Great to see your interest as a grantor for the DGP @RoboMcGobo. We suggest creating a separate forum topic for potential candidates to post their applications, making it easy for everyone to assess them in one place. Your experience in the Cosmos ecosystem is impressive!
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Iâd say thatâs the ultimate goal, to have such a governance platform. It seems like a product of its own though, not sure if you are implying that CipherLabs can build that. But if yes, I canât think of any reasons why we and other protocols wouldnât end up using it.
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Weâre definitely interested in helping to design and build a governance platform like that, but we envision an in-house solution tailored specifically to dYdXâs needs.
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Hi @CipherLabs, thanks for sharing your feedback on this proposal. You bring up a few points which Iâll address below.
Centralized vs. decentralized structures
Weâve thought long and hard about more decentralized structures for the DGP. Today, we donât believe a completely decentralized grants program is the best structure.
Decentralization comes at the expense of efficiency - there is no other way around it. The more people and stakeholders involved in a decision, the slower it takes to come to agreement. While decentralization is important for many reasons (resiliency, longevity, etc), we think efficiency is also critical, especially at this phase in dYdX v4âs life. Many of the largest initiatives outlined in this proposal (MEV, v4 infrastructure, validator tooling) require enormous amounts of coordination and communication between various parties involved. Without timely completion of these initiatives, it risks affecting v4, an outcome weâd like to avoid.
All this said, we think itâs critical that there are many perspectives within the DGP with decision making power. That is the motivation behind creating a separate âcommunity initiativesâ bucket with separate grantors with their own decision-making process. We see this is an optimal middle ground between a âcentralizedâ and âdecentralizedâ structure.
In this structure, Reverie is just one of many parties involved in the DGPâs decision-making process, along with trustees, the enforcer, the operator as well as the two other grantors. Reverie does not have unilateral control over any single part of the program. All grants under the âstrategic initiativesâ bucket are reviewed by Trustees. All grants under the âcommunity initiativesâ bucket are issued by separate grantors, and then reviewed by Trustees. All payments are done by the operator. The enforcer holds all other contributors accountable. The program is designed this way to ensure that many perspectives are heard and involved.
Payments
The payment issue you raise paints a rather incomplete picture. When we send payments in DYDX, we use the price at transaction time to value the amount sent. If that value ends up being below the amount due, we make the grantee whole in a follow-up payment. In this instance, you are referencing a fall in price after the transaction was completed.
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In the previous structure, Reverie also did not have complete control over the decision-making process. On paperâŚ
But trustees where approving ALL reverieâs proposals and ALL funding for the community cauldron was coordinated with Reverie, despite the absence of this arrangement in trust organizational structure.
Should we simply trust that something will change? I propose the following alternative. We do not question Reverieâs role as a grantor in the strategic bucket, but the selection of two other grantors, as well as all trustees, should be made with the involvement of the community in a decentralized manner
Suggestion:
- Selection of two other grantors for community be open to selection by the community. Candidates apply for role and then go through interview process (who do you trust to do this? or should it be done through AMAs).
- Selection of all trustees be up to community vote.
What do you think @Derek ? Seems fair?
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This is the Imperator team, and we would like to provide feedback as a grantee and share our experience working with Reverie. Imperator is a company specializing in proof-of-stake and data services across various well-known Cosmos projects, and we were granted the opportunity to run the dYdX testnet indexer, a crucial component of the dYdX v4 architecture.
Our interaction with Reverie has been nothing short of exceptional. From the outset, Reverie demonstrated a high level of professionalism and dedication, making them one of the most competent grant teams we have ever worked with. In a matter of days after submitting our application, we received prompt feedback and were invited to discuss our plans via a call. This willingness to engage and understand our vision showcased Reverieâs commitment to maximizing value for dYdX and ensuring a well-prepared transition to v4. Throughout the entire process, Reverieâs support has been invaluable, allowing us to work closely with dYdX, comprehend the infrastructure, and build a robust system for running the indexer.
