[PASSED] S23 - Gitcoin Passport Business Unit Budget Proposal

[kyle]

Hey Gitcoin Community - we are excited to present our FINAL six month budget to the DAO. It has been a goal of mine and others on the team to graduate Passport from Gitcoin as Gitcoin has been focused on Grants and growing GMV for a while now. At the same time, the Passport team has been focused on identity and the emerging world of onchain reputation, with some support for Gitcoin, but largely prioritizing the broader Ethereum ecosystem. Creating separation from the two entities ensures Passport’s actions across the space are no longer associated with the Gitcoin brand, and while Gitcoin continues to focus on capital allocation, there will no longer be questions on why we have an identity solution in the portfolio.

This budget request seeks funding to enable the spin out of Passport and fund the business for its initial six months. Here is what we are thinking. Passport has generated revenue on OP and Linea (by enabling onchain attestations of one’s unique humanity, and OP RPGF3). Together with this funding, and a six month budget, we would like to formally request a vote to spin out of Gitcoin DAO. In return for bootstrapping the business unit, we will ensure Gitcoin has equity ownership in the new entity, a token allocation if/when we launch a token and a board seat in the new entity. The details on how a DAO may participate are a little murky (ie, have equity, and a board seat) and so we will be working with the Gitcoin Foundation to formalize the ownership and board seat appointment.

Passport currently drives the majority utility use case for GTC and we plan to keep GTC utility in the product for the foreseeable future. We do not have details on if/when Passport has its own token, but we want to ensure as Gitcoin will likely be a large token holder in Passport, there will be token use cases that extend utility for other ERC-20 (like GTC).

We are aiming to have this spinout complete in July, and would expect the Passport team to start to use its own properties (ie, Passport.xyz for the website and app, its own discord server, its own email, etc.) on July 1. While Passport will be an independent entity, there will still be lots of areas of collaboration as those running grants programs often need Sybil protection (and those doing airdrops often want to seed a Grants program after TGE).

As for the progress the team has been making, updates below outline both progress and the roadmap we have ahead.

TL;DR on the next 6mos

Gitcoin Passport aims to be the go-to solution for web3 identity and reputation management. We are continuing to focus on ways to build a reputational substrate that can be leveraged permissionlessly onchain:

1. Adoption - Continue to expand the number of real humans with a passport
2. Growth - Grow the number of onchain attestations
3. Sustainability - Ensure continued runway extension

Outline

Passport is the premier web3 native offering that enables ecosystems to protect, understand and organically grow what matters most – their communities. We see Passport at the confluence of a best in class identity solution, backed by the most relevant and comprehensive data analysis toolset that also offers communities the ability to ascribe reputation.

Objectives for Seasons 23: This table lists the milestones and deliverables we plan to tackle. While they are in a loose priority order, their final sequencing is still under evaluation.

Initiative/Project	Outcome	Milestone/ deliverable
Adoption	Expand real human user base Grow Model based detection (MBD)	Increase Passport count 450k to 1.85M Passports from a baseline of 1.4M Score > 1,000,000 addresses
Growth	Increase onchain data available for other dApps and novel use cases	Increase attestation count from 100k to 500k (across all networks)
Sustainability	Increase revenue Increase GTC staked	Grow revenue from an average of 2.5 Eth a week to 4 Eth a week. Increase staked GTC from 1.75M to 2.25M

Milestone Update: Season 22

In Season 22, our top line growth picked up quite a bit adding 255k new Passport users or 22% net new growth in May, compared to 279k new Passports or 35% total growth in the previous 3 months of S21. We now have a total of 1.4M unique all time passports. We also continued to drive strongly against our targets in GTC staking, hitting over 1.75M GTC staked.

With a focus on onchain attestations, we have launched two new networks where Passport holders can attest to their unique humanity. This means, we now support attestations on Arbitrum, Optimism, Linea, and zkSync. Onchain attestations have started to unlock novel use cases where smartcontract interactions can now directly confirm a wallet’s humanity score, enabling truly permissionless and decentralized humanity confirmation.

