Funding The Cosmos Hub Grant Program

Hub Proposals Community Spend
123

A Call for Re-iteration

Summary

After much thought, I do not support proposal 95 in its current iteration. I believe that the risks outweigh the benefits. A better alternative path exists, one which also fulfills the base-requirement of “doing something” that many have expressed.

My concern is not the capability of the team, but that the structure of the proposal has a low chance of leading to optimal outcomes for stakeholders, and additionally, that there is no certainty that the grants will lead to sustainable infrastructure that addresses known foundational issues.

This is not a case of doing something vs. doing nothing. It is a case of doing something right. In my mind, a better approach is to iterate on the proposal, unbundle it, and work on more sustainable solutions at smaller, more-defined scales.

Rationale

There is an incongruity between the program operations, the duration of the program, community expectations, and the requested funding amount.

This is a spend proposal that requests 588,000 ATOM from the community pool.

In a period of 9 months the team plans to create a bespoke entity to manage foundational organizational needs, build a website and proposal pipeline, advertise and market the program, and allocate nearly all of the proposal budget.

According to the projected time frame, $5M of grants will be allocated in 7 months.

I do not believe the $5M is excessive if the committee has already lined up quality projects to work with. However, if that is the case, this proposal should be unbundled in order to be more direct about which projects it plans to fund. This will build trust and help establish appropriate expectations in the community. If it is not the case that projects are already lined up, I do not believe that the current stucture of the proposal & associated committee will lead to an optimal use of funds & time, despite the best efforts and talent of the team.

Assumptions and Scenario

Let me elaborate with a possible scenario (and I encourage others to make their own) and some assumptions:

Assumptions

  • The Hub governance environment is fragile. This means that proposal-precedents cause lasting cultural impact that is more likely to be negative than positive.
    • As an example, people still group governance participants of proposal 82 into two camps, and constant community feedback that “governance is a battleground” further affirms this narrative.
  • Things always take longer than expected.
  • Giving grants is an uncertain endeavour that is outside of the control of the grantors. Effective funding outcomes are more likely to be correlated with time spent receiving proposals than funds granted.
  • It will be difficult for projects funded by the Accelerator DAO to deliver anything meaningful in 7 months.
  • Clear expectations in the form of OKRs and KPIs have not been set and agreed upon across the stakeholder base, thus making it difficult to fairly measure the efficacy of the program and its impact on stakeholders.

Outcomes

  • This may lead to disillusionment (or at least the grounds for disillusionment) from governance participants.
  • This will further aggravate the governance feedback loop, and possibly eliminate the possibility of future funding requests and authority requests without the requisite tooling.
  • Dedicated, talented, and passionate contributors will be deterred from contributing.

The above scenario neglects positive outcomes, of which the following can occur:

  • The committee funds necessary public-goods in the known:known, known:unknown, and unknow:unknow categories.
  • The committee manages to turn its bespoke operational structure into a sustainable structure for Hub funding platforms.
  • A project is funded that clearly delivers value to ATOM holders, thus compensating for the pool spend, and providing a meme-like narrative for the worthiness of the program.

Still, I believe that the the positive outcomes have a higher likelihood of occurring under different structures that particularly target the desired outcomes, instead of as a generalized grant program with inefficient resource allocation.

It seems that everyone participating in the governance discussion agrees that there is a need for foundational organization tooling. Also, I have previously advocated for a plurality of funding platforms. This is at odds with the large scope & amount of funding requested by this proposal.

Proposal Re-iteration

Here is an alternative path for the proposers that provides, in my opinion, a better ratio of time & funds-spent to high-leverage deliverables:

  • Problem: contributors need to be compensated for their work.
  • Problem: the structure of the oversight committee has a conflict of interest in performing its mandate.
    • Possible solution: transform the accelerator-DAO oversight committee into an independent committee (with its own funding) that makes sortition a key component of the oversight process.
  • Problem: the Hub lacks tooling to design better organizational structures than the one proposed. It is unclear how to fund these structures.
    • Possible solution: collaborate as a community on RFPs for foundational tooling and, if necessary, fund a small, light-weight team of project & product managers to source talent and push these projects over the finish line. Fund these projects on a project by project basis via the community pool.
  • Problem: the Hub community doesn’t know what it doesn’t know it needs to fund
    • Possible solutions:
      • unbundle the currently proposed committee and re-propose smaller scale funding platforms in accordance with the strengths of the team members and funding visions.
      • work on an ecosystem-wide quadratic funding solution
  • Problem: proposers don’t want to go through the proposal process due to the intensity of public scrutiny.
    • Possible solution: build out a proposal incubation pipeline to support proposers by providing structure, process, facilitation, and logistical planning for each step of the governance process.

