[GRANT REQUEST] Optimistic Funding for 0x Improvement Proposals (ZRX Pathways Experiment 2)

[GRANT REQUEST] Optimistic Funding for 0x Improvement Proposals (ZRX Pathways Experiment 2)

Basic Details

Project name:
Optimistic Funding for 0x Improvement Proposals

Point of contact:
Nikita#4377, 0xSHA2#5156

Team background:

Other sources of funding and approximate amounts (grants, VC, etc.):

Project Details

TL;DR: We propose moving a portion of treasury funds to a Safe to support more predictable, reliable, and consistent pZEIP funding.

Describe the problem being solved:
This proposal addresses the following learnings and conclusions from ZRX Pathways Experiment 1: Accelerating Funding for 0x Improvement Proposals (E-1).

E-1 Goals:

  1. Frontload technical rigor associated with ZEIPs to inform and accelerate the development process
  2. Reduce the administrative burden of managing information tangential to the development process
  3. Mitigate risks associated with accelerated decision-making for community-based funding
  4. Reduce the time between application submittal and funds disbursal

E-1 Learnings:

  1. The requirement for technical specifications was an improvement over the status quo for general treasury proposals and enabled more structured and informed decision-making.

  2. The reduction of administrative burden in managing process-type (i.e., non-technical) information tangential to the development process was positive in that it abstracted these details for grant seekers, removing friction.

  3. The risk mitigation measures were overall appropriate and beneficial. However, milestone funding can inadvertently disadvantage and/or create obstacles for contributors when they deliver on their plan, but future funding is not approved in a subsequent treasury vote.

  4. The shortened timeline was an improvement over the status quo (for general treasury proposals), and there is no clear evidence that a longer timeline would provide improved outcomes for these proposals. Note that this learning is specific to the conditions of this experiment, which included multiple risk mitigation factors, and does not offer proof that the treasury grant timeline should also be reduced.

E-1 Conclusions:
The improvements were consequential but still insufficient to achieve the overall goal of enabling a better experience for core protocol contributors. A qualified contributor meeting the defined requirements of the initiative was unable to obtain a milestone grant, resulting in a suboptimal experience for them and delays in development and innovation for the protocol.

The current quorum requirement for treasury votes, combined with voter behavior, prevents qualified contributors from obtaining grants and discourages contributors from participating.

This insufficiency provides the impetus for Experiment 2 (E-2).

Explain how the funding will be used:
Our hypothesis is that implementing optimistic funding for protocol contributor grants will result in more predictable, reliable, and consistent funding for qualified contributors. We will know we have succeeded when we see an increase in grants awarded to protocol contributors.

If this proposal is approved, the funding requested on behalf of core protocol contributors for E-2 will be sent to a Gnosis Safe and will be distributed using the optimistic funding process described here.

Indicate whether your solution/product will integrate directly with the 0x Protocol contracts (such as the 0x Exchange Proxy) or via APIs. If APIs, please list them (if known):
All development will contribute to the core 0x Protocol contracts

List any critical milestones and dependencies (if applicable):

Describe how the solution/product benefits the 0x Protocol Ecosystem:
Improvements at the protocol level benefit the entire ecosystem by extending the protocol’s capabilities and user base.

Do you agree to tag your solution/product for visibility in 0x Explorer:

What are the actual and/or target usage metrics (such as users and volume) for your solution/product:

Provide links to any of the following for the project (if available):
Demo: NA
Website: NA
Twitter: NA
Discord/Discourse/Community: 0x Protocol
Github: ZRX-Pathways · GitHub
Other: NA

Funding Request

Grant amount requested (in fiat):
Based on observation and knowledge, we estimate a reasonable amount to support two concurrent pZEIP development efforts, including audits, to be $250k, as shown below:

  • costs for development (x2) $25k to $75k (average $50k) = $100k
  • costs for audits (x2) $25k to $100k (average $75k) = $150k

Grant amount by token (ratio of tokens):
100% in ZRX

Receiving address and chain:
TBD (Safe 1)

Grants will be disbursed in accordance with the experiment described here. Although Safes will be established, grant funds will be disbursed via Snapshot votes and the Tellor Zodiac module, i.e., not via traditional Safe owner signatures.

