[TEMP CHECK] Aave Grants Continuation Proposal

[0xbilll]

Title: [TEMP CHECK] Aave Grants Continuation Proposal

Author: Bill & @0xmigi

Date: 09-12-2023

Summary

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.

Overview

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%).

History

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.

Mission

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

AND

(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.

Metrics

Grants Provided:

• 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:

Since the Last Proposal

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 Budget

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:

Events Summary

There have been four main in-person events since AGD’s previous renewal:

• ETHDenver
• 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.

Event	Status	Notes
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.

Hackathon Participation

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.

Other Initiatives

• 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:

Grantee Highlights

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:

Dullahan
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.

Sommelier Finance
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.

Other applications include: DeFi Simulator, Aave Alarm, Projection Finance and Karma HQ’s Delegate Dashboard.

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.

Xenophon Labs
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

Butter
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.

Senate
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.

AwesomeQA
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.

Operational Focuses for this Proposal

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.

Increase Independence

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.

Measuring Impact

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.

People

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.

Compensation:

• 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.

Proposed Budgets

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.

Grants Budget

	Carry Forward	Ask	Tokens for Ask
Developer Grants	$614,980	$300,000	50% AAVE & 50% Stables
	$133,000	$0	OP
	$0	$400,000	ARB
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

Events & Sponsorship Budget

	Carry Forward	Ask	Tokens for Ask
Event Sponsorships, Hackathons & Bounties	$151,887	$550,000	Stables
Digital Marketing	$292,000	$0	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

Name	Date	Details
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.

Operations Budget

	Carry Forward	Ask	Tokens for Ask
Compensation	$20,150	$300,000	50% AAVE & 50% Stables
Maintenance: Tooling, subscriptions, gas reimbursements	$526	$20,000	Stables
Legal Buffer	$69,984	$0	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

Next Steps

• Get community feedback on TEMP CHECK
• Snapshot vote
• If Snapshot is successful then move to AIP

[stani]

AGD has been significant contributor to the Aave ecosystem and has been helpful on multiple fronts (Grants, Events etc.). The budget is reasonable given the current landscape, and growth work there is needed for the rest of the year (especially with the carry over from previous period). In the current form I am fully supportive of the proposal (for 2024, AGD should come up with a more fundamental model to focus on a specific mission and scope with a long-term vision.

[Figue]

Personally in full favor of this renewal. The proposal has been contracted significantly to adapt to the market and seems as much necessary as reasonable. To explain why, I’d like to tell a story.

Three years ago, we set out to actively participate in the DeFi ecosystem. Our adventure took a real turn when we were rewarded for experimenting on Aave via a hackathon prize. The amount wasn’t enormous, but it was enough for us to consider having a career in crypto. This venture has turned into what is Paladin today, and it wouldn’t have happened without the culture of co-building that Aave has fostered by Aave Grants.

We also had the pleasure of collaborating with Bill for a recent grant to audit Dullahan, the first app build on top of GHO, and our experience was nothing but top class. Onboarding is seamless, the processes are in place to efficiently analyze the opportunities and the team is eager to help.

To this day, I still carry the Aave bag I was given during my first hackathon. If this isn’t a sign of the impact Aave its grant and the culture defined by it had over my and many other’s life, then I don’t know what is.

Here’s hoping many other projects can benefit from such opportunities,

Cheers,

Figue.

[kohei]

Based on our experience as an AGD grantee, we are confident that the ongoing Aave Grants initiative will bring substantial value to the Aave Ecosystem. Beyond the financial assistance, the invaluable feedback and networking opportunities they provided were instrumental for us in implementing Aave Governance Notification. We appreciate all their efforts in backing builders within the Aave ecosystem and are fully supportive of the proposal.

[koalabs]

As an AGD grantee, we are in support of the proposal. The program is great for anyone who wants to seriously build projects for the Aave ecosystem, starting with hackathons and then moving on to grants.

Form our experience, the AGD reviewers are not only reviewing the proposals but often also support the projects with (free) advisory. This is truly awesome!

[Hazbobo]

Overall, Aave Grants is a force for good in the Aave ecosystem.

