Delegated Domain Allocation by Questbook - Arbitrum DAO Grants

We are voting AGAINST this proposal in the temperature check.

I’d like to signal our sympathy for the overall idea. We do believe that a Grant Framework for the DAO is needed and should be funded by the DAO. However, we have some serious doubts regarding this proposal. We have already raised most of those issues either in a direct discussion with Saurabh or in the public discussion regarding grants framework. We expect the proposer to provide further clarification before the vote goes on-chain, if it were to go for an on-chain vote unchanged, we will vote against it in current form.

Before I go into specific concerns, I need to disclose that I’m currently a reviewer in Optimism Grants Council and I’ve been reviewer in the Grants Council in the previous season and been involved in Grants Tooling Committee the season before. Apart from that I have experience in real-world grants programs (EU-based grants programmes and startup accelerators).

The main concerns we have are:

  • the budget for this Grants program is rather small. It’s just 1M ARB tokens for a 6-month program spread out for 4 domains. However, the distributed amount is just 800k ARB which makes it 200k ARB for each domain, which translates to ~33k ARB per domain per month. How many grants do we expect to provide if the budget is so small? What kind of grants can we fund with such amounts? Compared to Optimism for example - the grants from Builders Grants (which are considered rather small) are max 50k OP each, the Growth Experiments grants are up to 250k OP.
  • Individual domain managers who review all grants in their domain are not only prone to bias, but more importantly they can be overwhelmed with this job, given the expected time allocated only 15hrs / week by domain manager. I would prefer some diversity, for the sake of fairness but also for the sake of efficiency.
  • the proposal lacks important details regarding how the process will look like from the operational perspective - who and how is going to KYC the grantees for example, who and how is going to keep the grantees accountable, what happens if grantees don’t deliver on their promises?
  • the proposer mentions that " program manager will then coordinate with the Arbitrum team and the community to ensure that the proposal is aligned with Arbitrum’s roadmap before making the disbursal", this is an important point, but I don’t really understand it. What is the Arbitrum team mentioned? The Foundation? And how is the program manager going to coordinate with them and with the community? What is the roadmap that is mentioned here? Arbitrum team is mentioned several times here, if that is the Foundation then I would like to see the Foundation confirmation of their commitment to engage in that proposal. @stonecoldpat ?
  • less important, but still serious concern - parts of this proposal seem to be inspired by other grants frameworks (like the rubric mentioned in the KPIs is literally copy-pasted from Optimism Grants Council framework that I’ve been working on - without the Grants Council knowledge and consent). I know that at least within Optimism Grants Council there are some concrete assumptions in place that drive such form of Grants Framework (like the direct support and oversight from the Foundation in several aspects). As no sources of inspiration are referenced, I don’t know if the other parts are not copy-pasted as well, so I am not really sure if the proposer ever tried running such a program before.

I believe that this proposal is a good foundation for a proper Grants Framework, but in my opinion it requires some more discussion and clarifications. I’m willing to engage in such discussion and I hope that before it goes for an on-chain vote, all doubts will be clarified and we will be able to vote for it.

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  • the proposer mentions that " program manager will then coordinate with the Arbitrum team and the community to ensure that the proposal is aligned with Arbitrum’s roadmap before making the disbursal", this is an important point, but I don’t really understand it. What is the Arbitrum team mentioned? The Foundation? And how is the program manager going to coordinate with them and with the community? What is the roadmap that is mentioned here? Arbitrum team is mentioned several times here, if that is the Foundation then I would like to see the Foundation confirmation of their commitment to engage in that proposal. @stonecoldpat ?

We can help in an operational role where it is required. I don’t think we should be influencing the type of grants issued or deciding the priority list for what should be tackled. The Foundation already has its own grant programme that will be announced soon, so grant programmes via the DAO should really be up to the proposer / community.

Maybe Questbook can appoint an individual who could represent their view on the Arbitrum ecosystem and run grant proposals past them first? I think that individual should be independent of the Foundation though.

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Hey everyone, thank you so much for the support and for voting in favor of the proposal. Our Snapshot proposal has passed the temp-check.

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Thank you @krst for sharing your comments and concerns with us. Really appreciate it! Please find below our response:

  1. After careful consideration and extensive discussions with more than 25 active community members and delegates, we decided to propose a grants program through Delegated Domain Capital Allocation Model with a budget of $1M across two quarters. By funding proposals through this model, domain allocators can set maximum thresholds for accepting a wide variety of proposals that align with their respective domains. Proposals that fall below the set threshold can be approved directly by domain allocators, reducing the burden on the community while reserving the community voting process for proposals that exceed the threshold and require broader community input.

