Funding The Cosmos Hub Grant Program

Hub Proposals Community Spend
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We are grateful to the community for all of the terrific posts, feedback, & ideas for improvement.

Replying to doctor who:

Did you see our plan for the Oversight Committee which includes an independent Certified Public Accountant (CPA)? See here: OVERSIGHT & ACCOUNTABILITY - Google Docs

Thank you - we are working on a Conflict Policy and will release it soon.

What else would you like to see?

Replying to JD-Lorax:

The short answer is: we expect there will be a few failures along the way. Yet, at the same time, if we can internalize lessons learned and grow in our personal individual capacities thru failure, still, the ecosystem can strengthen.

Even failed initiatives can contribute useful open source code, and by working in an open manner, also contribute to community understanding of dead ends.

How do we protect against wasting money when failure is statistically inevitable at some level?

We start with small grants, we use the small grants to establish relationships and KPI reporting so that we can see a team start to prove itself, and then we provide medium-sized grants if/as success is being demonstrated; so that the typical pathway is for a team to ‘earn’ the privilege of being entrusted with a medium-sized grant after demonstrating some initial success.

As we get to medium-sized grants, we can also agree to milestone-based payment released milestones if/as it makes sense within the context of each project.

Please reference the response to Cosmos Founder JK (above) concerning his question re ‘minimalism at the Hub, and what this means’.

We do not believe we are building the canonical grant program for the Hub; instead we believe we will see a plurality of grant programs emerging over time.

We do not believe we have any natural right or programmatic role to set vision or strategy for the Hub; instead we believe that the vision and strategy will emerge one Hub gov proposal at a time; and we expect these changes to the canonical codebase to be hard-fought and time-consuming, given especially how important the Hub is within the ecosystem.

We do not believe that any sizeable number of projects that we fund need to necessarily be merged into the Hub codebase in order for the grant program to be successful in driving value for ATOM; some of the projects will be ecosystem initiatives, public goods, and tooling that does not need to be merged into Hub codebase at all; some of the projects certainly could be “core infra” but with adherence to the ideas of minimalism described in our response to Cosmos Founder JK, we would expect these “core infra” projects to be tested in other zones, to need to prove themselves to become worthy of consideration by Hub gov, and then to win the support of Hub gov on the merits thru the ordinary Hub gov process.

We are trying to break the conundrum: “the Hub is so important thus we can’t commit to funding something at the Hub unless we can be ‘certain’ about it; but since we can’t be certain about anything before it is built & tested therefore we shouldn’t fund anything at all & do nothing.”

To break this conundrum (and the stagnation that results), we need a program of R&D and experimentation, and this R&D needs to be done as a parallel activity. Testing of core infra ideas can happen in other zones, and then core infra upgrades should be merged into Hub codebase only after significant testing, audit, and refinement thereby giving time for larger community review so that precision, security, and timelessness of code can be enshrined via principle of minimalism, and most likely only after fierce fights like we saw with Litecoin SEGWIT and then Bitcoin SEGWIT.

TLDR; So what is the grant program doing? It is funding teams in the R&D stage pursuing ideas that can add value to ATOM holders: open source, public goods, and ecosystem initiatives. Some core infra projects, but, only after testing & community confidence is proved should any code be merged into Hub codebase according to the regular process of Hub gov.

The DAO has its own internal governance.

If someone within the DAO team is ‘missing in action’ or ‘failing to perform’ we will replace them via majority vote by our internal DAO governance.

As a DAO, our commitment to the community is to operate as a high-performance team & to go over and above in delivery of the mandate, and we would request that the community assess performance at the team level, and not an individual team member level.

If the DAO team does not perform on it’s mandate, then we’d like the community to fire our entire team by not renewing our mandate; or by holding a special gov vote to terminate our program mid-cycle.

If community gov held a vote that concluded ‘no confidence’ in a specific team member’s integrity or efficacy, at that point the DAO gov would be foolish to ignore the community’s wishes b/c by going against the community likely the entire DAO mandate would be at risk of non-renewal or termination.

Of course, as a technical matter, a decision to fire an individual member would be a DAO gov decision.

As before, thank you for asking these productive questions, which are very much helping us to sharpen the presentation of our vision for the grant program.

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Hi, thank you for the proposal.

Where will the grant money come from? Is it funded again by the community pool or already included in your proposal? If via community pool, then if approved it doesn’t need to be voted again by Cosmos stakeholders?

And what’s your target for the number of projects getting funded during those 9 months?

