On Scaling Small Grants at Nouns

TLDR; Small grants funding needs to be automated and targeted to specific segments in order to scale up the proliferation of Nouns.

Nouns is a protocol for proliferating Nouns. One of the ways we do this is by attracting smart builders who wanted to build on the protocol, who in turn make things that the whole world wants to use.

We support these smart builders with the DAO treasury that can be accessed via the different funding programs at the DAO that range from 0.1Ξ all the way to 1,000+Ξ.

Full disclosure: I am part of DCS, a funding program targeting mid-sized funding efforts.

Much discussion has been had around scaling our funding efforts, as they are seen as too manual and centralized, especially at the lower end of the spectrum in small grants.

The challenge in deploying capital at that level are many. First off, with a ~29KΞ treasury we can’t possibly ask members to vote on every single small funding request. Instead, we have set up “pods” and programs to handle smaller requests, such as NSFW.

NSFW itself is going through an upgrade process, but I believe there is an opportunity to accelerate the evolution of small grants funding in several ways:

  • Streamline & automate
    Use software platforms such as Prop House and AddressBoard to streamline the funding review and approval process
  • Create forks that target specific segments
    Create “forks” that target specific segments, which can be verticals like arts, public goods, events, etc; or can be regional, like Latin America or India
  • Leverage expertise at the DAO
    Leverage subject matter experts from the DAO in each segment to execute lean pods
  • Benchmark
    Measure the inputs and outputs, benchmark results across all programs

Some of the advantages to this model are obvious in the form of reduced overhead and admin cost to deploy capital. But by segmenting our efforts and leaning into a more data-driven approach we also unlock new powers for the DAO.

Targeted Outreach
By creating small funding forks for specific segments, we can now go deeper into these markets and reach out to builders to come build on the protocol.

We can create “challenges” and “bounties” to incentivize more activity in markets where we want to see more growth. These efforts don’t have to be centralized either, small groups within the DAO can create localized programs to direct attention to their desired funding efforts.

Doubling Down
In being more data driven, we can see what’s working and not working, not just at the point of small grants funding, but throughout the DAO funding lifecycle. We can see which small grants efforts leads to larger funding efforts.

Right now I would venture to say we don’t have a great read on this, but by seting up the proper tools we can start to make more informed decisions across the board.

What does this look like in real-life?
Some examples of segmented forks could be:

  • Small Grants: Arts
    Funding artists across different mediums and disciplines, running artists contest, etc.
  • Small Grants: Public Goods
    Funding non-profit efforts, local and regional efforts, giving challenges, etc
  • Small Grants: Latin America
    Proliferation across Latin America, sponsoring IRL events, education programs, working with local web3 groups
  • Small Grants: India
    Proliferation across India, sponsoring IRL events, education programs, working with local web3 groups

These are just some examples but as you can see the framework is quite flexible and can be applied to many different segments. Here are other categories as defined by the Proposal Tracker:

Each fork should have a very clear outline of its objectives. What are the inputs (sources) and outputs (results) that we want to measure it by. Is it targeting proliferation, sustainability, or other? In this way we can effectively benchmark it against other programs at the DAO.

This approach doesn’t need to stop with small funding either. At DCS we’re focused on mid-sized funding efforts, and I believe this model can work to create DCS forks that target specific segments as well (e.g. DCS: Arts, DCS: Public Goods).

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Great to see this discussion Juan! I think our current process is not serving us well and was hoping that DCS might bring some additional structure around this. And the more we can automate, the better. I would also like to see more target pods similar to esports but around things like events, media, etc. We’ll be more nimble in deploying capital.

For PropBox, we intend to use AddressBoard as a starting point for most projects that will come in. But also want a discord “I have an idea” starting point for those who are really early in the process. This will allow us to identify who from the team might be the best point of contact to start depending on goals, needs etc.

But right now, the DAO overall is not always capturing the information in a manner that is helpful and workable in many situations. Some of the ideas you noted definitely move us in a better direction.

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Appreciate the thoughts here, Juan! Agreed that more discussion around the broader idea of micro-funding mechanisms and their efficiency in the Nouniverse is needed.

Completely agree that one of the components that need to be developed is benchmarking. I think a great start would be to provide some examples of inputs and outputs. Perhaps a discussion around what are some basic or universal ones can be helpful for builders to be aware of.

We’ve had ideas to leverage nouns.build in order to essentially crowdfund the development of the Noundation design system in exchange for membership perks in what would be a design guild within Nouns. We would love to tap into ideas for how best we can communicate those outputs in the context of our particular inputs.

