Aave Grants DAO Update & Renewal

Governance
1

Overview

Since launching in May 2021, Aave Grants DAO has awarded over $4,395,000 in grants to teams building on Aave or contributing to the ecosystem. Aave Grants has also been a key driver of growth by awarding over $120k in Aave bounties across ten different hackathons, hosting three rAAVEs, and making other sponsorships to help proliferate the ghost. We are proposing to renew the program for the next two quarters by providing $4 million dollars ($2 million per quarter). See our initial proposal, our second proposal from November 2021, and our latest renewal proposal from May 2022.

Mission

Aave Grants DAO (AGD) is a community-led grants program, focused on growing a thriving ecosystem of contributors within Aave through funding ideas, projects and events that benefit the ecosystem. We aim to drive development on top of Aave and ensure a constant influx of talented builders to maintain Aave’s long term growth. We help build culture and community around the Aave ecosystem that in turn attracts the best contributors.

Background and Progress

This is the fourth proposal for AGD:

● The initial proposal launched AGD with $1 million of funding over two quarters, from May to October 2021.

● The second proposal was executed at the end of December 2021 and funded AGD for an additional three months with $2 million of funding.

● The third proposal was executed at the end of May 2022 and funded AGD for an additional six months with $3 million per quarter of funding.

AGD is one of the most successful web3 grants programs, as recognized in posts by Gitcoin and Sovereign Capital.

Since our last proposal we have observed three shifts from the Aave DAO that influenced how this proposal is structured: an increased focus on events, the Aave DAO entering into several long term agreements, and increased prudence from the community on treasury spend.

Events and Sponsorships

First, events and sponsorships have become an increasingly important part of AGD.

Using the events we outlined in our last proposal as a guide, AGD had a large presence at Permissionless, ETH Amsterdam, ETHCC and DevCon. AGD collaborated with the Aave Companies to create memorable experiences at each of these events. Along with the main conference, we hosted a side event with aligned partners to better engage with attendees and connect our communities.

High quality and quantity of Aave branded swag has become a staple at events AGD sponsors. Ask anyone who attended, and they likely left with a shirt, cap, and/or bag that is beautifully branded with the Aave ghost. Distributing swag is a unique way to stand out from other companies at events, engage and reward developers, and help proliferate the ghost with the most passionate community members.

The other staple Aave has become known for is the rAAVE, which we have hosted in Amsterdam, Paris and Bogota. rAAVE’s continue to be an important pillar and another key differentiator for Aave’s brand. rAAVEs help strengthen Aave’s culture and grow the community.

A key learning from our experience hosting events is the importance of developers or other knowledgeable team members to engage with attendees. We would like to continue working with the Aave Companies to have appropriate team members at events as well as look to expand participation to include other ecosystem members such as BGD. Notably, we have hired an Events Coordinator to continue pushing Aave’s presence at ecosystem events forward.

The importance of events and sponsorships will increase with the upcoming launch of GHO. Events and sponsorships can create widespread awareness amongst the community, increase the number of integrations and use cases and overall impact developer and community mindshare. All of these can be crucial in increasing GHO’s chance of success, especially early on. As such, we are planning to be a large supporter of GHO once it is live.

GHO is important to support as it offers large potential for Aave DAO in terms of revenue generation and becoming a flagship product in the ecosystem. We plan on creating a well structured launch to create a strong first impression and fuel initial developer momentum.

Beyond funding grants to teams building on GHO, we will also fund conferences and marketing initiatives to help GHO become widely known, as well as hackathons to foster new ideas and attract developers to start building with GHO. See more about events in the section below, including some of the specific events we are already planning to support GHO early on.

Long Term Service Agreements

Second, Aave DAO has entered into several longer term service agreements with third party providers. Each provider has a scope of work and focus on a core competency for the Aave DAO: BGD focuses on protocol development, Llama focuses on growth and treasury management, Chaos Labs focuses on risk, and Certora and Sigma Prime focus on security. In the past AGD has given grants to teams building across each of these areas.

With many of the agreements with these service providers lasting through our proposed term (six months), AGD will place more scrutiny on funding grants in these areas. The AGD should be flexible, evolving with the full time contributors voted on by the community to serve the Aave DAO. AGD aims to place a larger focus on grants outside of the scope of any third party service provider, and reduce the focus on grants if the scope is already covered by a team.

For reference, the following is a historical breakdown of the distribution of ‘Grants Awarded by Category’ since our last proposal:

Treasury Prudence

Third, we have seen more prudence around the Aave treasury including a desire to spend stablecoins to preserve AAVE in the treasury. As such, we have proposed to receive 70% USDC and 30% AAVE. This ratio is also inline with other recent proposals. Stables have primarily been used for event sponsorships, and we recently began giving grants in USDC as well. We believe receiving AAVE helps to align incentives for compensation and some grants.

See a full list of grants and events funded on our website. We distribute grants based on completion of milestones. For larger grants, we typically have three payment tranches: an upfront payment, a payment on completion of the first milestone, and a payment on the completion of the project. We follow up with projects where needed to check on their progress.