Someone here mentioning about project incentives, I think it’s a cool approach.

Thanks.

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First and foremost i want to say that this proposal is a step in the right direction. Community pools are insanely inefficient and bad allocators of capital, especially small grants should not be decided on by a full-chain governance imo. Below i will share some points i think the proposal can improve on.

  1. Id like to see formal knowledge in the proposal highlighting that at any moment in time one can also request to the community pool for funding instead. This also counts for proposals that dont pass the grant committee. This way the community pool can act as a backstop for the grant program.

  2. Id like to see a more detailed breakdown of the expenses going to human capital stating with a denotes per-person compensation instead of the aggregate.

  3. I think language needs to be added to the proposal regarding the maximum grant amount, 100.000 atom seems like an absurd high number to give out in a grant. Grant recipients will be forced to sell on the open market to cover expenses and I dont think spending 1M (even for supurb products) is in our best interest as a pure ATOM expense. Id like to see the program capped at a more reasonable number like ~100k USD with the option for recipients to propose a V2 grant at a later stage.

  4. Id like to see the Grants proposed in a public manner ex(Issues ¡ scrtlabs/Grants ¡ GitHub)

  5. Id like to advise you to look into setting up a legal DAO instead of whatever legal entity you were thinking off before. At a cost < 10k to instantiate, a max of 15k in taxes at 2-3% of income, NPO status, Limited liabillity and ease of use as an international DAO i think wrappers like https://www.midao.org/ are something you can look into. As a Legally registered DAO founder i am happy to further explain what it entailed for us to help you guys in making choices.

I hope this feedback helps improve the proposal.

Ertemann - Lavender.Five

Edit: Fixed Typo

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65

The proposal is good and the background of the members is good.

A recommendation:

Several verification nodes who have doubts about this proposal, please invite them to join “THE OVERSIGHT and ACCOUNTABILITY COMMITTEE” as committee members. Oversee DAO operations.

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Hey @Youssef, This proposal has covered all the details. I will like to support the proposal. I also have some doubts; I have scheduled a call with you and would like to talk to you.

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Hi everyone,

Based on community feedback, the DAO team is amending its original proposal with the following points. These changes will also be integrated to the original post in the addendum section:

  1. The applicant submitting the proposal is a DAO with name “DAO NAME (TBD)” and the name of the project shall be “DAO NAME Grant Program”.
  2. The DAO’s 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.”
  3. The program is not intended to be the canonical grant program at the Hub, and by creating transparency around program status, KPIs, and application flow via Oversight Committee it is anticipated that a plurality of more specialized grant programs will emerge organically within the ecosystem.
  4. The program is not intended to make or recommend any upgrades to the canonical codebase at the Hub; this decision to upgrade the canonical codebase will continue to rest with community gov and we would hope should adhere to the principle of minimalism at the Hub.
  5. As requested by the community, line item compensation details are presented here in a document
  6. Termination clause: at the end of the 9 month period, none of the leftover funding will be used for any purpose and a CHGP renewal proposal will be raised on the Cosmos Forum within 4 weeks of the completion of the program. If the renewal proposal is rejected, all community funds will be returned to the community pool within 72 hours.
  7. Conflict of Interest Policy: if a member of the Reviewer Committee perceives a conflict of interest, they shall report it to the Oversight Committee and abstain from voting on any grant application impacted connected to the conflict of interest. All conflicts shall be reported by Oversight in the Transparency Report.
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FYI, not seeing the document anywhere. Maybe need to re-upload?

Edit: There is a link in original post, though it does require us to ask permission. Not sure if intended.

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Hey! Document is in open mode now. Thanks for pointing that out :slight_smile:

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regarding point 4, i guess you make it yourself too easy. Saying to propose something else and if not the proposed is okay, that is not a argument to vote yes for this approach. That would mean if i propose to give me 1m Atom and if nobody says that i only should get 100k Atom my proposal will pass?!

I would bring another idea into discussion. A more or less performance dependent payment. A full-time manager shall receive an equivalent of 1.200$ per month in Atom (approx.110 Atom at the moment) as a base salary. With an estimated 160h work (40h per week) that is a base payment of 7.5$ per hour. A part-time member will receive corresponding 7.5$ per/ x hour he workes.

If they propose a project for funding, they help the team and workout the proposal (including KPI and traget the project will acheive one year after start), where the community can vote on with governance. If the Proposal passes, the 7 Member will receive a bonus of 700 Atom to share.

Once the Projekt is live, they will receive additional 700 Atom.

