S6. Ep. 4 - Downstream Grant Programs - Expanding the Superchain with Katie & Paperimperium

Transcript

welcome to the green pill. network podcast in September green pill will be hosted by the cartographers a high context community of individuals and teams dedicated to advancing the web3 grants ecosystem they'll explore the web3 grants ecosystem with topics ranging from novel funding mechanisms Grant councils and governance to emerging trends like Ai and direct to contract incentives this series seeks to bridge theory and practice by examining real world examples and featuring discussions with those who are closest to the action the next voice you hear will be Sav who contributes at getcoin and founded the cartographers sa will be hosting this entire season and I think that it's going to be a great season because Sav brings deep experience in web 3 grants

and capital allocation I'm excited for you to hear some of the perspectives from him and his guests without further Ado the next voice you'll hear is Sav enjoy all right we are live for the green pill podcast exploring Downstream Grant programs across the super chain um I'm s and I'm here with our guests paper and Katie who serve with me on the optimism Grant Council we'll start with some introductions Katie I'll pass it over to you sure yeah thanks for having me my name is Katie Garcia I am a delegate at optimism in the token house I'm also a badge holder of the citizens house and I'm on the grants council at optimism I

a super chain reviewer and then I'm also a part of the anti capture commission my other job is a as a proprietary investment firm called UDC our basic thing is bridging traditional finance and decentralized finance um through early stage startups in crypto and there's seven of us and we all came from the maker foundation so when the maker Foundation dissolved in 2021 we started our own investment firm and now we are focused on bridging trafi and Defi and that's my my other job I'm heavily involved to optimism as well nice paper give you a minute to introduce sure I'm mostly known as paper Imperium I am the governance lead at gfx

Labs so I handle our governance Affairs at various dii protocols and L2 Protocols of which optimism is a Cornerstone of our governance portfolio uh we've been around since governance started we're large delegates we have served on the grants Council since it started and have done a lot of work across the ecosystem so I'm real excited about best practices and other nerdy things about grants programs totally we share that in common I'm a grants nerd myself through and through so you know we'll jump into it you know in the previous episode we jumped into the sunnies with bji Carl and Chris from Charmers uh to take a look at that program that's running across optimism we've got this episode exploring the the

super chain and the grant programs underneath it and we're also going to be jumping into a future episode with other members of the grants Council to talk a little bit more about that group that we all serve in for this episode we really want to look at this concept of Downstream Grant programs and so as many of the listeners may know optimism through governance um and the groups that participate in that Express their intents and then from that missions are formed and then it's the job of the grants Council to review to propose those missions review the requests that come in against those missions and then ultimately teams can propose objectives towards those missions that help to advance the the vision of optimism a big one right now is this concept of expanding the super chain so optimism offering incentives to what I term is

Downstream grant program so participants in the super chain have expressed interest in running their own grant program that grows their ecosystem and also grows the The Wider super chain ecosystem the way that works is you've got uh two of the three members here on this call um that review those Mission requests on their Merit and work with those teams to vet that and ultimately make those approvals there were some approvals made just this week in terms of those incentives uh being allocated to some different ecosystem projects so I guess maybe let's let's jump into that a little bit and start with maybe the announcement this week um you know Katie maybe to kick us off talk us through some of the grantees that you know were approved and what the qualities of those

grantees were and um maybe a little bit on how that process worked yeah so I think so far we've had six chains that have been improved in total so first of all this is a brand new program we've never done done this before we've done the grants Council program for this is our fourth season but this is our first season doing the super chain grants and the idea is um we have a budget that we can allocate to different chains within the super chain and then they can um bootstop their own grants program so they apply and we review their proposal and we look at a bunch of different things um the most important things are in order to qualify a chain needs to be and they need to be contributing to

sequen or revenue and the grant amount the framework that we look at is that how much they're contributing sequencer revenue is uh affects their Grant amount so a chain that's contributing a lot to sequencer Revenue uh can request the max amount a chain that's newly live and you know still kind of like getting going um we're looking for them to request a smaller amount obviously so that's the biggest thing and then we look at how they have designed their grants program and how they are measuring success within their own program so like for the grants Council for example with an optimism mainnet it is Milestone based so you get a portion of the grant