We have also done a lot of work to revamp the GTC staking experience to make the process more intuitive and informative. This has brought the creation of privacy policy details and user terms as the GTC staked can be slashed when users are acting in bad faith.

And finally, our new Model Based Detection endpoint, and L2 coverage has continued to expand. We now can review wallets using our models across ARB, OP, zkSync, Polygon, Eth Mainnet, and NFT communities. This capability is incredibly helpful when engaging with other communities (new L2s) to help them understand who is likely a sybil actor and who is likely human on their network.

Milestone Report for Past Season

Legend:
Success/Completed/Shipped
Incomplete, but partial success
Incomplete, Will Not Hit Goal
Canceled

Initiative/Project	Key Results	Value Delivered
Ease	🟢Simplified Passport user experience	Revamped Passport with fewer stamps, credentials, and simplified path to 20 score.
Effectiveness	🟡Updated score weights for all Passports based on previous 6 months of data 🟢Aggregate L2 Models	In addition the revamp of Passpot and the addition of the new models we’ve made significant progress dropping the False positive rate under 16%, did not hit the target of <10%. We’ll have a working model by June 30th..
Adoption	🟢1.4M Passports 🟢Scored 400k addresses with MDB	Continued to drive top line growth of unique Passports by adding 255k new Passports exceeding our target of 1.3M driven by new partners Initia and zkLink. Strong prospects to continue to grow by end of year. Model based detection used to support zkLink airdrop which resulted in ~400k addresses scored
GTC utility	🟡1.75M GTC Staked	Staking remains strong, having increased another 95k GTC staked, but tracking to be just shy of the 1.87M target by end of June. We deprioritized the new staking experience to support partners and top line growth, but should launch in the next 30 days.
Partnerships	🟢 64 API Partners 🔴0 new onchain partners	Hit our target of 64 API partners before the end of the season, which has helped drive strong topline growth. We did not hit our target of adding 5 new partners. We have 3 partners in the pipeline expected to go live in the next 60 days.

Observations:

• We had strong growth in top line numbers driven by ‘surprise’ partners that were not initially in our funnel including both Initia, protecting their testnet, and zkLink, supporting their airdrop.
• Despite strong top line growth being above average, we’re underperforming on GTC staking. We’re excited to see if the new updated staking site will increase GTC staking and we’ll begin marketing efforts to help the community understand that GTC staked on an address is another strong signal in addition to the address Passport score.

For more granular details on our past work and plans, please refer to our previous budgets for S17, S18 & S19, S19 (Amended), S20 & S21, S22, and also our updated Passport Roadmap.

Budget Update: Season 23

We are only increasing the budget $36k to handle non-DAO compliance costs, otherwise the budget is flat for Season 23 compared to Season 22. No new additional hires for this season.

Team Composition

Full-Time Contributors: 13 (after hiring marketing in S22)

• Developers: 4
• Product Manager: 1
• Data Scientists: 2
• Business Unit Co-leads: 2
• Marketing: 1
• Support: 2
• Design: 1

**Part-Time or Shared Contributors: **4

• DevRel: 2
• DevOps: 1
• Operations: 1

Funding Request for Season 23

Requested Amount: Gitcoin Passport is requesting a net allocation of [TBD] GTC*, equivalent to approximately $1,604,857 out of the treasury to cover this final season.

Budget Evolution

	S17	S18	Amended S19	S20	S21	S22 (May & June)	S23 (6 months)
Passport Budget	$515,254	$589,846	$494,116	$478,591	$642,216	$460,405*	$1,604,857

*** Note: **The GTC amount requested and reserves will be updated based on market conditions when this proposal moves to Tally, using the lower of the current price or the 20-day moving average.