As a team with extensive knowledge of the Cosmos technology, we firmly believe that DGP v1.5 plays a crucial role in funding immediate priorities essential for the successful launch and transition to v4. The v4 introduces significant changes compared to v3, and our primary goal as part of the dYdX community is to ensure a seamless experience for current and future users of the dYdX chain.
Given the critical and historic nature of the moment for dYdX, we support the proposed six-month extension for DGP. This extension will provide the necessary time and resources to address key aspects of the project, paving the way for a smooth and enjoyable experience for all users of dYdX.
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Smart move to extend by six months ND restructuring to onboard two more contributorsâŚ
This is a massive project and as such,I believe allocating more time to ensure a smooth process is a right move in the right directionâŚ
Kudos
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Appreciate the feedback and thoughts, @RealVovochka. Iâll share some responses below.
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Agree with you here. We invite members of the community to express their interest in joining as Trustee in this thread. Weâll organize an AMA next week for the applicants to share their backgrounds and interest, so the community can get to know them. The existing Trustees will decide on the finalists, and the community will vote on the new Trustees through the snapshot.
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Running the community bucket alone could be challenging for a single grantor. We think two Grantors will improve the overall experience and effectiveness for both grantees and the grantors. Community initiatives typically include smaller funding amounts. If we assume an average of $2,500 per grant, the bucket can issue roughly 80 grants. However, this 10% allocation is only a suggestion to Trustees. The future Trustees can reassess funding allocations based on how the program evolves.
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The best way to fund event attendance is an interesting question with lots of different opinions. In this instance, the grant involved an opportunity to speak at a conference and a stipend to incentivize attendance. The Grantees accepted the opportunity and funding amount. We understand that they are now unhappy with the amount, but thatâs an issue that should have been addressed prior to accepting the grant. Moving forward, I would encourage the grantors in charge of community initiatives to explore a standardized process for funding event attendance. This would hopefully improve understanding and satisfaction for future grantees.
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Reverie is a team of five. We feel that the team is well equipped and experienced to manage this bucket. Adding additional grantors feels unnecessarily redundant given our track record and focus.
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Assigning a separate contributor to manage payments and financial reporting adds important controls to the DGP. With multiple grantors, itâs important that the DGPâs finances are managed by a separate contributor, instead of one or many grantors with conflicting priorities. We also think this can improve the overall efficiency of payments.
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The 90/10 allocation is meant as initial guidance for our future Trustees based on existing context. We expect infrastructure and research to play an important role these next few months. These grants typically require larger funding amounts. Community initiatives, on the other hand, average smaller amounts. The allocation has been set based on these funding needs. However, the Trustees will be free to reallocate funding based on program developments. If, for example, an exciting community initiative pops up - the Trustees can adjust to make sure itâs funded.
Hope these answers have been helpful!
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The moving target that is v4 plays a big part in our ability to move forward on certain engagements. Our work with Chaos Labs is one of them. I have included a page on our website to make sure the work to date is reported in full. We are now actively working on renewing and redefining the scope of our engagement to bring the most productive work possible to dYdX. We can expect much more to come as the new protocol opens up and the chain goes live.
Meanwhile, Chaos has been doing great work on community initiatives like the Parameter Recommendations. Itâs awesome to see them continue to work on dYdX even outside of our immediate engagement.
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Appreciate your thoughts on centralised vs decentralised structures. However, I respectfully challenge your claim that efficiency is sacrificed in decentralisation. In fact, studies and industry shifts indicate the opposite.
Yes, decentralisation involves more stakeholders, but it doesnât automatically mean slower decision-making. Instead, a well-structured council-centric system, embraced by 70% of our industry, shows how efficiency and cost-effectiveness can be realised through collective decision-making. Moreover, this approach mitigates single-point failures and ensures comprehensive accountability, leading to more prompt resolutions.
