[BIP-22] Fund Balancer Grants for Q3

Balancer Grants DAO Service Provider Proposal Q3 2022

Overview

This proposal aims to continue Balancer Grants within the Balancer DAO, as an independent community-owned grants program for the Balancer ecosystem as a Service Provider (SP) under the new Operating Framework (passed Snapshot vote here). The program aims to accelerate the development of the BAL ecosystem while optimizing contributor rewards in the Balancer ecosystem. Grants are an alternative pathway for projects aimed at funding smaller, short term or one off projects up to $100k USD that don’t fit the Foundation Service Provider funding model.

The requested budget for the first cycle (3 months) is 101,500 BAL and $60k USDC, as visualized in the breakdown at the end of this proposal. A learnings and review document will be created at the end of the cycle, and any unallocated resources will be either sent back to the BAL treasury or used to offset the budget request for the following epoch.

The current Balancer Grants team has been working together under the previous snapshot proposal passed on Aug 16, 2021. The team has evolved since the existing proposal and this document has been updated to cover learnings and to suit the current DeFi environment. To date, the grants program has successfully delivered 4 waves of funding and mentoring, expanding the Balancer ecosystem by encouraging building to increase TVL.

Background

Grants and contributor rewards are important mechanisms for coordinating resources and developing ecosystems. Multiple large blockchain projects and DAOs have dedicated grant programs with varying success. Balancer grants subDAO has run 4 waves to date with some very successful projects adding valuable functionality and securing TVL to the Balancer ecosystem.

The first 4 waves of the grant program have proven the Balancer grant model works. This model includes a dedicated Grants DAO Committee who is responsible for selecting grantees based on due diligence and care evaluation. The grants committee covers various skill sets to provide guidance, coordination, assessment and technical support. The Committee then continues to mentor and support the grantee team throughout both the duration and after completion of the project. This approach has been shown to improve the overall chance of grantee success while strengthening the Balancer ecosystem.

Finally, this mode ensures the committee and program will continue to evolve with the ever changing DeFi environment through monthly learnings review and grantee/community feedback.

Domain of Operation

The grant program provides support and funding (up to $100K USD, paid in BAL) to projects committed to supporting Balancer Protocol in achieving its mission to become the number one source of liquidity for DeFi. This program is made for groups and individuals that aspire to run a project that builds on the Balancer Protocol or supports the development of the Balancer ecosystem. While the Foundation SP model is aimed at long term engagements or those with a cost beyond $100k USD, grants are an alternative pathway aimed at funding smaller, short term or one off projects.

The Balancer Grants DAO Service Provider will be operated by the Grants Committee, a group of diverse and experienced Balancer contributors. More details on the Grants Committee can be found further in this proposal.

Impact

The Balancer Grants DAO will coordinate BAL grants independently, creating positive value for the Balancer ecosystem minimizing any extra workload to the Balancer Labs team.

Because the Balancer Grants DAO will have its own dedicated team and support network, it will provide guidance and support to Balancer contributors and grantees alike.

The Balancer Grants DAO also maintains Balancer.community - an independent community page. Balancer.community can be leveraged to amplify Balancer messaging and to improve community coordination. Finally, Balancer Grants will maintain its own communication channels and content, providing relevant content about all aspects of the Balancer Ecosystem. Medium articles are written and accompanying social media attention will be given to the grantees throughout the grant process.

Establishing a well-aligned yet autonomous unit within the Balancer Ecosystem aligns with Balancer’s Decentralization and Ecosystem strategy. Having multiple entities co-develop the Balancer ecosystem creates value-add opportunities and allows the separate entities to specialize further.

How the Grant review process will look

At Balancer, we want our applicants to feel heard and supported, not only financially. That is why we want this process to be as clear as possible.

During the evaluation, the Grant Committee looks at the reasonable viability of the applications and does due diligence on the team. The evaluation process takes about 2 weeks. The applicants are requested to submit a formal proposal with detail proportional to size of grant being requested to aid the committee’s decision making and value judgment. A guide is provided here https://docs.google.com/document/d/1zFKt8QHfcuea_ltUsTtv0v6kc5IfAbnGC9PUcCaiCQ0/edit.

