[TEMP-CHECK] Further Decentralising the Aave Grants DAO

Governance
1

Title: [TEMP-CHECK] Further Decentralising the Aave Grants DAO

Author: @Kene_StableLab

Summary

This proposal seeks to start a discussion around further decentralizing the Aave Grants DAO through elections run by the Aave Community. By enabling the Aave DAO to elect the Grants Lead and Reviewers, the Aave Grants DAO will enhance its accountability and transparency to the Aave Community.

Motivation

Since its establishment in April 2021, the Aave Grants DAO (AGD) has been managed by Shreyas Hariharan, and more recently by 0xBill. The AGD has successfully awarded $8M to grants and events to help grow and develop the Aave ecosystem.

As the Aave DAO continues to decentralise, it is crucial to introduce greater community oversight and participation in the operations of the AGD. To achieve this, we propose granting the community the power to elect a Grants DAO Lead and the seven reviewers who will form the AGD.

By implementing this election process, the DAO will be able to hold the Committee members more accountable based on their performance and effectiveness in their respective roles.

To ensure this power is retained, the community must have two things:

  1. Power to vote in and also remove members of that committee through an election process.
  2. Insight into how the committee conducts its day-to-day operations, as this enables the community to have the necessary information on their current and past performance.

Creating a more open and transparent grant process should be a priority for Aave DAO in order to invite more community participation and increase the effectiveness of the grant program. Other DAOs such as ENS, Compound, Optimism, Arbitrum etc. are leading this charge holding community elections to select which individuals are responsible for allocating the DAOs resources in order to further the mission of the DAO.

Proposed Changes

  • The electoral process: We propose the current grants committee be dissolved at the end of this quarter and thereafter conduct elections for the next set of Aave Grants DAO members.
    These elections would be conducted every six months on Snapshot using the weighted voting method, accounting for the seven reviewers and the grants lead, this election would select the seven highest-voted candidates as members of the Grants Committee. While the head of the Aave Grants DAO will be selected in a separate election that will focus on electing the most qualified individual to lead the Aave Grants DAO.
    Before nominees are brought forward before the DAO for an election each of the nominees must in a nomination thread on the Aave Forum, give an overview of their expertise in one or more of the following areas: Developer Tooling, Security Analysis, Protocol Improvement Strategy, Risk Management, Community Education and Event Planning & Management.

  • Clearly defined compensation: It is important that Grants Committee Members have clearly defined compensation. We propose retaining the $9k monthly salary for the Grants Lead, while the seven reviewers take home $6k monthly with a minimum 25hr/monthly commitment. The Grants Committee will hire a Program Manager to take over the role of the Operations Associate, and the Program Associate will be compensated $7k monthly. We propose retaining the role of an Events Coordinator who would be compensated with $3k monthly.

  • Transparent Review Process and Tooling: The Aave Community currently does not have adequate insight into the Aave Grants Committee’s request pipeline. Considering that all DAO members are stakeholders in ensuring that the Aave DAOs resources are well allocated through grants, we believe it is important that the community has as much transparency as possible into how grants are processed and considered. To enable this, we propose using web3 native grants platforms such as Questbook.

Questbook is a decentralised grants orchestration tool used by various projects and ecosystems across the web3 space. Questbook is leading the grants program for Compound using a Delegated Domain Capital Allocation Model. Questbook’s experience includes successfully facilitating the disbursement of approximately $1M in grants for Polygon. Additionally, Questbook has been involved in establishing the grant process for various other ecosystems such as Arbitrum, Celo, Perpetual, and TON.

Although this proposal primarily uses Questbook to illustrate how adding a transparent software component to the Aave Grants DAO is beneficial, this proposal is open to utilising other grant tools based on community inputs to enhance transparency and community participation in the capital allocation process.

Why is our initial preference Questbook?

  • Being an Aave grantee, Questbook is already familiar with the ecosystem
  • Questbook has been trialled and tested across many reputable ecosystems such as Compound, Arbitrum, Polygon, and TON.

How would Questbook improve the Aave Grants DAO’s Transparency?

