P4: Partnership & Mutual Grant with Gitcoin

Partnership & Mutual Grant with Gitcoin

Authors: @kempsterrrr @dabit3 @willblackburn @marc @Erik_Knobl

Summary

This proposal, if passed, would issue 5% of the Developer DAO Governance token (when live) in exchange for 50,000 GTC. The purpose of this alliance is to help ensure that Gitcoin and Developer DAO can work together to coordinate bringing more web2 developers into web3 than ever before through education and events, as well as supporting the creation and distribution of public goods.

Motivation

Developer DAO’s mission is to accelerate the education and impact of a new wave of web3 builders.

For our community to thrive, realise its potential and deliver on this mission, we need to lay the right foundations for growth and have the resources to bootstrap operations and retain a team where needed. Forming partnerships with other DAOs who have a well aligned mission and have been on this journey before will help us tackle these challenges faster than we otherwise would be able to.

Gitcoin’s mission is to build & fund the open web. Their innovations in Quadratic Funding have resulted in funding for over 1,900 open source projects to the tune of ~ $40m and around 300,000 developers actively use their public goods each month to learn, earn, connect and fund what they are doing.

These achievements and ambitions resonate extremely well with ours, and Gitcoin’s substantial experience establishing and growing a DAO are invaluable to us as we embark on a similar journey.

We see this relationship complementing Developer DAO in the following ways:

  • Enabling even more developers to have a voice in the future direction of Gitcoin via allocation of their Governance token (GTC) into the Developer DAO treasury.

  • Strengthen ties between and improve the shared bandwidth of Gitcoin and Developer DAO teams (Moonshot Coordinator, Austin Griffth, Nader Dabit, Cooper Turley, Preethi Kasireddy, kempsterrrr).

  • Collaborating on workshops, events and hackathons with Austrin Griffith and the Moonshot Collective workstream, to further the reach and impact of Gitcoin’s public goods efforts.

  • Co-creating prototypes between Moonshot + Developer DAO that play well with the Loot ecosystem vibes / memes.

Specification

The passing of this proposal would transfer 50,000 GTC to 0x7128f5ff32eD07Ce12E6a9deBE32BB40F9884b3C, Developer DAO’s specified Treasury address.

On the launch of Developer DAO’s governance token, a 5% allocation would be transferred to 0xde21F729137C5Af1b01d73aF1dC21eFfa2B8a0d6, Gitcoin’s multisig address for easier delegation / voting.

Use of Funds

To ensure long term alignment, Developer DAO will hold no less than 50% of the tokens received through 2023 and act as a meta-delegate in the Gitcoin ecosystem.

To ensure long term alignment, Gitcoin will hold no less than 50% of the tokens received through 2023 and act as a meta-delegate in the Developer DAO ecosystem.

Benefits

See “Motivation” section above

Drawbacks

5% of our Governance token will be issued to Gitcoin at launch.

Previous discussion

Note from previous town halls where the Gitcoin partnership was discussed can be found here and here.

Next Steps:

  • Discussion and voting will be open on this proposal for 5 days until 17:00 UTC
  • If the vote passes with a simple it will be elevated to snapshot for 5 days
  • Feel free to ask questions
  • Move to snapshot
  • Support but request changes
  • Oppose proposal

0 voters

18 Likes

One thing I don’t see here is how we plan to actually use the GTC. Will we use it to fund dev DAO hackathons? Guild funding? Is it just to participate in GTC governance?

This isn’t clear and is necessary to make an educated decision. At face value I support a partnership, but the utility of having GTC needs to be clarified and balanced against losing 5% of self-governance before moving forward.

And is this 5% before or after distribution to DAO members? In other words, does this end up diluting our own ownership and self-governance before even changing to a governance token?

Where are the discussions on moving to a governance token as well? This is a big drawback to the current system because it allows concentration of power which may be the end-goal, but something that seems antithetical to how the DAO was originally set up and what a lot of us signed up for.

18 Likes

I think we need to re-evaluate the token amount. 5% is a big chunk and we need to be sure that it’s worthwhile. Not saying 5% for 50,000 GTC is necessarily a bad deal, but it needs to be discussed.

@achilles ’ mention of diluting our ownership should also be taken into consideration. Are tokenomics public yet? Because it’d be interesting where this 5% is coming from - community’s allocation or from somewhere else?

