0x/Polygon grant structure

Objective: To accelerate adoption of 0x Protocol on Polygon chains. There are a total of 3,379,158 MATIC and 2,491,923 ZRX left from the original 4,200,000 MATIC and 3,308,129 ZRX grant. The balance is confirmed based on the sheet shared by Eric from the 0x DAO. One can also see the split below.

Tokens In Out Remaining
ZRX - no restriction 2,000,000.00 400,000.00 1,600,000.00
ZRX - polygon 3,308,129.00 816,206.00 2,491,923.00
MATIC - polygon 4,200,000.00 820,842.18 3,379,157.82
wCELO - celo 527,552.00 0.00 527,552.00
ZRX - celo 1,251,042.54 0.00 1,251,042.54
WYV - no restriction 10,000.00 0.00 10,000.00

To clarify again, this proposal This proposal seeks to provide guidance on where the balance funds could be used which was for the acceleration of adoption of 0x on Polygon chains. This proposal has no ask from the 1,600,0000 ZRX provided to start the DAO or 1,251,042 ZRX earmarked for CELO which were provided to the DAO. Also, wCELO, WYN and Arb air-drop that was provided to the DAO.

Funds Utilization: This proposal wants to clearly outlay where the balance funds would be used. The need for the proposal has been seen, when multiple dApps have tried to apply for the grants from the funds earmarked but were unsuccessful in getting the grants or faced immense difficulties to clearly be directed on the process. I want to also vouch for the same not just based on the problems shared by the builder, but personally when I helped a protocol with the process to apply for the grant. It took over 3 months to get the grant passed and even the $ value of the grant was lost by 20% till the grant was finally processed. This clearly creates a lot of frustration and friction among builders and hampers the growth mindset and this is not what I’d want the builders to face. I’d want the builders to focus on building solutions.

With that in mind, I’d like to proposal for the funds to be used in the following manner:

  1. Infrastructure Grants: 50% of the total funds [Budget: 1,689,578 MATIC & 1,245,961 ZRX] will be used to fund infrastructure. With the unlock of Polygon 2.0, and the focus towards zk specific chains, the infrastructure grants are to be used to:
  • Build 0x infrastructure on Polygon zkEVM: Subject to a maximum of 15% allocation or actual expenses (whichever is less), this amount to be used to build the infrastructure of 0x which will enable them to launch their services for zkEVM. The fund allocation will be used to launch all the existing infrastructure on POS to zkEVM as well.

  • Additional Infrastructure and Innovation: Subject to a maximum of 85% allocation, this amount to be used to build new open source infrastructure on both 0x and Polygon chains. Anything built using this amount has to be open source infrastructure and can be leveraged by other builders in the community as part of public goods infrastructure. The innovation can be on either projects i.e. built on zkEVM/PoS leveraging new or existing infrastructure of 0x and vice versa. Each grant will be capped at $50K USD irrespective of scale of development. If there is a requirement of funds in excess, the dApps can apply again, showcasing their existing infrastructure progress.

Successful deployment will be measured basis:

  1. Timeline of 0x deployment on zkEVM. If 0x deploys on zkEVM within the next 3 months it would be regarded as a successful utilization of funds.

  2. The infrastructure being built. If a total of 25 new innovative products are built using this amount then it could be considered as a success.

  3. Adoption of 0x infra on Polygon chains.

The grant process: If grant is up to 15K: 7D discussion, 7D Snapshot (5M minimum in favor and favor> against), amount paid from multisig.

If grant is above 15K: 14d discussion, 7D Snapshot (5M minimum in favor and favor > against), 7D On-chain vote with 10M in favor.

All the grants to be distributed will be 50% upfront and balance once the product is live for users.

Some of the costs here will be around some of the activities like cost of developer shops, cost of audits, or some basic infrastructure build. Polygon Labs team has already built a successful Village Voucher program and RFS program around it which enables a much more efficient use of funds and faster access to all services. So instead of direct fund distribution, we can use these vouchers for more effective fund utilization and achieving faster results.

