Gitcoin's Allo Protocol: Grants programs for web3 and beyond

Transcript

application from civil attacks and Bots I would love to talk to you about that I am also the protocol engineering lead for the allo protocol which is why I'm here talking to you all today in the next like 15 minutes or so I'm going to go through these three questions so we're really focusing on aloe today the first question is what problem does aloe solve right we're building a whole new protocol what problem is it that we're trying to solve with this protocol second question is how does aloe work I'll actually give you an overview of the core components of aloe and then the majority of the time today is going to be spent on this third question which is what can you do with aloe there's actually already people building on top of the aloe protocol we're going to talk about some of those use cases we're also going to

talk about some sort of like pie in the sky things that I hope inspire you to come up with your own ideas uh it's I think I'm really proud of the way that we've designed this protocol it leads to a lot of really exciting things and hopefully some of these use cases inspire you to think of your own so starting with what problem does aloe solve all right when we look at all of the capital that's been raised in crypto right now which is a lot of capital right I'm sorry crypto has given us a lot of tools for doing some parts of the capital uh life cycle right I like to call this the Ecology of capital and there's three phases to this the first is accumulating Capital we all remember the frenzy of the last Market of token launches nft

drops treasury diversifications all these uh tools that were created for bringing Capital together what I call accumulating Capital we've got a really great tool set for this the other is safeguarding capital gnosis safes multi-cigs as well as Governor Bravo these are really great tools for keeping your capitals safe and they're good at making really big Capital decisions but they're not good at making a lot of capital decisions and so we end up with this one problem which is there's a hole there's a big open space in how we allocate capital on on crypto and that is in actually allocating that Capital right this is what aloe aloe protocol which is short for allocation stands to

solve right of all the money that's been raised in the last couple of years using crypto rails how much of it is just sitting in a treasury right unallocated think of all the flame Wars that happen inside uh governance forums I need to point anytime someone tries to propose spending fifty thousand dollars on something cool right so that's that's a problem uh we see that as a problem right and so a lot of a lot of dows and crypto organizations Etc have come up with grants programs well how many of those grants programs are run with a Google form and a notion table right given the payment infrastructure that we have I think that's really sad right that's a problem that we want to solve and that's what aloe is for

when we think about why Capital gets stuck I see two things the first is that we're making these decisions at the root level of the treasury right we're not talking about the funds that have been earmarked for our grants program we're talking about the entire treasury all the money that's been raised by a particular program project excuse me well just like you wouldn't go deleting files on your computer with pseudo access it's kind of silly that we're making these funding allocation decisions with root level access to the treasury makes them all feel very unsafe which is why we have these flame Wars in our governance forums over pennies right peanut sized grants proposals someone's trying to get twenty thousand dollars to do something cool at a at a conference or something right well someone feels

very threatened by this right well they have pseudo access to the treasury that's that feels dangerous right we need to be allocating and breaking up these treasuries into different different portions the other is everybody gets away and on every single decision every single Capital allocation decision every token holder that's the level at which we're making these Capital decisions is all token holders right well some people don't like going to conferences and so they're not going to like the idea of sponsoring them we see aloe as a solution this is coming from the 18 rounds that getcoin has run Bitcoin has distributed about 50 million dollars through the quadratic funding grounds and that's not get coin's money that's the really important thing to know about that that's your money everybody who raised your hands only

like 15 or 20 percent of that has come from matching pools that get coin has put forward the rest of that 50 million is from Individual donors like all of y'all we had a really great case study of this recently where we ran a retroactive citizens round Bitcoin put forward twenty thousand dollars in the matching pool in total the community allocated eighty thousand dollars so four x multiple right that's really cool so with aloe building on all that experience the good coin has aloe is a solution for making these Capital allocation decisions right our goal is to create basically a playground where you can play around with different funding mechanisms and as a community use multiple different funding mechanisms

right rather than making every decision at the root level of the treasury have a grants committee right use something like hats protocol people are familiar with that to decide who's on the on the grants committee and those people get to decide how they're spending their money on whatever it is whatever their mandate is right so we get this plurality of funding mechanisms and we get that plurality within a community not just across communities which is really cool we can also earmark Capital there's a core feature of aloe called an aqueduct which lets us a priori earmark capital for things like public goods so before it actually hits the treasury we can allocate it towards specific causes right we get project reputation how do you know if the project that you're allocating towards is a good one well we can accrue project reputation I'll talk