11 Likes

Agree with @achilles.

Perhaps clarification of immediate action or no action with the tokens (perhaps clarification on voting for its use).

I assume that the 5% would be before any members but would be good to know if not.

What stipulations do we have for them holding the 5% (not saying they plan on selling them all off), but if they have a 50% holding requirement, why don’t we have one too or is there a reason for that?

Are there stipulations for revocation of tokens, in case of them as an entity do not abide by the same community rules? (not assuming the worst but valid question). If we did agree to their community guidelines, it would also be ideal that they agreed to ours.

The governance token (I understand not yet defined), will it or will not give more of their members access to the community? There’s definitely a balance between keeping the value of the community and making sure things are free and open to the public.

Dissolution of their entity or their tokens become compromised (lose them to a hack), what would happen to the tokens then?

Restrictions of transfer, do we have any so that they couldn’t pull a lateral move and give a certain amount of tokens to an actor that doesn’t share the same values as the DAO?

Future token acquisitions at rebate, ideally not the case but it’s non uncommon that an entity ask for this, and for that matter do we have such a deal for their tokens?

Restrictions on more token acquisitions, to prevent whale-like behaviour for governance, what measures are in place for that scenario?

These are just a few questions at the top of my head, but would be good to know because I want to make sure we don’t dilute the DAOs value.

12 Likes

I agree with comments above and I think it’s probably a good idea to flush out some of those scenarios/questions since this is more or less a “business” deal. Is there an official legally binding doc issued by both sides wrt to the agreement? What happens if our treasury address becomes compromised. Is the treasury address multi-sig and if so who are the “key holders”?

1 Like

Dang didn’t read this first, forget the multi-sig questions lol

1 Like

What stipulations do we have for them holding the 5% (not saying they plan on selling them all off), but if they have a 50% holding requirement, why don’t we have one too or is there a reason for that?

I think we do have same requirement:

To ensure long term alignment, Developer DAO will hold no less than 50% of the tokens received through 2023 and act as a meta-delegate in the Gitcoin ecosystem.

To ensure long term alignment, Gitcoin will hold no less than 50% of the tokens received through 2023 and act as a meta-delegate in the Developer DAO ecosystem.

As for restrictions on the token, it is interesting, but if we go down that road, we’ll need to have another solution for a multisig or a DAO vote on freezing the assets.

But since Gitcoin is paying $500,000 in GTC, I don’t think it’s in their best interest to act in a hostile way against D_D.

4 Likes

We need some clarification on how the GTC would be used. The Use of Funds should have some information about this.

8 Likes

2.5% could be vested for e.g. 2 years, and the other 2.5% given to them without a vesting period…

6 Likes

Another question that popped up while writing a response in another post, will the $CODE tokens be backed by any monetary value? For example, their value dictated by the amount of GTC we hold in the treasury.

“We want you all to agree to give away x% of something we haven’t agreed upon yet”

No.

First we establish the token and then we vote on exchange with other orgs. Any other approach is forcing us into a blind contract. I think gitcoin is a wonderful thing. I’m also confident that they’ll respect our need to establish ourselves before selling off a percentage.

4 Likes

I think the partnership is great and should be done in the future, but we cannot agree to this while not having our token defined yet.

5 Likes

But since Gitcoin is paying $500,000 in GTC, I don’t think it’s in their best interest to act in a hostile way against D_D.

Definitely agree that perhaps the questions could be rephrased to not seem hostile, but these scenarios are are worth bringing up. It’s not necessarily about hostility but feeling confident you’re going into a relationship with another entity that knows how to answer questions when things could go awry.

$500k is a nice chunk of money, even as a seed amount for equity ratio with no defined evaluation yet. I just want to make sure we’re not selling ourselves short considering if you think about it $500k from 5000 members would only be $100 each, and knowing that the gas price at one point was $200+ for minting. It’s not a far fetched idea to self raise and not dilute our position either, which would put our valuation higher and at that point we would have a better negotiation rate.

Really food for thought, only $100 per member.