  • Aligned allocation of funds: By using Questbook for reviewing proposals and disbursing grants, the Aave community can directly monitor if the funds are allocated to projects that align with Aave’s roadmap, promoting efficient and effective use of resources.
  • Increased transparency: Questbook will empower the AGD team to review proposals in a transparent process, ensuring stakeholders understand the decision-making process and building community confidence. Questbook provides a transparent space for teams to showcase their backgrounds and experience.
  • Increased accountability: With a dedicated group of stakeholders responsible for allocating funds, a transparent review process will promote increased accountability, ensuring that the funds are used effectively and efficiently. Members of AGD team can be replaced through a community vote if their performance is not up to the standards accepted by the community.
  • Pseudonymity / Anonymity: Builders can use Questbook and apply for funding without doxxing themselves. Questbook provides a transparent space for teams to showcase their backgrounds and experience, fulfilling the proposal’s requirement for team member descriptions.
  • Turnaround Time (TAT): Evaluating proposals in a transparent manner will significantly improve proposals’ turnaround time and overall outcomes for the ecosystem. An example of this is Compound who’s already leveraging the DDA model and has a communication TAT of less than 48 hours
  • Increase in the number of high-quality proposals: Supplementing AGD’s organic proposal pipeline, Questbook’s organic builder traffic of 30,000+ builders/month will enable Aave Grants DAO to source and fund a significantly greater number of high-quality proposals in a transparent manner.

How much does Questbook cost?

After negotiations with Questbook, the team will charge a 5% fee of the total disbursements made to Grantees monthly, this fee is capped at a maximum of $9k/month.

Rationale

Questbook’s approach of charging a percentage of the grants disbursed is designed to align their incentives with delivering value as against product usage. Funding a project signifies that Aave grants DAO has identified a project worth investing in, which further indicates that various steps in the funding process, such as attracting quality builders, establishing evaluation rubrics, and ensuring successful milestone-based payouts, have been executed effectively by the grants committee. They intend to charge based on the successful completion of all these steps, rather than just product usage, to align the pricing with the value delivered through the entire grant disbursal cycle.

Product Flows

  1. Posting a grant - Link
  2. Reviewing and Funding Proposals - Link
  3. Settings - Link
  4. Communicating with Builders - Link
  5. Funding Builders - Link

Specification

If community sentiment leans towards decentralizing the Aave Grants DAO and making it more transparent, we would actively take steps to implement the various aspects of this proposal at the end of this quarter.

Next Steps

All members of the community are invited to take the poll below to express their sentiments and also engage in active debate in the replies.

  • Decentralise Aave Grants DAO

  • Make no changes

0 voters

Disclaimer

StableLab is not presenting this TEMP-CHECK on behalf of any third party and is not compensated for creating this TEMP-CHECK.

Copyright

Copyright and related rights waived via CC0.

9 Likes
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Hi,

i really like the idea behind this proposal and it makes sense for me. I also really like the integration with Questbook. I never heard it about it yet, but it looks good, clean and easy to understand and follow. Which will give a lot more transparency whenever needed.

Im just asking myself does it make sense to have someone in AGD who is already familiar with all of the tasks? If new people start there and haven’t had any kind of training, it could be a hard start from the beginning. So in my view it makes sense to either have someone involved who knows what to do or at least have some kind of training before starting. The payments are still quite generous in my opinion and for example i would love to be part as a reviewer but i don’t know if i have the necessary skills. If i would see whats the amount of work to be done and how to approach different things it would be easier to estimate if i would be the right choice or someone else.

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Thank you for the comment. @EzR3aL

I see your perspective, but in terms of the experience level of the Grants Reviewers or the Grants Lead, the Aave Grants DAO would need individuals or teams who have previous experience leading a Grants Committee or contributing to one, combining this experience with an understanding of the Aave DAO and its ecosystem more broadly, we believe that whoever this election produces would not need to be specifically trained to hit the ground running with tasks.

We could definitely connect individually to talk more about the time commitment and skill level required of a Grants Reviewer.

1 Like
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Hello,
Thank you for this TEMP CHECK proposal, and I’m delighted that this subject is on the table :)
The AAVE GRANTS DAO has indeed a crucial role in the development of the ecosystem but also in the perpetuation of AAVE. This organization redistributes part of the protocol’s revenues towards external developments, industry support or events and hackathons.

But if the protocol is structured with independent delegates and service providers, it seems equally important that the AGD board, which manages several million euros a year for the collective, should also be independently appointed. It’s the 2nd biggest expense for prestation of the protocol! Especially as the projects in the protocol evolve and our stakes change; with this mode of operation, AAVE will be even more committed to its objective of decentralization, and this will bring even more at stake in the grants to be awarded, than in the projects’ desire to apply for this grant. The commitment of project leaders will undeniably be stronger, and the proposed supervision tool will make it possible to be granular in all this management.

