Temperature Check - Should ENS governance contribute funding to the Nomic Foundation?

DAO-Wide Temp Check
34

Yes, I understand. By providing them feedback outside of the ENS ecosystem as an individual upon solicitation, you have stepped into conflict. Your ideal stance here after recommendations to them should be to declare that you have advised them and then step away from the debate, and leave it to the Stewards. Anyway, this is beyond the point. Just a technical detail that will emerge when we are writing the bylaws and code of conduct. It will come up later.

True, but it easy to step up from $500,000 to $1m than from $50,000 to $1m. There is multiplier of 10 involved. Precedents are built on continuance. $0.5m grant will be a good precedent despite being half the value.

It is equivalent to one. Delegates are equivalent to shareholders representing financial capital. Funds of ENS are under DAO’s control and, DAO == delegates == votes == shares in governance of a financial infrastructure. Anyone can buy into it. It is absolutely a public entity with public shareholders. See here: On the nature of DAOs and their projection on Electoral & Corporate structures. Different subject though, my issue is only lack of due process considering how big the grant is. I’ll leave it at that. If it comes to vote, my objection will only be that it is ‘too much too soon’.

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What? This is a ridiculous idea.

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36

Let’s wait for the bylaws and code of conduct. It’ll be better discussed there. If you see delegates as legislators, there is no conflict. But if you see them as shareholders, there clearly is.

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We don’t know what other projects and initiatives need funding from ENS DAO and I think it’s too early to judge if the amount is reasonable.

Would you like to amend your proposal to ~1m? Seems like you weren’t thinking that 4m was reasonable from your response.

PG WG should not only have a process but also open up the applications to both ENS and wider Ethereum ecosystem to give equal opportunities.
At the same time, TNL should pass their budget proposal before Nomic proposal as the core development of ENS protocol will definitely have higher priority than supporting external organisation (especially when Nomic has already secured bigger runway). Optionally Meta governance WG should have clear treasury diversification plan. The current funding ceiling can be lifted if we establish ways to convert sizable ENS tokens to fiat so that we can tap into bigger funding budget.

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yes, I understand the urge to wrap up as soon as possible but I would say that that’s same to every organisation that seeks external funding.

After explaining all the reasons why ENS DAO is not ready to grant such a large amount, do you still think the Nomic foundation should be treated as exception? Provided that there’s no legal constrains, could you give us any other reasons why we should expertise your proposals over anything else?

Just to be clear, I am the user of your product myself and I personally support funding of your organisation in general. I just want to help the funding in the way that won’t hurt our long term relationship between your organisation and ours (but currently the proposal amount and the timing seems a bit too contentious).

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39

Respectfully, I also think that is not fair and doesn’t make any sense. Individuals/entities will almost always reach out to someone individually first, whether it’s on Twitter, Discord, etc. I’ve handled cases like that via support tickets, where an individual or representative of a group/company would like to make a DAO proposal, but they have no idea where to start. You gotta start somewhere, and obviously we won’t expect someone on the outside to know exactly how our governance process works, where the forums are, what to post, etc. So someone on the core team, or a support mod, or perhaps someone else in the community will give them individual feedback and guidance, and answer any questions they have. Usually to the effect of “here’s our governance docs, here’s the forums, here’s the general format you should use for your post”. Exactly what about that is “stepping into conflict”?

We have this wonderful initiative for individual onboarding: Onboarding Flow: Request for feedback

Maybe a topic like this would be another good thing to add to that “onboarding” flow, for when an individual or representative of a group comes to the community and wants to make a grant proposal.

After reading and considering everything in this thread, I would be for a $1m grant. However, if the main concern by others is the size of the DAO’s first grant, then perhaps it could just be made smaller, like $500k. Some funding is better than no funding, and the DAO can always follow that up with a larger grant later at a time when more people are comfortable with the maturity of the DAO and public goods working group.

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40

I am glad you asked. The conflict here is not of interest but of ethics. Reaching out to an influential individual in a corporation they work for to gain internal advice about the said corporation with an aim to draw influence and/or tangible monetary benefits from it is called Lobbying. While not illegal, it is frowned upon and many corporations explicitly discourage lobbying via code of conduct. In fact, this is how lobbying began back in the day; it used to be called internal counsel. The author said that ‘they took feedback from the community and asked Nick’, but Nick is not community; community is community and it is here on Discourse. Your example of onboarding applies to individuals and it is part of support, and not actionable financial advice worth millions in treasury – apples and oranges. I am sure if Nomic came to you asking for advice on Discord about a grant in millions, you will redirect them to the community, correct? Nomic is raising millions, they are not individuals with support tickets; asking for link to governance docs and asking for advice on how to get a million dollars are very different questions.