Reverie proposes to draw a salary of $37,500 per month, which is considerable. Transitioning to a decentralised model, therefore, presents a conflict of interest for you. This isnât about doubting your dedication or integrity; rather, itâs about acknowledging that decentralisation would require sharing control and financial resources, which could be an uncomfortable shift.
Weâve seen applications lie unattended for weeks under the current setup. In a decentralised system, such delays would be minimised, if not eliminated, thanks to shared accountability. The community would notice inefficiencies and appropriate measures would be taken.
Furthermore, having a minimum of three grantors per bucket prevents a stalemate and minimises biases in decision-making. More hands on deck means more efficiency and fairness, as funding decisions would be based on merit rather than personal preference.
In sum, while decentralisation requires careful planning, it proves efficient, cost-effective, and beneficial in the long run. Hence, we should consider this transition to align with long-term goals and community interests.
The idea of a âcommunity initiativesâ bucket, while a step forward, only addresses part of the issue. In this model, weâll still need three grantors to avoid decision-making stalemates. Meanwhile, the Strategic Initiatives Bucket stays untouched, leaving Reverie with total control - a situation identical to the current one. Without Reverieâs approval, nothing progresses. For DGP v2, we recommend introducing three Strategic Initiatives Bucket grantors to truly decentralise decision-making.
Itâs vital to note that Reverie controls all initial approvals, creating a single point of failure in the system. Despite the later involvement of other parties, which shouldnât be necessary in an optimally designed system, the core approvals depend on one entity. If grantors were executing their roles correctly, a second round of approval from trustees wouldnât be required - as this just isnât efficient. The current setup is far from optimal. As the saying goes, even with lipstick, a pig is still a pig. To genuinely embrace decentralisation, we need a more balanced system.
The picture isnât incomplete, but your explanation omits the lack of payment notification. If those notifications were sent as standard, we could avoid price fluctuation issues. Instead, we find ourselves repeatedly chasing for payment details. With an automated system, such issues wouldnât surface for either party. Itâs as simple as that.
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Regardless of Reverieâs competence, having a single decision-making entity can lead to issues such as potential bias and one-dimensional decision-making. We need a balanced approach for v2, with the addition of two more grantors, to ensure decentralisation and accountability, irrespective of who the grantors are. This point isnât about competency but about the systemâs structure.
While assigning a separate contributor to manage payments and financial reporting is a step forward, we should aim for a system that fully automates these processes for v2. A well-crafted governance platform in a web3 environment could handle these tasks seamlessly. We stand ready to assist in developing such a platform.
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Hey there all,
In the interest of diversified service providers, especially given the nature of conversations being held in this forum up to this point, Lemma Solutions is taking this opportunity to express our interest in serving as the Operator for this new structure.
TL:DR is that weâre a Cayman Islands DAO service provider who has been working with communities across the eco-system to improve transparency and decentralization alongside each Foundation/DAO and their representatives. The responsibilities outlined for the Operator role by Reverie are consistent with roles we undertake for other DAO programs, so we believe our skillsets would be well suited to serve the community in this way.
Happy to speak further on the needs within the Operator role and how we can best meet them.
~ Max @ Lemma Solutions
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Itâs great to hear the community will get chances to see the applicants in the process and eventually the vote on the new Trustees will be done through Snapshot. The direction to having more transparency and communication between the core operation teams and the community is definitely appreciated.
Itâs also great to hear that the allocation is adjustable upon needs. Itâs a critical responsibility for Trustees to fulfill.
From my perspective, while Reverie is still going to be a SPOF controlling the initial approvals, having Trustees in the structure is one step forward for the DAO to make decisions in a more mature way. We can revisit how we can improve the currently-proposed structure by having early-on discussions before the v2 starts, like applying a council style structure as @CipherLabs and others suggested in the past or more Grantors (which can be promoted from the ones selected for Trustees in this v1.5 extension!) with/without Trustees, etc.