Upfront for user incentives this is for a specific type of Grant and then when you meet those Milestones then you unlock the second portion of the Grant and so we're looking for chains to show that they've thought about like a way to do that within their own program and then we're looking for them to give kind of like a summary of what they're hoping to achieve with their program whether that's like an increase in TV users transactions volume whatever so like my advice to new chains applying is first of all unless your base probably uh lower your Grant amount uh the max is three million and the only chain that's going to get that that has gotten that as base and then um make sure that

you're really focusing focusing on metrics and how you're going to measure the success of your program because that's a super important part and that's something that we've learned through years and years of um I guess not that many years but seasons and Seasons crypto years which feels like a very long time totally in our um in our grants programs on op mayet is that you need to have some sort of like accountability and Metric space Milestones are like a great way to do that so the chains that we've seen that have applied and gotten a grant have met that criteria and they've done like a really fantastic job of like engaging with us and you know

incorporating feedback and just being like really communicative and yeah just like engaged and coming up with like a great program of their own um and so our role as the reviewers is to just like help guide them through the process and the the chains that have gotten a grant so far have done a really fantastic job of creating their own grants program and we're super happy to support them nice um paper maybe to have you touch on that a little bit you know given you've got experience working around Grant programs for sometime what was that experience like for you working with these teams what kind of feedback did you provide and you know maybe what were some of the Lessons Learned you know through that that will ultimately help to improve you know this program and kind of its focus over time yeah so I I think I I should

preface everything I say with the fact that I'm Only One reviewer and so other reviewers may feel differently or prioritize different things so I think Katie had touched on things like milestones and I I think expanding on that and just viewing grants as a process a repeatable process with good internal controls and oversight and treating a grant it has an entire life cycle it's not just give out the money and then you know maybe get a forum post six months later you know in addition to Milestones you want to at the end U hopefully have some kind of closeout process uh and that can be as simple as just a report back uh from the grantee or it could be something more in

depth um but you know you want to if a grant succeeded you want to try to understand why it succeeded and then expand on that uh in subsequent grants or if it didn't succeed uh why not was it uh an issue with the grantee was it an issue with the process was it an issue with the structure of the grant so you know grants programs have to constantly evolve and iterate so seeing a grants program that is set up to not necessarily be perfect right out of the The Starting Gate but with a capacity to learn from it successes and mistakes and evolve over time or respond to changing market conditions you know maybe they want to do a lot of stuff with

infrastructure today but then turns out you know in a few months what they really need is user incentives and the ability to be flexible or leave maneuvering room open to the grants program I think is a positive um I personally tend to take the view that these chains probably know their specific needs better than I do so while I do have strong opinions about what verticals are ones that I like to see money directed towards and which ones I think tend to be low return at least for now uh for this first round this is the first time we've done this uh I'm adopting The View that the the chains really know better than I do because not all of them are the same some of them

are gaming Centrics some of them are dcentric some of them are kyc real world asset chains so there's just it's not quite the same as handing out grants for optimism itself yeah look at them as like um like their overall like structure of their program and not necessarily like the details of like the grant themselves another thing that we should touch on too is that so there's two types of Grants within the optimism ecosystem and this is also true for the super chain grants program so there's the Builder Grant and there's the user incentive so Builder grants are locked for one year and they can be used for

anything from like operational costs development costs whatever um marketing and then the user incentive grants those need to go directly to end users with no intervention from the project organically so those are two different types of Grants and with the super chain they are requesting a portion of either the the lock tokens or the user incentive tokens as well they get the whole Grant upfront from us to do as they wish but then they are responsible for allocating that in those two different ways within their own program got it totally makes sense um when you look at the eligibility criteria you touched on it where you know it sounds

