March 31st marked the end of the 3-month trial period for Firestarters since the $50,000 budget we had earmarked was not exhausted before that date. As outlined in the original post with our plans for Firestarters, we are writing a comprehensive report to evaluate the pilot, the lessons learned, and the next steps.
We’ll begin with an overview of the program’s metrics and an executive summary, and then dive into the specifics of the four pillars we consider to be fundamental in managing programs on behalf of the DAO: operational efficiency, transparency, stakeholder coordination, and last but not least, impact.
Overview
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Total grant funding allocated: $24,100 of $50,000 budget (48.2%)
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Number of applications received: 14
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Average quality of applications received: Medium-to-low quality*
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Number of applicants we proactively reached out to: 0
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Quality of applicants we proactively reach out to: N/A
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Approval rate of funded projects: 35.7% (4/14)
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Milestone/project completion rates: 100% (still ongoing)
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Success of the resulting initiatives in governance, where applicable: None of the initiatives has moved forward to a full-fledged program requiring going through the governance process.
*We scored each application between low and high based on how strongly it fit the evaluation matrix.
Executive Summary
We believe that running Firestarters was a net positive, but not to the extent that would justify continuation, at least in the current landscape. Even though the OpCo was a two-person team, the operational management of the entire program was robust, without any notable delays or disruptions in processing applications, handling compliance, and executing grant payments in a timely manner.
The entire program was run fully transparently as delegates and other interested stakeholders could access a public dashboard at any time, which included all information relevant to each application. On top of that, we published three (3) monthly reports in the forum, one at the end of each month since the program’s start.
For each application, aside from our evaluation, we coordinated and asked for input from stakeholders with experience relevant to the scope of the respective application. We coordinated not only with other AAEs but also with delegates. The reasoning behind this coordination was to avoid assessing applications in an operational silo and instead have a holistic approach to the grants pipeline, thus avoiding duplicate work and exploring potential synergies.
In terms of impact, we unfortunately believe the program didn’t have any material impact on the ecosystem. This has nothing to do with the applications or the quality of work of the ones approved, nor with the management of the program. Instead, we attribute the lack of ecosystem impact to two main factors:
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The program was intentionally intended to fund groundwork that could potentially evolve into fully-fledged programs, which in turn would have an impact on the ecosystem.
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At the time of writing, none of the work funded has resulted in such a program, mostly due to the broader landscape and market conditions.
With all that in mind, we have decided not to continue the Firestarter program, at least not at this time, and not in the way that’s structured right now. We will use the experience and the operational rails we’ve set up to issue small grants on an ad-hoc basis if needed, but we won’t have an open application process.
Operational Efficiency
Operationally, the management of Firestarters was pretty lean and to-the-point, with short turnaround times and simple processes, both internally and for applicants.
Single-point-of-ownership
The bulk of the work for Firestarters was managed by a single person, with broader OpCo input on an ‘as needed’ basis. This meant that everything was under the eyes of a single person, and responsibility was not diffused between parties, which led to tighter control all around.
K.I.S.S
Since everything was managed by one person, and since the OpCo was just 2 people anyway, we adopted very simple practices and avoided elaborate funnels or complicated submission forms.
The flow was simple: a 3-minute form that automatically populated a Notion dashboard, connecting with grantees over Telegram, and evaluating applications based on a pre-determined evaluation matrix.
For approved applications, the process included KYC, signing a grant agreement, and executing payments.
Budget Management
Given the relatively constrained budget ($50,000), we were mindful of the grant request and didn’t shy away from negotiating the requested amounts, often based on back-of-the-napkin math of how many working hours something would take, coupled with an estimation of hourly rates for similarly scoped work.
The biggest savings, however, weren’t made by just asking to pay less. Instead, we’ve found that by narrowing down the scope of the grant and removing things that were not entirely relevant or valuable, grantees would complete the valuable parts for ~30% less.
Communication & Assistance
We adopted a proactive approach to communicating with grantees and assisting them when needed. The most common kind of assistance we provided came in the form of intros, either to delegates or to stakeholders from Offchain Labs or Arbitrum Foundation.
Takeaways
It’s not surprising that greater operational efficiency can be achieved when centralising the operations to a single party. The key difference here is that for this level of operational efficiency to co-exist with the decentralised nature of DAOs, it has to come hand-in-hand with the other 3 pillars. If it doesn’t, then we’ll end up with an entity that operates as a black box and acts in a silo.
Transparency
From the very beginning of the program, transparency took the central stage. Before the program even started, all the details around how it was going to run were made public, from the budget of the program to the evaluation matrix we used to evaluate applications.
