[GCP - 017] UPDATED - Proposal for Fiat Donations in Grants Stack

[noahchonlee]

During GG21, the viaPrize team added a way to donate with PayPal to the Open Civics round.

Overall stats:

$3,778.70 in crowdfunding

141 donors

337 total donations

$11.21 average donation

PayPal stats (after PayPal and viaPrize fees and not including transactions sent for test purposes):

$272.60 in crowdfunding

12 donors

13 donations

$62.30 average donations

7.21% of donation volume came from PayPal. Upon review, Umar Khan the head of data for Gitcoin said that the proof of personhood through PayPal is sufficiently strong for sybil resistance. More details here

We believe this number would be much higher if the option were added directly into Grants Stack because this was a new, unfamiliar feature only found on a separate website.

If it were directly in Grants Stack, perhaps the number would be 10-30% immediately (impossible to know until we try it.)

Almost all of the ongoing Allo volume is through Grants Stack at this point with roughly 2M in donations per year. A 10-30% increase would mean 200k-600k more Allo GMV within a year.

Across the long-term, adding fiat capabilities to Grants Stack means that Allo Protocol is accessible to billions more people, increasing the potential user base by 100x.

Not only that, making the platform more accessible means easier partnerships with major corporations and governments. Grants stack would no longer be another crypto platform just for crypto users, it would be a blockchain-based platform that anyone can use.

Maybe in 5 years Allo GMV will be 10x thanks to this capability.

These numbers are conjecture. It is impossible to know until we try. That is why we propose a one-time set up fee + a usage-based deal.

We are likely converting viaPrize into a nonprofit and launching a second company specifically for making web3 platforms more accessible to non-crypto users. We are already lining up clients in our waitlist who are sending us deposits. Visit normie.tech to sign up for a consultation.

We would like to negotiate a contract with Gitcoin to build these features directly into Grants Stack.

The system works by generating a wallet for each fiat user and sending stablecoins from a crypto reserve through the users’ wallet and into the smart contract.

We propose to charge a one-time set-up fee (essential so we have funds in the crypto reserve) and an ongoing percentage fee on fiat donations with a revenue split with Gitcoin. This would add valuable insight into how users would respond to a platform fee which is a potential way Gitcoin could become self-sustaining long-term.

Does the community want this?

Open Civics community has noted fiat capabilities as one of the most demanded capabilities for their rounds. Full retrospective here

During GG21, a majority of community round teams asked for us to set this up for them when they saw what we made with Open Civics. We didn’t have the resources to set up a crypto reserve for all of them.

We already have 4 groups applying for community rounds asking us if we can do this with them for GG22 and also Monty of the Celo rounds.

We believe meeting this community demand directly within Grants Stack in time for GG22 would be the best solution. We expect the Gitcoin team is extremely busy, so we look forward to hearing if that is a feasible time frame or if we should plan for something further into the future. The demand on dev time for Gitcoin would be minimal as we just need to add a button and our system takes care of the rest. Upon review we also found that this feature would be unaffected by the transition to Allo 2.1

To my knowledge, this is the biggest action Gitcoin could take with the potential to massively and quickly increase Allo GMV by opening up Grants Stack to 100x as many people.

And of course, we invite community input on this thread.

It is thanks to the support of this community that our team exists and we want to know what would genuinely be helpful for the ecosystem. Grateful to @umarkhaneth @owocki @MathildaDV @masterhw @omniharmonic @deltajuliet @rohit @Sov @thedevanshmehta for their encouragement in this process as we’ve gradually learned how Allo works over the past year.

If you have thoughts on what fiat donations would mean for Gitcoin, please leave a comment.

[umarkhaneth]

Great to see you making a proposal on the forum @noahchonlee! You and your team are a shipping machine.

From my perspective, the bootstrapped GG21 experiment sufficiently showed there was both demand and usage of fiat payments. It’s great that this set up drives Allo GMV.

@noahchonlee

We propose to charge a one-time set-up fee (essential so we have funds in the crypto reserve) and an ongoing percentage fee on fiat donations with a revenue split with Gitcoin.

