[Proposal] Unlock up to $20K in matching funds every year by exchanging $500k USDC for USDGLO—At No Cost to Gitcoin

[garm]

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

TLDR: I’m proposing that Gitcoin exchanges $500k of its USDC holdings ($5M today) to Glo Dollar (USDGLO) to unlock up to $20K per year for 2 new yearly Gitcoin rounds run by Glo Dollar.

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.

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 $3.6 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 ~$20K per year to run 2 additional Gitcoin rounds every year by increasing Glo Dollar holdings

1. Swap $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 $500k holding will be channeled. In the current interest rate environment, this will generate ~$20k in funds per year. This is a sustainable source of funding as none of Gitcoin’s USDC holdings are spent.

3. Twice a year, the Glo Dollar team will run a “Glo Dollar x Gitcoin” round with at least $10k USDGLO in matching funds. We plan to run these rounds simultaneous with GG rounds, and will run them regardless of whether they’re selected as official community rounds. 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:

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 ~$3.6M.

Relevant links:

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

Voting options

Yes: Swap $500k USDC for $500k Glo Dollar.

No: Do not proceed with this swap.

Abstain: Choose not to vote on this proposal.

[deltajuliet]

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).

[MontyMerlin]

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

[garm]

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

@deltajuliet

Can you talk more on the round participation you expect to see? […] Will this grow the ecosystem? Will this grow our builder community?

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:

3. 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!)

@MontyMerlin

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

Thank you sir!

[meglister]

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.

[garm]

Thanks for chiming in @meglister!

@meglister

I want us to be focused on building sustainable sources of revenue

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.

[Decentralizedceo]

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

[Jimi]

Would love to see Gitcoin join the GLO consortium

[KMLLC]

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.

[garm]

Thanks for the well-consider comments @KMLLC !

A 50% lower request as a trial run is definitely an option, although not our preference. Note that Gitcoin’s matching funds reserve already holds Glo Dollar as part of an earlier (trial) proposal.

Less USDGLO holdings would mean less funds toward Gitcoin builders, which would reduce the flywheel effect. Maintaining the 2x/year frequency with less funding available per round instead of cutting back to one funding round/year is a good option.

Could you elaborate on your idea to incorporate streams? I’m thinking it might be cool to run a round up front already and then leverage streams to distribute funding monthly as it comes in, this is a bit of a departure from what most projects expect when participating in a gitcoin round though!

[KMLLC]

The experience I have had with streams has been only positive. I love the functionality of Superfluid HQ.

Vesting schedules, cliffs, time bound distribution modeling, maximum flexibility on distributed funds.

The specific thought was around matched funds being distributed via streams. This will give grantees a runway for ideation, modeling, and experimentation. This could be iterated on, applied to direct funding rounds with an added layer of visibility.

It also adds another layer of accountability to keep grantees on track with milestones which should be transferrable or traceable using Karma HQ.

This is my thought on the subject, from my experience, based on my knowledge of how this mechanism works.

If anyone else has an alternate POV or a more technical reply I would encourage them to reply so we can all learn together.

[garm]

Thank you @deltajuliet !

I incorporated the feedback from the comments, especially these key points:

1. We reduced the amount of USDC we propose to swap to USDGLO from $2,500,000 to $1,250,000—this is ~25% of Gitcoin’s current USDC holding.

2. This will generate around $50,000 each year, enabling Gitcoin to run two additional rounds with at least $25,000 USDGLO in matching funds for each round.

The $50,000 unlocked will fund builders creating public goods or building with Gitcoin protocols and/or Glo Dollar.

We’re leaving streams out of this proposal to keep it focused on the treasury swap. When we actually create the rounds, and the Gitcoin rounds fully support streams, we’d be happy to embrace them.

As a bonus, I’m excited to see that more and more donors are using Glo Dollars for their Gitcoin contributions, funding even more public goods—at no extra cost to them.

GG20: $0 in USDGLO (0%)
GG21: $7,077 in USDGLO (5.29%)
GG22: $19,079 in USDGLO (6.47%)

@deltajuliet @cmurdock this proposal is now ready to move to Snapshot for a vote.

[meglister]

Thanks @garm , appreciate your notes and ideas. I am still a no on this proposal for the same reasons –

• We do not have expertise in active treasury management and I would like to develop that expertise in existing diversification efforts
• This does not scale beyond our existing stablecoins, which are not growing at a high rate (and I want to focus on solving that first!)
• $50k for the matching pool each year is nice, but represents roughly 2% of yearly funds, which doesn’t justify the effort/risk to me

Will of course support the effort if it passes.

