State of Grants and Delegation: Impact & Trends

Transcript

[Music] in the Bronx in New York where we were uh focusing uh to be able to direct the actual proposals because I was on the board of a few nonprofits at the time and saw the fact that it's a lot of people like swooping in from people who either have money or free time and being like hey you know what you need it's this thing and that just felt very uh not how support and growth should be going in terms of actually helping communities so yeah long story short there edow did not pan out but it was a great learning experience and was the first time really got into digging in more deeply around governance um so I'll save you the full life story but uh you know after gring uh going to grad school

getting a masters in public policy and then ending up at a bunch of research nonprofits uh really excited to actually be working on the industry side and playing around with some of these ideas so the focus for today is going to be talking a little bit about grants a little bit about delegation uh and then General discussion where does this need to be pointed to work did this die sure there we go all right cool um and again as mentioned please interrupt me like I would much rather have a discussion with whoever's in the room than just talk at it for the purpose of having a video later uh yeah it would just be a lot more fun for everyone I hope so let's start talking about some Grant Trends uh so in this Direction

with metago we have the grant Innovation lab where uh on the 2024 report we had around nine people collaborating including folks running Grant programs and just independent researchers and we've studied a bunch of different programs so in the 2023 version which was our first one uh we studied uh just about a dozen ones including you know like ethereum's ESP program a grant Stow some Sunset programs like the initial polygon program and the algorand fund uh and near was technically Sunset um and then like research program at protocol labs and some others uh this QR code is to that original report and I'll share it again at the end as well the report that we released this year uh covered uh I think it was around

13 Grant programs and five tooling companies uh and that's also the QR code is uh going to that report uh and this time we really expanded beyond the evm ecosystem so you could see just coincidentally by alphabetical order the whole bottom row is non evm right we had Solana we had rootstock which is a Bitcoin L2 uh we have Stellar Community Fund and their lead was actually one of the co-authors here and she covered octant um and yeah we covered a different ethereum program uh we had uh we were able to release right as a grant Stow had announced that their sun setting we were able to have kind of a retrospective uh with zerox Bill from there and cover some of that and yeah it was just really great opportunity to

both get more folks involved and cover more programs and yeah this year we were also able to include different uh actual Tools around granting we didn't want to cover the grant Stacks themselves but we did want to provide color on certain tools that are very related to granting such as hats KAG Gap uh metric Garden hypers certs open source Observer for folks who don't know like Oso open source Observer they're building a lot of uh public data that's available on Grant programs I think they have something like a 14 tbte uh data collection already of all the publicly available information and we're working on some efforts to help them grow that uh and then yeah like hypers certs are

all about impact markets and how you can generate those uh metric Garden is about creating webs of attestations uh around projects that actually happen so you know if you got a grant and you promis to do you know research on a thing or like let's say we got a grant to produce this report the whole idea of using metric Garden is everyone who interacts with that report can actually use e to attest to it and then you can develop this actual web of interaction understand and get closer to realizing its impact and then a tool like Karma Gap is all about accountability on the uh committed outputs uh so as part of a grant you know you promis to do some stuff well how does anyone track that right ideally whoever is issuing the grant has people following up uh in case you're new to granting in web 3 you will

probably be shocked by the amount of groups that don't actively follow and don't have uh basic norms and best practices uh you know from the non-web 3 world so yeah it's just really interesting to see these tools and I imagine next year when we cover this they'll probably be 10 times more tools out there so for those folks who just joined I will stress that as I'm going through this please interrupt like this is I I love having discussions much more than I love just presenting so yeah if at any point you have a question would love you to raise your hand and we'll talk about it so one of the more interesting Parts as we do this uh and I'm actually genuinely still frustrated by the fact that like I can't just give you a neat little chart that gives you all the data because all this data is

stored in different places a lot of groups don't like sharing it so it's actually a huge pain in the butt to get that data and I'll share a little bit more around Dow I5 or the grant metadata standard that we're working on through metago and dowar uh and actually it was part of the funding the commons design Jam that was going on earlier this week but I mean you'll see here just in terms of the overall numbers that we're talking about with web 3 grants uh we covered I mean this state of web three grants so this uh is between the two reports so 20 plus grant programs alone have shipped more than a billion dollars in four to five years uh and you know that's not including like op's dedicated 850 million op that's not yet shipped they've only shipped I think around like