That being said - I would propose some changes/have some questions for this proposal.

1. $150/hr is a lot of money for reviewers imo - even if capped at 10 hrs/week. I’d suggest potentially reviewing this as it seems like excessive cost (even though I agree Reviewers do great work).

2. The spend over the course of the previous proposal shows that a good deal more was spent on Events than Grants. Noted that this time youre proposing about 1mill for events vs 1.5 for grants - but this is still a hell of a lot of money spent on events which could have huge leverage if redirected to grants. If you think about this cost in terms of contributors the DAO could hire a large number of great personnel within that cost range. For a grantsDAO this feels problematic, especially at a time when so much could be done to work on things like GHO. Here your idea on subDAOs seems good and I dont think it should be held until later. Ideally events and merch would not be a direct mandate of GrantsDAO and would instead be its own subDAO with its own budget so there is more transparency and the DAO has more control over spending here. Im a fan of the merch and events and think they have a positive impact for Aave, however the current setup doesnt seem like the most cost effective or reasonable way to achieve this positive impact. @MarcZeller mentioned something along these lines here and received support.

3. On increasing independence - we should see a timeline here and key metrics. Current and previous spend on AC team attendance + an actual plan to change this over time and by when, if that’s what is desired as is stated "Over time, AGD will look to take over these roles while executing at the same high standard.” Would be great to see KPIs here like you have in other areas.

4. I am wondering on Events and Sponsorship budget - where does merch fit into this? is it in the Events Sponsorship section? and where are travel/accomodation/booth etc costs fitting in?

5. On the overall breakdown "a Grants Budget (44.6%), an Events & Sponsorship Budget (35.0%), and an Operations Budget (20.4%).” is this a % breakdown based on the new budget ask? or does it also include money left over from last agreement. ie. are these %s of AGD total budget after approval of this, or are they %s of what is asked for now only (ignoring leftover money).

6. The KPIs seem slightly weak in general regarding both grants and events and merch. It would be good to have outlined how realistic they are based on past performance, and also to have some indication as to what it means if they aren’t hit. I guess it will impact renewal, but itd be good to have some skin in the game on these KPIs.

7. At a time when all service providers are receiving much lower pay than they used to from the DAO when they renew, I think it is also worth considering reducing the budget here to help maintain the sustainability of the DAO.

Overall supportive of what AGD has been doing. Bill is great and so is everyone I know who works for AGD. Some good ideas in here - legal entity and subDAOs for example! But would be interested in answers/responses to the above to inform my opinion as to whether to support the proposal in its current form or not!

[fig]

@Hazbobo – speaking to point one.

While I agree this number seems high, it is much less in practice.

@0xbilll

$1,273/month

This is a 79% reduction than what is currently budgeted on a monthly basis.

I’ll disclose from personal experience this has been much lower; around $500 a month. I do agree there may be an opportunity to change this to prevent ballooning expenses and limit variable pay.

---

For the rest of the points:

It seems like there is opportunity to separate events and general grants, or better outline the goals.

How are venues and events chosen? Who does these events benefit?

Looking forward to @0xbilll’s response here!

[0xkeyrock.eth]

The contributions of AGD have been important and we’re supportive of them continuing this work!

We agree that the Event/Merch related expenses should be a subDAO or a different DAO that closely collaborates with the AGD due to the existing experience. In our opinion, event exposure for Aave is extremely important on ETH centric conferences.

Another idea to consider here is hiring someone dedicated to events. This could be a part-time role as in general the events are less than 5-7 per year. Event organising can be a heavy workload when combined with Grants.

If the AGD is solely focused on Grants, we believe that the performance and output could be even higher.

[Hazbobo]

This makes sense and is good context!

[dmars300]

Absolutely thrilled to see this Aave Grants Continuation Proposal roll out. The level of detail in planning, right down to the KPIs, shows a lot of foresight. It’s not just about funding projects haphazardly; there’s a clearly mapped-out strategy here, which is incredibly reassuring for anyone vested in Aave’s future.

Speaking of strategy, the plan doesn’t overlook the human element—events like rAAVEs and hackathons. These events are as essential as the tech itself; they’re the breeding grounds for innovation and community cohesion. It’s great to see a balanced approach that values both technical development and community building.