If the application is successful, the team will be contacted, further steps will be discussed, and they will be connected with a mentor for regular calls to keep up to date and provide support. It is expected that this is reciprocated by grantees through operational transparency, high developer velocity, active repositories and frequent communications towards us.

Grant Valuation

Under the existing structure, for Grant applications to be funded, their ability to provide value for Balancer is assessed through:

  1. Bringing in more investors to Balancer ecosystem, increasing TVL to earn fees in popular liquidity pools
  2. Expanding Balancer ecosystem creating a positive feedback loop to entice more projects to continue to build on Balancer Protocol
  3. Create internal growth/value through documentation and educational content, reducing friction for devs to build new functionality on Balancer

The Grant application needs to be assessed to bring in more value to Balancer than the grant value itself against the risk of it not succeeding.

Grant Milestone Review

Balancer Grants will work with milestone based payouts. These milestones are clear and reasonable targets based on the communication between the grantees and the Grant Committee. Grantees will need to outline their deliverables and timeline as part of their application with the intent to suit both parties (e.g. sufficient for grantee cashflow, while managing risk of high payout with no useful deliverables to Balancer).

Grants are awarded in BAL tokens, based on predefined payment installments. Such installments are subject to a payment schedule to ensure that predefined milestones are achieved. The first milestone can be prepaid, but must be sized appropriately to de-risk a rugpull. If a Grant application is larger than $100K USD, the project will have to be sent to the forum and a Snapshot vote. The grants are to be priced and paid in BAL, except in exceptional circumstances to limit risk for the Grants treasury and encourage grantees to be aligned with increasing BAL value.

The Balancer Grants Committee controls payments and assesses milestone reports from grantees before follow-on payments. The Balancer Grants Committee may decide not distribute all follow-up payments for projects that do not hit their deliverables.

Risks Analysis and Mitigation

  1. How does the Balancer Grant DAO ensure that grants contribute meaningfully?

To ensure that the Balancer Grants are allocated in line with the needs of the Balancer Ecosystem, each grant is assessed according to the following criteria in the Balancer Grants Assessment Matrix and scored by the committee to assist the final decision.

  • Does this fit with Balancer grant’s mission?
  • How does this add value to Balancer?
  • Expected Value to Balancer
  • Grant Difficulty
  • Project Team Capability
  • Milestone payment risk
  • BLabs involvement

Upon completion of a grant, both the delivery team and the project are assessed for value generated and efficacy.

  1. What happens if there are not sufficient quality grant applications?

All leftover grant funds are sent back to the BAL treasury in low participation or not enough quality applications.

  1. What if grants apply but do not deliver?

Although this is a common issue within all grant systems, we can mitigate this risk by providing mentoring and support. This will be one of the defining aspects of our approach—something that is often overlooked. Additionally, payments are always based on Milestones, limiting the potential resources lost when a grantee cannot deliver. Higher cost grants will require more scrutiny and potentially a first lower cost grant to build trust and confidence.

Specification

If approved, the Grants Committee multi-sig (currently 3 out of 5) 1 will be funded with 101,500 BAL and $60k USDC (details below in Budget Breakdown) and all remaining funds from wave 4 will be carried over and permissioned to be delegated to the grantees.All transactions will be recorded in a Sheet and summarized at the end of the Grants Cycle. Balancer Grants Composition

The Grants Committee consists of dedicated Balancer contributors with strong analytical and support backgrounds.

Mitch Burns - Committee Co-Lead
Zen Dragon - Committee Co-Lead
Jay Napier - Committee Member/Mentor
John Grant - Committee Member/Mentor
ZeKraken - Committee Member/Mentor
1 Open Committee Member/Mentor Position

The Grants Committee will work closely with Balancer Labs and Ballers to amplify and support grantees.

By having a dedicated and diverse group of committee members and proactively working together with other ecosystem partners, Balancer Grants are set out to be one of the most effective grants programs in DeFi.

Grants Application and Review

The current Grants Application and Review process can be found here https://balancer.community/balancer-community-grants.

