Apply 0x protocol to OP Onchain Builders

There is currently this proposal from OP retropgf to reward onchain builders, which I believe 0x protocol could apply and use the rewards to retrofunding projects building on top of ZRX protocol.

Me as delegate could apply in behalf of ZRX and run a program to reward ZRX builders.

Looking from feedback from other delegates that could join on this proposal.

A snapshot voting is on the way regarding this topic: Snapshot

I am voting against this proposal for the following reasons:

  1. No substantive information has been provided for evaluation; voters are essentially being asked to sign a blank check

  2. There are potential obligations, liabilities, and risks associated with soliciting, receiving, and distributing tokens from an external source, which are not identified or addressed

  3. While it is an uncomfortable and unfortunate subject, it is relevant that the proposer has engaged in hostile, ad hominem attacks against other community members, including myself, and has exhibited erratic and aggressive behavior regarding other grants; this type of behavior is not acceptable, nor should it be condoned or endorsed with additional authority/empowerment to represent the protocol/community

@nikita ofcourse it’s expected you vote against it, and with so weak arguments. Imo, you should not even be a delegate, but it is what it is

  1. This grant is given to protocols that apply to it, I am offering to represent 0x protocol, because I don’t saw anyone else doing so. If no one applies, 0x protocol simple will lost this money.

  2. This is the initial discussion, it’s on the proposal to address this after me as delegate be empowered by the community. Why should give detailed analysis, work on detail, if community signals it’s not interested? I invite other delegates to join.

  3. I always exposed my arguments, and till now, I am not being proved wrong. ZRX pathways was/is a huge failure, and I ofcourse will vote no on proposals that I saw no value. Where is the ad hominem on other community members? Please point it out, till now, the only delegate that I am highly critical is regarding you. Your behaviour on requesting more funds for failed experiments. You are the one that undermine others proposals.

Just curious what type of impact have you calculated that the protocol and its development base has created towards Optimism’s success to qualify for retro funding? Have a preliminary report on deployed contracts and actions taken to drive success?

Any obligation tied to receiving retro funding? Where would the retro funding go? To the treasury if received or dispersed to devs to reward them for their time past invested? How does reward disbursement get decided? Who controls the retro funds and their disbursements once received? Seems like lots of blanks to fill…

Retro Funding 4 will reward onchain builders who have deployed contracts to the Superchain and contributed to the success of Optimism. This round seeks to expand the reach and impact of the network by rewarding those building across the Superchain who have increased demand for blockspace and driven value to the Collective.

Retro Funding 4: Onchain Builders will reward impact which has been generated between October 2023 - June 2024. Impact will be rewarded within the following topics:

  • Demand generated for Optimism Blockspace
  • Interactions from repeat Optimism users
  • Interactions from Optimism users with high trust scores
  • Interactions of new Optimism users
  • Open Source license of contract code

This is a screenshot for the last 30 days for the 0x protocol generated volume on Base and Optimism:

Clearly 0x Protocol qualifies.

Yes, the aim is first get someone to fill the data necessary to 0x protocol apply. 0x protocol not applied to RPGF 3 and lost the opportunity to pursue an additional funding. I am suggesting using the funds to do Retroactive Funding for people and projects that contributes to ZRX. If you don’t like my proposal, for instance, you can propose an alternative approach, what is important is 0x protocol apply to get these funds.

My proposal is to build a framework to reward active contributors of ZRX ecossystem and engage active developers, doing Gitcoin or Giveth rounds.

If opportunity exists to receive funding for building up Optimism’s success and the received funding isn’t tied to any toxic obligations then it seems like a worthy cause to pursue. I guess I would explain within your proposal that once funds are secured that there would be pursuant votes to organize a framework on exactly how the funds would be disbursed moving forward. Under what parameters. Until those parameters are established the funds would remain locked up within the treasury.

Have any direction towards documentation that might speak about or establish any requirements and or obligations once the funds are received if your application would be honored?

Sounds like your intentions are to reward future development and not disbursing funds for retroactive work correct?

Sorry I am not able to follow up here. First, RPGF is a program from Optimism to reward contributions from open source software and that impacts their network, I recommend take a read first what is this program to us take a productive discussion here.

The proposal is to get someone to fill on behalf of ZRX, because no one else said that is applying, where money goes, if received, will be discussed on post proposals. I am proposing to use it, if received, to reward past contributions to ZRX protocol, which is the purpose of RPGF on Optimism. All details will be done later, and discussed with community, if community don’t want it, Ok.

