Funding The Cosmos Hub Grant Program

Hub Proposals Community Spend
21

Thank you for your comments.

I know it might seem broad at first, but, please think about it from a workflow standpoint. From a workflow standpoint we feel the mandate is quite narrow and specific. Our workflow is to intake and process grant applications in an efficient and professional manner, and to deliver transparent reporting to the Community on the activities, and that’s it.

Regarding an alternative of adding an improved spend process onto the community pool, I’m a bit skeptical tbh. Is it efficient 100,000 delegators & 150 or so validators voting on a continuous flow of small and medium spend items? As an analogy, why not have entire population of USA or entire US Congress voting every time a pothole needs filling or on every National Science Foundation proposal?

We do agree with you that more specialized grant-making committees surely can, should, and will evolve, but at this stage, with no grant program of any kind, no processes around due diligence, and nothing being done to invite grantees, a good first step – also with an eye towards quickly adding value for ATOM holders – seems to be to get an initial grant program opened up, create transparency around it, and then let specialization of grant-making activities emerge organically as the Community gains experience with what it wants and needs, and also gains data on volumes and types of submissions over coming 9 months.

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22

I totally agree with this. We cannot have 7 people who are self-appointed to control our cosmos community and get paid so much. Also, they are requesting so much 750.000 ATOM which is a lot! 250.000 ATOM is a reasonable number.

Let’s not forget that TERRA LUNA had a committee like this for 1 year and nobody got approved or applied for any grant. What you guys are trying to do is the same thing Terra Luna did and didn’t work.

Projects who are looking for funding should request directly funds from the community pool via governance, and the community will vote!

I will vote NO for this proposal!

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23

I completely agree with the main principles of the proposal made by Youssef Amrani.

However, I have a question about the jury: is it democratically elected by the community?

Regarding the budgetary and financial aspects, I prefer to abstain and let others speak :smile:

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24

@Damien mentioned before about ‘voters fatigue’ and it seems to be what you @Better_Future are also referring to here. However, this reasoning is incorrect for several reasons:

  • Most individual ATOM holders do not frequently vote in proposals, instead they delegate to validators also their voting power, so there is no ‘voting fatigue’ for them

  • Regarding the validators, around a third rarely vote or even some never voted. So this ‘voting fatigue’ should be asked to the group of validators that vote in most proposals

  • We ourselves are amongst the validators with the highest governance participation in the Cosmos Hub, do we have ‘voting fatigue’? Absolutely no, firstly the number of proposals in the Cosmos Hub is much lower than in other networks such as Osmosis for example, also the voting period is 2 weeks which is long enough to have time to review proposals and vote. Moreover, @onivalidator recently managed to raise the minimum deposit for proposals from 64 ATOM to 250 ATOM, this is now over $3k at current ATOM price and could be a much larger barrier of entry, so this by itself will also keep the number of new proposals small

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  • imo, conflict of interest is more relevant to the projects funded than the mandate itself in this context.
  • The reason for choosing these people seems to be the amount of connections and experience they would bring to the table, key traits of a grant committee.
  • This doesn’t need to be a bestowal of absolute power. We can aim toward a long-term plurality of funding platforms.
  • Why would this group control the community? They would have a specific mandate with a scope to be agreed upon by the community.
  • The group’s mandate would be to source and fund project proposals. We can push for multiple different funding platforms, and I hope we will see more well-put-together proposals like this doing so.
  • There are many grant programs all around the world. Each has varying degrees of efficacy. I don’t know what the Terra grant program funded and what it didn’t, but a counter-point could be the Osmosis grant program, which seems to have decent traction, provide tangible value, and was re-approved by the community.

@Cosmic_Validator it seems like what you are saying is that you believe that as it is proposed, funding the grant program would be a worse methodology than using the community pool because:

I would agree with you if this was framed as a canonical grant program. However, there seems to be agreement to move toward a plurality of funding platforms. Each can have a specific mandate and leverage their own networks and connections, and represent different segments of the community. This should bring a variety of development opportunities that would not otherwise occur via the less “hands-on” approach of community pool funding, in which there is no lead team to go out and source project proposals, nor to provide sufficient oversight and mentorship into the process. We have historical metrics that indicate community-pool usage, and it is relatively low compared to other chains. You also just mentioned that there are few proposals being raised to the Hub. I would point to that and say that that is indicative of the need to develop alternative methods for attracting and funding builders.

