The Potential Log-Jam for Epoch 3

Mechanism Design
22

Thanks so much for raising this important topic - and encouraging the community to share their feedback. A few ideas:

What types of public goods do we want to fund?

If we want to support a few well established projects with large amounts of ongoing funding, then we should employ certain mechanisms.

If we want to help kickstart many experiments with small amounts of one time funding or help grow medium projects with small amounts of ongoing funding, then we should employ other mechanisms.

That’s a big question - one for Golem Foundation, the Octant team, and the whole community.

It seems like Octant currently leans towards the former option. The minimum funding threshold helps entrench well established projects in two ways: less established projects do not receive matching funds (less funding to become well established), and less established projects are forced to reapply for the next round (more admin burden).

Personally, I lean towards the latter option. I value the work of established projects, but I think we will have more impact in the long run by encouraging and funding many experiments. I also see some well established projects with massive war chests and many small / medium projects struggling to survive.

Which projects in an Epoch should receive matching funding?

My gut feeling is that every project eligible to receive matching funding should receive it. But I would be interested in seeing the numbers. Would it be possible for Octant to share the matching funding amounts for Epoch One with and without a minimum funding threshold?

Which projects should be eligible for the next Epoch?

There seem to be 3 options. A project can be automatically rolled over, asked to re-apply, or be prohibited.

So far, the discussion has assumed that well established projects should be automatically rolled over and less established projects should be asked to re-apply. But I am not convinced we should make that assumption.

One option: We could impose a cap on matching funding per project per year. Well established projects could receive a certain amount of matching funding (in one or more Epochs) and then “graduate” from Octant for the year.

Second Option (mentioned above): Projects could self-impose a cap on matching funding per year. Projects could receive that amount of matching funding (in one or more Epochs) and then “graduate” from Octant for the year.

Third Option: We could prohibit all projects in one Epoch from applying for the following Epoch.

Fourth Option (mentioned above): We could have a different theme for each Epoch. GLM stakers who are not interested in the theme for a particular Epoch can assign the yield to their wallet or send it to the Golem Foundation to be distributed as matching funds in future Epochs. Over time, we may be able to measure the level of community interest in various themes by seeing what percentage of yield is donated to projects in each Epoch.

All of these options would clear more Epoch spaces and free up more funding for less established projects.

How many projects should be in each Epoch?

My gut feeling is that 24 projects is just right - small enough so GLM stakers can research all the projects, but large enough to keep it diverse and interesting.

23

Lots of great dialogue here with some great points brought.

All projects should require re-evaluation/re-application but the cadence might differ. The gold standard project that would be most appropriate to give the blank check would be Protocol Guild. However, after 1 year, or 5 years, they should still be re-evaluated or have to re-apply. We’re in a rapidly growing and evolving space and things change rather quickly including our gold standards.

I agree. A concern of mine is that people don’t engage in the projects, research them, and truly understand what they are allocating funds to. Is it possible to encourage people to research projects and vote for things they value? I would be disappointed if only “popular projects” met the threshold in the future. I know this is a complex issue of community engagement and how to motivate members to research and/or engage with the projects in a given Epoc.

This thread is great. We can find some overlap between ideas. The first thing that comes to mind is having 4 (or whatever) static themes and allowing the community to vote to replace or keep the theme with the lowest participation. Not saying this is the solution but I believe we can come up with something that both engages the community but also allows for, consistency, and for projects to have a defined Round/Epoc they fit into.

As detailed above by @Loring there are several options on how to determine eligibility. I am a proponent of experimentation and re-evaluation. Once we have the data from the next Epoc we can make more informed decisions.

Yearly reviews for Octant would be great to plan for. Evaluate the North Star, the mission statement, what worked, what didn’t, what could be improved, etc.

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24

As you noted correctly just after this point, we lean towards the former right now. This has already been developed a bit as there’s a social credibility threshold that new ideas / minimal development aren’t qualified to participate in a round.

Do you feel each PG funding mechanism should lean this way, or should there be a plurality of projects at different ends of the tail?

I don’t think much of a difference would take place, but I don’t have the numbers in front of me. But this could also be because people who saw projects that they initially donated to were well below the threshold and decided to move their funds to where it would be above. Definitely some fluid dynamics that played out there.

