IIP 154: Fund Gitcoin GR14 with $50,000 USDC

IIP: 154

Status: Proposed

Author(s): @afromac

Reviewed: @sixtykeys

Discussions-to: [IIP 154: Fund Gitcoin GR14 with $50,000 USDC]

Created: [05-27-2022]

Quorum: [5% of Votable Supply]

Simple Summary

This proposal is for Index Coop to fund the next Gitcoin Round with $50,000 USDC to contribute to an initiative to assist with crypto and web3 regulations.

Abstract

Gitcoin is a community of internet citizens with a shared mission to build and fund digital public goods. Index Coop has an opportunity to contribute to the next funding round, GR14. This funding round will contribute funds to grantees that are organizations that allocate a significant portion of their resources to advocating for a regulatory environment that promotes and supports web3 and/or produce research on web3’s potential for good. By contributing $50,000 USDC Index Coop can contribute towards this important initiative.

Motivation & Specification

The recent crisis around UST/LUNA has led to a renewed push for crypto regulations broadly, and stablecoins specifically in Washington.

GR14 has been created to enhance funding for organisations that are working to ensure the voice of the web3 industry is represented during these discussions and subsequent legislation. By funding this round, Index Coop helps to create a more appropriate regulatory framework, while also signalling that we are a conscientious and concerned actor in the space.

Voting

FOR:

Do fund Gitcoin GR14 with $50,000 from Index Coop Treasury

AGAINST:

Do not fund Gitcoin GR14

Copyright

Copyright and related rights waived via CC0.

7 Likes

Thanks so much for bringing this up to governance, Cormac.

There’s no wording to sugarcoat the fact that the UST collapse was one of the worst weeks in crypto’s history and will be one that we’ll be lamenting on for years to come. What it means for the near term though is that we’re going to be getting broad based attacks by regulators like Janet Yellen, Elizabeth Warren, Gary Gensler, and so on coming at the entirety of the industry with a broad brush stroke.

We believe the right regulation is critical to ensure crypto and web3 benefits as many people as possible. Grantees are organizations that allocate a significant portion of their resources to advocating for a regulatory environment that promotes and supports web3 and/or produces research on web3’s potential for food. Enabling the community to allocate funding for their preferred groups helps get them engaged in crypto advocacy, where their ongoing support will be crucial to success.

With the Gitcoin Grants Round 14 (GR14) kicking off on June 8th, we’re taking special measures to make sure those organizations that are fighting to help make sure we have an industry to work in are well funded as possible.

Too many times in the past, technology companies have waited too long and then been massively hurt by regulations. It is the time to come together to fight what is coming. By working together with policymakers, we can shape the best possible regulations to both build trust and spur innovation.

As of now there are a total of approximately 9 grantees. They include Blockchain Association, Coin Center, Electronic Frontier Foundation, Fight for the Future and Internet Archive, European Union Crypto Initiative (EUCI), Canadian Web3 Council, DeFi Education Fund, and Proof of Stake Alliance, with some others that may be confirmed later.

Finally, there will be a variety of marketing opportunities available through supporting GR14 that Index Coop could take advantage of, and that we’d strongly encourage as well.

These could include:

  • Email marketing
  • Twitter Spaces with Gitcoin people and grantees
  • Results on blog posts
  • Daily metric tweets
  • Support on Twitter with engagements and replies
  • Potential press opportunities
  • AMAs
  • Promo for live event
  • End of round top 10s
  • Survey for founders
  • Post round debriefs with grantees and ecosystem partners

As always, appreciate the support and look forward to answering anything we can on our end!

7 Likes

ELI5/TL;DR

Liquidity is everything.
Stablecoins are the backbone of proper liquidity flow.

After the recent unfortunate UST/LUNA event DeFi is about to face regulations directed at that backbone; ergo, stablecoins.

Depending on the final outcome, DeFi’ general development might be either:
a. significantly slowed down
b. be on the right path to start being adjusted for real-world adoption.

By supporting GR14 we support having DeFi representatives who will, supposedly, try to get DeFi “industry” on the right path.

PS.

Supporting this initiative gives Index Coop great marketing opportunities, as @azeem pointed out.

3 Likes

Hey @afromac,

Thanks for getting this posted. I’m supportive of this proposal and glad to see it live!

We mentioned in passing the other day about how it might be nice to create a product which continuously funds Gitcoin via the streaming fee. For example, a set which contains only stETH and has a 1% streaming fee which would go to Gitcoin. Something similar could be done with stablecoins. Earn yield and fund public goods at the same time :grinning:.