We have checked in on the status of each grant we have distributed so far. In total, from 168 grantees (from May 2021 to November 2022):

● 51.2% Complete or Live

● 38.7% In progress

● 10.1% Inactive or Unknown

Notes:

Since grants are given with milestone based payments, some inactive projects have only received a portion of their total grant. Some inactive projects fully delivered on their grant, ran the project for a period of time and then decided to shut down for various reasons. In the majority of cases, the code has been open-sourced and is available for anyone in the community to use.

Read more about AGD’s recent work with monthly updates from 0xmigi starting in July 2022. These will continue to feature new grantees, updates on AGD’s budget and highlight other milestones or relevant information for the community. Please respond with anything else you would like the monthly updates to cover.

Success Stories

Since our last proposal in May 2022, we have awarded 122 grants. Some of the success stories over this time include:

  • rAAVEs
    • AGD has hosted rAAVEs in Amsterdam, Paris and Bogota since our last proposal. These have been headline events at the respective conferences and are a unique way to bring the Aave community together and strengthen the culture around the ecosystem. The most recent rAAVE in Bogota was featured in The Economist, highlighting the reach and notoriety the rAAVE brand has earned.
  • Hackathons
    • Since our last proposal AGD has awarded $67,000 to 22 different teams across six hackathons. One team went on to receive a grant for continuing to develop and grow their hackathon project into something beneficial for the community. This brings the total to four teams since inception who have won AGD bounties at hackathons and gone on to receive further grant funding. You can explore all AGD hackathon winners on our website.
    • Since our last proposal we have sponsored four different ETHGlobal hackathons (two in person & two online). Where needed, we would engage with the Aave Companies and other ecosystem players to support creating bounties, providing technical support, judging and more. After each hackathon, we would have a retrospective and identify areas to improve for the next event.
  • Grantee to direct Aave DAO service provider
    • Both @ChaosLabs and @Llamaxyz started contributing to the Aave ecosystem by receiving grants from AGD and then became full time contributors (see AIP 104 and 113). Both of these are an example of how AGD can fund teams early on while they make their first contributions, form different connections and begin building a reputation in the community.
  • Risk dashboards
  • Applications and integrations
  • On-chain credentials
    • Together with Orange Protocol we launched a set of AGD reputation based NFTs that allowed users to mint three different NFTs based on their Aave activity including protocol usage and governance participation. In total, over 3,700 different eligible addresses claimed an NFT. This offered a unique way for AGD to attract a new community to Aave and reward existing governance voters and Aave protocol users.
    • We partnered with Gateway DAO to release an exclusive NFT for all Aave grantees. This will help build connections between grantees, enable us to better leverage and reward the grantee community, and allow other ecosystems to interact with grant recipients.

People

Our big update on the personnel front is that Shreyas is transitioning out of AGD and Bill will be taking over as lead. Shreyas has done a phenomenal job setting up, leading, and scaling AGD. Notably, he helped set processes to scale effective grants distribution. AGD is one of the best grants programs today, and we thank him for his contributions.

Bill has added a ton of value to AGD. He brings useful experience leading events, coordinating with various Aave stakeholders, and communicating to the wider community. AGD is in good hands with him as lead. To help with the transition, Shreyas will stay close to AGD to offer advice and assist where needed.

AGD now has eleven members.

  • Lead. Bill will become the new full-time lead of the grants committee, focusing exclusively on AGD without other commitments. Bill will oversee the growth of the team, the distribution of grants, and making sure AGD meets the strategic needs of Aave DAO. Bill will also continue some of his previous duties as community manager, including producing a weekly newsletter (Aave News), maintaining the Twitter account, and coordinating other community initiatives, including community calls and ecosystem AMAs.
  • Review committee. The Review Committee is made up of:
    • Corbin Page - Paymagic, ex-ConsenSys
    • Calvin Chu - Impossible Finance
    • Francis Gowen - Flipside Crypto
    • Lawrence Mosley - Omni Analytics
    • Kakashi - Symphony
    • Andrew Allen - Coinbase
    • David Truong - APWine, ex-Aave Companies Genesis team dev
  • Operations lead. Neil has streamlined the application process, manages payments, KYC, and other administrative tasks. This position will be moving from a stipend to an hourly rate.
  • Analyst. Migi joined in August to become the main touch point with current and future grantees to help find opportunities AGD can support and track the returns generated. Migi also provides monthly updates on the governance forum.
  • Events Coordinator. Cree is the most recent addition to the team and will be leading events going forward to deliver exceptional experiences for hackers and Aave fam. See more in the Events & Sponsorship section.

Aleks and BGD will be stepping down as reviewers after multiple quarters of support as reviewers. Thank you to both of them for their contributions to AGD.

Compensation:

  • Lead: $9k/month
  • Review committee: $150/hr, capped at 10 hrs/week
  • Analyst: $5k/month
  • Operations lead: $150/hr capped at 20 hrs/month
  • Events coordinator: $3k/month
  • Designer: one-off based on specific design engagements

Recruitment

We will look to add one new reviewer to the team. Reviewers judge applications, interview candidates, fill out feedback forms and in some cases present progress to the Aave community. If you are interested, please respond to the forum post below with the following information:

  • Describe your involvement in the Aave ecosystem
  • What skills/experience do you bring to the committee?
  • Can you commit between two and ten hours a week?

