The role of Xgov should not be that of a VC - speculatively gambling on future outcomes. It should be to reward those who are ACTIVELY MAKING AN IMPACT already as they are not receiving ANY support. Retroactive funding based on impact completely removes the issue but I guess it’s too radical to fund those who do the most even though the community seemed to be onboard? Who exactly at AF is making this decision that we must stick with this Xgov framework? Do I need a signed petition from every Algorand community member saying we could build a far better less complicated system?
I urge all the Algorand Foundation members to look at what Optimism is doing with retroactive grants / airdrops. They’re truly working to grow the ecosystem and support the people there. They just airdropped 10m OP to their NFT creators ($40m = ~ 220m ALGO). This is the kind of community support we need to be aiming for, recognizing those who make impact and rewarding them meaningfully, not these microscopic improvements to a broken program that will not change anything big picture.
No matter how many safeguards you put up around Xgov, it will still fail to efficiently and effectively distribute funds because no one knows the future, and because that isn’t the goal of the program, the goal is to fund proposals. The goal should be to fund those who actually make an impact / deserve it / will put funds to good use. Instead, we have the same old Xgov, where people who ‘might’ build something throw a proposal in to try and get some money, and if they get some money, then they might build it, and maybe if we’re lucky it will be used by 5 people. The point is - no one can tell the future, and no one can predetermine the impact any project will have, so why the hell are we trying? Not just trying, but being forced to by the AF. Apparently, no other design can be considered like the one I proposed with Impact DAO. It feels like it’s this or nothing and that’s truly disappointing because I keep hearing this is designed by/for the community, but as a community member I don’t feel this at all.
Milestones are a huge red flag. There have been dozens of high profile grant recipients who had milestone based grants, completed all their milestones, got millions of dollars, and the impact they had on mainnet was literally 0. Milestones ‘seem’ like a good idea until you break it down. Who is going to be responsible for judging if these milestones are completed?
Yes that’s right, a rotating group of 17 people that is voted in that changes every 3 months is going to be responsible for going through the potentially 10’s to 100’s of concurrent grants milestones. This sounds super unrealistic to me. For sure it will be an administrative nightmare for those on the council. Many milestones are technical, so for example, how will the council judge if a smart contract is working if they don’t yet have the UI (which comes in a later milestone)? They would need to be highly technical to be able to do this. And how do you get 17 highly technical people to dedicate days - weeks to this without any compensation? The whole thing to me seems highly unrealistic, overly burdensome on the council members, and STILL missing the bigger picture that we should be rewarding impact not promises / hopes / dreams. On top of all that, allowing these key roles to be voted in opens it up to be a popularity contest, meaning these council members will not be the ‘best fit for the job’, they will be ‘the loudest people in the room’. We are sacrificing accuracy for ‘fairness’ which imo is a terrible trade-off.
The fact that KYC is being forced on proposers is ugly. This should be controlled by a smart contract that does not care who the recipient ‘is’, it’s just an Algorand account. This just shows how centralized this whole process is and how unambitious we are in changing it, or anything frankly. This should not be the Algorand Foundation sending people grant money, it should be the AF funding a mechanaism which operates independently and autonomously to determine how the smart contract distributes funds.
A far better approach to funding would be designing the Impact DAO as laid out here: Proposal for the Establishment of the Impact Oracle DAO to Fund Public Goods in the Algorand Ecosystem | by fisherman.algo | Feb, 2024 | Medium
I don’t believe builders should have 0 risk when starting a project. You should not be able to show up with a pitch deck and receive free money from the foundation to build it. Where is the risk for the builder? They don’t even need to care if the project is good or bad, or if it will make a big impact or no impact. If they don’t receive funding then they don’t build it.
Since there was a lot of push back that some proactive grants should still be available in some fashion, this is the best solution I have seen to allow proactive grants to stay in some fashion, thank you Kappa for this great idea.
Make a crowdfunding App / DAO where interested users for a certain dApp to be built set up funding milestones. When the milestones are reached, the funds are given to the builder, then when the product is delivered and on mainnet the Impact DAO can judge the impact of it, and if it is seeing success, then the Crowdfunding DAO gets paid back via the Impact DAO awarding the project RGPF, and the members who funded the project get their money back + a small amount of interest, with any remaining funds going to the project themselves.
This does multiple things -
- It puts someone else’s money at risk for speculative projects, not the AF treasury. This is CRUCIAL. The individual members of the DAO would risk their own money, and only get paid back if successful as determined by the Impact DAO.
- It allows speculative, not yet built projects to still have a funding source.
- It rewards the sharpest investors with yield as they will only make money if the projects they choose to fund are successful.
I feel like coupling a proactive DAO with a retroactive DAO is the best path forward if we’re determined to build a mechanism that can fund both proactively and retroactively. The retroactive DAO is funded via AF, and the proactive DAO is funded via community members / investors, and if successful they get rewarded via the retroactive DAO.
In summary, Algorand is currently a very depressing space for builders. Maybe 2 projects on the entire chain are profitable, meaning every other project needs retroactive funding to be viable in the short-medium term. Until scale is reached, we all need assistance, and substantial assistance. If this does not change more projects will leave the ecosystem, not because they want to, but because they’re forced to. NFTx doesn’t want to close, but there is no possible way to turn it profitable with the ecosystem the size that it is, and without public goods funding. This fact not being realized by the community / AF is deeply troubling, and will lead to more projects leaving the space than entering. We need a system that encourages people to create impact, not a system designed to handout free money with a bunch of stipulations.