If you think should go to treasure, be my guest, open a new proposal, and propose that. I believe is more important reward direct contributions to ZRX ecossystem than spending it on experiments, but that is my personal opinion.

I looked it over prior to commenting and gathered that the program rewards efforts, projects, volume growth that aided in Optimism’s success. I understood it just fine.

Hey there now, thumbs up, there’s the information that I was looking for to better help make your proposal more complete.

This was suuuuuuper general and way open ended for a proposal imo. Now makes more sense….

:wink: have a nice day.

This is my idea, if community decides that I am not worth of pursue that. I would like you to champion a proposal where funds be allocated to the treasury. In my mind is important that ZRX protocol applies to these opportunities to start get sustainable funding while available.

@JoaoCampos89 I imagine that your idea would organize something like this… 1. Pull together all the data and present it in the application. 2. If application is approved and funds received, the funds are parked in the treasury or escrow wallet? for further post discussion. 3. Establish a program framework for funds disbursement for retroactive development per future proposal parameters. 4. Vote on proposal disbursement parameters 5. Execute funds disbursement

Please elaborate if anything was left out or mistaken. If we can confirm that funds from the RF4 program are not tied to any obligations that wouldn’t be good for the community then I am in support of your proposal with the understanding above. Seems like could be a good opportunity to take advantage. I like your idea.

There are potential legal/tax implications of soliciting and receiving these funds. As KYC is likely involved, what entity would be assuming liability?

Also, grants are not what would typically be considered sustainable funding, and soliciting grants would likely be considered a business activity.

Lately, I’ve been using the bass a lot, so I believe this is impactful work. There might be challenges until the application deadline, but let’s discuss it multiple times, revise proposals, and keep the momentum going.

I think it’s a good time to consider developer support in a new way. Legal frameworks may need adjustment with “Optimism” and “0x labo,” but at this stage, it’s unclear if we need to delve into that level of detail. Even if this snapshot gets rejected, I believe we should continue discussions and re-proposals.

My ideal is to support the activities of both Nikita and JoaoCampos89, as they are already delegates in the community. Besides full-time developers at 0x labo, it’s challenging to find others seeking to develop 0x.

There will be both failures and successes in DAO decisions. I believe the current DAO is opting for fewer failures, thus narrowing down options. We should embrace failure, gain experience, and learn from it.

I have already KYC done with Optimism foundation, I did this for DexKit. Which implications are you referring to? Do you have a specific case that happen or just throwing generic things and implying something that would not exist? This program is already on 4 edition, we didn’t applied on the others and lost already a considerable funding that could be allocated to 0x.

Regarding grants being not considered sustainable funding, In this case, we can consider this as sustainable funding as Optimism is committed to run this program every year.

It seems you already have answers for these specific questions, as you voted no, since the begining of the proposal. Can you bring us concrete answers? It will help anothers doing an alternative approach.

I voted no for the specific reasons I noted previously, which have not changed and which I stand by.

However, since there has been further discussion after my original post – in general terms, specifically regarding the receipt of outside funds, the implications are related to what reporting obligations and liabilities may flow to recipients of these types of grants at both an “organizational” level and an individual level. For example, at the individual level, I don’t know the answer and it may vary by jurisdication, but it would seem logical that the KYC’d entity could become a liable party for reporting the grant proceeds as income.

Separate from KYC, at the “organizational” level, if grants are being distributed and received by foundations or businesses/corporations with legal protections, then legal issues are handled by them and abstracted from their communities. That is not the case here, and I think it would be irresponsible and short-sighted to somehow blunder into something that on the surface may look innocuous and feel good, but in reality could be deleterious to the protocol’s long-term interests. In other words, rather than being “free money” for the asking, it could actually end up being very costly if new legal risks are created that didn’t exist previously, especially if that were to happen “by accident” and be related to something that isn’t core to the protocol’s purpose.

Regarding sustainability, funding received that is incidental to the core function of an entity is by definition not sustainable because it isn’t generated organically and there is a dependency on the outside funding source. Most large grant programs like Optimism have evolved over time in how they structure grants/rewards, and with each subsequent round they experiment with different eligibility criteria, voting schemes, and distribution mechanisms, meaning that it shouldn’t be expected that any recipient now would continue to be a recipient in the future.

However, I believe that the more relevant question that should be considered is whether or not externally-sourced grants make sense for 0x protocol.