60-ish million of it but that's what they have dedicated that's what they've committed to Grants right depending on the price of op that is a multi- multi-billion dollar fund right arbitrum has already shipped 70 plus million US dollar value of Grants right so there's a chance that collectively as an industry we're getting to the ballpark of 5 billion dollars spent on grants if we're not there yet we probably will be in a year or two and if you ask ask anyone who's shipped any of that money can you please show me the impact and like give me data and numbers and theories and models uh aside from like optimism that's probably done the most work in quantifying this um and even if you talk to Jonas or anyone else there they will still say there's a lot more to be done uh but if you ask most folks

they're like I don't know that place was good right like one of the projects that we covered um I don't remember if he said this on the record so I'm not going to call out which program but uh someone that had a100 million program they ran over a year or two years and then we asked him like how do you think it went he's like honestly I could have take 95 of those million dollars set it on fire in my backyard and it probably would have been more impactful because at least that would have been warm for like 20 minutes um so that just give you a sense of like how little thought goes into the infrastructure around impact right and that's a huge problem and the fact that we are not clear on what exactly are we spending money on why are we spending it right just because they

did is not a good response so like the fact that there's a lot of uh compe energy around just jumping into shipping grants uh is a huge red herring and a waste of money and like please just go donate that money to nonprofits that actually need it you will have more impact in the world if you do that if you don't have a strategy yep please startup survival curve um given sorry um given we're in a really early stage uh ecosystem as a whole is the you know 95 mil that would have been better burnt off um due to um just startups just not surviving 99% of them anyway on average I mean I think that's that's

giving a reasonable look at it I think that's a fair way to put it uh you know more broadly I think it's just right like when you're building a startup you kind of have to do whatever you need to do to survive is a lot of the mentality uh and in this nent space right like Bitcoin white paper was what 15ish years ago 16 years ago now um we're still super new right like AI seems new that started in the 50s and had Decades of like background development before it actually started hitting mainstream right so in my own opinion and I feel like I've been saying the same same exact sentence for like seven years now but I still think in like the development cycle of taking the comparison to the internet we've laid out tcpip we're not at the dot bubble

yet we've just somehow managed to like have a bunch of bubbles in between while we're just laying out the pipes right so if you ask anyone of your relatives who uh anyone here if you ask your relatives to like actually use crypto they're like step one like getting on a metamask is probably enough barrier to entry for them right so just like the ux UI like all these there's so many problems to solve and startups just want to do something and like try things so I also think a lot of the spending is just because like hey we have this magic internet money that we just made up and we're kind of sitting on millions or billions of dollars why not fund the ecosystem so I think part of the challenge with grants is that like VC investment granting public goods

Community Support funds audit support funds these should not all be in a single grant program uh which is why one of the takeaways I'm going to get to is the fact of like we're trending towards pluralistic Grant programs having multiple Grant programs to service different needs and even that will be a sliver of the full Grant allocation strategy map right uh the landscape of how you give money should be different if you are funding for-profit projects you should not be giving them the 17th round grant that does not make sense anymore they are a for-profit entity building they need VC investment or token swaps or something like that right if you're focusing on helping a community effort yeah that make that could make much more sense to like give a grant for an event like this right um and especially just in general there's a

lot of talk about public goods funding in web 3 I would argue almost all of it is Network Goods as Juan Benet and the crew at protocol Labs talk about it right like we're like for scroll let's saying we're new we haven't had grants yet this in in volumes so this doesn't fully apply to us but for many programs it's like well I'm really funding the things to make my ecosystem flourish right there aren't that many groups that are actually funding like core ethereum flourishing or core web 3 flourishing or even just like I want to see someone create an artist in Residency program where it's like hey we don't want you to use web 3 at all just like go create art with the ethos of decentralization like show people what it means I was actually sad that the person who said they had a

psych background from the previous talk left because I think one of the things that's missing most is like actual understandings of human behavior because like I have a lot of thoughts and theories about what it means to be an autonomous individual and then you show up at a dow and you have bags of money potentially hanging around in front of you if you act certain ways and that can subvert that so anyway yeah so with with the data sign and money there's just so much room for improvement there and that is something that we're working on and I'm definitely very happy to to talk about so let's get into some actual uh takeaways and Trends uh both takeaways from the report and general trends that we're seeing so the ones we'll broadly touch on involve mechanisms uh impact which I'll talk about that a little more