The AGD has contributed to many successes in recent years, and no serious error has cost the protocol its image, unlike others. But to continue to be competitive, to have a 360-degree vision and to reduce bad funding, openness to delegates seems quite necessary. And that’s the direction we want to take.
The AGD has received many successes in recent years, and no serious errors have cost the protocol its image, unlike others. But to continue to be competitive, to have a 360 degree vision and to reduce bad funding, opening up to delegates seems absolutely necessary. And this is the direction we want to take! Perhaps we need to review the role of the examiners, and in particular strengthen the monitoring of subsidies? These roles are relevant, and I think that in any case, in the manner of a board, the reviewers will exchange views across the board when awarding a grant, especially for larger sums. But the project leader needs to be challenged throughout the grant application process, and the reviewers need to be just as multi-subject, as the next two years will be so different from the last. Perhaps we need to slightly increase the size of the board, even if it means discussing the remuneration of each member?

5

If we are saying that only people who have committed to a committee in the past are eligible. How many people will be eligible overall in this forum?

I understand these people need to be educated and understand the DAO but there won’t be a lot. This could lead us to the same situation we had in the past with Shreyas leading the AGD but also being on the Llama team. So there will be some kind of conflict and I’m not sure if we should have this again in here.

But overall I still like the idea. But execution who will be on board will be interesting. And like I said I would still be up to support here if I would qualify for a reviewer role.
It would definitely help to get some insights from current reviewer to understand what skills are needed.

2 Likes
6

Perhaps not the right thread for it, but if the DAO is considering making changes to Aave grants DAO - I would also consider separating out the budgets (and maybe teams) for events & merch Vs funding projects in the Aave ecosystem.

GrantsDAO and merchDAO or something like that. That way the community can decide how much it wants to dedicate to different expenditures for the DAO more accurately.

Regarding this proposal exactly, I generally agree with this:

Referring to Questbook, I personally just have no idea if this is a great solution or not. It’d be great to see some past users chime in with their thoughts, or to hear from some of the AGD team on all of this.

Good proposal either way.

5 Likes
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Thanks @Kene_StableLab for this proposal. Great to see the first steps towards Aave Grants DAO decentralizing its grants process and the selection process. I’m a grant recipient building in the governance space and have received a grant from multiple ecosystems.

Questbook seems like a good option too. I’ve had a pleasant experience submitting my proposal and receiving a grant through Questbook. Transparent and smooth!

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Thank you for creating this TEMP Check @Kene_StableLab

I generally agree with decentralising the ADG to better reflect the ethos of the general crypto community. That being said, I do question the overall process and structure around this proposed change.

a. Are the grants lead and reviewers positions of trust or positions of skill? The token weighed election process points to the fact that these positions are meant to be positions of trust, but the salaries point to the fact that these are positions of skill. Having the right goal and aligning the selection process to this goal is important to ensure the right outcome.

b. Since Questbook compensation is based on a % of the total grants disbursed, it is in QBs’ interests to disburse as much amount as possible, which may not align with prioritising the goals of the AAVE community. In an ideal case, a request for proposals process should be opened up to allow multiple vendors to bid for being the grants vendor for the DAO, so that we get the best bang for our buck!

In all cases, I’d suggest compensating all stakeholders (atleast partially) in vested tokens, such as those enabled by https://hedgey.finance/ to align incentives.

1 Like
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Strongly in favor of separating the budgets if we go this route. Merch + Events requires a bit more centralized planning etc

1 Like
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tl;dr - Aave Grants has developed our own tools and processes that have resulted in funding close to 250 grants and becoming known as one of the top grants programs across crypto. This proposal increases costs to the DAO while ignoring the work and spend that has gone into Aave Grants, along with current plans to continue decentralizing.

Electing team members is an interesting idea that should be thought through more and properly structured if implemented based on likely consequences and results.

Thanks for the proposal. It’s good to see discussions around Aave Grants starting from community members.

This seems like two different proposals:

  1. Have elections for team members

  2. Use Questbook (and pay them 5% of all distributions)

Let’s look at each one.