With recently deployed networks, one of their main priorities is token distribution. Grant programs are a mechanism for distributing their tokens in a structured way, and they use that structure to reward and incentivize certain behaviors. For the protocols receiving those tokens, however, they then have to figure out how to distribute a non-native token in a way that makes sense for their own protocol’s core functional purpose and needs, which may be more difficult to do. With DEXs/AMMs, there is some logical rationale to aligning rewards with user liquidity provision or something similar. But this type of flow-down reward distribution is less obvious for a protocol like 0x, where the main metric is volume, and the main contributors to the volume are private/corporate entities).

Retro reward incentives by definition reward something that has happened in the past, and may have no relation at all to anything that happens in the future. A cursory analyis of the protocol’s volume indicates that the majority of volume flows from matcha, coinbase, and private marketmakers, rather than small integrators. Assuming the actual volume drivers would not receive any (or at least not a mathematically representative portion of) rewards, and instead the rewards would mainly go to small integrators, it is debatable whether this drives any value at all to the protocol or whether it makes sense to invest the time and effort in doing it. Small integrators don’t drive value, and big integrators don’t need rewards. That may be oversimplifying it a bit, but the point at a high level holds.

All this being said, it could be useful to brainstorm the types of incentivization that might make more sense for 0x protocol specifically. I have come to believe pretty strongly that in the current conditions, enabling and incentivizing core protocol innovation is the only real long-term value creator, although I am open to the possibility that there could be others.

In summary, a more thoughtful analysis and strategic approach would avoid the potential risks associated with receiving and distributing funds that arguably provide limited or no quantifiable value for the protocol.

Using your arguments here, all core protocol changes should be done aligned with the big players like Matcha, Coinbase and private makers, and incentivizing small core contributors could be highly risky to the protocol, we should prioritize only the big players. Are you doing that assessment on your Experiments? I believe no.

The protocol itself is already robust and attend most use cases, it is needed to incentivize dapp development and tools on top of 0x protocol. This funding can create incentives and more dev activity around 0x protocol and whole objective of the RPGF is rewarding past contributions to create a positive loop. Passing a message if you build and help the ecossystem you eventually get rewarded. We want to have more Matchas, and Coinbases using 0x protocol, for that is needed more open source tooling, more devs, more resources on tutorials on how to use ZRX.

But atm I believe is even better fix the Governance system, participation barely exists even to say no.

I voted in favor as I believe @JoaoCampos89 has raised a good topic for discussion. In fact, 0x is one of the core projects contributing to Optimism growth, and on top of aggregating liquidity, RFQ liquidity (i.e. 0x-native liquidity) is a direct source for price execution improvement.
As the DAO cannot make the claim itself, it is good to see community members step up and take responsibility, with the resulting legal liabilities of course. In my opinion the entity that should apply is 0x Labs, but having someone apply with community approval can be a valid alternative. In regards to the use of received funds, considering these funds would not be obtained without applying for them, I think it’s a fair proposal, even if details are to be discussed at a later point.
I understand @nikita ’s concerns in that the benefit in $ value could be far less than the negative outcomes, but we have no data that indicate this will be the case, especially in regards to the dao which has limited operational scope in this context.
As a closing remark, I hope we can find a way to overcome the differences that have emerged in the recent months.

Good concern brought up by Nikita.

Yes, some more opinions would be great to field. @mintcloud, @brentoshiro, @ericwong, @0xSHA, @GFX

100%!! Let’s come together!!!

I am writing to express my reservations about casting a vote on the current proposal, primarily due to insufficient details regarding the program’s operational framework and its objectives. Furthermore, I have concerns about the legitimacy of this action, as we do not possess the authority to represent individuals or to confer representation rights.

It is important to note that the perception of 0x is closely associated with 0xLabs, which is widely regarded as the legitimate representative for these types of grants. Additionally, there is an argument to be made that the traffic on the 0x explorer is not exclusive to 0x but should be attributed to applications developed atop the protocol, such as Matcha and other significant projects, which may be in a better position to claim the OP grants

Although I recognize that approving this proposal might not pose a significant risk, I believe that it falls outside the scope of delegate voting responsibilities. Nonetheless, regardless of the outcome of this vote, I think Joao should consider pursuing this initiative if he perceives its potential.

this sequence seems reasonable to me. the more time sensitive action are steps 1 and 2 - I can, as a representative of 0x, own step 1 and continue to use the existing treasury contract as where funds are held.

think it’d be productive for the conversation here to focus on step 3!

in terms of @nikita your concerns about obligations/liabilities/risk, while there is some, given that it’s the 4th iteration and unlikely given the nature of it.