and community and a few others that didn't fit into those buckets on the mechanism side uh perspective grants so I give you money for you to go do a thing that is still the most popular model um there's a lot of pros and cons to that with I think the biggest one actually being more from the mindset about granting right philanth proper grants or government grants effectively no string attached for you to kind of go accomplish a thing but they're not going to hold your feet to the fire in the same way if you don't especially it's like why didn't TBL go up from that Grant right like the parallels to that kind of funding outside of web 3 don't actually clearly Port as well um so again there's just a lot of mixed thinking about it uh as

opposed to just calling it what it is if you want it to be VC funding great just call it VC funding and you have much better comparables to pull from and then you can actually be much more productive with what you accomplish um we're also seeing more staged funding so the days of like hey you want a 50k Grant where do I give you all 50k today that's yester years's uh very few programs still do that at the very least they'll give you at the start and at the finish uh though a lot of them especially as ticket sizes go above like the 50k in certain ecosystems 100K in others but multiple milestones and actual verification of Milestones before your next troncha funding is issued uh it's also really interesting to see I've talked to at least one Foundation that explicitly says we will work with the

team to set up borderline unrealistic Milestones not the first one they obviously want the first one to succeed but then like 2 three four uh in terms of like Milestone 234 they're going to keep setting more and more ambitious because they're pretty much saying of like well if you're just doing the bare minimum in coasting right like maybe it's just time to Pivot to a different funding model or something but if you want that second Grant like you really have to outperform I think that's interesting that could work well in some places you know if it's like research funding that I I would find that a little little less clear of how that sits well there um but yeah nonetheless there's more thinking about the actual mechanisms right we've seen like optimism kind of laid the groundwork for doing retroactive funding uh we actually had a separate report that was three

case studies on retroactive funding programs we covered Dow drops optimism rounds one through three and getcoin citizen rounds one through three um and yeah now I think since we worked on that report there's been like filecoin and I'm forgetting all the others I think five or six other groups have ran mostly using the gitcoin XYZ retro stack right think I butchered the name but like the getcoin product for it um and yeah we're just seeing more experiments which I think is really good um oh today's Friday I miss oh no yeserday I don't know but at funding the commons like auke just had his book launch on mechanisms and I think that there's a lot more writing and a lot more ideas for people to pull from of how you could structure really non-traditional Grant programs and I think it's important to think about like why what why are we

shipping money in the first place right what is the mission and vision for which we are trying to accomplish with deploying this capital and then from there you can start picking well if it's to grow community in a holistic way the way you want to support that Community might be very different than if it is more VC style ecosystem growth so I'm really excited to see more experimentation with the actual mechanism Choice section um and then you know with plurality I think uh like plurality Labs that I ended up getting bought out by Thrive protocol you know they were the first to like really push for that in the arbitrum ecosystem and for anyone who like follows ARB you you've seen one flavor of pluralistic grants um and we're seeing more and more groups work

towards that right and so like plurality right having multiple viewpoints around a single thing here the idea is that again the way you invest in nurturing local communities is going to be different than how you try to grow your tvl is going to be different than getting new use cases ET etc etc and so I'm really excited I know for scroll Dow as we're starting to think about these questions uh and we're currently going through a co-creation cycle for our governance so how can we design with the delegates and with our community that wants to be active how can we actually design together the first proposals that we create um as we're going through that process I'm really excited to see what are the flavors of programs that we want right what do we want them to accomplish then create a separate mapping of all

the mechanisms and then picking and choosing which mechanisms are going to make sense for the things that we want to accomplish uh and again just a reminder for anyone else joining please feel free to interrupt me with questions as we're going like there's Q&A at the end but yeah I always have more fun talking to people than at people um the big thing on the sort of impact side um which is how it's generally slung around and I actually think impact is probably the most misused term in web 3 um what most people mean when they say impact isn't actually impact what most Grant programs mean when they say impact is a combination of output outcomes and impact right so this is pulling from