1. Have elections for team members

Decentralizing Aave Grants (AGD) is something we have thought about since the beginning of AGD and are constantly working towards. The path to decentralization is a long journey.

Proposed Changes
The electoral process

Having an election gives the community a say in who should be on the committee, but it doesn’t decentralize AGD. Decentralizing AGD should focus on empowering the community and giving individual community members a meaningful say in how the grants treasury is distributed. In this proposal, the decisions would still be made by a committee. To truly decentralize AGD the process needs to be decentralized, not the team selection. There are a number of things we currently have in the works to create a decentralized and sustainable AGD, including:

  • Grantee Accountability. You may have noticed an influx in grantees (e.g. BEN, Defi Simulator, and Projection Finance) posting directly on the forum to introduce themselves, explain their grant, and 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.
  • Request for Grants. Introduced a pilot to better direct builders to apply for grants in certain high impact areas.
  • Entity Formation. As outlined in our most recent proposal and in our Halfway Update, we have been working towards creating an entity for AGD. This will be a big step for AGD’s maturity. It will give clarity and protection to contributors along with increasing operational effectiveness.
  • AGD Values and Best Practices. Created internal guidelines to help align reviewers with decision making.

Politicizing Grants

I am also hesitant about politicizing the process of who should be on the grants team. It is something that should be carefully thought through. Are the best individuals or teams to serve the ones most capable of winning a DAO vote? If implemented, I would recommend that at least the core team roles are longer term so members can better plan and prioritize work.

Proposed Changes
Clearly defined compensation

Compensation is clearly defined in each AGD proposal. We have learned from our experience and changed reviewer’s compensation to be an hourly rate, calculated based on reviews and interviews, as it better incentivizes reviewers and accounts for fluctuations in applications. This may be worth adjusting again in the future.

This proposal would result in AGD increasing compensation as reviewers’ average pay in 2023 has been ~$1,300/month, versus the $6,000/month proposed.

Proposed Changes
Transparent Review Process and Tooling

AGD follows best practices from other grant programs like Ethereum Foundation or Uniswap, where reviews are private while grants are made public, along with clear feedback for why a project was accepted or denied. Importantly, we are in control of this process and are able to modify it. This allows us to make updates based on feedback from the community, reviewers and grantees and to easily experiment with different elements of the program.

If the community wants to see changes to our processes, such as having applications public for the community to provide feedback, then we can integrate this into our current process.

2. Use Questbook (and pay them 5% of all distributions).

This reads more like a sales pitch for Questbook to me. I’m actually somewhat familiar with Questbook as we ran a pilot with them earlier in the year. After running the pilot we did not continue with Questbook due to poor results compared with our existing technology stack (Airtable with integrations + automations) and the experience highlighted the value of the set up we had built along with being in control of it.

Review times took longer and we did not see any engagement from the community. With the current amount of applications we receive (~30 a week) the Questbook UX was not a sophisticated enough tool to manage the tracking, reviewing, and interviewing of applications.

Let’s look at each of the proposed benefits outlined:

Aligned allocation of funds

This is currently the case with AGD. You can see a list of all grants we’ve funded on our website, read our monthly updates or follow the Llama dashboard linked to. You may have also seen an increase in grantees posting to the forum, aligning grantees directly with the community.

Increased transparency

AGD does this through the above mentioned links and other updates. While there are reasons AGD has not enabled public applications, if there is demand from the community then we can implement that within our current system.

Increased accountability

This does not appear to be any different than how AGD currently operates.

Pseudonymity / Anonymity

AGD currently welcomes anon builders. There is actually more privacy with our system as applications are only seen by the review committee unless accepted, compared to all applications being public.

Turnaround Time (TAT)

From my experience, this is an odd thing to optimize for. Grants should optimize for effective and impactful grant decisions and support, not record decision time. 48 hours is not realistic for complicated, multi-phased grants that could receive $100,000 in funding. Time is required to properly research, communicate with other reviewers and engage with the team.

Increase in the number of high-quality proposals

Let’s be clear, Questbook would benefit far more by being able to say ‘Aave Grants uses Questbook’ than AGD would from any increased traffic.

If AGD starts using Questbook, then they will leverage the relationship to start working to manage other protocols’ grants programs. If AGD is on Questbook, our grants and applications would suddenly be alongside other protocols and grants.