like these chains have some fairly basic eligibility criteria where they have to be active um online contributing to se or revenue and then you're really looking at those applications on the Merit of trusting that the chain um is doing what they need to do to set correct eligibility criteria for their grantees um and really you're just looking for signs of like strengthen how they're going to set up and manage the program ongoing is that fair to say or is there any you know kind of like introspection at that layer of the grant program in terms of like how they need to operate how they need to allocate or requirements they have for reporting you you know on those allocations back Upstream you know to to optimism the The Wider Collective no it doesn't need to

be um prescriptive it's just that the fact that they've thought about it like that they're looking at like accountability measurements and kind of like how they're thinking about like reporting and like measuring the success of their grants program um but we're not like prescriptive about what that should look like like we have our own tools that we use within optimism Grant Council um but we're just looking for the super chain granes to come up with a structure uh if it's similar to ours that's totally cool but if they have their own ideas of what they want to do like that's cool too we're just like helping them kind of like Define the structure of their grants program and like best practices but yeah in terms of

a chain being live and contributing a sequencer Revenue yeah that's just um I mean so like if a chain like just launched and they're not really contributing the sequence or Revenue yet and they're you know requesting the max which is three million op we're going to look at that and be like okay well you don't have you don't have much activity on your chain you know let's like lower that and you can always come back and ask for more but we want to see kind of like how the grant program is doing before we give like an additional Grant to the chain yeah makes sense paper maybe a question for you um when you got these applications in did you see any uh you know information from them on how

they're going to Resource to running the program do they have teams already dedicated to Grants did they already have a grant program and this is growing it do they intend to maybe decentralize through a grants Council I don't know if any of that information was shared but maybe just some perspectives on you in terms of uh how they plan a resource you know to to allocating these grants well we definitely ask them this stuff so so we and there was a the answer is it it depends there was a wide variety of structures some of these had run grants programs before um usually through their devco or Foundation uh and that they were so they had experienced staff that were looking to upscale what they had done in the past with more modest

amounts others were looking to stand up a new grants program and so there was at least one that uh was trying to model it very much on the optimism grants program with the grants Council uh others had mixtures of varying mixtures of community and uh you know company or Foundation staff that would be the decision makers some of these councils were structured with one executive who had the final say but with an advisory Council others were voting so it was a it's a wide variety and again we tended to at least I tended to try to be fairly agnostic so long as someone owns the responsibility and so uh you know who's

going to be making the decisions so then you can come back to them if things go well or things go poor without trying to these chains are KD pointed out at varying points in their life cycle so some of them have more mature communities or uh groups of stakeholders and and then others are not really intended to have large ecosystems anyway so we long way to say it depends but we did ask for this and I believe it's publicly and listed in all of their grants applications yeah it's definitely something that we look at what's the uh requirements for reporting back back to the grants Council the collective I mean in the traditional grants that we give out as the council we have um Milestone trackability is definitely something

that we look at in the evaluation rubric and we kind of ask you know people that are submitting towards these Mission requests you know how are you going to track your Milestones what does that look like um was that a similar process for each of these and it kind of it depends as well in terms of how they're going to report back you know in their Milestones like what I guess what can the community expect to see you know over the next few months um as these grants start to be allocated with those those programs reporting back in so I I think we have to differentiate between are you talking about the the programs that we're giving these grants to or the grants that they then make the programs that were're given the grants to yeah so Milestones are structured a little differently for these so they're

you know typically in the past we've uh done 40% of a grant upfront with 60% that gets unlocked when Milestones are met that's not really feasible for these um because we want them to have access to the funds and they need to be able to make funding commitments so that that format didn't really make sense so I I believe all of these are 100% unlocked up front uh and given to the grants program which then in turn has to provide them either locked or unlocked with different Milestone investing patterns you know at that are compliant with the overall optimism grants Council policies so their Milestones are I think maybe a little B it important that the big carrot here is that they probably

