[Proposal] Unlock up to $100K in matching funds every year by exchanging $2.5M USDC for USDGLO—At No Cost to Gitcoin

🧙 🧙‍♀️ Ideas and Open Discussion
1

Hi, I’m Garm from Glo Dollar, the stablecoin that funds public goods.

TLDR: I’m proposing that Gitcoin exchanges $2.5M of its USDC holdings ($5M today) to Glo Dollar (USDGLO) to unlock up to $100K per year for 2 new Gitcoin rounds.

What is Glo Dollar?

Glo Dollar (USDGLO) is a stablecoin similar to USDC. Unlike USDC, USDGLO funds builders in your ecosystem.

Glo Dollar is US issued & regulated and 100% fiat backed by a mix of cash and US treasuries.

The big difference with USDC is that Glo Dollar is structured as a non-profit, which allows us to donate all of the profits we make on the US treasuries backing Glo Dollar to builders in your ecosystem.

The funding potential of doing this is massive. Stablecoin companies generate $7.4 billion annually from their stablecoin reserves. By choosing to embrace Glo Dollar, we can funnel all of those profits back into your ecosystem by funding public goods. Here’s how that works.

More Glo Dollars = More (Automatic) Public Goods Funding. AutoPGF. :magic_wand:

Thanks to Gitcoin swapping $100,000 of assets into Glo Dollar a year ago and leading by example, we’ve been able to kickstart the AutoPGF movement, and have since grown our market cap to $3.5 million. Glo Dollar is live on 7 chains.

Recent wins for Glo Dollar and AutoPGF

  1. The Mento Reserve converted $1M of reserve assets into Glo Dollars. The funds held will generate ~$40k in yearly funding for Celo Public Goods;
  2. Gitcoin exchanged $100K of USDC of its matching pool funds to Glo Dollar (USDGLO);
  3. Shutter DAO swapped $300K into Glo Dollars to fund Web3 public goods (currently Gitcoin, Protocol Guild, Giveth);
  4. Over $500K in matching funds for Gitcoin and Giveth rounds have been denominated in Glo Dollars, including CCN’s GG21 Climate Solutions Round, The GG21 Regen Coordi-Nation round, and various rounds on Giveth, including ones sponsored by Base, Celo, and Public Nouns;
  5. Glo Dollar donations are becoming more popular, with 2000+ Glo Dollar (USDGLO) donations on Gitcoin and Giveth. During GG21, ~8% of donations were made with Glo Dollars.

Our proposal: unlock ~$100K per year to run 2 additional Gitcoin rounds by increasing Glo Dollar holdings

  1. Swap $2,500,000 of USDC holdings into Glo Dollar (USDGLO) through our issuing platform powered by Brale (no fees).

  2. We’ll add a specific Gitcoin Builders Cause Area, where 100% of our earnings from this $2.5M holding will be channeled. In the current interest rate environment, this will generate ~$100k in funds per year.

  3. Twice a year, we will run a “Glo Dollar x Gitcoin” round with at least $50k USDGLO in matching funds. These rounds will support builders who:

    1. Create Public Goods;
    2. and build on top of Gitcoin protocols and/or Glo Dollar.

  4. Gitcoin can always swap the Glo Dollar (USDGLO) funds back 1:1 to USD or USDC with our issuing platform powered by Brale for free.

Grants = growth:

1600×670 158 KB

Why we’re making this proposal now

One year ago, Gitcoin purchased $100K Glo Dollars as a first test in holding this stablecoin.

Since then:

  1. Gitcoin’s $100,000 buy happened when Glo Dollar only focused on poverty eradication. We’ve since expanded our funding areas to include Web3 public goods like Gitcoin, becoming more mission-aligned with Gitcoin and its community.
  2. Glo Dollar received a Bluechip stablecoin safety rating, ranking it among the top 10 fiat-backed stablecoins.
  3. We’ve demonstrated 12 months of stability—with monthly independent proof of reserves proving Glo Dollar was fully backed by the same asset mix as USDC.
  4. Gitcoin’s leading example was followed by crypto orgs like Polygon Labs, The Mento Reserve, the Optimism Foundation and the Stellar Development Foundation, by holding/supporting Glo Dollar with 6-7 figure amounts.
  5. We’ve established a track record of monthly donations and increased our market cap from ~$2M to ~$3.5M.

Relevant links:

  1. Glo Dollar website
  2. Glo Dollar’s bluechip stablecoin safety rating
  3. Glo Dollar X account
  4. Glo Dollar monthly donations
8 Likes
2

Thanks @garm for all that you do. You and the GLO team have grit that is rare in this ecosystem.

Can you talk more on the round participation you expect to see? I’ll be honest, using 50% of our stables is a big ask - I’d be curious on the outcomes you’d expect (or hope for) with a GLO builders round. Will this grow the ecosystem? Will this grow our builder community?

This isn’t to say I’m opposed, or trying to tear down what could clearly be an exponential effect - I just need to weigh that across all the opportunities and if this falls within our current focus(es).

5 Likes
3

Epic. Very supportive of this proposal and of all the awesome work of GLO. AutoPGF FTW!

3 Likes
4

Thanks for the kind word @deltajuliet! It’s thanks to early adopters like Gitcoin that we’ve been able to get here.