    Upon the election of domain allocators, we will collaborate with them to establish funding caps that optimize the utilization of funds, taking into consideration the duration of the grants program. For example, in the case of CGP 2.0, domain allocators implemented a soft cap of $25k per proposal for their respective domains. Proposals exceeding this maximum threshold were encouraged to seek broader community input. We anticipate a similar approach to be followed in the proposed grants program structure.

    We believe that the success of the grants program should not be solely measured by the number of funded proposals. Instead, the primary focus of the proposed grants program should be to ensure domain allocators fund high-quality proposals that align with the Arbitrum DAO’s ethos and have a significant impact. In the event that our budget runs low after funding multiple high quality proposals, we will request additional funds from the Arbitrum DAO after seeking community’s inputs. In case the budget is underutilised, the unallocated budget will be returned back to the treasury. Considering the proposed grants program will be the first ever for the Arbitrum DAO, we want to be doubly careful on the amount of funding requested, especially in a bear market and these uncertain market conditions. We aim to ensure that the allocated funds are deployed in an efficient, responsible and prudent manner. [As also suggested by other delegates, community members,](https://forum.arbitrum.foundation/t/delegated-domain-allocation-by-questbook-arbitrum-dao-grants/14688/40#:~:text=that the proposal will function as a great trial for potentially a bigger grants program in the future.)) we will request a larger budget if the proposed model of the grants program is successful based on the key metrics specified in our proposal and community inputs.

  2. We believe that the proposed grants program design successfully strikes a balance between speed and decentralization. This ensures that the work load is naturally split among domains and subsequently, domain allocators. Domain allocators for each domain will be elected by the community from the community. These elected domain allocators will run their domains in a transparent manner on Questbook. Giving domain allocators the capital and decision-making powers will increase the efficiency of the grants program, without compromising on accountability, which may not be feasible with a committee based approach. For instance, CGP 2.0’s communication TAT was less than 48 hours, showcasing the effectiveness of the proposed model. In contrast, a committee-based design introduces diffusion of responsibilities and consensus-based decision-making, potentially leading to a less optimal experience for proposers and a loss of valuable contributors to the ecosystem. Moreover, having a single committee comprising of four experts compared to those four experts actively running the frontline show themselves ensures both efficiency and diversity within the grants program. Feedback from a few CGP 2.0’s proposers is referenced below:

Unlike closed and non transparent grants program design, the proposed model ensures a transparent review process and decision-making with greater insight into the performance of these domain allocators to the Arbitrum community. This will empower the Arbitrum community to publicly audit the decisions, rationale of domain allocators, based on which the community will re-elect/replace the domain allocators through a community vote. The program design also includes provision for community members or delegates to raise a no-confidence motion to replace/remove any domain allocator if their performance falls below expectations.

CGP 2.0 team reviewed 100+ proposals through Delegated Domain Capital Allocation Model with a proposer NPS of ~9/10. The expertise and experience of domain allocators, coupled with the dedicated Program Manager, greatly contributed to the efficient management of the grants program and the low TAT. This can be considered similar to liquidity mining of intellectual capital within the community. I would love to connect you with the active domain allocators from the CGP 2.0 to gather their detailed feedback on workload, the Delegated Domain Capital Allocation model, and Questbook.

  1. Really appreciate you bringing this up. Once a proposal has been accepted by the domain allocator, each grantee will be required to undergo a KYC process. We suggest using Synapse for KYC services and Docusign for all contractual agreements, as we have been using these services for CGP 2.0. However, we are open to alternative suggestions from the domain allocators once they are elected. The Program Manager will work closely with the domain allocators to ensure that the KYC and contractual agreements are completed before making grant payouts to the proposers. To ensure accountability, grantees will be required to include milestones as part of their proposals. Payouts will only be triggered once these milestones have been successfully completed. Additionally, all milestones, along with their respective funding requests, will be publicly visible to the Arbitrum community. This transparency will allow the domain allocators and the Arbitrum community to monitor the progress of grantees and hold them accountable for delivering on their milestones.


CGP 2.0 grantee’s milestones

  1. Before sharing our proposal with the community, we have proactively incorporated the feedback from the members of the Arbitrum core team, foundation, delegates and important community members. As specified in our proposal, the elected domain allocators will run their domains independently in a transparent manner on Questbook. They will take independent decisions for their respective domains based on their evaluation rubric. If deemed necessary, they may choose to consult the Arbitrum core team and members of the foundation to ensure alignment with the with the Arbitrum’s roadmap and gain additional insight into the considered proposal.

    The Program Manager will be responsible to facilitate the communication between the Arbitrum core team, foundation, and the domain allocators. For instance, in case of CGP 2.0, Program Manger, domain allocators, and proposers all participate in a shared Discord group for quick query resolution, seek clarifications and general discussion.

