Trust in the committee’s judgement of ROI
It’s fair to note revenues and registrations having a downward trend lately. We’ve been beating the drum for urgent attention to ENS revenue and growth, including in our SPP2 proposal. The “revenues are suppressed” framing is valid, but also leaves out the part where SPP2 itself is already contributing meaningfully to that revenue, to say nothing of the future. This was the case we made with SPP2, and the work since has borne it out.
The DAO is already earning $1M+ annualized revenue thanks to SPP2 work that wouldn’t otherwise exist. Two examples:
- The ENS Referral Program (funded under SPP2) is already driving new ENS integrations with a major web browser and a 15M-user wallet provider. Public announcements coming soon.
- Funding for Grails (Brantly’s EthId team) comes from SPP2 (with supplements via referrals), while the relaunched ENS Vision now relies on referrals as its sole revenue source and means of continuing to exist.
Detailed accounting data on these DAO revenue impacts is available on request.
Additionally, when ENSv2 launches, the onchain data model for ENS significantly changes. These changes are going to break many existing ENS integrations that build on indexed ENS data, which includes apps like Grails and Vision (to say nothing of many other important ENS integrations). Thanks to our work on ENSNode as part of SPP2, these existing ENS integrations (and many future ones) will have a strong and easy upgrade path available. The first key to growth is to avoid a terribly leaky budget. Noting also how the new ENSv2 apps are building on ENSNode. The ROI here from SPP2 is fundamental to the future of ENS.
Now, looking to the future with SPP3, our team already has plans for projects that will confidently contribute millions $$ / year more to the ENS DAO, even before the 1-year period of SPP3 concludes, to say nothing of the far larger recurring revenue impacts beyond that. And this is just from our team. I assume other teams will have compelling plans to grow revenues as well.
However, if the SPP3 stream budget is capped at $3.25M it proactively handcuffs the committee under too strong of an unvalidated assumption that the SPP3 proposals will make a weak case for a strong ROI, including as measured strictly through hard revenues.
Teams seeing real revenue opportunities will be submitting proposals that match those opportunities in scope. That’s why we (and I assume other teams) who see these big opportunities for ENS growth, will be making meaningfully larger budget requests under SPP3. Without adjustment, this Snapshot looks to force the committee to either reject strong revenue generating proposals on budget cap grounds or push providers to descope work that would have generated strong returns. Neither outcome serves the DAO.
Without even the potential of more resources available to SPP3, under what seems to be an incorrect assumption that SPP has not already demonstrated its potential to be a revenue-center, not a cost-center, and before the SPP3 proposals have been evaluated, it suggests a frame that the committee should not be trusted to exercise good judgement in recommending a cohort that achieves a good ROI for ENS.
Noting again how it is important to formally separate the max SPP3 streaming budget from what will become the effective SPP3 streaming budget. The committee has the right to decide that far less than the max should be what is effectively spent if the committee decides the received SPP3 proposals do not show strong enough ROI.
In conclusion:
- SPP has already proven its ability to contribute meaningful revenue impacts to ENS. The “revenues are suppressed” framing is technically true, but the bigger context is that revenue decline would have been far worse without SPP2. ENS is still very early. Growth is achieved through investments that deliver ROI, not by proactive budget cuts disconnected from a ROI analysis.
- The methodology should reflect total DAO revenue, including DeFi returns. The DAO holds the endowment specifically to support program continuity. Excluding endowment yield from the budget formula treats the DAO as paycheck-to-paycheck, which it isn’t.
- The max SPP3 streaming budget is the potential available to fund a strong cohort. The effective spend is what the committee actually allocates. These are different numbers. Proactively capping the budget at $3.25M inappropriately constrains a decision that hasn’t been made yet, based on assumptions about proposals that haven’t been written or reviewed yet. The committee should be trusted to make ROI and budget judgements when they are forming their cohort recommendation. I’m making the case here that the committee can and should be trusted with this.
The budget cap for SPP3 streams should be $3.85M based on the DAO revenue methodology. The budget for the actual cohort recommendation may be less.