PROPOSAL: Should Compound governance contribute funding to the Nomic Foundation?

Summary

  • Nomic Labs, the team behind Hardhat, has become the Nomic Foundation, a non-profit organization dedicated to Ethereum. Our mission is to empower developers to decentralize the world.
  • The Nomic Foundation’s work will be focused on Ethereum’s developer platform with the objective of achieving a world-class developer experience, and generally improving Ethereum’s public goods support structures.
  • Hardhat is the de facto standard developer tool used to build Ethereum software, with more than 23000 Github repositories using it and tens of thousands of active users. Prominent teams relying on it include ENS, Uniswap, Optimism, OpenZeppelin, Aave, Balancer, Chainlink, Synthetix, and many more leading teams.
  • The new foundation will expand the Hardhat suite of tools and, most importantly, build long-term infrastructure to catalyze organic growth in the Ethereum tooling ecosystem, decreasing Ethereum’s dependence on any one organization to build and maintain core development platform components.
  • Seeking $30m in total funding from the ecosystem. Donations of $15M already secured by the Ethereum Foundation, Vitalik Buterin, Coinbase, a16z, The Graph, Polygon, Chainlink, a16z, and Kaszek Ventures.
  • We’re proposing to Compound Governance to make a contribution of $5m to the Nomic Foundation to support its mission.

What is developer experience?

If you are already familiar with this concept feel free to skip this section, if you’d like to learn more, keep on reading.

Understanding developer experience starts with realizing that software development platforms are multi-layered technical products and that software engineers are their users. Developer experience is analogous to UX for software developers, particularly UX in professional tools that are essential for abstract tasks and have direct impacts on productivity, effectiveness, happiness, frustration, and therefore cost.

The practice of software development is a complex discipline, and developer experience is significantly different from the UX of a note-taking app. When a professional is working on an intricate problem that requires deep thinking and accessing information via a tool, or when one’s creative output is directly limited by the capabilities of their tool, then the professional will be directly restricted—or empowered—by the tools being used.

An additional aspect that may not be obvious and emphasizes the impact tooling has, is that developers frequently don’t understand what they’ve created. Writing code that doesn’t behave as expected is routine, and the process of making it work as expected (debugging) is one of the core activities of software development, which is heavily aided by development tools.

Developer experience is about the effectiveness of interactions with platforms and their tools, as well as the feelings that arise when trying to meet a specific software development objective with them.

Empowering users to create something without knowing what they’re going to be creating is a difficult challenge. The author of a tool or platform cannot optimize for a specific use case, only for the abstract needs of software development in general. In addition, the development platform that software is built on ultimately becomes part of the software itself, and very often, the software directly interacts in some way with the tools.

Since the created software is dynamic and has a limitless life of its own, it’s easy for tools and platforms to end up constraining what is created or how. Software development, in general, is a moving target that keeps evolving. Tools and platforms need to accommodate a future that is partially unknown, making achieving a solid developer experience a challenge.

Some aspects that contribute to a good developer experience include:

  • Ability to get up and running quickly as a beginner
  • Clear, thorough, and detailed documentation that’s easy to explore and facilitates learning
  • Accessible developer community as a support resource
  • Freedom and flexibility to take the preferred path towards a solution without rigid obstacles
  • Ability to easily gather relevant technical information related to code failure
  • Clear and explicit error messages that explain issues and suggest potential solutions
  • Automatic resolution of tedious automatable tasks
  • Reusable infrastructure to easily build ad-hoc solutions
  • Availability of specialized tools for domain-specific problems (local environments, programming editors, debuggers, etc)
  • Fast performance

Developers are empowered to meet their objectives with a high degree of comfort and efficiency when there are high-quality resources available, well-designed architectures with APIs that get out of the way, and insightful tooling functionalities to address domain-specific problems.

When the basic tenets of developer experience aren’t met, developers feel frustrated and suffer significantly lower productivity.

Ethereum developer experience

When it comes to Ethereum, which is primarily a software development platform to build decentralized systems, developer experience is a key strategic aspect for success. Ecosystem growth requires more developers to build more software on top of Ethereum. Developer adoption and learning speed, core contributors to this growth, are critically affected by developer experience.