To highlight a few things with our current system:

  • Created and iterated on a process over the past 2+ years - usually making several changes each month in response to applicant, reviewer and community feedback.
  • Have an experienced team in place to make changes quickly - see the integration of RFGs and introduction of video interviews into our application process as recent examples.
  • Processed 1944 applications with an average turnaround time since inception from application submission to grant decision of 9.6 days. This time frame has decreased significantly over time.
  • Achieved an NPS score of 83 based on responses from 78 grantees - the average response to “how likely are you to recommend AGD?” is 4.7/5.

A few other important points from my perspective:

  • This proposal will increase costs to the DAO. It essentially brings on a new service provider at $9k/month.
    • Since inception, AGD has awarded $4,852,753 in grants.
    • If Questbook had taken 5% of this, the total cost would have been over $242,000.
  • If this progresses to a Snapshot vote, the options need to be better defined and worded. Who in crypto doesn’t want to further decentralize something? No one in crypto wants to be stagnant. The options in the Discourse poll are not an accurate representation of the situation. Given the limited usage of the Discourse poll in Aave governance, this seems like an attempt to quickly gather the illusion of community support.
  • AGD will be sharing a new proposal shortly. This will include an update with details on the legal entity we are forming, more of our plans for decentralization and other updates. AGD has been prudent with spending since our last proposal and as such will be asking for a reduced amount to continue the same quality of operations.

This proposal would add more overhead by creating an election and increasing costs (over $100,000 per year in fees plus higher reviewer compensation) without addressing the core issue of how to empower everyday community members.

9 Likes
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@Oztlab Thank you for sharing your thoughts and comments. Really appreciate it. We believe that active community participation in selecting the members of the AGD and reviewing their performance is essential to the success of AGD. Furthermore, a transparent review process will help the community members to get an insight into the nature and type of accepted, funded proposals and the evaluation process. This will make the AGD grants team members accountable to the Aave community.

If the performance of any member of AGD is not up to the mark, the community can vote to replace them. In our proposed structure of the AGD, all members of the AGD including the Grants Lead will be elected through self nomination and community voting process.

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@EzR3aL Apologies for the confusion. We agree that we shouldn’t restrict the election process to only folks with prior experience with running grants program. Although such experience is valuable, as outlined in the proposal, interested community members will be required to provide details of their relevant experience along with specific details while nominating themselves to be a part of the review committee. We will provide further details regarding the self-nomination process after seeking community inputs and inputs during community calls. Overall, the opportunity to apply and self-nominate for the review committee will be open to everyone, and the committee members will be elected from within the community.

Additionally, we will request a member of the existing AGD team to share an overview of the existing processes and facilitate a seamless transition for the newly selected grants committee, chosen from the Aave community.

1 Like
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@Hazbobo Thank you for your comments and feedback. Really appreciate it! We will wait for more feedback from other community members and are open to separate the two focus areas based on the additional community feedback.

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@Roman_M Thank you for your comments and feedback. Really appreciate it!

1 Like
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@jengajojo Thank you for sharing your comments and acknowledging the need to decentralise AGD.

  1. As specified in our proposal, the grants lead and reviewers should be experts elected through a self-nomination and community voting process. Self-nomination outlining the expertise of the interested candidates takes into account the expertise and community oversight, while community voting ensures the ethos of decentralisation and community involvement in the election process.

  2. As specified in the proposal, this proposal is open to utilising other grant tools based on community inputs to enhance transparency and community participation. Because Questbook has been trialled and tested across many reputable ecosystems such as Compound, Arbitrum, Polygon, and TON and offers a transparent way to run and manage grants programs on-chain, we believe that transparent software will help AGD strike a balance between transparent review process, accountability and community participation in the review process.

1 Like
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Disclaimer: I am current reviewer at Aave Grants DAO, this is my personal view.

Now that that’s out of the way…

First, on the need to decentralize GrantsDAO – if we look across the DAO, there are much more impactful areas for “decentralization.”

This proposal seem to assume the reviewers are the issue – when instead the issue may be the structure. AGD is keen to improve this and introduce more accountability, as noted by @0xbilll .

Let’s look at some current and past reviewers:

@AndrewA – Coinbase Cloud
0xShreyas – Llama
@inkyamze – Gauntlet
@eboado – BGD
Jane Lippencott – a16z
@aleks-larsen – Blockchain Capital
@corbpage – ex Consensys
@daveytea – ex Coinabse & Aave
@calchulus – Impossible Finance

In my biased opinion, this is high quality list of people and organizations, who can help grow and connect builders. They are passionate about Aave and experienced with strong networks.