Metrics

  • Number of grants given out
  • Note: this does not include hackathons, events, and sponsorships
    • May-Aug 2021: 12
    • Sept-Nov 2021: 19
    • Dec 2021-Apr 2022: 32
    • May 2022-Nov 2022: 122
  • Growth in community engagement since our last renewal proposal (April 2022):
    • Substack subscribers: 1,511 → 1,748 (+16%)
    • Twitter followers: 6,930 → 13,300 (+92%)
    • Telegram members: 595 → 643 (+8%)
    • Lens followers: NA → 2,828
    • Mirror subscribers: NA → 169

We have received and given out an increasing number of grants over time. Most of the applications received and funded were in the “applications and integrations” category. This was due to primarily funding developer grants. However, over time we have been funding more events and community projects. Shoutout to Lawrence from Omni Analytics for creating the charts below.

Note: the steep drop off in grants received during December is due to pulling this information at the beginning of the month.

Proposed Budget

Proposed Budget (2 Quarters)
Outstanding Owed to Grants $0
Expected Grants to Award $1,800,000
Grants Total Budgeted Cost $1,800,000
Outstanding Owed to Events $0
Event Sponsorships, Hackathons & Bounties (including rAAVEs, SWAG and other event production costs) - see below for a full list $1,348,651
Digital Marketing $500,000
Sponsorships Total Budgeted Cost $1,848,651
Compensation $240,000
Maintenance: Tooling, subscriptions, gas reimbursements $20,000
Legal Buffer $90,000
Operations Total Budgeted Cost $350,000
Total Proposed AGD Budget $3,998,651

We have included a line item to set up an entity pending legal review. This will allow AGD to enter into contracts for certain sponsorships and help to protect AGD contributors.

Events & Sponsorships

Below is a list of events we have identified for AGD to host or sponsor in Q1 & Q2. This includes providing Aave branded swag for conference attendees where appropriate and costs to sponsor side events with partners to better engage with strong communities. The list is just to serve as a guide and is not comprehensive of every single event AGD will participate in. Given the nature of events, not all plans and details are available currently so it is important for the team to monitor key factors and connect with key stakeholders leading up to events. Any changes made or other events we participate in will be communicated in our monthly updates on the governance forum.

Event Date Location Notes
ETHDenver March 2-5 Denver This will be the main large-scale activation from AGD in Q1. It is a great opportunity to promote GHO to a relevant audience. As this is a very popular event and space fills up quickly, we have been proactive and locked in a sponsorship slot.
ETHGlobal Asia April 14-16 Tokyo Depending on the progress of different features in V3 such as Portal, this hackathon can be focused on driving development to those areas and continued development on GHO.
Consensus April 26–28 Austin A top-tier crypto conference focused on a more general audience with the focus of getting more mainstream attention on GHO.
ETHIstanbul May 26-28 Istanbul ETHIstanbul is a large developer hackathon to further attract top teams and contributors to build on GHO and Aave. There has been a growing community of developers in Istanbul and we are excited to sponsor an event in this next hot spot.
rAAVE TBD TBD We will aim to co-sponsor one rAAVE with the Aave Companies somewhere in the first half of 2023!
Exclusive GHO Hackathon and AGD Summit with ETHGlobal TBD - upon launch of GHO Virtual Once GHO launches, this hackathon will kickstart creating new innovative use cases for GHO, teams building on GHO and starting a funnel of new grantees.

AGD Events Policy

The following outlines the goals of AGD event activation, how AGD chooses which events to attend, and AGD engagement at these events.

Goals of event activations

The goal of sponsoring events is to help grow the Aave ecosystem by proliferating the ghost (more on this below), attracting and retaining the best contributors to the Aave ecosystem, and encouraging the development of new ideas to be built in the Aave ecosystem.

  • Proliferating the ghost: Strengthening the culture around Aave to make it a top ecosystem devs think of to build on and the first place consumers think of when deciding where to transact. AGD supports this by having a large presence at major events, including supporting the production and distribution of Aave branded swag at events and partnering with strong communities through side events to better connect Aave into other ecosystems.
  • Attracting and retaining the best contributors: By helping to promote new products from the Aave ecosystem and supporting builders through grants we can ensure Aave is a top choice for developers. Through the last proposal we have better connected with existing grantees and hope to offer additional social perks where we can, especially at AGD hosted events like rAAVEs.
  • Encouraging the development of new ideas to be built on top of Aave: By sponsoring and offering bounties at hackathons and other development focused events, AGD can incentivize teams to provide unique solutions to an array of use cases that support the Aave protocol. For example, during ETHOnline in September 2022 we incentivized hackers to build applications that grow stablecoin deposits, develop alternative front ends, leverage new features like eMode and credit delegation, and more.

Over the course of this proposal, AGD will aim to sponsor the events listed in the schedule above. That said, especially for events into Q2, details are still being finalized or are subject to change. We will continue to monitor the events landscape and make any changes if necessary. Any of these changes will be communicated through our monthly updates in the governance forum.

How AGD chooses events

When choosing who to partner with, AGD will consider a range of factors. One main factor will be alignment to the Aave ecosystem. AGD will especially look to partner with strong communities, not measured by their reach, but rather if they’re a dedicated community who have the potential to become long term partners and contributors to the Aave ecosystem.