[MathildaDV]

Hi @garm apologies that I’ve been a bit late to the party. I’m curious about how the round you’re proposing will be run. Are you going to take the $50k matching funds and run an independent round through our product, propose to run a community round during GG?

Or are you proposing that Gitcoin runs extra rounds within GG with these funds through USDGLO? To me the setup is slightly unclear at this point in time. And before I vote, I would love to have this clarified.

[garm]

Hi @MathildaDV - thanks for highlighting this!

Our intention is to not have this proposal create additional work for the Gitcoin team. In that spirit we planned to run an independent community round through Gitcoin during GG.

[MathildaDV]

Thanks @garm for the clarification. Just to be clear, if you plan to run during GG, your proposal for a round still needs to be approved through governance.

Equally, because of this setup, I actually think this proposal is maybe more suited for diversification of our matching pool (separate to our treasury) as it will unlock funds that you plan to use for community rounds through GG. As we already have an active strategy in place RE: our matching pool, if this was a proposal for our matching pool instead, it would likely be a no from me.

I really appreciate all your efforts and what you guys are building and that you’re planning on funding builders within the Gitcoin ecosystem, but bc of my points above I think it would first need to be adjusted before I can be comfortable to make a final decision.

[garm]

Thanks for the swift response @MathildaDV!

Correct me if I don’t understand the Gitcoin platform well enough, but as far as I know it’s still possible to run a round during GG even if it isn’t selected as an official community round through governance?

Our plan is to run a round coinciding with the GG timeframe, regardless of whether it is selected or not. I realize this means the round will not get exposure on the homepage, but it will still show up on explorer.gitcoin.co and we will invest heavily in driving traffic to it. We have done this successfully before outside of GG: https://checker.gitcoin.co/public/round/dwwXN5Evy5/show

On adjustments: I’ll make it clear in the first post that we will run the round regardless of being selected as a community GG round. Given that you’re not in favor of diversifying the matching pool funds I think it’s best if we won’t adjust that.

[ccerv1]

I have no opinion on the specific amount (would prefer this decision to be made by people closer to the state of the treasury).

However, I will vouch for GLO as a strong, values-aligned partner that built continuously through the bear market and has honored all its past commitments with Gitcoin.

No objection from me and will support this provided it addresses concerns raised by @meglister @deltajuliet @MathildaDV et al.

[kyle]

Hey Garm - Thanks for the proposal. I am less close to the work @deltajuliet is doing on the treasury diversification and would love to better understand the effort there, but I share lots of the same sentiment that @meglister expressed.

I don’t think taking USDC from treasury is the right answer here. I would be open to taking some funds from the matching pool, swapping them to stables and then using those though. If the yield ($50k) would go to funding matching rounds, it makes more sense to use matching pool funds for something like this versus the treasury IMO. $1.25M of Eth, to stables, and then to USDGLO feels like a lot still - ie, amount is too much.

How much did we move/swap into USDGLO in the last proposal? Perhaps we do something here around another $500k? How much would that offer for a matching round (ie, not $50k, but could we get to $15k?)

Community engagement on the funding rounds has declined a lot, so the smaller round size may be okay.

@garm

I incorporated the feedback from the comments, especially these key points:

1. We reduced the amount of USDC we propose to swap to USDGLO from $2,500,000 to $1,250,000—this is ~25% of Gitcoin’s current USDC holding.
2. This will generate around $50,000 each year, enabling Gitcoin to run two additional rounds with at least $25,000 USDGLO in matching funds for each round.

[MathildaDV]

Yes of course you may run a round alongside GG even if you’re not selected! Thanks for clarifying how you’re planning on running the rounds. I’m still in two minds about this proposal as I still believe it’s better suited for our MP instead of the treasury (as outlined before and echoing what @kyle mentioned).

@kyle

How much did we move/swap into USDGLO in the last proposal? Perhaps we do something here around another $500k? How much would that offer for a matching round (ie, not $50k, but could we get to $15k?)

Community engagement on the funding rounds has declined a lot, so the smaller round size may be okay.

I agree with Kyle here as for the matching pool it would need to be a smaller amount anyway. I would also like to know what a lower amount would equal in matching funds. Then we may go from there.