a little bit about how and why and you can use whatever method within your community makes sense to do that and then finally we get local decision making right let's have the experts maybe like the engineers making allocation decisions on how we should spend treasury funds on things like engineering right whatever the most local version of that is we can we can do something like that with that one okay next here we've got how Ella works I'll give a brief overview of the architecture if you're an engineer and you're interested in diving more I'm happy to share the repo with you I would love actually your feedback and critique on it but we'll talk at a high level about how it works and then we'll get into some of the use cases so there's four parts to allo the first is the project registry next is aloe core which

is what we call a pool manager third is an allocation strategy this is a contractor that you write right and then the fourth is an aqueduct the project registry is a registry of identities and anything can be an identity if you're allocating Capital that's an identity right if you are a project seeking to be a recipient of a grant that is also an identity and it gives us this very lightweight domain space for project identity and reputation a project is represented by an address and so anything that addresses can do you can do with these project identities right they're controlled through allo and the project registry so it's not like an eoa or a multi-sig or something like that it's actually kind of a deadweight address

that all it can do is be represent a on-chain representation of your project so if you and your community are really bought into the attestation thesis you can use attestations for controlling who gets Capital right you can look for particular attestations you can issue attestations to these projects Etc but you can also do this with nfts or with tokens Soul bound tokens perhaps and you can even create your own third-party Registries that's a use case that I'm particularly excited about we'll talk about more when we actually get into some of the use cases so that's the project registry so a lot of the use cases that I'm going to get to here in a moment are going to talk about that the next one is the aqueduct a really great way of explaining the

aqueducture understanding the aqueduct is uh thinking about income sharing Agreements are people familiar with this term one person cool Max welcome two cool so uh an income sharing agreement you pull together a pool of funds you allocate that towards students to pay for their tuition they then commit a certain percentage of their income back to that pool of funds they go through college or whatever they go off and get a high paying job a portion of their income goes back to the pool right the pool then goes to investing in more students who then commit the same income sharing agreement then go off and get jobs and pay back into the pool over time you can actually just remove the principal entirely because enough students have been invested in and are bringing in enough income that you don't need it and

it becomes a sort of self-perpetuating cycle this is effectively what the aqueduct does for you your protocol your project whatever it is however it is that you are in Revenue some percentage of that can go into the aqueduct you can invest it into projects that are going to create TBL on your project or transaction volume or whatever it is and then over time that's going to increase the amount of fees that you're earning which are going to go into the aqueduct which can be reinvested into new projects and so on the meat of the protocol though is in creating an allocation strategy right this is the contract that you write we'll have a library of these at launch in September but this is the contract that you write for who's eligible to receive Capital this goes back to the project registry idea we were just

talking about it can be that they hold an attestation or a particular token or they're an entry and another registry contract something like that who's eligible to vote this can be all token holders this can be an allow list this can be hats hats holders for people are familiar with Hats protocol Etc but any way of deciding who's eligible to vote you'll have some voting logic this can be something like how Governor Bravo Works where you're taking a snapshot of people's voting power and then using that it can be through donations this is what gitcoin does when you're donating you're actually voting for a project it can be using a credit system it can be using a governance token it can be these are just ones that I'm thinking of right there's lots more last two here you've got an allocation strategy right so you want to do

quadratic funding you can bring quadratic funding to just about anything now you can do direct grants paying out an alarm sum or you can do something like an RFP process in that case only one person is receiving the entire pool of capital based off of whoever is deciding right distribution here you can transfer all the funds in the pool in a single lump sum this is what Bitcoin does so basically like it's kind of like an airdrop except we're dropping you uh uscc or eth from the matching pool but you get it all at once you can set up a stream sably review two just launched you could create a version of allo protocol that sets up streams right then streams funding two projects you could also do something like Milestone based payments where they have to come in and make a request to your allocation

strategy for the next pool of funds okay so that's the overview four pieces project registry Aqueduct allocation strategy and I'm so nervous I actually forgot the fourth one aloe the core the pool manager cool all right so what can you do with alum I'm really excited to talk about a couple of use cases as I've said there's actually a couple people outside of Bitcoin who are already building on top of aloe it's still in uh sort of a beta we're launching in September pending an audit but this is going to give you a couple of ideas for things that I hope that you'll go build on top of it the first is this idea of continuous public goods funding within your ecosystem so whatever your ecosystems definition of