The rate at which the ecosystem innovates, coming up with new creations and solving difficult problems, both at the dapp layer and EVM/Solidity/Vyper layer, is also directly affected by developer productivity.

Software development platforms aren’t new, and playbooks established by the great developer experience success stories (Rust, .Net, TypeScript, etc) prove that achieving a quality developer experience requires a specialized approach paired with a long-term, big-picture strategy. The potential impact in executing a dedicated effort for Ethereum would increase the ecosystem’s pace of innovation and growth, building a powerful compounding effect over the long term for the entire industry.

The inspiration for our vision came from our experience building Hardhat, which allowed us to see how deeply challenging it is to build sophisticated Ethereum tooling. These challenges must be alleviated to bring about organic ecosystem-led improvement of developer experience that achieves world-class quality.

Nomic Foundation

Nomic Labs has been fully dedicated to Ethereum developer experience since 2019, and we’re now pivoting to a non-profit foundation formally dedicated to Ethereum. We’re aiming to build a long-lasting organization that makes Ethereum’s public goods support structures stronger by contributing to the Ethereum Foundation’s existing efforts, and reducing the ecosystem’s reliance on any one organization for development platform components.

Roadmap

Given the size and innovation pace of the ecosystem, there’s no way to foresee exactly what needs developers are going to have as things scale. However, we do know what engineering foundations the ecosystem will need in order to build its own solutions.

Our overarching engineering strategy is to empower the ecosystem to build its own specialized tools. This plan is based on four strategic pillars of the stack, each of which offers an opportunity to leverage a platform to empower the ecosystem to keep building open-source infrastructure.

For each of these pillars, we will build a platform. The four ecosystem pillars and platform opportunities we’ve identified are:

  1. Solidity
  2. EVM tooling
  3. Local development environment
  4. Ethereum connector library

The projects

Slang & Rethnet

Over the long term, these are our most important projects. Targeting the Solidity and EVM tooling pillars, Slang and Rethnet will serve as core infrastructure for the ecosystem to build new tools faster, cheaper, and better. We’re essentially building the tools that would have let us build Hardhat a lot faster. We previously published a Medium post with high-level descriptions of how both projects will complement each other.

Slang

A Solidity compiler designed as a platform for tooling development, an approach also known as compiler as a service. Its top priority will be servicing tools through domain-specific APIs. Much like .Net’s Roslyn, it will feature a compilation pipeline made of distinct reusable components with standalone APIs. A completely modular design guarantees that others can build on top of it by replacing the part of functionality they need to, and reusing everything else:

  1. Parser that is only concerned with producing trees from code. Usable on its own, for example, to create third-party formatters like Prettier plugins.
  2. Semantic analysis (binding) is concerned only with building a type system and validating the produced trees. Usable on its own, to implement third-party type checking, security/threat models, and more advanced third-party linting.
  3. Code generation. By replacing just this isolated part, the compiler can compile for different targets (e.g. non-EVM L2s).
  4. Language services. These will receive an immutable representation of the above (syntax trees, bound trees, codegen settings), and will only be tasked with answering questions. Usable on its own to expose in different IDEs (same service for VSCode, IntelliJ, Vim, etc). Reusable to extend the functionality of other editor features (task runners, testing, deployment, CI, debugging).
  5. Runtime observation APIs to support Rethnet.

All of this will be reusable to create entirely new EVM programming languages, since by replacing the parser and type system, one can get an entire high-quality toolchain working from the get-go.

Rethnet

To provide a simulated environment where developers can build and test their Ethereum software, tools need to replicate many of the components that make up a full Ethereum node implementation. This is a significant engineering effort, which given the complexity of Ethereum, represents a barrier to entry to tooling development given the depth of knowledge that is required.

Rethnet aims to make this easier by offering a native, flexible, extensible, fast, and language-agnostic EVM local development network, distributed as a Rust library, that is designed to be the underlying core in tools that provide debugging information to developers (like Hardhat, Foundry, Remix, Truffle, DappTools, etc). It will be a Rust library made to be consumed from other languages like TypeScript, Go, Python, etc as a native dependency. It will implement the baseline of essential functionality every tool should have like Solidity console.log, stack traces, and descriptive error messages, as well as implement code coverage, gas profiling, and a step debugger. At its core, it’s an implementation of an Ethereum node with a layer of EVM runtime observation to provide development features.