I’m looking forward to exploring these options further with you and hopefully the Gitcoin team as well.

Thanks!

5 Likes

Thanks so much @afromac for supporting this :pray: - I’ve been a huge fan of Index for years now and I’m super excited that we’re finding ways to collaborate. I hope this proposal will be the first of many.

@anthonyb.eth let’s definitely discuss that idea as well, we’d love to be able to showcase the results here at a small scale first before we ask for a large sum from the community but after that we could absolutely move forward on structuring this.

2 Likes

Appreciate your words! Yeah, would be awesome to get the chance to do some long term things like that. Love where your mind is at on it.

The Gitcoin team definitely sees this as a first step in a much longer term relationship and are really excited about it.

1 Like

Snapshot vote is now live:
https://snapshot.org/#/index-coop.eth/proposal/0xef785e6e02f37cd73dfb37e81f3d2b220871cad9699e9330a232f1ecf3be88e7

cc: @anthonyb.eth @catjam @DevOnDeFi @edwardk

1 Like

Excited to see this proposal and strongly for! Gitcoin is doing amazing things in the ecosystem and it is a no-brainer to be supporting their initiatives.

1 Like

The IIP has passed with 576K INDEX voting FOR.

3 Likes

Congrats to the supporters of this proposal on passing it.

In this specific case, we agree on supporting industry-wide initiatives and we are confident that there are returns in supporting Gitcoin grants financially BUT we are not convinced that spending significant amounts on industry-wide initiatives have a better return on investment than protocol-specific growth initiatives - specifically for a young protocol that has limited financial resources.

This is a proposal we’d generally agree with as we believe REVENUES can be distributed more granularly and cheaper than ever before with smart contracts. For example, we’d encourage supporting lower protocols and lower protocol developers such as protocol guild with a functionality like 0xsplits.

We’ll be voting actively on important, future proposals and will share our reasoning on Twitter and through our website. Looking forward to some delegated votes to scaleweb3.eth.

Best wishes & happy June fellow Owls :owl:

An unprofitable startup should not be in the business of donating money.

$50k could be half a year’s salary for an engineer to build.

If this transaction has not actually been executed, any board that is supposed to provide oversight here should strike it down expediently.

17 Likes

Hi @afromac,

In response to some private group chats and the broader community discussion, can the Index Council please share here how Finance Nest and multisig signers are to proceed ?

Finance Nest processes all third party payments each Friday and this payment is scheduled to processed tomorrow unless there is a communication on the forum to indicate otherwise.

Disclosure: I abstained from voting on this proposal due to poor optics voting against a council lead proposal. FWIW I agree with Punia’s comments. The merit of the proposal is good but the timing is not. When Index Coop is a more mature and a profitable business then initiatives like this can be pursued.

If the Index Coop community or contributors wanted to donate, then we could enable members to allocate funds from there rewards and contributors can opt in to donating to the cause. This would reduce folks taxable income, enable the donation to be made and would probably realise most of the marketing benefits for making a donation as it would be the Index Coop community donating.

7 Likes

Thanks for your input here @puniaviision, and also to everyone else who has contributed their perspective.

Council has agreed to pause this payment and prioritize fiscal sustainability over other initiatives at this point.

My apologies to the Gitcoin team. We will endeavour to find other ways to support your work and organization.

A separate IIP will be run in near future to cancel IIP 154.

cc: @Matthew_Graham @ElliottWatts

7 Likes

Hey there!

Really appreciate all of the thoughts here. For what it’s worth I agree with you that Index needs to think first and foremost about how it sustains itself in the long run, we’re having similar conversations on the Gitcoin side and it’s critical in the context of this market.

The one thing I’ll note is that I do believe this particular issue is directly tied to prudent risk management on the Index side: if bills that harm stablecoins are passed it would greatly impact the H2 roadmap related to stable yield products and likely reduce the viability of the DAO. While this is still an outside risk, as we’ve seen enough black swan events occur that I do think it’s one worth hedging against.

On a more procedural note, I do want to better understand the process for revoking a vote given that the Snapshot passed with quorum:

https://snapshot.org/#/index-coop.eth/proposal/0xef785e6e02f37cd73dfb37e81f3d2b220871cad9699e9330a232f1ecf3be88e7

This will just be important for us to understand in proceeding with future proposals within the Index community as I’m relatively new to the governance process although I’ve been a supporter of the team and the mission for a long time!

Appreciate all of your support, and even if we aren’t able to move forward with a collaboration in GR14 I’d be very interested in continuing the discussion in future rounds.

4 Likes