program evaluation models uh if you're interested in this world like the Kellogg handbook on it is just like a beautiful resource in this direction uh follow up with me later if you want to link to it um but basically it's the whole idea that right you have resources you Channel those resources to fund specific activities those activities then produce an output people interact with that output and generate outcomes and then that playing out over years has impact so to make it more concrete a dow has money or a foundation or whoever's running a grant program uh they decide that they want to go fund new dexes getting built on their protocol so they want to fund the development right the activity is Dev and then the output is the creation of that Dex people then

interact with that Dex that's the output is uh or excuse me the outcome is how is people's experience with interacting with it and how is that affecting your protocol and then the eventual imp is how is the world actually different because all this happened right you could have had a lot of activity but then you look at it and you have 20 dexes and actually that one's pretty insignificant so was it actually impactful right and there's no easy way to chop that down in this arbitrary example right well maybe now they're not relevant 10 years in but they were the first and they were the one that showed that it was possible and then everyone else came right so it's actually really hard to quantify impact uh and for those who might have been at funding the commons yesterday there were a bunch of great discussions on it and you know

there are some people that are intensely in the camp that everything is quantifiable you just have to find the right way to capture it uh and then there's the more subjective camp that you know at best metrics and measurements are always approximations and there's actually a big danger that your metric becomes your goal and if you over are overly reliant on hitting like tvl growth then everything could just get optimized towards making that a blip and then it all disappears as soon as money goes byby and then are you actually better off so being really clear on again what you want to accomplish right what is the eventual impact that you want and thinking about how you can measure it and then backing into like what are the things that you want to fund to make that happen it's a much more arduous route it takes a lot

more time and overhead but it will save you a ton of energy in the long run right A lot of the time Grant programs get started where it's like someone on the team it's like their 17th job internally you are not going to be happy with the outcomes of your grant program right like you need someone actually dedicated to it even if you're shipping pretty small amounts just cuz like oppos of pain in the structuring it correctly visioning it designing it correctly pulling in the right people building the review structures like it's a long process it's not straightforward which is why it ends up being so hard right and it's important to keep in mind that right there are organizations that have been continuously granting now for over a century outside of web 3 of course you talk to the people who are running like

Ford Foundation Rockefeller Foundation government grants Etc all of them say like we don't actually know what we're doing if you have an honest conversation like we're just doing the best that we can just they've had decad of iteration to get closer to their own goals right and like web 3 is still finding itself in this world and so on that regard like the lot of accountability challenges exist especially Grant teams are frequently underresourced relative to other areas there's no one actually holding all the grantees accountable like I know I've been on The Winning Side of Grants where like we win a grant it just gets shipped to a wallet they didn't even tell us I just randomly checked and then the money's already there uh and then all of a sudden it's like oh well like when do you want a report or should I check in from someone

and they're like you'll hear from us when you hear from us and like that's just not helpful to anyone in the process right so like actually creating meaningful accountability structures is really important and now we're seeing tools like Karma Gap uh evolve where you know you can publicly report uh so folks that are using like gitcoin rounds I think I'm forgetting which other Dows are using so I don't want to accidentally misquote but there are more and more places that say hey please go fill out your Gap profile and update your profile there if you want that next round of funding so I think more of that accountability on the progress of Grants is really important and you know as I was showing the different Grant tooling uh especially in the context of out uh outcomes outputs and impact we need such better infrastructure right to

understand what is the impact like let's think about this event that we're at today is everyone having a good time should we do a quick Round of Applause for all the organizers and just how great the event's been exactly right this has been such a great event I know I've had a chance to like meet colleagues who I I've only talked with online and I've only had a chance to like meet a bunch of delegates who I've never met in person yet and just like make new friends and see old friends and that's all awesome right but where is like if someone asks you a year from now what is the impact of today's event it's really hard to say right a we don't remember right I'm probably going to forget in two days what I was doing here already just because the amount of

other stuff happening around this week right and then just so many things happen that and it's such a subjective Journey like someone can just tell me one sentence today that fundamentally changes how I think about government right like I know I've been part of these conversations throughout my life they're not regular but they do happen and so like when you have those changing like do I then go log on a tool and say that person just changed the way no right like there's no infrastructure and even if there was there's no actual easy ways or culture or Norms around doing these things whether it's celebrating whether it's just propping up and all these things so I think we we have a lot of room for improvement on the tools and I'm really excited to see these initial tools come out because that will get us