One question though—any thoughts on directing some grants toward educational initiatives? This could serve as a powerful catalyst for bringing fresh talent into the Aave ecosystem.
Overall, I’m excited about the direction this proposal is taking Aave. It demonstrates a commitment to long-term vision and community involvement, which are key for sustainable growth.

Great work by the AGD team,
Diego,

[Sov]

I support the renewal of AGD as outlined in this proposal. My experience working with the AGD team has been positive, and I believe they are doing a good job in stewarding the grant program for Aave.

[stani]

I do think that 150/h can be a lot but if its net (i.e. reviewer pays taxes and other costs from that) maybe its closer but agree could be done in less costs.

The events, drip etc are quite cost effective (and the quality) given the impact it gets and positive recognition - everywhere - (and quality). Aave has the best events, the best drip and culture, purely because of the planning and execution of these events. No one has been able to copy that.

These events are also activations for GHO, especially demand/use-case side.

Regarding the independence, what I would expect would be more towards 2024 (speaking from experience here on timelines).

SubDAO idea does not make sense, rather a more uniform proposal on what areas AGD (even name change to reflect that) should cover besides grants and who are the people who are responsible of those areas (again mostly 2024 timeline to think about). Main idea that there is for now budget separability and accountability, thats important.

[0xbilll]

Appreciate everyone who has engaged with the proposal so far and provided initial feedback!

Big thanks to @Figue, @kohei, @koalabs, @dmars300 & @Sov for sharing their experiences as grantees.

@Hazbobo - thanks for your recognition of the positive impact that AGD has had. Happy to answer your questions.

1. As @fig highlighted and as outlined in the bullet point after the maximum amount of pay you quote, monthly reviewer pay has averaged ~22% of the monthly maximum budget. If anything, reviewers are currently underpaid and we will look to change this going forward.

2. Events and sponsorships will drive value to GHO - this is precisely the time to be supporting growth in the ecosystem and leveraging Aave’s position and ability to deliver the best events and continue spreading Aave’s culture.

3. Relevant KPIs are included in the Operations Budget with establishing the entity by the end of the year and experimenting with at least one governance experiment. AGD will come back to the forum with a longer term and comprehensive proposal in 2024 as @stani suggests.

@Hazbobo

Current and previous spend on AC team attendance

To be 100% clear, AGD has never covered the cost of attendance accommodations for anyone from AC. This is outlined in our previous events policy and highlighted above.

4. The costs shown next to each event are the total cost of executing each event.

5. These are percentages based on how the new funds would be allocated.

6. Open to any suggestions for other KPIs!
   In terms of skin in the game for AGD, every proposal is a judgment on whether or not to support AGD. Other structures that Service Providers have used are performance based incentives which is something AGD can include if there is interest from the community.

7. We agree and believe this proposal is well in line with a reduced ask. The current proposal is AGD’s smallest ask yet, with the upfront funding amounting to <22% of the previous proposal and the total funding including the stablecoin allowance equally <49% compared to the previous proposal.

AGD has followed the desire we have seen from the Aave DAO for treasury prudence across the ecosystem. Notably, there is a 53% decrease in the average grant size awarded so far in 2023 compared to 2022.

The sustainability of Aave DAO is also top of mind for us. For example, for our treasury, we access our stablecoin funds as needed via an allowance to ensure the maximum amount of interest is being earned by the Aave DAO.

@fig

How are venues and events chosen? Who does these events benefit?

AGD’s focus is on participating in and engaging builders at hackathons - this is where we have seen the strongest impact and return to the Aave ecosystem. AGD will sponsor and participate in larger hackathons such as ETHGlobal, so rarely has any decision making been around the venue. For the GHO Hackathon it was decided to do it online to allow anyone across the world to participate.

Across 4 hackathons so far in 2023, 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. Since inception AGD has participated in 14 hackathons, awarding $150,000 in Aave and GHO specific bounties to 58 teams.

