Rethinking ENS Small Grants

This is a discussion space for Working Group stewards and the community to talk through ENS Small Grants.

Visit ensgrants.xyz to view historical rounds.

Moving Forward (Q3/Q4 2023)

Small Grants have been running for a year now. This term (Q3/Q4 2023) both the Ecosystem Working Group and Public Goods Working Group have decided to review aspects of the program including:

  • the timing and frequency (from monthly to quarterly, or twice in a six month period); and
  • the voting mechanism used (using a voting method other than token weighted voting with $ENS)

@184.eth may be able to copy over relevant parts of Working Group minutes to this thread so all of the great discussion on this topic that is happening on calls can be found in one place.

@slobo.eth and @Coltron.eth can share context on how each of their Working Groups are looking at the Small Grants program going forward.

@gregskril can chime in with updates and comments related to building out the platform itself.

Looking forward to following developments over the coming months.

7 Likes

What’s the reason behind removing weighted token voting? I feel that removing the use of the ENS token removes the value of its importance from the token itself.

May I suggest that every other month is a good intermittent time period.

A monthly basis requires too much of ENS steward time as well as a lot of time to build or change the parameters in the user facing application itself. Not only that but voter pressure monthly can be difficult for those who feel motivated and compelled to cast their votes. That even extends to projects or initiatives preparing and submitting for monthly grants.

Quarterly seems too far apart requires attention only twice per term which has potential for lower submission rate. Not sure if that is necessarily good or bad per se.

The Opportunity

This is an opportunity to experiment with different voting mechanisms. Token-weighted voting will always be there as a fall-back, but we shouldn’t be afraid to experiment with different voting mechanisms to distribute small grants.

As an example, I suggested creating a list of 50 or 100 ENS community members who could be eligible to vote in a given round (similar to Optimism’s Citizen House). My personal opinion is that Small Grants are an opportunity to involve the ENS community in grant distributions rather than double-down on a governance-class.

Other suggestions include distributing poaps, or basing voting power on a number of actions related to ENS, like setting a primary + avatar + records.

Token-Weighted Voting

There is no reason to use token weighted voting — by the time Working Groups receive funding, Delegates have already voted on an Executable Proposal to approve that funding. We are then asking Delegates to vote each month on how that money is distributed.

The whole point of Working Groups is to reduce the voting burden of Delegates, and to shift the decision-making burden to stewards and working group participants. The decision-making burden shouldn’t then be shifted back to Delegates.

As a rule, I do not believe that Delegates should be asked how to vote on distributing tokens (ETH/USDC/$ENS) that are no longer in the DAO’s treasury.

Token-weighted voting in Small Grants could lead to voter apathy when it comes to voting on DAO-wide proposals, specifically on Executable Proposals.

Small Grants Background

  • Small Grants started a year ago, in August 2022. There have been 9 rounds for both Ecosystem and Public Goods.
  • A total of 104.7 ETH has been distributed. The value of 104.7 ETH at current prices is $195,000.
  • Voting is based on token-weighted voting using $ENS.
  • Delegate participation in Small Grants is low and generally diminishing (data to be shared next week).
  • A single large* Delegate’s vote can basically decide the outcome of each Small Grants round.
    *A large Delegate here is a Delegate with more than 50k $ENS in voting power.

Large Delegate participation

Here is an example from the latest Ecosystem round:

  • The winner received 361,500 votes.
    • The top two Delegates who voted made up 280,000 votes of that total.
    • The third delegate was 57,000 votes of the remaining 80,000 vote total.
    • So the top three Delegates made up 93% of the vote.
    • A total of 15 Delegates voted for the winning grant — and three of those votes came from the Ecosystem Stewards.

Timing of Grants Rounds

Getting the right voting cadence is important, no matter which voting mechanism is used.

I agree that every other month might be a good cadence. I think the only conclusion that has been reached so far is that monthly is too frequent, for both proposers and voters.

4 Likes

Absolutely love and support this. I remember refraining from participating in small grants early on because big delegates usually know who they want to support and requiring them to read 30-50 applications every month is simply never gonna happen.

A group of 50-100 community members eligible to vote sounds very interesting! Especially since it includes the broader community who are at the end of the day biggest users of both ENS and ENS-related products.

But I also see @accessor.eth’s point that removing token-weighted voting sort of chips away from the value/utility a governance token provides. Maybe requiring a small number of tokens to be held among the chosen 50-100 who would be voting makes sense?

2 Likes

The purpose of the token is to decentralize decision making related to the governance of the ENS protocol. This is primarily achieved through votes on executable proposals. Almost everything else is superfluous.

