TL,DR
Proposal to approve the first batch of grants of the Balancer ecosystem fund. This first batch will be comprised of 100k BAL, future batches will likely be smaller. To recap, the idea of this 5M BAL fund is to attract and incentivize strategic partners/stakeholders that will help the Balancer ecosystem grow and thrive.
Context
There are many projects and protocols that may want to integrate and/or build on Balancer. This is probably one of the most important areas for Balancer to thrive as a protocol and defend itself from new entrants or copycats. In many cases, it makes sense for Balancer to incentivize these integrations as these partners may need some extra motivation for them to feel staked within the Balancer ecosystem. Grants can also help partners convince their communities that Balancer is the right protocol to integrate their liquidity/users with.
Balancer Labs will be responsible for deciding on the specific grant distribution to avoid governance micromanaging the decision process for each single grant. After a grant batch is fully allocated (if there is some left-over, it will be added to the following batch), a report with the grant allocation in that batch will be released to the community and a request for approval of a new batch will be voted on. This dynamics ensures that Balancer Labs has to do a good job at grant distribution since if this is not the case a new batch of grants might not be approved.
The Proposal
A 100k BAL first batch of grants to be allocated by Balancer Labs to many teams/projects that are building on / contributing to Balancer.
All the grants have the long term alignment of incentives with Balancer protocol. Therefore, all grants awarded in this first batch will be given out as follows:
- 90% of the grant is vested linearly over 1 year (ensured by a smart contract)
- 10% of the grant is unlocked, but teams are expected not to sell these tokens, instead to distribute them to their project users or to hold them for voting on Balancer governance proposals.
Further Considerations
Balancer Labs has started working with strategic partners and giving grants since before BAL was even launched. Many grants were given out based on the seed price of $0.60 per BAL, so this is why the high number of BAL tokens in this first batch. Future batches will probably be of 50k BAL, as individual grants are going to be a lot smaller given the current market price of BAL.
