[6.42] [Social] SPP3: Program Authorization and Committee Model

5pence.eth · May 6, 2026, 8:18pm

Not if the prevention costs you $4.5M+.

clowes.eth · May 7, 2026, 9:22am

Whilst arguably true, there is nuance to a statement like this, namely that which I outlined last year in Toward Accountable and Strategic Funding in ENS:

I accept that not all value can be quantitatively measured and documented but in my opinion the majority of Service Providers don’t even pass the qualitative sniff test for having added value in excess of their cost. I’ve seen a lot of cool stuff come out of SPP and yes we should incubate interesting and promising ideas but the DAO is not a charity.

I do appreciate some of the recent transparency from ENS Labs employees regarding how they view their positioning. The below from Tate is a fair take.

That said, whilst I accept that relative to other protocol teams ENS Labs may be cost-effective, that does not necessarily mean that ENS Labs itself should be exempt from scrutiny regarding value delivered relative to cost - particularly when considering marginal value-add year-on-year.

I think as DAO participants we need to drop the ego and hold ourselves accountable. Constructive criticism should be welcomed, and effective collaboration between teams prioritised.

nick.eth · May 7, 2026, 10:30am

Asking for you to provide evidence for your claims is not an attack.

Prior to this post, your claim for $1M of revenue attributable to SPP has rested entirely on the claim that you can attribute all registration revenue associated with the referral program as additional revenue that would not exist without it. You haven’t provided any evidence that is actually the case.

lightwalker.eth:

Sure let’s do some super quick and dirty napkin math. Checking Grails now I see:

999 club has 997 names either actively registered or in grace period: 997 * $640 / year = $638,080 / year in revenue.

10k club has 6,099 names either actively registered or in grace period: 6,099 * $160 / year = $975,840 / year in revenue.

And checking the latest revenue report there’s $3,503,709 in recently released premium revenue for the year proceeding the end of Q1 2026.

As a super quick and dirty napkin math calculation, that adds up to $5,117,629 / year in revenue.

Obviously not all of the 999 club, 10k club, and recently released premium revenue is associated with speculation. There’s no perfect mechanism to explicitly determine the % that is, but completely confident it’s over $1M / year in ENS’s revenue.

Pretty much all of this revenue occurred when there was no referral program in place. So how can you claim that the referral program is responsible for any of it?

It seems to me that the strongest claim you can make at this point, with the anecdotal evidence you’ve provided, is that the referral revenue is likely good for the health of the ENS secondary market, and thus for renewal rates - but that there’s not enough evidence to say to what degree. I’d agree with that much, personally.

Arnold · May 8, 2026, 9:25am

Strong agree.

A revenue of $1M against $4.5M of opex is an operating loss of $3.5M. (or -350% on an EBITDA assuming negligible D&A)

No treasury, public or private, would underwrite that as a financial success.

I acknowledge (inline with the program goals) that not everything needs to generate revenue, however we should be measured when making claims like this.

Personally, given the current state of operations I would view having EBITDA in the range of -150% to 10% as an operational success.

lightwalker.eth · May 8, 2026, 4:06pm

Oh no!! Hahaha. There’s a misunderstanding here. “please feel welcome to attack” is a colloquialism we use every day in our team. We’re always eager to move closer to the truth, no matter who might have shared an idea or what their role is within our team. We often go out of our way to proactively welcome and invite critiques with this expression. “Hey, can you please attack this? …” We don’t attach ego to our ideas and instead are focused on getting the best possible answer we can together through some good debate!

We have a good example here for how it can be tricky to communicate on a forum. This medium has it’s limitations.. Zero negativity was being communicated there. Only positive vibes. When it comes to me, please always feel welcome to attack!

I agree that would be a bad argument. But once again this is not what I’m saying. We keep talking past each other on this forum thread. Not sure where I’m failing to communicate the idea.

Idea is: ENS receives over $1M / year in revenues from speculation. The platforms specializing in this speculation (Grails and Vision) are now exclusively supported by SPP2. If there’s no mechanism of support, a platform for speculation goes away. If the platforms for speculation go away, so too does the $1M+ / year that ENS receives from speculation. Therefore SPP2 has helped the DAO prevent further revenue drops of $1M+ / year which is still a contribution of $1M+ / year.

This is not saying that whatever revenue is associated with a referral program would not exist without it. I agree that would be wrong and a silly thing to say.

It seems there’s big misunderstandings all over the place because we’re trying to communicate about nuanced ideas through the constraints of a forum. Suggest we move to something more interactive such as a call if you feel something I said above isn’t clear.

Here’s an attempt to clarify what I fear might be another misunderstanding:

The key purpose of the ENS Referral Program is NOT to maximize support for platforms specializing in name speculation. No. That would be crazy. The key purpose of the ENS Referral Program is to incentivize platforms with millions of existing users to integrate with ENS and promote .eth registrations and renewals to their users. We’re talking about big wallets, exchanges, block explorers, payment apps, web browsers, etc..

In other words, the key purpose is net new growth for ENS, not shifting existing demand for registrations or renewals from app A to app B.