Building a new Hardhat, Truffle, Remix, or DappTools using Rethnet will be a much more manageable project, and Rethnet will be completely reusable for any EVM language through adapters.

Hardhat

Our flagship project targets the local development environment pillar, and it’s currently at an advanced level of progress and adoption. While Slang and Rethnet mature and catalyze organic growth in the tooling space, developers still have needs to be met, positioning Hardhat as our immediate-term solution to empower developers to keep decentralizing the world.

Hardhat is an Ethereum development environment that developers use to compile, deploy, test, and debug Ethereum software. Most importantly, it’s highly flexible, extensible, and designed to empower the community to build their own solutions. This strategy has been successful, and there’s already a valuable ecosystem of reusable plugins.

Hardhat’s roadmap is focused on becoming an extensible development environment with deep integrations across components in key areas of the tooling stack:

This roadmap leads to developers being well equipped to build powerful extensions to their workflow that increase their productivity according to their exact needs, and to then share them with the ecosystem in the form of plugins.

Hardhat will also eventually migrate to using Rethnet and Slang, increasing its feature richness, speed, and stability while enabling dogfooding at scale for our brand new building blocks.

Web3.js as a frontend platform

The OG Ethereum connector library, Web3.js, is being revitalized into a high-value project. By focusing on community and ecosystem growth, supported by an extensible architecture, it can become a great source of value, much like React represents in the front-end world, but for dapps. A website hub connecting community spaces, support spaces, educational resources, extensions, and related projects, combined with an active ecodev effort (workshops, talks, contests, and incentives), will create a source of leverage for the ecosystem. This will provide better troubleshooting, faster developer training, more reusable code, and, most importantly, the possibility of extending the library. This effort is currently spearheaded by the ChainSafe team.

Funding

The Nomic Foundation aims to benefit the entire Ethereum ecosystem, which is why we’re fundraising across multiple organizations and individuals within it.

The Ethereum Foundation is leading this round of contributions with $8M, alongside contributions from Vitalik Buterin, Coinbase, Consensys, The Graph, Polygon, Chainlink, Gnosis, a16z, a_capital, and Kaszek Ventures. These donors make up $15M, and we’re aiming to raise $15M more.

Why Compound?

Generally, we think that allocating capital to the Nomic Foundation makes strategic sense for any protocol treasury that is aligned long term with the growth of Ethereum, and we’ve approached and will continue approaching several protocols.

The projects that the Nomic Foundation will deliver will create value for the entire ecosystem, including Compound. We’ll provide services to the Ethereum community that will:

  1. Continue the maintenance of critical infrastructure used to build most protocols (Hardhat).
  2. Increase developer productivity for every team in the ecosystem.
  3. Accelerate developer onboarding to Ethereum, increasing the size of the experienced engineering hiring pool and making time-to-productivity shorter for new hires.
  4. Accelerate the pace of innovation and the number of products being built.
  5. Increase market volume driven by new users and new products.

We believe this grows the market for everyone, including Compound, and we’d love to have the Compound DAO contribute $5m in funding to this community effort.

An ecosystem-wide effort

We’re currently seeking funding from multiple DAOs. We’ll update with the corresponding links below as we create each forum thread.

Links

Nomic Foundation Announcement

Thanks for the detailed proposal and for Nomic’s open-source tools. Our community and the others on your ecosystem outreach list have certainly benefitted from access to these tools. Hopefully Compound governance will ultimately be part of the new funding initiative.

It’s also great to see from the requests that Nomic considers us one of the most deep-pocketed DAOs, though that perspective may frankly be a bit dated. This request strikes me as at least a 2-3x larger ask, relative to DAO size, than the requests to other protocols.

