[EP13][Executable] Support the Protocol Guild Pilot

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Authors Trent Van Epps (PG Member), Tim Beiko (PG Member)

Description

This is a proposal for the ENS DAO to support the Protocol Guild Pilot, a vested split contract which directs funding to 110 Ethereum core protocol contributors over one year.

Abstract

We propose that 200k ENS (~3.7% of the unclaimed airdrop) be allocated in recognition of past and ongoing work of these core contributors.

ENS is one of the most successful projects built on Ethereum, and yet core protocol contributors do not benefit in any way from the success of projects being built on Ethereum. The Protocol Guild provides a vehicle for the ENS community to distribute governance tokens to those individuals who build and maintain the foundational infrastructure that ENS relies on.

ENS sponsorship of the Guild allows members to engage with ENS in a way that is values- and incentive-aligned. Simultaneously, it will allow them to continue the important work of scaling our shared infrastructure and making it as resilient as possible for the applications on top of it.

Specification

Useful links

Context

  1. As a credibly neutral, maximally uncapturable infrastructure with no block reward, the Ethereum base protocol doesn’t offer the same token incentives to contributors as applications or L2s can. However, the protocol still needs to attract and retain talent to continue to evolve. As the broader ecosystem continues to grow, competition for talented individuals will only increase. This isn’t to fault individuals for rationally weighting financial incentives, or protocols for leveraging the power of tokens - this is just the reality of the current context. We also acknowledge that financial motivations aren’t the only or best motivator for people, it’s just one tool in our toolset that is currently underleveraged.
  2. Existing public goods funding solutions tend to be either too narrow or broad in scope, fail to exclusively target core protocol contributors, or depend on an intermediating institution, which often leads to organizations, and not individuals, being recipients of funds.
  3. The Protocol benefits from contributor continuity. Transferring institutional knowledge between cohorts is more likely to happen successfully the more overlap there is.

Here’s a longer exploration of the project rationale.

If we believe what we are building is important, then we should structure the incentives to attract more smart people to work on it. After all, “Ethereum is an unprecedented arena for playing cooperative games”; we should try to manifest the novel possibilities made possible by this arena. (Griffith, 2019)

What is the Protocol Guild?

The Protocol Guild aims to address the challenges mentioned above with a simple tool: a weighted split contract that includes vesting. Members will solicit sponsorships in the form of tokens from applications & protocols that build on Ethereum, which gives core contributors exposure to success at the application layer:

  • current contributors are rewarded for past work through time-based weighting
  • current contributors contribute for longer periods, resulting in less contributor churn
  • new contributors are incentivized to join core protocol work, protocol evolution and maintenance is more robust

To date, the membership includes over 110 Ethereum protocol contributors, including researchers, client maintainers, upgrade coordinators, and more, all self-curated (member list here). This is a broad-based ecosystem effort: members come from 22 different teams and 9 organizations. Only 30% of members are directly employed by the EF. The membership is continuously curated through quarterly updates to the split contract - we expect the membership to grow to 150 over the course of the Pilot.

The Guild contracts will act as an autonomous value routing mechanism, operated independently from any existing institution, purpose-built for incentivizing long-term core protocol work. At no point does PG take custody of funds on behalf of members, it is all handled trustlessly. The diagram below and the docs have more information.

2022 Pilot

Since starting the project in Nov 2021, we’ve built norms around member onboarding , refined the splitting and vesting mechanisms, and created extensive documentation on how PG operates.

At this point, we’re ready to test the mechanism’s efficacy with a 1 year / $10-20mm Pilot. We want to make sure the mechanism operates smoothly before graduating to a full-scale fundraising round for longer vesting periods. The funds for the Pilot would be vested directly to Guild members over one year: see the Pilot vesting contract here.

Proposal

We are proposing that 200k ENS (~3.7% of the unclaimed airdrop) be sent to the Pilot vesting contract deployed at 0xF29…f1a9 in recognition of the past and ongoing work of these core contributors.

The tokens would not be liquidated, but would vest for one year to each beneficiary listed on the underlying split. Each recipient would be making an independent decision about how to use their tokens once vested.

The USD value of the 200k ENS is $2.49mm as of the time of this post on May 25 2022. This is roughly in line with what we have already proposed to similarly prominent Ethereum-based protocols. Lido’s 2mm LDO contribution was worth $2.6mm; the active Uniswap proposal requesting 500k UNI would be worth $2.75mm.

