Funding Ethereum Aligned Ecosystems - Nico Gallardo

Transcript

testing. Does it work? Yeah. Awesome. Cool. Well, hard to uh go right after two of the greatest figures on uh the internet, but I'll do my best. Uh hi everyone. Thank you. I'm uh Niko Gallardo. I'm the community lead at Octant and today I'm going to talk about funding Ethereum aligned ecosystems. I'm going to tell you a bit of the history of um some experiments that we did that led to what we're building now that should help with this mission. And at Octant, what we call Octant V1 was an experiment where we

staked 100,000 ETH uh provided by the Gollum Foundation. And the yield that was generated through this staking was split in three. One to reward GLM lockers, the second to a matching fund to fund public goods, and the third for operations and growth of the Octant project. to visualize a little bit better uh how this works. Um we have first the golem foundation staking the uh Ethereum and in the Octant app uh what happens is that the staking rewards that are produced they are distributed to Octant users that we defined as the um token

holders and lockers of the GLM token. And um the other part as I mentioned goes to this matching fund. The users then can decide to withdraw their Ethereum rewards to their wallets or they can use them to donate um to the projects that participate in our funding rounds which will then uh proportionally receive uh funds from the matching fund. Uh who here knows what quadratic funding is? Can you raise your hands? Okay, a few of you. Basically, the way that the matching fund is distributed uses quadratic funding. And what that basically means is that uh the

projects that receive the largest amount of donations which can be seen as votes uh from the the majority of the um of the voters receive a largest amount of money versus the projects that receive maybe an equal amount of money from donations but from a lower quantity of people. So that's how we've uh distributed um funds across eight epochs. That's how we call the the funding rounds. And each epoch has between 20 and 30 projects.

And we have in total funded 86 uh unique projects uh across primarily uh the Ethereum ecosystem but also open source, privacy and even uh climate round. We've funded in total more than 8 million with this uh method and have rewarded our uh users or GLM lockers with almost a thousand ETH. Some of the projects that uh have received funding and continuously from us. I see Cheeky from uh Protocol Guild here. I've been recurring participants but also L2B. I saw some people here um from that project as well. um Ethereum

cut herders, hyperserts, revoke cash, rod key, funding the commons, eth staker, really a bunch of projects that continuously come back. And as you can see, the vast majority of them are quite Ethereum aligned or help progress Ethereum. So we thought, hey, okay, we're doing quite a good job at funding Ethereum. How can we make this even more sustainable? But even more, how can we kind of uh put this into a sort of protocol so that other ecosystems can apply our learnings and do the same for their own ecosystems. So we saw a big opportunity uh similar to the Golem Foundation that had all these ETH uh sitting idle on

their treasury. There's really a lot of projects in our ecosystem that have a bunch of funds just sitting on their treasuries or a bunch of their own tokens sitting on their treasuries. Um, most of them use these tokens uh to fund grants which is rather inefficiently not only because the process is not great but also because they keep bleeding this treasury in order to fund their ecosystems. Uh so the growth stalls while funding stays unsustainable. On the other hand, we have a wide variety of both allocation mechanisms like quadratic funding, the one I mentioned, or conviction voting, a bunch of uh different allocation mechanisms that are being built nowadays and DeFi uh

strategies that help us generate yield. And uh maybe as a side note, there's also uh the flag of Ethereum alignment being waved around without any actual proof or you know there's a lot of debate nowadays about who is actually Ethereum aligned and who's not. So um what we saw the opportunity to unlock is to put these um idle treasuries to work for their own ecosystems uh without uh exhausting them. This we do the same way that we did with uh the Golem Foundation funds by leveraging yield generating strategies and funding uh grant programs and by doing that we

empower the community uh through different allocations mechanisms uh that I that I just mentioned. All this while uh demonstrating Ethereum alignment by find funding what we call the ESF the Ethereum sustainability fund. So what we're trying to achieve there, what we're building is uh a protocol that we call it an ecosystem growth engine. That's what's going to be Octant or Octant V2. And here is how the value flow would work roughly for a project with a token. Um they would stake their tokens into the protocol generate yield.

This yield is allocated by the token holders through one of the uh mechanisms that I mentioned. Then the the projects that receive this funding through their uh grants programs uh create value for the ecosystem which in return uh increases the value of the entire project um itself which goes back to step one where like the the yield that's generated is a lot more valuable. And then uh we see this positive feedback loop that keeps growing um for the project. And then uh to to mention to dive a little bit deeper into uh what I talked the Ethereum sustainability fund at least 5% of the projects that participate into in

the Octant protocol uh will well 5% of the yield will go to the ESF. This will embody the project commitment to Ethereum alignment and at the same time they will receive governance rights as a project uh to decide where the Ethereum sustainability fund is allocated. Of course uh the goal of this fund is to fund Ethereum goods maybe like uh narrowing down the the public goods vision into Ethereum uh specific things. So to give a bit of a summary of what we are doing at uh Octant is connecting capital accumulation uh

mechanisms like any uh DeFi staking yield generation generating strategies with capital allocation uh like quadratic funding, conviction voting, all these uh different methods. Um and we aim to engage community members to shape their own ecosystem growth because they uh should know best uh how to do this and projects with a token can do this through their token by giving it another utility let's say and at the same time use uh these governance rights to direct the yield that's generated through the D5 protocols. So yeah, this is it. Basically, capital formation and capital capital allocation joined

together in a protocol uh to achieve sustainable growth for any ecosystem sprinkled with a little bit of Ethereum alignment. And uh to almost wrap up, I wanted to um make an ask for anybody who's building things infrastructure tooling or anything that's helping Ethereum. We're currently have a epoch open for you to apply and receive uh some funding. Um you can um scan this QR code and uh send me a DM and we'll point you in the right direction of where you can apply. But also for the protocol that I just mentioned that's kind of

like the evolution of these epochs that we're running. We're looking for ecosystems who want to use this mechanism to uh more efficiently uh grow and uh allocate the funding that's generated through the yield and at the same time looking for regions who help us identify cool allocation mechanisms and regions who help us uh identify good uh DeFi yield generating strategies and uh we're building a community of devs that uh help us build the octant protocol as well. So, thank you so much