Read the sister proposal first to better understand the context of this proposal.
There is a single FAQ to address common concerns to both proposals live at the sister proposal link.
Goals and Impacts
Create a high-velocity pool of capital to take advantage of opportunities within Terra.
Establish 3rd parties to verify quality and keep initiatives accountable to high-leverage use of community resources.
Increase overall metabolism and rate of innovation within the Terra Ecosystem.
Background
Given the community pool remains at >5M LUNA (>$35M as of July 23, 2021) post-Columbus-5 and Ozone launch we believe Rapid Grants to be among the highest leverage opportunities for the team to introduce stable governance mechanisms moving forward while maintaining agility in supporting the development of new projects. Even in its current state, TFL does not have sufficient mechanisms in place to issue rapid grants to the abundant community projects emerging, especially given increased interest after the launch of the $150M Ecosystem fund. Rapid Grants are defined as fast pools of funding to pursue high leverage opportunities within the ecosystem, specifically bypassing the 14-day voting mechanism and the guidelines for other proposals.
With inspiration from our friends at Compound / DeFi grants, we propose a Rapid Grants framework. We aim to use Rapid Grants to improve the overall velocity of shipping speed within the Terra ecosystem, especially by 3rd party groups of community members. We are known to be among the fastest product teams in DeFi and crypto, and while we aim to improve governance mechanisms by introducing scalable processes, we also want to maintain mechanisms to allow us to move at rapid speed. The next phase for Terra, we believe, is to be the fastest shipping community within DeFi more broadly and evolve the principles of product-driven, fast-iteration that TFL has been known for.
Thus we propose the following to emulate and improve upon current standards of grants and community governance following the structures below:
Rapid grants will be deployed to accelerate teams the Terra Ecosystem Committees believed to be essential to ecosystem development and the overall health of the Terra ecosystem. Thus, we will move fast to secure opportunities within the ecosystem.
Rapid Grants pool fund to be seeded with an initial 300K LUNA to provide funding for teams that would benefit the ecosystem via rapid funding. For example, upcoming hackathons/sponsorships, and teams that the Committee would like to expose to the Terra Ecosystem heavily.
The initial funding will be for Q3 and Q4 of 2021 encompassing August 1 (or whenever proposal passes, whatever happenss earlier) to December 31st, 2021.
In this format, funding decisions are to be made within 72 hours of the formal submission of a proposal. This is opposed to the potential 4-week period of a proposal review by TFL as well as the two-week on-chain vote period, which provides flexibility for teams to maintain high shipping velocity. Teams will still be required to submit all necessary proposals and milestone documentation. All funding will be auditable on-chain. However, select teams will be eligible for distribution via a rapid grant.
The Terra Ecosystem Committee will vote on all Rapid Grants and a simple majority will be needed to approve a Rapid Grant. Rapid Grants are to be recorded in public via the public Terra Ecosystem page for community records.
Rapid Grants bypass the on-chain vote and instead delegates authority to internal TFL members to issue grants.
The Rapid Grants pool will also be used to fund expenses related to the program including Hackathon development, sponsorships, and other community initiatives (CosmWasm course development, etc), creation of podcasts, institutional reports, conferences, etc. to increase overall developer supply.
Ecosystem Committee(s) Overview
The Terra Ecosystem Committee has the responsibility of reviewing projects and commenting to the community via Agora discussions their views on project and milestone feasibility.
This group is also responsible for releasing funds associated with project milestones.
External Ecosystem Representatives (i.e., outside of TFL) are approved members that maintain robust long-term interests in the success of the Terra ecosystem to properly incentivize constructive and honest behavior. They will consult with specific project-related issues and concerns. They are not responsible for releasing or managing Treasury funds.
If this proposal is approved, we will create a follow-up procedure for updating the Terra Ecosystem Committee pending feedback from the community including adding/removing members.
Depending on the amount of work we will discuss a fair compensation scheme for this committee that will be publicly auditable.
Committee Structure
Community member representatives of the Committee will be re-evaluated in subsequent quarters. The initial Committee representatives were determined by TFL and were selected to help bootstrap the new funding process but will be open to changes pending community feedback as the Committee and proposal system evolves.
Over time, we plan to decentralize the Committees to represent the greatest interests of the community.
Partner Protocol Leader - @tansawit, Band Protocol
Ecosystem Fund Leader - Ninor Mansor, Arrington XRP Capital
Ecosystem Tech Leader- @Larry0x, Delphi Digital
Notes
Please note similar initiatives within community pools of major DeFi protocols, we are aiming to match these pools and set a standard of performance at minimum. In addition, we aim to improve these governance mechanisms over time. Please familiarize yourselves with these other programs before commenting.
What is the size of the grants that the Rapid Grant will deploy? (is it equal to the $1K-$30K size of the Community Grant in the sister proposal)
Can you explain what sort of teams and for what purposes do they require funding in 72hours and cannot wait the 4 weeks of the Community Grant detailed in the sister proposal? Asking as a noob that does not understand why a team would need cash so quickly.
