CGP 2.0 - Delegated Domain Allocation by Questbook

CGP 2.0 - Delegated Domain Allocation

Firstly, thank you @adam_b_compound , @sukernik , @TylerEther @arr00 , Sovereign Singal and Sam Simmons for reviewing the proposal. It would not have shaped this way, if not for your valuable inputs.


  • We propose a Compound Ecosystem Fund should be launched to find and fund a wide variety of teams building on Compound
    • We propose a budget of $1.5M spread across 2 quarters. We are open to iterating this budget amount based on the response from the community.
  • We additionally propose this budget be managed by 5 individuals - each managing $300K (domain allocator). Each of these individuals would have expertise and builder-networks in their respective domains.
  • The performance of each of these domain allocators will be publicly viewable and auditable using rich dashboards.
  • End of every quarter the Compound community can come together to vote to replace, continue or increase budgets to each domain allocator.
  • We ( will help facilitate setting up these domain allocators and provide the tooling to run the grant program in an efficient and transparent way. We have previously/currently set up the grants process for Polygon, Solana, Celo and Aave.


An active grant program is a great way to attract and incentivize builders to build on Compound. The goal of this proposal is to benefit all the stakeholders - the builders, the token holders, and the people running the grants DAO.

Running the grants DAOs with a central committee run in to the following problems that this proposal aims to solve.

  • Committee blind spots - It is unfair to expect any grant committee member to have expertise across the various domains. It becomes impossible or inefficient to judge projects that may lie outside the committee’s expertise and may still be valuable to the Compound ecosystem. By delegating capital and decision-making to people on ground, we can engage the community to proliferate the ideas and projects that further the protocol.
  • Manager burnout - A single committee can handle only so many applications at any point in time. By not delegating and decentralizing the capital allocation, the grant program has a single point of failure.
  • Inadequate Tooling - Lack of tools and resources to effectively manage an on-chain governance process. Lack of tools and resources to effectively manage the grants workflows on-chain. Most of the grants programs currently use spreadsheets to manage their workflows with hardly any transperancy on the fund disbursals and application reviews.

By having domain allocators we will be able to delegate the outreach and disbursements to members of the community who are the closest to builders. Giving them access to capital and authority to disburse will go a long way in improving efficiency and reviving the grant program for Compound.

Specifically, this program aims to

  • Grow Compound’s grant program - measured by the number of builders applying and building on top of Compound
  • Delegate capital allocation - to identify, attract and fund projects/builders that the grant program would otherwise not have funded by delegating capital allocation to members of the community rather than a central disbursing committee.
  • Strengthen the builder community in the bear market - a crucial component of the community is to keep the builder activity alive even during the bear market. The building keeps innovation and optimism in an otherwise grim market condition. It also drives participation and transparency for the broader community.

Program Design

We also believe that more decentralized funding is important for the future of the Ethereum ecosystem. We continuously try to allocate resources to third parties that we believe can make better decisions than us within certain domains.” - Executive Director Ethereum Foundation [link]

This program focuses on getting the community to participate in the process of delegating capital.

The Compound foundation sets a budget of $1.5M to be disbursed by 5 domain allocators. These domain allocators will be led by one active community member each.

Each domain allocator runs their program on-chain for full transparency. The data and performance across key metrics will be visible for the community to judge.

The actual disbursement of the grant happens on-chain from a multi-sig wallet controlled by the domain allocator manager and one person from the foundation, whose responsibility will be to ensure that the application is aligned with the domain and in turn aligned with compound lab’s growth plan before signing the disbursal. The sole purpose of the multi-sig is to make sure capital is not being siphoned. However, the allocator is encouraged to make independent decisions.

Every quarter, the foundation & the community shall evaluate the performance of each of the allocators using publicly available data. The allocators can have one of the following outcomes from this review

  1. Discontinued domain: The grants manager (initially Questbook), will share the required voting to discontinue a particular domain, once the domains are finalized along with the compound team.
  2. Increased budget
  3. Replaced allocators: For replacement of allocators, or the resigned allocators, the grant manager (initially Questbook) will find the new allocator from the community, after discussing with the compound team. We are also working on making this process more decentralised.