High level, the benefits from events AGD sponsors can be split into three categories:

  • Branding
    • Exposing people, especially builders, to AGD and new products from Aave. In the past year V3 has been the focus, moving into 2023 the focus will be GHO and other new features.
    • Spreading Aave culture by proliferating the ghost. Including by aligning with strong communities, hosting the signature rAAVE, and distributing Aave branded swag to passionate users and contributors.
  • Technical talent and new projects
    • Sponsoring hackathons and technical workshops to promote the development of new projects and spread knowledge amongst developers.
    • Awarding bounties to builders on Aave to attract, support and encourage new contributors.
  • Community building
    • Partnering with strong communities during events to create unique experiences and help connect Aave with aligned partners.
    • Offering opportunities and perks to Aave contributors and grant recipients to reward and retain the best talent.

How AGD engages at events

At all AGD sponsored events, there should be at least one member of AGD who is there to lead the event activation, represent the interests of AGD and serve as a point of contact for all things AGD.

Other people from across the Aave ecosystem can also represent AGD at the booth or in other capacities at an event. These include members of the Aave Companies, different ecosystem contributors such as BGD or members from past grant recipients. In all cases, anyone representing AGD has to be vetted by the AGD team beforehand so the team can ensure a high degree of professionalism, accountability, and knowledge of Aave.

AGD members, AGD reviewers and other people who staff the booth or otherwise support AGDs sponsorship may receive priority access to conference tickets received from the sponsorship (or other perks offered). However, only AGD members are eligible for compensation through AGD for travel expenses. There will be no compensation for expenses such as flights, hotels or meals for people outside of AGD.

Next Steps

  • Get input from community
  • Move to a Snapshot vote
  • If positive temperature check, move to AIP
18 Likes
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I support this proposal with the relevant changes and look forward to AGD’s continued catalysing of the ecosystem.

Thanks Shreyas for all his work in setting up AGD, he has definitely made a mark on AGD and the Aave community. Also very excited that @0xbilll has taken on the responsibility of leading AGD into the next phase. He has shown a lot of skill and commitment to AGD and i have full confidence that he’ll do an awesome job. :clap:

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Hi Bill and Aave Grants Team :wave:,

Thanks for sharing this great overview and update. As one of the previous grant recipients, I’m rooting for and excited to see what’s next for this great ecosystem. Besides that, I see this update as an opportunity to put myself forward as a candidate to fill up the spot on the review committee given my connection to the ecosystem and my skills and experience. Below some details:

  • Describe your involvement in the Aave ecosystem
    • Co-founded the Yieldgate project which was the first project to use Aave’s protocol enabling users to stake assets and have the generated yield be claimable by a dedicated beneficiary. This allows for a multitude of applications ranging from yield-gated content to no-loss payments, donations, investments (NFT minting), bug bounty pools (e.g. for security researchers), subscriptions, and DAOs. Yieldgate is a recipient of the Aave Grant Foundation and also received further grants from The Graph, Toucan Protocol, etc.
  • What skills/experience do you bring to the committee?
    • +2 years as a Product Manager at Santiment, the first crypto analytics player running its own node infra, cleaning and standardising the data to build metrics (i.e. integrated with Bitfinex + built SANsheets)
    • +3 years as a VC investor at leading Silicon Valley venture funds where I saw/see crypto deals on the daily
    • In the crypto space since 2016, having invested into Kraken and also actively participating at several hackathons (have a closet with plenty of Aave swag ;))
      • ETHBerlin winner/finalist - prizes from Dune
      • ETHAmsterdam winner/finalist - prizes from ETHGlobal, Coinbase, Aave, Polygon, and WalletConnect
  • Can you commit ~5 hours a week?
    • Yes, can go up to Âą10 hours a week

Being a direct recipient of an Aave Grant, I see the reviewer role as a unique opportunity to give back and put my experience to work for the benefit of the wider ecosystem. Besides that, with my VC experience and deep knowledge of the space, I am certain I will be able to hit the ground running and be a great asset to the review committee.

Happy to hop on a call and share more about my background. In any case, excited to see what’s next for the Aave Grants DAO in 2023 and contribute to its success.

Cheers,

1 Like
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Overall I am in support of renewing the Grants DAO, but had two questions that I think the community should get more color on:

  1. The Grants lead compensation has changed drastically. While @0xbilll working on this full-time with no outside commitments for $9,000 per month ($108,000 per year) sounds incredibly reasonable, this calls into question the prior lead’s compensation of $150 per hour capped at 30 per week ($234,000 per year), which is over twice this amount for someone who seemingly had other commitments. Do we have a breakdown of how many hours were worked and how much was paid for this work? My optimistic take is this new budget is in line with prior payment records, but would appreciate more information to confirm.

  2. Beyond this, does the GrantsDAO have a more detailed cost breakdown of how prior budgets were used and what funds were leftover, if any? For an $8m annual cost, which is more than most Series A companies, the community should expect some level of detailed reporting on where this money is going and how spend compares to what was budgeted. Maybe @llama could help in this regard under their existing engagement?

Excited to see the continued growth of this program, but hope that there will be some structure in place for community visibility on expenses outside of just the Grant Awards.

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Hi @float, thanks for your support to continue AGD.

We have a detailed breakdown on our website that we update with spend on grants, events and operations.

