[EP 6.3] [Social] Renew Service Provider Budget

The Service Provider’s streams were initiated almost exactly a year ago, and while it’s approved for 18 months, it is supposed to be a program reevaluated yearly. Here is the proposed format for this year. This vote intends to be a DAO check on whether to renew the program and if so, under what budget.

Vote

The vote will be a Ranked Choice Vote on either to approve or reject and budget. Options will be:

  • Renew and increase budget to $4.5 Million per year
  • Renew and maintain budget at $3.6 Million per year
  • Renew but reduce budget to $2.7 Million per year
  • Do not renew the program.

The budget is set per year. However the actual required budget will need to cover 19 months, because as detailed below, 1/3 of the streams will be budgeted for 2 years and we will add another 3 months of runway to make sure the program is not interrupted by eventual delays in the 2026 vote.

What is the Service Provider Program

The ENS constitution states that “Any income generated to the ENS treasury is to be used first of all to ensure the long-term viability of ENS, and to fund continuing development and improvement of the ENS system.”. The goal of this program is to create a more diverse and decentralized base of developers and companies involved in the improvement of the ENS system, by creating a guaranteed income stream to support their continued work. Streams last at least one year.

Who can apply?

Any company offering services they believe will add value to the ENS ecosystem is eligible to apply. While this process has traditionally focused on developers, delegates now have discretion to determine what services qualify as beneficial.

Eligibility Requirements:

  • The applicant must be an existing company, over one year old, with an established team and reputation.
  • The company or its team members must have serious prior experience with ENS, blockchain, or internet domain related projects.
  • The company must secure endorsement of at least 50k delegated ENS tokens, either through public backing by a delegate or by demonstrating support via Snapshot.
  • Neither the company nor its team members may reside in OFAC-sanctioned countries.

Submission Process

Candidates will be required to submit a proposal demonstrating their eligibility and outlining their plans. The proposal must include the following:

  1. Past Achievements:
    A list of their accomplishments in ENS, the blockchain space, or domain systems.

  2. Scope of Work and Budgets:

    • A basic scope, which outlines the minimum yearly budget they would accept to perform their work, along with the specific goals and deliverables they aim to accomplish within that budget.
    • Optionally, they may also provide an extended scope, which includes an increased budget and details the additional projects or goals they would pursue if granted this higher budget.
  3. Proposal Format:
    The submission must be provided both as a written document and as a short video (no longer than 5 minutes) where the team discusses the above points.

  4. Quarterly KPIs:
    The proposal must include a set of quarterly Key Performance Indicators (KPIs) to define what “success” looks like for their basic and extended scope. These may include specific targets, such as product releases, user acquisition numbers, or other measurable metrics that can be used to evaluate their progress against their own promises. Althought we encourage developers to explore new areas of research outside these given metrics, considerable thought should be given to these metrics, and every quarter you will be required to post an update on them. Failing targets in two consecutive targets will trigger a Service Assessement (see below) by Metagov stewards.

  5. Budget Guidelines:

    • All budgets must be submitted as integer multiples of $100k per year.
    • The minimum budget request is $300k per year, and the maximum is $1.3M per year.

What will be selection proccess look like?

  1. Eligibility & Voting

    • The MetaGov Working Group reviews candidates for eligibility.
    • Eligible candidates are included in a ranked-choice DAO vote with the option “None Below”.
    • A quorum of 1M ENS votes is required; otherwise, the process halts and a new vote is conducted.
  2. Budget Streams

    • Two-Year Stream: 1/3 of the yearly budget for a two-year duration.
    • One-Year Stream: Remaining 2/3 of the yearly budget for one year.
  3. Evaluation Process
    Projects are assessed in ranked order:

    • If “None Below” is reached, evaluation stops.
    • If the candidate has been part of the Service provider program for at least a year AND if the extended budget fits within the remaining two-year stream budget, assign to the two-year stream . Subtract the extended budget from the two-year stream budget.
    • Assign to the one-year stream if:
      1. The extended budget fits the one-year budget. Subtract its extended budget from the one-year stream.
      2. OR if the basic budget fits the one-year budget, subtract the its basic budget from the one-year stream.
    • If none of these conditions are met, the project is eliminated.
  4. Completion

    • Evaluation ends when all projects are assessed, the remaining budget on all streams reaches zero or “None Below” is selected.

Relevant Dates

The Submission process will start as soon as this vote ends, the deadline for submission of proposals will be March 31st* and the vote for the selection will start soon after that. Those with the two year stream will be guaranteed a stream until at least february 2027, while the others will be at least february 2026, when they will need to submit again.

Resposibilities for selected service providers

Brand name and association with ENS DAO

Selected providers will be rewarded with the streams, but will also carry the responsibility to represent ENS to the world. They will be granted usage of the ENS brand name (within guidelines).

The stream will be managed by the Metagovernance Stewards, but they are to enact representing the DAO’s intent. They will have access to pause or move streams due to security concerns or upon the request of the service provider. They can only terminate a stream if there is a sucessful DAO vote requesting them to do so (which the DAO is free to do at any point for any reason).