As you know, making proposals requires a lot social and technical context to build and collaborate with the Hub’s community. This context can be difficult to gather without dedicated peer-support and funding.

The way I see it, the key pieces of this program are the connections, support, and dedicated oversight that the grant committee would bring to the table. This is a markèd improvement over the current process, in which smaller teams are “thrown into the wild” without sufficient context.

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26

I’m in full support of this initial proposal. We probably require a grant committee going forward especially with the Proposal that we had passed recently for increasing funding towards the community pool.

With a well defined and a well defined committee handling the grants, this will enable anyone to ask for funds.

What I like to having a committee is that they can handle most of the requests internally rather than anyone launching a proposal on chain and having so many low to medium importance governance proposals having to be voted on. Responding to @Cosmic_Validator, having a lot of proposals won’t essentially make people vote less but, ‘voters fatigue’ in my eyes is when there isn’t enough time to fully and properly go through every proposal with proper care and due dilligence and risking votes being thrown around without proper rationale.

There could be an alternative where the committee can evaluate multiple proposals and then bulk post them as a proposal.

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27

thakyou bro turkey hello

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Hi @JD-Lorax,

this is a good point. In reality, this grant program is not exclusively about ‘open grants’. If this proposal passes, the team will also identify thematic areas that need funding. This would be done in a collaborative fashion with the community.

Once those thematic areas have been identified and published on the website (or forum), teams can spontaneously form and apply for grants within the realm of those thematic areas.

Example: we define with the team and the community that the following areas need a special focus: building a liquidity layer om ICS, fund an Insurance protocol to support DeFi on the Hub etc. Following up this, the grant program team can take funding requests that match those criteria.

So in short, the ATOM Orbital DAO will ALSO support the beginnings of gathering proactive roadmap ideas, to bring inspiration for builders.

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29

Replying to both @Better_Future and @Youssef

The amount requested as it stands with no mandate is not specific towards small/medium spends. If that’s something Orbital DAO will be focusing on then it should be identified as such. That’s why I think establishing and defining the mission of the grant program first is important.

Personally I think requests such as consumer chain or infrastructure funding should still go through Cosmos Hub governance directly as the validators play a key role and their opinion matters in those areas. If grants are going toward smaller things like content, marketing, education, research, governance, analytics, etc., that should be the specified intention of Orbital DAO. This narrows the scope and provides more clear intentions and purpose.

I do think Cosmos Hub can manage spending more effectively and efficiently with an improved community spend process, something I think is worthwhile for the community to consider. But that’s a conversation for another time.

This kind of funding should be done through Cosmos Hub governance because validators opinions and decisions are important when it comes to anything ICS related. With the proposed approach a project may be funded from Orbital DAO grants but the validators may reject the consumer chain prop due to misaligned values (validators may have different opinion than Orbital DAO). That was a risk with proposal 72 spending as we don’t know that all of the funded projects will be approved as consumer chains.

What about instead funding this initially as a research group that will identify those thematic areas? This can be done in phases of proposals rather than a large, broad up front spending prop. First fund research and bootstrapping then in the future after the Orbital legal entity is setup and thematic areas identified Orbital DAO comes back to Cosmos Hub governance requesting funds for a grants program focused on (insert focus area)? The initial prop could still include an smaller grants fund for Orbital DAO to start with, while also having the option for topping up funds in the future.

In my opinion it is better for a conservative approach requiring the funded entity to request additional funds instead of allocating a large sum with an open-ended “leftover funds will be returned” approach.

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30

can you clear up one thing first ?
The DAO is going to be owned by few individualus. So it is a private projects?
And if it is a private project why should the community pay for it?
If you guys are trying the making an incubator (it looks like that ) why not build it own your own and ask for a % from the group which you help for getting the grant?