  2. We acknowledge the importance of referencing relevant sources and apologize for not doing so as part of this proposal. We have presented a broad range of data points to provide a comprehensive overview of the best practices, review patterns and rubrics used across different ecosystems including that of Optimism. Our goal is to provide the Arbitrum community members with all the relevant data points to help them make an informed decision on our proposal. The mention of Optimism’s review rubric in our proposal serves as an example. As outlined in our proposal, “each domain allocator is required to collaborate with the program manager to develop domain-specific rubrics, similar to the provided example

    We have specified the proposed domains and the rest of the details stated in the proposals after incorporating valuable feedback from several Arbitrum delegates, community members and members of the foundation. At Questbook, we have successfully facilitated the setup and operations of grants programs for multiple reputed ecosystems such as Compound, Polygon, TON etc. I am happy to connect you with the active domain allocators from the CGP 2.0 to gather their detailed feedback. Sharing their comment on this particular proposal for easier access here.

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Hey, @stonecoldpat, thanks for sharing your comments. As mentioned in the proposal, the domain allocators will run their domains independently in a transparent manner on Questbook. They will make independent decisions for their respective domains based on their evaluation rubric.

As you outlined, if deemed necessary, the program manager will facilitate communication between the Arbitrum foundation and the domain allocators for any operational details.

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Good morning, do you believe the Camelot proposal falls underneath this grant framework?

Hey @Franklin, thanks for the question. The Camelot proposal and this grant framework are different proposals, so the Camelot proposal doesn’t fall within this grant framework.

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Thanks for the clarification @Saurabh, much appreciated. So from my understanding, this AIP isn’t meant to be a comprehensive program for all Arbitrum grants, but only for the subset of grants that you’ll be responsible for administering.

Does questbook take any Fees?

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Thanks for your kind words. The identified domains, specifications and their relevance is specified here. I’ll also be attending all subsequent community calls and will be seeking suggestions/ answering any questions there.

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Hi, I support this proposal, but I have a suggestion on the grant request. Since the request is in ARB tokens (800k ARB tokens as visible in the executable code of the proposal - in wei), I suggest that you mention this amount in the text description, to avoid any ambiguity when it comes to the requested amount.

Also, please describe whether these ARB tokens will be converted to stablecoins (nothing wrong with that, but it needs to be clarified), or will they be distributed further to the program manager and domain allocators as ARB tokens.

Thanks!

Thank you for your support and recommendation. We appreciate your attention to detail. We have specified the requested budget for running the grants program in our proposal as follows.

To clarify, the ARB tokens will not be converted to stablecoins. The grants will be distributed in ARB tokens. The program manager and all community elected domain allocators will be compensated in ARB.

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Our proposal is live on Tally and we would appreciate the continued support from all the delegates and the Arbitrum community: Tally | Arbitrum Proposal

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Building on my prior post addressing concerns related to the suggested program, I have conducted research into Questbook’s DDA program’s success in the past and wish to share my discoveries with the community.

I’d like to begin by expressing my gratitude to @Saurabh and the Questbook team for supplying me with data and being willing to discuss the details. I also wish to clarify that my reason for delving into this program’s particulars is solely to foster potential improvements through dialogue. I harbor no ill will or hostility towards the Questbook team. In fact, I desire to see them administer this program to the highest possible standard.

I strongly believe that the opportunity cost of not doing any grants program is higher than the actual cost of this program. Thus I really want to vote in favor of this proposal. However, I have some concerns, whichI am raising in this post, so that we can address them early on and ensure that this program is more likely to succeed. I also raise these concerns to show that we may not want to rely solely on this grant framework and it should not be seen as an argument to dismiss any other grant program proposals submitted in the forum in the future.

I undertook an analysis of DDA’s performance across different ecosystems. Questbook highlighted two programs that they have been running, specifically in Polygon and Compound. From my conversations with Saurabh, it was evident that Polygon was only utilizing Questbook’s platform, without implementing DDA as a structured program. There is no available information on the efficacy of Polygon’s program, and it is no longer available for review on the Questbook platform.

That leaves us with the Compound’s program. Fortunately, its structure is very similar to the one proposed for Arbitrum, which allows us to draw some inferences.

