Should the Gnosis DAO create a sub-DAO to offer GNO grants for community goods?

Governance
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Simple Summary

Gnosis has issued grants via the GECO grant program. With the GnosisDAO live, it will need a way to incentivize people to create community goods. This post explores ways the GnosisDAO could do this and is looking for feedback and discussion around community grants issued by the GnosisDAO.

Abstract

Gnosis currently issues grants via the GECO grant program. This program has given a significant amount to builders and researchers but is conducted by Gnosis’s company. At some point, the GnosisDAO will need to issue grants to incentivize the development of community goods.

There is a lot to be unpacked, but the primary issue is how the GnosisDAO can issue grants without governance overhead for each grant given whilst making sure the grant funds are put to the best use possible.

Motivation

There is a ton of software, tooling, and educational resources needed to support developers building using Gnosis protocols. These community goods are in the best interest of GNO holders as they should lead or facilitate the adoption of Gnosis protocols. How the adoption of Gnosis protocols leads to the appreciation of GNO is a topic for another forum post. Still, I’m quite sure that appreciation of GNO is tightly linked to the usage of protocols produced by Gnosis.

The motivation is also somewhat personal. I work with teams to issue grants, albeit smaller ones ranging in the 1000 to 5000 USD mark. I’m a central point of contact for those teams, and I believe that for GnosisDAO to grow there needs to be a way that grant issuance can happen outside of Gnosis company structures.

Specification

A grant program has a few fundamental parameters that need to be addressed:

  1. How and in what currency grants are paid out in
  2. The min and max USD value of a grant
  3. A guideline of what is and is not suitable for grant funding
  4. A method to decide on issuing a grant
  5. A method to decide on if a milestone/grant has been reached
  6. The total size of the grant program

Each sub-DAO could have its own version of these parameters. For example, a sub-DAO responsible for issuing grants that fall in the range of 2 000 to 5 000 USD of GNO value specifically for the creation of tutorials.

Some initial ideas on the parameters above:

How and in what currency grants are paid in

I believe this should be GNO as it helps achieve a greater distribution of GNO and increases the number of participants in the GNO ecosystem whilst aligning the interests of the GnosisDAO and grant applicants.

Min and Max values

Anything less than 1000 USD could probably be better served through a tool like rabbithole/sourcecred. I’m not sure if there is a maximum but what I have noticed is that higher maximums tend to invite proposals which look more like startups looking for seed capital than people looking to produce community goods. Perhaps this can be better addressed by giving the grant program a narrow scope of what can/can’t be funded.

What is funded

Community goods. But what is a community good? I believe this falls under the same definition as a public good because usage of the good is not limited to an exclusive group, does not extract value, and its use does not negatively affect others. However, with the example above each sub-DAO would have a narrower scope.

How to decide on funding a grant?

I’d imagine the bulk of the discussion to take place over this point. One model to issue grants would be a sub-DAO that is essentially a committee formed on a multisig. The members of that multisig would be responsible for deciding on grants based on a charter. Administering grants is work, and there would need to be some method of compensating those who administer grants.

Here are some examples of this in the wild:

Uniswap: [RFC] Uniswap Grants Program v0.1 - Proposal Discussion - Uniswap Governance

Synthetix: Introducing the Synthetix GrantsDAO!

Futarchy

Issuing grants based on the outcome of a futarchy mechanic like Gnosis price impact or conditional markets, asking what impact the grant would have on a specific metric if completed. This has never been done in practice, but it would be a great test of futarchy as a concept.

Token voting

Grants issued by token voting, albeit with a different structure to GIP process. Perhaps something using quadratic voting with sybil resistance and lower quorum thresholds.

Something else? Please add in the comments below if you know of other ways in which grants could be decided on.

How to manage Milestones?

The simplest method but with the most overhead would be manually issuing payments when a milestone has been reached. There is an opportunity to use realti.io and kleros to be independent arbitrators of when milestones have been reached. Conditional Tokens representing successful completion of milestones would be given to grant applicats so they may redeem them for funds once the milestone has been reached.

**The total size of the grant program **
A sub-DAO to be created would require a vote from the GnosisDAO. To make it worth the governance overhead, we can expect sub-DAO’s to command 100 000 USD or greater.

Questions For the Gnosis Community

  • What do you think of what the GnosisDAO should and should not fund for grants?
  • What do you think about the min and max values for grants?
  • What do you think about how grants should/should not be decided?
  • What do you think about using conditional tokens to pay out for Milestones reached?