Meanwhile, I like the idea of bypassing chain voting for funding marketing things like podcasts, reports, and sponsorships as these types of opportunities develop quickly.
Overall, I am very much FOR rapid allocation of capital. In addition to the other DeFi grants that you highlighted, this approach was also taken by Tyler Cowen to rapidly fund scientific research into Covid-19, with great success (https://fastgrants.org/).
The success of this scheme will be in the hands of the committee. Will funded projects be monitored periodically after receiving grants to see if the evaluation process can be improved?
It depends on the size of the project. In all cases, it will require the same milestones.
For example, a team that already has proven traction (10k+ users) and has already proven worth to the Terra Ecosystem from successfully executing prior grants may want a rapid grant. This is just another pool of funding. And like you said, we get 100s of random opportunities like podcasts/newsletter sponsorships that do not cater well to the on-chain 14-day governance structure and review process we laid out.
Yes, the point of the committee is to approve milestones that are easily audited and accountable. Updates on milestones and if funds are spent wisely is in the scope of this proposal.
I really like the ability to tap into these 100s of random opportunities. And with the current talent in the committee it could even be used for advertising and educating the world about Terra. I did comment on the other post that $100K limit for rapid spend might be too high to start with. A lower limit for undemocratic spends should be set in place. Once the committee matures, transparency is satisfactory, and the need for higher spends is shown, we could increase the limit.
@0xwagmi I went through the Compound rapid grants. Although 99% of them were below 50K, I now see the benefits of having a <100K limit, in terms of not committing to a hard number. I no longer have an issue with the limit.
However, I still do not think we have enough information to vote yes:
How are the funds disbursed here protected? Does the committee have a multi-sig wallet?
What is the priority for the ideas that will receive funding? Or is it a you’ll-know-when -you-see-it sort of priority? The compound rapid grant detailed exactly what the plan was for the rapid grants: Parameter development, code audits for compound updates, advertising/sponsorships, hackatons, bounties.
What does success look like? How/when will we determine if this is a good idea in the future? When do we plan to reassess? When the funds run out or in a specified amount of time? (note Compound disbursed $1M per quarter with a 6-month limit, in order to reassess).
The compensation should be discussed and decided BEFORE this got voted on. An hourly salary, with a yearly cap, for the time the committee spends on this, is acceptable no matter the amount of time they work. This way the community can vote on the salary, instead of it being decided afterward.
In the end, this is an experiment, and I want it. And Terra needs this. I also want more information.
Thank you for putting this together! I love the initiative and goals, however, I’m curious about certain aspects of the plan. Forgive me, but I’d like to put the proposals under the same scrutiny the TFL Community Pool Spend Committee will put their respective applicants under, I hope you don’t find that unfair.
I understand that you have said that many of my questions will be worked out later but I feel it is necessary to at least find what the initial thoughts are before approving the proposals.
What alternative ideas, if any, were explored prior to settling on the Compound/Defi grants model?
What sort of time commitment is expected of committee members?
What sort of compensation, if any, will be provided to committee members?
What is succession plan for each representative’s respective group?
What is meant by the “schedule of replacing and adding committee members is to be evaluated on a quarterly basis”? Wouldn’t this allow for committee members to reapprove themselves for the next quarter? Does this also include the ability to remove members?
How were the current Community Leaders chosen and how do they feel about their roles in this?
What sort of line of communication are Community Leaders expected to keep?
What recourse does the community have against a Community Leader who is not performing their duties?
Will a separate site and organization from TFL be created just as been in Compound?
These funds will cover the next four months. What are the expected milestones for this group?
Will add as much transparency as possible as to how we’re approaching the project below.
What alternative ideas, were explored prior to settling on the Compound/Defi grants model?
This program has been in the works for a few quarters. The Terraform Labs team has not had the bandwidth to work on it. We evaluated all governance and grant models. We were always thinking about what the right level of structure to add to a process like this would be.
Too much structure would stifle experimentation but little structure would not encourage accountability. we’d like to see as a community. Our priority was to to go with a structure that allows us to decentralize further over time. Compound kept coming up as a model to emulate with the right mix of structure and flexibility.
We settled on these terms given conversations with dozens of DeFi teams and internal community members.
What sort of time commitment is expected of committee members?
2-10 hours a week to review proposals and consider responses given areas of expertise. Time commitment could fluctuate depending on volume of work. We expect it to remain between 2 and 10 hours per week.
We rotate a “Lead” committee member each week to manage operations and lead discussions for proposals. This team member may work >10 hours that week managing program operations.
How are the funds disbursed here protected? Does the committee have a multi-sig wallet?
The Committee will distribute funds from a multi-sig wallet.
What is the priority for the ideas that will receive funding? Or is it a you’ll-know-when -you-see-it sort of priority?
We will be releasing a public site with information related to the Ecosystem Grants. This will include public bounties for projects that we would particularly like to see built. For example a CosmWasm IDE or testing framework for developers.
