Pre-HIP RFC: Should the Hop community fund a grants program

Author(s): Jack Clancy, Benji Cohen
Contributors: N/A
Status: RFC
Date Posted: 2022-09-21

This is a request for comment (RFC), in line with current Hop governance processes , intended to provide a place for comment and feedback to be incorporated before moving it to a temperature check and requesting a sponsor to create a formal Hop Proposal.

As per the instructions in Phase I (RFC), the question posed is: “Should Hop governance incentivize developers to build on HOP under this trial program?”
Jack Clancy & Benji Cohen are all under the 1 million HOP threshold to initiate a formal vote if the temperature check is successful.

Motivation:

Hop is an emerging protocol with a large community of developers and users. It is one of the most used crypto apps in the last few months due to its utility and support for many of the most popular blockchain networks.

Establishing a grants program that funds independent developers to build on top of HOP will increase developer interest. Protocol developments could be alternative frontends, in depth analytics sites or dune dashboards, or sdks that make it easier to integrate with HOP, just to name a few. There have been several successful grants programs like Uniswap grants, Liquity, and Maker, which this proposal attempts to emulate.

Renewal/Sunset:

This program is intended to be reviewed after 6 months. After the trial period ends, if the program is not renewed, any unused $HOP token will be returned to the treasury.

Funding

The initial grants program will allocate 750k HOP to the grants program (~$100k). This should give the grants program enough funding to allocate several sizable grants to the HOP development program. The intention of this funding amount is not to definitely allocate all funds, but to have enough funds to give out several sizable grants if there are worthy candidates. As stated previously in this RFC, any unused funds will be returned to the treasury or rolled over into a more formalized grants program after the 6 month trial period.

Reporting and administration:

Developers wishing to seek a grant from the HOP grant program will have to apply via a forum post here, outlining what they plan to build, milestone deliverables, and the amount of funding they require to develop in line with their specifications.

DAO governance will select several eligible candidates (based on their technical expertise, prior contributions to their protocol and their willingness to contribute time to this initiative) to administer this grant program.

Grants under this program will receive a maximum of 100k HOP, which is ~$16k USD given current market pricing for HOP. The grants committee will allocate funds to developers as they see fit. The grants committee members could be as follows:

  • Lito - Hop Growth
  • Getty - GFX Labs
  • Lefteris - Rotki & HOP Delegate
  • Jack - Developer and DAO contributor
  • Chris Winfrey

This is not a hard recommendation, would like to have community input from the DAO on committee members. Most importantly, members of this committee will be engaged, have a stake in HOP and have technical expertise to review grants proposals.

The grants committee will be added as admins to a Gnosis Safe that holds the funds allocated to the grants program. They will vote with a simple majority quorum whether or not to fund grants. Grant submissions will come via forum postings with a lightweight template developed if/when this proposal passes

Disclaimer: Jack Clancy and Benji Cohen are writing this RFC on behalf of Web3 Equities, a liquid token fund run by Benji Cohen. The fund has a sizable $HOP position.

4 Likes

I’m overall supportive of spinning up a grants program for Hop, and this seems like a reasonable budget given the state of the project and the token market cap.

I’m curious what the community envisions as the scope of the grants program. For example, should it be focused on directly supporting the protocol itself (such as building tooling around Hop), or should it be more broad, supporting adjacent projects in the space, events, etc?

3 Likes

I think it would be good to have a relatively large scope, especially for the first 6 month period. Education, governance initiatives, data tooling and things like events would all be good projects to fund. Uniswap grants had a nice range of projects in their latest funding round:

It might make sense to keep this grant program focused on advancing Hop’s mission and create a separate initiative for external public goods funding (including both general Ethereum public goods and broader charitable causes). I think both Hop’s mission and public goods funding should be considered important though.

The reason being that it is important to know whether a grant is meant to advance Hop’s mission or is intended to be a charitable act by the DAO so that the success of various grants can be properly assessed and a high level of accountability is maintained.

As an aside, one thing we plan to pitch to the DAO on soon is a commitment to (external) public goods funding at the protocol level. The next version of Hop will likely include a way for the protocol to capture fees. It could be encoded directly in the fee capture mechanism that a minimum of say 10% goes directly to an external public goods funding address such as the Gitcoin grants matching fund.

IMO, in the long run, this creates a better alignment between the DAO and public goods funding than giving away HOP that will need to be dumped to fund the external public good. With the fee share model, public goods get funding when Hop does well and therefor the Hop DAO and broader Ethereum ecosystem/world are aligned behind Hop’s success.

All of that being said, there’s no set timeline or guarantee for fee capture so not against HOP grants for public goods but think it would be smart to have a separate budget and success metric.

1 Like

I support hop trialing a grant program, especially with 750k HOP, since it will encourage the committee to be pickier in distributing grants.

The grants program should clearly define the categories; network dev, research & analytics, community, etc. Also, expand on how the grants committee will record and track grants.

One issue with grants committees is the lack of accessibility for the community to clearly follow up on grants and evaluate their success, and thus the grant committees’ success in grant distribution.

I agree with this and am also for trialing a grants program with a specific scope of advancing Hop’s mission. With that in mind, does anybody from the proposed list of committee members have any potential examples of projects that they would explicitly fund vs. what they would not fund? This may be a difficult question to answer without any concrete proposals, but it seems like it’s worth thinking about ahead of time.

1 Like