Grant Proposal 9 : Delegated Domain Allocation by Questbook

Thank you so much @batuX for the detailed feedback. I appreciate your recognition of the need for a formalized grants process. Please find the responses to specific questions as below:

Why was the grants budget set high to begin with? I did not see any reasoning on the numbers?

The initial proposed grants budget and the committee compensation was based on our ongoing engagement with Compound and to keep Euler competitive with rest of the market.

Defi Protocol Grants Budget Committee Compensation Details
Aave $3.25M per 2 Quarters Grants Lead- $9k/month Review committee- $150/hr, capped at 10 hrs/week Aave Grants
Compound $1M per 2 quarters Program Manager - $100/hr Domain Allocators - $80/hr Compound Grants Program 2.0

Putting up a rushed, unreasonable proposal, to be as rushed adjusted after some push back by an individual

Based on the feedback of the community, we have updated the proposed amount and the proposal to ensure that it is run as a pilot. We’ve made best efforts to stick to the community’s recommended governance process here.

To make sure we launch the program with community’s best interests, I will be having a call for taking inputs on:

  1. What should definitely happen in this grants program
  2. What should definitely NOT happen in this grants program
  3. RFPs that should be listed for each domain
  4. Evaluation rubrics and proposal evaluation process
  5. KYC, legal, multi sig setup and other operational concerns

We don’t intend to cut any corners in the governance process and are incredibly sorry if that is how it has come out in this forum.

Thank you @knightsemplar for your detailed feedback and support. Appreciate the specific questions, answering them as below:

1 - There are ongoing grant developments with the Encode team. Different I know, but they are still spending significant amounts from the treasury

We totally appreciate and respect Encode Club team’s efforts in launching the grants program. We are in no way are against it, in fact, are totally open to collaboration.

The grants program proposed by us is a community-run grants program. The reason why we submitted this proposal is that there is no community-run grants program for Euler prior to our proposal. Encode proposes to run its grant program similar to the “Bounties4Bandits” approach and there is merit to having that. We genuinely want to engage the community and keep the entire process as transparent as possible. We are happy to collaborate with and support Encode.

We’ve answered the remaining questions here

Hey @nikita , thank you so much for your support.

The initial proposed grants budget and the committee compensation was based on our ongoing engagement with Compound and to keep Euler competitive with rest of the market.

You are comparing a young startup with more mature, better capitalized organisations. Also, the Aave and Compound figures are equally off in my mind, given the reasons stated in my other post.

The space needs to do a reality check. I would have expected a higher degree of thought put into this proposal with a clear reasoning on comp packages – you just don’t come along and ask for a $2M contract and outsized comp like that, it’s the etiquette that is off. I don’t think saying “Aave and Compound pay alike” is a fair reasoning.

Based on the feedback of the community, we have updated the proposed amount and the proposal to ensure that it is run as a pilot. We’ve made best efforts to stick to the community’s recommended governance process here.

I would strongly disagree with best effort.

  1. There was no temperature check on the restructured proposal. You rushed it to a vote and it looks like passing through via votes from an entity that one may think has a conflict of interest to begin with.

  2. It is not best effort to discuss this matter within a 7 day window and rush it to a vote right away. Again, contracts of this size would face thorough diligence in the real world, going through various instances for second opinions and approval, serious discussions without rush.

I can only reiterate that I will be voting no as well as suggest existing voters to reconsider their votes.

Just want to clear some inconsistencies I can see in the discussions:

Lemniscap did not manage to increase our delegation by 200K EUL.

Those are our tokens. We have used our tokens to vote strategically on gauges (ex: voting for the cbETH gauge on the launch of cbETH market to jumpstart liquidity for that market) and we would continue to do so in future (EUL tokens used to vote on Gauges are not assigned for voting power). There are no magic tokens. We have been participating in governance votes for a while and it would be good to check who are the first time voters voting NO and maybe also have that as part of the analysis.

Being the lead investor in Questbook they have an agenda to push.

A little more research would point out Lemniscap led and co-lead both Euler and Encode rounds as well. And I think we can all agree, one would not be a very good investors if we did not believe in the products and team one invest in.

I think framing this vote as an Encode vs Questbook vote does not help anyone, especially Euler. As Euler members, the only concern should have been benefit to Euler. To us, it is clear that processing grants through a onchain orchestration tool like Questbook is in the right direction.

We also don’t see Questbook and Encode as competitors. Questbook does not run grants - just provide onchain tooling. Encode runs grants and are an allocator who do the work on ground. Building these kind of zero sum frameworks would mean saying a frontend on a gnosis safe the treasury uses is a competitor to Encode, which is not the case. Questbook’s onchain stack has been selected to run grants for a number of protocols before their proposal for Euler (and in which Lemniscap has no votes) which should speak about the strength of their offering.

I find this accusation that this proposal has been singly rushed through a bit wild. It would be good to compares apple for apples. This proposal has had more discussion (which is to the benefit of the dao) then most other grants proposal that have previously passed.

Below are some picks:
Grant Proposal 7: 10 replies on the proposal. Passed with total Yes/No vote of 105K EUL and 3K EUL vote differential. 15,000$ given. Third (or second?) grant for the same team.

eGP4: Messari Q4 (bi-annual) Report: 15 replies on the proposal. Passed with 44K EUL vote with 6K EUL vote differential. 50,000$ given.