I personally don’t like feeding into the narrative that we need to do things that add utility to the token, as this encourages speculation. I would also be extremely surprised if anyone had purchased $ENS tokens to participate in small grants.

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I believe @ENSPunks.eth had bought ~500 $ENS on behalf of BENSYC multisig for voting in small grants. It was more of a symbolic thing in the end though since 500 tokens don’t help in anything.

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Understood. And well said.

I don’t look at it as trying to feed into the narrative of forcing utility on a governance token, it already serves a well defined purpose. But from here are we open and willing to explore the use of the token further or completely remove the token from context when thinking and approaching an issue/situation/rethinking like this in the future.

I don’t necessarily see that as a speculation issue or see any downside to trying to explore other ways for the DAO or ecosystem to utilize the token in some way. Could be wrong. Asking all of this so I can understand better. And I like your explanations.

I bought ens tokens initially to vote on small grants and then again later on when I became a delegate. :man_shrugging:

In that case, it would be great to hear @ENSPunks.eth’s thoughts and get his feedback here.

I think the opportunity is to develop a fairer voting system for small grants that doesn’t require substantial investment just to participate. In an ideal world, there would be no cost involved. That’s why I favour a list made up of community members as well as past and present ENS contributors. I am involved in the Optimism retroactivePGF as a badge holder and I personally like that the financial burden to participate in voting is not present.

3 Likes

I like this the most. A group that’s a combination of active community members + previous voters and delegates. The selection criteria for previous voters and delegates is easy to find and you can see who they are by scraping the data. And I’d be in favour of some selection criteria as well for including community members. Not sure what’s the best approach tho yet. I literally just talked about this with @5pence.eth. I’ll keep thinking.

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Thanks @cap, yeah. I’ve been pretty vocal in this. I think it’s an important concept that ultimately has second order consequences on the strength of the protocol’s governance. Alisha did a great job of outlining the “Why” above, but I’ll also add my voice here:

There are two reasons to move the small grants off of the ENS token:

  • First, but less important - the distribution is heavily skewed, and I’ve had delegates express they’re reluctant to participate because their votes tend to be kingmakers. That said, this issue could be lessened through methods like quadratic voting or other strategies.
  • Second, and more importantly - Some of the onchain governance decisions that go to our delegates require them to do a good bit of research and have conversations to get a really good grasp on the context and ramifications of a given decision. It’s super important that we respect that and honor their contribution by making that as easy as possible. We as a protocol DAO want to attract the highest quality attention that we can get on those important decisions, and any dilution that we introduce can lead to apathy or less informed decision-making. Those are consequences that weaken our overall governance.

Beyond those two points, I’m a big believer that we are all super early in the infancy of what governance is and the things we do today will form the basis for us and the next generation of DAOs in general. Let’s experiment and explore things. The small grants are the perfect opportunity to try strategies that empower and involve the community, with fairly low risk. I’d love to see us explore several different strategies and then learn from the results.

Last point on creating the list of participants. I’m usually of the opinion that we should try to have objectivly defined and repeatable criteria for things like this, but I see the value to perhaps go beyond that in this case to make sure we capture everyone who wants to participate. If we do decide to create a list manually, it needs to be extremely inclusive and open.

2 Likes

In favor of this.

I agree with @5pence.eth and look forward to furthering discussions on how to develop a framework for grants voting mechanisms that prioritize high-impact, high-context contributors, irrespective of their $ENS balance.

Great discussion so far, thanks @alisha.eth for starting the thread.

The Ecosystem Working Group is excited to run the new small grants round.

There are a few items that need to be decided before this round can run.

I’ve spoken to metagov and they have graciously agreed to lend their expertise on governance for this task.

To get this across the finish line in a timely manner, the following items have to occur:

  1. Select a date for submissions: Decided by PG & ECO WG [August 28 or September 4]
  2. Decide on submission window: 10 days
  3. Determine budget for PG & ECO: [ECO: 15eth, PG: 10eth]
  4. Determine voting mechanism: Provided by metagov
  5. Determine prize distribution mechanics: Provided by metagov
  6. Greg to implement changes based on the above
  7. ECO/PG WG promote round at weekly calls

Both Public Goods and Ecosystem WG are excited to experiment with this new format that facilitates community involvement while minimizing the burden on the delegates.

Thanks again to everyone for participating and helping out so far. This is what we want ENS to be all about.

4 Likes

Glad to see this discussion. We have had had discussion on this in a few of the Public Goods working group calls. The last call was mostly dedicated to this topic. The notes can be found here.