I think each of the options you share are interesting, but there’s two caveat to it at the moment. The first is the functionality that you are describing for limits in funding aren’t possible with our current architecture. We’re building this, but its not ready. Secondly, our community is really small atm.

At this stage, and this is totally my opinion, is that if we clean house and have a bunch of new projects join us for a new round, this will cause a few problems. One problem is the UX around getting the next group of projects into an Epoch. We don’t have an alternative to snapshot at the moment, and so hosting a snapshot of 40-50 participants vying to be 1 of 24 projects is a nightmare in my opinion. Additionally, many of the projects that are participating now are interesting to our small community. If you remove them and add projects that don’t have as much enthusiasm / support, then that causes a lot of problems for Octant growing at this stage.

So while I am all for trying different things, I think the stage at which we try them is extremely important, and introducing things too early will shoot ourselves in the foot.

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25

I don’t know if there is a way in getting around this with Octant. 24 spots is not many, so I don’t see how theoretically an unknown project could perform well?

My intention for this topic is to have a band aid solution for the short term, and then having this idea be discussed / designed with the governance council shortly after the overall structure of governance is established.

North star and mission statement has been reworked over the holidays and we are releasing this information next week with some big updates for users which will take place in Epoch Three. Really excited to share this info!

26

@james Thanks for your comments and questions. Love the discussion here! A few follow-up thoughts …

Great question! I think it is reasonable for different funding mechanisms to focus on different types of PG projects. I also think we should prioritize funding the top of the funnel (i.e. experiments and growing projects) before funding the bottom of the funnel (i.e. established projects) - and periodically re-evaluate whether there is sufficient funding at the top of the funnel.

Limits would be easy to implement manually - if we don’t worry about enforcing an exact limit. For example: Let’s assume the limit is 50 ETH per year, and Project X receives 43.5 ETH in Epoch Two and 20.2 ETH in Epoch Three. Since Project X passed the limit in Epoch Three, Octant could easily prohibit Project X from participating in further Epochs for the rest of the year.

These are both excellent points. I prefer Option 1 (impose a cap on matching funding per project per year) and Option 4 (a different theme for each Epoch) because they are reasonable for the Octant team to implement and because they strike a balance between well established and less established projects. Themed Epochs may also broaden Octant’s appeal.

Excited for these updates!

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27

I wonder if the mini-rounds can help here. once a threshold of projects in a theme is reached we spin up a mini-round.

this doesn’t always work effectively. for example, i have seen some of the more unscrupulous people apply with multiple projects to optimism retropgf to maximize their funding. so it keeps away focused projects and gets more money to grifters

Second this point, we dont want to become like gitcoin or retropgf where its overwhelming.

in traditional philanthropy, no one’s given a blank check. even the blue chip NGOs are guaranteed funding contingent on them raising other grants. We don’t want any projects survival to depend solely on Octant.

I agree, if we wanted to start in the simplest possible manner static themes are the way to go for 2024.

To be fair octant does fund experiments indirectly, by giving money to regrantors like gitcoin which are much better at funding experimental stage ideas.

28

Yeah this is my thought in how Octant can support the long tail without it being directly distributing to the long tail.

I agree, and I would argue that there are many more projects that focus here than the short tail. Gitcoin, Clr.fund, DAO Drops are all examples of this. Not sure where the EF falls on this spectrum.

But I really like what @mike.sylphdapps.eth wrote here:

So I don’t think we necessarily need to be at the extreme short tail, but more a middle ground as well, where projects who are looking to make that next step by being able to show they’ve built something that should continue to grow.

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29

Just my 2 cents. A big +1 here.

I think Octant is doing really great here by focusing on smaller number of projects.

We have seen what a complete open-door policy does to many of these funding mechanisms. I find it really refreshing that Octant tries something stricter.

this doesn’t always work effectively. for example, i have seen some of the more unscrupulous people apply with multiple projects to optimism retropgf to maximize their funding. so it keeps away focused projects and gets more money to grifters

Another plus one here. And some may not even be a grift but this is a pattern I also see and something I want to push out of ALL the current PG funding mechanisms.

