Six months is too long, and it is recommended to set up a mid-term check-in time every 1-2 months to assess the progress of the program and ensure that resources are being used. Like a 2 month check in?
Is a budget of $50,000 per program on the high side? Is there any data to prove that this amount is effective in driving MVP and market validation? What are the funding sizes of similar programs in other chains? If there are issues with wasted funds or project teams leaving, are there appropriate countermeasures? For example, recovering funds or quickly moving to other projects.
The proposal mentions that only 4 projects will be selected, is it possible to try to lower the threshold so that more small teams can get small support (e.g. $10-20k) and test the waters for more possibilities?
Personally, I suggest lowering the threshold to attract more projects, many innovative projects are in the exploratory stage, good ideas and teams with project mentors, full-time support and operational resources may not have the same effect.
The direction of the proposal is good, whether the resources landed are real or not, I think this is very important
As others have also indicated, having a sort of tool or program aimed at following-up this hackathon projects is a smart move that prevent us from losing these winner projects and with them the investment done on them and the energy of the Hackathon as you indicated, but we would like to recall on an important point you made when you indicated that 2 valuable projects moved to other chains (Optimism and Cardano), could you provide us the information of what projects are you talking about here? If you say they were valuable we would like to have these projects named as to truly appreciate and dimension the lost value you are talking about. If possible and since you are bringing this idea forward, we would also like to watch a list of others projects that have previously failed after Hackathons were carried away as to get a better idea of this central point of this proposal.
All in all we really believe that what you are bringing to the table while addressing this issue is a very good idea and useful for the development of projects into the DAO, but from our POV examples of the kind are needed as to fully support this.
In my opinion grants shouldn’t exceed the amount of 50k.
Why is that?
Well simply because giving a grant to someone doesn’t have a positive impact, at least not from the very beginning. A grant is more or less a cost factor without knowing the outcome.
For example, there was a project DAO XY (dont want to name anyone) funded a few years ago. This project barely finished their work. But shortly before they did, someone else bought their company and they left the space without a proper product.
So what happened?
The DAO paid 50k to basically bootstrap their business and they left the space with a ton of money and the DAO was left without any prodcut or benefit.
What I want to say is, that grants need to be checked very well, they need to communicate on their progress and need to benefit the ecosystem somehow.
That being said, a great project will show its benefit straight from the beginning because in the end its important for the Arbitrum DAO to attract great developer and protocols but also keep the financials aspect in mind. @danielo this is something what should be kept in mind, how to really track down everything and create the most and best benefit for Arbitrum and potential projects.
Hi @danielo, I have to emphasize that if we want great startups to stay in the Arbitrum ecosystem, we must avoid getting their devs into bureaucratic traps. I mean, we must be fast and furious in this matter of funding them and not waste their their time and energy on all kinds of validations and appraisals.
From my experience of dealing with various startups over the past three years or so, the really good ones, and their devs, can easily get some funding from the market.
I know that there are various process norms that must be met to use DAO funds. But given that the maximum match is $50,000 per program, I don’t think that’s a lot of money, so I’m suggesting keeping things simple and letting Devs focus on innovation building rather than building to meet Grants conditions.
The following reflects the views of the Lampros DAO (formerly ‘Lampros Labs DAO’) governance team, composed of Chain_L (@Blueweb), @Euphoria, and Hirangi Pandya (@Nyx), based on our combined research, analysis, and ideation.
Thank you for presenting this thoughtful proposal. We really like RnDAO’s approach to supporting Arbitrum builders through hands-on mentorship alongside funding.
Really like how the team plans to work directly with projects instead of just giving advice. Having experienced mentors actually working with teams day-to-day will help projects grow faster and avoid common mistakes. This is much better than just giving money and hoping for the best.
Also, this is a great idea to set aside money for user interviews. Paying users for their time shows respect for their input and will help get better feedback.
Having access to RnDAO’s network is a big plus. New projects often struggle to find their first users, so having help making connections could really speed things up.
We believe that additional clarity on the following questions will provide us with a better understanding and support this program.
While the proposal mentions selecting ‘the most promising’ projects, it would be valuable to understand the specific selection criteria.
While user acquisition targets are mentioned, can we establish more specific KPIs for measuring the program’s success? For example - TVL targets or Transaction volume expectations, etc.
Could you share more about how you’ll help projects find team members?
We’re basically following the order of the hackathon voting (which combined expert assessment and community votes). Ultimately we’re looking for builders who show promise (driven, smart, skilled) and are working on a meaningful problem (based on the extensive CollabTech experience and continuous research our investment committee does).