In terms of value, it is the whole Aave ecosystem who benefits from AGD’s event and sponsorship activities. AGD’s event summaries capture these and other details - I’ll highlight AGD’s goals across all events and sponsorships:

The overarching goal for AGD sponsorships at all events is to proliferate the ghost. This is done through:

1. Brand visibility and community engagement - Make Aave top of mind
2. Attracting and cultivating top contributors - Connect with the community
3. Fostering innovation and supporting the development of new projects - Support builders

@0xkeyrock.eth

Another idea to consider here is hiring someone dedicated to events.

Yes, this is a solid idea. It is a role we previously had and it worked well. As we finish setting up the entity, we will look to expand the team including this and other roles.

Looking forward to more discussion. AGD is open to modifying KPIs for this current proposal and will commit to bringing the DAO a longer term proposal in 2024.

[noturhandle]

Responding as a grantee, I’ll limit my comments to our experience of AGD and Aave as an organization while we worked on the Delegate Incentives Pilot earlier this year.

We were initially attracted to working with Aave because of the brand, technology, and the DAO’s composition. The organization is welcoming—a great mix of ambition, talent, and openness.

As I’m sure many will agree, DAOs appear to have simple interfaces, including channels, DMs, groups, and forums. Still, there are often multiple layers and relationships to navigate to understand the interface you require before you can interact in a productive way.

Aave has managed to build an organization that is both extensive and clean—all interfaces appear to be simple, easy to access, and well-defined. It didn’t take long for us to figure out how to participate.

After posting on the forum, we understood that we could apply for a grant and submitted an application. We heard back from a reviewer shortly after and scheduled a call. Once approved, we were placed into a telegram group and given all the necessary details and resources. All of our announcements were amplified by the team, and they ensured we were regularly promoted in comms. Seamless from start to finish.

Whenever a conference loomed, we heard from the team and were invited to come and meet them—I got to meet a few of the team in Tokyo, including @0xbilll, @0xmigi, and @stani. I felt incredibly well looked after—almost like we were part of the team. That’s a tricky asset to establish and an expensive asset to recreate.

Finally, Aave has one of the most captivating brands in the space—it’s an asset every project would like to have, and it extends far beyond the idea of a liquidity protocol. Events and Merch are clearly a vital part of that. Unless people stop attending rAAVE and trying to steal the merch, or you need to scale either operation, I struggle to see the upside in splitting them out.

I support the AGD renewal.

[eboado]

Some points from my side, both high and low level.

• The charade of a grants entity taking care of community growth (via grants per se, hackathons, etc.) together with marketing, events organization and merchandising of a brand like Aave needs to stop.
  Events and promotion services for the DAO should be taken care of in a segregated manner from grants, and by an entity that has shown strong capabilities on it, like @AaveLabs .
  The situation is so surrealist, that I frequently see sponsorship material like “Aave Grants DAO sponsoring X”: who sponsors is Aave, the Aave DAO. It is even ridiculous to raise the point.

• Currently, there is approximately 0 connection between AGD and the majority of active contributors to the DAO. This could be perfectly acceptable if the grants entity would limit itself to its mandate: support teams/individuals building on top of Aave their products.
  The issue is that again and again, grants are given for quite invasive items, conflicting with ongoing (or even delivered) items of service providers. Some examples:

  • Funding research of Safety Module slashing, while actually, an engaged team like Llama was doing (publishing multiple blog posts here about it!).
  • Funding grant for RFPs research (?), having clearly 0 visibility on DAO procedures.
  • Proposing projects for hackathons tooling that was built by service providers. This happened with the debt swap feature, even when both myself and even a reviewer pointed out that it was already built. This points to a really serious problem of context and visibility in the leadership.

  The solution to this is pretty simple AGD should stop giving grants which have implications on other operations of the DAO.

• Related to the previous, and regarding the point on the proposal of exploring RFPs, again, this is not and should not be the mandate of AGD. A grants committee does not have enough expertise to decide on RFPs at scale. This will degenerate into asking other contributors (like myself, which already happened) to participate in it, which will make the role of AGD completely useless in those regards.
  Giving precedents, personally, I’m not really willing to participate with the current leadership, no matter the framework.