I would like to reconfirm some of what was discussed in thread above. After listening to discussions on our calls over the past six months, and getting feedback from delegates, I would agree that:

  • The current cadence (monthly) should be reduced.
  • New voting strategies should be explored.

Small Grants has always been a slightly experimental tool. I don’t think we need to spend too much time mulling over the options. Looking at this thread, I’m confident that we can quickly decide on changes that will be high-impact and and an improvement over the previous settings. If we need to adjust, dial-up or down, we can easily do so in another subsequent round. This is our smallest grant stream with the least amount of contingencies. The ability to iteration is a strength here.

My priorities are:

  • Solving the chief complaint of reducing voter fatigue on small grants.
  • Ensuring this is not overly complex for anyone (@gregskril) to technically implement or manage.
  • Getting this operational around in 2–3 weeks.
  • Establishing a predictable Small Grants schedule for the remainder of the term.

I agree with the rough outline that @slobo.eth provided, and because @5pence.eth from Meta-gov has provided good feedback during working group calls and this thread, I will also touch base with him.

2 Likes

Thanks @slobo.eth and @Coltron.eth,

Here’s what Metagov suggests on the strategy items and why:

Timing

The general consensus from weekly calls and this forum indicate that a longer cadence period before each grant period may alleviate voter pressure as well as time and technical contraints. We are in favor of extending this time period to the following:

  • Target every other month starting September. That gives us two more rounds this term to calibrate on timing.

Strategy

Please note that the following strategy is meant to be an experiment in alternatives to the standard Token-weighted Voting method. We are always open to new ideas and perhaps experimenting with other methods. To start, we propose the following for the next (September) Small Grants Round.

For the September round. we suggest an attempt at “one person one vote”. We’ll use an exisitng Snapshot voting strategy that relies on a POAP (or similar NFT) to determine voting eligibility. This strategy allows for the POAP holder to break their vote into smaller percentages to vote for multiple applicants. Read about this stragtegy here, weighted strategy and here, techical specs.

The initial challenge here is sybil protection. We’ll try to address with the following strategy:

  • We’ll deliver this new POAP to any wallet that has participated in a previous voting round by voting with at least one full $ENS token.
  • We’ll also deliver the POAP to a list of known community particpants and contributors that weren’t on the initial data scrape of previous participants.
  • We’ll allow for additional participant requests via a dedicated thread in the forum where users can request the POAP to participate.

Our ultimate goal with implementing new voting strategies is to achieve a more fair voting process both for grant participants, and for voters. This is an initial attempt at addressing Plutocracy (where large token holders/ delegates dictate the conclusion of every vote). Ultimately, we hope that voting methods get refined over time and will work to include any newcomers to the DAO who seek to be active participants.

Prize Distribution Mechanics

We suggest award amounts and number of winners per round should be decided upon by the working groups based upon their allocated budget at the beginning of each round. This honors the stewards autonomy in spending decisons of funds and shifts decision-making burden to stewards and working group participants (as said by @alisha.eth above).

We hope that this makes a step in the right direction. Our DMs and weekly calls are always open and welcome any suggestions or feedback to any of the above.

1 Like

I think we are over engineering this.

  1. Small Grants should be a low effort framework, for execution, implementation and participation due to the nature of the amount we are giving out.
  2. Small Grants should encourage participation not limited it.
  3. It should be above all a reliable source of funds, at least on timing, for small builders and project in the context of bear market. We shouldn’t be limiting people’s access to funds in a market condition like this one when is the most needed
  4. Small grants should be a place of experimentation, not of complications.

Vote:

I understand the concerns regarding sybil resistance, and so on, but to be honest frENS we are not the congress and the amount we are giving it’s not the pentagon budget. Let’s be more real and down to earth.

  1. I think we should do 1 ENS vote. If we get people over voting it will be very obvious and we can address it. The other option I like, is to send a poap to anyone participating on the past votes of Small Grants, I wouldn’t limite it to people also holding 1 ENS because they may not (things change). But that’s it. Something simple and easy to follow. (We should consider to repeat again this process for every round if we want people to still be involved in the next rounds)

  2. If we are doing less rounds, we should at least provide a stream of funds until the next round happens. For example: Project A wins small grants. Project A receives 1eth per month until the next round of Small Grants. Because people won’t stop building or shouldn’t have to wait until the next round to happen

This is my feedback on the topic. Bottom line: keep it simple, no one here is really an expert in governance and I think it’s clear that voting mechanisms aren’t our forte hahahaha. And that’s Ok.

2 Likes

Hey @vegayp,
Appreciate the feedback.