  1. Integration Grants: 25% of the total funds [Budget: 844,789 MATIC & 622,980 ZRX] will be used for integration purposes. There is a great number of requests that are asked for integrating 0x API’s and other infrastructure built by 0x on Polygon Chains. This integration is not a very heavy tech lift and hence subject to a maximum of $15K, these grants will be provided to the protocols which will be using the grant to enable 0x on Polygon for their dApp.

Successful deployment will be measured basis:

  1. Number of integrations of 0x on Polygon.
  2. Total volume achieved over the next couple of years.

The grant process will be the same as (1) for amounts up to 15K. The grant to be paid in 50% upfront and balance once integration work is completed.

  1. Educational Campaigns, Hackathons and Event Grants: 20% of the total funds [ 675,831 MATIC & 498,385 ZRX]. One of the biggest secrets for Protocol success is to involve the community into it. Hence a proposal to use 20% of the funds for:
  • Educational Campaigns: 25% of the funds to be used for creating educational content for Polygon chains and 0x Protocol. This fund subject to a maximum grant of 10K, should be used to create both technical and non-technical educational content in the form of twitter threads, blogs, videos and quests which can be built by third party to boost users on Polygon chains for the dApps being built on Polygon chains or 0x. The purpose is to raise more awareness through these activities.

  • Hackathons: 50% of the funds to be used for cross pollinating and funding hackathons by 0x and Polygon chains. 0x runs its own set of hackathons and so does Polygon Labs. The funds to be used to provide bounty and prizes for hackathon winners around it. For example: DevX tour by Polygon Labs, where 0x could become a partner and the cost of becoming the partner could be used from this fund and vice versa.

  • Events: There are over 100 Polygon guilds across the world which are working on growing the Web3 ecosystem around Polygon. For any event which is being run by the guilds, and subject to them also promoting the developer ecosystem of 0x, these funds could be used. Subject to a maximum of $1000 or a blanket 10 event budget of $10K for 10 events this fund can be utilized post which the success has to be measured to provide the next set of grants. The remaining 25% of the funds will be allocated here. If 0x has a similar setup the same money could be used there.

The grant process: All grants will have 7D discussion, and 7 Day snapshot with 5M votes on snapshot and votes in favor > votes against. The grants will be upfront but once the activity concludes the grantee has to come back and post a report on the successful use of funds.

Successful fund deployment would look like:

  1. Reviews on educational content.

  2. Number of projects that deploy due to hackathons.

  3. Having events which are enabling a more vibrant dev ecosystem around both the communities.

  4. Operational Grant: 5% of the total funds [168,957 MATIC and 124,596 ZRX] : This fund is being set out to:

  • Incentivize voters in the community and keep them motivated to participate in the voting process. For each snapshot vote a total of $100 will be allocated and distributed to the voters, on Polygon chain [because of low gas fees] based on the votes they have casted irrespective of their total votes. If there are 10 votes posted, with whatever voting power, each one is entitled to $10. The payment will be done monthly to the addresses on the Polygon POS chain.

  • Contributor: Since managing this whole process will need at-least one contributor to ensure:

    1. Running a newsletter: This newsletter will be used to share monthly spent, grants funded and any updates which are important to be shared with the community.
    2. To maintain full records at disposal to share it with the community.
    3. To create a communication channel on telegram which has all the members with high voting power and also a channel with all the projects which are applying for grants to create a vibrant ecosystem where everyone is involved and is getting full updates. Proposal is to pay at 40 Weeks/600 hours at $100 per hour. This contributor is to be proposed by Polygon.

A successful on-chain vote will enable movement of 20% of the total funds to a multisig where 2 members will be from Polygon, 3 members will be from the 0x community in a 3/5 Multisig setup. There will be a clear bifurcation of the funds being used so that even when the funds are in one multisig they are appropriated accordingly. This treasury will be evaluated in 6 months on utilization to get fresh funding and to finalise the multisig owners we’ll have a separate vote.

