Update
Thank you @kevin , @adam, community members and the members of the Compound Labs team for sharing your inputs on the CGP renewal proposal, more specifically on the RFPs. Without your critical inputs, the RFPs wouldn’t have shaped this way. Thank you @allthecolors , @Doo, and @cylon for creating the RFPs for each domain. Over the past two months, we’ve conducted several calls/sessions with each Domain Allocator to draft the RFPs, keeping in mind the feedback that we’ve received on the initial proposal and this thread. Additionally, we’ve included the RFPs for each domain in the updated proposal and have incorporated valuable inputs from community members engaged in this forum post to ensure that the RFPs are aligned with Compound’s roadmap.
RFPs, acceptance criteria and specifications for each domain
- Dapps and Protocol Ideas - Link
- Multi - Chain/Cross chain Strategy, Dev Tooling - Link
- Security Tooling - Link
Please find below the updated CGP 2.0 renewal proposal:
Title
CGP 2.0 Updates and Renewal
Summary
After successfully running CGP 2.0 for two quarters and taking into consideration its impact, we propose to renew Compound Grants Program 2.0 with a budget of $970,000 spread across 3 domains. We have received great feedback and support from the community, builders, and domain allocators to renew the grants Compound Grants and are grateful for their valuable inputs.
Background and Progress
CGP 2.0 went live on Jan, 2023 with a grants budget of $800k spread across four domains. Over the past two quarters, CGP 2.0 domain allocators approved proposals requesting $670,000 in grants and disbursed a total of ~$410,000 to accepted proposals from a pool of 100+ proposals. These domain allocators were elected from the community and by the community. The specific information regarding the accepted proposals and the funded teams can be found here. Please find below CGP 2.0’s funding breakdown, relevant metrics, insights, and proposed improvements going forward.
Funding Breakdown
Metrics
- CGP 2.0 team has received exceptional feedback from the builder community. After conducting a survey to gather feedback from the proposers and grantees, CGP 2.0 received an impressive NPS score of 8.6/10 and experience score of 8.2/10. Below are some comments provided for reference.
- The CGP 2.0 grants committee has accepted proposals from a diverse pool of over 100 submissions with an acceptance rate of 40%. This acceptance rate indicates high quality of proposal submissions and proposal pipeline. Throughout the grants program, CGP 2.0 grants team has consistently maintained a remarkable average communication turnaround time (TAT) of less than 48 hours and an average funding TAT of less than 2 weeks after the milestone has been completed. Furthermore, the milestone completion rate for all funded proposal and accepted proposals stands at ~ 74% and ~44% respectively.
- Total number of proposals funded - 35
- Number of funded proposals with new interfaces for supplying/borrowing/governance interaction - 14
- Number of funded proposals supplying/borrowing on Compound - 3
*Note: These figures exclude proposals that have not yet completed their first, initial milestones. The majority of the accepted proposals are actively progressing towards accomplishing their milestones, and we will keep the community informed about the progress of proposals in each bucket such as proposals supplying/borrowing on Compound, TVL through community calls and reports.
Insights and Feedback
1. Specific domains made it easier for builders to understand the scope and structure their grant proposals
In the case of CGP 2.0, we took a fundamentally different approach by ensuring that each focus area (domain) is communicated clearly. We streamlined the program to four specific domains, providing builders with a more focused and structured framework.
2. Knowing the allocator’s name for their domain helped builders with a significantly faster query resolution and TAT
The public availability and accessibility of the domain allocator played a crucial role in maintaining a very low turnaround time (TAT) for CGP 2.0. Builders who applied to a specific domain could directly connect with the respective domain allocator, enabling them to ask additional questions/seek clarifications.
3. A transparent and objective review process significantly benefitted builders, enabling them to incorporate actionable feedback into their resubmissions
In addition to maintaining a communication TAT of less than 48 hours, domain allocators assessed proposals using a domain-specific rubric in a transparent manner. This objective feedback provided builders with a clear understanding of the areas that needed improvement, allowing them to revise and resubmit their proposals based on actionable feedback.
Proposer’s Experience and Comments
- Governance Voting Participation and Decentralization Tracker by Signal Corps
- Alcancía - Be your own bank for Latin Americans by Juan Diego Oliva Heinsen
- 1Delta DAO - The decentralized margin broker by Achim and Kevin
- A Flexible Voting Money Market on Compound V3 by Ben DiFrancesco
- Wido - Collateral Swap Extension by Roman
TAT
CGP Demo Day
Challenges and Expected Improvements
While CGP 2.0 team has received great feedback from the builder community and Compound, there is still room for further improvement.
