Grant Proposal - Protocol Guild Pilot

Moloch Rises
#1

Project Title: Protocol Guild Pilot

Description

This is a proposal for MolochDAO to support important Ethereum Public Goods through the Protocol Guild: a vested split contract which goes to 110 core protocol contributors.

We propose that 500 WETH be allocated to support the ongoing work of these core contributors in the initial Protocol Guild Pilot.

Moloch was launched as a way to resolve coordination failures around Ethereum public goods, and contributing to the Protocol Guild is aligned with this ethos. This contribution will allow guild members to continue the important work of scaling our shared infrastructure and making it as resilient as possible for the applications on top of it.

Manifesto/Vision, Problem & Solution

Watch / listen to this Funding Ethereum with the Protocol Guild presentation or read below.

In Nov. 2021, a group of core Ethereum contributors started exploring the incentive mechanism proposed in this tweet via this framing: What mechanism could help us better attract/retain talent and fund core protocol contributors?

We surfaced three challenges to address:

  1. Curation is hard
    1. Interested sponsors donā€™t have a single mechanism which curates all protocol contributors
    1. Protocol contributors interested in receiving funding arenā€™t sure how to self-organize
    1. Existing solutions bias towards teams & canā€™t surface all contributors
  2. Incentives are imbalanced
    1. Financial incentives are skewed towards newer projects with upside/tokens
    2. Existing public goods funding solutions usually donā€™t consider exposure to upside to applications/L2s - eg. soliciting tokens from initial allocations or recurring revenue from existing projects
  3. Churn is bad
    1. Steep learning curve for new contributors to meaningfully contribute
    2. Contributor value grows over time, but there is less incentive to stay once they are experts

Through a lot of discussion and iteration, the Protocol Guild was formed: a collective of protocol contributors which actively maintains an onchain registry of its membership.

In response to the challenges above, the org was designed to carry out specific activities:

  1. Self-curate an onchain registry of individuals
    1. Sponsors only need to know a single contract address instead of many separate team addresses, they can trust that there is quality backing it
    2. Members now have a single mechanism to coordinate around and solicit sponsorships to
    3. Domain expert members can surface part time contribs or lower profile collaborators which may be missed by other existing mechanisms
  2. Solicit sponsorships to balance financial incentives
    1. Bootstrap with high profile DAO treasuries
    2. Longterm, build norms around pre-allocation of a % of initial token supply
  3. Incentivize long-term contributions
    1. 6 month min before eligibility
    2. Vesting gets people to stick around
    3. Time weighted allocations to recognize the importance of long term contributors

To date, the membership includes over 110 Ethereum protocol contributors, including researchers, client maintainers, upgrade coordinators, tooling maintainers. This is a broad-based ecosystem effort: members come from 22 different teams and 9 organizations. Only 40% of members are directly employed by the EF. The membership is continuously curated through quarterly updates to the split contract - we expect the membership to grow over the next year.

Product Features

The Guild contracts are an autonomous value routing mechanism, operated independently from any existing institution, purpose-built for incentivizing long-term core protocol work. At no point does PG take custody of funds on behalf of members, it is all handled trustlessly. Learn more about the smart contracts we are using for the Pilot here.

In terms of deliverables, here are initiatives that Guild members will be working on over the next several years:

  • The Merge: moving from PoW to PoS, increasing security and sustainability
  • EVM improvements: new functionality for application developers like EOF
  • Statelessness: sustainable management for state growth as the network scales
  • Supporting Layer 2 scaling: EIP-4844, EIP-4488
  • Proposer Builder Separation: reducing centralizing incentives for consensus participants
  • Continuous client maintenance: improving sync, exploring new database types, researching and improving modular clients
  • Coordinating network upgrades: making sure the community helps to shape and is aware of network upgrades

Validation & Progress

Since starting the project in Nov 2021, weā€™ve built norms around member onboarding , refined the splitting and vesting mechanisms, and created extensive documentation on how it should be operated.

Weā€™ve kicked off a test of the mechanismā€™s efficacy with a 1 year / $10mm Pilot. So far, weā€™ve raised $5.4mm (as of June 28 2022) from a number of notable communities, including:

Secured funding can be tracked onchain through the Pilot vesting contract. We are currently engaging with a number of other notable projects to secure the remainder of the target.

Differentiation (from other projects)

Existing public goods funding solutions tend to be either too narrow or broad in scope, fail to exclusively target core protocol contributors, or depend on an intermediating institution, which often leads to organizations, and not individuals, being recipients of funds.

Team

From the Manifesto/Vision section:

To date, the membership includes over 110 Ethereum protocol contributors, including researchers, client maintainers, upgrade coordinators, tooling maintainers. This is a broad-based ecosystem effort: members come from 22 different teams and 9 organizations. Only 40% of members are directly employed by the EF. The membership is continuously curated through quarterly updates to the split contract - we expect the membership to grow over the next year.

Grant Request: 500 WETH

We are inviting MolochDAO to contribute 500 WETH (32% of the treasury) to the 1 year Pilot vesting contract deployed at theprotocolguild.eth (0xF29ā€¦f1a9).