1 Like

Thanks for putting this together @Aishwary92
The framework and proposal seems solid, and I am glad to see a proposal to have the funds earmarked for 0x expansion on Polygon put in use.

Just to make things more concrete, would you or someone else in the Polygon team be down to run this program?

If so, I think it would help establish that already as part of the proposal which could be a de facto transfer to the multi-sig whose composition can be defined in this conversation directly.

Also, FWIW I think the grant committee could also receive compensation for their activity (just like for 0xEVE and other grants programs in the industry)

Thanks @mintcloud for the suggestion. I believe we can do it, by finding a contributor from our side and working closely with them to run the program. I’m more than happy to take the charge. The growth of both POS and 0x is going to be a great value add according to me.

The grant committee compensation and voting compensation can be clubbed. To ensure participation we can look towards increasing the total reward per snapshot vote to be 200-250$. We can also look at engagement metrics for increasing the share. But a flat out compensation is really not good since there is no way to not pay, if there is no active participation.

Would love your thoughts?

Nice, thanks for stepping up. As a suggestion, I’d recommend you scouting & clarifying the composition and the roles in the program and multi-sig.

In addition to that, I’ve re-read the proposal and wanted to clarify a couple of things that concern 0x Labs:

  • Build 0x infrastructure on Polygon zkEVM: Subject to a maximum of 15% allocation or actual expenses (whichever is less), this amount to be used to build the infrastructure of 0x which will enable them to launch their services for zkEVM. The fund allocation will be used to launch all the existing infrastructure on POS to zkEVM as well.
  1. Timeline of 0x deployment on zkEVM. If 0x deploys on zkEVM within the next 3 months it would be regarded as a successful utilization of funds.

On 0x Labs side, we can softly commit to deploy 0x Protocol on zkEVM (assuming no substantial obstacles such as incompatibility of opcodes or similar). We don’t need to receive funding to do that that.

We cannot commit at this time to deploying 0x API, but someone else could (code is available here).

I get from where you are coming. The fund was put there to ensure that the deployment happens on zkEVM. As regards to opcode and other codebase, we have two other aggregators which have deployed so it was smooth for them.

Since the codebase would be similar to ETH hence I presume that there wouldn’t be any significant hurdles. So I think the question is what timeline we are looking at? This helps in taking the decision on whether it can be 0x deploying the capital or someone else doing it? Also, it raises another question in mind, if someone else deploys who takes the ownership of it. :slight_smile:

Hey Aishwary, appreciate the time and effort here in proposing a structure to think about how the funds that Polygon Foundation and 0x provided to the treasury could be utilized.

At a high level, the first three categories suggested make sense to me: (1) Infrastructure, (2) Integration, and (3) Education. Given that the top portion of this post is meant to provide broad stroke suggestions of how funds can be allocated, I feel that the level of detail for each sub category is appropriate. Personally, I’m not sure if I’m on board with the last category, Operational Grant, particularly with incentivizing voters which I will elaborate more fully below.

In terms of incentivizing voters, I’m not sure if I see a need for this as current snapshot votes average ~100 participants whose voting power range from 1.5M+ to less than 1 — given this activity, I’m not sure that the additional monetary incentive per snapshot vote would increase participation in a sustainably meaningful way. Paying people for just voting without any additional steps such as explanations of their vote does not seem to incentivize informed governance participation but participation just for participation’s sake.

At the end of your post, you make a request for 20% of funds to be sent to a multisig of 5 members, 2 from Polygon and 3 from 0x community - I would like to see more details about this proposal for funding that provides more insight on things such as:

  • which of the suggested categories and subcategories would funds be used for
  • how those subcategories would be operationalized (i.e. if educational campaigns are one, is there a type of educational campaign you have in mind)
  • who would be the 2 people from Polygon on the multisig and how the 3 people from 0x community would be selected

Hey @Aishwary92, thank you for putting this proposal together. Personally I am excited to see the application of systems that have successfully helped build developer community support for Polygon being tested with the 0x protocol community. I think that this undertaking will present some strong findings on further cementing long standing probable pathways, frameworks and systems that will better assist onboarding developers to the protocol.