Document Management and Handover

All grants documentation will be maintained through the Balancer Grants accounts on Gmail (grants@balancer.community), Google docs, Medium and Notion. These records will be maintained weekly or as required including:

  • Individual Grants pages (Notion) with progress overview and tracking
  • Grants treasury sheet
  • Typeforms, templates, meeting minutes etc
  • Grants email inbox
  • Grants Treasury multisig

Having these documents regularly updated and controlled via the grants accounts, handover to new contributors or in the case of a replacement SP will be significantly simplified and minimize loss of information in the transition.

Key Objectives and Success Metrics

Value add to Balancer Ecosystem

The Grants SP is setup to grow the Balancer ecosystem through funding projects which will return a net value equal to or higher than the grant amount. This can be either a monetary value (increase TVL or increase BAL price) or perceived value (add SDKs/tooling, functionality or documentation/education). The following value add mechanisms will be reviewed accordingly to assess success of the program/committee:

Add TVL - Directly bring in liquidity, creating income through direct and indirect fees which can be estimated by pool emissions. Increased TVL can be measured through pools created by a grantees project or funds added through an app built on Balancer…

Expand Balancer Ecosystem - Fund projects that will entice more projects to build on Balancer Protocol, creating a sustainable positive feedback loop to grow the Balancer ecosystem

Create internal growth/value - adding documentation, dashboards, SDKs, tooling, calculators etc is extremely important for lowering barriers to entry, increasing widespread adoption of the Balancer protocol. Success can be measured through traffic and use of these pages.

Committee Performance

Grant Review, Approval and Delivery

Application reviews/assessments are:

  1. Undertaken in line with Balancer Grants Assessment Criteria
  2. Carried out in a documented and consistent manner so feedback can be shared with applicant and future committee members
  3. Milestones are setup to manage risk to Balancer and encourage grantee to meet

Grantees are guided and mentored to maximize successful outcomes
Communication maintained and coordinated with grantee and internal resources
Minimize/Eliminate stale grants
Active participation in weekly meetings and assessments

Systems and Processes Maintained
Grants pages are maintained
Grant application, approval assessment and completion assessment records maintained
Treasury maintained
Announcement articles published
Accounts monitored and actively contributed - Gmail, Discord, forum
Monthly reports submitted to the community

Length of Engagement and Budget breakdown

This budget contains all costs for the full operations of the Balancer Grants DAO for the period July 1st, 2022 till September 31st, 2022

At the end of this cycle (September 31st), any unallocated resources will be sent back to the Balancer Treasury or kept to offset the next epoch budget request. A new proposal for the next cycle will be submitted at the end of this cycle.

Due to the inconsistent nature of grants and the associated workload, grants team members will self-assess their level of contribution against defined Tiers each month to determine their compensation which is reviewed by the grants co-leads and committee.

Tiers are:

Committee Lead / Major Contribution - $5,000 USD - as per Low Contributor, significant administration of grants docs, prepare and present monthly reports/community calls, wave round up, grantee announcements, budget preparation and SP proposals…

High Level Contributor - $3,500 USD - as per Low Contributor plus mentor 5+ low assistance grantees or 3+ high assistance grantees.

Medium Level Contributor - $2,500 USD - as per Low Contributor plus mentor 2-3 low assistance grantees or 1-2 high assistance grantees.

Low Level Contributor - $1,250 USD - contribute to weekly grants meeting, follow up call for 1-2 grant applications, mentor at least 1 grantee with low level assistance required (generally self-sufficient grantee with no major coordination with BLabs).

Name Amount in BAL/USD Description
Q3 Grants 100k BAL ($400k USD @ $4.00 USD/BAL) To be rewarded to grantees based on milestones following the full Grants review process. For sub $5k USD contributions a light review process will be utilized.
2 Grant co-lead $5k x 2 x 3 = $30k USDC The Grants Lead role is split between 2 co-leads. Roles takes ownership of the establishment and operations of the Balancer Grant processes. The co-leads are responsible for coordinating with Committee Members, scheduling and hosting meetings, maintaining Medium and Notion pages and leading the post grants report.
4 committee members $2.5k average x 4 x 3 months = $30k USDC Commit to supporting & reviewing up to 10 hours a week and mentoring up to 5 hours a week
Other Program Expenses 1500 BAL Any other program expenses that may be required for the smooth execution of the grants program. This may include (but is not limited to) to design, media, PR, research, legal, gas fees or any other specialized functions outside the skillset of the committee
Total Budget request for quarter 101,500 BAL + $60k USDC