Disclaimer

The plans outlined in this proposal are subject to discussion and change. They may also need to be (re)structured to take account of legal, regulatory, or technical developments as well as governance considerations. This document should not be taken as the basis for making investment decisions, nor be construed as a recommendation to engage in any transactions. You are solely responsible for your own investment decisions and transactions.

4 Likes
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I’d opt for the simplest option to start and modify it if it becomes obvious that it is insufficient or that another option would work better. One nice quality of this sub-DAO structure is that there can be multiple sub-DAOs running in parallel, each using different mechanisms. So the efficacy of the different mechanism can more or less be directly compared.

In my opinion, a grants committee would probably be the simplest thing to get up and running. Perhaps the signers consist of both Gnosis employees (the current grants team) along with some community stakeholders who want to be involved.

Quadratic Funding (QF) is the mathematically optimal way to fund public goods.

I’ve been working on a side-project called clr.fund; a permissionless quadratic funding protocol and dapp. An interesting option for a sub-DAO funding Gnosis public goods (community goods) might be to spin up a dedicated instance of clr.fund, using GNO as the native token, and run periodic matching rounds to decide how to allocate grant funding.

This is obviously a little different to how GECO currently works, whereby prospective grantees request a specific amount of funds for specific deliverables. Rather, in QF, each round would have a fixed matching pool, prospective recipients would define the work they want to do, and the community would collectively decide what relative share of the matching funds to allocate to each project.

I’m happy to help facilitate this if it is something the community is interested in.

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I am not quite sure I understand the problem statement of this proposal. We do have the GECO program in place for funding initiatives that provide value to the GNO token but are too small for justifying going through the full GIP process. So GECO covers all funding needs from $1-100k without much governance overhead. Whereas higher decisions should be made directly by the GnosisDAO. My assumption was that the GnosisDAO would just fund GECO in the future with a 1-2 year budget attached to some higher-level objectives.

As for being more scalable / community-driven, nothing prevents GECO to become more like a DAO itself gradually by having the community involved, having open-door pitch events, a separate snapshot page to signal support. Even ideas such as futarchy and QV could be explored in the exisiting framework.

My concern is that it would require additional overhead setting up a new framework as a sub-DAO right away and there would then be two grants initiatives in parallel with a similar objective. At least this would require a clear picture on how they relate to each other an whether GECO would at some point cease to exist etc.

So if the primary problem is that GECO is not scalable / community-driven enough, I would suggest to rather make incremental steps with GECO to get to the same end-goal as described by this proposal.

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The problem, in my view, is that a grants program tied to a company is not sufficiently independent to garner community ownership.

This is a good point and a valid route to go down for the GECO program as it currently exists. An assumption of mine is that it would be more effective to start fresh with decentralization in mind. Like public goods, grant programs are no rivalrous and non-exclusive so there is no reason the two cannot exist at the same time which would be a net positive to encouraging/incentivising the creation of community goods.

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I agree that grants are a valuable tool to foster contributions to the Gnosis ecosystem. I also agree that it’s probably not viable that all grant decisions are done by the GnosisDAO.

However I also share Lukas’ concern, that yet another (sub) DAO would add more overhead than it would do good. I would rather start simple and then add more decentralization (i.e. decision making, discussion etc), if necessary.

In the current framework, how does the grant process look like and which steps require the most effort/involvement from Gnosis currently?

Also, is there any overview about what kinds of projects have received GECO grants in the past? Knowing this could help forming an opinion on how this should be done in the future.

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Best overview can be found on the GECO github: GitHub - gnosis/GECO: Gnosis Ecosystem Fund

Personally speaking, the co-ordination to get a grant signed off takes time, a lot of back and forth between the team applying for a grant and Gnosis MGMT. There is a relationship between the amount of money and coordination.

The second aspect process-wise which is time-consuming is figuring out if the work produced by the grant will benefit the community.

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Yes I think the final part Graeme touches on is especially valuable about this proposal:

GECO decisions are centralized and based on our internal funding parameters and priorities (which is great for serving this purpose and something that should not be disrupted).

Community Grants subDAO would be for an adjacent use case, which is funding of public goods for the ecosystem as defined by members of the ecosystem. Since we have the structure of the DAO by which to involve the ecosystem in such decision making (defining what development directions are desired and would be used), and Gnosis Impact to assess whether the decision to develop a public good would also positively benefit GNO value, it would be cool to see what kind of proposals arise with this subDAO.