public goods funding is you can do something like that here you're using that Aqueduct that I was talking about right some percentage of your protocol fee or whatever it is nft sales something like that is going to go into the aqueduct after a certain period of time or once a certain amount of funds have been raised you're going to distribute that aqueduct in another round of funding into projects that you as a community feel are going to be promising and driving more growth for your project that's going to generate more revenue for your fee structure or whatever it is which is going to replenish the aqueduct and over time if you're successful the aqueduct is actually going to replenish faster and faster with each sort of round of funding okay cool um this is I'm gonna go through these

kind of quickly uh one thing that we're really excited about here is this is going to create basically a mechanism for playgrounds you saw all the different parts of an allocation strategy well you can mix and match for whatever is useful for your community if you want to use hats to create streams you can do something like that if you want to use an allow list you can do something like that Milestone based payments Etc there's this whole design space that's now opened up around how you allocate capital another exciting one is qf all the things basically you can wrap qf now on top of anything right so whatever your protocol is you can now wrap quadratic funding on top of it and I'll talk about endowment here in just a second this is one of the use cases that's already out in the world

this is one that I'm really excited about this is called wrapped voting right you can do this with qf you can do this with any allocation strategy but whatever your protocols mint deposit fund whatever method is whatever method it is that you're trying to incentivize within your protocol you normally do that with something like staking or with yield well now you can do that with an allocation strategy like qf or something else entirely great example of this would be pulled together people here are familiar with pool together you deposit funds into a pool that generates yield then there's a sort of Lottery mechanism for how that gets allocated well you could attach a bonus to this where not only does the do you know you get your return back not only does the pool go

through that whole Lottery mechanism but if you had an additional pool or secondary pool of capital you could distribute that to pool together pools based off of which one people are investing in right and so you get this kind of like added bonus project curation the project registry I think is going to be a really exciting part of aloe right you can use tokens to curate particular projects and so you know what is a dow other than the sum of its projects well you could use a token to curate these on chain right anybody here familiar with the term token curated registry a couple people yeah uh y'all have probably been in crypto since before 2017. token curated registry is just like it sounds it's a contract that is a registry use a token to curate entries represented by an address on that on

that registry well you can do this with aloe those projects are going to be represented in the project registry they get an address now you and your community can use your governance token to curate which projects are official projects within your community part of that too will be Grant scouting and curation right you can do this at the community level but you could also do this as an individual right mantle just announced they have a 200 million ecosystem fund I don't know how they're going to distribute 200 million dollars that's just so much money well one way that they could do this is you could become a trusted member of the community someone who is effectively a scout for them for Grants making they've allocate Capital into your pool that you manage through your own allocation strategy if

you would like this is optional but if you would like you could potentially take a fee on that allocation strategy so that you know if they give you 10 million dollars to allocate into projects you take I don't know five percent or something like that and then because everything is just an identity in aloe you as an allocator get to a crew reputation as well right and then the last use case here I'll talk about is running grants programs on crypto Beyond web3 this is two projects that I'm really excited about these are both projects that are currently building on top of aloe the first is endowments Universal impact pool if you're not familiar with endowment it's the largest on chain and the largest Online Registry of non-profits in the world

it's all through crypto rails you can donate directly to nonprofits all over the world well now as of effectively last week when you're donating to a non-profit on aloe or sorry on endowment you're also voting on how a matching pool should get distributed on aloe back to those non-profits this is that sort of wrapped voting layered qf use case that I was talking about just a moment ago you can also this is a fantastic use case of it you can just contribute directly to the universal impact pool and know that it's going to get distributed across nonprofits based off of the signal of the crowd which nonprofits are receiving the most number of donations finally there's a group here in ECC that was actually just in Togo the West African country onboarding people to web3 because in September

we're going to be running a qf round I'm working with impact stream to do this we're going to be running a qf round to fund public goods in Togo and the public goods that we're talking about here are things like Wells and schools and hospitals they're all going to use web3 rails to do this everything is going to be on chain this is great because it's all way more auditable and transparent than the normal cash Grant system that they use and they're going to get to use the wisdom of the local crowds to determine who should receive grants yeah cool thank you sorry for going well that was rude anyway that's my talk thank you so much that's a bunch of use cases for Aloe if you've got questions I would love to hear them otherwise I would love to just offer you to follow

along we've got aloe protocol on Twitter and then I'm zero exact on Twitter would love to chat with you afterwards about any use cases that you might want to dive deeper on [Music] all right