The WETH will vest to each beneficiary member listed on the underlying split at 0x84afā€¦8ea1. Each recipient will make an independent decision about how to use the WETH once vested.

What the Funds Are For

The funds for the Pilot would be vested directly to Guild members over one year: see the Pilot vesting contract here . Note that funds would not replace salaries for core contributors, and each recipient would be making an independent decision about how to use their tokens once vested.

Help Requested: N/A

Additional Resources, Links, Portfolio

#2

Thanks for sharing this proposal @timbeiko.eth. Protocol Guild seems like a very important initiative. My main concerns are outlined below though:

  • In the past, Moloch DAO members have rejected proposals that consist of sending money to other DAOs without a list of deliverables. It is true that this is quite an exceptional use case as it is a DAO that contributes to one of the reasons that Moloch DAO was created, but I guess I would see MolochDAO sending 32% of itā€™s treasury as the DAO deciding to ā€œgive upā€ in ways. What I would prefer is the Protocol Guild thinking of use cases where Moloch DAO can be a supplementary body to the Protocol Guild, and to actually have Protocol Guild members who are also members of Moloch DAO to consider contributing to this DAO again in governance and proposal review as opposed to just requesting 1/3 of its treasury. DAO-to-DAO relationships should ideally be symbiotic, and not just one sided as this one currently feels. Here is a more symbiotic idea:
    • What if there is someone who wants to start contributing to Eth development needs to prove themselves before their address is added to Protocol Guild? Moloch DAO can serve a symbiotic relationship in that way, offering small grants for people who havenā€™t yet proven themselves. These can be pseudonymous contributors that may not have any connections at EF and other places.
    • Moloch DAO members have also previously discussed 25% a year when it comes to our spending rate. One option can be we target 12% a year of that budget towards grants to people who want to prove themselves to join the Protocol Guild, for example. This then still gives Moloch DAO another 13% a year to fund other projects that may not exactly fit this Protocol Guild use case.
  • One thing Iā€™d love to generally understand from the Protocol Guild budget perspective is also a breakdown of the different initiatives the total of $10m is going towards. Like based on the people in the guild, what are the different categories / speciality areas they are working on. Because I want to understand the percentage of the budget allocated towards people working on privacy.
    • Many members in MolochDAO are interested in privacy and if weā€™re going to put large sums of money towards protocol development in ways, it would be great to earmark that capital towards initiatives that bring greater clarity towards the roadmap to privacy support on Ethereum and what that looks like when it comes to the L1 strategy.
    • As far as the category breakdown of the budget - I understand there is privacy involved with respect to this split, but I feel like a balance needs to be made between peopleā€™s privacy and actually knowing what is actually being advanced more in Eth development. Iā€™d love to understand the Protocol Guildā€™s longer term design to provide transparency on what it is actually being funded. For example, it would be cool if there were smaller sub-guilds for different focus areas of protocol development, and then be able to earmark funds towards a sub-guild.
    • One temporary solution can be adding an additional column in the protocol guild members table here that has a few standard category tags, then we can at least see the percentage of people contributing to different categories. That wonā€™t give us the actual budget amount but may be good temporary solution to bring greater visibility towards the funds allocation.
1 Like
#3

Appreciate your comments, @stellar_magnet !

Here are some answers to your questions:

I think thatā€™s generally fair. That said, I donā€™t really see PG as a ā€œDAOā€ as much as a mechanism to ensure that protocol developers + researchers are incentivised to keep working on the protocol rather than other things. So itā€™s worth noting that any ā€œaskā€ from PG donors comes at the cost of having people focus on that donorsā€™ ask rather than on improving the protocol.

I think this is an interesting idea, but PG members typically work at least 50% of their time over a long period on the protocol before being considered. Would ā€œhiringā€ protocol contributors be part of Molochā€™s mandate? This would also be a significant financial ask, but itā€™s something worth considering if you think it can be done!

Itā€™s hard to get a specific breakdown because PG members are basically client developers, researchers, etc. working on the core protocol. That said, the list of receipients/teams is available here: 9. Membership ā€” protocol-guild documentation

Some PG members may be working on privacy-related changes to Ethereum, but I suspect itā€™s minimal. First, because most privacy work happens at the application/L2 layer, and second because the bulk of the PG members are involved in engineering and most protocol-related privacy changes are still in the research phase. That said, there are definitely some PG researchers who spend time on privacy.

I think this is worth doing, but I donā€™t think Protocol Guild is the right vehicle for it. PG donations are ā€œno strings attachedā€, so this should not be thought of as a way for Moloch to ā€œnudge protocol devs to work on privacyā€. This is obviously true for any PG donor.

Yeah, this is a good suggestion! We do share what people are working on when they get proposed for membership inclusion here: https://github.com/protocolguild/membership/pulls

#4

Whoops, this is actually a private repo still. Unfortunately no public way to get peopleā€™s contributions easily (though the vast majority can be found on Github)

#5

I support this proposal for the full 500 WETH, and would be inclined to give more (up to 100% of the treasury) should this pilot proposal be fruitful. Any funds retained by MolochDAO should go towards initiatives that are complimentary to Protocol Guild, like privacy as Yalda mentioned and perhaps the Eth Cat Herders as well.