• Aave should keep an important budget and presence at events, most probably higher than proposed. The problem at the moment, after like 2 years is that the visibility is low. As other community members commented, it is totally unclear how events are chosen, based on which criteria.
  For transparency on an item I was involved in, a service provider (Certora) offered AGD the opportunity of a small sponsorship of the Defi Security Summit, arguably the most important Defi security event of the year. AGD declined, even if actually the community had a presence there (the team I’m part of, BGD Labs, talking about Aave).
  Additionally, I have the feeling that Aave promotion was order or magnitude stronger before AGD took control of it.

• In this stage of the market, individual grants should be capped in size with no exception. Aave should not be giving grants to bootstrap projects: the DAO is not an incubator, its goal is to support projects, not to invest in them or pay all their bills.
  Having a bigger size requires monitoring for accountability that 1) AGD is not capable of 2) it should not be even targeted, to keep lean procedures.
  Most probably, the optimal way could be having 4 grant tranches of let’s say 2’500, 5’000, 10’000, and 20’000, which will even benefit the decision-making by reviewers.

• Arguably, one of the most important benefits to grantees is the exposure Aave provides, in some cases, pretty certainly more than the monetary grant itself. What is the strategy for this at the moment?

• The ask for a quite important sum on ARB and OP tokens raises the question, what exactly is gonna be the focus on that specific side? From my perspective, it feels totally arbitrary.

• The discussion is going into the branches of compensation of reviewers which is totally empty, for several reasons:

  • The numbers are pretty acceptable. A budget to holistically run a grants program in a decentralized manner with ~10 people involved for an effective ~400,000-500,000 yearly is acceptable.
  • Being a review of AGD in the past, reviewers were precisely the lesser of the problems, with pretty high implications from their side. Operations efficiency was the problem.
  • Again, procedures are way more important, with things like: how is the history of reviewers of application X being investors pre/post giving the grant?
    Which mechanisms to avoid conflict of interest are in place?

• Regarding the legal entity formation, who took this decision? Who is personally managing it? Which implications this has for the DAO in all senses?
  Commenting that things will be “like always” is unacceptable, without explaining in full detail everything to the community.
  The problems mentioned of not being able to enter into contracts, etc. on giving grants (?) are simply out of mind: Aave is a decentralized protocol, really serious entities are working with the DAO and never have any problem, but there is a problem to work with a grants entity just supporting developers?
  If the issue is on events, the solution is as mentioned: the grants entity should not be organizing events.

• The topic of subDAOs feels not even debatable to me. The concept is lately pushed by MakerDAO as some kind of promotional grift with absolutely no substance. Extremely concerning to see anybody associated with Aave even propose it as an option.

Generally, I have the feeling that the pattern is repeating again and again: a proposal is presented to the community, not even so precise → all previous grantees support for a matter of gratitude and because they had a good experience with AGD (which I’m not denying at all) → fundamentals are ignored.

As a consequence of the previous, I’m totally against the current state of the proposal, it is time to change things.

[MarcZeller]

Hello,

The ACI appreciates the enthusiasm in the grant DAO renewal discussions. Our perspective on this matter isn’t black and white, and we’d like to share our nuanced thoughts:

Alignment with Service Providers:

Historically, the Grant DAO has felt like an isolated island, somewhat oblivious to the DAO’s broader needs and strategies. This has led to some glaring misses. So, hats off to the “AGD and Service Provider Alignment” section of the proposal. It’s about time.

On this part we echo @eboado feedback at 100%

Compensation:

The compensation budget is Fair. Skilled folks deserve fair pay. And taxes are a thing. More than half of the numbers you see out there usually get eaten by our best friends from the governments.
we have zero remarks on this part of the budget.

Grantee Support:

@dmars300

Absolutely thrilled to see this Aave Grants Continuation Proposal roll out. The level of detail in planning, right down to the KPIs, shows a lot of foresight. It’s not just about funding projects haphazardly; there’s a clearly mapped-out strategy here, which is incredibly reassuring for anyone vested in Aave’s future.

It’s lovely to see grantees like @dmars300 showing support. But let’s be real: AGD funded him $4600 for a series of videos that barely hit 500 views. That’s $8.6 per view. Loyalty is great, but this kind of support might be doing more harm than good.