There are a few reasons why supporting the Protocol Guild benefits the ENS community:

  • ENS’s long-term success is tightly coupled with the continued evolution and maintenance of the Ethereum protocol. These are projects that often have multi-year timelines. Contributing to the Pilot meaningfully increases the incentive to contribute to the core protocol, including:
    • The Merge: moving from PoW to PoS, increasing security and sustainability
    • EVM improvements: new functionality for developers like EOF
    • Statelessness: sustainable management for state growth
    • Supporting L2 scaling: EIP-4844, EIP-4488
    • Proposer Builder Separation: reducing centralizing incentives for consensus participants
    • Continuous client maintenance: improving sync, exploring new database types, researching modular clients
    • Coordinating network upgrades: making sure the community helps to shape and is aware of network upgrades
  • Having exposure to ENS allows protocol contributors to engage more with ENS governance. Members will be encouraged (but not obligated) to delegate them within the ENS governance framework.
  • ENS should be among the protocols maximally aligned with the Public Goods of the largest ecosystem it operates in. Pilot participation maintains and expands the ENS community’s existing reputation for funding Public Goods.
  • Diverse funding sources from the community further decentralizes protocol governance and prevents influence from pooling with any single entity.

We hope that a successful Pilot will pave the way for future funding collaborations between the ENS community and the Protocol Guild as we scale up the project after the Pilot. To that end, we think it’s important to demonstrate impact: learn more about how we intend to evaluate Pilot outcomes here. We have also adopted an active stance of continuous adjustments to improve PG while we operate the Pilot: improving documentation, resources for members, better transparency, etc.

Next Steps

Discussion on this forum post - we’re very interested in feedback on how to structure this proposal to best fit the goals of the ENS community.

21 Likes

@trent and @timbeiko it has been great to have you along to the Public Goods WG calls to talk through your proposal.

ENS has its fair share of past and present Ethereum core devs with @nick.eth, @AvsA, and @ricmoo. I am looking forward to their comments given their unique experience of being core Ethereum contributors and also being major Delegates AND Stewards within the ENS DAO.

8 Likes

Strongly in favor of this. Core devs deserve better compensation, and this is an excellent way to do it. Apart from being the right thing to do, it makes it more likely that talented individuals will choose to work on such crucial public goods rather than joining a private project.

On top of that, this comes from a small part of the funds that were unclaimed in the airdrop - funds intended to boost ecosystem growth - and we should be very prepared to use those unclaimed tokens to help grow and improve the wider ecosystem.

19 Likes

The Protocol Guild is a very healthy project that supports the health of our whole ecosystem. Trent and Tim are first class actors, and I offer 100% support to this initiative and I would strongly encourage others to do the same. ENS supporting the core protocol is a manifestation of our true vision for a healthy & decentralized network.

5 Likes

Thank you @alisha.eth and the Public Goods WG for bringing this to proposal!

It’s so incredible that the ENS DAO is in a position to play a role like this for base protocol contributors.

Thank you Protocol Guild. It’ll be a privilege to support this proposal.

3 Likes

This is definitely the type of project that I want more of and I fully support it.

Supporting dependencies should be a goal for any project. The participants, their experience and tribal knowledge represented by the Protocol Guild are some of the most fundamental dependencies in the ecosystem (and for ENS, obviously), which I would love to see competitively compensated.

Retaining this talent is crucial to the health and security of Ethereum, and I will admit to having a micro panic-attack every time I see a tweet (in jest or otherwise) alluding to one of these folks getting poached by some rando not-worth-their-time-but-can-compensate-them-for-it project. :slight_smile:

<3 Protocol Guild

7 Likes

I’m in full support of this proposal.

Core protocol contributors have generated immeasurable value for the ecosystem. The opportunity cost for them is immense. Anything we can do to keep them focused is a boon to all projects built on Ethereum.

200k ENS is a reasonable price to pay for their continued efforts, especially given the way the vesting works.

Could not agree more!

4 Likes

This is pretty much a no-brainer. A devil’s advocate would ask why core devs deserve funds from ENS, but the easy answer is “why don’t they?”

None of us would be here without core contributors. ENS aims to increase the extensibility of Ethereum by providing human-readable names, and Ethereum wouldn’t even be here without those core contributors.

Core contributors are historically under-funded and under-appreciated and ENS is in a good position to help solve that.