I wonder if you have a specific numerical ask here and if this is the type of thing that goes through gitcoin’s governance or another process

[meglister]

Hey @noahchonlee ! Thanks so much for posting this – I’m excited that you guys want to contribute to GS and push fiat donations forward. How we move forward depends on the technical plan here, I think a good next step is to connect w our product/eng team to figure out what the specific proposal is. Then we can figure out go-forward plan and commercial terms.

[metahands]

Echoing the sentiment here, we saw fiat options as a major request in the first Ma Earth grants round, and expect this to continue to be the case.

[noahchonlee]

Hey Umar!
Mathilda had encouraged us to apply for a citizens grant. Do you think thats the best path forward for this?

For pricing we were thinking of charging both a retroactive + usage based model.
Usage based:
5% transaction cut for credit card/paypal (3.5% + $0.35 per transaction goes to paypal, 0.75% to viaPrize team and 0.75% to Gitcoin). This would be ongoing.

Retroactive:
We are willing to bet on our belief in how this will increase Allo GMV.
We suggest we are paid the equivalent of the Allo GMV processed through us after 1 year. We expect the number to increase exponentially afterward, but this would be the one time retroactive cost.

We would need an upfront transfer to keep our crypto reserves stocked.
For now we manually refill it by turning the fiat into stablecoin. Do you have any data on whats the most thats been donated within one weekend? We would want to stock the reserves with that amount minimum.

Then after 1 year (and at least after 4 GGs end, in case there’s a delay) we would be sent: Allo GMV from fiat minus the upfront transfer

We also are testing bank transfers which may invite much larger one time transactions. If theres a single large donation (such as the 400k donation to Gitcoin in 2021) instead of using reserves our team can manually handle such cases within a few day delay.

[noahchonlee]

Thank you for the connect to Kat! We have a call Friday

[noahchonlee]

Update, we have more community rounds asking us to add this integration, we don’t have the resources for it so would have to pick just a couple and say no to the rest if we don’t do this with Gitcoin

[MontyMerlin]

Love this proposal!

Would be really great to see this implemented in time for GG22. I know the BioFi Pathfinders round would really appreciate this as a lot of their potential donors may be non-Web3 native.

Would be awesome to see this functionality integrated directly into Grants Stack, if not would love to set up a ViaPrize page for GG22 for the rounds on Celo! :))

[mars]

@noahchonlee

Update, we have more community rounds asking us to add this integration, we don’t have the resources for it so would have to pick just a couple and say no to the rest if we don’t do this with Gitcoin

Update from my side as well.

The Planetary Council round got rejected: it means less rounds for you, more time for me. I can totally help you with reviewing / evaluating / scoring your round Youth in Need as a juror / evaluator.

I also left the comment on the GitHub issue that you’ve created: Fiat Donations in Grants Stack · Issue #3658 · gitcoinco/grants-stack · GitHub

Longer term I would like to suggest / discuss / propose (not sure what’s the best place / form / factor) some additional features in the Grant Stack, areas adjacent to accepting PayPal / credit cards…

I see this as on-topic / related / worthy discussion. Starting from donor CRM and ability to follow up with people via email / socials. This is inspired by the current Climate Coordination Network Jokerace: it would be so handy to follow up with existing donors. This feature is / seems incredibly useful in terms of adoption / scaling / GMV (gross marketplace value)

[noahchonlee]

That’s an intriguing idea. Maybe we could have a little checkbox when people check out during donation saying “send me email updates from the projects I’m donating to.” If fiat, we already are getting their email. If crypto donation, maybe if they click the checkbox then a text field appears where they can add their email. Maybe this could even be linked to Karma Gap so when a project adds an update to their project it is automatically sent out in an email to all donors who checkmarked the box. Also chatted with Mahesh about making Karma Gap gasless. If we made karma gap and gitcoin gasless and include web2 login then anyone could easily participate in these systems and have easy email communication in the ecosystem. I think a great first step even before getting complex impact tracking is just having a way to email someone you gave money to so you can ask, “hey, what’s going on?”