The community members with certain credentials can also initiate a no-confidence motion to initiate a review off-cycle.

Product Screens

Performance Tracking

Edit Member’s access control:

Invite and Assign Reviewers

Application Review Screen:

Product Demo Link: Demo Video


We have also identified various domains that are relevant to Compound. The committee members recommended below are also the ones best suited to evaluate applicants for the mentioned RFPs, evaluating them on axes like community participation on forums, discord and social media.

We propose the following set of individuals to run one domain allocator for each, we’re open to more domain, alterations to the suggestions and prioritization :

Domain Credentials Needed Individual / Orgs Why it is relevant
Security Analysis Tools, Security Bounties Done 100 Security Audits Certora, More the security of the protocol, lesser the requirement from DApp developers to worry about security in their products
Risk parameter update research Paul J, Gauntlet team Crowd sourcing how and why the risk parameters should be adjusted
Developer tooling Core contributor to Compound and/or popular web3 Defi applications Arr00 Tools and libraries like hardhat plugins, gas optimizing libraries etc
Privacy-preserving transactionsI Deployed and audited zkSNARK, zkSTARK contracts TBD Increase scale of users participating in compound because of privacy preservation
Multichain Strategy Deployed 100 Solidity contracts Tyler Ether Will help compound roll out to multiple chains with appropriate caps
Open Oracle Geoff Hayes
Coding bootcamp Demonstrated technical writing and workshop organizing skills TBD Scale DeFi contributors to Compound
New protocol ideas and dapps Core contributor to Compound Github Adam Encourage more people to do experiments and compose on Compound

Domain Allocator Roles & Responsibilities:

The roles and responsibilities would be similar to the one used in CGP 1.0 incorporating the learnings from the learnings posted by the CGP 1.0 team here.

  1. Time commitment per week: Estimated 10 hours, might fluctuate based on the number of applications.
  2. Reviewing applications: The grant manager (Inititally Questbook) will ensure a 2 week turnaround time for the applicants.
  3. Allocation of amount for the accepted grant proposals
  4. Using the questbook tool to disburse the funds. It’s seamless, you can check it out here:

Questbook will proactively manage the tasks of the domain allocators, eventually this manager will be elected from the community itself.


  1. Domain Allocator is paid at $10 an hour, maxed at $500 a week.
  2. Grant manager is paid at $15 an hour, maxed at $800 a week.

Assuming 5 domains to start with, and a grant manager: We’re looking at ~40K operation cost for a quarter. We are open to iterating this amount post the inputs from the community.


What does success look like?


  • The prime objective of this model is to have domains that align with the. compound’s priorities like Risk, Security etc. This way the contribution of the projects as part of the grants program is directly adding value to the DAO and the token holders.
  • Increase in number of builders & projects being funded
  • Increase in homegrown leadership to run grant programs (measured by the number of people running grant programs)
  • Increase in community members’ participation to keep grant programs accountable (measured by the number of people looking at the dashboard and participating in no-confidence motion votes)
  • Diversity in projects being funded - across technologies, geographies, demographics, etc. We encourage the community to regularly review the project domains, during the compound developer call and also posting on . The grants team will also propose few domains like public goods, if there is a major traction, we will double down by allocating a % of funds to such domains.
  • Increased engagement in builder communities
    • Discourse
    • Discord, Telegram
    • Social media (Twitter, Reddit)
    • GitHub, Radicle
    • DAO Tools - dework, gnosis, etc.


  • An increase in community involvement keeps the grant program accountable
  • Builders’ sentiment toward Compound
  • Compound’s brand recognition in builder circles

About Questbook & Compensation:


  • Questbook (YC-W21) is a decentralized grant orchestration tool, currently being used by Polygon, AAVE, Celo & Solana.
  • Sriharsha Karamchati (co-founder, Questbook) will initially take the role of the grants manager till we find the manager from the community. He has previously setup the Polygon Grants program from scratch to help DAO disburse $600K across 70+ applications and he is one of the signatories for the Polygon Grants Fund.


