[EP 5.19] [Social] Governance Distribution Pilot Program

🗳️ Meta-Governance
1
Status Posted on Snapshot
Author avsa.eth
Snapshot Link

Objective:

This proposal establishes a pilot program to distribute ENS governance to eligible DAO contributors who have been selected by the DAO to receive a grant, bounty, or other payment for services. The program would also serve as a pilot, and if successful, could become a long-term initiative, aiming to cover all DAO USDC and ETH recipients, while setting a policy for future governance distribution.

The intent is to engage contributors in governance. We believe governance distribution increases access to DAO governance, enhances the utility of the token, decreases the amount of tokens purely used in markets, increases delegation and the safety of the DAO, and helps align developers and other contributors who bring value to the DAO.

Context:

Matching Program:

The distributions are calculated using a progressive ratio, meaning that the more you receive in dollar value from the DAO, the more you will receive in absolute values in ENS, but less relatively to the amount, following a quadratic formula. The process is as follows:

  1. Calculate all eligible transfers: First, we list all transfers from the various DAO wallets into external wallets from January to September 2024. Data is collected from the ENS Ledger app.
  2. Exclude ineligible transactions: Transactions to Stewards, ENS Labs, Service Providers, and other transactions that are considered refunds or payments for goods are not counted.
  3. Calculate the square root of the total value received: The total weights are calculated to determine the percentage of the budget each recipient will receive. That calculation and further details can be seen in this spreadsheet.
  4. Decide the program’s total budget: The total budget will be determined by this vote.

Voting Method:

The vote will use a ranked choice voting system with options of 0, 30k, 60k, and 90k ENS.

An Instant Run-Off will be calculated, and if the budget option of 0 wins, or if the total votes are less than 1 million, then the proposal will be considered rejected.

Distribution Table:

The table below is from the ENS ledger, excluding Stewards, Service Providers, ENS Labs, refunds, and internal wallets. ETHGlobal Hackers are bounties given by ETHGlobal to hackathon winners. The final number of hackers is still being calculated, but here it is presented as a maximum of 100. If the final number is less than this, then more ENS will be distributed to other recipients, and if it is greater, it will be capped at 100. This proposal covers transactions from January 2024 to September 2024, and the final table may be subject to change upon legal or technical review.