By following the above route, the ideal of the proposal, which many seem to endorse, is preserved while each individual component becomes a sustainable piece of the larger puzzle. Additional feedback is needed but hopefully this will provide a reasonable starting point, and if there is sufficient interest I am happy to work with others to write specs and project charters for any of the above components.

Conclusions

The currently proposed structure of proposal 95 is not congruous with plurality because it neglects nuance in exchange for a blanket solution. Because of the breadth of the blanket solution, ambiguity is created. Plurality cannot exist without boundaries.

Additionally, in its current iteration, the proposal does not guarentee sustainability because of bespoke operational structures, the large chunk of pool replenishment that it will consume, and the potential damage it could do to the governance culture.

I will not be upset if the proposal passes, and I think something is better than nothing. However, I would strongly advocate for the proposers to go back to the drawing board with the above considerations in mind.

For those wondering why I didn’t publish this before it was on-chain, I was in the process of gathering and composing these thoughts when the proposal was broadcast to the chain. As a note going forward, it’s always helpful to announce a last-call date on all submitted proposals.

In short, I do not support the proposal in its current form and I believe it is setting the committee up for failure, which will further damage the governance environment. The team is talented and capable, but the best possible outcome is for a re-iteration of the proposal. The worst possible outcome is doing nothing at all.

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124

It seems that when there was another competing grant program proposal draft shared on the forum they rushed to put their proposal on-chain first.

Edit: @Youssef & Team, did you not even read the guidelines in the forum? After a proposal is on-chain it CANNOT be changed or edited and a pdf snapshot of the forum post should be taken and pinned to IPFS before going on-chain, which seems you didn’t do? This seems kind of an obvious thing to do, how could you be allowed to modify the proposal after putting it on-chain?

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125

Hello everyone,

We added a new change log today. Here are the main modifications:

  1. All 4 validators involved in this proposal will vote Abstain given the involvement of some of their contributors in Prop 95

  2. Amount of grants will be denominated in USD and not ATOM. The range is 10,000 - 1,000,000 USD. Although grants will be delivered in ATOM, the amount will be decided in USD terms, which makes more sense given the volatile nature of ATOM.

  3. Compensation for Program Managers was reduced by 10% following community feedback. See updated compensation document in the addendum.

  4. Following community feedback, there will be a lockup of received ATOM over 6 months with one additional 1/6th made available to the team every month.

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126

I think this point is very important for consideration. If there are already projects lined up and planned they should be made known for the sake of transparency, as quoted; to build trust.

As for the change log it’s nice to see something even though it’s a little late to finally be making further changes. But the 588,000 ATOM elephant in the room is not addressed. There is still no consideration to the fact that even when written as $1million that is a significant amount for a single grants spends. Amounts that large should go probably go through governance instead of being a decision made by 7 people. The cap is too high.

The prop is on-chain so these concerns hardly matter at this point. Would’ve been nice if the proposers took the community concerns more seriously before hastily putting this prop up to vote.

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127

A strong no with veto from me. Report are full of buzz words and figures that’s too good to be true without backing facts. How about one steps at a time instead of asking 588,000 lump sum that cannot be held accountable after delivery.

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128

Cosmos Hub Proposal #95 - ATOM Accelerator DAO

I vote: Agree

The reasons are as follows:

  1. The team members are excellent and have a good understanding of the cosmos ecology.

  2. The Cosmos Hub does nothing at all, ATOM is just a MEME token and a governance token.

  3. If Accelerator DAO successfully introduces more than ten protocols, it may bring value to ATOM holders.

  4. If the COSMOS HUB community does not move forward, it will starve to death in place.

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129

Although I agree with the problem statement and believe that a Hub specific grants program could theoretically work, I am voting no on this proposal for two primary reasons that I feel haven’t been adequately addressed by the authors, even though several users have pointed this out:

  • There is no clear guidance on which goals to achieve and projects to provide grants to. The criteria of “what brings the most value to the Hub” is too subjective. Before a grants program can be approved by a community, voters should agree on a direction. This agreement is currently clearly lacking after the ATOM 2.0 proposal failed. In the current format, this grants program is a headless chicken.