  • We are willing to share the tool for free with the compound labs.
  • However, for any specific asks from the grants team in order to run the process more smoothly, we charge for the additional features based on the development overhead. From our previous work experience: We propose a budget of $50K to be kept aside for specific features.

Community buy-in and next steps

This is a temp check to gather interest to execute such a grant program during the bear market. If the proposal is accepted by the community, we will chart out a more detailed plan on how to setup a domain allocators and the processes to review their performance.

We will also be involving more members from the community to identify the right domain allocators and the top 5 domains that are most relevant to Compound.


I spoke harsha about this proposal, and i have to say this is incredibly robust and well researched. This will be a great legacy for all of us :slight_smile:


Thank you so much Sam for taking the time to review the proposal thoroughly and sharing your deep insights. :pray:


thank you for your tooling. we could have used it back in the day, but i am glad the future looks brighter


Thank you. I think there should an exclusive domain for dApps/Protocol built on top of Compound.
I’m thinking of something that can help solve issues and at the same time, benefits Compound by increasing borrowing/lending volume a significant percentage.


We’ll surely consider having dapps as one of the domain Charlie. We’re planning to have an exclusive voting for selecting the domains soon.


This looks a very promising proposal for the compound ecosystem :rocket::rocket::rocket:


Very detailed proposal.


domain allocators are the way to go! it’s a huge success with Ethereum.
love the proposal

Reopening compound’s grants program is much needed and would be very good for the community right now!



Considering that allocators/managers are not just reviewing/signing multisig transactions but have significant responsibilities within the process, I think higher compensation is appropriate. Otherwise I think the proposal looks pretty good, no other feedback at the moment :smiley:


Excellent, great to see the fruits of Questbook’s investment in learning the ins and outs of Compound’s needs and experience with CGP 1.0, which has led to this detailed and compelling proposition. I agree with @monetsupply’s recommendation to bring compensation for program stewards to a level that reflects their responsibilities and experience.

As critical as privacy-preserving transactions are to the future development of money market protcols on public blockchains, it’s hard for me to see that domain rising to the top 5. However, if the community does decide to prioritize this domain, I would be open to taking on the allocator role for this domain on the basis of my experience contributing to Aztec’s bridge to Compound.


What do you think should be the credentials of the dApp domain allocator. @Charlie_Danern ? . Do you have someone in mind from the community who can potentially take up such a role?


Thank you so much for coming forward with the domain suggestion, and contesting to be the domain allocator @allthecolors . We will definitely consider this domain while we take a vote on the domains. If prioritized, we can discuss your experience in this category for being the allocator. :slight_smile:


Thank you for this input @monet-supply . We will work on this and come up with the updated compensation number in the next iteration of this proposal. :slight_smile:


hmmm, maybe being advisor either Marketing or Technical Smart contract for several projects? I’m not so sure, but I think they should be able to detect great ideas that could potential work.
as for allocator, i don’t know since i only joined the community recently :smile:


Great job with this proposal @harsha! It’s extremely well thought out and it addresses the pain points of the first grants program. I very much support this new grants program!

The only problem that I see is the compensation, but this is more so up to the Compound DAO in how much it is willing to spend.


Thank you so much @TylerEther for those kind words & support. Yes, we’re working on updating the compensation and will take a vote before concluding on the final number.

1 Like

Nice to see the grants program being re-activated. Props to everyone involved!


I’m generally supportive of someone taking a swing at refreshing Compound Grants, and appreciate the effort that went into this post.

As always, the devil will be in the details. I’d encourage you to move forward with scoping this out further, and am happy to be a sounding board as you do so.


I think this is a really cool initiative, and I definitely think that we really need a new Grants Program. I’m not sure about the approach (personally I would like to see a lightweight/cheap DAO voting mechanism for the whole community to participate in as opposed to pushing the decision-making to individuals), but it seems like a worthy experiment for 2 quarters, and the alternative right now is nothing. I don’t think the proposed set of domains and allocators makes a ton of sense however, and I’d love us to spend more time discussing that aspect of it. I’m glad to see that that’s the plan. I’d also be thrilled to see @allthecolors and @monet-supply supply on the list!