[noahchonlee]

Probly not most important data point but my 2nd most liked tweet (after the tweet about ppl funding the youth in need round) is the suggestion to add fiat to Gitcoin

Other update, called with Sov who said DAO vote could be way to move forward with this, gave lotsa helpful advice

And awesome call with Kat and Ed and we clarified technical side, and theyre are asking Meg best approach for funding it, and they suggested I put together a clear product requirements doc with showing the user flow so I’ll work on that (tl;dr it’s super simple and just click pay with Paypal for donors, for project managers they’d just have to send us a CSV which we send back to them with the whitelisted wallet addresses)

[mmurthy]

@noahchonlee

Maybe this could even be linked to Karma Gap so when a project adds an update to their project it is automatically sent out in an email to all donors who checkmarked the box.

We already have this and many funders are receiving updates from projects they funded every month!

Easy to subscribe, just enter your wallet address, we fetch all the projects you funded and will subscribe you to those project updates.

Karma GAP - Gitcoin community grants

[noahchonlee]

Brilliant!!
Ill see if i can include instructions for donors to do that in the youth in need round description

[noahchonlee]

As recommended by Kat I’m writing up here details on the user flow

Donor user flow:

Click “donate with Paypal” in their grant stack cart. Do the usual PayPal checkout. That’s it.
Video here of how we did it in the viaPrize website: https://photos.app.goo.gl/UbqyYnGS78jQmhJb7

Project manager user flow:
At the end of the round, We send the CSV back with the list of whitelisted wallets. That’s it for the project manager.

Note on the CSV:
If the round manager or Gitcoin prefers, instead of doing this for them, we could show them the Paypal data and they could edit the CSV themselves. We might be able to automate this in the future as well. For now it’s pretty easy to manually whitelist the wallets with a checkmark associated with verified Paypal accounts.

[noahchonlee]

Summary

This proposal would fund the viaPrize team to build fiat donations to Gitcoin projects directly into Grants Stack in time for GG22.

Funding would consist of the following:

• An immediate transfer of 100,000 stablecoins to fund the fiat-to-crypto reserve
• Ongoing transaction fee which is split with Gitcoin
• A retroactive fee equal to the fiat donation volume after one year (minus the 100,000 in stablecoins that was already transferred)

Abstract

During GG21, our team successfully built fiat donations on our own site for the Open Civics round which led to 7.21% of donation volume occurring through fiat. We believe this number would be much higher if the option were added directly into Grants Stack because this was a new, unfamiliar feature only found on a separate website.

Upon seeing this success, most GG21 rounds asked us to build this for them as well. However, we did not have the resources. Currently, several rounds for GG22 are asking if we could do the same thing this time for them, and once again we do not have the resources to assist with this community demand.

If this proposal is passed, then we will be able to support all rounds with fiat donations and have a much better user experience by including this directly in Grants Stack.

Motivation

1. Gratitude to Gitcoin. viaPrize grew to a full time team of 5 with our sole funding coming from over 1,500 donors on Gitcoin and thanks to initial successful experiments during Zuzalu which was also funded by Gitcoin. We exist thanks to this ecosystem and we would love to give back in a meaningful way.
2. Months of work on the line. Our team spent many months learning how to make web3 easier to use, familiarizing ourselves with Allo, and then finally succeeding in putting fiat payments on-chain. We would like to see this work make a difference to users.
3. Bringing web3 to billions of people. How can we expect to onboard people when 3/4 of onramp attempts fail? To solve this the viaPrize team are launching Normie.Tech to allow non-crypto users to interact with web3 platforms through gasless transactions and fiat transactions straight to smart contracts. This allows us to transition viaPrize to a nonprofit and to use this separate company to support many web3 platforms in the ecosystem. If this proposal passes, Gitcoin would be our 3rd and biggest client which would jumpstart our future growth.

Specifications

How It Works

-An individual checks out in their cart through PayPal with $100 for example. See a demo video of how this worked during GG21 https://photos.app.goo.gl/UbqyYnGS78jQmhJb7

-We send 100 in stablecoins from our crypto reserves through a wallet generated for the user to those projects

-Those donations receive full matching if they have a verified PayPal account

The Budget

Why the 100k upfront?
We manually refill the crypto reserves by turning the fiat we receive into crypto. Thus, we would want enough on hand so that it doesn’t run out due to donation volume exceeding the reserves over a weekend. Considering 600k was donated during GG20, we think 100k would provide a reasonable buffer.