want to be able to come back and also not damage their relationship with optimism since in the long run the plan is for optimism governance to eventually have increasing amounts of powers and key holding over some of these chains got it um I know I've seen a lot of talk about this concept of the the law of chains and just kind of how there's the shared governance model it sounds like uh that wasn't something that was necessarily in scope in this round of Grants but it could be something that gets you know expanded in the future in terms of how the broader Collective you know participates with these Grant programs and kind of optimism proper um to help enable them ensure kind of like you know shared outcomes those types of

things is that fair to say Katie I guess yeah definitely yeah I mean this is our first time doing this program and like how we measure success of a chains grant program is going to be like that's something that we like need to determine um but right now we're looking at how each individual chain measure success of their individual program so like we have the same template like we do for the op mainnet grants where there's like Milestones but those are more just like a marker um they're not like beholden to those it's more like a um kind of like a goal of what you are looking for your chains like grant program to achieve but

in terms of the super chain grants as a whole we'll probably need to come up with some sort of way to measure the success of those as a whole once this season is complete which will be super fun to see like how it all went and like how this program you know like how successful it was because that like I said I mean this is like a brand new program for us that we've been doing so it's exciting maybe a mission request you totally yes I would totally do that mission request that's a great idea there we go you heard the alpha here first uh audience um no that that'd be really cool you know maybe that's something we should look into when you kind of look forward you know for the

program let's say it's six months down the road you know paper if you had to give just you know two or three bullets on what kind of like a desired state would be six months down the road with the programs that you know both have have been given grants uh today for this um and new programs coming in what would that look like to you so I mean I think kind of almost as a placeholder metric believe they've all been asked to track like the number of active developers so ideally they all increase the number of active developers in their chains um I would also just generally like to see increase in in number of users and in tvl you know both are imperfect metrics user is easy to game tvl is notorious

mercenary so I'm also just like the number of chains like or the each of the chains they they're not all generalized general purpose chains so I think it's really going to vary like Chain by Chain basis like if it's a gaming chain like you know tvl is not maybe that important we want to see lots of activity in user acquisition whereas if you're you know a defi centered chain then you know maybe activity is less important than tvl like particularly if it's like a yield bearing like real world asset thing you know so I think we're going to have to take this on a case-by casee basis and I think we're still kind of figuring it out yeah I'm just like a huge fan of

anything that can be um verified on chain and easily measurable so like that's the beauty of crypto right like there's so much information that's available to us so I like to see anything that's just like onchain measurable TV transactions users like all that type of information because it's hard when you have programs that don't that aren't easily measurable because you don't know the impact and there's so much that you can do on chain that's easily measurable so um that's always my preference you know I I know a big part of what we assess you know as part of the grant council at least a lot of the grants that I've seen has been you know this concept of super chain composability and obviously we want to

see new developers coming into the ecosystem maybe Kitty do you view this as something that current developers in the optimism ecosystem those that have been awarded grants Etc this offers them new opportunities that they can explore you know IE is their ways that we can make those Builders those those developers fungible right between the programs that maybe we've done as optimism proper with the grants Council and some of these super chain Partners is that double counting or are there going to be opportunities for those existing developers to jump in just as much as we want to see new ones coming in the ecosystem yeah I don't think it's like value extractive or double counting at all I think it's like the super chain like the Grand Vision is it's going to

be like one chain right so like the more developers that you bring into any chain is like good for the ecosystem as a whole and also like if you have developers that are building on like base and then they move over to you know derive or something like that that's a net positive for everyone I think just the more builders that you have in general doesn't matter necess necessarily where they're building like we're all part of the op stack and just like one big ecosystem so it's kind of like a net positive in my mind what are your thoughts on that paper I mean you know maybe from you um what are some ideas you know that we we could use to drive more new developers in that you'd