The foundation has agreed to serve as a counterparty to make the funds deployed an investment and not just a grant. We’ll be editing the proposal to reflect this over the next 24h or so, and as such our focus will be on maximising the value of said investment. There are many paths to do so, and we don’t want to necessarily constrain the builders.
RnDAO has 1500 members in our builders’ discord and a larger community of builders interested in CollbTech across twitter, mailing list, etc. We regularly help our projects attract contributors by amplifying their messages and we also have formed multiple teams through inbound talent. Upkeeping this community and assisting projects to find talent is part of the job of the RnDAO marketing team.
the program funding disbursement is based on two phases, so this is already in place.
we’ve looked into multiple options here and I’d argue that 50k is on the low but viable side. We have projects in our ecosystem that have received $25k grants and that’s often insufficient to allow a bit of iteration and then have enough runway to fundraise, generate some revenue from the product, or find the next grant.
On the other hand, multiple accelerators offer 100k-150k investment which is closer to what we’re offering here when we account that the projects are in an earlier stage, we can leverage global arbitrage for talent costs, and RnDAO is putting in a lot of work in the form of services reducing the costs of projects.
I hear you about lowering the threshold and allowing more projects in. As mentioned above, less than 50k total is rather low and can be problematic as projects don’t have enough runway to get to the next stage.
However, we could say select 5-6 projects in phase one and only 3 for phase 2. Which leaves costs for Arbitrum at roughly the same level but gives us a chance to test more teams and ideas before doubling down on the best.
I’ll run some numbers to explore this with RnDAO core team.
for context, our thesis has been that deploying capital alone is not a good approach. We were unable to deploy either funding or support, so we lost two promising projects but we lost them to poorly designed paths that don’t offer good results. The founders were Dominik and Rich.
We haven’t got updates from Rich but Dominik has been building a reputation system in SingularityNET and has received subsequent funding.
Agreed. We’re happy to confirm the Arbitrum foundation will formally explore serving as a counterparty to turn these grants into an investment, so even if the projects migrate, Arbiturm will still benefit.
We’ll be interacting with the projects on a weekly basis, they will be formally assessed between phase 1 and phase 2, and payment will be staged. So the approach here is very different from traditional grant programs that pay upfront.
So throughout the program the projects need to continue building in Arbitrum. After the program, if they move to another chain we still hold the investment contract in them so if they’re successful Arbiturm still wins
I’m still hoping that after this pilot we can scale up this program and create a Swarm with powerful network effects through integrations and collaboration between the projects, making it a bad idea to migrate even if other chains were to give you significant money. This is just the beginning!
Thank you, @danielo, for the spirited proposal. We believe this is an interesting proposal to continue supporting hackathon winners. If we understand correctly, this is a matching program in which RnDAO will provide ~50% of the upfront capital, with Arbitrum covering the other half?
This is a difficult one to gauge, as while the proposal’s mission is very much aligned in that we don’t want to see hackathon projects fall to the wayside, we are still talking about a quarter of a million-dollar investment. The hackathon winners are inspiring, but it’s unclear whether they are aligned to fix critical needs for the DAO. One important distinction delegates have been trying to draw recently is the line between grants as charity and strategic grants that provide some value back to the ecosystem and DAO.
We’re currently undecided, but generally, we’d prefer to have these smaller grants delegated to a key decision-maker w/in a larger grants program who can value a project’s potential and the ability of their developers rather than having each delegate review all three projects and rnDAO’s operational budget and come to a decision on this one program. Ideally, these projects apply to Questbook or the Foundation grant programs.
Thank you, @danielo. This proposal essentially suggests building an Arbitrum-specific accelerator program that supports projects beyond the hackathon phase.
We see the value in supporting projects in their initial phases and agree an accelerator program would bring value to the ecosystem. However, this proposal explicitly refers to an “investment” rather than a “grant”. Does this imply that Arbitrum DAO would get equity/tokens in return for the investment?
If so, how does this proposal relate to the M&A and AVI initiatives?
Indeed the agreement with the projects would be an investment and not a grant.
This proposal is not related with M&A (as M&A targets late stage, mature projects with potential high value but high risk deals. While this proposal focuses on early stage projects with low risk deals).
And the proposal is aligned with the objectives of AVI to the best of my knowledge (and based on a conversation this week with the AVI team), as they have been looking for pilot deals. Importantly AVI / CapCo is not set up yet so the counterparty who will sign the investments in this case is the Arbitrum Foundation. We’ll add a clause to the investment agreement that stipulates the Foundation can transfer the agreement to any Arbitrum Affiliated entity. So when/if we get a CapCo or related structure setup, the agreements can easily be transferred to said new entity to be governed there.