Not to mention this is a small percentage of unclaimed funds, so a good talking point when future users complain about missing the window of time is “Hey, at least your unclaimed tokens went to a good cause. You’re directly contributing to Ethereum!” :joy:

There’s understandably a lot of positive reaction here so far, but it’s good to be aware of other viewpoints. I recommend reading the proposal on the Uniswap forums that has some good discussion/feedback.

7 Likes

Also firmly in favor of this proposal!

Couldn’t have said it better.

PG contributors are of course free to do whatever they want with the ENS tokens, but we couldn’t ask for better candidates to extend the responsibility of ENS DAO governance to :mechanical_arm:

6 Likes

I’m for this. My reasoning can be found in the old thread, here:

3 Likes

As discussed on the latest Public Goods group we support this in the following format: Grant 100k ENS from the airdrop to protocol guild, as a pilot vesting for the next 12 months. After that period we will reconsider and if successful, commit about 400k ENS tokens vesting over 4 years.

1 Like

Thank you for pointing this out. It had been bugging me to see the amount doubled to 200k $ENS from the 100k quoted in the TempCheck you posted. Seems like absolutely no one read the numbers in a haste to jump on the agreement bangwagon.

Full send, Metaphor is on-board with this. Very critical we secure solid funding from the community for base-layer infrastructure!

2 Likes

I’m against this. I don’t have anything good to say about it, and I’m aware I won’t change anyone’s mind, so I’ll just leave it at that.

2 Likes

I don’t see any such number in the Temp Check thread: ENS Public Goods meeting (may 10): should we use part of the unclaimed airdrops to incentivize core ethereum developers?

In fact, I see that the initial Temp Check suggested 10% of the unclaimed airdrop. The current draft has significantly reduced that to 3.7%.

If there were subsequent discussions/decisions in a WG meeting, then it sounds like those were not communicated in the previous Temp Check post.

For what it’s worth, yes, I read the numbers in this draft. And I agree with them. Please don’t jump to conclusions about other people jumping to conclusions. :slight_smile:

I would also be on board with @AvsA’s suggestion of 500k with different vesting periods!

Well I would love to hear your side of the argument! This seems like a very worthwhile use of the ENS treasury to me, in-line with Article III of the DAO Constitution as well.

5 Likes

I am strongly in favor of this proposal and generally agree with @spencecoin that this is a no brainer. We should be doing everything we can to support our core infrastructure across multiple experiments. In transparency however, I’m biased here as I expect it’s likely that Gitcoin makes a similar proposal for core infrastructure rounds in the future.

I’m flexible on amounts, but would defer to @AvsA’s suggestion on how to split out the commitment. We should also clearly define what we mean by a successful experiment, I know PG has a good overview here but it’s worth making sure we are internalizing that and setting up proper check-ins on that front.

1 Like

You are right, my bad. I cannot find it either, but I clearly remember reading 100,000 ENS somewhere. Yet I cannot find it in TempCheck or the comments. It may have been in a WG meeting… :grimacing:

10% is crazy in my opinion. Anything more than 100k ENS, which stands at > 1,000,000 USDC today is borderline. I always like to draw comparisons on how the DAO compensates internal contributors. .eth websites has so far gotten only 100 ENS in funds. I won’t harp on this point more and derail the conversation because I support this proposal as well but within limits.

Let’s keep this discussion and the bias for when Gitcoin comes with a proposal :slight_smile:

Gitcoin has a serious spending problem and is happy to give away six figures on memes and merch in a bera market under the guise of ‘Public Goods’ – a term which I am starting to slightly detest since it has become a jargon.

4 Likes

I do want to go on record to say that this is quite literally a proposal to pay dividends, in the form of $ENS tokens. Not only that, but pay dividends to an exclusive group of people. You’ve made a really convoluted dance around presenting it as that, and it’s impressive, but fundamentally this is what it is. I would actually be more inclined to support it if it didn’t read like dog-whistle laden, pat ourselves on the back for our selfless commitment to “public goods” but oh yeah let’s provide economic bonuses to ourselves and our peers while we’re here posting for the first time.

5 Likes

@daylon.eth I think you provide an important perspective - there always needs to be people sharing an opposing viewpoint for us all to get a fuller picture of a situation. I appreciate your willingness to share!

3 Likes

From what I understand this amount is split between 110 core Ethereum contributors. 200k ENS split evenly among 110 people is 1818 ENS (or just under $20k) per person. Add to this a vestment schedule. For core Ethereum dev work that doesn’t seem very high to me in and of itself.

2 Likes