Budget Breakdown

Breakdown staffing, contracting, operational expenses

We have accounted for upcoming expenses, aiming for a lean but comprehensive budget. Our 16-member team comprises roles in Product, Design, Engineering, DevRel, Operations, and Support.

	S18 (Actual Spend)	S19 (Projected Actuals)	S20 (Requested)	S21 (Adjusted)	S22 (May & June)	S23 (Jul-Dec)
Contributor Rewards	$373,791	$318,102	$341,674	$426,799	$378,496	$1,297,891
Contracting (Dev Ops, DevRel, design, Marketing)	$114,192	$70,969	$75,192	$149,192	$11,000	$125,004
OpEx (Software subscriptions, gas, audits, travel, professional development)	$31,835	$42,236	$61,725	$66,225	$70,908	$181,962
Total	$519,818	$431,307	$478,591	$642,216	$460,404	$1,604,857

Thanks for reviewing and the consideration!

[Jeremy]

Thanks Kyle! I’m excited for the final budget and spinout. I’ve been thrilled with the progress the team has made over the last 15 months within the Business Unit!

[deltajuliet]

The team has clearly put a lot of thought into this and Passport’s future - I believe this is a positive step forward for everyone.

I’ll be voting yes on this proposal.

[meglister]

thanks @kyle – I’m also supportive and excited for Passport’s future and the opportunity ahead. Will vote yes!

[CoachJonathan]

I too am supportive of this proposal.

[Viriya]

I’m supportive of this proposal as well and will be voting yes to this.

Some additional food for thought as to why I think that this is the right step both for Passport and Gitcoin (for those who might not be getting as much info from within the org):

In the last year Passport ventured out to explore it’s own avenues for growth. While their areas are complimentary with Grants Stacks’, they are not the same. This created a strain on Gitcoin’s overall market position and brand. Meanwhile, it became increasingly difficult to share resources (namely in sales and marketing) amongst these entities due to these shifts.

As Passport grows, evolves its value proposition and combats it’s own challenges in market, it’s important that it is free to do so without having to be too closely tied to Grants Stacks’ market and Gitcoin’s (historically regen) brand. Again, while they can both compliment each other, it ultimately makes more sense for them to be autonomous.

I’m really excited to see Passport’s growth and momentum! I wish this amazing team the best of luck.

[kyle]

Thanks for the comments and support.

I am going to move this to snapshot to ratify the vote. Once the vote is confirmed, we will then start the legal process of drawing up paperwork to formalize cap table allocation, IP transfer, indemnification (for Gitcoin) agreements, etc.

We will confirm with the foundation that the details are tenable before and legal agreements are signed, and before funds are transferred.

-kyle

[system]

This proposal is now live on Snapshot

[owocki]

My takes:

1. Gitcoin seems to be focusing on on Gitcoin = Grants, and the Passport spinout enables this focus.
2. I hope to see Passport become one of the more successful Gitcoin alumni.
3. The ask is substantial, but if it sets up Passport for success in market, and if that could flow back to Gitcoin/matching pool one day, it seems worth it.
4. I plan serve as an advisor Passport in the future. Having help conceive of Passport/TrustBonus back in the day, I think I can add value here.
5. Leaning supportive of this proposal, but will not be voting due to potential COI from advisorship position.

[carlosjmelgar]

Stoked for this. Onchain reputation market will continue to grow alongside Ethereum (and industrial sybil rings). It’s cool seeing Passport use cases outside of Gitcoin rounds. Looking forward to innovative use cases and traction across the EVM space.

[MathildaDV]

I’m excited about the future of Passport and I’m aligned with this direction. I’m proud of what the Passport team has achieved and the potential that lies ahead.

I will be voting yes on this proposal.

[system]

This snapshot has closed and option to “Approve budget & spinout” has won.

Metrics:
1164 unique wallets voted
~4.7M GTC tokens cast.

Thank you to the author for the proposal and to all the GTC token delegates who cast their vote.