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Thanks @Reverie. As mentioned before, there is no doubt on Reverieâs ability in continuing to helm the Grants Programme given the importance of a stakeholder to understand what areas of focus are needed in this critical transition to v4. This is a great step forward on the progressive decentralization of Grants in a non disruptive manner over the next 6 months.
As a recipient of the dYdX Grants Programme, Iâd like to nominate myself for the Trustee Role.
- Whatâs your background? What previous work have you done?
Iâve been on dYdX over the past 1 year + and was the first and only ambassador on the Risk Analysis burrow. During this time apart from the risk weeklies, Iâve also coordinated the grant between dYdX and hummingbot to bring in maker volume. My 2 other grants were on:
- Trading Fee Optimization in collaboration with 0xclr
- dYdX LP Rewards Programme Review with the working paper published.
- Other forum posts include Bridging to v4: Assessing Token Bridges and Governance Transition to v4 : Supporting Endorsed Delegates to spearhead active community discussions.
Elsewhere, my research contributions at the moment are mainly in the field of MEV studies in the Ethereum ecosystem. And I believe my knowledge can help in the post v4 era in minimizing and suggesting economic designs in this area. As such, by being actively involved in the protocol and identifying areas of focus, my experience will empower me as a Trustee in assessing and approving grants, while balancing with the overall direction of the protocol
- What should the DGP prioritize as part of this extension?
- Liquidity provisioning in v4 (vs v3) and improve altcoin activities, as alluded to in my paper
- Governance support for community stewards
- MEV design
I look forward to being a part of the DGP as a Trustee in this next phase of dYdX.
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Although I propose to separate the applications of potential candidates into a separate topic, I would like to announce that I fully support the candidacy of @0xcchan for the role of trustee.
With his excellent research papers and constant activity on important topics in the forum and Discord, he brings immense value to the project. I consider him one of the brightest community members who will be an excellent representative of the community in such an important structure as the DGP.
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As an ex-dYdX Foundation employee working on all things governance, Iâd like to nominate myself for the Enforcer role in the amended Grants Trust. The Enforcer reviews activity performed by the Trustees to make sure the purposes of the Trust are being carried out.
I support @Reverie 's proposal to extend the grants program for an additional 6 months to continue funding immediate priorities that will help with the launch and potential transition to v4. A 10-90 split between community and strategic initiatives respectively over the next 6 months makes sense, given that the potential dYdX chain will be in its infancy, and initiatives to bolster research, security, validator tooling, MEV, user experience and integrations should be prioritized. Ultimately, the trustees would need to further deliberate on this, and the 10-90 split is simply a recommendation. A 20-80 split is also reasonable in my opinion.
I echo @BritAus and @tane sentiments around iteratively increasing transparency of communications, and it would be a compromise on efficiency if everything were made public. That said, as an enforcer, I will hold trustees accountable on progressively increasing the level of public communications to the community. Additionally, I will also work with trustees to review constructive feedback from the community around areas like election structures, compensation, and allocations across categories (non-exhaustive).
I believe I am an ideal fit for the role with my previous experience at the dYdX Foundation, have a sense of how the DGP can progressively decentralize as v4 is launches and matures, and have good pulse on the community.
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I wholeheartedly endorse Cliffton for the Enforcer role. While our views differ slightly - I believe a 20/80 split is more balanced - his deep understanding of governance and passion for decentralisation make him an excellent choice. His previous work with dYdX and our extensive discussions on governance assure me heâs the right person to guide the transition to DGP v2.
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I fully support Clifftonâs candidacy for the position of Enforcer. It seems to me that he possesses all the knowledge and experience necessary not only to fulfill the role of Enforcer but also to establish a solid foundation in developing a fully transparent program with effective communication within the community. Additionally, he will aid in transitioning to DGP 2.0. The program must be flexible, as funding buckets may potentially change. An individual like Cliffton, who enjoys the trust of all stakeholders, will help avoid potential conflicts of interest and other issues. For the program to succeed, it requires individuals deeply engaged in the project, and it is difficult to think of a better candidate than Cliffton.