like to see U maybe some of these chains thinking about and then you know do you think that there's Pathways out there from the existing grant program the builders that we already have in optimism that have been awarded through retr funding the op Grant Council whatever it might be um you know to these programs is there ways that we can help you know as as a collective facilitate those Pathways versus Builders having to in some ways like you know build their way around in the dark and hopefully find those programs I think my thoughts are constantly developing on this I mean Everyone likes money so people like grants programs but it I think if you're a developer it really comes back to what why are you going to choose one one place over another and you know there are some subsidies like the audit sub code audit

subsidies I think have been a very successful program like that's kind of specialized and targeted at like a specific pain point and I think if we can be more imaginative about things like that I think that would be great but I think offering a user base for developers to have access to is like really there's there's no grants program that substitutes for that you know it's why so many people like to you know developers like to go to base right there there's a big big audience there you know optimiz arbit from danana you know like the the larger chains and l2s polygon big draw is not necessarily going to be technical or Financial in nature it's going to be the fact that

that's it's a market that they can then serve their product too and there's there's not really a way to get around that so um I I think I think my thoughts are are constantly searching around for ways to improve developer own boarding and user own boarding and and ways to you know to put them in the same place so that they can use each other's products and and benefit from each other I think as a builder though within the optimism ecosystem there's just so much incentive like we have the op mainnet grants and now we have the super chain grants and then we also have the retr funding which is like separate from what we do but still I mean that's like a great you get rewarded for the work that

you've done so there's like all these different paths for you to get rewarded for like building which is so cool and I mean it's kind of like a new way to incentivize Builders and like if I was a builder I would definitely want to come to optimism because there's so many different routes to get funding like you can apply to get a grant to build something and then if whatever you're building is successful you can then get a grant based on the performance of what you've built through retr funding so it's really like a great ecosystem to be a part of as a builder because there's just so many different ways for you to get rewarded for um what you're doing I think it's like really awesome and the

super chain composability is like a big part of that you know you you bring up a good point paper about the um audit providers and it makes me think you know it's very common in the web 2 world with AWS Microsoft Google gcp they offer this concept of credits where you basically have resources that you can tap into that aren't necessarily just kind of you know you're giving out tokens or you're giving them cash directly but you're giving them um credits that they can redeem towards you know Services um that could be valuable and so um I know that isn't the way that this program is structured today but do you think it could be valuable to maybe consider whether it be audit providers or you know certain elements of infrastructure certain service providers that have

proven themsel as strong optimism super chain partners that some of these programs could potentially tap into those resources and be provided those through incentives but maybe it's not you know direct op incentives right if that makes sense so I mean I guess Katie like what are your thoughts on that is that something that you could maybe see as as a future um state that we get to yeah and it actually reminds me that we have a mission request that's similar to that with the optimism as a venture studio so like yeah a lot of these startups new projects have issues with like you know just like the basic operational aspect of yeah I mean there's like audits marketing just general admin right and so we have a mission request right now

that is um designed to support new projects within the optimism ecosystem and help them with just like the general support that I mean traditionally like maybe a VC would help with right like just kind of getting them going with um some of like the operational setup that they need and so yeah I think that's great I mean this is kind of like if you think about it it's just like a new way of doing like a capital formation and like support for projects is kind of like the way I think about it so yes I think that's definitely like a solid path forward and if if I'm An established audit provider today would I be able to apply to that mission request um in a way that I could use those

incentives to kind of bootstrap going and helping some of these Downstream Grant programs or would it be a little bit different where that mission request only towards you know kind of new emerging you know companies um and teams well I don't know that an audit provider necessarily should apply to that mission request just because we have an existing program that they can apply to be a part of I think it's it's very open-ended it could be you know legal or accounting or you know other you as Katie said like all kinds of just kind of odds and ends things you know if you're a founder or a builder like you want to do your thing like the thing that you're building you don't necessarily want to be setting up payroll uh maybe you've never done that before um I think those are