In terms of the lead compensation, you’re correct - the new compensation is based on what was historically paid to the lead and the updated scope of the role.

The compensation for the previous lead was the max amount that could be paid. Over the course of the last proposal, the lead was paid $6k/month between June and September, and $0/month between October and December as the lead voluntarily stopped accepting compensation during these months.

Maybe @llamaxyz could help in this regard under their existing engagement?

Llama is working on creating a real-time dashboard that will let the community monitor and explore AGD spend. In the meantime, I pulled AGD’s spend (including some pending transactions) since May and compared it with the budget included in AGD’s previous proposal:

Budgeted Cost Actual Spend
Grants $3,055,000 $2,663,303
Sponsorships $2,418,500 $1,658,387
Operations $347,000 $245,569

Actual spend for Grants and Sponsorships is lower than the amount budgeted as we received 50% of our funding in AAVE. Since May, the AAVE price has declined ~38% from around $90 to $56 at time of writing. As we have paid out grants since May, many payments included realized losses on AAVE compared to when we received it.

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Thanks for the clarity and I appreciate the links on transparency, would you consider adding invoices or documentation for major line items in the future? Certainly not making accusations of wrongdoing by the Grants DAO in the past, but, with the happenings of FTX, added layers of transparency on spending and counter parties would always be appreciated!

On the budget vs. actual, can you break that down in USDC/AAVE tokens to show what if anything was leftover from the last grant outside in token terms and how that breaks out?

Lastly, how do you view the KPIs defining success of the grants DAO moving forward?

1 Like
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Happy to help. I definitely agree transparency is key to strengthening trust in the community. We don’t typically receive invoices as AGD currently does not have an entity who invoices can be addressed to. Once an entity is set up, this is certainly something we can consider sharing if the community desires and the other party agrees to have the information public. One potential concern would be some providers’ willingness to have the information shared and the operational effort involved. That said, we could definitely look into it.

can you break that down in USDC/AAVE tokens to show what if anything was leftover from the last grant outside in token terms and how that breaks out?

In total from the last proposal we received 22,341.38 AAVE and $3M USDC. After the pending payments (all USDC) are sent, the AGD treasury will have 11.12 AAVE and ~265,000 aUSDC remaining. The remaining USDC is set to cover operating expenses, continued distribution of grants (we pride ourselves on rolling applications!), events where commitments were already needed, and as a buffer for future grant tranche payments.

how do you view the KPIs defining success of the grants DAO moving forward?

I view the success metrics as those outlined in the initial AGD proposal:

  • Number of long-term contributors to Aave that were initially funded with grants
  • Growth in the number of grants applications received quarter-over-quarter
  • Growth in the number of projects, ideas, and events funded
  • Growth in community engagement (e.g. increased activity on forums, Discord, etc.)
  • 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)

Going forward, tracking projects building on GHO and other metrics related to helping drive the growth of GHO and the adoption of other new features will be important to track. We will work to define these and can follow up with the community closer to the launch of GHO and other features.

One thing to note is that for some of these metrics it can still be early to fully measure the impact, especially when considering the hurdles and longer development times many financial apps face. Take Atlendis Labs (formerly L2P.Finance) - a decentralized credit protocol where the default yield source for LPs is Aave. They received one of the first grants from AGD around July 2021 and launched V1 of the protocol earlier this summer.

1 Like
8

As a previous grantee (Buckets), I can only support this proposal!

AGD has been insanely helpful in the development of our product, enabling a faster development with better technologies. Half a year later, we are ready to beta launch, with Aave as the first and main integration in the protocol.

Depending on the success of Buckets, this could provide additional liquidity to Aave. I believe AGD greatly contributes to the growth of the ecosystem.

3 Likes
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I fully support season 4, but I think it’s important for us to be more self-critical before going for a snapshot vote. This post mentions the highlights of the previous seasons, but it doesn’t address the shortcomings. I think it’s important for us to identify areas where we can improve before we allocate a larger budget. I’ve seen the folks at Optimism do a thorough and honest review of their last season, calling out all the ways it was failing, and using that as an opportunity to make their current season better. I think it’s important for us to do the same. In short, I don’t believe there were no shortcomings in the previous 3 seasons of ADG that we can learn from.

2 Likes
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This sounds like an elaborate proposal to fund raave parties. What exactly was the tangible impact of previous grants program?

Number of long-term contributors to Aave that were initially funded with grants

Despite spending millions of $$s, why is this metric not growing? What are we doing different this time? We can’t expect things to magically change by just repeating what we did in the past.

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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.

  • 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.

  • 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.

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Hi everyone - we have posted the proposal on Snapshot. Voting starts tomorrow (Jan 4th) morning EST and will run for 5 days. Snapshot

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Penn Blockchain is in full support of this. Being a past recipient, we see the value this provides and thanks Shreyas for all his past work. We’re looking forward to @0xbilll and are confident he’ll lead the team well.

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Congratulations on the work thus far.

It has been a pleasure to work with the team from Aave Grants DAO and a great experience working with @0xbilll @daveytea @0xmigi @corbpage as I did my research report.

I do have some questions I would like to add to the mix here that I would like to understand better:

  1. What makes great reviewers for this cycle? What are your criteria for picking someone to join the team?
  2. Can you describe the tooling and infrastructure used today to support the grant lifecycle (Notion/Airtable/etc.)? What are you happy with, and what do you feel could be improved?
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We would also like to formally apply to become a reviewer for the Aave Grants DAO.