To compare with ENS as an example: ENS has a fully diluted valuation of $1.5B compared to COMP’s fully diluted valuation of $1.2B; by that metric ENS is, financially speaking, the larger DAO. ENS also enjoys a revenue stream (from registrations) that is fully divorced from protocol security; in contrast, Compound’s “revenue” is in the form of token reserves which serve double-duty as a sort of insurance against bad debt within the protocol. One more example, Uniswap: we are only about 1/10 the size of Uniswap in treasury valuation, so a Uniswap-sized contribution (also $5M request) seems incorrectly weighted.

Currently a significant portion of our reserves are being considered to fund core community developer teams, leaving COMP emissions as the primary route for funding public goods.

I will state support for up to a $2M contribution in COMP (approx 17000 COMP).

But I am one of the stingier community members on the DAO spending front. Let’s hear what others think.

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I had a great chat with @FrancoNomic a number of weeks ago where he discussed all of what Nomic is planning, and I have to say, I’m impressed.

They’ve already built a great platform for development, Hardhat, which has greatly improved the developer experience. I’ve been using it for my own projects, I used it to build tools to aid in the recovery of the proposal 62 bug, and work is underway to adapt Compound protocol to use it.

Hardhat addresses many pain points of smart contract development; improving speed, quality, and security. The further development plans of Nomic will greatly improve upon these points. This benefits the whole ecosystem, allowing everyone to ship at a faster rate with fewer headaches and higher quality and security. Such tools will enhance the development process of Compound developers as well as those integrating Compound.

Compound was founded in a time of very limited tooling. The work Compound Labs did to bring about Compound protocol was marvelous - creating Saddle and various other tools. This was years ago, and thanks to Hardhat, we’re able to retire the responsibility of maintaining and expanding on these tools as we shift to Hardhat. Once the shift is complete, we’ll be able to dedicate more of our resources to what we’re best at - providing the best lending and borrowing protocol.

I’m very supportive of this proposal and can’t wait to use the tools to come.

Hi all, I’m representing Avantgarde Finance. We’re supportive of this proposal.

Building on Ethereum is complex. Even today, there’s no getting around it. Having spent a decent portion of February using a Hardhat mainnet fork combined with locally deployed subgraphs to build and test the front end for Enzyme’s integration with Compound, I know this challenge intimately. Conservatively 50% of my month was spent messing with deployment config rather than building the app. With that in mind, I listened in for 45 minutes several weeks ago while our CTO grilled @FrancoNomic on the foundation’s plans (both for Hardhat and more generally) moving forward. As they lay them out, it’s easy to see a world where they’ve created a bedrock layer of modular, unopinionated tools and they’ve also showcased one opinionated combination of those tools in Hardhat. The potential for additional devops products to be built off of the base-level tooling is enormous.

There will inevitably be pushback on the price tag. Bryan from Otherinternet said it best in his post on this topic in the Uniswap forum:

As an initiative framed as growing/sustaining ethereum public goods, we need to view this proposal and others like it as an easy opportunity to mobilize stagnant capital, not a budgeting exercise.

Contributing to these public goods will empower present and future Compound contributors to focus more exclusively on building features and functionality that bring value to the protocol rather than devops configuration and tooling. In our opinion, this makes every future proposal easier to implement, every future request for funding easier to scope out and the teams behind those requests more likely to succeed.

The Nomic foundation has requested funding at a specific amount; as strongly as we may share the ideal of supporting public goods with a ‘yes’ to requests from top-quality tooling contributors like Nomic, there is no getting around the fact that the specific amount requested, together with the existence of the protocol’s other priorities (including internal funding for the protocol’s development needs and other public goods funding) unavoidably makes this is a budgeting exercise.

As I mentioned earlier, Nomic has requested the same magnitude of funding from Compound as it has from Uniswap, perhaps not realizing that Compound is only 1/10 the size (by fully diluted market cap of its governance token). Since no rationale was offered for the request size, I am inferring Nomic was unaware of the significant difference in valuation between the protocols.

It is perfectly reasonable for the community to support this at a funding level that is more generous than Uniswap if it wants; 10x just strikes me as excessively generous relative to the other organizations participating. I hope this will be funded at a level that is still generous but also more closely proportional to Compound’s market presence.