I’ll say it again — I’m not sure this is the area which needs most improvement.

I am in favor of adding some community voice in future processes, though.

I do agree there is opportunity for positive change in AGD.

Some plain thoughts about this – which we may discuss:

  • More proactive grants and community-based RFPs vs. reacting to applications (h/t @benhoneill)
  • More segmenting and subject matter expertise (i.e. Engineering, Governance, UX, Events, etc.)
  • Owning the paid delegation program
  • Sharing proposition power among the community
  • Separate and/or refined budgets a la @Hazbobo

If you’re looking for change and decentralization, it may be best to start there.

As for Questbook, I am against this integration.

Feels very strange to pitch this one solution which adds cost for marginal benefit. Software is usually only bought if solves a problem or reduce costs; this seems to do neither.

Looks like StableLab has supported Questbook in the past:

It feels worth differentiating ourselves and saving the admin fee.

8 Likes
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Pretty interesting topic, organization-wise. Some points of mine (generally about AGD):

  • I tend to agree with @fig that the focus should be less on the participants in the review, and more on the general organization.

  • Public election of reviewers will give 0 value and will create more problems than it solves. Candidates will lobby for some kind of weird exposure and expertise will drop.
    What Aave needs for grants distribution is impartial, competent, and Aave-expert people.
    However, I agree the lead of the program should be elected, presenting credentials, conflicts of interest, etc.

  • Even if some grants definitely gave/give value to the ecosystem, I tend to think that there is an important disconnection between AGD and general vision, or even forum proposals.
    E.g. I saw multiple grants related to the Safety Module optimization (incentives, composition, etc), while 1) the community has made movements in that direction (Llama, TokenLogic) 2) service providers rarely (sometimes yes) have been included in the conversation; and honestly, they have no obligation to do it, as AGD is a compensated program.
    That reflects a clear problem.

  • The budget allocated for grants is enormous. Without having perfectly optimal operations, definitely too high. I keep seeing grants of +30’000 for items like building Aave v3 adapters, which at this stage, sounds a bit ridiculous.
    Let’s be clear, this is a really big problem because it creates some “contagious” effect where criticism of other budgets opens to reflections like “Well, AGD awarded 50k for projects that were not even delivered”.

  • Using an extra tool taking an important fee is nonsense, without really optimizing everything else before. From my experience in the past as a reviewer of AGD, definitely tooling was not really a problem.

  • Elaboration of RFPs should be exclusively the job of AGD if going that direction, and their own responsibility to detect any kind of misalignment with ongoing projects, by contacting other contributors.
    Personally, I got requested to participate in the RFPs elaboration, but 1) it requires time, which I don’t have 2) it is work of AGD, and if there is a lack of expertise, it is not up to me to provide it.

  • Generally, over time the responsibilities of AGD have expanded (e.g. some kind of dark marketing role and sponsorship), which is over-extending when there are doubts about the grants themselves.
    What the Aave DAO needs is an entity distributing grants, maybe an entity to organize events, maybe another for marketing purposes; not a big conglomerate taking everything and ending up tackling nothing.

  • Could you elaborate @0xbilll on why a legal entity is required? How would the transition of controlling members would work?

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Thank you @0xbilll for sharing your thoughts and comments. Really appreciate it!

While we appreciate the efforts of AGD to decentralise the grants process, it is worth noting that the discussion started almost 2 years ago. ~50% of the existing members of AGD have continued to be a part of the committee over 3-4 terms without clear performance reviews, and without extending the same opportunity to the broader community to participate in the review committee and contest for those positions based on their expertise.

Moreover, a key point of concern is that the initial set of reviewers appear to be nominated and selected by the proposer/grants lead. There seems to be a lack of clarity on the process for electing, replacing, and assessing the expertise of reviewers after their nominations are submitted. This process has been discussed in various places, such as here, and here, but some community questions on this topic have remained unnoticed and unanswered in the past, as highlighted here.

Through this proposal, we aim to ensure that key community members and experts have an equal chance to contribute to the AGD and participate in funding quality proposals that significantly influence the growth of the Aave ecosystem.