Quarterly reports

Service Providers must provide a detailed written report on their accomplishments every quarter. They are also required to present at working group meetings when requested by stewards and to give at least one presentation at a conference each year (remote attendance is acceptable if necessary). These reports must include any metrics or KPIs promised for the reporting quarter, as well as any new metrics or KPIs proposed for future quarters. Additionally, the report must state the total amount received during the quarter. While Service Providers are encouraged to include financial spending details, this is at their discretion and not a mandatory requirement.

Increased funding

Selected service providers may request specific, non-recurring grants at any time, following the usual governance process on the forum. However, to request an increase in their ongoing stream budget, they must meet the following conditions:

  • They must have been a service provider for at least one year.
  • At least six months must have passed since their most recent stream-related request, whether it was part of a service provider submission or another stream adjustment process, regardless of either it was sucessful or not.

Service Providers can terminate their own stream at any time without notice, thus liberating them from any further obligations towards the DAO. (Note: Terminating their stream does not exempt them from potential liability for any misconduct or unresolved issues.)

Responsabilities for Metagov Working Group

The ENS DAO can terminate streams for any reason following the proper governance procedure and after a DAO vote. Additionally, Metagov or Ecosystem Stewards can and should trigger a Service Assessement if any of these conditions are met:

  • A service provider fails to publish their quaterly report twice
  • A service provider falls short of the KPIs on their proposal twice in a row.
  • A service provider is unresponsive to attempts to contact them
  • A service provider is believed to be actively participating in a behavior or project that is considered harmful to the ENS system or brand.

The Metagov Working will then appoint a person that will conduct an investigation on the claims and publish recommendations on how to solve the issue moving forward. Solutions might include (but are not limited to) a reconsideration of new KPIs, a demand of internal reorganization for the service provider, a renegotiation of terms or even the termination from the program. Once the report is published, a DAO wide vote will executed to decide on the proper outcome for the provider.

12 Likes

Link: https://snapshot.box/#/s:ens.eth/proposal/0x0cca1cf36731203e235b0e2de9041be3a16d9cdeadff6e15e1f1215c611e12ef

4 Likes

Was the full $3.6M allocated? If so, is there an article on to who, how much per team, and impact?

there is this Tally | ENS | [EP5.2] [Executable] Commence Streams for Service Providers

although it probably doesn’t answer all the questions

2 Likes

In general, I think the Service Provider program has been a great success. I’m voting in this order:

  • Renew and increase budget to $4.5 Million per year
  • Renew and maintain budget at $3.6 Million per year
  • Renew but reduce budget to $2.7 Million per year
  • Do not renew the program.

I should disclose that I am part of the program so i have a conflict of interest, but there is no option to abstain anyway.

5 Likes

We have a live dashboard of the funds being distributed second by second.

4 Likes

Vote Stance

I’m sharing my voting rationale to invite feedback before casting my vote:


After reviewing our budget targets, I believe we should start the Service Provider Program at the $2.7M baseline. The program’s new structure allows teams to request additional funding mid-cycle, meaning we should expect this program to increase in cost during the year from whatever we vote in now.

If we front load the maximum budget now before we select providers and projects, we’ll have limited funds to allocate to the additional increases that are requested. Leaving some funds off the table gives us more precision in how we deploy capital across the program’s lifecycle.

Budget Math and Analysis


Analysis using 2024 numbers

Source Amount (USDC) Notes
2024 ENS Revenue 27,065,523 Revenue from Steakhouse’s Dune Dashboard
2024 Endowment DeFi Results 3,819,438 Endowment data from karpatkey
Total 30,884,961

Some of the above was deferred revenue. According to this dashboard from steakhouse, actual 2024 income was 13,289,358 USDC (representing only the USDC value of ETH inflows, excluding deferred revenue).

Now, calculating the forward looking spend:

Forecasted Spending (2025)

Item Amount (USDC) Notes
ENS Labs 9,700,000 This is already locked in for 2025
Service Providers Streaming 3,600,000 Assuming this is final spend after requested increases
Working Group Expenditures 2,739,000 Based on 2024 spend in the reports linked below, and assuming no increased WG spending from 2024 levels
Sum 16,039,000

In the initial Brain Dump thread, we targeted 50% of revenue (approximately 15.4M based on these estimates) for total DAO expenditures. A 3.6M SPP total budget would put 2025 expenditures at 16M, meaning starting the SPP at 3.6M level would put us over that 50% target even before the likely increases to deserving teams.


Working Group Spending Reports

6 Likes

Great to see some revisions to the original format, especially the new structure allowing teams to request additional funding mid-cycle as well as the quarterly reports on progress and deliverables. Would welcome the creation of a standard template for this to ensure a baseline of evaluation across service providers for easier assessment on key markers.

Given the above and the ability to request extra fund mid-cycle, my vote will be:

  • Renew and maintain budget at $3.6 Million per year
  • Renew and increase budget to $4.5 Million per year
  • Renew but reduce budget to $2.7 Million per year
  • Do not renew the program.
2 Likes

Results are in for the ⬡ [EP 6.3] [Social] Renew Service Provider Budget proposal: off-chain voting | 133 voters | 1,748,990 votes

6 Likes