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31

Initially, this was presented as THE Cosmos Hub Grant program to basically manage most of the funds in the community pool to fund any kind of projects (not focused on some specific area) and receive a large salary for this, and the people to manage this self-appointed them for this.

In our experience, preparing a draft proposal and answering all the questions from the overall community is hard, however we would still prefer this than 7 people controlling all funding decisions of the community pool.

Could the process be improved? Definitely, but absolutely not how it is presented in this proposal, here are some ideas:

-Define the funding strategy: what are the priorities for the Cosmos Hub to decide which projects to fund or what would be the sourcing strategy? Then, all these projects should be organised in many different categories. After this, the best experts from the overall Cosmos community for each funding area should be selected by the community (not self-appointed) to have the best possible expertise in each funding area. Once all this is defined, then a specific DAO could be created for each funding area, the amount of funding for each expertise specific DAO would be defined and so on.

-The goal of the grants should be to bring value to the Cosmos Hub, not just to give grants, so it is a bit like seed investments, and we all know even the best investors and VCs only invest in a few successful projects among many investments. Are we expecting 7 self-appointed people to provide best or similar results as large teams with decades of experience in investing? This is highly unlikely. If we want to use the funds in the community pool more actively to bring value to the Cosmos Hub this is great, but designing this strategy should be a great effort by the whole Cosmos community with a multitude of very expertise specific DAOs. What is proposed here, a single group of 7 self-appointed people to decide about all grants decisions and using the Osmosis grants program as an example doesn’t seem very promising. In fact, the Osmosis grants program shouldn’t be used as an example, we should aim to create a much better system to bring real value to the Cosmos Hub.

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32

Thank you @Youssef and others for bringing up the prop draft. This is a much needed thing in the community. However there are certain things within the draft that make me a bit nervous.

  • The asked amount from community pool over period of 9 months seems too high. I’d love to see some deeper understanding and implementation on a smaller scale before we should implement such a high amount.

  • I have no doubt on capabilities of 7 self appointed people. However it seems unconstitutional to appoint someone without describing in detail how they were appointed. IMO there should be a fair democratic process how these people are appointed.

Lastly, as much as I love the idea, I fail to understand the need of such a Program. ICF was created for fostering such programs. TAB was created to view overall technical aspects of a project.

The intent of this grant program seems in good faith towards the community. However, I’d suggest this group be more like an advisory group without controlling too many funds. The control of approving grants to projects should rest in hands of community via governance.

Cheers!!

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33

@Cosmic_Validator

TLDR:
You propose that:

  • we should have the community coordinate to determine a funding strategy
  • 7 people is an inadequate team size for making effective funding decisions
  • grants should bring value to the Hub

I respond that:

  • that method of coordination is inefficient and ineffective. a better alternative is a plurality of funding platforms. this is top-down vs. bottom-up. bottom-up is preferable.
  • team-size is irrelevant to value creation. as an example, y-combinator was founded by four people.
  • yes, they should, though the draft-proposal in its current form brings us closer to that than the methodology you outlined.
  • Having 7 people control the community pool is a terrible idea. However, this would not be the case with the proposal in its current form, and it certainly wouldn’t be the case if there was a plurality of funding platforms. A plurality of platforms means that there are a variety of ways for teams to seek funding. This makes funding more accessible. Funding accessibility for teams seeking to build on the Hub is a low-hanging fruit. We should aim to attract more contributors and increase the Hub community’s agency in doing so.
  • Domain specific funding is definitely a good idea in regard to areas that are known. However, we should also aim to account for unknown unknowns, ie: things that none of us, using our collective brainpower, could think of.
  • Defining a funding strategy is a top-down approach that is influenced by the process used to define the strategy. We should aim for a bottom-up approach. Again, this issue is solved by having a variety of funding platforms and methods.
  • Who would select these experts? How would they be selected?
  • Calling this team self-appointed is fuzzy-logic. It is a proposed team. The Hub community would appoint them only if the proposal passes. If the community does not like the team, they should reject the proposal.
  • This is similar to the approach that is being taken by the proposers. What is lacking is a clearer statement of scope or purpose.
  • FWIW, many of the “7 self-appointed people” do have this type of experience.
  • Team size is not necessarily correlated with the value that VCs and incubators create. Y-combinator was initially founded by 4 people.
    • Y combinator succeeded because of the mentorship offered by the founders. This type of mentorship is a key differentiator between community-pool-spend proposals and the formation of dedicated groups.
  • Again, top-down vs. bottom-up
  • Who is going to lead or be accountable for this effort? How should it be coordinated?
  • Why should the whole community need to come together and coordinate, which comes at a great cost of attention and time, and may not even be effective, when we can fund independent and diverse units that can each work toward a certain aim?
  • You keep implying (or directly stating) that this team would decide all funding decisions of the Hub. This wouldn’t and shouldn’t be the case. The community pool will still be accessible. Other platforms can form.
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34