1.Ensuring a consistent TAT for all proposals - Although the average communication TAT for all proposals was below 48 hours and the average funding TAT was less than 2 weeks, there were instances where proposers experienced delays in response or were unaware of the reasons behind the delay. Similarly, some grantees encountered delays in receiving funding. While these delays can be attributed to factors such as product bugs, going forward the CGP team will ensure a consistent communication and funding TAT to all the teams and ensure that these delays are communicated proactively.
2. Addressing funding amount discrepancies - CGP 2.0 will be able to honor all funding commitments to all the accepted proposals. Despite that, there were cases where proposers did not receive the exact amount initially committed due to fluctuations in the value of COMP and funding delays. To mitigate this issue, the CGP team will aim to payout the grantees as soon as the proposer hits the milestone. We further propose paying out accepted proposals in stables rather than COMP to avoid potential discrepancies caused by COMP price volatility.
3. Improving operational efficiency - Questbook is working with Synapse and Docusign to integrate their service and enable KYC and agreement signing directly from Questbook. This will significantly improve the operational efficiency and funding TAT going forward.
Proposal
Based on the impact and insights derived from CGP 2.0, we propose renewing CGP 2.0 with a budget of $970k for two quarters. The domain allocators will utilize this budget to fund proposals that align with Compound’s roadmap. After researching, and gathering feedback from domain allocators, active community members, and builders, we propose supporting the following domains:
| Domain | Domain Allocator | Proposed Budget | RFPs and Rubrics |
|---|---|---|---|
| Dapps and New Protocol Ideas | allthecolours | $450,000 | CGP 2.x Domain: Protocol Ideas and dApps - Google Docs |
| Multi - Chain/Cross chain Strategy, Dev Tooling | Doo from Stable Labs | $200,000 | Multichain Cross Chain & Dev Tooling Domain - Google Docs |
| Security Tooling | Michael from Openzepplin | $150,000 | CGP 2.x Domain: Security Tooling & Enhancements - Google Docs |
- Given that Dapps and New Protocol Ideas domain received more than twice the number of proposals compared to all the other domains combined, we propose merging Multi-chain and Cross-chain Strategy domain with the Dev Tooling domain.
- Additionally, we propose increasing the allocated grants budget for Dapps and New Protocol Ideas domain to $450,000 and reducing the grants budget of the Security Tooling domain to $150,000 taking into consideration the number of proposals and allocated grant amounts for both domains during CGP 2.0
RFPs, acceptance criteria, and specifications for each domain
- Dapps and Protocol Ideas - Link
- Multi - Chain/Cross chain Strategy, Dev Tooling - Link
- Security Tooling - Link
-
The renewed grants program will maintain its dual-track approach, including both approaches i.e. outbound (sourcing based on the domain-specific RFPs) proposals to ensure alignment and value creation and inbound (open) proposals to invite creativity.
-
The Program Manager will share the status of proposals (whether accepted or funded) and ensure that the updates are effectively communicated to the broader community and members of Compound Labs through monthly forum posts and bi-weekly community calls
Specifications and Implementation
Similar to the model implemented in CGP 2.0, the renewed grants program will be run using Delegated Domain Capital Allocation Model. Each domain allocator will run their respective domain on-chain for full transparency using Questbook. The data and performance across key metrics will be visible to the community.
The disbursement of the grant will take place on-chain from a multi-sig wallet controlled by the program manager & the domain allocator. The domain allocator will approve or reject the application based on evaluation rubric. A Grants SAFE, with 3/4 multi-sig, between the program manager and 3 domain allocators will be setup. We will then have 3 SAFEs for each of the domains with a 2/2 between the program manager and the specific domain allocator. The funds for the grants program will flow from the treasury into the Grants SAFE. This SAFE will hold the funds related to operational costs, committee compensation, and the grants budget. Funds that will be disbursed to the proposers will reside in the domain-level SAFEs.
After the end of two quarters, the grants committee and the Compound community shall evaluate the performance of each domain using publicly available data and decide to change the domain, change the domain allocator, or the program manager.