We believe that decentralisation should not be looked at in isolation. It is essential that AGD balances decentralisation with expertise and speed of decision-making. Requiring every proposal to be commented, and voted on by the entire community can result in voter fatigue and low participation. Instead, proposals that fall below the threshold can be approved directly by community-elected experts, reducing the burden on the community while reserving the community voting process for proposals that exceed the threshold and require broader community input.
In relation to entity formation, we would appreciate more clarity on how this step contributes to enhancing community engagement within AGD. It seems to raise concerns about bypassing community voting for the selection of AGD members altogether. Critical information such as internal guidelines are important artefacts that require broader community insight and transparency to help community members get a deeper insight into how proposals are evaluated and their alignment with Aave’s roadmap.

We believe that both Aave community members and experts should be given an equitable and unbiased opportunity to contribute to the AGD and participate in funding quality proposals. This can be accomplished by implementing mechanisms such as community oversight and well-defined success criteria.

Even in the existing AGD structure, the team members are chosen through a voting process, which, in itself, carries the potential for political influence. The only distinction lies in how these team members are selected, with the current process involving nomination by the proposer or AGD lead, rather than self-nomination.

It is important to offer Aave community members a transparent platform to showcase their expertise and backgrounds, facilitating a fair chance at being elected as part of the AGD team. We are open to further insights from fellow community members on this matter as the AGD grants lead and reviewers might have a potential conflict of interest in an open election process for AGD team members election.

We understand that the compensation framework was outlined in the initial proposals; however, there is a lack of clarity and transparency regarding the precise allocation of hours dedicated by each team member to fulfil their responsibilities. Furthermore, there is limited insight into specific details, such as the reference to a $1,300/month compensation for the reviewer, its associated breakdown and the proposer’s recommendation score.

To enhance transparency and eliminate potential ambiguity in committee compensation, we propose implementing a fixed monthly compensation structure. This adjustment would contribute to a clearer understanding of the compensation process for the community. Additionally, we are open to reevaluating the compensation figures in order to remain in line with the DAO’s fiscal constraints and community feedback.

As active community members, we strongly believe that a transparent review process, coupled with well-defined acceptance criteria and constructive feedback, significantly enhances the proposer’s experience and encourages positive word-of-mouth within the community. This approach not only keeps the community and proposers informed about the review process but also serves as a means to ensure that reviewers adhere to the process guidelines and mitigate potential conflicts of interest.

Overall, implementing a transparent review process with community input can help prevent scenarios similar to the one highlighted here, where proposers are left in the dark about the reasons behind the acceptance or rejection of their proposals.

As previously specified, this proposal is open to utilizing other grant tools based on community inputs to enhance transparency and community participation. We believe that transparent software will help AGD strike a balance between a transparent review process, accountability and community participation in the review process. We are proponents of any software that helps us reach this goal.

Increased Transparency - We acknowledge AGD’s efforts towards transparency and believe there’s significant potential to enhance transparency across the entire submission, review, and grants program performance and analytics. Implementing a transparent review process, coupled with well-defined acceptance criteria and constructive feedback, not only enriches the proposer’s experience but also establishes a robust system of community oversight.

Increases Accountability - The proposed model guarantees that AGD members are elected through self-nomination and retained or replaced via community voting, solely based on their performance and expertise. This structure ensures that AGD members are selected by the community itself, rather than through nominations by the AGD proposer or Grants Lead. The process reflects the community’s voice and prevents concentration of decision-making power in the hands of a few.

Turnaround Time (TAT) - Faster response time and communication TAT are highly valued by the proposers and key contributors. Considering community’s sentiment and Aave’e brand as one of the grants program KPIs, swift response and funding TATs are crucial for the timely progression of Aave’s innovation cycle. High-quality builders and small teams need faster access to capital. A faster turnaround time, both in terms of response and funding, reinforces Aave’s brand and fosters continued growth.

Increase in the number of high-quality proposals - The involvement of a service provider that offers substantial value should be viewed as an opportunity to enhance overall outcomes and key performance indicators. Embracing a partnership that enriches AGD through a transparent tool such as Questbook, if proven beneficial, should be considered a strategic step. The utilization of third-party service providers like Gnosis, Snapshot, and Discourse by numerous ecosystems underscores their value and utility, without compromising their suitability for individual ecosystems that adopt them as part of their workflow.

