Title: [TEMP CHECK] Aave Grants Continuation Proposal
Author: Bill & @0xmigi
An opportunity to continue Aave Grants DAO (AGD) for 6 months by preserving the current AGD treasury holdings, providing $700,000 of new funding between ARB and AAVE, and increasing AGD’s stablecoin allowance by $870,000.
This proposal will enable AGD to deliver and improve upon the top tier grants program the Aave ecosystem has had over the past 2+ years and continue being a gateway for new contributors to the ecosystem. AGD will fund $500,000 in developer grants per quarter, drive Aave’s culture and GHO adoption at key events like Devconnect, and set the groundwork for the next chapter of the continued evolution of AGD.
Throughout the previous proposal, AGD has:
- Awarded 50 new grants and made 15 payments to grantees based on milestone completion.
- Engaged builders and the community at five events, including four hackathons where AGD awarded a total of 19 Aave and GHO specific bounties and inspired 58 teams to hack with Aave and GHO.
- Proliferated the ghost by hosting 1 rAAVE to strengthen Aave’s culture, bring the community together, and cultivate an ecosystem with the best contributors.
- Exercised prudence with the treasury by decreasing the average grant size awarded by 52.8% and maintaining average reviewer compensation at ~22% of the monthly maximum budget.
This proposal outlines renewing AGD for the next 6 months by:
- Providing new funding of:
- $400,000 in ARB (~18% of the total ARB received by Aave DAO)
- $300,000 in AAVE
- Increasing AGD’s stablecoin allowance by $870,000.
- Splitting the funds across three distinct budgets: a Grants Budget (44.6%), an Events & Sponsorship Budget (35.0%), and an Operations Budget (20.4%).
Since its inception in May 2021, AGD has awarded $4,852,753 across 249 grants.
From the last AGD proposal in January 2023 to now, AGD has awarded 50 grants and awarded 19 Aave and GHO specific bounties across four different hackathons.
*Note: All $ cost amounts are calculated at time of payment, pre/post token value fluctuations are not included unless otherwise specified. Pending payments are not included.
This is the fifth proposal for AGD:
The initial proposal launched AGD in May 2021 with $1 million of total funding over two quarters.
The second proposal was executed at the end of December 2021 and funded AGD for three months with $2 million of funding.
The third proposal was executed at the end of May 2022 and funded AGD for six months with $3 million per quarter.
The fourth proposal was executed at the end of January 2023 and funded AGD for six months with $1.625 million per quarter.
AGD is a community-led grants program that supports the growth of the Aave ecosystem by:
(1) Funding innovative projects backed by strong teams with creative ideas that benefit and strengthen the Aave ecosystem through products and initiatives which:
Increase TVL or other protocol metrics
Expand the capabilities of the platform and utility of Aave
Empower the community with accessible and novel insights
Engage new users and enhance retention of current users
Grow GHO by stimulating demand, expanding its utility, and accelerating its transactional velocity
(2) Fostering a strong and inclusive culture around Aave. Aave’s culture leads to:
- Attracting and retaining the best contributors, and
- Encouraging the development of new and creative solutions to key areas in the Aave protocol and Aave DAO.
Since May 2021: 249 grants worth $4,845,753
Since Jan 2023: 50 grants worth $885,020
Breakdown of grants by category:
Category - $cumulative cost - number approved
Applications and integrations - $2,664,556 - 108 grants
Code audits - $82,000 - 3 grants
Committees & DAOs that serve Aave’s ecosystem - $703,780 - 18 grants
Community (marketing and educational) - $698,550 - 52 grants
Developer tooling - $415,000 - 13 grants
Events / Hackathons / Sponsorships - $185,000 - 14 grants
Other - $294,900 - 12 grants
Protocol development - $474,200 - 21 grants
Status of all Grant Projects Awarded:
Complete/Live - 67.6%
In-progress - 24.8%
Inactive - 7.6%
Growth in Community Engagement Since Last Renewal Proposal (Jan 2023):
Substack subscribers: 1,748 → 1,805 (+ 3%)
Twitter followers: 13,300 → 13,400 (+ 0.75%)
Telegram members: 643 → 719 (+ 12%)
Lens followers: 2,828 → 8,801 (+ 211%)
Mirror subscribers: 169 → 546 (+ 223%)
Key Stats Since Inception:
- Participated in 14 hackathons, awarding $150,000 in Aave and GHO specific bounties to 58 teams.
