CGP 2.0 Updates and Renewal

Proposals
26

Thank you so much @kevin for sharing your valuable feedback and inputs. Really appreciate the encouraging words and your initial support to kickstart CGP 2.0. We recognise that there is a scope of further improvement in CGP 2.0, and believe that the active involvement of Compound Labs, community members, and other stakeholders will be instrumental in making CGP 2.0 renewal a success. Such actionable and constructive feedback regarding an individual initiative can be viewed as great progress in itself. We have actively taken feedback from active community members over Discord and Compound community calls on a frequent basis and have proactively worked towards resolving them. We invite additional comments on this initiative. Going forward, we will also ensure to amplify our efforts to seek feedback and provide additional opportunities for comments throughout the duration of the grants program rather than near its conclusion or renewal initiatives.

Furthermore, we are thankful for the opportunity to engage in discussions aimed at further improving the grants program and its design. This transparent approach, distinct from other opaque programs that lack adequate data points to facilitate open discussions about crucial improvements, has allowed us to seek actionable feedback from Compound Labs team and the community members.

RFPs vs CGP 2.0’s approach

Prior to the launch of CGP 2.0, each domain allocator wrote comprehensive guides outlining the RFPs as well as guidelines for crafting well-structured proposals. The detailed documentation can be found on Questbook’s dashboard just below the title of the domain.

Proposal Dashboard Screen
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The guides for each domain are referenced below.

Outbound vs Inbound

While each domain had well-defined RFP and proposal guides, we acknowledge that we can further scale our outreach and sourcing efforts. To accomplish this, we have significantly scaled our team and efforts to grow the number of builders submitting high-quality proposals. We already have an organic traffic of 20k+ builders and have now appointed dedicated resources to source proposals aligned with the domain-specific RFPs to increase our sourcing and outreach efforts. In addition to this, we worked and will continue to work with the Compound Labs team to participate and conduct hackathons at various events to increase awareness about the renewed grants program and source projects aligned with the domain-specific RFPs. This will include various initiatives, including guided sessions, workshops, and sourcing activities, which were previously implemented to attract talent and attention to CGP 2.0. Furthermore, the RFPs for the renewed program will be finalized only after actively taking feedback from the members of the Compound Labs and community members. We are open to receiving further feedback on scaling our outreach and sourcing efforts.

Reviewing the projects funded by CGP 2.0, I question the value that some projects provide to Compound. Funded projects are occasionally redundant, given existing solutions. An example is the $30K grant to launch Comet on Optimism, which was approved despite Compound Labs already communicating the work being done there months prior. This grant was revoked after Labs cleared up the miscommunication, but it was concerning to see the cross-chain domain allocator’s lack of familiarity with the cross-chain work being done for the protocol. Another example is the Compound API kit grant to build a Typescript SDK for interacting with Compound, which already exists.

The evaluation criteria of “Relevance to our ecosystem" was designed as an obligatory field for domain allocators to complete proposals under consideration. Its significance lies in carefully evaluating proposals, ensuring their alignment with Compound. This requirement emphasizes the selection of proposals closely tied to the Compound’s objectives.

Evaluation Rubric Parameter
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Really appreciate you pointing this out. We’ve thoroughly addressed the situation regarding the Comet launch project, clarifying the matter with the proposer and resolving any miscommunication. As part of our efforts to prevent such occurrences, we’ve enhanced the role of the Program Manager. The Program Manager will now ensure that the accepted proposals are known to the members of Compound Labs every week, and over community calls along with syncing with domain allocators twice a week.

I’d like to avoid providing specific examples here, but there are many projects that collect fees from users, none of which are given to the DAO. There are other projects that seem more like a solution in search of a problem, as is the case with cross-chain infrastructure projects that benefit greatly from being adopted by a blue-chip protocol like Compound. Considering the significant portion of the DAO’s funds allocated to these grants, it’s wise for the DAO to reevaluate its fund allocation strategy, aiming to efficiently direct resources toward projects that generate maximum value for the protocol.

