Hi everyone,
I wanted to post a few takeaways from my time at DevConnect/Zuzalu that were relevant to Gitcoin. You may have seen on twitter that I posted some takeaways yesterday already. In this post, I want to focus on, and expand upon those that are most relevant to Gitcoin.
In this post, I will try to seperate the observations (what I saw in Istanbul) and my takeaways (the editorialized version of what I think it means/what we should do about it). This will allow us to separate out the action on-the-ground-happenings from Kevinâs opinions about them.
I want to warn you that some of this post is strikingly honest about the state of Gitcoin in market. Iâve long thought that founders are too glowing about their projects in their public communications, and the market could use more constructive criticism/learning in public about their projects. And that would collapse some of the asymmetries between project insiders/outsiders. Did I go too far and hurt some feelings? Maybe. Will people read this and get defensive? Maybe. Will it turn into a blame game? I hope not. Will we learn if we donât honestly look at ourselves? Definitely not. To me, the benefits of looking honestly at ourselves + learning outweigh the drawbacks. Over time, the market will evolve towards the live players, the projects that can learn from their missteps and evolve new tactics/strategies as fast as the ecosystem around them is evolving. Crypto evolves fast, so it is incumbent upon us to evolve with it.
Here we go.
0. DAOStar grants standard
Observation
DAOStar has dropped a standard for grants + for impact tracking. this will make it much easier to collaborate across projects if adopted! read the standard here =>
My takeaway
We should consider building upon this + identifying opportunities it provides (like a common app, where you can apply to many grants projects all at once).
1. RetroPGF
Observation
Led by optimism RPGF, the retroactive public goods funding narrative has taken the ecosystem by storm. At Devconnect, every public goods panel I was on seemed to slant towards RPGF, Vitalik himself talked about RPGF in a few of his talks. Building upon his support for it which started in 2021. Additionally, there were many projects doing retroactive public goods funding.
- Optimism
- ENS
- Purple DAO
- Celo
- Starknet
My takeaway
The market has evolved, and Quadratic Funding isnât the hot new thing anymore.
Unfortunately our attempts to be involved in RetroPGF at Gitcoin has come with some false starts. In early/mid 2022, Scott and I saw it coming and negotiated with Optimisms founding team to have Gitcoin Grants tech at the heart of Optimism RPGF. As that agreement got passed along to implementation, it was not prioritized/resourced appropriately (or something else went wrong, depending on who you ask) and Gitcoin lost the deal. Optimism broke up with us in Q4 2022 and decided to go itâs own way technology-wise. This cost us $40m/yr-$60m/yr in GMV.
That doesnât mean that weâre totally out of the game. In order to increase our impact, it may be valuable to re-capture this mindshare. But that could only be done with a concerted/aligned effort between groups building product, doing user education, market research, and marketing.
Luckily Quadratic Funding/Gitcoin Grants and RetroPGF are not wholly incompatible. Especially as Gitcoin evolves in its 3 transitions, one of which is to move from âwe are a tool for QFâ to âGitcoin is a swiss army knife, that supports many funding mechanisms/methodologiesâ there is an opportunity to provide tooling for projects that wish to do Retroactive Public Goods Funding.
The focus on RPGF can also be an opportunity for Gitcoin Grants. i was a part of some interesting discussions map out range of grants lifecycle. Basically what are the primitives that a project can use to raise when it just starts? how about when it matures into a unicorn? how do these relate to each other? what is the cradle-to-grave (or cradle-to-unicorn) funding stack? what are the primitives that can be shared across this spectrum? how do they interrelate & co-evolve together? This research could be the foundation of a roadmap for Gitcoin Grants Stack.
I wrote a brief about this here.
2. New Market Leaders
Observation
According to publicly available data, [1] Gitcoin is now #3 (as measured by GMV) in the public goods funding market for Ethereum behind Optimism and Protocol Guild.
This data also shows that there are public goods funding tools for other DAOs (like Hedgey) that hold significant positions in the âpublic goods funding for any EVM based communityâ narrative.
My takeaway
The market has shifted since 2021 when Gitcoin was the only game in town.
As Gitcoin spent ~24 months rewriting its core products (and adjacent things like governance, legal) to be decentralized/modular, other projects caught up and captured both the narrative and the funding.
Does it matter? According to the philosophy of practical pluralism we should be Ethereum aligned and in it for the mission, so we should welcome other players in the market + embrace their impact tooâŚ
From the angle of âIs Gitcoin a billion $$$$ impact opportunity?â or âhow does Gitcoin pay itâs bills?â, I think it matters much more. If Gitcoin is not a market leader and the market has power law returns for whomever is the market leader (as many markets do), I think it becomes harder to justify Gitcoinâs $800k/mo spend - and we should consider refactoring Gitcoin to make it a market leader again.