Describe your involvement in the Aave ecosystem: We have worked with many teams to help cosponsor and draft proposals, most recently being the Certora AIP and the deploy V3 on Celo discussion post. In the past, we have received an Aave grant ourselves to look into ways of increasing Aave governance participation. We have been delegates for Aave for about 1 year and a half now, and from the delegate standpoint, we have been very active with our current ~90k Aave delegation.

What skills/experience do you bring to the committee?: Team members have been in similar grant reviewing positions in the past. We have worked for Near Protocol, Uniswap Foundation, and other web3 related grant teams. We have also received a few governance related grants ourselves and are very familiar with good and bad characteristics for the grant application process. We are an active delegate in various defi protocols such as Compound, MakerDAO, dYdX, Uniswap, Centrifuge, etc., and are familiar with other successful grant programs through there as well.

Can you commit between two and ten hours a week?: Yes, (@Juanbugeth on twitter) who leads our Aave delegation will take point.

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Some feedback from my side.

First and foremost, I think Aave Grants DAO has been evolving well over time and there is a clear public impact of its presence in the ecosystem.

That being said, I think there are things to improve and adapt on:

  • Budget on grants side. In isolation, it is always debatable and frequently empty to discuss a budget. When the decentralized and partially volunteer nature of a program like this is mixed into the picture, things become even more complicated. But considering other expenses of the DAO, personally, I think for Aave at this stage (we are early, creating and improving infrastructure) to budget an estimated ~$4m ($1.8m * 2) per year in pure grants is clearly too much.

  • Budget on events side. Sponsoring events and being present at them is clearly important; obviously requires funding. Points that are not too clear for me on this are 1) How are the events chosen? 2) What are the metrics to choose certain digital marketing sponsorships against others? (looking at Sponsored events / community initiatives)

  • Grants morphology. Probably related to formalizing, being a bit more strict on evaluation, and defining clear targets on the topics looked for on each AGD renewal. For every grant here Funded grants, there should be a deeper post-analysis on what it gave to Aave as a whole, or to the goals of the renewal period. When going through the list, it is relatively simple to see that some grants have little relation with Aave. If the project didn’t deliver, it should be public for awareness.
    I’m personally aware through my involvement on BGD (reviewer last period) that there is work on this direction, but trying to abstract myself from that, I just think it is completely mandatory to re-evaluate this because it impacts directly on both the budget and quality of grants given.

  • Payment approach. The way of receiving the funds has been done wrong in the past and it is not really acceptable with the size budget moved. The funds should be received as an allowance, and only pulled from the Aave collector whenever needed in smaller batches. What Aave Grants DAO asks for is an allowance, not for transfer. When that kind of transfer happens like here https://etherscan.io/tx/0x990e2518f37d28996d753d41e1af6cf845b6d6f2fb1ea1edfd60291eea444c5a, it means the Aave Collector stops accruing aToken (aUSDC in this case), factually providing that “growth” to Aave Grants DAO.

  • Currencies of payment. This should be a bit more formalized, in my opinion, the 70/30 split sounds arbitrary. aUSDC is to be used in expenses, so preferable for some types of projects. AAVE is governance power, so probably makes a lot of sense for other types of projects. From my perspective, other venues of “grants” should be explored especially on the latest, for example by having as a type of grant given some AAVE delegation power for a period, instead of just transferring funds.

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The ACI would like to propose feedback & an adjusted budget that will allow AGD to achieve a cost cut while still supporting the growth and development of the Aave ecosystem.

Intro & Cost-cutting

First of all, I would like to congratulate Bill on his new role as the lead of Aave Grants DAO (AGD). I am confident that he will bring valuable experience, leadership, and community engagement to the program.

We all understand that the current bear market has made it challenging to operate as usual, with the market being down 70-90%. In light of this, it is essential for AGD to be strategic in its spending and to focus on what will have the greatest impact on the ecosystem.

The next semester is also highly strategic for Aave as it’ll see the bloom of V3 on mainnet, GHO release & portals release, among other innovations. That is why this feedback & recommendations of cost-cutting is a “tame” scrooge McDuck and is unwilling to sacrifice the essential budget points.

I agree with the proposal’s recommendation to prioritize events and swag as efficient marketing tools. While it may be necessary to scale back on their quantity in the current market, it is essential to maintain the quality of these efforts in order to make the most impact.

Grants

the ACI does not support cutting any grant budget, with the release of V3, GHO & Portal during the period, every $ count.
While not all grants have shown results, the AGD has done a good job so far and probably outperformed the results of most Crypto VCs in terms of quality produced by $ attributed. 100% success is impossible to reach, and AGD has ACI support in its mission.

Events

With regards to specific events, the ACI is supportive of skipping EthDenver, as it may not be worth the investment at this time the Aave brand is well known in that audience, and money is better spent elsewhere.
Consensus, is simply a terrible conference with low quality on every front and not worth the three main currencies we have to allocate: Time, focus & money. The ACI recommends skipping it this year & forever.

That said, I agree with the proposal that EthGlobal, Istanbul, and the GHO virtual hackathon are good events to prioritize, as they align with the goals of V3 and GHO and provide opportunities for adoption and engagement.