Importantly, this proposal offers something somewhat similar to an accelerator but not the same format as we’ve seen mediocre results with traditional accelerators (3 months, hands-off, little support after, sourcing ideas from the outside). So we’ve made multiple improvements to the format, most notably a deeper focus on supporting the projects with methodologies and expertise for customer validation (phase 1) and a staged program (so we work with projects for 3 months before committing extra funds and efforts). This also means the projects we take are somewhat earlier stage but we believe this approach will be advantageous in ensuring they’re built upon solid foundations.
For clarification, this proposal would NOT be based on grants. The proposal pilots ArbitrumDAO making investments into early-stage projects together with RnDAO. The foundation would act as counterparty and a clause allowing to transfer the contract later to an Arbiturm-affiliated entity such as CapCo).
As such, the value here comes from multiple fronts:
generation of onchain transactions from the projects
value of the investment contract (based on a SAFE + token warrant, thus giving flexibility to projects to go one way or another as regulatory conditions evolve)
ecosystem development value (the projects are focused on CollabTech so serve to increase governance+operational effectiveness and pave the way for mainstream organisations to go fully unchain)
Now, an important disclaimer is that we’re taking Hackathon projects. As such they typically haven’t done customer validation nor proper market research before. Because of this, many fail. We’re addressing this head-on by selecting the teams for talent and drive. The proposed program thus starts with validating the problem with customers (lean startup, customer development, and design thinking methods) and the Arbiturm investment is only 12k per project at this stage. Only projects that can showcase customer interest and a market gap will then move to Phase 2 and get extra funding. This setup provides the opportunity to capture data from the ArbitrumDAO and existing Arbitrum projects about what painpoints are significant (although we’ll focus on solving larger needs that go beyond web3 so to grow the onchain economy and not be only stuck with the current web3 market size. the sweet spot includes current DAO needs that also address larger societal issues). As a result of the work in Phase 1, we expect the projects to evolve significantly. Basically, please don’t assess the raw materials as if they were the finished product
Also, we’re not asking the delegates to evaluate the projects as we believe most delegates are ill-equipped to do so given this is not their focus. The RnDAO team is specialised in this area with decades of experience in the specific vertical (e.g. Drea has been working on it since Web1, including leading research at a team that became Google Suite and then leading Research at Asana and Aragon before joining RnDAO). We will carry out due diligence on the projects and select the teams.
We’re suggesting to do this outside the existing grants programs because:
this is not a grant but an investment
The foundation is focused on growth grants for later stage projects, while this is early stage projects
Questbook is currently out of funding but even if it had funding, it’s not specialised in this vertical and generalist programs are less equipped to assess which project teams to fund. Note we could use questbook infra, in which case if the DAO felt strongly about that we can add a note saying we’ll use questbook as the funds management infra before going to Tally. We don’t see any significant value in using this infra but we’re not against it.
Neither questbook program nor the foundation are equipped to provide hands-on support to projects. And deploying capital alone often leads to poor results (this is why accelerator programs have evolved to provide mentorship. We take this a step further by moving from hands-off support aka mentorship and providing more dedicated hands-on support which has been shown in data comparing venture-building models to improve ROI).
Thank you @danielo - this is an interesting proposal and I agree with the value of creating a program to support early stage startups/teams and increase retention of projects within the Arbitrum ecosystem.
While this is a good start, I have a few suggestions that I believe could help improve the program:
if you haven’t done it already, I suggest looking at Uniswap Foundation’s Unichain Developer Grants initiative and Uniswap Hook Incubator. While these programs are focused on Uniswap and not Arbitrum, I think they can provide valuable suggestions on how to structure a best-in-class program for Arbitrum.
who is on the committee that selects the 4 projects? are you planning to host an RFP for that? (ideally, it would be someone with a background in either VC-funding or grants-funding)
We’ve already been in close contact with JoJo who manages the new protocol and dapps track for questbook and have a precedent of collaborating. I’m hoping to continue this if and when it makes sense. And indeed we have the security audit subsidies in mind as something to refer program participants too when the time is right.
The committee is the RnDAO investment committee which exists precisely to satisfy this need. We have members with VC and accelerator experience (ex head of investments at outlier ventures and another member having setup 20+ accelerator programs), and importantly everyone has knowledge on the specific vertical.
Support the proposal. This program aligns with Arbitrum’s long-term development strategy, focusing on turning the short-term success of hackathons into long-term value. The necessity and unique value of supporting early-stage projects are well demonstrated. If executed effectively, it will bring lasting value and contributions to the Arbitrum ecosystem. Thank you for your proposal.