If this proposal ends up engaging more first time voters into participating in Euler governance, that is a positive for the DAO.

Lastly, this proposal is for a quarter and the dao will have the option to assess and decide if this grants framework has delivered result, which i hope is what everyone wants to see and we as a dao should put our best efforts to try and make it a success.

The proof of the pudding is in the eating.

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I am Lyuben and I voted NO with 400k+ EUL. To second @batuX - I would love to see people that voted in support to reconsider.

Batu already mentioned the most important issues, let me summarise and add.

  1. Lack of attention to detail
  2. Unreasonable size of the program from the very beginning. Even the revised proposal is way to large. 200k per quarter is a run-rate of 800k p.a.
  3. Spending 200k per quarter for half baked products with unproven value for the development of Euler is disproportionately high to the expenses for the FT employees to Euler and would be impacting morale negatively.
  4. Involvement in other projects and lack of 100% focus to the the LT success of Euler is also a big challenge.
  5. AAVE and Compound are much more mature and larger projects, even for them spending unreasonably is to be questioned.
  6. Some of the domains are integral part of the core value proposition of Euler and should be run and organised from the FT member of the team.
  7. Timing for a fruitful and well thought decision is not enough
  8. I think a substantially large shareholder in one company voting for a contract to be signed with another company where he is a substantial shareholder is not a good practise (especially given the fact that Lemniscap could actually decide on the vote).
  9. it is essential for the shareholder to disclose interests from the get-go and recuse from any decision-making related to the potential “conflict of interest” proposals. I think there should be also “Code of conduct” and some kind of conflict of interest prevention policy.

I hope that the above thoughts make sense. I would propose to decrease the budget, re-consider the domains and put a upfront goals against which to measure the results.

In the interest of transparency- I am large token holder in Euler and not an investor in Questbook. I am also LP at Lemniscap. As somehow Encode got mentioned- I am not an investor there, however know Damir and Anthony for ages and fully respect and value their work, however I do not see Encode as a party in this proposal.

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oh wow thank you for the big no vote.

i also would vote for no.

No offense but it feels super rushed and kinda irk me that the vote was determined by one entity

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Welcome @lyuben. Large token holders becoming active in governance is good for the dao and hopefully this is a first of many.

I find a lot of the points you have raised laughable. But since narrative is such a big part of crypto i would address a few of them which is directed at us.

On 8 and 9, you discuss conflict of interest and our investments and i would like to respond on that below:
Most crypto funds have invested in multiple protocols which many time work together through public proposal and are voted on by the funds. You definition would make all those votes invalid and all the investors not able to participate in the decision making. Shareholder representation is the basis of the capitalist system we all adhere to.

Also, i find it a huge blind spot in you that you talk about conflict of interest but miss to see your own. When you delegated your vote and popped up on the Euler delegator page just a few days earlier to this proposal going for a snapshot vote, your voting intention was known to us (even without ever discussing euler or this proposal with you) and we were not surprised to see you vote NO (which you obviously have full rights to vote). We are aware of the campaign to vote NO on this proposal by interested parties so in the interest of transparency, let us not be selective.

Worrying about fiscal responsibility is good. We could have saved >$100K if big EUL holders had woken up to fiscal worry for Euler earlier so hopefully we see a lot more of this from everyone.

I can only speak about us, and every vote we cast is after lengthy deliberation with the Euler Labs team to understand their needs and to take onboard their concerns in deciding our vote including for this proposal. In this case, their feedback is reflected in the domains and budget finalised for this program.

P.S: using language like half baked is never encouraging or helpful. If you want some feature in a product which you think is critical, helpful would be to point those out so team can learn and improve from the feedback. It is also a bit insulting to dao’s of other projects which are using Questbook and have found it to be helpful. There was more than enough time to constructively participate in this discussion before it was put to vote.

You keep me online on a Friday evening, tnx for that. I would refrain from using strong words and enter into discussion. Just this one above- where do you see conflict of interests?

Thanks, @ruchil, for the hard work in creating this proposal. I’ve spoken to a few members of the Questbook team over the past six months concerning Compound’s grants program, and I’ve always been impressed by the team’s passion and work ethic.

While I like the team and the platform, I think this proposal has been rushed. Two weeks from RFC to proposal is not enough time, especially with how much discourse there has been on this topic. For this reason, I’m voting no (a soft no).

Euler Labs has been doing a great job, and Euler is headed in a fantastic direction. Let’s not rush to branch out.

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Hi @TylerEther , thank you so much for your kind words. We’ve made best efforts to stick to the community’s recommended governance process here and don’t intend to cut any corners in the governance process.

Update: The proposal has passed on Snapshot

We thank everyone for their consistent support and guidance throughout and for their participation in the discussion :pray: . We are excited and look forward to working closely with the Euler community.

Please find below the next steps:

  1. Selection of Domain Allocators: We are currently looking for domain allocators for this program. We welcome community members to self-nominate themselves here
  2. RFP creation for each domain: We will be working closely with the Euler team and the elected domain allocators to create RFPs for each domain
  3. Launching the grants program

I will attend all subsequent community calls to take suggestions and answer any questions from the community. I will also be sharing all the updates related to this program during the community calls and through this forum.

Thanks once again for the trust you’ve put in us :raised_hands:

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