closer to what are better ones because until you try the first thing you don't actually know what's not working or what's missing uh and you know coming back to the grant data that we were talking about before right better standards are needed and I know I was talking with a few folks uh right there's like the optimism or they don't publish it that way but like optimism has its own standard around grants uh we just developed that metago and dowar I guess it's been like a year and a half now but uh thanks to Rashi and Josh who I'm not sure is here today and others uh we've been working a lot on actually improving uh metadata standards and we don't necessarily need like one to rule them all it's okay if there's a plurality of Standards because if at least there's one or three or five or some manageable

amount right we can build infrastructure say into open source Observer where every grant program that has publicly available information it ends up in a single repository right so like in that regard My Hope Is that in a year from now where anyone from the grant inovation lab is giving a presentation on grants they could show the one neat chart or dashboard that actually talk talks about all the public Grant programs and where we're at so like that is not a fantasy that is a tangible thing that many of us are working on that I'm very hopeful for a year from now we will have a very meaningful hopefully sooner but at least by then we will have a very meaningful tool right and we just need more of these kinds of things more these actual public goods that benefit everyone uh around the space who's interested in a single

domain the other side uh one of the other general areas of uh takeaways from the grant report was around community and specifically in the context of non-financial support or more broadly as I think of it of systems of support right if you've ever won a grant especially in the web 3 context uh I'm guessing like I've been with all my grants you're very appreciative that you got the money you needed it to do something you wouldn't have been able to do that thing without the money but then especially the more complicated the thing that you're doing you might say like hey money's great but like can I go talk to your devs for an hour can you help me get an audit I'm a Dev I have no clue how to Market a thing or I'm a market I have no clue how to develop a

thing like can you actually connect me to other people in your ecosystem who are thinking about these elements right we're seeing more of a trend of a few ecosystems have accelerators now like octant just ran their program I know cardano has been doing one for a while uh there are a few others that I'm blanking on at the moment uh so like we're seeing different types of approaches but again this isn't an area where there's going to be a one siiz fits-all for every Community but we need to just have more experiments then we need to all of the experiments and see how each one of them is going and then we're going to have better and better data to start building these kinds of systems so I'm very excited to both kind of have this discussion with our community around the Dow and we're

already starting this uh and understanding what else does our community actually need to flourish and how do we then provide that whether from the foundation or from the Dow and this is a long and ongoing thing right something can be useful today that won't be useful a year from now and that's why you always need to be evolving from that perspective um and then communication and engagement right so many Grant programs coming back to just like the overhead challenges so many Grant programs don't actually do a great job of publicly saying who they funded right or even like I know at metago we haven't always done a great job being like hey here are all the groups that fund us so if you come to us and you have no clue who we are and you're not sure whether or not we're reputable but you trust ethereum

Foundation well then you should trust us because they've given us money or something like that right um and on the flip side right if you're a new startup company or project or something like that to get to say that like hey cardano Foundation or definity Foundation or scroll Foundation or whoever or the Dows gave us money that actually can go really far away to adding legitimacy to you as a new project right and so like that could just be a norm of hey if we are granting you money we are going to publish it here you can use your logo at the bottom of your website right like that's not a huge ask but that can be a commitment in each way where that brings together the fun and the Fundy closer that can have better results um and then yeah just the challenges with

reviewing because I think for anyone especially if you've ever been on the grand Ting side of things um or maybe I don't know if this is just my own experience but I'm pretty sure this is not unique but once you get to the point of like oh no wait I'm supposed to now review the hundred things that we got and I make a choice on these like it just feels like an intimidating amount of responsibility I've been in environments outside of web 3 where it's literally just like I thought I was the part-time person on this how am I making this call like I'm not qualif ifed to do this but I'm the one with the most time because I'm the junior person on the team so I guess I'm making these calls now right so it's like the reality of how these things roll out it's not fully

professionalized right we could look at say optimism in badge holders right very different structure it's meant to be open you're meant to pull in they're trying to create better structures towards like metrics impact and I I really respect what the optimism team is doing but nonetheless right badge holders will all complain of like well if I'm a Dev why am I voting on community stuff I don't know apples from oranges there if I'm a marketing person I I have nothing to say about the nuances of this coding language being developed or anything like that so creating actual matching the people with the right knowledge sets and wanting to provide input with the things that they should provide input on is actually a harder problem than many people who design Grant programs realize at the outset and you know it's exciting to hear about things like review Dows or