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Bullish AF
Finally someone thinking of ground level impact

NSFW has incubated numerous speciality subdaos and grants pods in the past. If you are looking for trial funding for a speciality grants pod, please reach out

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Great point @noun22, I believe eSports Pod and Food Nouns were both incubated and launched from NSFW.

If we think about Small Grants: Art pods, I can see artists launching several of these that focus on different areas, since Art is such a big vertical. For example, @nick is working on a Creator Contest platform (a fork of Prop House) that could potentially be used to run open rounds that seek out the best pixel artists. Then Great Gremplin can take that same model and apply it to different art formats and different communities.

The point is this should be a recreatable model that others can follow and spin up quickly, so we can run more experiments and reach new audiences of builders to join the community. These can all be spun out of NSFW today as @noun22 noted.

I’m happy to help organize one of these forks, but I’ve tagged several folks here who should also be able to run with these concepts if they’re interested. I’m also receiving a lot of messages from folks who should feel free to jump into this thread to keep the discussion going. Thanks!

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Many have asked me for my thoughts on Prop 175 within the scope of scaling small funding at the DAO.

I struggled with this prop. While I love the team, I don’t believe this effort will lead to an optimal outcome for the DAO. Given my thoughts above, I believe Prop 175 takes us in the opposite direction.

  • Inefficient capital allocation
    The prop asks for 65Ξ to allocate 10Ξ, a ~90% admin overhead.
  • Non-scalable approach
    The approach appears to revolve around “consulting” services that are very manually intensive and do not scale, unless we want to employ a small army of consultants at the DAO like a Deloitte, Ernst & Young, PwC, KPMG, etc.
  • Unnecessary creation of static website tools
    We should lean into automated tools like Prop House or AddressBoard. Information repositories already exist in the form of Nouns Center, which is already linked to from the main Nouns website.
  • Unclear outcomes or measurements of success
    How is success being measured here? What benchmarks would need to be hit so we can decide if we want to fund an effort like this again (or clone it in other areas)?

Posted this in the jungle yesterday in response to elad’s question, but I’ll post it here for you as well in reference to the measures of success and creation of statis website tools:

I like to think in terms of, if we can accomplish all we are setting out to do in 90 days, here’s what it will look like:

We will have created a community of active builders with a ‘y-combinator’ type of energy. We’ll have 30 builders in the group who are building in the open and sharing their progress. 15 will have already found funding through various sources. For most of them, it will have been their 1st time getting funding with Nouns and more will be coming all the time to fill in the pipeline. We will be a premier entry point to onboarding into the Nouns ecosystem as a builder.

We’ve seen in this group how frustrating that process can be for some people. There’s a lot of information and a unique culture forming here that can take some getting used to, especially for those coming from other areas of crypto.

@bradq gave a great illustration earlier that I’ll expand upon. If you are fixing a car, you can watch a video on Youtube and struggle to figure it out. We think that’s similar to what it’s like to enter the community and build a proposal now. Instead, we want PropBox to be like fixing your car with a few experienced mechanic friends. You’ll get the job done more efficiently, avoid lots of mistakes, and save time, energy, and aggravation along the way.

If Noun.Center is a course syllabus for building proposals, then we want our website to be the textbook and our community to be a team of specialized tutors. We want it to be a very natural extension of the great work already done there.

I’m not sure if we just have a difference of opinion on how to onboard new builders, but I don’t think there’s any more efficient way in a decentralized environment than to have others who have been through the process help out. We don’t have an HR department and if we don’t have some people dedicated to that effort, then we’ll see the problem of the same people getting funded (those who know the culture and have built trust) continue to happen more and more and the barriers to entry will get higher and higher.

We do believe this can scale and that’s one of our goals in the 90 days is to add to the team of helpers and also to make this process sustainable and open as well. As far as the first point, this is not a centralized capital allocation effort.

Our goal is not capital allocation. It’s to make all of the other capital allocation efforts easier because builders will be better prepared when they first enter the process. Our small amount of capital allocation with this prop was simply to take talented builders with large, scalable ideas and give them small amounts of capital to test their ideas and build MVPs before making a larger ask.

Thanks for reaching out to chat before. I wish we could have done that before the vote, but I really appreciate your thoughts on this.

I would debate that where the DAO currently sits as an organisation in Web3 and still very much in its teething phase: maybe more full-time consultants are needed even if it can be compared to the Deloitte’s, E&Y etc. In many ways the tech props consult first with their idea to the DAO and if passed then they execute. So does it really matter right now if: ‘the prop asks for 65 eth to allocate 10 eth’ because the DAO is essentially funding a group of people that know what they’re doing to compile somewhat of a ‘manual’ that the DAO can follow in the coming months, and with the influx of new people into the system this is needed.

