PR with Payload
TL;DR
With V3 in final audits and due for release in Q4 2024, the grants program requests funding to target new V3 integrations, hook building and reformulating our Grants program. With less projects being approved, the structure of the grants program will be changed to allow for decreased overhead, while keeping a funding route open for valuable projects without the DAO having to sift through these applications.
While other SPs move to 6 month requests, the grants program will use this 3 month period to reshape the program for 2025 as an effective vehicle for assisting Balancer develop and meet its roadmap. We have been seeing a decreasing quality of applications and our biggest successes have come from projects with high internal buy-in (Scaffold Balancer, hooks etc), so this quarter we will experiment in tying the grants program more closely to Balancer Labs and the DAO. This is in an effort to enhance ecosystem and community engagement, align more closely with protocol goals and increase meaningful RFPs.
Main points:
- Attract more projects to build on V3 - fund v3 hook building, integrations and custom pools
- Complete retrospective report on grants program to reformulate it. With recommendations and a new proposal structure for 2025.
- Funding duration 3 months from Oct 1st to Dec 31st, 2024.
- Funding for new grantees - 50k BAL (match awarded grants in Q3 + 25% buffer)
- Funding max to $50k USD per grant, above goes to the forum with assistance by BG and a technical champion appointed. BG will facilitate MS payments.
With a significant drop in BAL price, funding is requested to top up the treasury (currently 3,887 BAL uncommitted) to
- 50,000 BAL for new grantees (46,113 BAL top up)
- 12,800 USDC for committee/support (7,800 USDC top up)
As always, we welcome comments and recommendations from the community on how to better develop the Balancer grants program.
Service Provider Name: Balancer Grants
Leader(s): Burns, with committee members Mike B, Steve0xp and Zen Dragon.
Pledge to abide by the DAO’s Code of Conduct 1 (or link to your own): Yes
Pledge to abide by the Accountability Guidelines: Yes
In accordance with the Balancer DAO Accountability Guidelines and uphold those proposed here. This will include the Grant’s Committee:
- Developing a monthly report detailing key objective progress which is posted to the Balancer Forum and Medium
- Attending and presenting during the Baller weekly meeting (mandatory attendance by at least 1 representative)
The grants committee will undertake compliance checks and facilitate agreements between grantees and OpCo for funding amounts $20k and above.
Domain of Operation
After 13 waves of funding, this proposal seeks to continue the grants program approved in BIP-633 with changes to in place to extend the DAO runway with BAL at all time lows. The program will reduce it’s delegated authority to offer up to $50k USD (down from $100k) in BAL tokens per grant supporting the Balancer Protocol’s mission to become a leading DeFi liquidity source, catering to both short-term and one-off projects, as an alternative to the Foundation SP model’s focus on long-term and higher-cost engagements.
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 are below. We will work towards increased alignment with Balancer Labs and assign more accountability to technical sponsors to better support grantees. There is a collective vision that the grants program is well suited to be leveraged in a more directed manner to help Balancer achieve its roadmap.
The grants program will be focused on:
- Continue to mentor and deliver with existing grantees
The program currently has 5 live grantees building assorted integrations, novel use cases for Balancer pools and educational resources. We are also running a hackathon to promote hook building. The committee has assisted projects to complete their milestones and intervened where the project has gone stale to recover funds for future grants. These projects total ~109k BAL of committed funds yet to be paid for outstanding milestones. These can be reviewed on our Finalized and Live Grants Notion Page.
Deliverables: On-going support/management, monthly reports, coordination between Balancer entities.
- Fund projects dedicated to increasing adoption of Balancer V3 and further into Balancer’s roadmap
With Balancer V3 launching in Q4 2024, grants will play a significant role in incentivising projects to:
- Integrate Balancer V3.
- Create educational content, tooling and docs to lower barriers to entry for teams building on V3
- Create new use cases with Balancer custom pools and hooks
Deliverables: Live Grant assessment sheet, monthly reports, committee meetings
- Funding categories
Primary focus:
| Category | Why / Why not |
|---|---|
| Custom Pool Types | Custom pool types have the highest potential value to Balancer but are risky. These projects create new use cases and showcase Balancer technology. |
| Education / Tooling | Very important to make Balancer more user/dev friendly and drive adoption of building and investing in the platform. |
| Hook builders | Hooks are the newest feature to come to Balancer with v3. Creating new use cases through hook building will be incentivized to showcase this new rapid development option. |
Secondary Focus:
| Category | Why / Why not |
|---|---|
| Analytics | Continuously improving analytics and encouraging existing projects to include Balancer drives volume to the protocol. Clear value. |
| Research | Research has been generally avoided after early failed proposals. Recommendation is to revisit funding research as optimizations or new use cases may prove valuable. Risky with low likelihood of payout but high potential payout. |
| Swap Aggregators | Swap aggregators create more revenue streams. Strategic grants may be considered. |
| Wrappers / Infrastructure | Can lower barriers to entry for other projects looking to integrate with Balancer and provide additional revenue streams |
| Yield Aggregators* | Only with a direct value calculation. There are generally sufficient incentives for yield aggregators. With no yield bearing assets, this is not worth funding. If the aggregator has the potential to bring high volume and TVL of yield bearing assets, then a value calculation can be made. |
Grants Committee
The Grants Committee consists of dedicated Balancer contributors with strong analytical and support backgrounds. The committee remains an equal democracy with no person having a greater authority on what is approved or not. We rely on individuals’ expertise in different areas to help make informed decisions.