- Many of these teams have continued building or contributing to Aave and GHO, including five projects that went on to receive grants.
- Achieved a Net Promoter Score, a measurement to gauge the experience of grantees, of 83 based on 77 responses.
- Average response to “How likely are you to recommend AGD?” is 4.8/5.
- Processed 1,944 applications with an average turnaround time from application submission to grant decision of 9.6 days, shrinking over time.
- Consistently accepted applications and awarded grants to builders:
The community has been kept up to date with AGD’s activity in @0xmigi’s monthly governance updates, the Halfway Update, and through AGD being added to Llama’s treasury dashboard. The AGD website houses a running list since inception of grants awarded, event and sponsorship spend and other information.
The GHO release was an exciting launch for the Aave community and was a prioritized focus throughout AGD’s last proposal. AGD began to spread awareness about GHO’s launch and encouraged early development with GHO across the four hackathons that were sponsored. AGD also funded multiple GHO related grants and supported development with the introduction of ‘Request for Grants’, inviting projects that help to stimulate GHO’s demand and increase its utility to apply for a grant.
AGD has exercised prudence with the treasury, while continuing to fund high quality builders and drive growth and experimentation in the Aave ecosystem. The current AGD treasury, including token allowances and OP, is $1,450,895. Part of the reduced spend is because of a reduction in the average size of grants awarded. The average grant size awarded so far in 2023 is 52.8% lower than the average grant size awarded during 2022, currently at $13,936.
Here is a breakdown of AGD’s spend versus what was budgeted:
Here is AGD’s spend over the course of the previous proposal:
There have been four main in-person events since AGD’s previous renewal:
- ETHGlobal Tokyo
- ETHGlobal Lisbon
- ETH Prague
To better document these events, a report has been written covering each event in detail, including engagement numbers and a retrospective analysis. Across five total events, AGD has engaged with 30 different existing grantees, inspired 58 teams to hack with Aave and GHO, and awarded $31,000 in prizes to 19 of the top projects building on Aave and GHO.
Here is an overview of the events AGD has participated in based on what was outlined in the previous proposal.
|ETHDenver (March 2-5)||Successfully executed||ETHDenver Event Recap|
|ETHGlobal Tokyo (April 14-16)||Successfully executed||ETHTokyo Event Recap|
|ETHGlobal Istanbul||Rescheduled for Q4||As outlined previously, AGD had to replace ETHGlobal Istanbul when it was rescheduled. Given the initial rationale, ETHGlobal Istanbul is included in this proposal.|
|ETHGlobal Lisbon (May 12-14)||Successfully executed||ETHLisbon Event Recap|
|rAAVE Lisbon||Successfully executed||Included in ETHLisbon Event Recap|
|Exclusive GHO Hackathon and AGD Summit with ETHGlobal||Jan 2024||AGD is working with ETHGlobal and other stakeholders to ensure an exceptional experience for builders with impactful results for the Aave ecosystem.|
|ETHPrague (June 9-11)||New, Successfully executed||ETHPrague Event Recap|
|ETHGlobal New York (September 22-24)||New, Upcoming||ETHGlobal New York will be AGD’s first hackathon sponsorship since GHO launched on mainnet. Having a strong presence will help drive more builders and awareness to GHO. Given New York’s status as a financial hub, it is an ideal city to promote GHO and drive developers to build innovative payments and other applications on top of GHO.|
Since inception AGD has participated in 14 hackathons, awarding $150,000 in Aave specific bounties to 58 teams. This has contributed to increasing the number of new and creative ideas and projects that are formed, as well as growing the number of contributors in the Aave ecosystem by growing the contributor pipeline.