review protocols and like let's incentivize all the reviewers in the world um and I mean those things might work right I don't want to be too much of a pessimist cuz we don't have enough data yet but I think we just don't know what are the best and most realistic structures and I think we could look at something like scientific peer review for anyone who might come from that world and have had the wonderful joys of interacting with it um but like the theory of it is if like I just released a computer science paper that other computer scientists at my level are the ones reviewing it they can't be too close to me or have partnered with me so it's like you know finding the right Set uh is its own interesting challenge especially as we have like like imagine a cryptoeconomic paper there aren't that

many crypto economists right like that's not an existing profession that has been around forever so right now a paper might actually need seven different skill sets to review it appropriately but the fun reality is that the grad student or the professor will give it to the PHD who gives it to the master student all within one lab and it's the master student most likely doing the review right whereas like the the professor who's tasked with it is paid a 10e salary and the master student is effectively free labor while they're getting their degree right so like most review structures are immensely inefficient and a lot of the time highly exploitative so actually Building A system that works well and produces the desired outcomes where everyone involved in it is Happy is just an open question across all domains so I'm really excited

that it feels like there's more energy to experiment with this because we definitely need it and I'll just reiterate again sorry you have to keep hearing this if you've been here from the beginning but I always prefer more discussion so like do feel free to just interrupt me with a hand at any point we also had a couple of takeaways uh and trends that we're seeing that sort of didn't fit into the other buckets um the first one that I've mentioned is already adapting to needs right as uh was brought up before like a lot of startups they're they're figuring themselves out right like startup and pivot are a word that go very well together because you start out with one idea you realize it's not the way to go you go somewhere else uh in this regard when you're doing a grant program again

your goals should develop and get more nuanced as you're issuing Capital right if you're actually tracking where all your grants are going and what are the outc and impacts of that money you're going to realize that some of it was not well spent so you shouldn't keep doing the same thing right you should be learning and revising and adjusting and everyone who's been in crypto the entire audience here um you know that you know like a year in the regular world uh can feel like a decade in crypto right so things change so quickly here and especially in those environments what worked yesterday might not work tomorrow so you always have to be willing to not be so hubristic to think that you unquestionably know the right thing right read the room learn from the people around you and on the other side just be ready to say like hey what we

did was Dumb and not great and like we're just going to start a new and even if it's painful from a personal ego whatever perspective it's going to work much better in the long run if you do the thing to serve your ecosystem right because all these ecosystems are built of people they are constituted by human beings who actually have desires needs Etc and if you are servicing them the right way and like really listening and hearing people then we can all grow together which is not usually stated outcomes but important nonetheless as mentioned the communication and documentation challenges is really important uh you'd be shocked the amount of times you go to a grant manager and you're like hey can we talk about all the grants you you've issued and they're like yeah yeah I can talk about the like last three months it's like oh well can

you tell me about like the first 10 grants you issued two years ago they're like oh that was like three people ago we have no clue what happened there and so just like institutional knowledge and memory and systems right I'm sure especially if anyone's had a job outside of web 3 you've heard of crms right customer relation management software CR M are not a norm for Grant programs yet nor is any kind of tracking tooling right so these things are just like foundational struggles still and so we just need to come up with better ways to document and share this information and I I feel like I talked on the grant infrastructure side so I don't want to belabor that point and so now I'll switch over to delegation I guess before I do that any quick questions on the grant side or anything

yeah so you mentioned that some grants programs got sunsetted like near and polygon and others uh so what was the reason for their sunsetting yeah to be clear I I guess I didn't add the appropriate Nuance so like say for near it's not that they have stopped granting in any way shape or form it's that a grant program that they launched that specific thing got shut down all right so like the protocol Labs program that we covered was actually Sunset because they just realized that hey this research grant program isn't accomplishing what we need so we're just going to put put it away right um for algorand I just thought like they weren't pleased with the outcomes and they felt like they couldn't measure it and so they couldn't justify spending the same amount of money again uh for a grant I actually