There is many projects that share the same entity behind them either directly or indirectly and all apply to the same rounds of every grant program they can find. That is imo double/triple dipping and one of the many reasons why strong curation is needed.

Nobody owes anybody anything. This is funding projects for doing a lot of good work and producing outcomes. It’s not just throwing money around.

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30

Could I ask what you think would be fair around the initial topic of project rollover?

Should the top 1/4 or 1/2 of projects from last round be streamlined for the next round, maybe a stricture threshold based on the funding outcome of the previous round?

I’m trying to find what is fair, but also not a crazy UX nightmare for the snapshot vote that decides which projects (that aren’t automatically rolled over) join us for next round.

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I would say any project that has made the threshold in the round. The allocation itself is the decision making no?

32

Thats what this conversation was more or less trying to address. With the current minimum funding threshold very favorable for projects to acheive (its only 2.4% of what users donate), that then allows for most projects to theoretically roll over, limiting the spaces for new projects to join next round. I’m thinking a healthier balance is possible vs what we have at the moment.

33

So you want to define a rollover only for the top funded X projects and then the rest can apply along with the rest in the snapshot so that more projects get given a chance?

And wonder what number would be good for X? I guess we would need to also know how many projects would be in Epoch 3 to come up with a valid value there.

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Sure thing, after two rounds obviously better data, I suppose we can put this conversation on hold until the 31st.

35

If the goal is to adequately support about 20-24 projects, I think if projects self-report how much funding they require (essentially capping their potential reward in the epoch), and that amount is below the average payout, then it would be possible to include (and fund) more projects in the round (potentially allowing more projects to roll over without needing to adjust thresholds)

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36

We are working on self reporting and impact evaluation at the social level for Epoch 3, and making this much more robust afterward with different funding models depending on the project.

So you’re thinking is spot on with what we’re currently discussing, just need to get a framework in order that each participating project can abide by.

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37

Just to add to this discussion, we’ve increased the total slots available for potential funding in Octant from 24 to 30 for Epoch Three. With project rollover linked to the minimum funding threshold, it means that there are 11 slots for projects included in the E3 Snapshot vote to continue onto the E3 Allocation Window. This is quite a bit better than the last Epoch when there were 6 slots for potential new projects to join.

The reasoning behind adding more slots is that there’ll be more total funding than previous epochs due to the New Algorithm Design.

My assumption is that we’ll still need to change how rollover works since otherwise the increased slots for new projects joining will likely only be temporary.

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38

So with what @mat7ias just mentioned above, there has been a bit of a bandaid solution for Epoch 3’s specific situation as we have more spaces now than previously estimated. But in the long run there are still issues at hand.

Octant V2 is going to theoretically solve these problems in the long run by not requiring so much of the dev resources to get new projects in and old projects out for an upcoming round. But in the meantime, we should definitely optimize as best as we can.

@thedevanshmehta has suggested themes, and I really like this idea, but it would have to be thought out, and I don’t anticipate this is something we could move towards in a quick fashion. So while we can explore that idea, I have some thoughts on how we can improve for Epoch 4:

  • Establish a higher funding threshold for projects that roll over from one round to the next. Maybe the top 50% of projects? Maybe the recipients that fall into the top 50% of funds? Maybe one of these ideas but with a different % ? This would be something easy to implement in the short term and can be further tweaked in the long term.

  • The 2nd idea that I’ve had but needs more thought put into it is that with project roll over, I think there should be a higher bar of scrutiny for projects that have participated in 2 rounds and are looking to continue on towards a 3rd. When a project receives funds from Octant, we ask that if a project wants to continue, that they need to share an update based on what their initial proposal detailed. I’ve had discussions with many projects that its hard to share much impact and progress after being rewarded from one round, since the sharing for the next round is only a month or so out. But after two rounds, I think this becomes a much easier area to look at closely. Defining what this looks like obviously needs more thought, but intuitively it makes sense to me.

As a community, how do we feel about implementing point 1 for projects rolling over into Epoch 4? And do you have any thoughts on point 2? Do you agree with this idea? Any thoughts on how to refine it?