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Something we wanted to avoid when deciding the amounts was making it seem to the Uniswap community like we were taking advantage of the fact that they have the largest treasury. If we had weighted by treasury sizes, we would’ve had to request the vast majority of the funding from Uniswap, which didn’t seem like the right approach. So we went for funding tiers of roughly $500k, $1m, and $5m. The tier and specific amounts for each were decided by having conversations to see how a few people at each community felt about the numbers, and that’s what we went with.

We thought newer DAOs in less established projects might struggle with significant asks. Since Uniswap and Compound are some of the most mature and established projects, we believe both DAOs are well-positioned to decide on a substantial allocation like this. We decided to ask for amounts that we considered wouldn’t break the bank for either one and make them the same, as part of the same tier.

While supporting Ethereum tooling is a positive, $5M in COMP tokens is a disproportionately large request, comprising 1.63% of the remaining COMP tokens, which are necessary to support user growth, community development, etc in perpetuity.

I will be voting against this proposal; it is too large, and asks too much of Compound relative to the rest of the community.

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Agree with this note–would look for a version of this proposal at a lower funding level :slight_smile:

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Uniswap:Yes $5M
ENS:Temperature Check Oppose > Agree $5M
Yearn:Yes $400K
Sushi:No, not interested
Compound: Agree > Oppose $5M

No one wants to be someone who doesn’t support Ethereum tooling, but business is still business, we should be against it.

Based on the community’s feedback we’ll lower the amount in our proposal from $5m to $2m.
We submitted the proposal last night with $5m, but we’ve heard more comments since then and after discussing we think this makes more sense, so we’ll cancel and re-submit at $2m.

Thanks to everyone who provided feedback on this aspect!

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You forgot Curve, Vyper asks for donations in the Curve community.

BitDAO Lido GnosisDAO …

We submitted our $2m proposal

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Can anyone provide a bit of background as to how this proposal fits into any overarching budget, strategy, grants program or processes that currently exists at Compound?

I noted a grants program/process for grant requests over/under $125,000 (still active?) - but am not seeing this proposal as part of that process? Would this be considered a grant, if not - why not? If so, why would this not be part of that process? This is not to say that the general idea behind the ask is not beneficial or positive, just that, as an organization, we would want the processes for giving out funding of this amount (grant or otherwise) to be transparent and fair to all those who may be seeking support for other worthy projects as well.

Would be helpful if anyone more familiar with the community/structure could help explain how this proposal fits within those structures (any budget, strategy, grants programs in existence). If any budget, strategy, grants process is still in infancy stages, query whether making a contribution of this size makes sense at this point.

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I don’t believe this fits into any overarching plan. I’m a little surprised to see this get so much traction, given the unclear value proposition for the protocol.

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Out of curiosity, what other communities are on the roadmap for this type of funding request? For example Aave core is listed as a user of Hardhat in the proposal, is that community also being commissioned for a donation? I didn’t see anything in snapshot or their forums.

Also, is Nomic planning to liquidate all of the COMP they receive from this request immediately after funds are transferred?

I am strongly opposed to this proposal as the proposition provides little direct benefit to the Compound Protocol writ large, and further, the ask is off by an order of magnitude.

To provide a simple example, let’s compare this proposal to what OpenZeppelin has committed to providing the Compound Protocol and community. OpenZeppelin has become the primary auditors of this protocol for the benefit of this community. They have assigned their own full-time engineers to audit the protocol and they have pledged to review all incoming governance proposals. Nomic Labs, on the other hand, is pledging to continue building the same tools they are already building. Nomic Labs is not pledging to focus the tools or building on the needs of the Compound Protocol. Yes, the Protocol benefits from a strong ecosystem of external teams and projects, built on the shoulders of giants. But if the community thinks $2MM is right donation for Nomic Labs, then should we also give equal- or greater-sized grants to the Ethereum Foundation for developing Ethereum, Joyent and Microsoft for making NodeJS and TypeScript, and Vint Cerf for his seminal work on TCP/IP. The DAO would be out of funds in a day if we scaled donations to match what is being considered here for Nomic Labs.

While, as an engineer, I strongly believe engineers should be paid for their efforts in open-source software, Nomic Labs is asking for [in aggregate] $30MM, which at prevailing rates implies 150 engineering-years of effort. Not to belittle the effort, but Hardhat is, at its core, a tool which invokes Solc.js and executes a fork of EthereumJS. The tooling wasn’t used by Compound for a long time as there are multiple viable alternatives (Truffle, Saddle, etc). I even wonder if the push toward Hardhat came with this grant in mind.