$ Received jan-sep 2024 30k ENS % 60k ENS % 90k ENS %
ETHGlobal $ 190,000.00 1,441 13% 2,883 26% 4,324 39%
Karpatkey $ 187,149.13 1,430 13% 2,861 26% 4,291 39%
@UGWST_COM $ 75,000.00 906 21% 1,811 41% 2,717 62%
Rotki $ 53,973.38 768 24% 1,536 48% 2,305 73%
wslyvh.eth $ 50,004.00 739 25% 1,479 50% 2,218 75%
gashawk.eth $ 40,000.00 661 28% 1,323 56% 1,984 84%
buidlguidl.eth $ 35,000.00 619 30% 1,237 60% 1,856 90%
borderlessafrica.eth $ 30,000.00 573 32% 1,145 65% 1,718 97%
daemon.eth $ 27,000.00 543 34% 1,087 68% 1,630 103%
Revoke.Cash $ 25,000.00 523 36% 1,046 71% 1,568 107%
Onthis $ 25,000.00 523 36% 1,046 71% 1,568 107%
ipns.eth $ 25,000.00 523 36% 1,046 71% 1,568 107%
Fluidkey $ 25,000.00 523 36% 1,046 71% 1,568 107%
Blockscout $ 25,000.00 523 36% 1,046 71% 1,568 107%
beaconchain.eth $ 25,000.00 523 36% 1,046 71% 1,568 107%
1w3.eth $ 25,000.00 523 36% 1,046 71% 1,568 107%
Firefly $ 20,000.00 468 40% 935 79% 1,403 119%
EIP-7212 $ 20,000.00 468 40% 935 79% 1,403 119%
Urbe Campus $ 19,680.00 464 40% 928 80% 1,392 120%
ethdaily.eth $ 14,797.60 402 46% 804 92% 1,207 139%
Discord Support $ 13,000.00 377 49% 754 99% 1,131 148%
Dappnode $ 12,500.00 370 50% 739 101% 1,109 151%
generalmagic.eth $ 11,563.43 356 52% 711 105% 1,067 157%
Immunefi $ 10,200.00 334 56% 668 111% 1,002 167%
Pugson $ 10,000.00 331 56% 661 112% 992 169%
Juicebox $ 10,000.00 331 56% 661 112% 992 169%
frolic.eth $ 10,000.00 331 56% 661 112% 992 169%
ETHDenver $ 10,000.00 331 56% 661 112% 992 169%
Drips $ 10,000.00 331 56% 661 112% 992 169%
Lemma $ 9,998.67 331 56% 661 112% 992 169%
Tally $ 8,999.54 314 59% 627 119% 941 178%
pairwise.eth $ 8,402.18 303 61% 606 123% 909 184%
@navad $ 7,500.00 286 65% 573 130% 859 195%
apoorv.eth $ 7,021.88 277 67% 554 134% 831 201%
leticiaferraz.eth $ 6,949.32 276 67% 551 135% 827 202%
@Sagamore $ 6,000.00 256 73% 512 145% 768 218%
Socket $ 5,000.00 234 79% 468 159% 701 238%
Latin Hackathon $ 5,000.00 234 79% 468 159% 701 238%
eth-mexico.eth $ 5,000.00 234 79% 468 159% 701 238%
aynieducativo.eth $ 5,000.00 234 79% 468 159% 701 238%
@adhd $ 5,000.00 234 79% 468 159% 701 238%
ENS Fairy $ 4,781.34 229 81% 457 163% 686 244%
glodollar.eth $ 3,762.22 203 92% 406 183% 608 275%
weird3.eth $ 3,000.00 181 103% 362 205% 543 308%
Event Support $ 3,000.00 181 103% 362 205% 543 308%
daveytea.eth $ 2,818.29 176 106% 351 212% 527 318%
@solidityhaxor $ 2,500.00 165 112% 331 225% 496 337%
@haoce505 $ 2,500.00 165 112% 331 225% 496 337%
@h4nt3rx $ 2,500.00 165 112% 331 225% 496 337%
stephancill.eth $ 2,367.89 161 116% 322 231% 483 347%
Scope.sh $ 2,367.89 161 116% 322 231% 483 347%
Kiwi News $ 2,367.89 161 116% 322 231% 483 347%
bloomnetwork.eth $ 1,881.11 143 130% 287 259% 430 389%
modularcrypto.eth $ 1,818.29 141 132% 282 264% 423 395%
aexek.eth $ 1,750.00 138 134% 277 269% 415 403%
@austinoa012 $ 1,000.00 105 178% 209 356% 314 533%
illuminated.eth $ 940.56 101 183% 203 367% 304 550%
dhive.eth $ 940.56 101 183% 203 367% 304 550%
pabl0cks.eth $ 877.74 98 190% 196 379% 294 569%
iviangita.eth $ 877.74 98 190% 196 379% 294 569%
easlabs.eth $ 877.74 98 190% 196 379% 294 569%
2118.eth $ 877.74 98 190% 196 379% 294 569%
andrewpage.eth $ 780.00 92 201% 185 403% 277 604%
ETHGlobal Hackers (est 100 participants) $ 500.00 72 245% 144 491% 216 736%
8 Likes
2

A question here. And since I own rotki I will abstain from any vote. Do I understand correctly the proposal is to provide ENS tokens for governance to people/entities who have done work for ENS in the past?

Another alternative here would be to just delegate them these tokens instead of giving them.

The problem is that giving tokens is also a payment/donation and renders them taxable for the entities. So they are pushed to also sell.

1 Like
3

The ENS DAO has already distributed 170k to service providers and stewards this year. This initiative has over 50 recipients, which is several times more than the previous two combined (9 stewards + 9 SPs), although they may be less interested in managing ENS on average and would rather sell these tokens.

As far as I understand, DAO wants to have as many delegates with a small number of votes as possible rather than a limited number of delegates with a huge amount, so it would be a good idea to give a small number of votes to a larger number of organizations.