  • Without clear goals and a proven track record of a team, the amount requested is (still) too high. This isn’t about how soon this amount will be replenished, but about how much money (expressed in dollars) is simply at risk of being misspent.

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130

Can we hear some justification of why a 1 million USD grant needs to be decided on by a small number of people as opposed to going through community governance that is already in place?

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131

This seems like more centralization. The idea, or how I thought it to be, of the communict governance is to give power to the holders to make decisions on the future of the project. This appears to be asking us to relinquish that ability and to give it to "smarter’ and “more qualified” individuals or groups

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132

Address your #3 please. In what way is any value being brought to the table with this move. It seems to be taking money off the table and not showing any path to making any. Continuing to pay others to use the product/system will indeed bring your #4 to reality. Let us come up with a plan utilizing all of the community rather than a few that can accidently or intentionally destroy it.

133

holders always make decision by voting into the gov.

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Hi @ala.tusz.am,

thanks for your feedback.

We will reflect on the points that are specific in nature and can allow us to implement constructive changes.

This idea that “well the process wasn’t perfectly optimal so therefore the best thing is to scrap it & re-do the whole effort to make it optimal” is indeed nice in principle, but opportunity cost, momentum, and community morale also have value to ATOM holders in a highly competitive space in 2023, and everything in life is about balance.

We are all working towards ideals of permissionless systems, but until we have better tooling ready, we’re going to need to rely on humans to fill in gaps, unfortunately.

Hi @Noam,

We would love to be able to give you a specific list of proposals builders will submit to ATOM Accelerator DAO in 2023, but it is impossible to know in advance what ideas builders will propose, especially in such a large & decentralized community.

Osmosis grant program currently receives ~50 proposals per month. For reference, here is a list of projects Osmosis grant program has funded:
https://grants.osmosis.zone/grant-recipients

I’d encourage you to browse through this list to get a sense for the kinds of projects that come into an adjacent Cosmos community grant program.

If there is an entrepreneurial team coming to ATOM Accelerator DAO with passion and conviction to say “here’s our team, here’s our track-record, here’s why we believe in this proposal, this is how we want to drive value for ATOM” then it’s an idea the program will consider.

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135

TL;DR:

  • vote yes.
  • better to have a good enough funding mechanism, the arguing for months how to fund projects
  • it can always improve
  • small teams are known to be more efficient. The proposed committee looks solid enough
  • 588k ATOM is not that much given the size of the ecosystem, the needs (more tools please, on all levels: dev, user, testing!) and that it will replenishment in 2 months. I don’t believe anyone in in the committee will trade their reputation for colluding / doing a bad job.

Let’s move on!

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136

Of course you cannot predict what proposals are coming. You’re missing my point.

What’s lacking is a northstar. An agreed upon set of goals for the Cosmos Hub to use as a starting point in establishing criteria for a grants program. You cannot decide what’s good for the Hub without knowing what it’s supposed to be doing. So far, besides anything ICS related, nobody is in agreement on the Hub’s future.

This is why I would propose to reduce scope and focus entirely on Interchain Security and everything around it as we know that’s pretty much the only thing the community seems to agree on.

Once we’ve gotten some kind of ATOM 2.0 agreement, expand the scope & budget of the grants program.

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137

I agree with this point. One of the main issues I have with the accelerator DAO, is I’m not sure what part of Cosmos it intends to accelerate. I prefer to have a stated objective. I prefer that these ATOMs go directly towards ICS exclusively (albeit, I do wish it was a smaller amount), and new initiatives with different governance models can come up and provide grant funding for different parts of the Hub. An example of what I’d like stated, for this grant program:

  • We are to use this 588,000 ATOMs to fund projects that are building or intend to build on Interchain Security, and use our social influence to try to gain more meaningful consumer chains. (This can also give ICS chains a central point of funding, and in turn, this grant program can keep these chains on track in the building phase, and would also be able to lock chains into ICS better than what we currently have now. Not that this program becomes a central point of ICS, but rather a mediator, making it easier for chains that wish to become a Hub consumer chain.)

  • We will use these 588,000 ATOMs to help fund research initiatives to make ICS more effective and efficient, giving forward momentum to bring V2/V3 of ICS to the forefront of the Hub. (A central point of research funding for ICS, as Informal has been the main contributor to ICS, it may be good if this grants program, intended to help fund and connect Infomal with new teams, looking to help build out ICS into its V2/V3 implementations.)