This is hard to say, but I honestly find this proposal is effectively changing my viewpoint on B2DAO in general, as the grant is scaled significantly beyond what I would consider in reason, and the grant is riding the wave of good support that came from the amazing proposals by OpenZeppelin, Trail of Bits and ChainSecurity. The protocol community should look at these decisions from a perspective of what would, in the long term, grow the value of the Compound Protocol and this community. On its face, this proposal offers little substantive benefits to the Protocol, while costing excessive amounts of limited resources.

I am, and hope others are, voting against this proposal with prejudice.

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A16Z:0x0f50D31B3eaefd65236dd3736B863CfFa4c63C4E
A16Z:0x92E3F4891B37d1fAAE471091599721115893eD24
Nomic Foundation:0x8c64c3d24c4df13b451d5bc9292b75e5dba2e02a

0xf50D transfer 65000 COMP to 0x92E3F4
0x92E3F4 delegating 0x8c64c3d
0x8c64c3d initiate a proposal Request a 2M$ donation

0x8c64c3 and 0x0f50D3 Voted For

Why did A16Z not initiate the proposal itself, but lent it to the Nomic Foundation.

Isn’t this a governance attack? It seems that they can ask for more donations to hollow out the protocol funds,

Maybe I should avoid getting involved in protocols that A16Z has invested in.

I don’t think these are apples-to-apples comparisons. The Ethereum Foundation did a token sale to get funded and holds a significant amount of ETH as a result (of which they’re allocating $8M to this effort), so they’re not in need of funding for the time being. Providing funding to Vint Cerf in the past so that he could work on TCP/IP would’ve been impactful, but funding him today would produce no new value in TCP/IP. Microsoft needs no funding support.

The objective of funding public goods is making sure that highly-valuable projects that don’t attract returns-seeking investors are built, since the incentives structure isn’t there for the market to take care of it, and that’s what we’re proposing as a non-profit dedicated to Ethereum. We’re no longer a business, and we’re not asking for payment for the work we’ve done, but for funding that will be exclusively used to build new software for the ecosystem.

If no one funds the kind of projects we’re proposing they will simply not happen.

For this framing to be fair it should be compared against what we’re setting out to do. I don’t think the amount we’re raising in isolation could accurately be described as being too much or too little without knowing what the team is planning to do with the capital. Compound Labs raised $33m according to Crunchbase, and I’m sure once the capital was deployed, more was needed to continue operating. The reality is that $30m for us won’t be enough either, and we’ll need to raise more in the future since we’re setting out to build a lot of sophisticated infrastructure, which we outlined in our proposal.

This is an extreme and inaccurate oversimplification of Hardhat, which isn’t the core of our proposal. At its core, Hardhat Network contains many of the same components a full Ethereum node contains, and an entire layer of Solidity tracing on top. As a simple example, we had to put a lot of time into building support for EIP1559, just like every other core Ethereum team did. EthereumJS provides just an implementation of the EVM (a single component), which doesn’t do anything for developers other than executing specific bytecode. It took Solidity 5 years to have proper stack traces and console.log(), with Hardhat being the first tool to introduce these features properly at scale. The reason wasn’t ecosystem laziness, but the fact that it’s a significant engineering effort to build passive runtime observation to trace Solidity at the opcode level with production scale quality. The same applies to Solidity error messages, which didn’t exist before Hardhat. None of this functionality is provided either by solc, or by EthereumJS.

We’ve built a very significant amount of code around them to provide the functionality the ecosystem relies on, and we’re proposing to build new alternatives to EthereumJS and solc. Both Slang & Rethnet are projects designed as platforms for the ecosystem to build more developer infrastructure. In the long-term, the biggest impact will come from the dozens of tools built on top of these, rather than Hardhat.

These challenges are explained at high-level in this piece about Slang & Rethnet, where we also explain how we’re turning what we built so far into something bigger.