We will also detail a tentative budget for how much we expect to spend on various initiatives from the pool.
What does success look like? How/when will we determine if this is a good idea in the future? When do we plan to reassess? When the funds run out or in a specified amount of time?
We will plan to distribute the Community Pool funds over the rest of this year and throughout early Q1.
The effectiveness of the program will evaluated on which milestones project teams complete.
Each proposal for funding requires success criteria, as outlined above. We will publish the extent these success criteria have been met.
The goal for the program is to close the resource gap for teams. Any team at any stage should have the financial and ecosystem resources to contribute to Terra. They should be able to do this without unnecessary overhead. At the same time, we must maintain the integrity of community funds and resources.
What sort of compensation, if any, will be provided to committee members?
At the moment, we plan to match the Compound process and update with further text proposals as needed.
As we have not begun operations it is difficult to determine exactly what fair compensation is. We will stick with Compound’s hourly rate of $100 hour with a max cap of 30 hours per week for team members. Team members will post their hourly work per week for audit and transparency.
Again, we expect most team members to be operating 2 to 10 hours per week.
What is succession plan for each representative’s respective group?
Applications for committee representatives are live via the form in the original proposal. The earliest we expect succession of representatives to occur would be at the start of Q1 2022. At that time, likely 1 to 3 representatives will be replaced with new members in the TFL community
We are trying NOT to add too much structure here to succession planning.
We expect to introduce a formal process combining community voting and nominations. First though we have to understand the standard operating procedures that make the program successful. This is after all an experiment as was Compound’s original proposal.
How were the current Community Leaders chosen and how do they feel about their roles in this?
Our goal was to get this program off the ground and effective as soon as possible. That meant reaching out to the highest value add members within the community that have a history of supporting the ecosystem. Based on interest we assembled a group from across the Terra community.
All committee members were eager and excited to contribute. They all see this as a natural evolution of Terra, and want to contribute to this new set of operations and frameworks.
What sort of line of communication are Community Leaders expected to keep?
External Communication will happen over a public facing page.
Internal communication happens via email and instant message between committee members.
What recourse does the community have against a Community Leader who is not performing their duties?
If this happens to be the case, we expect the community to propose a governance proposal to remove a member.
Will a separate site and organization from TFL be created just as been in Compound?
Yes, we are working on this actively.
These funds will cover the next four months. What are the expected milestones for this group?
Milestones will be both operational and project based.
Operational milestones include the above. We will establish the standard operating procedures as founding committee members. This means having better answers to compensation, succession, and reporting/record keeping as we learn more.
Project based milestones are related to each funded project and will be on the specific milestones projects lay out. Examples of such milestones are well documented by a new proposal here: Governance - Terra Research Forum
Thanks for all the great questions. As you can tell, we are trying to remain flexible so we can best adapt to the communities needs in what is still an experiment. We at TFL have been very careful with the committee members. Each is looking forward to making the program a success.
I think an evaluation criteria for the submitted projects should be released! For example, each project can receive max 100 points and several criteria are taken into consideration. This way the evaluation should be more objective.
Example:
integration with other TFL products like Mirror or Anchor - 15 points
“real world” usability and possibility to attract new users - 10 points
Hi. Can someone from the TFL integrate Terra Grants into Terra money website? Can we do something similar like solana it’s doing with their website? The moment you enter on solana website, you are incentivized to apply for a grant and build something! Also, there are a lot of devs that are not aware of Terra grants… How TFL plan to promote and share this with other devs? Thank you!
Can we get confirmation from each member that there is a multi-sig wallet in place currently?
When can we expect delivery of these items?
Following up on compensation, would love to know how the funds are being spent and if the team is being properly compensated.
Seeing as Sawit is no longer at Band, and presumably a TFL employee now, I would request that we begin the formal process of replacement for this member as they were more less our neutral party.
I think this needs to be rethought through, 500 LUNA = 20,000 UST(at the time of writing) to bring a vote on a Committee member is far too steep.
2 months in and we are not seeing these milestones met. I would like to hear from you on what difficulties you are facing in meeting milestones.
Flexibility is fine and all but accountability is of the utmost important when dealing with funds that were given from the community pool. Lets start there :).
At this point, I think it is fair to ask for results or at the very least a response.
I can say, it is concerning that Committee has not held itself to the same standards that it attempts to hold projects to. We still do not have milestones, goals, budget, clarity on procedures, a website, etc, 3 months after being approved.
Let me be clear, this is not an acceptable use of community funds as it stands. At this point, this committee needs to start delivering on its promises or return the funds to the Community Pool.
I would like to know what are the results of this grants? any project? Where was promoted these grants and how come a lot of people don’t know about them? We need some marketing for these grants so people can present their projects… Please let us know more.
I hope this message finds you well. I am concerned by the ongoing silence of this committee. The Rapid Grants Committee currently hold $32M in LUNA in its wallet. We have not heard from you since August 2021. An update at this point is mandatory and should not be delayed for any reason. Do right by the community and let us know your plans for all that money.