Burns - Committee Coordination Lead
MikeB - Committee Member/Mentor
Steve0xp - Committee Member/Mentor
Zen Dragon- Committee Member/Mentor
The committee has the ability to onboard/offboard members as individual circumstances change throughout the quarter between funding proposals. Given the authority to approve and distribute grant funding, the committee can also self manage members within the approved budget.
The Grants Committee will continue to work closely with Balancer Labs, Ecosystem SPs 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.
Previous Performance
As a committee we have shown ourselves as:
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Diligent assessors of grant applications with intimate understanding of the DAO and protocol.
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Trusted to find and manage grantees building on core Balancer code alongside Balancer Labs. With one grantee being on-boarded to Balancer Labs.
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Fairly recover funds from stale grantees when no longer relevant saving ~30k BAL to date
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Prudent with spending to maintain the grants treasury and limit BAL expenditure
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Supporting grantees to completion by connecting with the resources required
Q3 Recaps: Julyl Monthly Report and August Monthly Report
Total application submissions and approvals:
Length of Engagement and Budget breakdown
This budget contains all costs for the full operations of the Balancer Grants SP for the period July 1st to Sept 30th, 2024. Unallocated resources will be kept to offset the next budget request if successful. 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 committee.
Tiers are:
Committee Lead - $3,600 USD paid in USDC - mentor and provide support/coordination for all grantee teams, administration of grants docs, RFP development, prepare and present monthly reports/community calls, wave round up, grantee announcements, budget preparation and SP proposals.
Committee members - pro bono as a part of other DAO SP roles
| Expense | Amount in BAL/USD | Description |
|---|---|---|
| Q4 Grants | 50,000 BAL | To be rewarded to grantees based on milestones following the Grants review process. Includes buffer for current approved grants in $USD to be paid in BAL. |
| 1 Grants lead | $3.6k x 3 months =10.8k USDC | The Grants Lead Role takes ownership of the establishment and operations of the Balancer Grant processes. The lead is responsible for coordinating with Committee Members, scheduling and hosting meetings, carrying out KYC/compliance due diligence, maintaining Medium and Notion pages and leading the grants reporting. |
| Other Program Expenses | 2k USDC | 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, analytics, media, PR, research, legal, gas fees or any other specialized functions outside the skillset of the committee |
| Total Budget for Q4 | 50,000 BAL & 12,800 USDC | |
| Uncommitted Treasury | 3,887 BAL & 5,000 USDC |
Funds to Transfer: 46,113 BAL & 7,800 USDC
The Grants Committee multi-sig (currently 3 out of 5) will continue to operate with the remaining funds in the Grants treasury (0xE2c91f3409Ad6d8cE3a2E2eb330790398CB23597) carried over and approved to be delegated to the grantees.
Impact on the Treasury: The Treasury currently holds ~3.51M BAL. Funding Balancer Grants for Q4 is at a cost of 1.31% of the treasury’s BAL holdings (this is assuming all BAL is spent on grantees), which annualizes to ~5.26%. The Treasury currently holds ~5.73M in stables. After savings from this quarter, funding the USDC portion would cost ~0.14% of the treasury’s stable reserve, which annualizes to ~0.54%.
All transactions will be recorded in a Sheet maintained by the committee and on chain.
ETH Address to Receive Funds
Grants Treasury - 0xE2c91f3409Ad6d8cE3a2E2eb330790398CB23597
Current Treasury Balance ~ 113,240 BAL + 9,000 USDC
Committed ~ 109,353 BAL + 4,000 USDC (@$1.70 USD/BAL)
Uncommitted treasury ~3,887 BAL + 5,000 USDC
The Balancer DAO multisig 0x10A19e7eE7d7F8a52822f6817de8ea18204F2e4f will interact with USDC 0xA0b86991c6218b36c1d19D4a2e9Eb0cE3606eB48 by writing transfer passing the Grants SP Safe 0xE2c91f3409Ad6d8cE3a2E2eb330790398CB23597 as recipient and amount 7,800 USDC as 7800000000.
The Balancer DAO multisig 0x10A19e7eE7d7F8a52822f6817de8ea18204F2e4f will interact with BAL 0xba100000625a3754423978a60c9317c58a424e3D by writing transfer passing the Grants SP Safe 0xE2c91f3409Ad6d8cE3a2E2eb330790398CB23597 as recipient and amount 46,113 as 46113000000000000000000.