I like what you are saying Juan, you have a very interesting thought process, but I think when the term ‘optimal outcome’ is used, it is a term Deloitte, E&Y etc would also use when looking to maximise efficiency that leads to higher profits, right? But, as it stands at this point in the journey, Nouns is an experiment and a bold risk taking protocol with a war chest as 4156 states in his Virtuous Cycle manifesto. And thinking objectively about all of the debates on Discourse as to how the Nouns Atm is being allocated and who’s earning what at the moment, maybe that actually doesn’t matter right now because there are so many legitimate categories to this organisational structure that haven’t properly been explored as you’ve pointed out.

I’m still of the opinion that the DAO needs to also start funding projects that can give something monetary in return in the long run as realistically there is a runway here even with 29000 eth in that war chest. And with an increasing supply with a 0% creator fee and a falling floor price at some point the DAO will hit a cashflow problem where props can’t be funded as they currently are. This is simple math as the only income at the moment is selling nfts? Please tell me if I’m missing something here.

My final 2 cents here and without having a dog in the fight, salaries aside, as a general statement let’s support everyone right now that has a proven track record and embrace the newcomers that are clearly showing an interest in the future of the protocol, otherwise it’s going to keep on coming down to justifying the spend in every debate vs focusing on the actual information?

How do we all re-wire this thought process? Do we all need to adjust our thinking? Or is this the reality of Nouns as a DAO? Is there another way forward here?

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On the whole of your thoughts in the original post here, I don’t think I disagree with anything you said. From your perspective, we’re obviously pretty far apart on how to get there though. What do you think the main points of contention are? I see DCS and PropBox as both trying to drive to solve different parts of the issues that you outlined. What am I missing?

@bradq just stated that:

we want to develop this into a business model that charges builders for the service

can you please clarify that statement? that is a VERY different business model than what is proposed in Prop 175.

Sure. What we’ve seen so far is props like Small Grants and DCS that are getting funding pay a team to do allocations. When the allocation pool runs out, they have to make another proposal to refill the tank. We’d like to survey Nouners and delegates to explore other ways to make this sustainable and open and make the incentives more aligned for the proposers and the DAO.

Rather than 75 ETH of allocations and 51 ETH for the team like the DCS prop, what if it looked more like:

  • The team made a percentage of a proposal when it passed on chain or was funded through other means.
  • The team was paid based on the level of help that the proposer needed. (Consulting and feedback was one percentage, helping write and structure was a different %, and creating media, video, and promotion were another.)
  • Some other method that we’ve not discovered yet.

We’ve already seen this happen through finder’s fees in the past on proposals and it may be happening behind closed doors that nobody knows about, but I personally believe that it would be much better if it were all in the open. Maybe pools are best for small props and another method would work better for medium sized props and yet another for large props. We’ve seen some cool and unique ideas already, but I think there’s much more to explore in that realm.

None of these methods are part of the proposal as everything we’ve proposed in 175 will be free, but we would like to explore better alternatives to what is already taking place. This is one small piece of the things we want to explore over the next 90 days.

Pasting a link here to the Discord thread where we discuss the potential conflicts of interests with this approach (this is in the public Jungle Discord server).

Is there another link, not loading on my side.

Also, please feel free to participate in this Twitter poll, it is open until Tuesday:

Question for Nouns builders, would you pay a fee for help in writing a prop? The fee could be ETH or a percentage % of your overall prop ask (e.g. 10% fee) Feel free to post your thoughts below:

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Do you really feel that’s a fair way to post the question?

How about “Would it be worth a fee for consulting to help get funding for a proposal? Consultation could include a suite of tools to use, help writing a proposal, creating media, temperature checking, advice on funding strategies, project promotion, and more. The fee would only be paid after funding was secured and could be a flat ETH amount or % of the proposal funding.”

Plus, that’s not even in the proposal…but I digress

It was stated by Brad and is being discussed in the Jungle Discord. I linked to the thread and Discord in the poll, and I’ll add this comment to the poll thread, feel free to comment there with additional context as desired. Thank you!

So you really feel after reading the proposal and all the conversation that ‘help writing a prop’ is what we’re doing in full?

Wouldnt that make NounsBox a middleman?
As far as I remember NFTs thrived coz people had freedom and no middlemen. Thats why smart contracts were popularized as well. No one in between the user and the tool

It would be a middleman if you were forced to use it, but that’s not the case at all. I would venture to say that people who had proven projects that had been funded before and had already built trust within the community would not need it. They would probably be better suited to go the normal route. They would also be well suited to come into propbox to share their expertise, improve systems, and help onboard more people to the ecosystem.