The outcomes we expect:

  1. Growth for the Gitcoin ecosystem. 100% of the earnings from this $2.5M holding will be channeled to fund these rounds. That means:

    a. More Gitcoin rounds (2 per year)
    b. More builders building on top of Gitcoin protocols

  2. More funding for public goods that contribute to Web3 growth

We want these rounds to accommodate both existing projects that have partnered/built on top of Gitcoin (e.g. The Tor Network, Hypercerts, Octant, IDriss), as well as new projects, e.g. builders who 1) bring Gitcoin donations into other dapps (crypto + traditional), 2) create GG impact reporting tooling, or 3) build tools for fiat donations.

This isn’t to say I’m opposed, or trying to tear down what could clearly be an exponential effect

Indeed, the third anticipated outcome is that we’re boosting an exponential effect that’s already resulting in a Web3 and Gitcoin growth flywheel:

  1. More Glo Dollars get distributed to values-aligned public goods → positive feedback loop

When more Glo Dollars are distributed, Glo Dollar’s market cap goes up, meaning more Web3 public goods and charitable causes will be funded. The default Cause Area for most chains (Ethereum, Arbitrum, Polygon, Base) is ‘Web3 Public Goods’, currently funding Giveth, Gitcoin, and Protocol Guild.

We’re already seeing this exponential trend across our monthly donations so far—we’re expecting to do $4,100 next month—and if this proposal passes, that trend will be supercharged.

I just need to weigh that across all the opportunities and if this falls within our current focus(es).

That makes sense! IMO, adding more rounds (at no cost) aligns with the mission of Grants = Growth. I’ll end by emphasizing that this ~$100K is net-new funding for Gitcoin rounds, to be obtained merely by swapping USDC to USDGLO, a similar stablecoin currently held by Gitcoin. (mainly to clarify for other readers—I know you know the model!)

Thank you sir!

4 Likes
5

Thanks for the proposal @garm . I think $2.5M/50% of our stables is far too high of an ask for this, given that you have a current market cap of $3.5M. I also have a bias against active treasury management – I want us to be focused on building sustainable sources of revenue for the matching pool and the business, and I don’t see a way that this scales beyond what you’ve proposed.

2 Likes
6

Thanks for chiming in @meglister!

Wouldn’t this fit the definition of a sustainable source quite well?

  • ~$100K match pool funding—annually recurring
  • Generated by idle cash in treasury
  • Not dependent on fundraising efforts / partnerships
  • Grows automatically as Gitcoin grows

I don’t see a way that this scales beyond what you’ve proposed

There’s two ways in which this would scale beyond this proposal.

  1. Gitcoin’s own holdings. Whenever Gitcoin grows, it most likely gets richer, and most likely owns more stablecoins. Let’s say it all quadruples. Then the proposed ~$100K would become ~$400K, funding even more rounds, further growing Gitcoin → positive feedback loop.

  2. Orgs following Gitcoin’s lead. Gitcoin’s $100K buy already convinced a cascade of others to do the same, with growing amounts:
    Gitcoin ($100K) → Polygon Labs ($150K) → Shutter DAO ($300K) → Mento Reserve ($1 million)
    As a result, monthly donations have grown steadily:
    $151 (Dec 2023) → $1,855 (Aug 2024) → $4,000 (Oct 2024), projected
    Part of these donations are already funding Gitcoin. This proposal would do the same thing, on a much larger scale.

The potential scale here is limited only by the total stablecoin market, the revenue of which was $7.4B last year. That’s the number that could be unlocked for public goods funding, and with this proposal Gitcoin would set the example.

I think $2.5M/50% of our stables is far too high of an ask for this, given that you have a current market cap of $3.5M

We could ofc cut in half and start by funding one round/year. Note, though, that for a fully-backed stablecoin the metric % of market cap is not as meaningful as it usually is.

Whatever our market cap is, anyone rich enough could mint 1 billion USDGLO tomorrow.

They’d then hold 99.9% of market cap, yet still be able to redeem their complete holding at any time to get their original $1B back.

Each of their billion coins is verifiably backed by exactly $1 of fiat—from the money they used to mint the Glo Dollars.

3 Likes
7

This is an excellent initiative! If the budget allows, I fully support this proposal in the effort to achieve sustainability for public goods!

5 Likes
8

Would love to see Gitcoin join the GLO consortium :raised_hands:

1 Like
9

I can understand both perspectives that have weighed in on this proposal.

As a grantee this excites me to know that there would be the possibility of having rounds that are 100% distributed in $USDGLO.

As a Gitcoin Citizen & Delegate I have to look at this through the lens of responsible treasury management. If the rhetoric from the primary core members of Gitcoin is not supportive, then maybe there is some middle ground that can be achieved.

I would support a proposal that would suggest based on the agreed compromise of 50% less request from the treasury as a trial run. Frequency could remain the same at 2x/year just with less funding available per round.

I would be more in favor of a proposal that included at least one of the rounds incorporating streams in the process somewhere of either the funding or distribution of the QF funds. Citing the examples of what Flowstate Co-Op and Superfluid HQ have created in streaming funding mechanisms.

I also appreciate the intent by GLO Dollar to have the awareness of creating a closed loop mechanism by having $USDGLO in play rather that additional funds from the treasury based on the yield vice the principle funds.