the kinds of like boring you know unglamorous tasks that that mission request is is more more geared toward um I mean I think audit would be a good fit if we there was not already an existing program for it yeah we already have like the audit program this is for like this like boring but necessary aspects of like doing business where like a lot of these projects it's just like a couple Developers right and it's like they have no idea how to do marketing or payroll or just like the boring like mundane things that it takes to do a business and so this Mission request is tailored to that and to help these like new projects um kind of like get all the like boring admin stuff off their plate

which I think is Super Rad because it's like this is stuff that would normally like I said be something that like maybe like a VC firm or something would be helping them out with but it's like a brand new way of like doing this type of thing of like supporting projects and incentivizing totally and the audit Mission request in particular came as a result of a recognition that that was a wider need right and something that was kind of common across you know a lot of the reviews that we do projects that we see and even these these Grant programs so you know I guess the way I look at it is as more people apply to that mission request and more of those needs are surfaced and this program goes forward and you kind of see what the needs are on going from these Grant programs you

could potentially see other Mission requests that are more domain specific you know pop up potentially right oh totally yeah and I mean yeah the audit one was like one of the first programs that we came out with because it's like everyone needs to be audited like that's a win for us too right it's like we want the projects that are like building on op to be audited so that one is like a no-brainer and then I'm sure there's other things that will come up like um you know I mean marketing is the big one and yeah there's like so many different options of like how we could do this the opportunity still there right so this is an active Mission request the first wave of these programs has been announced if

you're a super chain grant program maybe kind of our super chain partner maybe Katie walk us through the process if you're interested in applying what does that look like and um maybe some considerations that way as you put the application together yeah definitely so the program goes until I believe the last date to apply is November 6th or 5th um I'd have to double check but it goes until November so and like I said before the requirement for um a chain to get a grant is to be live and contributing to sequencer revenue and you want to make sure that your request is proportional to the amount of sequencer Revenue that you're contributing and also how long you've

been live and you can submit your application any time and it'll get slotted into whatever review cycle we're in and I would just say to be very like aware and like check in on your application and look for like feedback and engage with the reviewers there's three of us um it's paper and I and then Jack who's not here so there's only three of us and yeah so we give feedback throughout the process um the things that I would say to focus on the most is just like the amount the metrics and how you're think about like accountability within your grants program and then the overall goals of your program and what you're hoping to achieve in the long term and

how you're going to report that yeah I think that covers it we've gotten some like really great proposals and everyone we've worked with so far has been fantastic to work with and it's been a really great experience and yeah looking forward to more awesome applications from these chains totally as we close out papers is there anything you would add to that in terms of you know I know you mentioned a little bit in the episode already but what you're looking for is those applications come in and maybe advice that you would give to applicants yeah I mean I can't really like give people advice on the merits of their application because it's not our job to write them for them but uh I think to kind of like tack onto what Katie was saying about applying I would encourage any super chain members that

if you have an application that's 95% done and you're just trying to figure out one or two more things usually I would recommend you just go ahead and submit because there's going to be a fair amount of you should expect some back and forth of questions suggestions clarifications for these anyway and so I I don't think that you're served by trying to make it perfect because I promise you we're going to find something about it to nitpick or ask about anyway so if you are 95% of the way done go ahead and submit it I think um in most cases I appreciate you both jumping on today thank you so much for the time and walking through this it was great to pick your brain you know on this topic and you know stay tuned for the audience we have more episodes

coming up around optimism in the grants Council uh sometime next week we'll be airing another episode with a few other Grant council members and looking forward to discussing more there a little bit about you know how that process works with missions and intents and some of the work that uh the team here on this call and others do so thank you both for the time it's been great chatting thanks for having us thanks for having me oh