Some might dismiss this and say âKevin, someone said we are the most og/best. So who cares?â. To which my retort is âok show me the data.â.
How can we make Gitcoin a market leader again? A few ways we could go about it.
- Recapture the number 1 position by GMV.
- Give up on being a crowdfunding/public goods funding market leader + refocus on Passport as our billion $$$ impact opportunity.
- Redefine our crowdfunding/public goods funding market definition to be something other than âhighest by GMVâ. Perhaps if we carve out our own niche + become the â#1 democratic funding tool out thereâ as measured by number contributions. *
*Here are multiple spectrums in the PGF/crowdfunding mechanism design space:
- democratic vs expert-led
- for seed projects vs mature projects
- retroactive vs proactive
- investors expect a return or not
- ux/data intensive vs more simplistic
Which of them should we pursue?
Whatever market definition we choose to pursue, I think it should be sufficiently large + have a sufficiently credible go to market path that it justifies our spend in pursuit of the market.
I think there will be some pain in the form of re-organizations, renewal of strategy, and smart tactical bets until it is figured out. My feeling is that we should build a culture that charges the hill instead of one that prefers to continue the status quo.
Not be overly doomy tho. Gitcoin does have more momentum with Grants and Passport adoption than itâs ever had since it became a DAO. There are stronger leaders here than Iâve seen itâs history. Gitcoin is protopian (it gets better every quarter). My hope is that by looking realistically where the market has shifted, we can make it even more protopian.
3. Impact Attestations
Observation
There is a lot of energy at Zuzalu around impact attestations and Hypercerts. People are excited about using them in RetroPGF to connect impact that has occured with financial rewards that could one day occur (either through RPGF or otheerwise)
Vitalik himself called impact tracking as something to focus on on his recent Greenpill episode
My takeaway
I think this will be a big thing in 2024. Standards like EAS HyperCerts will allow projects to attest to the impact of one another, and over time as a web of trust evolves, weâll be able to more easily tell the difference between projects larping as public goods and actual public goods.
There is an opportunity here to build web of trusts on top of Allo/Grants Stack Registry. The more we do that, the more that creates a network effect/moat around Gitcoins tools - making them exponentially more valuable the more grants are on the registry + the more impact attestations are on the grants.
4. Portland PDX dao QF Round
Observation
HodlOn (PDX DAO member) and I had an interesting chat during Devconnect about how the PDXDAO QF Round (which I YOLOed at the PDX event in September) accelerated some of their governance conversations.
From my convo with him
it forced a lot of hard questions about our governance to actually have money.
- it forced a convo about governance. and what we were going to be when we grew up.
- diff ppl have diff ideas about what pdx dao is coming from that event.
- it convoluted the already happening convo that was forming around governance.
- its not resolved. person X talked to person Y for hours about this. a lot of these ideas would be easy to resolve if it wasnt for money.
- this convo is either going to harden us or we are going to fork into multiple entities
My takeaway
It is interesting for me to see that having money can be an accelerant not only for progress, but also for some of the hard convos that only happen when you have money to collectively manage in a treasury. I think its something to be more mindful about in the future if we do Gitcoin Grants work with projects that donât have a hardened governance structure in the future.
5. Passport Friction
Observation
While at Devconnect, I heard a lot of feedback about Passport being too full of friction for end users. Some of the friction included:
- Why canât you just pull my on-chain history and see iâm sybil resistent from there?
- Each new identity is like a quest for me to go on. Canât you prioritize service X (where service X is some foreign social network Iâve never herad of)
My takeaway
I think that continuing to focus on less friction-ful experiences for Passport could be a really good idea. And making sure that for each customer Passport has, there is enough services that users already have an intrinsic reputation built up on, enabled on Passport, can reduce friction.
Of course, there is a narrow line that weâre walking here. Reducing end user friction while increasing cost of forgery for attackers. Weâve not yet found a silver bullet.
In the meantime, things like Cluster Mapping can help close the gap.
I know that @Jeremy & co are thinking about these things as well.
6. Dampened Enthusiasm for PGN
Observation
I had a handful of conversations about PGN at DevConnect. âWhy canât I bridge DAI?â âWhy canât I make a SAFE?â âWhats the USP?â.
My takeaway
PGN has a handful of ux hurdles to solve before it gets to a baseline of usability.
And even then, Iâm not sure what itâs USP is in a crowded L2 ecosystem.
Is costs Gitcoin several tens of thousand dollars per month to run.
According to the dune dashboards here and here itâs not being used much outside of Gitcoin.
I feel like itâs time to shit or get off the pot with PGN. If itâs not going to take off, why not spin it down and focus resources on the products that are winning?