Concerning the rAAVEs, they are incredibly efficient ways to support the Aave brand, but they’re a luxury and not quite fit for current market conditions.

The ACI recommendation is to limit rAAVEs to only the three main events in 2023 (Devcon, Ethcc, and Ethglobal devconnect) as it allows AGD to focus on the most impactful events while still maintaining a solid presence.

All other rAAVE should be killed or paid for by the Aave companies.

Here’s an proposed updated list of events with Aave’s presence

Event Date Location Initial presence Updated presence Proposed Budget Justification
ETHDenver March 2-5 Denver X Removed due to high cost and low return on investment as Aave brand is already strong in the US and audience overlap Devcon, EthCC & Devconnect
ETHGlobal Asia April 14-16 Tokyo X X $175,000 Kept due to strategic importance for GHO adoption and strong Asian developer community
Consensus April 26-28 Austin X Removed due to low relevance for GHO and Aave ecosystem, Consensus is too generalist and low ROI event, should be avoided completely
ETHIstanbul May 26-28 Istanbul X X $175,000 Kept due to strategic importance for GHO adoption and strong developer community (Turkey is a big market for stablecoins & have strong devs)
rAAVE TBD TBD X Removed due to high cost and prioritization on 3 main events
GHO Hackathon TBD - upon launch of GHO Virtual X $150,000 Added to kickstart development and adoption of GHO/V3/Portals
Event Buffer $98,651 Buffer to adjust budget for any events
Total Budget $598,651

Compensation

the ACI does not support cutting any compensation for AGD team members. Fair work deserves fair pay, and it is essential to value and retain the talented individuals who are driving AGD’s success.

Others budgets

While some form of optimization can exist, the ACI is not particularly keen to cost cut in other budgets and have no specific recommendation for change.

Proposed revised budget

To achieve a cost cut, I suggest the following adjustments to the budget:

  • Maintain the current budget for grants at $1,800,000
  • Reduce the budget for events, sponsorships, etc. from $1,348,651 to $598,651
  • Reduce the budget for Digital Marketing from $500,000 to $300,000 (good content creators should be supported in bear, but they need to adjust what they ask for to market conditions)
  • Maintain other budgets points

I believe that these adjustments will allow AGD to continue to support the growth and development of the Aave ecosystem, while being mindful of the current market conditions and budget constraints.

Below is a full budget table outlining the proposed budget for the next two quarters:

Item Current Budget Adjusted Budget Comments on Adjustments
Grants $1,800,000 $1,800,000 No change
Events, Sponsorships, etc. $1,348,651 $598,651 Reduced by $750,000 to reflect market conditions and budget & Raave cuts
Digital Marketing $500,000 $300,000 Reduced by $200,000 (sorry bankless & frens but you’ll survive this)
Compensation $240,000 $240,000 No change
Maintenance $20,000 $20,000 No change
Legal Buffer $90,000 $90,000 No change
Total $3,998,651 $3,048,651 Reduced by $950,000 to reflect market conditions and budget cuts

I believe that the AGD proposal, with these adjustments, is a well-thought-out plan that will allow AGD to continue to drive growth and development within the Aave ecosystem, while being mindful of the current market conditions and budget constraints.

The ACI will be supportive of voting YAE on an adjusted budget.

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18

Thank you @0xbilll for putting the proposal forward with detailed explanations for the use of funds and metrics and explanations to support the proposal.

In general, I want to highlight that AGD has been important part of the Aave ecosystem on supporting growth of the ecosystem with grants, events and other sponsorships. AGDs work is the most hardest to value given AGD not only suppots ecosystem initatives such as grants, but also empowers the culture of the Aave community - something that many of the DeFi competitors haven´t been able to achieve so far or have the stickiness that Aave community has.

While I do agree that bear market is an opportunity for cost reductions, I do also believe that for the scale AGD operates and the empowerement it does currently for the exposure of the community and its products, AGD is in important position to capture market share especially around new initiatives such as GHO, where the market share starts from 0 and would be highly competetive market.

First and foremorest I am happy to support the current proposal from @0xbilll as it is since given next year would be important for Aave to gain market share and adoption in already highly competitive markets. Building products on bear market itself doesn´t guarantee success of the product, instead there needs to be awareness and exposure on what is being build and around the ecosystem. There are countless and countless DeFi projects including stablecoins that lack of adoption or have trouble for adopting market share simply because they don´t invest into their awareness, events and community.

Aave community has been in incredible position for being able to create exposure across the whole web3 ecosystem (beyond Ethereum) but this wasn´t purely by building products rather also being involved within the wider community and participating in events (big shout out for every single person participating in these events and raising awareness), giving away swag and hosting gathering such as rAAVE. In fact, the strategy and its success is being copied across the whole web3 ecosystem.

In case of the overall grants itself, as mentioned happy to support current proposal, but would also support scaling down to $1,500,000 or even slightly less, mainly for the reason that it would require distributing lot of grants during the next six months and would see value if increasing the quality and reducing the quantity but do agree on @MarcZeller point that lot of grants could come around GHO - reducing overall the size of grant program would help to shift more costs towards the community builders.