Hardhat alone is a major engineering project to deliver with quality, polish, correctness, and stability to service >20k developers. The code is open-source for everyone to look at, but Hardhat isn’t the core of our proposal. The big picture combination of all of the projects and the bootstrapping of a non-profit engineering organization dedicated to Ethereum public goods is.

This isn’t a fair or accurate take on our proposal. The Hardhat everyone is using today is one component in a much bigger plan which we’ve outlined in the proposal. As one example, building a new Solidity compiler (Slang) from scratch is another major engineering project, which will benefit Ethereum and Compound indirectly in a significant way. In combination with Rethnet, these will give birth to many more tools, independent of Hardhat. These projects are in a very early stage, with Slang not having a single line of code written yet.

Working on a programming language, compiler, end-user tooling, and infrastructure for tooling developers is what building and maintaining a software development platform entails, and that’s what we’re doing for Ethereum. As a non-profit. This donation isn’t a post-facto award for the work we’ve done, but funding to create more value for Ethereum (and hence Compound).

I appreciate you chiming in, but I believe this perspective is misleading to the Compound and Ethereum communities as it doesn’t consider the importance, potential impact, extent, and complexity of the work we’re doing. Talking to engineers involved in the development of advanced developer tooling could be helpful to understand the relevance and cost of our work from an unbiased point of view.

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Thank you for your response here, and I do appreciate the work that Nomic has done on a variety of high-quality tools. I think the key driver that’s not being discussed here is: why should the Compound Protocol support this work? Is it because some developer of the protocol may someday decide to use some of the technology built, maybe?

Historically, we’ve seen developers submit a proposal to the Governance system with the grant given simultaneous to execution. Those proposals have a clear value for the community to assess. This proposal, on the other hand, has no tethered return value. The Protocol is sending assets in exchange for the hope that some of the tools developed by Nomic turn out to somehow be valuable for future development of the Protocol. This isn’t even a streaming grant that assesses milestones over time- it’s a lump sum.

The benefits created by Nomic will, honestly, help new teams and projects in the ecosystem far more than they will help the Compound Protocol itself. That work should be applauded, but we would be better off donating as individuals, not as a DAO, to support it.

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We addressed this in the proposal:

The line of thinking for why projects like Compound should support Ethereum itself is similar for why it makes sense for tech companies to heavily invest in open-source, albeit at a very different scale for now. Linux, v8, GCC, Chromium, LLVM, Rust, Node.js, etc are all examples of OSS public goods with heavy funding from many organizations building on top and benefitting from others also leveraging the created value. Compound itself exists thanks to these technologies being funded in the past. FAANGs all needed the internet to grow for their businesses to be able to grow, so they invested heavily into infrastructure that is reusable by others to empower the world to keep building tech.

Compound is aligned and dependent on Ethereum being successful, and this requires the ecosystem to keep evolving. Funding public goods grows the pie for everyone in the long-term, including Compound, but in a blockchain context where decentralization matters, I think it’s even more important for the funding for these efforts to come from a diverse set of backers, to allow for neutrality to flourish.

Decentralization isn’t simply an architectural aspect, but also organizational. If the Ethereum world we’re all building is reliant on the EF being the sole provider of funding, then we could go in a direction of not being as decentralized as we could be on the most core component that underpins the entire ecosystem, and that poses many risks. What if EF changes? what if it’s captured? what if management changes and becomes really bad?

Is the infrastructure that Compound is relying on both for its tech stack and for the growth of its business with certainty going to be effectively developed, maintained, and funded for the long-term, in a way that is strategically (see: decentralized) aligned with Compound and every other decentralized protocol? I don’t think the answer to this is a clear yes today, but I do think we can build that. An independent organization with diverse ecosystem funding being solely focused on helping Ethereum evolve into a world-class development platform is a really important aspect of increasing the odds of success, and that’s what we’re requesting funding for.

I realize that Compound is working to achieve similar objectives for itself, as it should, but I’m sure you know that these things don’t happen quickly. They take time to build, and if we don’t plant the seeds today, then we won’t see the results in the future.

Long-term, as long as Compound is Ethereum-aligned, it looks like Compound needs efforts like ours to be successful. I think it makes sense to allocate resources to make that happen.

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