Take Fuji Finance from ETH Amsterdam 2022. During the hackathon they built a cross-chain debt teleporter called “FLoan” and won a prize from AGD. The team has continued to build and recently upgraded to their V2, which is a cross-chain money marketing aggregator inspired by their hackathon project and integrating Aave front and center.
Aave grantees have not only built impactful projects in the ecosystem, but have also brought strong contributors to the Aave ecosystem. For example, before @harshpandey joined bgdlabs, Harsh won a bounty from AGD at ETHIndia in April 2022 for ‘Aave Flash Transfer’ and received a grant for TranzoFi to continue building the idea.
- Increasing Grantee Accountability. There has been an influx in grantees (e.g. recently Defi Simulator, Projection Finance, and Aave Alarm) posting directly on the forum to introduce themselves, explain their grant, and to keep the community updated as they progress. Most of these posts are the result of an initiative from AGD to better increase grantee accountability and engagement with the community.
- ‘Requests for Grants’ (RFGs). A pilot project has been introduced to better direct builders to apply for grants in certain high impact areas. Going forward, AGD will look to expand the list of RFGs to target high impact areas and community needs by better communicating with different contributors and encouraging anyone to make suggestions.
- AGD Operations and Best Practices. Over the last two years of operations, AGD’s values and best practices have been refined and adopted. It is a priority for AGD to clearly define and share these values and best practices with the community. Here is an overview of AGD’s current process:
Since AGD’s last proposal, 50 new grants have been awarded and 15 follow up milestone payments have been made. Of the 50 new grants awarded, 22 are complete, live or have reached notable milestones at the time of writing. Each grant has positively impacted different aspects of the Aave ecosystem.
Here are some recent highlights from grantees:
Designed and launched a hub for GHO to drive adoption. Dullahan produces passive income for stkAAVE holders and provides GHO borrowers with access to reduced interest rates and has over 3,000 AAVE in deposits a few weeks after launch.
Enables the creation of state-of-the-art DeFi strategies that leverage Aave V3 and GHO with the development and audit of a Aave V3 adaptor used by Sommelier strategies. As of July, their Aave V3 integration has allocated a net of $4M to Aave V3.
AAVE based CIAN Strategies & Automation Tools
Expands access to Aave V3 with open source vaults and advanced automation tooling, allowing strategists to generate strategies and users to easily access yield. As of August 2023, CIAN has generated $55M in TVL across Aave V2 and V3 on Polygon, Arbitrum, Ethereum Mainnet, Avalanche and Optimism via its leveraged staking strategies.
IntoTheBlock Risk Radar for GHO
Helps the community understand GHO’s activity with 20 dedicated risk indicators including peg performance, collateral distribution and whale credit history.
Performed an analysis on the Safety Module proposing an increase in the slashing percentage with the intent of saving the Aave protocol ~$2.1M per year
Facilitated an incentivized delegate initiative which kickstarted paying Aave delegates, encouraged participation in Aave governance from new community members and sparked TokenLogic to start their delegate platform.
Reducing the friction of engaging with Aave governance by implementing their notification and alert system in the governance forum.
Flexible aToken Voting ScopeLift
Unlocks the potential for new deposits by enabling protocols to allow users to retain voting power with tokens that are active in DeFi like Aave.
Streamlined the community support process with their Discord bot that automatically and quickly responds to user questions. In the past 3 months, the bot has answered over 55% of all questions, with 30% of those answers voted up by users indicating the response was very helpful.
The path to a decentralized and sustainable AGD is a long journey. Here are some initiatives planned for this proposal to continue working towards an effective and sustainable AGD:
Finish Establishing Legal Entity
Establishing a legal entity allows AGD to begin operating more independently and with more protection and certainty for contributors by providing a legal structure for members and the ability to operate with the traditional financial world. As it currently exists, AGD is not able to even sign a contract. Transitioning to an entity is a big step for AGD’s maturity by providing clarity and protection to contributors, along with increasing operational effectiveness.