Here is the link to the proposal introducing CGP 2.0: Compound | Proposal Detail #136

We can note that the structure mirrors the proposal for Arbitrum:

  • Duration of 6 months, budget of $1M.
  • $200k management fees, divided as follows: Program Manager: $60k, Domain Allocators $30k each (though one Domain Allocator, who happened to be Questbook’s CEO, worked pro-bono, so the actual distribution remains uncertain), $20k for miscellaneous expenses (presumably KYC and operational costs).
  • $800k to be divided by 4 Domain Allocators.
  • The $800k was allocated as follows:
    • $410k for Compound DApps and protocol ideas.
    • $179k for Compound Multichain & Cross-chain.
    • $83k for Compound III Dev Tooling.
    • $212k for Compound III Security Tooling.
  • Each Domain Allocator published their unique vision for their domain and their assessment methodology for proposals.

There were a few differences to Arbitrum proposal, though:

  • Domain Allocators were appointed by Questbook, not by the DAO.
  • A specific KYC procedure and operator were mentioned in the proposal.

The program concluded recently (it was a six-month program, approved and started last December), thus enabling an analysis of the results. Of the planned $800k, only $255k has been paid out so far, as per data from Saurabh (this information is not available on the site), and a total of $451k was allocated throughout the program with the following breakdown:

  • Protocol ideas and DApps: $247K out of budgeted $410k (with $163k paid out).
  • Multichain Strategy: $82K out of budgeted $179k (with $50k paid out).
  • Dev Tooling by Madhavan: $22K out of budgeted $83k (with $16k paid out).
  • Security tooling: $100K out of budgeted $212k (with $26k paid out).

It is worth mentioning that the program only received 75 proposals in total across all four domains (Saurabh’s data indicates this, although the website lists a higher number, 117 proposals, possibly due to duplicate counting). Of these 75 proposals, 29 were accepted and funded (again, as per Saurabh, although the website cites a higher number of 48 accepted proposals). Around 80% of these applications were submitted to Protocol ideas and DApps, with the remaining 20% spread amongst the other Domains.

Having reviewed several proposals, I question how Questbook calculates a Total Turnaround Time of less than 48 hours, as some applications suggest a TAT closer to a month. Despite this, I believe a TAT of 2-3 weeks is more than sufficient for both the proposer and reviewer to ensure that a proposal merits funding.

Before we consent to fund the Arbitrum program, certain aspects may require clarification:

  1. I would appreciate a summary of lessons learned from the program from the Questbook team. As they have the most intimate knowledge of this program, it is crucial that we understand some key points, such as what has been funded and what was rejected, the minimum, average, median, and maximum grant amounts, the performance of funded projects, why some projects haven’t performed as expected, why the budget wasn’t fully distributed, and what measures were taken to increase the number of applications.

  2. I recognize that GCP faced challenges with both building an applications pipeline and monitoring/managing the delivery of proposal outcomes. I want to understand Questbook’s mitigation strategy for these issues in the Arbitrum program.

  3. Since the Domain Allocators’ tenure is theoretically over, who will oversee the projects to ensure they meet their milestones in the Arbitrum program?

  4. I question the use of review metrics in the process, as many projects lack this assessment (especially those that were not funded). How are these scores factored into the grant approval process? How will they be used in the Arbitrum program?

  5. The method of calculating payouts is unclear - Questbook’s platform counts everything in USD, but the program itself pays out in COMP (similar to how the Arbitrum program is intended to be paid out in ARB). How is the conversion performed? How is price fluctuation accounted for?

  6. What happens with funds in the multisig wallet? Presumably, any unallocated tokens will revert to the treasury, but what about tokens that were allocated (grant accepted) but not distributed (milestones unfinished)? How will this work in the Arbitrum program?

  7. In the “Domain Allocator Roles & Responsibilities” section, a ‘Grants program’ is mentioned, alongside certain key responsibilities. Who is specifically accountable for these?

  8. The “What does success look like?” section contains items that I find confusing. For example, “Increase in the homegrown leadership to run grant programs (measured by the number of people running grant programs)” – how is this related to the grant program? How can it be a measure of success for this grant program? The other metrics also appear ambiguous and more subjective than objective.

  9. Why isn’t legal compliance included in the proposal? It was explicitly mentioned in the Compound proposal with specific contractors (BLG) chosen for this purpose. There is no mention of legal coverage in Arbitrum.

In conclusion:

  1. I believe that the DDA program in Compound did not perform satisfactorily. Although the aim is not to fund indiscriminately, the ultimate goal is to distribute all funds and support many promising projects. If there is a risk that not all funds will be distributed, I would expect the team to take action.

  2. Due to that, the cost (management fees) of this program in Compound turned out to be somewhere between 50% to 100% of the distributed funds (depending on how many funds will be finally distributed).