I do echo Eric’s sentiment about incentivized voting. If incentivized voting would take place I do believe that it should be extended beyond just casting a vote and instead be applied towards voting justification explanations. Perhaps it would be interesting to promote incentives for the top 5 due diligence voting explanations for providing the best and most well thought out due diligence argument in support or in contention of the proposal. An achievement for community members to strive for. Perhaps most active community members in governance achievements would be in the running for a mega achievement incentive compiled after a certain duration of time / amount of proposals administered. Something to chew on…

Thanks @ericwong . Point taken on the incentivization of votes. I’ll love to follow your suggestion here where we can have a pool of $100 and the top 5 (based on likes on the comment) can have an equal share.

I know it would not be a lot but if there are multiple proposals it will be a tangible amount for people.

Regarding the later part:

  1. The categories are the same as specified above. Infrastructure, Integration, Educational and Operational cost. Personally I don’t want to be too specific because that hampers the proposals that could be too good but don’t qualify and we drop on those projects. It just had to keep in mind the objective of the funds at as the minimum passing criteria and then let the forum decide.

  2. The two people from Polygon would be me and one more from the DeFi team. The person from the 0x could be from nomination. It could be anyone who is a part of other delegates or anyone from the community who comes up to take ownership. The 3rd person could also be the person managing the operations. Do you have any parameter that you’d have in mind?

Thanks @Patrick. Makes sense. Both you and @ericwong are right. Like I referred earlier, it could be likes on the suggestions. We could also have like a mega reward which is a sum total of monthly leaderboard. This could push community to vote and make the DAO more active. :slight_smile:

Thanks @Aishwary92, I feel that it is interesting and worthwhile to explore the game theory promotional strengths of organizing achievements / leaderboards / rewards, as you well put it, to make things more attractive. With exploring such a framework it is possible to incorporate cross promotion with organizations that would like to sponsor leaderboards / rewards by contribution towards the rewards pool and better become more publicly aligned with the development of public good interests.

From the success criteria, it seemed that having the protocol within 3 months from this writing would be ok. We (0x labs) can make it happen.

Thanks @mintcloud. Then we can wait for the next 3m fro 0x to deploy and I can combine the money back to the wider category of infra grants.

Thank you so much for this proposal @Aishwary92.

I can closely relate to this proposal. I feel that growth of every protocol depends on active development support. We have many of grant proposal active in the forum that needs attention and direction for next steps.

This proposal is giving clear visibility to developers on

  • Clarity in terms of ownership and process
  • Growth of 0x protocol and use cases
  • Types of grants
  • Clear guidance of grant amount

Also, I feel that once we support builders to integrate on Polygon, eventually they will expand to other networks as the dApp grows (increasing 0x usage ultimately). I suggest that in terms of grant funds distribution, there must be equal or valuable contribution from 0x treasury too.

Regarding utilisation of funds, I think that the distribution of funds should be in milestones with some combination of pre-passed proposal. This will save time for the community if developer has multiple things planned. It will be one time approval and then milestone based transfer based on proof of work.

For example, if a developer is asking for $15K grant, it can look something like below:

  • Approval of 100% grant
  • Some amount (i.e. 50%) of transfer at the time of approval
  • Milestone based transfer

So, I strongly support @Aishwary92’s initiative. Thank you for pushing 0x forward.

PS: I have tried to share my unbiased opinion for the growth of 0x. We have a pending grant proposal.

