent basis.

With that in mind, members of PGF would like to invite members of the stewards council to join a working group on mutual grants. Joining this group is not necessarily an easy task but it’s a necessary one, and would likely take between 5-10 hours a week for at least three stewards if stewards were to agree that it is relevant to Gitcoin’s objectives.

Committee membership would involve:

  • deciding when project alignment is high enough to necessitate a mutual grant (what bar should be set)
  • helping to prioritize different proposals from external partners (in what order do we conduct grants and how often)
  • work to suggest strong partners that come up process evaluating these proposals
  • post-grant, helping to execute on meta-governance between different groups by serving as a member of at least one mutual grant multisig used for inter-DAO voting

Members of this group will be paid a stipend by PGF for their help on top of any amounts from other activities.

If you’d like to get involved, council members will have time to ask questions during the next call, so please reach out to a council member to make sure yours get in. Alternatively, feel free to reach out to one of the PGF workstream leads (@annika @Fishbiscuit @vgk and myself) so that we can discuss in more depth!

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Excited to explore this in the upcoming Steward Council call + would very much want to be involved

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I’m very interested in being apart of it… but obv 20 hours a week is impossible :frowning: I can only give 2 hours a month.

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Excited to see this move forward and be involved!

This work is vital for helping establish the direction for lots of the work the community partnerships team will be doing - so it’s important that we deeply think through these principles and frameworks with relevant stakeholders.

If you’d like to get involved - please reach out!

Telegram: vishnu_g_kumar
Discord: vgk#0551

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I am very interested in helping, but agree that 20 hours a week for an advisor role (to help define a framework and review prospects) is a bit much.

I would love to stay informed of when the kick off call for the group will be :slight_smile:

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Agree on that, I think for most members the scope can probably be reduced to around 5 hours a week but with recognition that PGF will likely need to scale up (which is already likely to happen in other areas) to help cover the core work. Adjusting the post to reflect this!

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Hey @ceresstation do you think that workstreams that resemble more of sub-daos or side-daos fall within the ‘mutual grants committee’ framework or scope of work?

Here’s why I’m asking the question.

The examples im thinking of primarily in asking the question here are

  • KERNEL
  • moonshot collective
  • FDD
  • dCompass
  • MMM

At various times, each of these workstreams has flirted with going independent (or multi-DAO) and starting to seek governance tokens from multiple DAOs.

Current course & speed, there is no standard for what those deals look like. But a few recent examples:

  • KERNEL was incubated at Gitcoin Holdings, and is becoming its own independently governed project. Vivek and I directly negotiated the terms of that departure such that he could be successful and that Gitcoin could make sure expectations were well defined of how Gitcoin was involved in the KERNEL project from now on.
  • FDD (consuming 93.5k GTC/season) continues to flirt with spinning out a SDD (Sybil Dao).
  • dCompass (consuming 38k GTC/season) continues to flirt with creating its own independently governed project.
  • MMM (30k GTC/season)/MSC (130k GTC/quarter) has both had inconsistent discussion about becoming it’s own independently governed project.

One example Ill drill deeper on recently is dCompass. Specifically, the following has come up in discussion about dCompass:

To which @huxwell responded:

I guess another way of asking the question at the top (does this fit in the MGC scope) is:

  1. Who should be the counter-party to negotiations with @Huxwell (dCompass) or @DisruptionJoe (SDD) or @Fred (MMM) or @emudoteth (MSC) in the creation of this workstream flavor of mutual-grants?
  2. Is there a standard set of criteria/terms for when GitcoinDAO will/wont support these entities becoming independently governed? Is there a common understanding of these criteria of terms?

Of course, the default option is to do nothing (not include these types of deals in the MGC scope). There are a couple of problems with the current approach.

  1. The primary one is there is no mutual understanding that there should be a correlation between the GTC governance rights that GitcoinDAO gives to these workstreams to get them off the ground + the eventual governance rights of their independently governed project that GitcoinDAO gets back.
  2. This incentivizes the workstreams to keep requesting more GTC ad infinitum from GitcoinDAO. I would venture to say that if a workstream fails to meet its goals and thereby stays longer to consume more GTC, it should give up more governance rights in its eventual departure (or be shut down if its just not working). Not having this understood upfront increases the risk of misunderstandings + hurt feelings down the road.
  3. Another problem is that GitcoinDAO has put a lot of work into being regulatory/legally compliant. Without a process for the creation of these independently governed sub-DAOs, there is no way to make sure the sub-DAOs are regulatory legally compliant too.

Open to feedback on the thinking here.

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We’ve requested 38k GTC previous season because we thought we were ready to scale and compensate more contributors.

However our estimations were not accurate enough, we made this proposal before having a proper product roadmap.

Failing is part of the journey but we’re willing to improve and learn from our failures by minimizing the risks for the DAO and staying in alignement with our roadmap. So I’d like to suggest the following approach.

  • instead of requesting more GTC, we will actually request way less for Season 14 and it would be our last season with recurrent funding from the DAO in both scenarios below.

