Compound Interest

You may have heard through the grapevine that we recently partnered with Compound to revitalize their grant program. We worked very hard to propose our approach and take feedback from the community in their forum. You can read the proposal in its entirety at the link below:

To say we're excited about this development is an understatement. This achievement results from many months of hard work and lessons learned from builders and our partnered grant programs. If that interests you, you can check out some of the lessons we learned from our early partnership with Polygon DAO.

Beginnings

So, where did all of this begin?

For starters, our approach with CGP 2.0 involves an interesting new approach to running community grant programs called Delegated Domain Allocators or DDA. DDA was first mentioned in this report by Ethereum Foundation as a means to make grant programs more decentralized. This involves identifying and empowering active community members with domain expertise to run their programs for that domain on behalf of the foundation.

DDA is an alternative to the more traditional committee-based grant programs. While these committee-based programs can be effective, they become more challenging, specifically for Protocol DAOs, due to the distributed nature of their work and the broad span of expertise that could be needed to cover all the facets of protocol or community development.

DDA is set up to empower individuals, teams, or groups within the community to make decisions with reasonable autonomy while ensuring that the community has visibility into the grant decisions made. The rationale is that it allows the DAOs to become more agile with their grant-making while maintaining a level of oversight and accountability to the broader community. With this autonomy also comes skin in the game, and this was very important for us in how we envisioned DDA being successfully implemented.

We knew that DDA would be a viable alternative, so we started to put the work into developing the approach with our platform. We began to look around the space, specifically at Protocol DAOs. We noticed that Compound had recently shut down its grant program, and we thought that might be an opportunity for us to engage and see if they would be interested in entertaining the DDA model.

Community Engagement

What did engagement with the community look like?

Well, it looked like our co-founder, Harsha, was reaching out to many different stakeholders and asking their thoughts and opinions on the previous model and what a new program might look like.

Harsha used the CGP 1.0 forum post as a guide for whom he should engage and organized more than a dozen meetings with these community stakeholders and Compound team members to understand their thoughts around CGP 1.0 and what desired traits of a new program might look like if CGP 2.0 emerged. Harsha also started attending the developer calls, taking the draft of what we were developing, and gaining consensus among the team members.

Along the way, we met Adam Bavosa, Compound's Community Manager. From the initial stages onward, Adam has been instrumental in helping to guide and provide advice on how best to work within the community. Given the decentralized nature of how Compound operates, it was beneficial to have his support as we worked within the context of their governance process to propose DDA.

A special thank you to all that participated in those early conversations. There was strong support around the idea of DDA, further strengthening our resolve to develop an initial proposal.

The Proposal

After hearing the feedback from multiple community members, we knew this was worth the time and effort to pursue.

We developed a comprehensive proposal outlining our approach to DDA and how it would be implemented for CGP 2.0. We crafted this by combining lessons from our early work with Polygon DAO and conversations with the Compound community.

The proposal outlined how DDA would work, how it would be governed, and what activities a successful program would take on. The proposal saw a lot of engagement from many different team members, and we made sure to be responsive to any questions and concerns as we honed our approach based on their valuable feedback.

As the proposal started to gain acceptance, it was apparent we needed to move to the next step of selecting who in the community would be filling the roles of Domain Allocators. Initially, we wanted to see Compound Labs serve some of those roles. Still, due to Compound's ethos of decentralization, they have strict rules in place that prevent members of that team from participating in the work of the Protocol DAO.

After some help from the Compound Team engaging the community, we were able to round out the list of Domain Allocators; you can find this information in the proposal mentioned earlier.

Now that we have the initial group of Domain Allocators in place and the proposal has seen good reception from the community, we are ready to engage the token holders. We identified token holders with 400K+ votes and started to engage and set up calls if they were open to meeting. These were some great conversations where we took the time to review the proposal and explain our approach. Many had questions about legal considerations (about the foundation and legal entity managing the grants). A special thank you to eaglelex (a friend we made through our work with Polygon DAO) for his assistance and guidance in helping to address these questions.

The last step in this journey before a formal post in Compound Governance was whitelisting. Whitelisting is a process that allows for someone to submit a proposal that doesn’t hold more than 1% of $COMP, as that is a requirement for Compound Governance. Again, we drew upon help from our old friend, Adam Balvosa, as Compound Labs can grant whitelisting through a process that seeks approval from signers on their multi-sig.

It was starting to feel like we were nearing the end. We prepared our proposal in markdown (a bit more challenging than anticipated) and posted it. Proposal #136 was now live and up for voting by the community.

As we saw the results roll in, we were floored by the support and felt justified in all of the work that had been applied up to this point to make this proposal a reality. We believe this is only the beginning, and we look forward to watching the DDA model impact the Compound Community and its grants program. We hope that our story inspires more people to come on board and join us as we explore the idea of DDA.

Closing

At Questbook, our mission is to make grants more accessible to builders of all kinds while allowing flexibility and choice to grant programs on how they can use our platform to meet their individual needs.

If you might be interested in applying for a grant from Compound, please join their Discord and send us a note in the #grants channel or watch the Compound Grants Twitter account for announcements.

If you are interested in looking at DDA for your community grants program or learning more about Questbook, we would love to hear from you. Connect with us on Twitter; DM's are open.