Compensation
Sourcing, reviewing, funding, marketing, tracking, and nurturing proposals requires significant expertise and time commitment from the grants committee members and they should be fairly and competitively compensated for their efforts. Based on the learnings from CGP 2.0 specified above, we believe that a Program Manager is expected to dedicate approximately 25 hours per week, while the domain allocator is required to allocate an estimated 15 hours per week. However, these time commitments may vary depending on the number of proposals received for a domain and the domain allocators may exceed or work for less than 15 hours per week based on the proposal volumes. We propose keeping the hourly price the same for the Domain Allocators and the Program Manager as in the case of CGP 2.0
| Role | Per Hour Cost | Hours Dedicated Per Week | Total |
|---|---|---|---|
| Program Manager | 100 | 25 | $60,000 |
| Domain Allocator | 80 | 15 | $90,000 |
| Operations Cost, Misc. | $20,000 | ||
| Total Amount Required | $170,000 |
- Questbook will provide the grants committee its grants orchestration tool free of cost. We suggest that the grants committee continue with Synapse for KYC services and Docusign for all contractual agreements, as we have been using these services throughout CGP 2.0.
- However, for any specific asks from the grants team in order to run the process more smoothly, Questbook will charge for any additional feature requests based on the development overhead through a retrospective grant from Compound.
CGP 2.0 Funding Overview
(As on 4th October, 2023)
| Domain (A) | Amount Available (B) | Grant Amount Paid Out (C) | Grant Amount Allocated (D) | Surplus (E) |
|---|---|---|---|---|
| Dapps and protocol ideas | ~$144,433(3,293 COMP) | $242,850 | $387,851 | |
| Multi - chain and Cross Chain | ~$54,694 (1246.8384 COMP) | $50,001 | $87,003 | |
| Developer Tooling | ~$5663(129.06 COMP) | $52,177 | $90,877 | |
| Compound III Security Tooling | ~$40,759 (929.33 COMP) | $64,550 | $105,800 | |
| Total | $245,549 | $409,578 | $671,531 | 0 ($20,000 in the parent Grants SAFE) |
All unallocated funds have been returned back to the Compound treasury
KPIs and Expectations
Contribution of Funded Projects to Compound
- Number of users onboarded by the funded proposals onto their app/protocol
- TVL (if applicable) of the selected proposals
- Number of projects increasing supplying/borrowing activity on Compound
- Number of new interfaces for supplying / borrowing/governance interactions
- Number of projects that have raised follow-on capital after getting a grant from CGP 2.0
Program Success
- Increase in the number of contributors, proposals, and funded projects
- Increase in milestone and proposal completion rates
- Increase in NPS score from all proposers and grantees
- Lower response turnaround time to delegates’ and community’s queries
- Diversity in projects being funded across technologies, geographies, and demographics, to name a few. We encourage the community members to review the proposals across different domains during community calls regularly
- Timely publishing of comprehensive monthly grants report, outlining the status, progress, and impact of the program, ensuring transparency and accountability
Enhanced Community Involvement and Brand Awareness
- Increase in the community members’ participation to keep domain allocators and program manager accountable (measured by the number of people looking at the dashboard engaging with the forum post updates)
- Strengthened contributors’ sentiment and word of mouth towards CGP and Compound measured through frequent sentiment surveys/ polls to gauge satisfaction
Domain Allocator Roles & Responsibilities
- All Domain Allocators and the Program Manager will continue to uphold their designated responsibilities as outlined in the CGP 2.0 proposal.
- The Program Manager will share the status of proposals (whether accepted or funded) and ensure that the updates are effectively communicated to the broader community and members of Compound Labs through monthly forum posts and bi-weekly community calls. This will increase visibility proactively and enhance community participation, giving the community an opportunity to voice concerns and seek clarity before milestone payouts are initiated.
- Domain allocators may request an audit for the considered/accepted proposals, particularly those that involve Solidity code being deployed into production and directly impacting Compound. The audit requirements for each domain have also been detailed in each of the domain-specific RFP docs
About Questbook
- Questbook (YC-W21) is a decentralized grant orchestration tool, currently being/previously used by Arbitrum, TON, Polygon, AAVE, Celo & Solana.
- Considering the achievements of CGP 2.0, as well as the time commitment and operational expertise necessary for running an effective grants program, Questbook will continue in the role of the Program Manager. Ruchil from Questbook will assume the responsibilities of the Program Manager in place of Sriharsha Karamchati due to bandwidth constraints. Ruchil was the program manager for Polygon facilitating the disbursal of ~ $1M in grants. He works with Solana foundation and ecosystems within Solana on a frequent basis to help them design their grants program. He has received a grant of $250K from the Solana foundation for the same. He also worked closely with CGP 2.0 Program Manager and Grants team.
We welcome the community members to share their comments before proceeding with an on-chain vote.