One might then ask that what is the ideal way to do this: such a way would be that the person who is advising (= Nick) the entity (= Nomic) declares that they have advised the entity and then step away from the decision-making process. In a traditional corporate world, the current situation will be akin to someone asking one of the Board of Directors for help in a fund-seeking proposal and then have the said board member push it and also vote on it. This is pretty much outright illegal under most bylaws since it puts the decision-maker (board member) at the risk of potential conflict of interest. In principle, the advisor in this case should refuse to advise in individual capacity in the first place and ask Nomic to consult the community directly. If Nomic had done that, they would have realised pretty quickly that ENS community probably doesn’t agree with Nick and that $1m is perhaps too much at this stage for the DAO.

This is all very technical but class action suits are won and lost on such technicalities. I hope bylaws will elaborate on this more.

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I support giving funding to Nomic, but I’d favor the lower end of their range, around $1m. We can always give more in the future, this is the first proposal of this size (which sets precedent, and I think we should be conservative with that), and since the ENS DAO treasury is first of all for the good of ENS itself I think we should err on the side of being conservative when funding outside projects (however worthy).

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Thank you for the additional information. Clearly, I am way out over my skis on anything legal, so please forgive my naivety.

It sounds like what you suggest is exactly what Nick has done, he directed Nomic here to the community. Some basic advice needs to be given to direct them to the community in the first place, and what to post. Giving basic feedback so that they can bring a quality initial proposal to the community seems perfectly fine to me and not a breach or conflict of ethics whatsoever. But as you say, there are surely technicalities that must be ironed out here in the future, I can respect that.

Nick clearly strongly feels that this project is a worthwhile grant. Not all will agree and that’s perfectly fine, but I don’t think it’s fair to accuse him of a breach of ethics for giving initial feedback to the requester, especially when the bylaws you speak of have not been ratified yet.

All delegates, being tokenholders, have a financial interest in the future of the project. Surely, we wouldn’t want to just bar any outsider from soliciting help from any delegate? That would basically mean that they can’t contact nearly anyone in the community. Or is it just “influential” delegates, like ones who also happen to be on the dev core team?

If someone knows ahead of time where and how exactly to bring a quality proposal before the DAO, then great! But that will not be true in most cases, and even more so when, as you say, the DAO proposal workflow becomes “much more rigorous”, right?

Must all ENS delegates, including Stewards of the Public Goods Working Group, respond with “here are the forums, go figure it out yourself, I cannot help you”?

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Not at all accusing Nick of breach of ethics; he clearly has no material interest with Nomic and he genuinely likes their project and hence advised them. I am sure at no point Nick realised that he was potentially in breach of ethics. In fact, lobbying is not intrinsically unethical, only that is it exploited in our timeline unethically which has led to some regulations on it.

This is a very good question and the legal subgroup will have fun dealing with this. On the surface though, Directors, Stewards and core team members at TNL are most affected by this. Other than that, it will have to be judged on case by case basis if any breaches exist and any parties involved in potential conflict declare it and abstain at the time of voting. We need a legal subgroup for precisely these reasons.

If we have a streamlined process for proposals and grants, people wouldn’t need to ask such questions and they will instead have proper resources to refer to. We should encourage streamlining of grants for this reason.

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To avoid conflicts of interest, especially those in leadership, in connection with the disbursement of ENS assets, the DAO should create a formal grant application process and a committee to review and make recommendations on such grants, before submitting the request to the DAO, or subdivision thereof, for a decision on any grant.

Directors should not be part of the decision makers.

@inplco

EDIT: If time is of the essence because the by-laws have yet to be drafted, then the lowest amount should be considered and submitted for a vote with a note in the proposal that it is a one-off.

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45

This is my opinion and is similar to my colleagues of the Public Goods working group that have already expressed their views: I think the grant is too big and too soon.

A simple calculation: ENS had 20M of revenue last year. If we imagine that 10% of that would go for public goods, that would amount to 2M of discretionary revenue intended for grants and other public goods (if the other 4 working groups requested the same amount, half of the revenue of name registration would still go to back to the DAO). If we had a budget for $2M, I would prefer to contemplate more smaller projects than to spend 50% or more of our budget in one single grant.