If these were the sole, stated goals of this grant program, I would vote yes for the current 588,000 ATOMs, as I believe ICS alone is worth that type of money being poured in to benefit the Hub. So long as this program’s sole intent was to build the hell out of ICS and ICS research. I don’t want to fund an “anything goes” fund though, I need specific goals and mandates.

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138

Is funding a grants program team for 9 months necessary? If we voted to spend 588k ATOM on grants for the 1st half of the year, couldnt we make a proposal deadline for teams to submit grants proposals to funding tiers like $1k, $5k, $10k, 100k, etc. then hire a large dev dominated review panel for 1 month/year. the panel makes recommendations to exclude proposals for being spam or frivolous and the like, leaving a field of 20 or 50 or however many proposals each tier and then regular governance uses ranked choice voting to fund half or 1/3 of the proposals. The voting doesnt determine whether or not to fund things, its voting on what the community most wants to see funded. then we only pay for the month of panel oversight instead of 9 months of market rate salaries.

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139

Thank you, @Noam.

Creating a globally-competitive economic agglomeration effect around the hub is likely to be a medium- to long-term endeavor.

For building of bottoms-up economic systems, the idea of incrementalism is important.

It took 50+ years and many rounds of top-down planning and bottoms-up investments by individual players to build Singapore or Hollywood or Silicon Valley into a ‘holonic sympatheia’ (not sure if this is grammatically correct term, but I am using it here as a noun).

Beyond completion of the ICS vision, as far as building out ATOM economic zone goes, do you foresee a way to short-circuit the bottoms-up part of the process?

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140

If anything, the Hub’s priority should be to develop a better framework to reach common agreement. In my personal view this is not through a giant long term plan via a whitepaper, but an incremental process that adapts as the ecosystem evolves.

We have to acknowledge that the original design of the Hub was flawed. The Interchain is not shaping as a hub and spoke model. And once we do get to 1000+ chains, hubs will be everywhere, but the Cosmos Hub is not positioned to be among them currently as chains do not actually have a reason to connect to it besides fiat on-ramping (which is an advantage we can expect others to have as well soon) and its “brand”.

The current design of ICS does not scale, nor has there been considerable thought given to how this aims to compete successfully and sustainably with upcoming alternative shared security models.

Hub minimalism killed the Hub. The Hub should have been Axelar, Gravity, Babylon, whatever. Anything that solves a real infra problem now, not one that we may (incorrectly) think will be there in 5 years.

But to answer your actual question: I don’t think you can actually short-circuit the bottom-up part of this process. Fund multiple teams that have ideas on how the Hub can actually find product-market fit, let them do R&D and pitch their product to the community, establish better feedback mechanisms, and once approved, go hard on the funding.

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141

Not really related to the grants program, but I’ll have to take issue with the claim that “there has not been considerable thought given to how this [ICS] aims to compete successfully and sustainably with upcoming alternative shared security models”

The Cosmos Hub team has put a lot of thought into how ICS aims to compete successfully. So much thought, in fact, that for example we are the only team to have published an analysis on what security Mesh Security even provides!

We are working on similar analyses comparing Opt-in Security (ICS v2) to rollups, and answering once and for all whether Mesh Security can be secure without fraud proofs. These are almost ready but we’ve been so busy with the launch of RS that we haven’t yet put the final touches on them.

Are there any other competing forms of shared security that need to be given more thought?

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142

What I was referring to is how the Hub itself isn’t positioned to compete compared to other chains. Whichever configuration is chosen (Replicated Security, Mesh, or something else), other chains can easily do the same. So long as the Hub doesn’t have an intrinsic value accrual mechanism besides ICS, nor a good reason to be at the center of significant IBC transactions, it won’t be able to compete in the long term because other chains will provide better reasons to act as provider chains (via a larger market cap, better IBC connectivity, better access to liquidity, etc).

If the only reason to hold ATOM is to receive tokens from consumer chains, the Hub effectively becomes a glorified ETF paying out dividends to delegators. To be fair, this alone could potentially function (if we do away with any regulatory concerns), but it leaves the Hub at the whims of other protocols and off-chain sales efforts to get the best chains to join the network. Not exactly what I personally think is the most future-proof strategy.

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