We’re advancing this right now for ENS as we’re working to activate a major web browser and wallet provider with the ENS Referral Program. We’re quite proud to advance this within the limited scope of the ENS Referral Program within SPP2. Let’s note how currently the ENS Referral Program within SPP2 is both time and budget constrained. That makes persuading big platforms a lot harder! They want indefinite opportunity with referrals otherwise the economics for investing their team’s time in building and promoting ENS integrations don’t work out. Our focus with referrals within SPP2 was #1 on building up the infrastructure and demonstrating we can operate referrals in a way that doesn’t result in race to the bottom problems. We’re also so proud to have demonstrated this in SPP2. Next steps include coming back to the DAO with a proposal for scaling up the referral program as part of SPP3. I believe the ENS Referral Program has promise to be the biggest driver in the next chapters of growth in ENS. Time will tell. Let’s see.

lightwalker.eth · May 8, 2026, 5:20pm

I can understand being upset if the analysis being performed goes as deep as SPP2 approved a 2-year budget of $4.5M and ENS’s top-line revenue number has gone down, not up since SPP2 began.

Good news though: that analysis is superficial.

SPP2 spans 2-years, not 1. Both eth.limo and Blockful have 2-year terms. Their second-year terms combine to $1.4M. Therefore, the first full year of SPP2 has a budget of $3.1M.

SPP2 commenced on May 26, 2025. Today is May 8, 2026. We haven’t even finished the first year of SPP2 yet.

Therefore, SPP2 has spent roughly $2.9M so far, not $4.5M.

SPP2 already has a direct revenue contribution of over $1M+ / year. Note how this revenue is annualized to “per year” while the cost is 1-time.

And this makes no consideration of all the other big value produced for ENS during SPP2 which is absent the analysis here.

I’m so confident about the big value and ROI of work produced under SPP2 that I’ve been beating the drums over and over again for a formal ROI analysis to be completed on work delivered under SPP2 before SPP3 funding decisions are made. Zero others communicated their support for this. I stood alone calling for it. If anyone had doubts about SPP2 ROI, that was a productive time to raise it!

I’m not finding this use of my time in this thread productive so will just let whatever posts follow be whatever they are.

5pence.eth · May 8, 2026, 9:39pm

Incorrect.

SPP2 is 4.5 million USDC per year.

The full cost of SPP2 is 5.9 million (breakdown below).

	SPP2 Year 1	SPP2 Year 2
Two Year Awards	1.4M	1.4M
One Year Awards	3.1M
Total Spend	4.5M	1.4M

Resources:

lightwalker.eth · May 10, 2026, 4:32am

Thanks @5pence.eth for catching that. All the more reason for a formal ROI analysis and accountability review to be completed.

5pence.eth · May 10, 2026, 9:31pm

+100

I’d add that this ROI analysis looks quite different depending on who is receiving the funds. Something that isn’t historically discussed is the revenue model of the applicants.

Some providers run for-profit businesses where these streams supplement, or in negative ROI scenarios even subsidize, existing commercial revenue.
Others exist solely to serve the protocol as a public good, like ENS.
Still others are essentially seeking seed support for something new.

As the committee builds its evaluation framework, I’d encourage them to be intentional about which of those categories the applicants belong to, and in what proportion DAO funds are used across those categories.

netto.eth · May 11, 2026, 3:38am

Appreciate the leadership and effort here @Coltron.eth, thanks. Also congrats on a strong and diverse committee composition. I’ve seen several of the members working in different opportunities and I’m confident in the quality and professionalism the DAO will have.

I voted for, although I don’t fully agree with having the entire decision-making process handled by a committee. I’d prefer a more gradual iteration, since that would make it easier to learn along the way. Here, we’re taking a completely new approach.

I know it’s too late for any structural change. Sharing anyway, for future reference and discussion, since I’ve already shared this privately some time ago when people asked me about SPP.

The Foundation board/DAO could propose budgets (as @AvsA mentioned) and ideas that ENS needs. Directions and north stars, giving clarity on what is SPP trying to achieve (as @clowes.eth mentioned).
Delegates discuss and either approve or amend the proposal.
SPPs apply with proposals to fulfill the scope and goals, or to bring new ideas to the table.
A council would screen the proposals, reading each one in detail and conducting interviews with the teams. They’d evaluate based on a framework that considers pricing, track record, and other factors relevant to the goals. A minimum score could be required to appear on the ballot. The council could also negotiate pricing, rewarding adjustments with a higher score.
Delegates vote, but much better informed. The vote should use the Copeland method (same as last year, but without the basic and extended budget split, which made SPP2 even more complex for delegates), and with private voting. This would mean much less lobbying, thanks to privacy and to relying on the council’s scores for general decision-making. There’s still a lot of subjectivity, so delegates can capture that beyond the scores.

Service providers with two-year streams from SPP2 will be serving the DAO alongside SPP3 SPs (building on @lightwalker.eth’s point about building context from evaluating SPP2 SPs).

One suggestion: include a step in the process where the council interacts with the existing SPP2 SPs, so they’re fully aware of their scope and can make better decisions on resource allocation for SPP3.