I would like to make a proposal for the gitcoin 1.0 page. Each grant has the " Lifetime funding received" which is a $ amount. I would like to propose to remove it from all grant pages. I would even go so far and ask to remove it with urgency.
My reasons follow below:
- It’s wrong and by a big margin. The calculation is simply off and I have pointed that out multiple times in the past but it was never fixed. There were improvements, then there were bugs again, regressions etc. We used to use the gitcoin API (where this number comes from) in the past in rotki. But since we are an accounting tool and financial accuracy is important for us and our users we had to stop using it and implement our own solution. With gitcoin 1.0 deprecated I understand it will never be fixed but having a wrong number there is harmful.
- It gives the wrong idea since its supposed to be amount at the time received. Many grants were funded through multiple tokens, not only stables. Tokens which have lost their value by 50-90% since the time of funding and as such the amount is off.
- Some grants are live since 2019, so the amount is going to be high~ish compared to other grants. The number does not take into account the duration the grant is active.
And you may ask why is it that bad? Let me tell you how it has harmed grants (including the one I am running – rotki).
It creates a tax liability. This is the most important problem and why I am writing this here today though I wanted to let it slide. We at rotki are paying taxes as a Germany entity for all our revenue. And donations are also revenue so we owe taxes on them. We also are an accounting application and have our own way of calculating the per year income through grants which is accurate and tested thoroughly since it uses the actual on-chain data. Yet the real amount and the amount shown in the gitcoin page differ by so much that our accountant warned us we may get audited since the amount shown in the official gitcoin page should be correct and is what the tax authorities would look at.
Some grants were excluded from some ecosystem rounds due to having a high (>$50k) lifetime funding. While each ecosystem is free to manage their own round as they see fit, I believe that the number creates wrong expectations for all the 3 reasons I mentioned above … most important of all that it’s wrong by a very big margin.
I am not sure if this should be a DAO issue or a github issue for GitHub - gitcoinco/web: Grow Open Source but I believe it should be here and discussed by the community as grants 1.0 is still the number 1 product of gitcoin.
Hey thanks for the proposal Lefteris. Couple of questions - on point 1. Is the data definitely wrong? Are you considering it includes matching amounts? Is it wrong due to price fluctuations (point # 2) or wrong regardless of that? Do you have any concrete evidence or data you can share to help pinpoint this? If it is totally off we should definitely look into it.
Price fluctuations - I think trying to peg “lifetime funding” to the current price of tokens today would take a ton of work and constant recalculations, and I’m not sure it makes sense if we could. $ amounts of donations for matching calcs are always using the price at the time of donation, which they should be. If your concern is taxes/accounting, the price tokens were received at is what matters most, right? That’s the cost basis for tracking any gains or losses when the tokens are eventually sold. Plus how is Gitcoin supposed to know whether a project held or sold non-stable tokens they received? Trying to make this value variable would cause more confusion and incorrect data IMO.
For Rotki specifically, if you received a lot of Eth in 2019/2020, wouldn’t pegging to today’s price actually make your grant look like it received even more $ than it shows now? I agree we could maybe showcase front and center a “grant created date” or “number of rounds participated in”, but I don’t see how the lifetime funding stat could objectively take into account a grant’s age and be adjusted accordingly.
For the second part:
Tax liability - could you share the data you have from on chain that differs from whats shown on Gitcoin? This would help a lot. But to what I said earlier, pegging lifetime funding to today’s price would actually make tax liability much more confusing and wrong since you owe taxes on the value at the time the transaction was made (I guess could differ in different jurisdictions though)
As you know in the ENS round, ENS said any grant who earned over $50k lifetime is not eligible for their round’s matching, and I know Rotki was removed as a result. I get why this is upsetting, but that’s ENS’s call to make at the end of the day, and I do see why they want to focus on smaller/newer projects for their limited matching pool. But yeah it’s not ideal for older/bigger grants
Last point, I do feel in some ways showcasing a grant’s high lifetime funding amount helps build trust and reputation for new donors
The data is definitely wrong yes. I have had multiple issues reported both in github and via discord(mostly talked with thelostone-mc) and at this point I can’t devote any more time on this. I just know that a wrong amount should not appear there. For example it turned out that the amount calculated at some point was using rounded up amount of tokens since this is what you had in the DB.
I am not asking to change this. Having this calculated with price at time of donation is indeed correct. It’s just an unfair thing to think of when looking at the grant via a bear market lens and creates the wrong expectations for the grant.
Look into (2)
I am not making this post for ENS and this is not the point of the discussion. They can do whatever they want with their funds so I don’t want to discuss it in here even though I am personally quite vexed by this decision for many reasons which I may go in more details elsewhere in the future.
The point of this post is to remove a value from the grants page that is wrong and also creates false expectations and may put us in serious accounting troubles as a project.
I know we are probably one of the few projects that actually also pay taxes on all donations so this may not bother others as much. In any case I will edit the grant description to specify that the “Lifetime funding” is simply wrong even if gitcoin decides to not remove it to at least have something shown in our grants page.
Hello! In the past I started building the Gitcoin integration for rotki and we found several errors in the API starting by one critical error that affected in a bad way the total amount calculation. For reference we created
https://github.com/gitcoinco/web/issues/9222 . Also as @lefterisjp commented we found that the amounts were incorrect due to rounding of the tokens.
The worst case in the logic we found was
https://github.com/gitcoinco/web/issues/9256 and we can’t say for sure if there are more errors or not since we decided to stop using the API.
As for the price calculation having it recalculated, as it has been commented, is not correct for tax purposes but we believe is better to avoid showing it or show some kind of warning next to it detailing how it was calculated and that might be inaccurate
I think this total funding number is sometimes a useful metric to have when evaluating a grant but not always necessary. Perhaps having the current grant round’s total (ie; GR14 here) and then the total all time funding is not shown automatically but can be toggled to display in the funding tab, under where the current round total is displayed. That way the info is there if a user wants it but not automatically displayed.
Just my 2 sats
That would be more useful during a round imo, yes.
But the point is also when there is no round running at all. Having a number that is not 100% accurate, to the cent there is misleading and can lead to financial trouble in some jurisdictions if your tax authority decides to audit you and see a number there adding up differently than what you reported.