Over the past few days, I spoke with seven of the nine service providers to gather feedback on the programâs effectiveness and potential improvements. Below is a summary of ideas and conclusions. Nothing is finalizedâthis is a brain dump of interesting solutions that Iâd like broader input on.
1. Positive Feedback from Service Providers
The Service Provider Program, approved by the DAO last November, held elections in December, with funding streams starting in late February. Providers consistently shared similar feedback:
âWe couldnât have achieved what we did this year without the funding streams. Last year, we struggled to stay involved with ENS, and now we have multiple developers working full-time. We hope to continue next year.â
While these views come from the most direct beneficiaries, the general consensus is that the program has been an innovative and cost-effective success.
I, too, hope it continues. While the DAO must reapprove the program, Iâm optimistic. MetaGov stewards have asked me to continue leading it, even if Iâm not on the working group (WG).
2. Shifting Votes to Q1
Last yearâs elections in December overlapped with Steward elections, creating challenges:
- High demands on delegates and candidatesâ attention.
- Candidates had to apply for both roles simultaneously.
- New streams were managed by incoming stewards during a busy end-of-year period.
This year, elections wonât happen in December. While the program guaranteed a minimum one-year commitment, it was funded for 18 months. This allows elections to be held in mid-Q1 (February or March), after most holidays.
Three votes will occur:
- Program Reapproval and Budget: A DAO vote to reauthorize the program and set the budget.
- Service Provider Selection: A vote to select providers.
- USDC Allowance Update: An executable vote to adjust the superfluid stream allowance.
Since streams flow to a DAO wallet, any other stream adjustments will be managed by stewards without additional votes. Stream updates will occur about a month after the selection process. This ensures:
- Continuity: Re-selected providers experience no funding interruptions.
- Notice Period: Providers not re-selected receive a one-month notice before funding ends.
3. Ranked Choice Voting with Round Robin
Iâve advocated for ranked-choice voting (RCV) using the Copeland/Round Robin method. This approach ranks all candidates, unlike Instant Runoff Voting, which identifies a single winner through eliminations. For service provider selection, we need an algorithm that produces a ranked list of candidates.
If Copeland + RCV is available, weâll use it. Otherwise, weâll default to the Approval voting used last year.
If we adopt Round Robin, I propose including a âNONE BELOWâ option. Voters can express their preference to disqualify any team ranked below this choice. Similar to last yearâs âNOTAâ option, teams ranked below NONE BELOW would be disqualified.
4. Two-Year Streams for Top-Ranked Projects
Service providers expressed concerns about the annual reevaluation process, citing its political and unpredictable nature. Many emphasized the strain of reapplying annually, though they also acknowledged the importance of regular DAO oversight.
To balance stability and oversight, I propose a two-tier funding system:
- Top-ranked projects receive two-year funding.
- Lower-ranked projects receive one-year funding and must reapply annually.
This approach provides three benefits:
- Projects with strong DAO support donât need to reapply annually.
- Lower-ranked projects can still secure funding but face annual reevaluation.
- Service provider turnover is staggered, ensuring continuity and integration of experienced teams.
Implementation: In the first year, the top third of the budget (not projects) would be allocated to two-year streams. From the second year onward, this would shift to the top half. This ensures half of the funding rotates annually, balancing continuity with accountability.
Visually it looks like this:
For simplicityâs sake letâs assume all projects ask the same amount and the total budget can accommodate six projects (and everything remains constant over the years). In the first year, two providers get a two-year stream, while four get a single year. On the next year these four will need to apply again for more funding and two of them will get a two year stream while two will only get a one year. Subsequent years remain the same, with half of the providers needing to apply every year and half of it applying every two years.
5. Allow current providers to make two asks
Last yearâs âknapsackâ selection system encouraged modest budget requests, prioritizing smaller, high-ranking projects. However, the binary nature of the process discouraged providers from proposing expanded scopes, fearing rejection.
To address this, existing service providers should be allowed to submit two budget proposals: with their according scope.
Both budgets would be treated as separate candidates during ranking. If one is selected, the other is automatically removed.