Service Provider Pledge

The Grant DAO service provider agrees to operate under the existing Balancer DAO’s Code of Conduct, as listed here https://www.notion.so/balancergrants/Code-of-Conduct-fef15e2ed1f5453f8bd56f338c70bb88

The Grant DAO service also pledges to be held accountable by the Balancer Token Holder in accordance with the Balancer DAO Accountability Guidelines https://www.notion.so/balancergrants/Accountability-Guidelines-229d93372403415688f8d3dc4cb964b1. This will include the Grant’s Committee:

  • Holding an open community call monthly and keeping a recording available for 3 months
  • Developing a monthly report detailing key objective progress which is posted to the Balancer Forum
  • Attending the internal monthly DAO meeting (mandatory attendance by a least 1 representative)

ETH Address to Receive Funds

Based on this proposal being votes in, the Grants Committee would request the total budget allocation be sent to:

0xE2c91f3409Ad6d8cE3a2E2eb330790398CB23597

This address is the Grant’s DAO primary multisig.

5 Likes

As a grantee I can say from my own experience that grants are handled very professionally and give individuals as well as teams an incredible opportunity to build on top of Balancer.

Given my position in the DAO I will abstain from voting on this proposal but endorse it fully!

3 Likes

This initiative is great and we are leaning towards being in support but it lacks some information to help make that concrete choice.

The SP should be a lot more transparent about the work being completed otherwise we continue to fund a grants program without a full comprehension of the work being completed. Some of our thoughts are documented below to help bring more transparency to this SP.

Is there a page that documents your reasons for funding certain grants? I can see your "finalized and live" grants page here but there aren’t reasons for the public to easily understand why you funded them. You could even provide continuous updates about the grants that get multiple grants like TracerDAO.

It would be helpful if you could tag these grants in categories too. Only a few have been tagged, but its important to help us understand what categories we are focusing on.

It would be helpful if you can create charts for the monthly updates that can help give us more information about the grantee application (during a wave and cumulative), success rate, and the category of these grants. It’s much easier for us to digest and understand which categories we might be over or under-supporting.

5 Likes

Bobbay,

Thanks for your comments not only here but across the forum during this time of restructuring. Our medium page currently has an update for all live grantees each month, as well as an announcement for when a grant is first approved regarding what their work scope will be and why this benefits the DAO. Putting updates on the page you linked does make sense, we will be sure we include this going forward.

I do agree the decisions have not 100% transparent in the past. This is why @burns has developed a decision matrix (outlined in the proposal) which we will be implementing and documenting going forward. There is no reason for this not be open to the public.

Charting the application data has not been done but we do keep track of it weekly in terms of approvals, total applications, etc. With proper filtering (some noise comes through our application channel) I would not mind taking that on myself.

Transparency in the grant process, start to finish, is something we want to emphasize as important to us in the proposal. On top of that, the value add metrics mentioned will be where we are focusing our resources. We will remain open to recommendations now and after approval if it does happen. I hope this clears up some of your concerns.

5 Likes

While we have had some not so good grants there have been a lot of great success stories, like Xeonus. From my interactions with Burns and Zen Dragon I believe them to be capable leaders and I would commend them on the smooth transition taking over from Zeb when he departed earlier this year. I think the Grants program is in very capable hands between the leads and committee members (great to see the lead role being split) and all in all the ask is reasonable in my view. Happy to support this and let this group continue their good work.

4 Likes

I appreciate the detailed response and look forward to seeing the feedback incorporated! We are very much in favor of supporting this SP and are excited to see the great work continue.

3 Likes

To avoid confusion as I can’t edit the post further to fix a typo, proposed committee members are:

Mitch Burns - Committee Co-Lead
Zen Dragon - Committee Co-Lead
Jay Napier - Committee Member/Mentor
John Grant - Committee Member/Mentor
ZeKraken - Committee Member/Mentor
1 Open Committee Member/Mentor Position

https://snapshot.org/#/balancer.eth/proposal/0x29c1d0e6b7d09fbee6f69d28b24539e1a793c7a7d61ca7eb039686ae5de6ed02

1 Like