However, it is true that it is better to delegate these votes than to simply send tokens. Next time, I would suggest to transfer these tokens to a contract that delegates votes to recipient organizations, gradually sending them these tokens to simultaneously decide the issue of rewards and vote distribution. This will allow the recipients to be involved in the decision-making in ENS for some time, and maybe they themselves will not want to sell.

1 Like
4

Hey Lefteris, thanks for pointing this out. From what I understand, vested token contracts like these follow a Restricted Token Units (RTU) structure, at least in the United States. As a result, distributing tokens in this manner, similar to how they’ve been distributed to Stewards and Service Providers in the past, creates a tax liability.

As we continue to explore ways to decentralize ENS DAO and distribute voting power to contributors, we should remain mindful of the tax burden created by distributing ENS tokens.

That’s why, after learning more about tax liabilities, I’m advocating for a distribution program that prioritizes delegation of ENS, rather than direct distribution. This approach would 1) ensure the tokens are used for their primary purpose (voting) and 2) reduce tax liabilities for the recipients.

1 Like
5

Thanks for the comments. I have spent a lot of time and unfortunately money cleaning up and setting up proper tax book/accounting for rotki as it’s Germany and crypto. Guess it’s similar in other jurisdictions.

So if you guys paid us ENS for voting, the company would have to partially liquidate to offset the liability as we need liquidity.

Another thing. I said I would abstain, but I see no such option. So I will just not vote on this instead. As my company is marked as a recipient and I should not vote here.

1 Like
6

I will also need to partially liquidate to offset liability. As a result, I will no longer be able to submit offchain proposals.

Thanks for sharing your position! AFAIK, it’s not clearly stated whether voting in favor of a proposal one would benefit from is considered a conflict of interest. I think you’re doing the right thing, though.

7

I noticed small grant recipients might not be included, or at least some seem to be excluded from the table that I think otherwise be included in the top 100 by distribution amount.

Are there additional considerations outside “Stewards, Service Providers, ENS Labs, refunds, and internal wallets” resulting in ineligibility?

8

Hi ENSPunks! I see what you mean.

Since the beginning of 2024, 2 rounds of small grants have been conducted, both within the framework of the PG WG.

12th round
13th round

In Round 12, an organization without an ENS name (listed as UPE in the application) won 0.25 ETH. For some reason, I thought it was related to Bloom Network. I assume the final distribution will be to real addresses, not to the names listed in the spreadsheet, so it’s unlikely that such errors would result in the wrong wallet being distributed.

This is my mistake. However, as I pointed out here, when building the ENS Ledger, the final recipient databases were filled in manually, and frankly, half of the recipients of ENS funds do not have an ENS name. This is a good reason to give grant winners a 5L+ name if they do not have one.

@AvsA I think this should be corrected in the executable proposal.

Instead of this row:

bloomnetwork.eth – $ 1,881.11

These should be used:

bloomnetwork.eth – $ 940.56
UPE – $ 940.56

@ENSPunks.eth If you meant something else, here is the list of winners of rounds 12&13; this information matches that provided on the ENS grant platform:

Wallet
12th: 3 ETH
13th: 1 ETH

Wallet
12th: 0.25 ETH
13th: 3 ETH

Wallet
12th: 2 ETH
13th: 0.25 ETH

Wallet
13th: 2 ETH

Wallet
12th: 1 ETH

Wallet
12th: 0.25 ETH
13th: 0.25 ETH

Wallet
12th: 0.25 ETH
13th: 0.25 ETH

Wallet
12th: 0.25 ETH

Wallet
12th: 0.25 ETH

Wallet
13th: 0.25 ETH

Wallet
13th: 0.25 ETH

Wallet
13th: 0.25 ETH

Wallet
13th: 0.25 ETH

1 Like
9

The results are in for the [EP 5.19] [Social] Governance Distribution Pilot Program off-chain proposal.

ens_results_1478
ens_results_14781759Ă—1126 124 KB

See how the community voted and more ENS stats:

3 Likes
10

Thrilled to see the community rallying around this pilot program! Cheers to @AvsA for championing the cause and @danch.quixote for building the ENS Ledger to help attribute ENS allocations!

2 Likes