That level of transparency continued throughout the program through the combination of making the Notion dashboard public and publishing monthly reports in the forum. At any time, delegates and other interested stakeholders could see the status of each grant, the amount granted, the KPIs set, progress towards them, and a changelog reflecting almost daily changes.
Takeaways
We didn’t face any issues with the level of transparency we adopted. We feel that having everything done in public resulted in even greater accountability on our end and a lower overhead in putting together monthly updates, as the majority of the work was already written down as it was happening.
Overall, we’d say that having everything done transparently didn’t offer any significant advantage, nor did it create any noticeable downsides or overhead.
That said, we acknowledge that some applicants may have been turned off by the program’s very public nature, or that some applications may have warranted more privacy.
Stakeholder Coordination
Since some applications fell outside our professional domain knowledge, we engaged other stakeholders with more relevant experience as needed to better assess them. At the same time, we coordinated with other AAEs and DAO programs to get input on the potential value of different proposals to their workstreams.
Examples include, but are not limited to:
Consumer App Support Program
For both the evaluation of the original application and the recommendations in the feasibility report, we coordinated with the consumer apps team at Offchain Labs. We arranged a call for Tempe to present his findings to AGV and Offchain Labs to identify any possible pathways for a DAO program that wouldn’t overlap with the work those AAEs were already doing.
Events Playbook
The events playbook came at a time when OpCo was considering submitting a proposal to take over the leftover budget from the D.A.O program’s events domain to administer after the D.A.O program concluded. We also coordinated with the Arbitrum Foundation and Offchain Labs event teams to ensure we do not overlap on the scope of work, but rather complement each other.
Ultimately, we decided that the best path forward would be to let the funds be absorbed in the ATMC as per Entropy’s proposal and go back to the drawing board for events. That resulted in the events playbook being deprioritised, and that’s why it wasn’t fully delivered to the forum.
DAO Contributor Program
After the RAD proposal passed, an open question remained around delegates’ contributions to the ecosystem and whether there would be a structured program to identify and reward them. After coordinating with the Arbitrum Foundation, we deemed that it would be helpful if a third party conducted research to identify whether a) there are things that contributors could do that would be valuable enough to reward, and b) whether there are contributors who could tackle those things within the DAO. The grant deliverable is still being finalised at the time of writing this update, but coordination with the Arbitrum Foundation ensured they weren’t working on the same thing.
Similar coordination occurred in evaluating all applications, including those ultimately not approved.
Takeaways
Coordinating with other AAEs, DAO programs, delegates and contributors is a relatively low-hanging fruit which can have a big impact down the road. It’s akin to a ship adjusting its course by a few degrees now, leading it to a completely different location in the future.
We believe that one reason this kind of communication and coordination doesn’t happen more often is that the relevant parties are simply not aware of each other or of the work they’re undertaking. For example, while someone from the Arbitrum Foundation might know of Firestarter’s existence, it’s highly unlikely that the events team knows about a grant we issued for the creation of an events playbook. Similarly, a contributor working on the events playbook isn’t privy to the events team’s work details.
The reason for that isn’t indifference on either side, but rather a structural problem. Having a coordination layer, such as OpCo, act as the liaison between could be very beneficial.
Impact
All the above are insignificant if they do not culminate in some sort of positive impact in the ecosystem. The premise of Firestarters was to fund groundwork that could lead to a larger initiative, whether a standalone program or as a complement to an existing workstream, with the aim of creating a positive impact.
We wanted to avoid funding work just for the sake of funding something, and we also tried to avoid funding things that could ultimately be described as ‘nice-to-haves’.
Takeaways
We found that most of the valuable work was already being done, and the remaining tasks weren’t valuable enough to justify funding. That’s a core problem when considering any contribution to the ecosystem: if it’s not already being done, there’s a reason for that more often than not, and if it’s already being done, there’s no point outsourcing it through a grant.
Next Steps
For the time being, we will not continue the Firestarters program, at least not as an open program that accepts applications. Instead, we’ll leverage the operational rails we’ve set up and the insights we’ve gathered to only offer grants on an ad-hoc basis if the need arises. The reason is that we currently see little value in keeping the program open to applications, but we do want to maintain a pathway to quickly fund something the DAO might need in the future.
The current landscape isn’t very conducive to new initiatives or experimentation, so discussions of new initiatives aren’t as frequent as they used to be. That played a crucial role in the fact that throughout the last 3 months, we had no cases of the OpCo proactively reaching out to fill a need by issuing a Firestarter grant.
For any questions, please contact Sinkas on Telegram.