Thanks for the questions @fabiengiraldi and @letsraave.
What was the tangible impact of previous grants program?
One third of Aave’s current active service providers started out contributing to the Aave ecosystem through AGD. Llama and Chaos Labs both received grants before becoming full-time contributors (see AIP 104 and 113) alongside other full-time contributors: bgdlabs, Gauntlet, Certora and Sigma Prime.
AGD has provided 168 different grants as of mid-November mainly to fund ‘Applications and integrations’, ‘Community (marketing and educational)’ and ‘Committees & DAOs that serve Aave’s ecosystem’ (see a full breakdown in the first image from the top post). Looking at the status of all grants distributed:
- 51.8% of projects are currently live or the work is complete
- 38.1% of grants are in-progress
Notably when calculated based on dollars distributed opposed to the number of projects, the combined figures increase to 91% with:
- 58.5% live or complete
- 32.5% in-progress
Going forward our aim is to increase the combined total to 95% or higher. On top of providing the ecosystem with a direct benefit to Aave, these grantees also form a pipeline of individuals and teams to become long term contributors to Aave and direct contributors to Aave DAO.
To summarize some of AGD’s tangible impact since inception:
- Received 1336 applications and approved 187 different grants
- Awarded $124,000 across 39 different prizes at ten hackathons
- Pushed forward initiatives outside of grants funding including setting up the Aave Guardians, facilitating bug bounty payments and advocating to receive OP rewards
See below for where we can improve on tracking the impact from grantees.
I think it’s important for us to identify areas where we can improve before we allocate a larger budget.
Below are some areas AGD has fallen short in the past, how we have decided to tackle them and other plans we have for improvement. I’ll also highlight that we are proposing a 33% reduction in budget compared to our previous proposal, not an increase.
To focus first on rAAVEs, although we do see them as a strong tool for community growth and creating Aave’s culture as outlined in our proposal, they are a luxury to host and should be done sparingly. This proposal includes one rAAVE that is co-hosted with Aave Co, accounting for less than 5% of the total proposed budget. Moving forward we believe roughly one rAAVE every 6 months is an appropriate cadence.
Grantee completion rate. Although we set specific milestones with grantees and in some cases tranche out payments based on completion of milestones, there are some grantees that have failed to deliver on their agreed upon milestones with high quality results. This August we hired an analyst to act as the main touch point between AGD and the growing number of grantees to support milestone completion and high quality results. As noted above, when calculated on a dollar basis, 91% of grantees are currently either live, completed or in progress. Moving forward we want to increase this number to 95% or higher.
Tracking impact from grantees. We want to do a better job of aggregating the impact of all grantees, especially in regards to tracking ‘Growth in Aave pools driven by applications funded via grants (e.g. increased TVL, borrow activity, and unique addresses due to apps funded by grants).’ While we have tracked this individually for some grants, we have yet to capture a full and up to date picture of the activity all grantees have generated. Tracking the status of each grant awarded (noted above) was the first step and over the coming months we will work to collect, aggregate and share more metrics around the activity generated with the community.
Grantee value-add. We can do more to support grantees with marketing, connections to auditors and other areas beyond providing capital.
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In terms of marketing we have grown an audience of Aave fans and users across different socials to help amplify grantees to a relevant audience including through our newsletter, community calls and dedicated Twitter Spaces. Lately there has been more demand to feature grantees in front of the Aave community so we are going to revamp the community calls to include a longer format spotlight on more grantees.
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Currently with regards to auditing requests, we will help make one off connections when teams reach out. Going forward we want to standardize the process and look to make partnerships directly with auditing firms where possible.
No action after receiving OP rewards. Earlier this year we created a proposal and successfully received 300,000 OP tokens as part of phase 0 of OP Stimpack. The tokens are to go towards funding projects to help grow Aave on Optimism. We have yet to distribute any OP tokens as we have focused on distributing aUSDC and AAVE that we received from Aave DAO. However, this has not stopped us from providing grants to projects building on Optimism including: analytics from DappLooker and Block Analitica, integrations with Mean Finance and Layer3, and native apps like Pegasus Finance and Lyra Finance. We plan to make a proposal to the community on how the OP rewards should be distributed in the New Year.
Staying on top of ecosystem updates. With many different contributors and active projects across Aave, it can be difficult for reviewers to know what features and changes are currently being worked on. This can cause uncertainty over whether a certain application or area is worth funding and can lead to funding grants for duplicative work in the ecosystem. We will continue to try our best to keep up with everything that is publicly shared by contributors and open up lines of communication with contributors to get clarity where needed.
Leveraging existing grantees. We have funded a talented and diverse group of contributors but have been limited in our engagement with grantees outside of the grant process. There is an opportunity to take advantage of AGD grant recipients to help decentralize AGD by involving grantees in the review process, making a space for grantees to connect and uncover mutually beneficial opportunities, and unlocking other areas grantees can support AGD such as at events.
- Three of the current seven members on the review committee are former grant recipients. We want to explore other tools and ways to involve other grantees in the review process.
- As mentioned in success stories, we partnered with Gateway DAO to release an exclusive NFT for all grantees and have created an exclusive Telegram channel. We hope this will be the start of growing a vibrant and engaging community of grantees that can be a key resource and differentiator for AGD into the future.
Grant process delays. Grantees have faced negative experiences arising from applications being left un-reviewed for a significant period of time, grantees waiting to receive follow up after an interview, as well as payment delays after receiving confirmation of their grant. We are constantly looking for areas to update and improve our processes such as moving to a set cadence for payments and increasing automations in the process flow. We have also looked to improve communication along the way and better set realistic expectations about the process timeline with applicants. Our average monthly time to initially review applications (image below) has significantly improved over the past year. Since July 2022, it has been less than 7 days on average between submitting an application and getting an initial response. We will continue to work to reduce times throughout the grant process and increase communication with grantees where possible.