Thanks @Aishwary92,

In terms of further breaking down the 20% of funds requested, I understand not wanting to be too specific as it could prevent the use of funds for something outside of the scope that could be good projects to fund. That being said, given that the initial ask is to provide a 6 month POC that this overall breakdown of fund is a good approach, I would advocate for those proposals outside of scope to go through the typical grant process and keep the experiment scoped for what is described - I think this would be a cleaner set-up and make the post evaluation simpler.

In terms of the makeup of the multisig, want to clarify - your comment seems to imply that it’s a 3 person multisig (”the person from 0x could be from nomination… the 3rd person could also be the person managing the operations”) but your proposal says 5. As to who it could be from 0x Protocol, I’ll let people self-nominate.

In terms of the incentivization of governance participation, I think tying it to comments is a better step but overall, I’d personally advocate for setting aside a pretty small total budget for it and really track governance behavior prior vs. after to determine if it’s a meaningful use of funds. But overall, appreciate your flexibility and openness to suggestions there.

Hi @ericwong thanks again. For the funds here is the breakup:

  1. Infrastructure spend: Matic: 337,915/ ZRX: 249,192
  2. Integration spend: Matic 168,958/ ZRX: 124,596
  3. Education spend: Matic: 135,166/ ZRX: 99,677
  4. Operational Spend: Matic: 33,791/ ZRX: 24,920

Total: 675,830 Matic and 498,385 ZRX.

The outlier imo would be a grant being built on either of the protocols and not both and that can go to the community directly for wider discussion.

The multisig is 5 person and it will be a 3/5 meaning that if 3 people execute, the funds will be sent. 2 people will be from Polygon, 3rd can be the coordinator and the last 2 members could be from 0x Protocol or the community.

For the rewards let’s keep it as it.

I really want to move forward with the proposal and I don’t want to spend a month perfecting it. Idea is to act fast and not perfect it till the time it loses all intent and interest.

Hey @Aishwary92 , appreciate the back and forth.

My intention is not for perfection but to get clarity on what I think are important high level details.

My last question is with naming the members of the multisig and proposing that instead of 5 (2 Polygon Foundation, 2 0x Community, 1 coordinator that is picked by Polygon) we go with 4 (2 Polygon Foundation and 2 0x Community) as a purely worst case scenario protection as once funds are transferred to a multisig, there’s no way to enforce anything on-chain.

That being said, I think it’s reasonable to move forward with a snapshot vote in parallel with answering the question I pose above is addressed.

Hi @ericwong, makes sense. We can go for 2 each. Thanks. I’ve move this to voting now on Snapshot.

This proposal seems to imply that some of the ZRX and MATIC in the ZRX Treasury are “restricted” or “reserved” for Polygon grants. As a delegate, I am being asked to make a decision based on data that has not been provided to me, specifically the alleged agreement between a Polygon entity and a 0x Labs entity. Therefore, it is not clear to me how to enforce rules I am not aware of. It is not even clear what penalties/early termination causes the cited agreement entails. Since the ZRX Treasury is controlled by the ZRX token holders (either directly or indirectly through delegates), this opens up a series of potential legal liabilities either on the head of 0x Labs or on the delegates.

As a delegate, I am being asked to preserve the interests of the ZRX token holders. Furthermore, this proposal gives me the opportunity to ask for disclosure of the agreement which allegedly locks part of the ZRX and MATIC, so that the community has a base to understand whether it is still valid and whether a legal liability could arise, should a proposal pass that spends some “locked” tokens.

In my opinion, this proposal sets a dangerous precedent for enforcing private agreements on a sovereign smart contract which is not designed to inherit those clauses.

Last but not least, this proposal aims at formally reserving some tokens in the ZRX Treasury for specific purposes. In this case, the legal liability for delegates could be even greater, as an onchain vote would crystalize the status of some of the tokens, with limited ability to modify the strategy as time evolves.