want to I wasn't the one who wrote that section up and I I want to unpack it a little more because in my mind they were one of the more efficient focused lean programs that was actually working really well for their stated and desired outcomes and yet they the community decided to Sunset it and it's yeah I haven't had a chance to catch up with with X bill or anyone but like I'm excited to better understand what changed their mind to feel less relevant to what you're saying I just wanted to say that one of the um well Eugene yesterday and past two days I've spent uh reading all the papers that uh Grant Innovation SLB put out so um I wanted to add on to what Eugene was saying was uh one of the reasons that

some of the sunset some of the programs were Sunset was because of Grant farming um they realized that there's so much Grant farming going on where uh some projects who receive grants in one ecosystem when they didn't complete their Milestones they went to other ecosystem and uh uh they were applying for Grants and they sometimes did receive grants and they still weren't able to produce uh outcomes uh well at that time I think there's right now there's no coordinated way to for Grand systems to know what's happening in other ecosystems um that's why again she D5 so yeah um just adding to what Eugene was saying thank you thank you yeah and Shameless plug Rashi is the technical

lead on the Dow ip5 Grant metadata standard so if you're interested in that kind of thing uh yeah please feel free to talk to her me after um but yeah at the end of the day it's just some version of we can't justify how we're spending the money um even in arbitrum Dow they didn't Sunset their grant program per se and they didn't have a single grant program right but even as a dow they realized like hey we probably out a little too hot with the whole granting thing and we should cool down and figure out our priorities and where we're trying to go with it so it can be for a mix of reasons so again if anyone else has questions feel free to jump in there otherwise I'm just going to truck along to the delegation set because I think I have like 10ish minutes left um so I

want to touch on a couple questions with why do we delegate uh some stats around delegation the rise of professional delegates what are some of the challenges and kind of where can we be heading from here so in terms of uh delegation five minutes cool um yes so I'll go quick on this side uh but basically right delegation uh initially a lot of one token one vote that was the idea of like direct democracy everyone gets to vote on everything uh delegation is more representative democracy I don't have time to vote on everything I'm going to vote unelected official who supposedly has time to vote on everything uh and that's kind of the structure we're in now with a lot of dows uh and so yeah so in terms of that side there's some

benefits to it of like creating more specialization right we have some delegates that we're talking to at schroll right now who are individuals and some that are big teams right obviously as a team it's going to be easier for you to find time to be involved in stuff whereas if you are one person trying to be active in multiple Dows and you have a job and you have a life you can probably only give so many hours a week to whatever protocol you're on um so yeah I think that does bring a question of like are we just going to see mainly professional delegates within a few years that it's just these structures that have more energy for it um and I want to give some like generic uh I generally didn't want to call out anyone though I I did kind of want to

give zky a recognition here because I I didn't want to unpack that with their team uh but they had a bit of an outlier number there so which is interesting to see but again this is also another area where there is not great collated data yet so this hopefully in the future uh one of the efforts I'm trying to work on is to actually get more research and data coordination around these topics so if you're interested in all this stuff please talk to me later but long story short total vitable Supply so whatever is the portion of tokens you have out there the amount that is actively delegated to someone today for l2s it's mostly in the 1 to 4% range so yeah the fact like ZK Sync has their 12 and a half I have no clue how that happened uh but that is not a usual number that you

see uh for the defi projects and a lot of them have been around a little longer I candidly didn't look at the newer defi protocols but for like the Unis swaps the compounds Etc uh 20 plus% delegation right cuz also like think about who owns Which type right if you're new to crypto you might buy an OP token if you're new to crypto and don't know what things are you're probably not buying like defi specific application tokens yet you might start with the l1's l2s more General use cases um and then looking at top delegates so what percentage of the total votable U of uh the total supply to the top delegates control uh and I realize these numbers can look a little muddy so this bottom number here is for a lot of these ecosystems the top 20 as a percentage of the actual votable