I think this approach makes a lot of sense, and echoes what @JD-Lorax said above:

I don’t necessarily agree that every member of a working group needs to be democratically chosen. I do think it makes sense to list past-experiences and roles of team-members as well as rationale for selection.

Electing every seat is not possible with our current tooling. IMO the democratic process (which isn’t even democratic, but representative-democracy as it is implemented in the gov module) is for the community to ratify the group via governance. If the community disagrees with that the team is capable, they should reject the proposal.

What would your arguments be for having a fair democratic process for each appointment? Again, I think that a plurality of working groups solves this issue, because it enables contribution on a unit-by-unit basis, rather than offering a limited number of seats in a canonical program.

The need is for the Hub community to have more agency over the Hub.

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35

First of all want to say the authors have clearly put some thought into this and I’ve been fortunate to meet a couple of them in person and know this is something they truly believe the Cosmos community needs. I do however want to say that this proposal is the wrong answer to the problem (which is basically the dysfunctional state of public goods funding for Cosmos in general).

  1. The proposal above references the Osmosis Grants Program (OGP) several times. For anyone thats been tracking the OGP; the data is in and it’s clearly a poor way of running a grants programme. This proposal basically seeks to recreate OGP for Cosmos and clearly not enough thought and analysis hasn’t gone into why that programme failed and of ways to avoid that in this instance.

  2. The proposal above seeks to create gateways to funding via a self-appointed group that then basically decides everything that gets funded with a full staff of part timers all on full time salaries. As designed this circumvents community scrutiny. This might just work if this was writing small cheques designed to seed experiments but it isn’t. Clearly there’ll be big cheques being written and a narrow team of 7 isn’t the best way of doing this.

  3. This prop is heavily front loaded. As designed, this is basically a ~ 8 million $ experiment. No one on that team has run anything like this (angel investments don’t count) and there hasn’t been any attempt to lay out the logic behind the design decisions above.

  4. The current dysfunctionality we have around Cosmos public goods funding is partly down to the 2 entities that currently dominate the space (everyone knows who the are). This attempt to create an alternative, whilst laudable is just wrong - its fully permissioned and relies on you convincing people that might not be experts in the subject matter to fund you. As designed this programme is an open invitation for insider dealing that may also have the effect of crowding out private investment. i.e what happens if a team is building a tool already (with no grant funding) and another team sees the market opp and applies for and gets grant funding - disadvantaging the first team. By its design this fund would be picking the winners in the ecosystem. I don’t believe thats something any entity should be able to do.

  5. There’s so much more I could go into but this is off the top of my head. This just needs more thought and analysis. One thing I would say that it needs to be permissionless from the ground up. It should be funding experiments/prototypes not finished products. i.e one could envision it working something like this. The team helps to curate and maintain a request for prototype (RFP) list. This list is open and community can add to it. The RFPs are fleshed out and a bounty is created around it by the team or any expert. Any team/anyone can fulfill the bounty and cash it in. The winning team/teams can then raise a community prop to further develop the prototype into the full version. Its open, its permissionless and won’t rely on who you know and it avoids domain experts having to convince non domain experts (one of the biggest problems with OGP) and the reliance on prototype as team validation avoids the mistakes made with Juno’s grants system.