One year after go live of the project the 7 member will receive additional 700 Atom as bonus.

The amount must not be 700 Atom, could be more ore less also maybe pending on the complexitiy of the prfejct the support.

This is another idea…

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I’d personally like to see a significantly smaller pool allocation request in this amended proposal. 721,000 ATOM is too much for an initial, what can still be considered experimental phase, grant program. A more reasonable and modest starting allocation with the option for additional funding to extend the program after proven success in 9 months is a sensible approach to me.

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You say that not intended to be the canonical grant program at the Hub but you are asking for 700K atom.

Let say that in one month, we have 2.1M atom in the CP, this is 30% of community pool.

How can a another grant program can make it if you ask so much.

Grant program should be 30% MAX of the community pool then by your logic, if there is other grant program, let say 3. Amount requested should be much lower…

I hope there is a competing proposition.

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I see nobody replied to my concerns, it’s fair, they are quite subjective, and controversial.

People are ok with validator(s) being bribed to switch their gov votes then. Or is it a taboo topic ?

__

. About the pool allocation : it should be lower. as many said here. If there is a need for more some day → gov.

. About the Validators members : Nobody seems to worry. I do worry. I would advocate for a rotative selection. There are 175 validators. Only 2, even 4, of them participating in this committee all along the process is not enough. Not fair. And it looks like there have been a deal under the woods with some 82 NWV voters - even if not.

. Has the recently created TAB a role somehow regarding this grant program ?

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They are asking too much money for monthly compensation the members. Look at Juno Growth Fund, they don’t have these big salaries as you guys! Also, you are asking a lot from the community poll. 100,000k atom is enogh to start! If not, create a DAO on Juno network and there is no need for all these costs.

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After reviewing this document, this is the summary about the compensation:

  • 20% Part time Technical Lead: $30k/month equivalent full time monthly salary

  • 20% Part time Community Review Panel Participants (4) (these are the validators): $15k/month equivalent full time monthly salary, likely higher than in their current full time validator jobs

  • Oversight Committee 20% Part time Senior member: $27k/month equivalent full time monthly salary

All these part time members listed above have much higher equivalent full time salaries than the only 2 full time people that would work on this grant program at $12k/month (out of ~10 people listed, just 2 will work full time, all the others mostly 20-35% part time).

These salaries are huge, start asking for much less and then when there are good results you can ask for more. This is huge financial gains for you, the self appointed committees, for 9 months, while putting all the risks and costs on the Cosmos community.

This sounds good, however you are still asking for around 40% of the community pool funds, wishing to have the ability to decide about grants of over $1M and receiving huge salaries for mostly working on this part time such as $30k monthly equivalent full time salary, so based on this it still sounds to be intented to be the canonical grant program at the Cosmos Hub.

Well, this is like saying ‘if a hacker attacks the Cosmos Hub they shall report it and abstain from taking any funds’. Obviously, others should monitor and evaluate conflicts of interest of the reviewer committee, not the reviewer committee itself.

Fully agree, we actually mentioned about this in our first reply: ‘4 validators cannot have more technical capabilities or experience than 175 validators.’

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You have missed the by-far biggest complaint: the cost. The cost needs to be significantly less.

The current state, even with the updates, puts all the risk on the community. If you aren’t willing to take some risk yourself, you shouldn’t be doing this. Ask for much less, show results, then ask for more.

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AN FAQ FOR THOSE WHO WANTS TO GET DISCUSSION TL;DR
Why does Cosmos need a grant program?

A specialized workflow for grant funding evaluation and approval will make the process easier and encourage teams who are willing to build public goods for the ecosystem as the current funding through governance is not at all efficient and lacks necessary due diligence. Grant program will:

  • make criteria more perceivable
  • make sure that the grants are efficiently sized
  • find proposals that deliver value for ATOM holders

Why are the members self-appointed?

Building an efficient organization requires recruiting team members who have the necessary skills and experience to achieve the vision, and it is the most efficient way for the Community to move things forward for a contractor team to self-organize. The team is experienced with Cosmos governance and is committed to driving value for ATOM holders. We are looking to work on inclusivity & will do our best to come up with a design for it. By the way, the team is looking to hire community members who have experience as coordinators or auditors.

What is an Oversight Committee?

Separate team of three will:

  • keep track of all reviewer committee activity (including on-chain txs)

  • share information on the processes

  • monthly report on program KPIs, wallet balance & tx activity

  • communication

  • reporting on progress of grantees

We need community representation. How are you solving this?