Disclaimer: I only have my 1 summoner share in MolochDAO, so I have no financial stake in the outcome.

We summoned MolochDAO when ETH was $100 and it accomplished 3 objectives:

  1. provide funding for actual projects in the bear market
  2. help ignite the DAO revolution by curing PTSDAO
  3. spread the meme of Moloch-as-ultimate-enemy within the Ethereum community

I think MolochDAO has succeeded on all 3 counts. We set the bar high for transparent funding, providing support for ETH 2.0, the first grants for Tornado.Cash, and more. PTSDAO is a distant memory, with thousands of DAOs resembling a college activity fair. And the slaying-Moloch meme has become a banner of Ethereum community leaders, aligning folks to fight against coordination failure itself, instead of each other.

If the terminal value of Moloch is to help incept Protocol Guild with the remainder of its treasury, in my view that would be a great conclusion to this story. Not every organization needs to exist forever, and MolochDAO was specifically designed to be easy to dissolve.

To be clear, I think Protocol Guild is a great recipient of funds from MolochDAO, because Protocol Guild is attempting to accomplish what MolochDAO set out to do, and possibly more effectively. The goal of MolochDAO was to provide support for whatever Ethereum needed the most, at the time that turned out to be ETH 2.0 and privacy. Now it seems likely that the highest stakes, least-likely-to-be-solved-on-their-own challenges are at the core Ethereum protocol, and it seems no one is better informed than the Protocol Guild. For example, the VC fund Paradigm can put out Foundry and elevate ETH dev tools, but itā€™s unlikely that they will contribute directly at the protocol layer. For that Ethereum is on its own.

Also another fun fact is that what is now Protocol Guild literally came out of a MolochDAO grant. James Fickel, a molochDAO member wanted to create a grant streaming people so he could YOLO fund a group of ETH devs. MolochDAO paid for the development of https://opengrants.com, which was a v1 of the PG concept. Over the last 2ish years, 1,500+ ETH have been distributed through Open Grants to ETH devs. Trent, now one of the leaders of Protocol Guild was critically helpful in curating the initial grant recipients. So IMO everything is going according to plan.

Thereā€™s another more ambitious reason I want PG to work - in 3-5 years, if PG is a trusted curator of ETH protocol dev grants, then it is likely to be the only non-EF organization that would be a viable target for Ethereum protocol issuance, if that ever happens. Seems like a worthy cause, even if unlikely to come to pass.

:japanese_ogre:

2 Likes
#6

@timbeiko.eth I had some more time to think about this, and I think following Ameenā€™s recommendations make sense here: a grant for 33% to PG, and once the pilot proves successful, donate the remaining treasury to PG.

Along those lines, with MolochDAO going into a mode of gracefully recognizing itā€™s death, I think MolochDAO simplifying its governance back to the way it used to be also makes the most sense, where people just submit proposals on-chain, and itā€™s a memberā€™s responsibility to stay on top of what is happening: minimizing the operational overhead (since adding operational overhead has not necessarily lead towards increased participation).

So basically, whether there is an additional ā€œ60%ā€ or whatever treasury left to give to PG after 1 year will be based on if MolochDAO members feel comfortable keeping their assets in the DAO that long when the operational team becomes non-existent (which is where I think the DAO is heading).

2 Likes
#7

@stellar_magnet that seems reasonable to me - happy to go with a ~33% proposal during the next grant round and re-evaluate after that one.

#8

Interesting discussion. Iā€™m leaning toward Yes.

1 Like
#9

the proposal is live for voting here: DAOhaus

#10

Whatā€™s up Moloch DAO! Posting on behalf of Tim and Trent.

A few months ago we asked you to help support Ethereum public goods via a novel funding mechanism called the Protocol Guild. Today, with your support, weā€™ve reached the halfway mark of our 1-year pilot program, so weā€™re back to share some exciting updates!

In case youā€™re hazy on the details, the Protocol Guild serves as a counterbalance to the way Ethereumā€™s core protocol work is being funded today. It aggregates all active core protocol contributors into a single funding mechanism, which encourages long term contributions via a vesting mechanic. This allows anyone from Ethereumā€™s ecosystem / community to easily and effectively direct a portion of their treasury or revenues to support the protocol they depend on.

Moloch DAO signaled its support for this initiative by donating 500 wETH back in September - THANK YOU for your commitment to securing Ethereumā€™s future!

So, where are we today?

  • $10 million raised to date from 3.8k donations (185 unique donors)
  • $5m has been distributed to 128 members (up from 90 to start), on average $39k per member
  • Work is currently underway for the Guild to adopt Moloch v3 tooling (:japanese_ogre:) and allow consolidation of L2 donations
  • Our next fundraising push will target raising $100m over four years, from the end of the pilot (May ā€˜23)

Hungry for more? Check out the links below, or post any questions / comments here! Thatā€™s it for now, thanks again for your belief and support, we wish you all very relaxing and happy holidays!