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36

It’s my understanding that the ICF funds things that may never land on the hub, and that it’s currently not funding anything.

Kind of like I was in favor of printing additional atoms to ensure that the hub can be developed sustainably, I am also in favor of the hub having a fund / grants program that originates from the hub, and does not have additional mandates.

I guess another way to put it is- does your grant committee have any strategy or vision which will guide your granting? Or are you just going to see what cool proposals come in?

Great question.

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I have no doubt on capabilities of 7 self appointed people. However it seems unconstitutional to appoint someone without describing in detail how they were appointed. IMO there should be a fair democratic process how these people are appointed.

The cosmos hub does not have a constitution, and is not democratic. If the hub worked “one user one vote” I believe that our work here would have already failed.

Same

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38

Thank you to everyone here for engaging in a dialogue, we are grateful for your feedback.

The lion’s share of the projects that need funding are open source and public goods, and cannot have a private investment component; the returns needs to accrue to ATOM holders.

Replying to @Sumit_Redhu, @JD-Lorax, @jacobgadikian:

We are viewing this as a public service activity, not a seed investing activity; that said, we do have several team members with backgrounds in investing & setting-up investment team processes, which does position us to establish a public funding function competently based on our direct experience.

The DAO set-up does not allow for any beneficial ownership, and, since the stated purpose in the proposal (ie, the vision) “is to create a grant program to support small/med size projects for open source software, public goods, and ecosystem initiatives that add value for ATOM holders”, there is no possibility or intention of taking any equity interest in anything.

Replying to @Cosmic_Validator, @alijnmerchant21:

We agree with you that experience, team design, and workflows all matter tremendously to establish a successful grant-making function.

Five members of the team bring investment experience, including investment lead at Chorus One, team members at Delphi Digital, team members at Cosmostation, and the head a top ranked VC in APAC region, plus myself.

My personal track record (since people are asking about qualifications): I’ve been making seed investments for 20 years, I had 1200+ seed deals per year come across my desk and did ~85 pre-seed and seed deals in 2022. Over the last decade I’ve invested in more then 50+ Y-Combinator deals thru my partnership with Liquid2 Ventures, and, my track record as a seed investor on AngelList where I’ve done 100+ seed deals is top 5-10%’ile over last 8 years. I’ve been involved in several investment clubs and funded dozens of projects on behalf of Stanford University during the five years that I served as Executive Director of a cross-disciplinary research program there. I’ve also built three software companies. I’d be happy review my seed investing and professional track-record with a few community members if that would be helpful towards creating trust, pls schedule a time via Calendy.

As for rationale for how we built the team, here is the thought process: Cosmos validators, investors, & community members w/ deep Cosmos knowledge; low drama people who ship; good reputations & track-records; a group that is neutral to ICF; committed to a vision of funding public goods to create value for ATOM holders; available to spend time on this activity.

Replying to @yoda, ala.Tusz.am, @jacobgadikian:

We agree with you that funding experiments/prototypes is needed, that is the right idea for a program like this.

With respect to the question of ‘breadth of mandate’, this is an interesting topic. On the one hand, a successful program like Y-Combinator (since people are using it as a reference) is totally open to ideas across all of technology globally – and it is this openness to finding the next brilliant entrepreneur with a blue sky idea that is a big part of its success. I see Y-Combinator’s other success elements as a blend of strong positive brand, high volume of applications, efficient process for entrepreneurs, excellent mentorship, and team-based workflows to sift through and rank 1000s of proposals every year.

The idea of ‘depth vs breadth’ is relevant to the discussion of mandate for a grant program. For a typical software project, you want to see ‘depth’ of team & execution capability around a specific project plan. However, for a grant program, you actually want to see a team & workflow to handle ‘breadth’ of proposals. That is the comparative advantage of such a program in the first place: achieving horizontal breadth & exploration of ideas to find teams and initiatives that can bring new value into the Cosmos community!

Also, we need to create a culture where we try lots of ideas with willingness to accept at least 1/2 of them will fail, and, to get out of this mindset of over-deliberating on every small item and instead get into an action-orientation around the precise workflow that we know can lead to catalyzing positive initiatives within our ecosystem.