Grant Budget KPIs:

@0xbilll

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

• The “Award a minimum” approach is problematic. Quality should always supersede quantity. If there aren’t enough quality grant applications, it’s better to carry forward the budget rather than spend it for the sake of spending. The mindset of “spend this budget or risk a reduced budget next quarter” is detrimental and the reason why most governments are deep in debt.

• Speaking of the review committee, y’all are generally too nice. While kindness is a virtue, I, personally, am not afraid to decline proposals that don’t meet the mark.

Hence, I’m putting myself forward as a candidate for the AGD review committee to bring a more critical perspective.

Event & Swag Budget:

The Aave Companies Event & Swag team is unparalleled. No one in the ecosystem comes even close to the quality of their delivery.

We believe they deserve more than what’s currently allocated in the proposal. Their work offers incredible brand ROI.

However, the current funding structure, where AGD and the DAO indirectly partly fund by proxy the Aave Companies, is convoluted. If there are legal or other concerns, it’s time to clear things up and streamline this with a dedicated structure. the AGD is simply not a good match for this.

In conclusion, the ACI will vote NAY on any budget that doesn’t clearly segregate events/marketing/swag from grants.

Grant budget

On this topic, we greatly echo @eboado remarks.

Conclusion:

The ACI acknowledges the hard work and dedication of the AGD team. Their efforts have been commendable and have contributed significantly to the ecosystem. However, in its current form, the ACI will cast a NAY vote on this proposal.

That being said, we are generally supportive of the AGD’s mission and believe that with some modifications, a consensus can be reached on this proposal having an effect on the vote we will cast.

We are eager to continue our collaboration with the AGD team and are optimistic about its future.

Furthermore, we cannot emphasize enough the exceptional work of the event/marketing/swag team. They are unparalleled in their expertise and deserve direct support. We strongly advocate for a separate proposal dedicated to them, and they can be assured of 100% ACI backing for budget proposal in the realms of what is currently proposed.

[Hazbobo]

Thanks for the response bill!

Generally I agree on costs after reviewing.

As others have noted - I remain convinced that events/merch is an area that can be improved. Everybody agrees they are of high value so this isn’t really the discussion - it’s more if the current setup is appropriate - to which i still agree with @MarcZeller and @eboado.

Also, on the extended 2024 proposal - why are we waiting until then to fully flesh this proposal out? I’m not sure why we can’t address these points now tbh.

A side note - On subDAOs (responding to @eboado) - I think the term subDAO is a bit of a misnomer. Yes MakerDAO has taken on the term recently for endgame - but actually “subDAO”s have a serious history within DAOs and can be successful. They are often simply just independent working groups. The point here is to have an independent events groups, hopefully AC. Ofc this could just be a service provider - but given subDAOs were mentioned in the proposal it also feels like it could be a solution (ignoring the name and just setting up) - technically AGD is a subDAO within the Aave DAO.

[TokenLogic]

Hi @0xbilll,

Overall, we are very supportive of Aave DAO having a Grants DAO and want AGD to continue. However, similar to others, we believe there is room for improvement. Rather than repeating some of the comments above, we will focus on different points.

TokenLogic enjoys working with AGD, and we are always willing to support AGD. Collaboration on GHO adoption feels like a key area for the two teams to focus on together. We are excited to see GHO featured in the AGD proposal; it is a key growth area for Aave DAO, and we would suggest removing the Quantity of Grants Awarded Metric. Instead, we would suggest developing GHO-specific objectives and measuring against those. The RFP lends itself to this approach nicely, but it does require understanding the GHO roadmap and having really good communication with Service Providers.

We believe the AAVE component of this funding request should be removed and replaced with another asset. We suggest replacing AAVE with GHO. Incentive alignment is a great point and something we recognize. However, like Chaos Labs, TokenLogic, and ACI have done, we believe adopting non-AAVE funding is the best path forward.

[AndrewA]

Hi all, chiming in here as an AGD reviewer.

First off, I have a tremendous amount of respect for @eboado and @MarcZeller. From my perspective, they form the DAO’s strong backbone, and I agree with quite a few of their points (e.g. grant sizing should be smaller and focus on grants vs. events).