AGD is currently finalizing the process of establishing a Cayman Foundation Company. The grants process will continue to operate as it does today and there will be no noticeable changes to AGD’s current processes or operations for the community.
AGD intends to explore growing the team and resources to operate more independently, specifically on the events side.
AGD has worked closely with Aave Companies previously to align resources in order to deliver exceptional experiences and results at events. This relationship ensures AGD is getting the most out of the sponsorship spend. Aave Co supports AGD at events in a variety of ways, including by sending multiple people to engage with attendees and support developers, and by leading the design and production of Aave merch. Over time, AGD will look to take over these roles while executing at the same high standard.
Establishing an entity will help by positioning AGD to attract the best talent, enter longer term commitments, and interact with the traditional world.
Revamping Review Committee
AGD will update the processes and structure around the review committee. One idea AGD will explore is introducing a rotating committee of community experts to serve short (3-6 months) time frames as grant reviewers. This will further involve the community in AGD while bringing expertise from different community members.
Explore creating sub DAOs within AGD
One evolution of AGD could be creating different sub DAOs under AGD. Over time, each sub DAO would make their own proposals directly to the Aave DAO. This would allow the community to individually review different activities while ensuring the alignment and synergies that currently exist and drive value to the Aave ecosystem are not lost.
Over the course of this proposal, AGD will explore related best practices and start implementing the necessary structure to better separate AGD’s different activities.
AGD and Service Provider Alignment
With the increased number of Service Providers, there is a need to create better alignment between AGD and the work being done across the Aave DAO. Introducing simple activities like regular touch points would enable AGD to better (de)prioritize areas for grants based on feedback and insights from service providers. Where appropriate, AGD can also better work with service providers on helping to define the scope of related grants.
AGD aims to enhance the way it measures impact from grants by further developing internal resources and working with teams such as Spindl to better track the impact effectiveness of grants.
Starting with specific categories of grants like quests, AGD will better visualize activity driven by grants and gain insights into the effectiveness of different spend. Over time, AGD will extend similar tracking to other grant categories and impact metrics. This will enable the community to better track impact from grantees and empower AGD to make better review decisions.
AGD now has ten members.
- Lead. Bill oversees the growth of the team, the distribution of grants, and making sure AGD meets the strategic needs of Aave DAO.
- 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 - x23.ai, ex-Aave Companies Genesis team dev
- Operations Lead. Neil has streamlined the application process, manages payments, KYC, and other administrative tasks.
- Analyst. Migi is the main touch point with current and future grantees. He finds opportunities where AGD can support grantees and track the returns generated. Migi also provides monthly updates on the governance forum.
- Lead: $9k/month
- Review committee: $150/hr, capped at 10 hrs/week
- Reviewer pay per month has averaged $1,273/month per reviewer since May 2021. We will look to modify this as part of the overall revamp of the review committee.
- Analyst: $5k/month
- Operations lead: $150/hr capped at 20 hrs/month
- Designer and other roles: one-off based on specific design engagements
The roles and compensation will be reviewed and iterated on in line with the focuses outlined above.
This proposal’s total budget will be split between a Grants Budget, an Events & Sponsorship Budget, and an Operations Budget. In total across all three budgets the total ask for the next 6 months is:
- $400,000 in ARB
- $300,000 in AAVE and
- $870,000 increase in AGD’s stablecoin allowance
This would make AGD’s treasury, including allowances and OP: 65% in stables, 17.4% in AAVE, and 17.6% in ARB & OP.
Notably for the stablecoin portion of the treasury, AGD has started to explore further driving GHO adoption and grantee alignment by collaborating with @TokenLogic to swap AGD’s DAI allowance with GHO. AGD will look to continue to do this with other stablecoin holdings in the future based on similar style governance proposals.