Although constraining a grant-program pipeline building mandate seems value-limiting for the reasons pointed out above, we could certainly do so if that is the wisdom and feedback of the community.

A question for community members: if we were going to constrain the grant-making mandate under this proposal to a more narrow purpose, how would you recommend we do so? In addition to the vision statement already provided, would pre-specifying a few program themes, such as building on top of ICS, governance/tooling, etc. be sufficient?

Can you please share your feedback on this topic? We are open-minded to adapting our proposal based on community feedback, but so far the feedback isn’t specific enough to actually be useful in narrowing the focus of the grant-making activity.

If you’d like to discuss and brainstorm with us via a Zoom call feel free to book us over next few days via Calendy. That can be a faster way to discuss complex topics and brainstorm together.

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39

I never mentioned anything about the team size, investing/giving grants is very complex, and to increase the chances of success people with great expertise in specific areas should be selected by the broad Cosmos community to work full time on this. Not as @yoda mentioned correctly, part timers on a large full time salary, that are just proposing themselves for this.

Quoting from the proposal: 'We envision a group of 7 people that will figure on the Reviewer Committee in charge of allocating grants"

Well, of course they cannot self-appoint themselves and have the direct control of the community pool, it must go through governance. But in this proposal they self-appointed themselves, we are not aware of any public discussions or community votings to select these 7 members.

As @yoda mentioned the 7 people proposed are working in other projects, for example some of these people are working for some validators, would these validators be ok paying them for working on this grants program and on top of this salary they would be getting another salary from the grants program? Or are these people planning to continue their normal full time jobs and then work on this part time on the evenings and weekends? Also, are the specific people being proposed representing for example the companies/validators they are working for? If so, what if they later leave those companies?

As @alijnmerchant21 suggested ‘I’d suggest this group be more like an advisory group without controlling too many funds. The control of approving grants to projects should rest in hands of community via governance.’ Also there are projects funded by the ICF like the builders program who help projects with finding validators, mentorship and other areas. Grant fish also has a 100% fee validator in the Cosmos Hub that is supposed to give grants as well, I believe Keplr and others got grants from them too. A detailed list of all the current funding options in the Cosmos Hub should be organised, the results from each analysed, what could be improved and how. Then a better coordination should be made amongst all these funding options so the process could become more efficient and successful.

Yes, expertise specific DAOs for giving grants or diverse units as you mention is a good idea and likely to provide better results. But the selection process of the people to lead each of these specific DAOs should be done by the Cosmos community. People should be able to submit applications for specific funding DAOs detailing their experiences and knowledge in that area and then the community could vote and decide about the selected people. There should be regular reports updating the progress and then Community should be able to add/remove experts from each specific funding DAO.

As it is presented, it seems that the aim of the program is to be THE Cosmos Hub grant program (still written like this in the title). This would mean that community pool spend proposals would then be redirected or forced to apply via this program. You mention that other platforms can form, but taking the example of the OGP, this doesn’t seem to be the case, instead the OGP is precisely called THE Osmosis grants program and all grants funding is centralized here, since this proposal is basically trying to replicate the OGP in the Cosmos Hub (using it as an example also for their salaries proposed) there seems to be a high risk of centralization in this small part time reviewer committee.

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40

I wanted to take a moment to discuss the positive impact of a grant program on the ATOM community and the Hub as an ecosystem:

  • Dedicated structure to channel funding for small & medium initiatives

  • Offers an alternative source of funding for the Cosmos Hub and removes some of the burden on public governance. Getting funding through public governance is not always an easy process for contributors and it can evolve into a painful process, both for the community and the proposers.

  • Gives more funding flexibility by allowing proactive allocation of capital (development of in-house investment themes in collaboration with the community)

  • Build the ATOM pipeline of contributors by giving them access to fair compensation and attract builders from other Cosmos chains.

  • Capacity to make funded initiatives accountable to the ATOM community through a built in oversight function and detailed monthly reports on the state of these projects.

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