Proposed Revision to Grant Eligibility Criteria

[David_Dyor]

1. Summary

This proposal suggests a policy change to Gitcoin Dao grant eligibility criteria. This policy change suggestion arose from the BrightID appeal request - Grant 191.

This policy change is recommended by the Fraud Detection & Defence workstream of the Gitcoin Dao.

2. Abstract

A Gitcoin Grant eligibility criteria reads “The project should not have its own token…)”

This criteria is interpreted as mandatory by reviewers. FDD grant reviewers are trained to deny projects with tokens.

The FDD proposes this criteria be revised to apply to non-governance tokens only.

The suggested revision reads “The project should not have its own token, other than a governance token,”

Full analysis of the novel situation is here in this forum post.

3. Motivation

This change will empower FDD grant reviewers to use judgement and discretion to make a decision about whether a token is a governance token, or a token meant for generating revenue.

Currently all projects with tokens get recommended ‘denied’ from the FDD. By making the suggested change we will likely increase the number of quality public-goods-focused projects that are eligible for grant funding.

4. Specification

Gitcoin uses a set of eligibility criteria that has evolved over the grant rounds to determine which projects are aligned with Gitcoin values and goals. The goal is funding public goods and open source software creators/maintainers.

The fifth current eligibility criteria for the Gitcoin Platform reads:

“The project should not have its own token or have raised VC funding…”

The proposed change reads:

“The project should not have its own token , other than a governance token, or have raised VC funding…”

5. Benefits

The core benefits of this revision are:

• Increased funding to public goods and open source software creators and maintainers
• Increased number of projects participating in Gitcoin Grants Rounds
• Increased positive public relations/advertising for Gitcoin, via word of mouth of grantees (less unhappy denied project teams)
• Empowering Gitcoin Dao Grant Reviewers with more autonomy and decision-making power. Giving them the power to evaluate a project’s public token
• Improved communication with grantees. Giving them advance notice of accurate criteria will help them stay within limits, and help non-eligible projects stay clear.
• Increasing overall Dao efficiency and reducing unproductive time spent denying grants with tokens, plus managing the possible appeals.

6. Drawbacks

The potential drawbacks of this revision are:

• Some Grant Reviewers are not experienced enough to accurately evaluate a project and its token to determine if it is a governance token or otherwise
• There are no established metrics which quickly indicate the nature of a project’s token. Evaluation will require deep inquiry into a project’s background. For example, locating and reading archived forum posts from the founding team near the time of the token launch. This takes more time than the average review.
• Token evaluation, which is really a financial audit,can involve technically challenging research and analysis skills.
• Projects may be tempted to falsely categorize their tokens to gain access to grant round funding

7. Vote

The official 3 day Steward vote will happen on Snaphot if enough signal is shown in this post (poll below). In 3 days, on March 20th, we will either move to vote or dismiss the appeal and consider alternatives. The vote is a straightforward choice between two options. Either we make the suggested revision, or we do not, and continue with our current policy.

Choice 1:

Yes, revise the Gitcoin Grant eligibility criteria to read:

“The project should not have its own token, other than a governance token, or have raised VC funding…”

Choice 2:

No the Gitcoin Grant eligibility criteria should not be changed.

8. Conclusion

While this will not solve all the problems it is a step in the right direction. Revising our criteria will send a clear message to all potential applicants. A message that signals our alignment and values around public goods. This is an improvement from our current state, which has a blunt general policy not reflective of the reality in the web3 space. The reality that tokens have become a common governance tool for web3 projects.

Tokens are likely one of the best tools for governance. We should not deny projects funding opportunities because they have token based governance. Following 3 days for debate and polling we will either move this to a snapshot vote or dismiss the appeal.

Proposed Revision to Grant Eligibility Criteria Poll v.2

• Yes - Go to Snapshot for a 3 day Steward vote. We want to revise the Gitcoin Grant eligibility criteria as described in section 7.
• No - No changes at this time and no need for a Snapshot Steward vote.

[Sirlupinwatson]

Hi @David_Dyor!

Thanks for posting the revision to the grant eligibility criteria.
I will strongly support this proposal following numerous conversation that we had in the past over grants review and “Grants with a token” as I think this will carry on Public Goods as a hole and we will be able to diversify the ecosystem needs while at the same progressing forward in the right direction…

We have a great team of reviewer since about 9 months now and I think it’s time to do a few modifications like this one.

[David_Dyor]

Thank you Armand. This is the first policy amendment being posted as a result of a grant appeal and I am struggling to shrink it, while providing full details. The full debates really happened here, and this is my attempt at proper proposal formatting, to get to a steward vote.

We thought 3 days was sufficient debate time, but with the weekend ahead the debate/poll will stay open till mid-next week. I wasn’t sure about some options…like should voting be private? should the results be available immediately or ? If you have any strong thoughts about the best ways to use forum polls please let me know! I thought hidden-results and confidential voting would bring the most accurate reflections out.

The FDD Source Council voted on the outstanding appeals, to determine which ones had merit and are worthy of Steward’s Time. Four appeal requests made it through the FDD vote and will be presented in the Gov Forum for a Steward vote. This is the first.