Our project coordinator is a community member @The_BendyOne he is to champion the community’s views within the DAO and ensuring that the DAO communicates openly with the community. Please do reach out to him or any member of the DAO we want to hear from you.

In the future we want even more community members involved.

How is the transparency achieved?

We will use a variety of tools and comms channels to give everyone the information they deserve in convenient locations. Transparency goes beyond what happens on chain. With community representation within the DAO and the creation of the oversight committee will aid in building transparency.

Is there any conflict of interest if members are already on multisigs from a competing chain?

We have declared a Conflict of Interest policy as part of our most recent set of updates to the proposal on the Cosmos Forum.

Why are you asking for such a large amount of ATOM?

ATOM is a $3B economy at the center of the Inter Chain. The hub has been under invested and now with ICS going live soon more than ever new initiatives can be developed that bring value to ATOM holders. Public goods funding has always been ignored by VCs. Thus there is a lot of low hanging fruit. As such we need a well funded grant program. We are asking for an amount of ATOM to achieve 30-50 small/medium grants over 9 months, fund existing teams, and recruit new builders to come. The amount of ATOM is actually quite small, it is an amount that will be replenished by the tax that flows into the community pool in approx 2 months.

Will you be issuing guidance for builders?

Yes, we will be gathering a list of ideas, as a way of accelerating the process of sharing ideas about what community members are interested in, support, and value.

Would you become a DAO that uses DAODAO or similar tooling once it is on the hub?

We are exploring the best available tooling for our DAO, and we will make sure to put it in use.

Are you going to be the only grant fund on the hub?

Not necessarily. We are looking to provide the best possible way to fund the projects contributing to the growth and prosperity of the Cosmos ecosystem, however there might be other initiatives emerging to serve the same function. We are pro plurality - so looking forward to seeing other potential innovations to strengthen the ecosystem.

How are you going to fit in this work with other employment?

Reviewers are expected to contribute around 10 hours per week to the evaluation process. It was negotiated with their teams & also well-arranged in personal schedules so that additional time may be contributed on evenings & weekends. Reviewers are individually responsible for delivering their duties according to personal schedules & time zones. Program managers are committing to a full time activity in 2023.

Why is the maximum cap for a grant set at 100,000 ATOM? Isn’t this amount too high?

The program is for small-grants ($20k-$100k) and medium-size grants ($200k-1m). We do not anticipate very many grants over $500k. Most of the grants that we fund will be small grants, less than $100k. We will expect that a team should have a proven track record of delivering results to apply for a medium grant. A typical workflow will be for a team to apply for a small grant, demonstrate success, and then apply for a medium-grant.

When we fund medium-sized grants over $100k, we expect this will be three scenarios:

  1. teams who we’ve built up a relationship with through seed grants

  2. more established teams with higher headcount

  3. more established teams where the problem necessitates a larger amount.

How do you ensure that there are no conflicts of interest with grantees? How do you plan to address any potential conflicts?

We have published a Conflict Policy in the latest amendment to the proposal, which can also be found in the changelog. Conflicts will be publicly disclosed - if any (even if slightly potential) association might appear for one of the team members, one will abstain from the review process & declare it to the oversight committee. Recusals will be taken to ensure the objectivity and impartiality of the evaluation process.

What tools are you planning to use so that the community can monitor all the different grants and the status of each?

  • On-chain wallet
  • Monthly transparency reports with operational updates on grantees activities
  • The Oversight Committee will also have an auditor with relevant professional training (Hiring in progress)
  • Progress dashboard
  • Other transparency ideas are being discussed including the recording of prop presentations
  • Team members open to public discussions

Are you really taking the feedback into account?

Yes, we are making essential adjustments to the proposal and you can track the changelog via the changelog

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So unfortunately reading from the reactions here ATOM is still on its way of democracising itself into fragmented nothingness. Not able to protect itself, it will continue to see it’s usecases looted and rugpulled in fratercide style. A real pitty of such a wonderful tech and project.

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Hi lorax,

I think that this is a really good point and that it may make sense to have a policy where consumer chains can only ask for funding from global governance.

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They need to work for far less amount of money! You guys are asking a lot of money to pay your salaries for something you haven’t delivered! We should pay them per hour, as Upwork!

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Not necessarily! Debate is and discussion is healthy for the future of Atom! Lower your salaries, pay the members of the committee per hour, and lower the amount of ATMOM you need to give grants! 100k-200k ATOM should be enough for the start!

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