In my opinion, within its grants, the ZRX treasury should not give preferred status to a specific network, and by contrast, maintain a neutral approach. Projects contributing funds to the ZRX Treasury must be willing the accept that the pledged funds be used not exclusively for their own project. I want to clarify that by this I mean pledged tokens will be used for the benefit of the pledging project, but not strictly, i.e. some pledged funds will be used for general purposes which will benefit partly or mostly the pledging project, but no formal obligation to exclusive benefit should ever exist. In this context, being asked that some MATIC and ZRX be spent exclusively for Polygon development will create confusion in assessing grant proposals that benefit other networks as well.

To conclude, and given the amount of discussion and distraction that the MATIC allocation is causing, I believe it would be best for the ZRX Treasury to return the so-far-unspent MATIC to the Polygon Foundation by means of an onchain treasury vote.

Hi @gabririgo thanks for asking the questions. Let me answer them one by one:

Your point is absolutely correct. The original proposal which anyways is public states clearly this:

We’re thrilled to announce that the Polygon #DefiForAll Fund has allocated $7M in MATIC to to drive 1M new users onto 0x-powered applications running on the Polygon Network. 0x Labs is contributing another $3.5M in ZRX, meaning the DAO, controlled entirely by ZRX token holders, will have a whopping $10.5M in total funds to grow DeFi and the 0x ecosystem on Polygon.

So yes, the funds were meant to be used for the upliftment of 0x on Polygon. Here is the link: 0x + Polygon partnership to bring 1M new users to 0x-powered app… — 0x Protocol

Also, the facts were always public. Unsure, why you never read them earlier. It was a show of faith from both the ends to ensure growth for both protocols. Hence the funds are earmarked. I’ve been highlighting this since past 4 months both in the forum posts and delegates discussion as well.

Now coming to the next one around inspiration: The funds were sent for growth of 0x on Polygon only. The funds were sent in 2021, however, initially the program to on-board more users and protocols by providing assistance in terms of grants worked but since the disbursal of grants for “TraderXYZ”, where almost $1M dollars were sent as grant upfront and then the person who asked for funds ran with it, no new grants were being processed. Leaving those things in the past, there are many protocols in the forum who are struggling to be heard etc and as both 0x and Polygon we do not want this experience to continue hence the steps.

In my opinion, its not a preferred approach. Every other chain, can have similar setup. As a basic logic, if the original public agreement allocated 3.5M worth of ZRX tokens when Polygon was making the 7M contribution, this is exactly where the funds should be used.

As Polygon, we have never denied any such requests because they were not completely related to Polygon. As a protocol, we have always wanted public goods infrastructure to be built and we are more than happy to always support as delegates if the proposals are making sense.

This is exactly what I wish to clarify here that there is a pool which is to be used for a helping 0x scale on Polygon.

I respect your opinion but this vote is to ensure exactly the opposite. If you look at the help we are also extending with it in some of the programs that are currently live on Polygon, it helps the DAO and the overall protocol.

How?

  1. Polygon Village: In order to make more effective utilisation of funds and provide best support to the projects building for Polygon, we created this program where a massive amount of resources were saved, tons of projects got assistance and helped Polygon get more genuine projects.

  2. Education, Hackathons and Guilds: This also brings a lot of traction with genuine utility to the overall project.

  3. SPN Program: What we are calling pathways here, Polygon already has something called RFS (Request for Startups) where teams building on Polygon can provide ideas and builders can claim those ideas as NFT’s and work on it.

Look at how much benefit we are willing to bring to the community. If you are ready to turn a blind eye towards it and go on to say that this is causing distractions I am not sure how to respond to that.

However, if you are so inclined to say that this is causing distractions, please propose on the forum and let the community decide.

I am voting ‘Yes’ for this proposal with the following caveat/qualifier: Because the request for funds and associated comments can be interpreted as a claim premised on purported restrictions regarding certain treasury assets, I am creating a record that my vote to approve this proposal pertains explicitly and only to the specific quantity of assets requested to be transferred with this vote and should not be construed as an endorsement or ratification of a broad claim of encumbrance on any treasury assets and/or restrictions on how treasury funds can or cannot be used.