Supply there are some ecosystems where the top 20 have 70% of the entire delegated amount right decentralized governance at its finest so I think we also have to be aware of like what does this actually mean how do we structure right this comes down to like airdrop questions what is your token allocation strategy how are you building the community of who that goes to in the first place um yeah oh that's all good um so yeah I want to quickly touch on professional delegates right the whole idea it's more than one person they can provide more energy and FOC on it I gave like from a comparison I always think of it of you know like I live in DC in the states uh my the mayor there is an elected official representing me supposedly um what if they were a mayor in New York

and London and Bangkok I would probably have much less faith in them right but actually for where crypto is at it's a benefit right now uh I don't think it would be sustainable without it but as we normalize uh incentivization programs I think we might actually end up also seeing the rise of delegated EOS e system delegates uh excuse me yeah dedicated ecosystem delegates so if there's a clear enough Pathway to get incentivized as a delegate and I'm okay with that level of compensation for my monthly salary I could just maybe be a delegate and DOW X and like that's my life is that like I'm a professional politician there um so yeah that's that's generally one potential Trend in that direction um oh nice um I think in general uh there's always the question

of incentive alignment so if you look at a lot of the major and I I know I'm already starting to experience this so happy to share more in a couple months once things play out um but incentive alignment right you have people coming in and being like hey we should build a billion doll VC oh and did I mention that I should be the one doing it and we should get a 2% management fee on all the funds th flowing through it so I know for scroll now I am very much trying to encourage like when you write a proposal imagine it's the foundation running it right we're probably not going to run the majority of things cuz like we're a small Foundation um but let's separate the idea from the execution right like let's separate and let the best ideas win based on their

Merit and then we will do selection of who is the best group to run that idea right so I think right now those two are very conflated in the space um and expertise is not always a given right like I've already been in conversations whether in ow or others where people are like hey you know what you need a VC fund and the person pitching me or pitching the other Dow has never worked at a VC or an investment or like they read a couple blog posts and heard a couple podcast and now they feel like they're ready to compete with the big hedge funds right it's like or VC firms it's like like sure but probably not and chances are it's not going to go well so like we're definitely not giving you $100 million to start that's definitely a no no so I I think there's still this

like incentive and skill set misalignments with the needs um in terms of where we're headed uh I think we need a better understanding of the current state this is something that we're already talking to a few research groups about doing some really light research uh but I think this hopefully we will be kicking off especially through metago and dowar uh we'll be kicking off much more effort to do like years worth of research around this and partner with a lot of groups so that we could actually be making informed decisions and not like oh well they did that so I do this and just like purely relative based or uh Instinct gut based things which generally don't go over as well as we'd want um every group still has a challenge with how to increase percentage of Delegation I don't have answers I just think both more of us

need to collaborate on how and do we need that or do you just accept the confines you're in and maximize governance there it's not necessarily a given that the numbers will keep climbing there definitely are ceilings we just don't know them yet um a huge other thing especially with professional delegates I mean with everyone but especially I think with professionals is conflict of interest disclosure right A lot of the time there will be a backdoor conversation that hey I'm a professional delegate in this ecosystem let me hit up the the grant lead because they or the governance lead because they know me convince you of a thing oh I just forgot to mention that the way this plays out I'm going to walk away with $10 million or something like that or I'm already invested in a bunch of companies that are affected by this decision so I

think we need more norms and practices around conflict of interest disclosure and there need to be clear repercussions because the first step is going to be clearer ideas and then we're going to very quickly hit a point where not everyone's doing it and then we need repercussions right if it's known that you have walked away with a lot of money that no one realized because you should have disclosed but you didn't we we need to figure out how how to enforce that kind of action and there's a lot of interesting like legal questions and implications there uh I mentioned the ecosystem specific delegates and the last thing I'll mention is this like move away from what I call like Global voting right so this idea of even if you stepped away from one token one vote a lot of delegates are still expected to vote on all the

things and so like they're voting globally right they're voting on everything I think there's a lot of uh protocols that are working towards uh what I consider like fractured governance surfaces so you start breaking up the governance surface some things you say the foundation is going to handle and we're not pretending we're fully decentralized while otherwise it's being like hey maybe the people who vote on growth should be different than the people who vote on community should be different than the people who vote on governance experiments and it's okay for you to be involved in more but like pick a lane like you only have so much time like just pick one thing to go deep on and develop your expertise there right we're kind of seeing that with like working groups and councils but I think there's a lot more both from the norms

and the org design perspective that can be improved there so am I at time or do I have a time for a question I'm at time cool so so these are uh that's my Twitter if you want to talk to me later I'll also just be hanging out outside and those are links to the two reports if you missed it uh and I will be here so if you didn't get to do any of that feel free to just come talk to me I was told I'm at time so yeah if you want to take question I'd love to talk right outside but yeah thank you thank you this is fun