Furthermore, there is limited insight into specific details, such as the reference to the recommendation score, evaluation criteria, decision TAT, the contributions of funded projects directly to the Aave protocol’s roadmap and KPI, the process for selecting reviewers and grants lead etc. To further improve this, we propose decentralising the nomination and selection process of AGD members and making the entire review process transparent.

This proposal is open to utilizing other grant tools based on community inputs to enhance transparency and community participation. Moreover, the compensation model for Questbook is as follows.

The compensation model is 5% of all distributions made to grantees in a month, if 5% of those distributions exceed $9k, Questbook is capped at receiving only $9k, if 5% of those distributions fall below $9k, for example $7k, Questbook will only take $7k that month.
It is important to note that this can be further readjusted should the community decide to adopt them and take into consideration additional feedback from the community.

Decentralisation should not be looked at in isolation. It is essential that AGD balances decentralisation with expertise, background of decision makers and speed of decision making. We are strong advocates of healthy public discussions and will adhere to our values. We have no intent of creating the illusion of community support and are open to incorporating community feedback into our proposal. As specified above, we would appreciate more clarity on how a legal entity contributes to enhancing community engagement within AGD. It seems to raise concerns about bypassing community voting for the selection of AGD members altogether.

To summarize, our proposal advocates for an equitable and unbiased opportunity to contribute to the AGD, alleviating concerns of voter fatigue, alongside implementing a transparent review process with built-in accountability measures enabled by community oversight.

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Thank you for the comments! @fig

At no point does this proposal bring into question the quality of the reviewers that currently manage the Aave Grants DAO, clearly all the reviewers are high-quality people in their respective roles.

But this proposal is not about that, this proposal is about empowering the DAO to select who the reviewers are, across the ecosystem major DAOs enable and encourage their communities to elect their Grants Lead and Reviewers, this is essentially a best practice of decentralisation.

To effectively argue against allowing the DAO to elect members of the AGD and its lead, you must justify to the Aave Community why the leadership and membership of the Aave Grants DAO must remain managed in a centralised manner, currently, all the DAO has a say in is the budget granted to the AGD, with no access to information, the DAO cannot comprehensively assess the performance of individual Reviewers and the Grants Lead.

Is there a particular reason why this is not the best time to open up the AGD to Community Participation through elections?

This proposal clearly states that Questbook has only been suggested as an initial solution to the transparency issues that exist within the AGD, due to the initial feedback we have received regarding Questbook, the community will have the opportunity to select different tooling options to improve transparency into the AGD Grant Pipeline and the performance of individual reviewers.

When this proposal goes to Snapshot it will provide three options as follows.

  • Run Aave Grants DAO Elections
  • Make no changes
  • Abstain

If the community decides to simply run the Aave Grants DAO elections, we will put up a thread on the forum where various vendors who have built Grants Management Software with a focus on community transparency will be invited to pitch their products, after which the product selected by the community will be used to run the AGD and grant transparency to the entire Aave Community.

Transparency, accountability, and community oversight within the review process stand as essential pillars of any robust grants program, and the adoption of a transparent tool definitely solves problems related to these.
Embracing workflows and methodologies that enhance AGD’s operations through a transparent grants solution, represents a proactive stride toward fostering transparency and active community involvement. Furthermore, this proposal is open to utilising other grant tools based on community inputs to enhance transparency and community participation.

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Thank you for the feedback! @eboado

I do not believe that there is anything preventing highly qualified individuals from nominating themselves and being elected by the DAO as reviewers, taking away this decision-making power from the DAO does not have any significant benefit to the AGD in my opinion, highly qualified people simply need to highlight their experience and have the DAO make a decision through a governance vote.

On the concern of lobbying, under the current system, there is nothing preventing individuals from directly leveraging their relationships with the Grants Lead or Current reviewers to join the AGD as a reviewer, the DAO does not have any insight into how the AGD selects and replaces reviewers, asking for the DAO to elect the Grants Lead and Reviewers is most certainly a fairer way to decide who gets on to join the AGD.

On the point of tooling, the major reason for asking for a change of tooling is to grant the Aave Community more transparency into the Aave Grants Pipeline, and the individual performance of reviewers, considering the size of funds that the AGD is tasked with distributing, transparency is essential, the tool that should be used for this is definitely up for debate, from the sentiment gathered from this proposal we believe that Vendors should be allowed to pitch themselves in a separate proposal and the DAO should decide which tooling should be used to grant more transparency into the AGD’s operations.

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