You have the luxury of time. We would prefer smaller grants and more accountability. I would suggest a $500k would still be a great amount of money for any development project. If you that amount would not be so significant, then I would suggest that ENS should be the ones requesting a development grant from Nomic :wink:

Of course this is my view in the Public Goods working group budget. You are free to take this proposal direct to the DAO, but I will probably vote according to the same logic.

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46

Can we please stop trying to throw as much FUD as possible at literally the most straightforward good grant proposal I’ve ever seen, and talk about the merits of the proposal instead of arguing about future process that doesn’t exist yet and an imaginary conflict of interest with @nick.eth ?

The notes on the process are so noted.

I think:

  1. 5% of treasury (considering it also represents February’s revenue) is not exceedingly large
  2. Nomic Labs is very well respected and trusted, effective, and this non-profit is the embodiment of what public goods funding for a protocol is for. I think making sure their funding continues to remain solid is far less risky and more guaranteed to be effective than 100 smaller proposals would be.
  3. I would recommend this move forward to Draft. The $1M amount seems fine to me, if we really think that is a big deal, maybe we can RCV different amounts in the snapshot? Seems like a fair solution to that issue.
  4. Even if another organization came up later and wanted the same amount for the same thing, there’s no reason we can’t fund them too. That’s why the whole “we have to open the floor to other orgs” argument is baseless in this context. We’re not a government giving an exclusive contract, we’re giving away grant money with no strings attached to as many good initiatives as we can to improve the ecosystem.
  5. What @AvsA brings up is valid, if the DAO feels strongly it should max at $500k, then that’s what it is. I disagree we have the luxury of time, though. We’re competing with a large ecosystem of other projects and chains that are dolling out billions to improve their developer experiences, which is critical to adoption.

Speed is their advantage. Developers today know they can go to Solana Labs and ask for $4M and get it basically tomorrow, whereas there are tons of horror stories from groups I talk to of proposals that get side-tracked a lot like this one is, making grants DAOs an unreliable source of funding and pushing these orgs to VCs and centralized chain organizations instead.

If this weren’t a group as important and core to the developer experience as Nomic, I might agree with more caution starting out. I just don’t see a concrete downside to funding them today. It seems likely we’ll literally make back the money we get them by the time we get a more formal process together, but then we’ll have a solid signal to the community that ENS DAO will take big swings under our belt.

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As an engineer, I can tell you the tools Nomic provides are absolutely critical and high quality. The tools they’re proposing to build on their roadmap would be a huge boon to the ecosystem. I would like to see ENS support them. As @nick.eth says— if not Nomic, then who?

$1M seems like a reasonable number for a first grant. As @brantlymillegan points out, the DAO can always give more later.

It’s extremely laudable Nomic is going the non-profit route and keeping the tools open source. It would be extremely easy for them to raise an enormous sum of money from VC’s by simply promising to add some paid, proprietary, closed source service on top of the open source tools that have already gained such traction. We should be eager to support an organization eschewing that all-too-common path.

On a meta note, I hear a lot of discussion about setting up a formal grant process. As the founder of a company that has received a number of grants in this ecosystem (none this large, but more than one in the six figure range), I have experienced a wide range of requirements for grant applications. I would strongly encourage ENS keep any process as lightweight as possible, and focused on gathering information that is actually useful.

In particular, proven projects and builders should be fast tracked. Let’s not recreate the lengthy, bureaucratic processes that exist in government and academia. Anyone who has been through those know they are merely theater, and only benefit those who become good at jumping through hoops, not those who are actually capable of doing the work.

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Such a great point. Process for the sake of process can be a death sentence for execution ability of any organization.

DAOs today have no trouble raising large sums of money, they have tons of trouble actually deciding to spend it, from my observation.

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49

I’m not sure it’s necessary, but I’d like to clarify that @nick.eth wouldn’t benefit directly in any way if we’re awarded a grant. He has no conflicts of interest here, and it doesn’t look to me like he breached any kind of ethics. It’s standard practice to approach a leader for collaboration with his organization, and for that leader to then champion the idea to other leaders and stakeholders. The amounts suggested also happened in the context of me explaining how much more we needed to raise, how much others were contributing, etc. He also didn’t make any kind of decisions. He just provided guidance and suggestions to help us engage the community, so I don’t see wrongdoing of any kind.

Having said that, it looks like we triggered internal discussions the DAO needs to have, and we’re happy to make more room for those discussions to happen. While we expected some opposition against our proposals in every DAO, we didn’t expect this to turn so controversial.