  3. It is not clear who will monitor the program’s effectiveness and collaborate with the Program Manager to address any issues that might arise. In the proposal it is mentioned that Program Manager will work “with the Arbitrum team”, but it’s not clear if that should be the Foundation (and if the Foundation is willing to do this) or if this is Arbitrum DAO (and in this case, I’m a little concerned about the diffusion of responsibility)

  4. Although I believe it is worthwhile to test this program, we should not rely solely on it, but instead pursue several different grant program approaches.

  5. This grant framework does not seem to fit recent proposals posted on the forum (such as Camelot, Rari Foundation, etc.), suggesting we need alternative solutions as well.

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@krst, I have been a part of both Compound and Arbitrum for a very good time now. To my knowledge, this is the most diligently run grant program I have seen in the last few years. It’s completely transparent, all on-chain.

A few points from my quick look at your comment:

  • I think management fees of 200,000 dollars, this is the maximum, right? It’s pro-rated, based on the number of hours and proposals that are received.

  • All the allocators who have run Compound’s grants program, they have run a grants program for the first time. It also shows how the Compound community members’ responsibility scope is growing, yes?

  • If the allocator is not doing their job well, there is provision to replace them with a new member from the community. The allocators, they are really chosen by the community.

If the price, this is the only contention, we can ask QuestBook to adjust it. Maybe we need a stronger mandatory provision to review and replace allocators mid way for more effectiveness if we all feel it’s necessary.

The reason why I personally like this proposal: it is one of the few proposals that empowers community members to spot and nurture innovation happening on the ground. I would not take away the chance for Arbitrum community members to contribute by running a such grants program.

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Thank you @krst for sharing your valuable comments and acknowledging the importance of having a grants program for Arbitrum. Please find below our response.

Questbook helped Polygon structure their grants program from ground up. We collaborated closely with their grants team to facilitate the sourcing, review, and distribution of funds to high quality proposals. Throughout the duration of the program, Polygon received 1000+ proposals, with over $700k disbursed to grantees.

However, Polygon’s grants team sunsetted the grants program in December 2022, and as a result to avoid any confusion, the information related to that program is no longer available on the Questbook’s product. We have shared a detailed case study highlighting our learnings and contributions to Polygon’s grants program. Please find below the case study and Polygon grants’ lead comment available publicly for reference:

Grendel (Polygon DAO Lead): https://twitter.com/GrendelMarco/status/1583568394309148673?s=20
Polygon grants program case study:
It Takes a Village — Questbook

Thank you Krst for your analysis and comments. At the start of CGP 2.0, the total budget was spread equally across 4 domains. However, as the program progressed, adjustments were made to the budget allocation for each domain. These adjustments were based on factors such as the number of proposals received and the remaining funds available for each domain at the end of the first quarter. This approach allowed for a more efficient capital allocation across different domains while considering the overall grants budget. Compound community was informed about these adjustment after the first quarter by the Program Manager.

The allocated funds specified in your comment above are the available funds in each domain level safe taking into consideration the readjustment and COMP’s price as on July 26th, 2023. A detailed breakdown of all the funds committed to the projects domain-wise can be found here

  • To further emphasise, all domains and respective allocators were elected from the community by the community. Interested community members were required to fill out a form to submit their nomination who were further interviewed by Compound Labs team and voted upon by the Compound community.

The announcement for community members to submit their nomination is referenced here -

For KYC and all contractual agreement, we used Synapse and Docusign respectively.

CGP 2.0 went live in Jan, 2023 with a grants budget of $800k spread across four domains. Over the past two quarters, CGP 2.0 domain allocators approved proposals requesting ~ $670,000 in grants (84% of the total budget) and disbursed a total of $252,000 to accepted proposals from a pool of 117 proposals. A detailed funding breakdown for each proposal can be found here and the same is publicly available here. As the grants program was conducted on-chain and with full transparency, Questbook does not possess any data that is not accessible to the community. The data for each domain is specified below for your reference.

Domain Grant Amount Paid Out Grant Amount Allocated
Dapps and protocol ideas $160,000 $384,000
Multi - chain and Cross Chain $50,001 $89,003
Developer Tooling $16,000 $90,877
Compound III Security Tooling $26,000 $105,800
Total $252,000 $678,031

In total, CGP 2.0 received 117 proposals spanning all four domains, and there were two proposals that needed to be resubmitted under different names. Of these 117 proposals, 46 proposals were accepted with a 40% acceptance rate. The details of these proposals along with their benefits to Compound, grant amount allocated, paid out can be found here.

Indeed, it is accurate that Dapps and protocol ideas accounted for 80% of the total proposals. To ensure effective capital allocation across all domains, adjustments were made to the budget allocation for each domain accordingly at the end of the first quarter. We would like to emphasise that as the grants program was conducted on-chain and with full transparency, Questbook does not possess any data that is not accessible to the community.