Why the ongoing transaction fee?
Transaction fee breakdown: 3.5% + $0.35 per transaction to PayPal, 0.75% to Normie Tech, and 0.75% to Gitcoin.
The transaction fee to us allows us to scale our crypto reserves as usage increases.
The transaction fee to Gitcoin provides valuable insight into a potential way for Gitcoin to become self-sustaining long-term.

Why the retroactive cost?
We would be rewarded equivalent to how much Allo GMV was processed through our feature after 1 year and at least 4 GGs (in case a GG gets delayed before the end of the 1 year time frame.) The 365 days would start when the feature goes live.
If 300k is processed through us after 1 year, Gitcoin would send us 200,000 in stablecoins (300,000 minus the 100,000 already sent).
If 50k is processed through us after 1 year, we would send Gitcoin $50,000 (50,000 - 100,000).
Plus, we’re PGF nerds in a crowd of PGF nerds so… let’s go retro

By making the costs usage-based + retroactive we ensure our incentives are aligned. The benefit to us is proportional to the benefit produced for Gitcoin.

The Team

Noah Chon Lee (steward responsible for the execution of this proposal)
Dipanshu Singh
Nithin Varma
Swaraj Bachu
Aryan Tiwari

User Flow

Donor flow:
Click “donate with Paypal” in their grant stack cart. Do the usual PayPal checkout. That’s it.

Project manager flow:
After the round, we send the round manager a CSV with the appropriate wallets whitelisted. The round operator uploads the CSV into manager.gitcoin.co and then sends funds the usual way.

Sybil resistance

Each unique PayPal donor account would be linked to a single custodial wallet.
The Sybil resistance consists of whether this donation comes from a verified PayPal account.
Verified PayPal account = has a bank account linked to it.

We’ve stress tested this ensuring only one bank account can be linked to one PayPal. Umar the head of data of Gitcoin has called this Sybil resistance satisfactory.

Donation Minimums

Due to PayPal’s $0.35 minimum fee per transaction, we would implement a $2 minimum donation. Note that a donation to many projects at once would count as a single transaction.

Possible improvements

Bank transfers and Visa card verification

We’ve found APIs that we are in process of gaining production access to which allow us to check whether someone is using their legal name in a bank transfer or a Visa card transaction. We likely can add bank transfers as an option (with $50 minimum donation) which invites larger transactions. If we access the Visa API we may eliminate PayPal in the future and also increase the cut to ourselves and Gitcoin.

Requirements from the Gitcoin product team

Accepting a Github request that would add the pay with PayPal button into Grants Explorer.
We would also add a little alert by the button that says, “Make sure a bank account is connected to your PayPal account to have matching funds added to your donation.”

Benefits

• With a bootstrapped version resulting in 7.21% of donations in fiat, we expect that this feature directly within Grants Stack could result in an immediate 10-30% increase in Allo GMV.
• Long-term, adding fiat capabilities to Grants Stack means Allo Protocol is accessible to billions more people, increasing the potential user base by 100x.
• Not only that, making the platform more accessible means easier partnerships with major corporations and governments. Grants stack would no longer be another crypto platform just for crypto users, it would be a blockchain-based platform that anyone can use.

Perhaps in 5 years Allo GMV will be 10x thanks to this capability.

Drawbacks

Chargebacks
Credit card chargebacks average 0.6% in online platforms
We would deduct these costs from the transaction fees given to us and Gitcoin.

Massive transaction at end of the round
If a massive transaction comes in through fiat (such as the 400k that was donated at once in 2021) that exceeds our crypto reserves, then we can still process it manually with a few day delay. If this massive transaction comes in within a few days of the end of the round then it may miss out on automatic matching.

Time to pass this proposal
Considering that we must take 5 days of discussion then 5 days of voting before finishing this proposal, we may need to build in this feature 3 days before the start of GG22. We believe this is doable, especially if the DAO vote is passed quickly, but we may have to launch fiat donations partway through GG22.