Imagine an example in which there are three candidates who put forward two budgets each, and the total budget is only $600k. They go to a vote and the final rank is as below.
| Rank | Proposal |
|---|---|
| 1 | Alice Big Ask ($400k) |
| 2 | Bob Redux Budget ($100k) |
| 3 | |
| 4 | |
| 5 | |
| 6 | Charlie Small Budget ($100k) |
In this case, when Alice gets her 400k project approved, her 200k one is immediately taken out of consideration. Then next, Bobâs $100k project is approved and his $200k is taken out (even though there would be enough budget left over) because the smaller project is ranked higher. Now thereâs not enough budget left for Charlieâs $300k project, so thatâs disqualified, but because Charlie was allowed to put a smaller redux version, he can still get in the program with a reduced $100k budget.
To reduce clutter and decisions, this option would be available only to current service providers and it would be limited to two budgets. Itâs a way for them to ask for a raised scope but keep on the program if itâs denied.
6. Lower-Tier âTalent Providerâ Program
The Service Provider program has supported larger teams but could benefit from a lower tier for individual developers or niche contributors.
A new Talent Provider program could allocate a small annual budget ($200â500k), allowing individuals to apply for funding in increments of $10k. This would support roles like:
- Content creators
- Auditors
- Event coordinators
- Voting assistants
- and other types of talent we canât predict now
This lower tier could nurture talent and grow the ENS ecosystem.
7. âGraduatingâ from Service Provider
Recently the Unruggable team has asked for 1.2 million stream, outside the scope of the Service provider. I have expressed my concerns that this could go against the whole purpose of service providers, as it could create a race for developers asking individual streams. Most developers Iâve asked had the same fear for others, although they expressed that they themselves saw no need to ask for individual large stream at the moment. Regardless, there should be opportunities for teams to ask for additional funding from the DAO (as Blockful did) or to ask for a large project with a much broader scope (as unrugabble intends).
We could remove the limit on the service provider program ask, but that could mean that one 2M project would be competing with attention to a 200k project. We could also create a higher tier for the program in the molds of the small tier for Talent Providers, but then it would create a weird situation of asking the DAO for a very large budget for yet to be unspecified projects which are not necessarily needed. Also, large asks should be treated individually and considered in their own merits.
I propose increasing the limit from last year of 1M to something larger like 1.2 million per year (or even 1.5M). I also would propose increasing the minimum ask from 100k (which nobody asked anyways) to something like 200k or 300k to make sure we have solid and serious asks (smaller asks could go via the talent pool).
I think any project above that ceiling should be voted and considered separately, in a similar fashion that Unrugabble is doing. I think it would be important to create a proper standard format for that, both on the process of asking and the tech behind, to make sure we donât end with different technical solutions to the same means. I donât know what that would look like but I believe in paving the cow paths, and the current projects are definitely setting these first paths.
8. Mandatory Quarterly reports
While the last program, transparency and showing up on calls was encouraged, no specific framework was given. We will take a look at what we considered best practices of progress report and make it mandatory for the next year.
9. On a Meta Budget
A final consideration is that while everyone wants great projects to be generously funded, the reality is that the DAO operates within the limits of its income. In many ways, the yearly budget resembles the Knapsack algorithm used on the selection: we start with a total budget and prioritize spending based on ranked needs. Personally, as the creator of this program and a two-time steward I believe those are great uses of the DAOâs fund but I would have no hesitation cutting the budget for both if the DAO only had enough funds for the development of Name Chain by ENS Labsâtheyâre doing excellent work. Deciding who comes second, third, or fourth in priority is more subjective.
While the DAO votes on individual proposals (âtreesâ), itâs the responsibility of the Metagov working group to maintain a broader perspective and not lose sight of the entire âforest.â This group has weekly calls with Karpatkey to assess the DAOâs financial health and determine its true annual budget.
My suggestion is that at the end of each Metagov term, the working group should take a holistic look at the DAOâs finances and calculate an annual spending cap using a formula like this:
- Take all DAO income from the past year derived from registrations and renewals.
- Deposit half of this total into the endowment.
- Calculate the yield from the endowment and halve it.
The combined amountâhalf of last yearâs income plus half of the endowment yieldâshould determine the DAOâs spending for the next year. This provides a sustainable way to budget while allowing for growth in the endowment.
Before any major vote is put forward, the working group should consider how it aligns with this budget cap and its long-term implications. Balancing generosity and financial sustainability is crucial to ensuring the DAO can continue supporting projects while safeguarding its future.
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