As specified in our proposal, CGP 2.0 has maintained an average TAT of less than 48 hours and a funding TAT of less than 2 weeks. I would love to connect you with CGP 2.0 proposers, grantees and domain allocators to gather comprehensive feedback on the overall communication and funding TAT.

Thank you for your thoughtful questions and comments. Really appreciate it! Please find below our response.

These are some of the key learnings and insights we gained while running CGP 2.0.

  • Insights and Key Learnings

    1.Specific domains made it easier for builders to understand the scope and structure their grants proposal

    In case of CGP 2.0, we took a fundamentally different approach by ensuring that each focus area (domain) is communicated clearly. We streamlined the program to four specific domains, providing builders with a more focused and structured framework.

There were multiple verticals that we are able to decide from in terms of what we wanted to build.

2.Knowing the allocator’s name for their domain helped builders with a significantly faster query resolution and TAT

The public availability and accessibility of the domain allocator played a crucial role in maintaining a very low turnaround time (TAT) for CGP 2.0. Builders who applied to a specific domain could directly connect with the respective domain allocator, enabling them to ask additional questions/seek clarifications.

3.A transparent and objective review process significantly benefitted builders, enabling them to incorporate actionable feedback into their resubmissions

In addition to maintaining a communication TAT of less than 48 hours, domain allocators assessed proposals using a domain-specific rubric in a transparent manner. This objective feedback provided builders with a clear understanding of the areas that needed improvement, allowing them to revise and resubmit their proposals based on actionable feedback.

While CGP 2.0 team has received great feedback from the builder community, we have identified areas of further improvement. For instance, Questbook is working with Synapse and Docusign to integrate their service and enable KYC and agreement signing directly from Questbook. This will significantly improve the operational efficiency and funding TAT going forward.

In total, CGP 2.0 received 117 proposals spanning all four domains, and there were two proposals that needed to be resubmitted under different names. Of these 117 proposals, 46 proposals were accepted with a 40% acceptance rate. The details of these proposals along with their benefits to Compound, grant amount allocated, paid out can be found here. The data for each domain is specified below for your reference.

Domain Grant Amount Paid Out Grant Amount Allocated
Dapps and protocol ideas $160,000 $384,000
Multi - chain and Cross Chain $50,001 $89,003
Developer Tooling $16,000 $90,877
Compound III Security Tooling $26,000 $105,800
Total $252,000 $678,031

The status and comments on proposals under review, accepted, and rejected, along with their respective reasoning can be seen here. The allocated grant amounts ranged from $1,000 to $50,000 as can be seen here. The domain allocators implemented a soft cap for their respective domains. Proposals exceeding this threshold were encouraged to seek broader community input.

We believe that the success of the grants program should not be solely determined by the number of funded proposals or the amount allocated per proposal. It is essential to consider data points such as the impact of the funded projects and their alignment with the ecosystem’s roadmap when evaluating the grants program’s effectiveness.

~ 50% of the funded proposals have been demoed and/or are currently live, playing a key role towards developing new interfaces for supply, borrowing, and governance interactions on the Compound . These proposals also facilitate supply and borrowing activities on Compound. We expect this figure to increase as we have excluded the proposals that have not yet completed their first/initial milestones. The majority of the accepted proposals are actively progressing towards accomplishing their milestones, and we will keep the community informed about the progress of proposals in each bucket.

The details of several such projects can be found here - Comet extension for supporting Real world assets on Compound, Governance Delegation dashboard for Compound Finance DAO, 1Delta DAO - The decentralized margin broker on top of Compound V3, Flexible Voting — Compound V3 Support, Alcancía - Be your own bank for Latin Americans.

Furthermore, the CGP 2.0 team organised a demo day where all grantees had the opportunity to showcase and discuss their projects and experiences with the Compound community. The community was encourage to actively participate, ask follow-up questions. For your reference, a recording of the demo day can be accessed through this link - CGP 2.0 Demo Day

Over the past two quarters, CGP 2.0 domain allocators approved proposals requesting ~ $670,000 in grants which is 84% of the total grants budget. We believe that the objective of the grants program should not be to allocate its entire budget, but to source and fund high quality proposals while investing quality efforts in sourcing such proposals. Furthermore, CGP 2.0 had an acceptance rate of 40%. This acceptance rate indicates high quality of proposal submissions and proposal pipeline.

To boost the number of proposals, the CGP 2.0 team and Questbook made substantial efforts to engage with high-quality builders and source projects. Additionally, Compound Labs sponsored hackathons at various events to increase awareness about the CGP 2.0. Various initiatives, including guided sessions, workshops, and sourcing activities, were implemented to attract talent and attention to CGP 2.0. These efforts resulted in a threefold increase in the number of builders and users visiting Questbook.app within a one-month period.