Vote

• Yes: Fund the addition of fiat donations in Grants Stack in time for GG22 with an immediate 100k transfer, ongoing transaction fee, and retroactive reward
• No: Do not fund the addition of fiat donations in Grants Stack in time for GG22 with an immediate 100k transfer, ongoing transaction fee, and retroactive reward
• Abstain: I am missing context

[noahchonlee]

Responding to question from @meglister
Called with @umarkhaneth about potential of automating the user flow for round operators.
Worst case scenario our team would send round operators a CSV that they add into QF calculator which takes a couple clicks and 15 seconds just like we did for OpenCivics.
However, we might be able to automate this before the end of GG22.

He suggested:
Gitcoin sets up a cloud folder (just a list of addresses to whitelist)
Our team would write the file and Gitcoin would read from it and pull it into the calculator
Then round managers don’t need to upload a CSV from our team to calculator.
@katalunia does this sound right to you? Also what’s Ed’s forum handle?

[mars]

@noahchonlee

Worst case scenario

Keep in mind this resource: Grants Stack GraphQL indexer - possible to fetch the data on viaPrize to have all rounds, all projects, purely as a backup, in case 1-class Grant Stack integration not accomplished in time.

If you are not working everyday with these data structures, it takes some effort to figure out the correct query (but I did it anyway, see this GitHub issue), that’s why help / support / dev time from Gitcoin core contributors is practical, one way or another.

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I would love to support BUT the bounty seems excessive.

@noahchonlee

If 300k is processed through us after 1 year, Gitcoin would send us 200,000 in stablecoins (300,000 minus the 100,000 already sent).
If 50k is processed through us after 1 year, we would send Gitcoin $50,000 (50,000 - 100,000).

If 100m is processed through us after 1 year, Gitcoin would send us 99,900,000 in stablecoins (100,000,000 - 100,000).

Where is the money coming from? You cannot guarantee the $GTC token performance. In fact I’d rather bounty in $GTC and mutual exchange of the viaPrize tokens. Ideally viaPrize can becoime a new crypto onramp payment system financial system lego block and becomes public good In terms of new financial systems: just imagine a coffee shop and by buying there you become a shareholder of the place, genuine WIN WIN WIN.

The $100m is totally aligned with the vision: How might we scale Gitcoin's Impact from $50mm GMV to $500m GMV? 📈

RELATED: https://transak.com/ (buying crypto reasonably easy, something to keep in mind)

@noahchonlee

Each unique PayPal donor account would be linked to a single custodial wallet.

Maybe use this https://www.privy.io/ maybe use some open-source alternative. I do not like the vibe of managing custodial wallets, that’s a honeypot for hackers. Need to think about about OPSEC and INFOSEC (security in general) from the start.

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Also in terms of governance: don’t mix 4 questions in into one.

• create 4 separate votes
• create a single vote with all 16 combinations
• maybe some convenient Snapshot feature to ask 4 questions separately

Currently the vote is clear NO to me, needs rewording

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EDIT / UPDATE / RELATED:

The cashback in $DON… That’s also kind of logical. Inspired by the UK regulation - when donating, cannot receive anything in exchange. Donation token = hacker mindset, finding loopholes, treating regulation as a guideline. Technicaly speaking there is nothing wrong with it. Maybe in 5 years the courts will decide otherwise, but in the meawhile I see this as a genuine pathway to adoption. It is the role of visionaries / entrepreneurs / builders to push the limits of what is possible. It is morally ethical and acceptable in my book, even though the UK charity regulator may not like it.

Initially suggested in legacy twitter thread on May 20. We can design Web3 onboarding experience

[revmiller]

this is an interesting proposal, and i believe Gitcoin could def benefit from fiat donations — would love to see the integration happening, given that tech & ops details are aligned. good luck!

[noahchonlee]

Ok update talking with Meg that we need to look more into the legal side of this. She said she’d connect me with some lawyers to chat with

[noahchonlee]

@meglister update, called Bridge.xyz (stablecoin service being bought by Stripe) and they have money transmitter license
It’d cost $2,000 /mth and 0.40% transaction fees
So we have a solution we are testing though it’ll cost us

And we also would use non-custodial wallets if there’s concerns about the MTL so that’d also cost Privy.io fees