Thanks for your thoughts. Not to debate your points, but I want to clarify b/c I think we actually agree. It might have gotten lost in the above Metagov post, but the intent was absolutely to include anyone who wants to participate. The 3 bullets above are simply a basic attempt at Sybil resistance. No one would be excluded as anyone can simply request to participate via the forum (3rd bullet in the suggested strategy above). No $ENS would be required at all.

The 1 $ENS component would only apply to the data scrape from past round’s participants. There is a ton of voting that’s happened with .1 $ENS that is clearly airdrop farming so we didn’t want to include those wallets. Again, it wouldn’t be a requirement to hold any $ENS at all to participate.

It’s absolutely all just experimentation and we’re hoping there will be room for more creative approaches in the next rounds. This is the first of us trying a new style, so we wanted to suggest the simplest thing we could find to get off the ground by September.

But, it’s just a suggested strategy. All other suggestions are just as valid until we have consensus. Thanks for your thoughts.

Can we propose a solution in the format of a pole, so people can vote and we can sort it out?

  1. I would reuse an idea that was given on the call (maybe @gregskril?) and to vote just meet a list of requirements: Own an ENS name. Have avatar record set. Have reverse record set. I think those three things act itself as sybil resistance. And also people and ENS will gain something if people decides to go the lengths of trying to do all that to just emit one vote.

  2. We should still keep 1 person 1 vote. In this case 1 ENS Name = 1 vote.

  3. If we go for the list / poap option, rather than poap I would distribute subdomains. For example to vote you would need to have “voter1.ecosystemwg.ens” “voter2.publicgoodswg.ens”.

  4. My issue with poap and the lists option, is that no vote that has a curation made before, seems fair.

Again guys, it’s about thinking with context, not a vision tunnel of what WE believe it’s the best, sometimes we are like a box full of echo.

I would love for the decision of this round of small grants be decided in a simple pole here with the three options: 1. Keep the old way. 2. ENS Name with Records set. 3. Poap/Listed distribution.

2 Likes

This conversation has proved fruitful. I’ve taken the liberty to abstract the discussion in an attempt to move towards consensus. Below is a summary of the discussion on Rethinking ENS Small Grants, highlighting the areas with the broadest agreement:

  • Decentralization Emphasis:
    • $ENS primary objective is the decentralization of governance for the protocol itself, not for grant funding.
  • Delegate Participation Concerns:
    • A decline in delegate participation in ENS Grants has led to disproportionate influence by few or even a single delegate.
  • Decision-making Optimization:
    • Decision-making on grants should be delegated to stewards and contributors to reduce the voting burden on delegates.
  • Alternative Voting Proposals:
    • Voting power can be based on participant contributions, actions related to ENS (setting records) as a sybil resistance measure, manual listing of eligible participants, or a “one person, one vote” system via POAP/NFT.
  • Voting Cadence:
    • Considering a regular voting schedule for grant rounds, aligning it with other voting windows, to ensure optimal participation from both proposers and voters.
  • Small Grants Approach:
    • Prioritize simplicity and efficiency to ensure that Small Grants remain accessible; the primary aim should be boosting participation and guaranteeing consistent funding.
  • Community Involvement:
    • Any experimental approaches should consider the broader community’s context and feedback; community polls could be used to achieve consensus on the ideal voting mechanism for Small Grants.

I hope that this summary reflects our collective perspective on this matter.

3 Likes

Thanks all for the input and thank you to @alisha.eth for starting the discussion! After going through this forum and also have had conversations with folks on here, here’s what Meta-Gov will propose as an actionable next step (this incorporates @5pence.eth and @vegayp and @gregskril 's viewpoints too):

  1. Cadence will be extended in order to address delegate fatigue/ voter apathy. To @5pence.eth 's point, we propose the small grants period to happen every other month, starting next month (September).

  2. Voting mechanism. Taking in account all the factors at play here, here’s what we propose:

  • Historically active voters that have demonstrated care and attention to previous small grants should be able to repeat participation. Therefore, voters who have voted in the previous small grants round will receive a POAP that will allow them to vote in the upcoming round. This is the most technically efficient way to do so in a short amount of time.

  • We hear those concerns about being inadvertently exclusionary to newcomers who want to participate. To that end, Meta-Gov will post an open communication channel that newcomers can request to participate. Meta-Gov will also work closely with Ecosystem and Public goods in order to minimize any exclusion.

  • As with any DAO/ governance discussions, we realize we are still early. Part of this is an experiment, but hopefully in the right direction. We are always open to feedback, questions, and discussion. My personal perspective is to let this play out for the month of September then calibrate from there-- we learn the best by doing.