Considering that the proposed grants program will be the first-ever for Arbitrum and taking into account the developer growth on Arbitrum and its versatile nature compared to more specialized use cases like DeFi and NFTs, we expect a significant number of organic proposals for the proposed grants program. In addition to this, Domain allocators, and the Program Manager will invest significant efforts in sourcing proposals and promoting Arbitrum grants program across different hackathons, events etc. Notably, Questbook is a frequent participant, speaker in all major Web 3 events and served as one of the lead sponsors for Eth India.

CGP 2.0 in close collaboration with Compound Labs took several initiatives such as guided sessions, workshops, and sourcing activities, to attract high quality proposals to CGP 2.0. Moreover, Questbook.app is home to 20,000+ builders each month. To further support these builders in submitting relevant and high quality proposals, the CGP 2.0 team created domain-specific RFPs, which can be accessed below:

Over the past two quarters, CGP 2.0 domain allocators approved proposals requesting ~ $670,000 in grants which is 84% of the total grants budget. As specified above, ~ 50% of the funded proposals have been demoed and/or are currently live, playing a key role towards developing new interfaces for supply, borrowing, and governance interactions on the Compound . These proposals also facilitate supply and borrowing activities on Compound. We expect this figure to increase as we have excluded the proposals that have not yet completed their first/initial milestones.

Taking into consideration the retained allocated budget, the newly elected/ retained domain allocators will oversee the milestone completion of the accepted proposals once CGP 2.0 is renewed, subject to community voting. We anticipate a similar approach for the proposed grants program. Furthermore, we want to emphasise that term elections for capital allocators is a well-established norm in various reputed ecosystems such as Aave, Optimism, Safe etc . When comparing the proposed model with these existing grant programs, the proposed approach doesn’t introduce any significant innovations except for the inclusion of community-elected domain allocators and improved transparency, accountability.

In CGP 2.0, domain allocators created evaluation rubrics specific to their respective domains to evaluate proposals. The evaluation process was conducted transparently on-chain, complemented by well-defined domain-specific RFPs to provide clear guidance and support to builders. 70% of the total accepted or rejected proposals were evaluated using well defined evaluation rubrics. A proposal scoring rubric along with domain allocator’s comments is referenced below:

For proposals that lacked the use of evaluation rubrics, domain allocators provided detailed explanations for their acceptance or rejection decisions in the comments section. The use of evaluation rubrics, transparency of the evaluation process and the impact of accepted proposals on Compound will be taken into account when the community votes on the performance of CGP 2.0 domain allocators, determining whether to retain or replace them based on their performance.

In the case of the proposed model for Arbitrum, domain allocators will follow a similar approach by designing evaluation rubrics and assessing proposals transparently, while defining the acceptance and rejection criteria specific to their respective domains. The Arbitrum community can vote to replace, retain the domain allocators based on their performance using the publicly available data.

Really appreciate you bringing this up. To simplify builder experience and avoid confusion, all amounts are displayed in USD in real time on Questbook. The conversion from the native token to USDC is executed using the Coinmarketcap API, which allows us to show USDC-denominated values both on the platform and at the time of grant disbursement from the multi-sig safe.

CGP 2.0 will be able to honor all funding commitments to all the accepted proposals. We want to emphasise that making payouts to grantees in native token is a well-established norm in reputed ecosystems such as Optimism, Uniswap, Solana, TON etc. In the unlikely scenario of budget constraint solely due to ARB price fluctuations, we will request additional funds from the Arbitrum DAO after seeking community’s inputs.

At the end of the domain allocator’s tenure, the newly elected/ retained domain allocators from the previous cycle will oversee the funding of accepted proposals’ milestones once the milestones are successfully completed within their respective domains.

All unallocated funds will be returned back to the treasury.

Thank you for highlighting this Krst. The Program Manager will be held responsible and accountable for all outcomes outlined under the ‘Grants Program’ section of the roles and responsibilities. The Program Manager will collaborate with the elected domain allocators to achieve those specified objectives.

After extensive discussions with various community members and delegates, we have provided both objective and subjective metrics to allow the community to assess the grants program’s performance more effectively. Additionally, we have outlined specific metrics for each selected project in our proposal here. We are open to incorporating any additional metrics based on your valuable suggestions.

DDA is a community owned community run grants program and the participation of the community is essential to the success of the proposed model. At the end of two quarters, the adoption and effectiveness of the proposed model will be evident through community members’ involvement in proposing domains, self-nominating, and electing for different roles, preferably without our direct involvement.