8 Likes

First we establish the token and then we vote on exchange with other orgs. Any other approach is forcing us into a blind contract

Yeah, same feelings. Not opposed to the partnership but this should be done after the token is defined and handed out. Not before. If there’s a specific reason for not doing that, I would love to hear it from the core team

2 Likes

Manny has a great point here too. Giving away 5% of our governance so early on, before even the token exists - is it really worth it if instead we could in theory raise that money ourselves? (nearly, if not the same)

Personally, I’d be happy to do so.

2 Likes

I appreciate seeing all of the feedback here.

Regarding some of the comments, here are some thoughts around this proposal:

  1. We should definitely add some more info in the proposal about the use of funds. I think a portion of the funds would probably be used to pay to have at least 2 core team members full or part time, Will K for example did not try to transition to another job and instead has been working full time here (after Gitcoin opened this discussion around funding at this capacity) because at that point we realized there was a viable chance that we’d succeed as a DAO and be able to pay for dedicated members to continue pushing forward what we’re doing. We definitely need to fund the treasury, sooner than later, as we have a couple of people dedicating large amounts of their time here.

When Gitcoin proposed around 1/2 million dollars for 5% so early on (about a month before anyone else gave us much notice) it gave us a lot of the encouragement and confidence we needed at that time to move forward as we have done, as we did not have anyone else that early on offering that type of monetary support. I attribute some of the momentum we have been able to build to the fact that we knew we had the option of being supported by them.

  1. The tokenomics have not been figured out yet, but this would not come out of any community distribution. I think we’re going to propose 30% going to the community (25% + another 5% to early contributors) for discussion and go from there. We should get that proposal out for feedback and discussion asap!

  2. The vote around the governance token itself as not been put up yet, but it’s being proposed we move to an ERC20 (as was originally mentioned from day 1) for a few reasons, mainly being able to open up memberships for more people in the future and having a better primitive for more types of involvement in the DAO, while also doing our best to make it the most fair for the community members who helped get us to where we are (and not rewarding those who intended to abuse the community for speculative purposes). This process is not perfect and the problem of sybil resistance while enabling the most fair involvement in a community is still not something that has been solved anywhere.

  3. The $CODE tokens will not be backed by any monetary value at launch, they are governance tokens.

We also thought that having the opportunity to partner with Gitcoin was very aligned with some of the core principles that we are also working towards - education, public goods, funding OSS, and connecting developers with opportunities and other builders in web3.

I see a fairly large discrepancy between the votes and the comments, I’d love to hear from more of the people who have voted to “move to snapshot” to hear their thoughts to understand what they view as the benefits of this proposal.

I think that having a treasury funded soon is important, and that having at least one dedicated core team member is also important. I personally cannot spend a lot of time on things here as I have a full time job along with a handful of other responsibilities.

7 Likes

If we can raise this type of money we’re 100% open to hearing some ideas!

I know that we can probably figure a way out to get some really great sponsors. If someone wants to put together a sponsorship document / strategy / proposal we can use to put start putting forth to some of the major protocols and projects that would be of great value.

6 Likes

Do you think a different amount or a different valuation makes sense? This essentially puts us at a $10million valuation.

2 Likes

When Gitcoin proposed around 1/2 million dollars for 5% so early on (about a month before anyone else gave us much notice) it gave us a lot of the encouragement and confidence we needed at that time to move forward as we have done, as we did not have anyone else that early on offering that type of monetary support. I attribute some of the momentum we have been able to build to the fact that we knew we had the option of being supported by them.

I, along with many community members I assume, were not aware of this, which gives the current proposal a lot more weight. If Gitcoin hadn’t offered 50,000 GTC, then D_D might not have progressed this far and I think we as a community need to take note of that and appreciate their trust & proposal due to it being very early on when nobody was sure what would come out of this DAO and they were the ones who were willing to give the DAO a shot, partnership wise.

After I wrote my comment, I worked out the valuation & thought about it and we’re still very early, a lot of things need to be worked out & worked on. This half a million dollars would bootstrap the DAO and fund the infrastructure. That’s why I think it’s important to calculate how we can use these funds to better the DAO’s infrastructure - What is the cost of 2 full-time members? How long will they be contracted for? What are their responsibilities? Can we hire more full-time members for the DAO? What can we build with 250k? etc.

All-in-all, I think it’s important for us to have a specific plan regarding how the funds will be used (obviously no less than 50% will be held by the treasury, but what about the rest?).

8 Likes

i agree we have our token then cooperate~~