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Thanks @Reverie for putting together the proposal, I think it looks good considering the circumstances leading up to V4. For the time being, it doesnât seem to make sense given the short period until mainnet to make widely sweeping changes to the program. Additionally, given the solid track-record of grantees and Reverie itself, I am in favor of extending the program.
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Iâm delighted to see the grant program shift towards a more community-oriented approach. Strategic projects often require long timeframes and can essentially be evaluated similarly to VC investments, as the tangible results from such initiatives are not immediately clear. However, a community-oriented grant program allows for smaller investments in projects that yield fast and understandable results and metrics.
The Community Cauldron
In my opinion, the âcommunity cauldronâ did not reach the anticipated success, mainly due to the decision-making process still involving Reverie, who understandably dedicated much of their time to strategic projects of greater importance. The community bucket should primarily distinguish itself from the strategic bucket by its quick decision-making process. The process of âscreening, conducting due diligence, interviewing, and negotiating with applicants in their categoryâ should not exceed 5 days.
Community Builders on Discord
Furthermore, I suggest establishing a distinct Discord channel named âcommunity buildersâ, where members can generate ideas that could potentially transform into grants for both the community bucket and, potentially, strategic initiatives. This interaction not only allows for the development of projects beneficial to the dydx ecosystem but also, more broadly, fosters the growth of our community, which has somewhat dwindled since the closure of the Ambassadors program. Members can gather into groups with different competencies, which enhances the value of the final applications.
Transparency in Grant Selection
To make the grant selection process more transparent, the text of the grant application will be published, for instance, as a separate topic in Discord. This adds transparency and enables community feedback before the grant has gone into operation. Overall, I believe the grant program should unify the community and not turn into a âhunger gamesâ scenario amongst applicants.
Community Knowledge Database
I also recommend establishing a community knowledge database. For example, if someone wants to conduct a dydx workshop in their city, they can leverage the experiences and presentations of other members. This will reduce preparation time and decrease the need for funding. The community knowledge database would also provide links to up-to-date information from the Team and Foundation.
Funding Targets
Now, I will briefly go over the Funding targets:
- Events and Workshops: I believe we should focus on funding Events and Workshops that community members can organize or attend. If a community member makes a presentation, they should be compensated in accordance with a transparent expense structure. The funding model for this will be transparent and equal for all such grants. I think itâs reasonable to focus on builders or traders workshops if weâre talking about Live events, while concurrently increasing online events, which enhance overall brand awareness.
- Promotional and Educational Content: This aspect seems to be a vital part of the grants, particularly during the transition to V4, when the entire projectâs architecture is undergoing significant changes.
- Tooling and Technical Resources: This direction should be funded carefully, aiming for a quick MVP. If the project proves promising, it can be transferred to the strategic bucket for further development.
- Analytics: All votes on the parameters specified in v4 Deep Dive: Governance - dYdX will necessitate extensive analytics to arrive at the right decision. As a person inclined towards data myself, I perceive this aspect as crucial.
- Other Marketing Promotions: As a person who has interacted with the community cauldron regarding marketing promotions, I comprehend the need for a clear system to evaluate the results of such events - including social media reach, participant count, and registrations through specific referral links. Such an evaluation system could be developed in coordination with the foundation marketing department. This will greatly speed up the process of evaluation and implementation of such grants.
My Candidacy
This is just a brief overview of what can be accomplished within the grant program. I put forward my candidacy for the role of Grantor in the community bucket. I believe I would be a suitable candidate that could take community grants to a new level. I look forward to discussing my ideas and candidacy in the upcoming AMA.
Sincerely,
Vladimir
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