Really appreciate you bringing this point up. As with CGP2.0, we’ll be working with BLG - Blockchain Lawyers Group for all legal compliances for the proposed grants program. BLG will provide their expertise in contractual drafting, application of KYC standards, and address any potential legal issues during the grant disbursement phase. Their services will be funded from the allocated operational budget (~$3k), and they will also be available to offer early-stage legal support to all accepted proposals. However, we are open to alternative suggestions from the domain allocators once they are elected.

We believe that the success of any grants program should not be solely measured its ability to exhaust its budget or by the number of funded proposals. Instead, the primary focus of the proposed grants program should be to ensure domain allocators fund high-quality proposals that align with the ecosystem’s ethos and have a significant impact. CGP 2.0 domain allocators committed 84% of the total budget to find and fund high quality proposals that benefit Compound and further its mission. A detailed breakdown of all the funds committed to the projects domain-wise can be found here. ~ 50% of the funded proposals have demoed and/or are currently live, playing a key role towards developing new interfaces for supply, borrowing, and governance interactions on the Compound . These proposals also facilitate supply and borrowing activities on Compound. We expect this figure to increase as we have excluded the proposals that have not yet completed their first/initial milestones. CGP 2.0 accepted proposals from a diverse pool of over 100 submissions with an acceptance rate of 40%. This acceptance rate indicates high quality of proposal submissions and proposal pipeline. Throughout the grants program, CGP 2.0 grants team consistently maintained a remarkable average communication turnaround time (TAT) of less than 48 hours and an average funding TAT of less than 2 weeks after the milestone has been completed.

Additionally, CGP 2.0 team has received exceptional feedback from the builder community. After conducting a survey to gather feedback from the proposers and grantees, CGP 2.0 received an impressive NPS score of 8.6/10 and experience score of 8.2/10. Below are some comments provided for reference.

Considering the hours dedicated by the Domain Allocators, Program Manager, and the total funds disbursed as of July 28th, 2023, the maximum realised committee compensation ($100k) represents 11% to 15% of the allocated funds ($670k) and 29% to 39% of the disbursed funds (~$252k). Additionally, the realised compensation represents 10% of the overall CGP 2.0 budget. It is anticipated that these proportions will decrease further as additional accepted proposals are funded upon successfully achieving their milestones.

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We believe that DDA model strikes a balance between speed, decentralisation and accountability. As specified in our proposal, the elected domain allocators will run their domains independently in a transparent manner on Questbook. They will take independent decisions for their respective domains based on their evaluation rubric. If deemed necessary, they may choose to consult the Arbitrum core team and members of the foundation to ensure alignment with the with the Arbitrum’s roadmap and gain additional insight into the considered proposal.

The Program Manager will be responsible to facilitate the communication between the Arbitrum core team, foundation, and the domain allocators. Additionally, we will reach out to the foundation for any operational support as suggested by the members of the foundation.

The program design includes provision for community members or delegates to replace/remove any domain allocators during/at the end of two quarters if their performance falls below expectations. In case of any issues, the Program Manager will proactively seek inputs from the Arbitrum DAO and/or the foundation based on the nature of the issue.

Thank you Krst for acknowledging the need of the proposed program. The grants program proposed by us is a community-run grants program. The reason why we submitted this proposal is that there is no community-run grants program for Arbitrum prior to our proposal. While the decision to pursue different grant program approaches lies with the Arbitrum community, we are open to collaborate and support any other programs the community chooses to implement in the future.

As specified earlier, we want to be doubly careful on the amount of funding requested for the proposed grants program, especially in a bear market and these uncertain market conditions. The proposed grants program will be the first ever for the Arbitrum DAO, and we aim to ensure that the allocated funds are deployed in an efficient, responsible and prudent manner. We will request a larger budget that may fit other existing grant requests if the proposed model is successful based on the key metrics specified in our proposal and community inputs.

While the decision to pursue different grant program approaches lies with the Arbitrum community, we are open to collaborate and support any other programs the community chooses to implement in the future.

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I had a long discussion with Questbook team and we went through most of my concerns outlined in previous comments. @Saurabh assured me that DDA program for Arbitrum will have more details and more thorough reporting then GCP2.0.

I believe that Questbook team may need additional help and oversight from Arbitrum DAO during this program to ensure effective execution and I have offered my help and support.

We will be voting FOR this proposal and we hope that this will be a very successful program that will bring a lot of value to the Arbitrum ecosystem.

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Thank you so much @krst for voting in favour of the proposal. Appreciate your help and support :pray:

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The proposal passed (check on Tally) and the ARB tokens have been sent to Questbook from the Arbitrum DAO!

Questbook have begun the process of Domain Allocator nominees, please check it here:

I’ll lock this thread now :slight_smile:

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