We care about building good relationships with the communities we’re asking for funding from, so we’re not going to put forward a vote if we’re being told it will harm our relationship with the team that’s tasked with our domain.

If the community can lay out a non-contentious path for us to move forward towards a vote to see what the majority of the DAO wants, then we’re happy to continue the process, whenever that is. However, if the only path forward right now is contentious, then we’d like to retract our proposal.

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I agree with you 100% . I am a current academic with a web3 startup, and I wholeheartedly resonate with your dislike for overly bureaucratic systems. Ideally, this process should be highly streamlined, have as few steps as possible, to the point, and only serve to deal with contentious issues and not step in the way of constructive work. I will propose this in the next days as we are just getting started with the by-laws group which will have some say in the structuring of this process; these two things will likely go in parallel.

This is the result of ENS DAO still trying to find its feet in terms of governance, and as you can see we are still in the process but making fast strides. This only goes to show that the community is perhaps not coherently aligned yet, especially when it comes to disbursing big grants. I am sure if you come 6 months down the line, you will meet a different response.

Wrapping up from my side on a side note: I know how I have come off, I am aware how I am perceived when I question the alphas and I am aware of the scrutiny that results from it. However, we are working in a highly cooperative system with ample communication strategies across multiple channels. I am not much of a game theorist but such systems do not have a Schelling point afaik and tend to either moon beyond recognition or eat themselves out. A devil’s advocate is necessary for a quasi- or local- Schelling point. Constructive cooperation requires non-zero conflict.

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Sorry your proposal brought some unpleasant discussion in the thread. I wouldn’t take this thread as representative of any out-sized controversy in the DAO though, just in this forum lol. I think if we can bring this discussion back to the proposal itself (which no one seems to disagree so far on the cause being worthy of a grant!) and the amount (which it seems like at least $500k would be a safe bet for support from the grant subcommittee, right @AvsA), we can hopefully get this back on track.

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Hi team,

Thanks for such a robust conversation around this! Stepping in on behalf of the Public Goods Working Group.

First, I want to say that we’re all very excited to see this first proposal for public goods funding and the dialogue around it. We want ENS to be an ecosystem that values and supports public goods.

That’s why we’ve been working hard in the background to come up with some fundamentals for the public goods working group and processes. Here are some of the considerations we’ve discussed:

1. Desire for a Community-Driven Definition of ENS Public Goods
The reason for asking for a 6-month window is for us to be able to go to the community to get an understanding of how they would like the DAO to define public goods. We envision this research to outline how the community is thinking about three buckets broadly:
(1) ENS Public Goods;
(2) Ethereum Public Goods (&/or Partner Public Goods);
(3) Out-of-scope.

We think this is an important fundamental step for establishing a long-term and sustainable process that reflects the views and needs of the community.

2. Learning from other Grants Programs
We’re also hoping to capture lessons from other grants-giving groups – both inside and outside of the Ethereum ecosystem – to understand what’s worked and what hasn’t from a process standpoint. This includes things like what percentage of the TNL/ENS budget we should be allocating to public goods, how to best evaluate proposals, accountability mechanisms, etc.

3. Process and Precedent
Part of our broader conversation also is around public goods funding in the space more broadly. We want to promote, for ENS and beyond, processes that are fair, open, and clear (which we haven’t been able to establish yet). We also want to think through ways of funding public goods that represent long-term, sustainable, and scalable models for supporting open source software. We’re not ruling out the possibilty that large, lump-sum grants are the way to go, but we have to consider the different options available for this purpose.

4. Potential Opportunity Costs
Since we haven’t opened the process officially, we don’t know what we don’t know in terms of other proposals that could come through. As a result, it’s hard to know if making such a large grant would represent an opportunity cost – particularly for projects who haven’t already raised a significant amount of money.

& Noting that we hear the requests for not creating too much process/bureaucracy.

Hope that clarifies some of our thinking!

We’d love to hear more of your thoughts, questions, and feedback on the Nomic proposal. Would tomorrow, Friday, March 11 @ 10 am ET work for everyone? We can use the following meeting link: meet.google.com/fge-reug-crq

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We want to follow the lead of the public goods working group, but we’ve heard several different proposals. Waiting 6 months, requesting $500k, and going for a streaming grant have all been suggested. Could you please let us know which of these paths (or any other new ones) are the WG’s preferred suggestions?

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