Optimistic scenario:
Assuming that we got back on track after Season 14 and reached our goals, we would work on a mutual grant agreement for a proper spin off.

Pessimistic scenario:
If dCompass was to fail again for accomplishing the Season 13 goals (going to production and hitting KPIs) then no mutual grant agreement would be created.

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The details from @owocki create a valuable precedent that there should be more term sheet style interactions, with standard funding options based on some criteria. ie, why does Kernel get X amount in funding support, but dCompass gets Y… and why does Wonder get a “no thank you”, but others may get a “yes.”

I do think that part of the work this group does should include a rubric for how funding decisions are made (to remove some of the bias of the selection committee), or at least make sure its a transparent process so that the community can weigh in (in a quadratic vote).

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@owocki definitely agree that both side-DAOs and strategic partnerships are important, but tl;dr I’d love to more clearly map out the role of the committee in helping @Huxwell and the crew with any future mutual grants

@kyle +1 on the idea of having a clear rubric for these types of arrangements as well, this is something we’re actually working on within PGF but as above it’d be great to have more steward visibility, maybe we can even do a quick introductory call on this with interested stewards after the budgets are through? If everyone who wants to be included could ping myself, @vgk, @annika or @Fishbiscuit on Discord that’d be a great next step (@kyle will include you by default since it sounds like you’d be down to jam)

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Does this mean that those relationships are in-scope for this committee?

My default answer would be yes but to be sure I don’t think it’s up to me to decide, it would likely be something the committee itself works on a policy for as part of its mandate.

Hi Scott,

Firstly thank you for raising mutual grants committee idea, like it.

Second, based on the discussion above, I can see it is more important for now is to create the rules for mutual grants.

We had some partners before like DeveloperDAO and PrimeDAO, so should we involve them in the mutual grants as well?

I’d like to contribute to the mutual grants program if possible.

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Hey @ceresstation, thank you for bringing this forward!

If possible I’d love to contribute to this within the work I’ll be doing in PGF workstream as a key effort to continue to build super values aligned imapctDAO stack. I’d be happy to help build an effective framework to evaluate a potential mutual grant and make sure we set ourselves up for these grants to go beyond just a token swap into tangible value add and synergies between Gitocin and these projects or helping these bring a lot of value to the rest of the ecosystem! Continuing to nurture the relationships and execute on synergies will strengthen all mutual grant efforts.

On a slightly separate note, regarding @owocki’s comment on streams going independent – an idea that might be interesting to explore is Orca Pods. Of course, I have far less context on how Gitoin governance works but this immediately came to mind as I was reading the challenge/opportunity of how to think about sub-daos. (Pods are small working groups, usually centred around one expertise. Each pod has its own multi-sig wallet that is controlled by the pod members. So pods can be thought of as mini-DAOs within a larger DAO.) Although they are not yet active and still developing the product, it might be a useful mental model to think about and possibly an aligned protocol to build synergies with.

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I also think that folks should look at @pet3rpan 's framework for governance minimized DAOs + subDAOS: https://twitter.com/pet3rpan_/status/1505977366991974402

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Would love to have you involved here, I’m going to reach out to everyone that responded or DM’d with their interest this week to get a first call on the books. I definitely think the impact DAO research you conducted is super relevant to helping build a framework for + rank order potential candidates.

Also love the idea of Orca pods as a potential way to build out the different control structures for each independent grantee on the meta governance side. That said, I think that’s likely a consideration down the road as IMO the social coordination should always precede formalization via tools. Will definitely ping Julia for her thoughts as well though!

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I love this initiative; I just talked to @vgk about it and would love to get more involved.

I like the thinking around risk/rewards or cost/impact; I think those are very simple but powerful primitives.
But as you mentioned, some partnerships might need a high amount grants to create reasonable engagement. I would add that it will also require high effort; someone should probably manage this partnership and be actively engaged in their governance, product development, strategy … and that can be a full-time job.

I would put even more emphasis on this - the problem with VC money as I see it is that it’s just the money without the commitment and support. VC-funded DAOs very often struggle with governance engagement as there are no clear incentives to be involved for the VCs. I believe if we are creating an ecosystem of DAOs, something like business partnerships, there are incentives in place to make sure that we are supporting each other as we depend on each other success.

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Hello again Scott! It’s great to see this initiative being created, it’s also related to the discussions that me and @David_Dyor have been having since GR12 and it fits with the future vision we see for the GIA.

We haven’t met, but I’m the person that from GR13 has been entrusted to ensure that all our grants are being reviewed by the community, credible neutrality is maintained, our grant eligibility criteria are respected all while during the round grants are being approved in under 48 hours.

It would be amazing to have somebody from the Grant Investigation Agency(within the FDD) participate in the Mutual Grants Committee. I believe that @David_Dyor and/or me should be in the loop due to our experience with the grant review/appeal/dispute and especially because of the recent evolutions of fraudulent behavior which require ever evolving eligibility criteria, processes and thorough grant investigations.

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