AIP-252: Funding Grant Proposals using Delegated Domain Allocation

ABSTRACT

• We propose ApeCoin DAO fund a wide variety of teams aligned with ApeCoin’s roadmap with a budget of $1M spread across 2 quarters using Delegated Domain Capital Allocation Model. Questbook is leading Compound grants program through Delegated Domain Capital Allocation Model, a community-run grants program
• We additionally propose that this budget be managed by 4 individuals called Domain Allocators - chosen from the community and by the community. These domain allocators would manage grants for a domain. These domains are strategic areas of focus for which ApeCoin DAO wants to disburse grants
• The performance of each of these domain allocators will be publicly viewable and auditable using rich dashboards. At the end of the quarter, the ApeCoin community can vote to replace, continue domain allocators or increase budgets for each domain allocator.
• We (Questbook.xyz) will help facilitate setting up these domain allocators and provide the tooling to run the program in an efficient and transparent way. We have previously set up or currently setting up the grants process for Compound, Polygon, Solana, Celo, Aave, Perpetual, and IoTeX

BENEFITS TO THE APECOIN ECOSYSTEM

1. Aligned allocation of funds: By leveraging the Delegated Domain Allocator (DDA) model, the ApeCoin DAO can ensure that funds are allocated to projects that align with the domain (key areas selected by the ApeCoin DAO community), promoting efficient and effective use of resources. This approach aligns with ApeCoin DAO’s goal of enabling the distribution of $APE to empower the community to build and participate in the future of the Greater Metaverse.
2. Increased transparency: The Delegated Domain Allocator approach provides a clear and transparent process for allocating funds, ensuring stakeholders understand the decision-making process and building community confidence. Questbook, a decentralized grant management platform, provides a transparent space for teams to showcase their backgrounds and experience. In addition, Questbook’s reporting features will allow the ApeCoin DAO to quickly generate monthly reports on the allocation of funds, with the details for each grant proposal.
3. Increased accountability: With a dedicated group of stakeholders responsible for allocating funds, the Delegated Domain Allocator approach promotes increased accountability, ensuring that the funds are used effectively and efficiently. Domain allocators can be replaced through a community vote if their performance is not up to the standards accepted by the community.
4. 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.
5. Turnaround Time (TAT): The Delegated Domain Allocator model will help 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
6. Increase in the number of high quality proposals : While we recognize that the ApeCoin DAO has dedicated its entire treasury to support proposals that advance its mission, we are concerned about the underutilisation of reserved funds and the dearth of high-quality proposals. Comparatively, Aave receives more than 50 proposals per month, and Nouns receives over 100 proposals per month across different funding formats. Without investing in resourcing and scaling high quality proposals, we believe that the ApeCoin DAO risks falling behind and losing its competitive edge. Delegated Domain Capital Allocation Model and Questbook’s organic builder traffic of 20,000+ builders/month will enable the ApeCoin DAO to source and fund significantly greater number of high quality proposals in a transparent manner.

More specifically, the Delegated Domain Capital Allocation model aims to address the following challenges:

1. Addressing Blind Spots: It is unrealistic to assume that every community member or one individual possesses expertise across all domains. Evaluating projects outside of one’s area of expertise can be challenging and inefficient, potentially resulting in missed opportunities for valuable contributions to the ApeCoin ecosystem. By delegating capital and decision-making to people who are experts and who are closely involved in that domain, ApeCoin DAO will be able to find and fund projects that align with the mission of the ApeCoin DAO, while also addressing any blind spots.
2. Addressing Voter Fatigue: We believe that not every grant proposal needs to go through an AIP process for receiving grant funding. Requiring every proposal to be voted on by the entire community can result in voter fatigue and low participation. By funding proposals through delegated domain capital allocation model, domain allocators can set maximum thresholds for accepting proposals within their respective domains. Proposals that fall below the threshold can be approved directly by domain allocators, reducing the burden on the community while reserving the AIP process for proposals that exceed the threshold and require broader community input.
3. Addressing Inadequate Review Process and Tooling : Lack of evaluation rubrics and domain-specific evaluation criteria can result in an inconsistent and subjective review process, potentially leading to suboptimal proposals getting funded. Each domain allocator in the delegated domain capital allocation model will be required to specify domain specific evaluation rubrics to ensure alignment with ApeCoin DAO’s roadmap and funding of high quality proposals. With Questbook, members of the community can easily access and view the scores assigned to a proposal by the domain allocator, based on their domain-specific rubric as mentioned below.

• Multi - Sig Wallet - The disbursement of the grant will take place on-chain through a multi-sig wallet for each domain controlled by the program manager & the domain allocator

OVERALL COST

ApeCoin DAO will be required to set aside an overall budget of $1M to be disbursed by the elected domain allocators to fund a wide variety of teams aligned with ApeCoin’s roadmap across two quarters. The compensation for Domain Allocators and Program Managers has been factored into this overall proposed budget. Please find below its details:

1. Program Manager : $100/hour (est. $24K per quarter at 20 hours per week)
2. A Domain Allocator : $80/hour (est. $14.4K per quarter at 15 hours/week per domain allocator)

The proposed compensation is based on the valuable feedback given by the ApeCoin community members, community poll and our ongoing engagement with Compound. It is competitive with some of the best-run grants program and community initiatives of ecosystems such as Compound, Uniswap, Nouns DAO, ApeCoin DAO Working Group and Aave. Based on our experience after working with multiple reputed ecosystems, a domain may receive more than 20 quality proposals per month. To effectively support and fund exceptional teams, domain allocators will need to invest significant time in activities such as marketing, project research, calls with proposers, preparing reviews, exchanging info/feedback with other DAs, tracking teams’ progress, and coordinating milestone based payouts. These activities demand significant expertise and time commitment. It is crucial for ApeCoin DAO to attract top talent for the role of domain allocator to ensure that exceptional projects are funded.

3. Questbook : 3% of all disbursals made through Questbook as product fee

Our approach of charging a percentage of the grants disbursed is designed to align our incentives with delivering value as against product usage. Funding a project signifies that the ecosystem 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 domain allocators. Our intention is to charge based on the successful completion of all these steps, rather than just product usage, to align our pricing with the value delivered through the entire grant disbursal cycle.

The domain allocators and program manager will be required to track their hours and provide weekly reports that will be accessible to the community. If the domain allocators have clocked fewer hours than estimated, the total spend will be lower than the proposed spend. If there are fewer grant requests or smaller grant amount requests for a particular domain, the unused fund from every domain will be returned back to the treasury after two quarters. For instance, in the case of CGP 2.0, not all domain allocators spent an equal amount of time reviewing and funding proposals for their respective domains. Some domain allocators spent comparatively less time than the budgeted 15hrs/week due to the time required to review proposals and the volume of proposals received within their domain.

The proposed budget represents the maximum amount needed to ensure the success of the program and to avoid the need for frequent community ratification for budgets for the proposed funding model. It does not guarantee that all the proposed expenses will be incurred. The unused fund from every domain will be returned back to the treasury after two quarters. Moreover, the proposed spend per quarter is expected to remain constant for the proposed budget/quarter and is not expected to increase every quarter.

PROPOSAL

Link to the full proposal: https://forum.apecoin.com/t/aip-252-funding-grant-proposals-using-delegated-domain-allocation/11862

The AIP implementation is administered by the Ape Foundation. Implementation may be immaterially or materially altered to optimise for security, usability, to protect APE holders, and otherwise to effect the intent of the AIP. Any material deviations from an AIP, as initially approved, will be disclosed to the APE holder community.