I’m also hugely in favor, from a marketing and ecosystem development perspective, because it calls to mind the success of the proto-analogue of DAOstack’s Genesis Alpha that was directly influential in bringing many people to the space (including me :smiling_face_with_three_hearts:) who have continued to be devoted to working in decentralized governance after connecting with like-minded collaborators there and seeing DAO mechanics in action.

I think this initiative has the potential to be equally instrumental in forming a community around conditional tokens research and use cases in action! This does bring up an important element of both your points @lukas_gnosis @tschubotz – this proposal does impact different teams differently, and would need to be implemented accordingly to the unique, differing needs and objectives of each vertical.

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I take from this that the sub-DAO would strive for different objectives than GECO and therefore its existence would be justified even if GECO would be turned into a GECO-DAO. Could you elaborate on this?

For me, GECO is a vehicle to fund initiatives that drive the Gnosis Ecosystem. Those can be public goods, open-source projects, or even for-profit ventures. In what way would the objective of this proposed sub-DAO differ? What types of projects would be funded through this sub-DAO, which would not be covered through GECO (or a potential GECO-DAO)?

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Here’s my take on the type of sub-DAOs as well as how this exists with a program like GECO.

For Gnosis employees, GECO does not have to be a DAO. It can do the job of administering funds for public goods that benefit the gnosis community perfectly well as a company.

Should it be more transparent or involve the community more using methods like token voting or a product like price impact? Absolutely. Why, because involving the community should result in a more efficient allocation of resources to public goods that benefit the community. More work is required in measuring and defining the effective allocation of resources.

When it comes sub-DAOs or grant DAOs, I believe the case for these exist when the members of a sub-DAO do not rely on their employment at Gnosis for compensation in administering grants or have no affiliation to Gnosis other than wanting to support the growing public goods in the gnosis ecosystem.

Let’s take some hypothetical examples:

A community member makes a proposal to the GnosisDAO to fund a grant which will exclusively focus on the creation of educational content focused at developers for building on Gnosis protocols. The proposal asks for 100 000 USD worth of GNO and has in place a mechanism to payback funds that remain in the grant program after 1 year.

The sub-DAO itself is a multisig with people who have directly worked on content creation and have the judgement to vet potential grants.

There are more details to work out (so many), but this example illustrates what kind of sub-DAO proposals could come our way for the funding of public goods.

Or perhaps something related to Safe?

A safe community member who has encountered some issues regarding a Safe App, as a result they make a proposal to create a sub-DAO that focuses exclusively on Safe apps. It aims to issue grants on the creation of Safe Apps as well as quality assurance. Anything that improves the experience of using applications with a Safe.

You might say that GECO grants already issues grants for Safe Apps and this is unnecessary overhead. I don’t think these concerns are reasons not to pursue the creation of sub-DAOs for the following reasons:

Future Facing
I think a focused decentralised organisation can be more effective than a company. It depends on the mechanism and the founding team of the DAO. It might not be more effective now, but it will be, someday and GnosisDAO should be open to discovering these mechanisms through facilitating experimentation via sub-DAOs.

Overhead is placed on sub-DAO team, not Gnosis Ltd
Imagine if a passionate, safe community was actively working to allocate funds to projects that benefit the Gnosis community, and to do this independently of Gnosis as a company. This leads to scaling of the Gnosis ecosystem far quicker than relying on a single company.

There is work we can do to improve GECO, but ultimately to take this conversation forward we need a grant program proposal from a person in the community.

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I think I’m starting to see the motivation. GECO sort of works as a broad funding vehicle, covering both big and small grants in many different areas of the Gnosis ecosystem. But you argue that basically putting GECO as-is into a DAO framework would not work given that it needs to be more focused to work efficiently as a decentralized organization. In the same way, it does not make sense for GnosisDAO to make a $50k decision because the consensus process is not tailored to this, it is also not possible to put both the $5k and the $50k into the same DAO. Or the same DAO funding both Safe Apps and Conditional Token integrations.

Let me know in case I’m still not on the right track. :slight_smile:

In that case, however, I would propose not to have as a first experiment a sub-DAO that has the same objective and grant amount targets as GECO. I was under the impression this was proposed in the initial post so therefore probably my misunderstanding. Because that would contradict the initial notion that GECO as a DAO would not be effective. Making a sub-DAO that has a much more defined objective (e.g. fund Conditional Token integrations) makes perfect sense to me.

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Yep with the addition that community ownership is important and I’m not sure GECO, as governed by Gnosis as a company, can get this as efficiently as a community proposed and run grant DAO.

Yep this is reasonable and I’m confident that the more focused the Grant DAO’s scope, the better it will perform.