GP8 Measures DRAFT xGov Grants Allocation

Governance Governance Measures
1

Measure 1 - Approval of xGov pilot program allocation top up mechanism

This quarter we have launched the first iteration of our xGov program, where xGovs analyze community grants proposals and select them for funding. Governors strongly approved the allocation of 2M Algo to this program when GP5’s Measure 3 passed with 69.05% approval. The program is still in its pilot phase and is designed with the community using our ARC process.

For the first voting session, 26 projects have submitted proposals to xGov for a grand total of about 5M Algo of funding (i.e. if all funding requests were to be granted). The community is still iterating the xGov MVP so it can effectively filter funding requests and be used to collectively select the ones that will create the most impact for our ecosystem.

Discussions have begun amongst xGovs in our social channels about increasing funding for the pilot phase of this program, anticipating that the 2M Algo already allocated by the community may be fully distributed before voting session #2.

This measure seeks approval to automatically top up the xGov grants allocation by tapping into the quarterly governance rewards available.

A maximum of two top-ups would occur during the pilot, if and when the remaining funds available to xGovs drop below 1M Algo.

[We consider that having a threshold of Algo that can be drawn upon every quarter might be a good short-term solution whilst we still work with the community to improve the program. If the threshold isn’t met within the quarter, the remaining amount would be distributed as rewards.

For example, a threshold of 2M Algo per quarter is set for the duration of the pilot. At every quarter the amount of approved grants cannot exceed that 2M Algo threshold. If xGovs approve only 1M in grants for Q1/2024, then the remaining 1M would be distributed as governance rewards for GP10.]

The Algorand Foundation supports option A.

Measure 1
Should Algo from governance rewards be allocated to the xGov community grants program after the initial 2M Algo allocation has been exhausted?
Option A - Yes
Option B - No

Measure 2 - xGov top-up amount

This measure is conditional on the measure above (1) to approve allocation passing. Governors must vote on this measure, even if they voted “No” on measure (1).

This measure proposes creating a threshold of (up to) 2M Algo per quarter during the pilot to be allocated to the xGov grants program from governance rewards.

If the total amount of grants approved is less than the threshold, the remainder will be distributed as governance rewards. When the program is better formed, with clearer rules and a better interface, we will readdress the program’s funding needs.

As per the example above, if a threshold of 2M Algo is set per quarter, the total amount of approved grants cannot exceed that 2M Algo threshold. If xGovs approve only 1M in grants, then the remaining 1M would be normally distributed as governance rewards.

The Foundation supports option A.

Measure 2
What amount of Algo from governance rewards should be allocated for distribution through the xGov community grants program?
Option A - Add up to 2M Algo
Option B - Add up to 1M Algo

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Thanks for posting these ahead of time for visibility and community feedback.

I support the xGov program as an Algo holder, and as a builder in this ecosystem I have an interest in its success and further expansion. I also think that regular passive governance participation rewards need to be reduced to zero as quickly as possible. This period there will be 42M Algo given away in rewards and only 2M available to support people building tools and apps.

I suggest there be an option to increase the top-up amount above 2M Algo. The xGov program should be given an opportunity to grow. The options should be 2M or 4M Algo.

If xGovs do not want to award the full amount of the pool in grants, they already have a voting mechanism to vote against all proposals.

Furthermore, when these measures go to a vote, the very first xGov period will just have ended. It is much too soon to have a regular governance measure to potentially curtail the xGov program before it has even completed a full cycle.

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I definitely agree with your points. Given the enormity of passive rewards we would be best to allocate more towards projects and tools.

I noticed multiple comments among xgovs hesitant to pass some projects due to the algo requested from a project. Some not because the amount was egregious but because they didnt want to run out of algo in xgov in one voting session.

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Thanks, @SilentRhetoric and @Fritos2, for your comments.

As an xGov, I also feel this need to grow the program faster.

The reason why the Foundation is hesitant to crank up the amount of Algo available, whilst we are still building the program, is that we are not prepared to handle the potential volume of grants to be processed. We have to automate contracts and payments before we can handle more grants.

Now that AlgoKit 2.0 is nearly here, John has allocated more dev resources to governance, we will move faster.

So the reason for this measure is that we want to see something in place now so we don’t run out of funds once xGovs have allocated the 2M Algo currently available.

Once we have completed at least one more voting session, and have the contract and payment processes working, we will propose a new measure to increase the allocation past the 2M Algo mark.

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