Thank you for highlighting this. Really appreciate it! With the Program Manager’s expanded role and the valuable input from Compound Labs, we are committed to prioritizing projects that align with the finalised RFPs and demonstrate a commitment to contributing their fees to the DAO. Additionally, we will actively seek inputs before finalizing evaluation rubrics to ensure that projects aiming to both generate and contribute fees to the DAO and provide value receive funding. We expect that the alignment of funded projects will improve significantly as we actively gather input from both Compound Labs and community members on domain-specific RFPs and evaluation rubrics.

Lack of Community Oversight

While we have and will continue to encourage community members to actively oversee the evaluation process and the status of each submitted proposal on Questbook, going forward, we will collaborate closely with approved proposals to facilitate the sharing of their proposal details and milestones with the Compound community. Some of the initiatives taken towards this direction can be seen here. Further initiatives will involve more frequent demo days, similar to the one conducted near the end of CGP 2.0, where the community can gain deeper insights into the ongoing projects and their impact to Compound. It is in the best interest of all stakeholders to deliver what is best for Compound to avoid any significant reputation damage.

This came to our attention when we realized a grant project received the green light from OZ to launch on mainnet, despite lingering security concerns tied to their contract. This situation raises significant concerns, as the protocol’s brand could suffer irreparable harm if any issues were to arise. While there seemed to be an implicit assumption that OZ, as the official security partner of the DAO, would uphold the quality standard, it appears this expectation was somehow overlooked. Given that any project launched via the grants program is backed by the DAO’s funding and implicitly carries the DAO’s stamp of approval, maintaining a high project quality benchmark is essential. Clearly defining the responsible entity for upholding this standard going forward is crucial to safeguarding the protocol, especially as more grant projects are shipped using the Compound banner.

We appreciate you raising this concern. This issue has been thoroughly addressed through in-depth discussions with the domain allocators, with special attention from the OZ members. As a result, the responsibilities of domain allocators have been extended to requesting an audit for the considered/accepted proposals, particularly those that involve Solidity code being deployed into production and directly impacting Compound. In order to streamline the code auditing process and avoid potential time-consuming challenges, the domain allocators will also provide assistance to the considered/accepted proposals by offering feedback on code quality and design.

We are dedicated to implementing quality assurance measures to safeguard the protocol and uphold and enhance Compound’s brand reputation.

Further Improvements

We acknowledge the potential for further enhancements, as highlighted above, and greatly appreciate the valuable feedback you’ve provided:

  1. RFPs vs Inbound approach - Although all proposers were encouraged to review domain-specific RFPs before submitting their proposals, we will finalize the RFPs for the updated program after actively seeking input from both Compound Labs members and the broader community to ensure alignment with Compound’s focus areas and roadmap.

  2. Designate OZ as the quality oversight stakeholder - We are actively collaborating with OZ on this initiative and have incorporated their feedback in this proposal to expand the role of domain allocators for improved quality oversight as initial steps.

  3. Tie milestone structure to value creation - During CGP 2.0, all proposals were funded based only after the milestone was accomplished. We have taken feedback from a few Compound Labs members on this matter and have linked metrics such as TVL to the grants program’s success.

We extend our sincere gratitude for your valuable suggestions towards further improving CGP 2.0 We request you and the community to proceed and participate in the CGP 2.0 renewal, taking the following into consideration:

  • Considering CGP 2.0 stopped reviewing proposals on June, 30th, a large number of small teams and proposals who could potentially contribute significantly to Compound are awaiting review on their proposals for over a month

  • While we acknowledge and appreciate the initiatives undertaken by other entities to contribute to Compound’s growth, we believe that their focus is primarily directed towards business development, expansion, and funding proposals within this domain, rather than prioritising and funding core protocol-related and technical proposals. We also believe that they can complement CGP 2.0’s efforts should the community decide to proceed with their proposal. We are open to collaborating with them to accomplish what is best for Compound

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