It is clear from the related comments in the ‘Novel Case #1’ post that we have diverse opinions about the best way to move forward. I don’t see why we can’t do it all. Use the policy revision as a short term solution while DaoOPs works out the best metrics to consider. In the event the metrics being discussed here never materialize at least we are in a better position.

[DisruptionJoe]

I’m recommending we add a couple provisions, although this may be something for the future and would support this passing as is.

1. Only governance tokens with market cap less than $20 million

Although it goes without saying, we might still need to remind everyone that while the governance token wouldn’t clearly eliminate a project from qualifying, it wouldn’t mean they couldn’t be denied for having a token which is a governance token if their are active attempts by the organization acknowledging the economic value of the token. These may include providing yield farming options, directly discussing price, etc.

I really like that you found the voting feature here too. Pretty cool. I think the 6 day vote period was intended to be 3 on the forum and 3 on snapshot, but it looks like 6 here. We would need the entire process to end by next Friday to have this judgement overturn the BrightID appeal.

[DisruptionJoe]

@David_Dyor

We thought 3 days was sufficient debate time, but with the weekend ahead the debate/poll will stay open till mid-next week. I wasn’t sure about some options…like should voting be private? should the results be available immediately or ? If you have any strong thoughts about the best ways to use forum polls please let me know! I thought hidden-results and confidential voting would bring the most accurate reflections out.

Let’s be clear that this forum vote is for determining if there is broad support to justify a snapshot proposal. Then the snapshot is the actual vote.

@David_Dyor

The FDD Source Council voted on the outstanding appeals, to determine which ones had merit and are worthy of Steward’s Time.

We need to list the potential outcomes at each stage:

FDD Source Council judgement for merit:
-If denied, no further action

• If upheld, determine if it was review error or a novel/gray area situation which may require policy revision
  -If reviewer error, re-activate grant (we can determine if this is just or if there should be back pay for next season, I don’t think we have bandwidth to execute this season)
  • If novel/gray area, FDD Policy drafts appropriate policy revision with input from PGF Grants Ops, DAOops Support, and FDD Grant Review Quality before posting for 3 day discussion period on governance forum

If 5 or more stewards express intent to change policy, then move proposed policy change to snapshot for a final vote.

[annika]

I’m hesitant for this proposal to move right to a Snapshot vote, for two reasons:

1. While the resolution solves some ambiguity, I think we should push ourselves to go a step further if we are going to moving ahead with formally ratifying a new policy.

2. This has been entirely FDD-led; the Public Goods Funding workstream (at least to my knowledge) wasn’t made aware that we were formally moving forward on this. I would have liked for us to collaboratively shape this proposal together.

On 1, I’d really push for us to set a market cap threshold, at the very least. As discussed on the other forum post, there are many projects with billions of dollars in market cap in governance tokens that would qualify under the proposed criteria, but certainly do not meet the ethos of Gitcoin Grants and early-stage funding.

On 2, I’d love to collaborate in getting us to FDD & PGF co-leading & collaborating on these types of proposals and come in with a joint perspective pre-emptively, rather than seeing this for the first time on the forum.

[DisruptionJoe]

Annika,

I am hesitant as well. While I commend @David_Dyor for moving this forward and biasing towards action, I don’t think this proposal is at a state of clarity between PGF and FDD yet, let alone support.

That is my failing for not guiding this down the proper path.

My suggestion if ok with @David_Dyor and @annika would be for us to take this off the forum temporarily ASAP. (Not remove, but notate that there are revisions based on the replies and it will be back soon!)

Then we discuss today at Grants Ops to draft a clear policy revision which includes the PGF feedback and then repost tonight or tomorrow.

This would allow the BrightID process to play with a forum period ending Monday at the latest and then snapshot done by Thursday.

@annika

This has been entirely FDD-led; the Public Goods Funding workstream (at least to my knowledge) wasn’t made aware that we were formally moving forward on this. I would have liked for us to collaboratively shape this proposal together.

Yes, and this is a mistake. For the voracious forum readers, please note that it has been either FDD (or me running grants ops prior to the DAO) which has been in the position of having to make all these decisions in the past. The accidental “snub”, as Kramer would say, was more a continuation of past process rather than malicious or negligent actions.

We have taken steps to bring the public goods workstream, especially the grants ops, to work more closely with FDD including bringing Annika onto our multisig as as oversight for our workstream as she represents our primary customer, the grants operations team.

[David_Dyor]

Annika I agree with your comments. I absolutely prioritized action, and mistakenly thought the community wanted this. The FDD wanted to take a step in the right direction and we thought using a temporary process to deal with outstanding cases was good. I personally support a collaborative approach that spans multiple work-streams but I worry about the process reaching a conclusion in a timely manner.

If this proposal feels rushed, we should take a step back, and unpack the process with more granularity. Although the appeal closure for Grant 191 is important, it is equally important that we focus on our whole-dao operations and relationships across workstreams. Those are the things that will help our dao fly long-term.

An appeal work-flow document is being drafted here. Please share your comments and we will coordinate to establish a fast and fair process that meets the greater Gitcoin Ecosystem needs.

I appreciate all the feedback!

[Lunacat]

I am for this proposal. I also hope we could expand this in a future vote to also include entities such as Coin Center and Blockchain Association that have abundant access to funding outside of Gitcoin.