Regarding events, I would recommend to have ETHDenver as the Aave community´s presense has been somewhat limited there for the past years and traditionally the event is full of builders and also newcomers to web3. Consensus events are not dev oriented events but actually good opportunties to create exposure within the institutional space and improve the presense there. Having institutional presense is what leads to exciting experiments and wider DeFi adoption across the institutional space as DeFi matures to become the backbone of finance, and Aave community should be the leader in the space.

Regarding the rAAVEs, also it makes more sense to have rAAVEs when there is already an event or a hackathon that AGD is participating in, in the current case I would say ETHIstanbul would work quite well given as a new emerging market and a venue to expand the community. I do agree with @MarcZeller that selectiveness should come where rAAVEs are hosted (and events in general), but would not consider them as a luxury, rather valuable part of the events strategy. I do agree that 3 rAAVEs should be the max but would even argue that 2 could be enough for 2023, as long as one is during first 6 months, preferrably ETHIstanbul. Also nice to see as well some of the focus in Asian markets regarding the events and I think its strategically good area for growth.

Regarding digital marketing, would be good opportunity to utilize Bankless given the innovation that is coming up withint the Aave community - but also see value if it happens on second period of 2023.

Regarding the compensation it sems fair to me given how much of work and resposibility there is with the AGD ops.

Regarding cost management process - recommend to move any unspent funds to the next renewal, in case there isn´t enough grants to fund with the current budget with the criteria set by the AGD or all of the event commitments are not fulfilled. There is no need to fund every single idea, instead ideas that can make an sizeable impact on specific grants category (risk management tools, data tools etc).

2023 is the year for Aave :ghost: and the community should not be reluctant of incurring costs for growth but also the community should be conscious of costs/spending and ensure the community gets most out of AGD, which the proposal steers towards a healthy budget for first 6 months.

Will vote YAE on the AGD renewal

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19

Thank you, @stani, for your feedback on the ACI proposed budget revision for Aave Grants DAO (AGD).

We appreciate your support and suggestions for adjustments to the budget, including hosting a rAAVE during ETHIstanbul and limiting rAAVEs to a maximum of two events in 2023, with one being hosted in the first six months. on the remaining proposed rAAVE, I think we can both agree ethCC might be the less strategic and could easily be replaced by ethIstanbul, Paris already got two rAAVE and it’s a good signal to host these strategic events for new audiences.

We also appreciate your recommendation to add ETHDenver as an event and to scale down the grant budget to $1.5 million or slightly less in order to increase the quality and reduce the quantity of grants.

We have thus increased the revised event budget for ETHDenver & a rAAVE to $175,000 & $150,000 in order to better reflect the value of these events in building and expanding the Aave community.

We still think Consensus conference is the least painful sacrifice to make, and we still think this event is costly with low ROI.

Here is the revised budget:

Event Date Location Proposed Budget Justification
ETHDenver March 2-5 Denver $175,000 Added due to value in building and expanding the Aave community
ETHGlobal Asia April 14-16 Tokyo $175,000 Kept due to strategic importance for GHO adoption and strong Asian developer community
ETHIstanbul May 26-28 Istanbul $175,000 Kept due to strategic importance for GHO adoption and strong developer community (Turkey is a big market for stablecoins & have strong devs)
rAAVE TBD TBD $150,000 Added during ETHIstanbul as an opportunity to expand the Aave community in a new emerging market
GHO Hackathon TBD - upon launch of GHO Virtual $150,000 Added to kickstart development and adoption of GHO/V3/Portals
Event Buffer $0 Buffer used for ETHDenver
Total Budget $825,000

And the total revised budget incorporating your feedback:

Item Current Budget Adjusted Budget Comments on Adjustments
Grants $1,800,000 $1,500,000 Reduced by $300,000
Events, Sponsorships, etc. $1,348,651 $825,000 Reduced by $523,651 but now integrating both ETHDenver & a rAAVE
Digital Marketing $500,000 $300,000 Reduced by $150,000 (350k$ will work, I’ll help with negotiation if needed)
Compensation $240,000 $240,000 No change
Maintenance $20,000 $20,000 No change
Legal Buffer $90,000 $90,000 No change
Total $3,998,651 $2,975,000 Reduced by $1,023,651
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Thanks for the detailed proposal and the input from the community & contributors.

The members of AGD are the backbone and driving force of many activities that propel the success of Aave forward. The current compensation allocation feels low for the value and commitment the full time contributors provide.

Current Compensation Total: $240,000

  • Lead: $9k/month

  • Review committee: $150/hr, capped at 10 hrs/week

  • Analyst: $5k/month

  • Operations lead: $150/hr capped at 20 hrs/month

  • Events coordinator: $3k/month

  • Designer: one-off based on specific design engagements

Bumping this up by 25% - 50% for the lead, analyst, and events coordinator should be considered to retain and reward top non-techincal full time contributors.

Compensation scenario for +25% - +50% for lead, analyst and events coordinator:

Total: $288,000 - $336,000

  • Lead: $11k/month - $13k/month

  • Review committee: $150/hr, capped at 10 hrs/week

  • Analyst: $6k/month - $7k/month

  • Operations lead: $150/hr capped at 20 hrs/month

  • Events coordinator: $4k/month - $5k/month

  • Designer: one-off based on specific design engagements

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