With each budget, AGD outlines distinct KPIs that can be used to measure success.
|Carry Forward||Ask||Tokens for Ask|
|Developer Grants||$614,980||$300,000||50% AAVE & 50% Stables|
|Grants Total Budgeted Cost||$747,980||$700,000|
The OP is based on the 100,000 OP allocated to AGD during the previous proposal. In line with the total amount of OP AGD has (300,000 OP), AGD is requesting $400,000 in ARB tokens to support the growth and development of projects building on top of Aave on Arbitrum. This is equivalent to ~18% of the total ARB received (at current prices) and is in line with the community’s preference to allocate the full amount of ARB received across multiple options. Any ARB unspent during this proposal will be kept in the AGD treasury and allocated to future proposals.
Grants Budget KPIs
- Award a minimum of 20 grants to projects building on GHO
- Award a minimum of 10 grants to projects that will add TVL to Aave V3
- Award a minimum of 5 grants to projects that drive or enhance governance participation
|Carry Forward||Ask||Tokens for Ask|
|Event Sponsorships, Hackathons & Bounties||$151,887||$550,000||Stables|
|Sponsorships Total Budgeted Cost||$443,887||$550,000|
Events continue to be a key focus for AGD and driver of growth for the Aave ecosystem thanks to:
- Creating a welcome, engaging and memorable experience at the Aave booth.
- Sponsoring prizes and providing exceptional support to developers.
- Spreading Aave’s culture by distributing merchandise.
- Selectively hosting rAAVEs to bring the Aave community together, reward contributors and make Aave the top ecosystem in crypto.
Events & Sponsorship Budget KPIs
- Have at least 100 projects submissions to Aave and GHO bounties at hackathons
- Increase the average number of projects that hack on top of Aave and GHO at hackathons
- Engage 30 different previous grant recipients IRL
Future Events Overview
|ETH Global Istanbul||Nov 17-19||Also the location of Devconnect, this will be the event of the quarter in the Ethereum community. The community was supportive of AGD activating here in the last proposal but then the event was rescheduled. Istanbul is a community with substantial and growing crypto adoption so it is a prime market to engage hackers and the community with GHO.|
|rAAVE||TBD||rAAVE’s bring the community together, helping to strengthen Aave’s culture and differentiate Aave’s ecosystem. AGD will look to host one rAAVE during the course of this proposal that is powered by GHO to help spread adoption and awareness.|
|GHO Hackathon||Jan 2024||AGD is working with ETHGlobal and other stakeholders to ensure an exceptional experience for builders with impactful results for the Aave ecosystem.|
For this proposal, AGD is focusing on sponsoring fewer events, while increasing the quality of Aave’s presence.
A majority of the new event spend will be used to have a large presence around Devconnect and drive hackers to build with GHO at ETHGlobal Istanbul. This will be the marquee event of the final quarter and Istanbul is a top crypto community. The location offers the opportunity to explore hosting a GHO powered rAAVE with potentially lower costs.
AGD has also locked in January 2024 for the GHO hackathon … ready, set, GHO! AGD will use the remaining budget to have a major presence during at least two other hackathons and will look to support other, smaller opportunities that arise over the course of the proposal.
The same events policy outlined in AGD’s previous proposal will apply.
|Carry Forward||Ask||Tokens for Ask|
|Compensation||$20,150||$300,000||50% AAVE & 50% Stables|
|Maintenance: Tooling, subscriptions, gas reimbursements||$526||$20,000||Stables|
|Operations Total Budgeted Cost||$90,660||$320,000|
Increasing the overall amount allocated to operations, especially compensation, is necessary for AGD to grow its resources and operate more independently.
Operations Budget KPIs
- Execute 1 experiment to bring on new reviewers
- Triple following and subscriber counts on Lens and Mirror, respectively
- Complete incorporation and set up of entity by end of 2023
- Get community feedback on TEMP CHECK
- Snapshot vote
- If Snapshot is successful then move to AIP