---

However, I did notice one inconsistency that I’d like to discuss as I think it is an important example.

• Funding research of Safety Module slashing, while actually, an engaged team like Llama was doing (publishing multiple blog posts here about it!).

Context
I played a part in approving @XenophonLabs’s grant to research the Safety Module, which as a first stage resulted in this discussion.

Before funding the grant, since I was aware of @Llamaxyz 's work stream on the Safety Module, I reached out to the various DAO contributors that might have an opinion and tried to get their understanding of the workflow as I wanted to prevent funding work that was already being done. As part of that, I specifically reached out to @eboado and @MarcZeller as I know they are active contributors who might have more context than myself. @eboado had reasonable reservations given the potential overlap, and I didn’t hear from @MarcZeller on first outreach.

After some work to clarify how this work stream would differ from Llama where the @XenophonLabs team met with @HelloShreyas (lead’s @Llamaxyz), the team landed on these specific differences with Llama’s work stream and they came out of the conversation planning to collaborate with the Llama team on pushing towards an outcome:

So there are (at least) two parts: slashing percentage and pool composition. The simpler, less controversial of those is the slashing percentage. We want to do research to quantify, in dollar-terms, the sensitivity of the module to changes in slashing percentage, as well as demonstrate the optimal slashing percentage. Our preliminary work showed that this alone can lead to millions in savings, and our understanding is that this is not being performed from within Llama’s current research scope

With the additional clarification, I discussed further with @eboado and confirmed that he felt comfortable with AGD funding the additional research on a topic. After @XenophonLabs finished their initial research, I then followed up with @MarcZeller to see if he’d like to learn more and chat with the team. He then decided this was not his area to have a unique input on and asked that I direct Xenophon Lab’s questions to @MatthewGraham, who was working on this for @Llamaxyz at the time. Per the feedback, I connected the Xenophon team with Matthew so they could collaborate moving forward.

Fast forward a few weeks, and it becomes clear that @TokenLogic contributors @MatthewGraham and @Dydymoon, who were working on the Staking Module upgrade for @Llamaxyz, are moving forward under a different flag. This complicates things because based on initial discussions that the @XenophonLabs team had with @HelloShreyas, they agreed on a collaborative path forward, whereas discussions with Matthew and Dydy were a bit more argumentative. This is likely worsened by the fact that getting funding from the Aave DAO has become competitive, and @TokenLogic is now pursuing funding from the Aave DAO and listing their work on “Safety Module Improvements” under their current and future work streams. So I’m assuming they feel somewhat territorial regarding the Safety Module.

Conclusion
I attempted to communicate clearly with all engaged members of the DAO and get their thoughts before ever approving a grant for any research on the Safety Module. I hope the outline of events above makes it evident how difficult navigating DAO contributors and politics can be, expecting no overlap or perfect efficiency in contributions is too idealistic. Furthermore, in my opinion, no one entity should have an unchallenged monopoly on a work stream.

---

TL;DR
While I agree that duplicate efforts (e.g. building the same tool twice) should not be funded, I think that funding competing ideas is important and should be encouraged such that the Aave protocol doesn’t settle for suboptimal or noncompetitive services.

[eboado]

Well, in that specific case, I would say the problem is for Llama to agree on “collaborating” with a grantee when there was a paid mandate from the Aave DAO for them to do the same.

Regarding my feedback on the item, I actually had/have no criticism of what Xenophon Labs delivered, as it was quality work. When I was asked about it, I just mentioned that their proposal was reasonable.
However, pointing to feedback from contributors like myself or @MarcZeller as some kind of “well, it is your fault”, just tries to create some scapegoat: let’s be clear, same as by participating on this thread, I give feedback to anybody on the ecosystem when I was asked for a matter of community collaboration, but I have no obligation to.

Regarding duplication of scopes, it simply makes no sense because the vast majority of people involved in the process have 0 skin in the game. That creates a situation in which everybody is happy with it because the consequences are only for the DAO.
Additionally, I don’t think anybody voted for AGD to decide on high-level duplication or not of scopes; definitely not me.