The Tellor Zodiac module is a Tellor implementation of the Gnosis Reality Module, and it uses the Tellor oracle to enable onchain execution from a Gnosis Safe based on Snapshot proposal results.

The Safe ownership structure will be in place only to restrict non-authorized expenditures or to return unspent funds to the treasury at the conclusion of the experiment.

Specifically, two new Safes will be established.

Safe 1:

  • will hold the funds
  • will be set as the target for the Tellor module; similar to the ZRX treasury contract, anyone can execute the proposal transactions after the Tellor cooldown period has passed
  • will be set to approve the ZRX treasury contract for transferring ZRX from the Safe, which allows clawback through a treasury vote
  • has three owners (Nikita, SHA, Eric) with a three of three signature requirement, which protects against unauthorized transactions

Safe 2:

  • holds no funds
  • will be set as the Tellor module owner
  • has three owners (Nikita, SHA, Eric) with only one signer needed, which enables any owner to veto a malicious/non-authorized proposal

Funds not disbursed can be returned to the treasury by either a simple transaction signed by all three owners as described above or by a treasury vote, which will have the effect of the treasury sending the funds back to itself.


ZRX Pathways was a huge failure and you are requesting more money?

Please before doing more proposals to drain ZRX treasure do first an internal evaluation and pick up the feedback you gave to another proposals and give it to yourself.

In my opinion, as the ZRX pathways was a huge failure you should resign as delegate and stop this nonsense.

Are you returning funds from ZRX pathways failure?

I feel that this is the primary takeaway that needs to be focused upon and focusing on user behavior tailoring is the needed focus to resolve this issue. By resolving this issue I believe that a better format will emerge that will better help contributions obtain grants and encourage more contributor participation.

I believe that at this time focusing on developing a strong delegation core is critical. Doing so will guarantee a quorum to be met with quality discernment over grant proposals being performed.

I do not believe that quality delegation can exist without a core that possesses required skill sets to perform delegation roles with success at a required level of performance to match required discernment levels of inspection. Often levels of abilities shown by your past discernment of proposals.

To match these levels imo delegation will not engage unless their investment of time and energy output would foster a return on investment of time/energy output. Which was showcased during E-1. Delegation lost traction and needed interest.

Therefor at this time I think it would be logical to segment a portion of delegation funding to support a delegate core that would meet needed delegation roles to vet proposals, ensure quorum interaction, and begin the creation of a culture known for smooth grant proposals processing. This then gained “reputation” will further attract contributors to be encouraged to further participate. I feel this can be the primary focus of E-2.

The development of the core of delegates. Vetting the core. Establishing expectations of the core. Defining the financial metrics by which the core would operate by during E-2 experiment.

Imo this experiment will show a smoothening out of processes to engage and complete grant requests with consistent follow through.

Overall we are trying to reach consistency to build required and sought after reputation to attract more developers through a process that runs smooth.

I do believe that in the future when and if self sustainment of treasury is possible then flows from sustained treasury will then support the delegation core.

Furthermore I believe that a strong delegation core in time will form a strong user outer core around it and through leadership of action the outer core of general users will grow, in learning, of quality governance and mimic delegation core.

The foundation of strong future governance supported by a large user base imo begins with a strong delegation core. During E-1 it was observed that it was problematic to reach quorum.

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I think the language chosen is aggressive. Could have made a position and created a post in support of why you feel the position is supported by listing out how E-1 may have not met its requirements to achieve a success in your eyes. Which would have educated more members on perhaps why your position is strong or perhaps why maybe it is not due to a lack of support. So…. I would like you to break down the metrics of E-1 and show how its parameters were not achieved and therefor a negative in your eyes.

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Governance reform at scale is outside the scope of Pathways. We are conducting focused experiments that can be implemented quickly and with a minimum of variables so that the effects can be observed and used to inform follow-on experiments or possibly to inform recommendations for some broader implementation down the line.

Similar to a previous discussion about confusing the problem with the solution, it is important to scope experiments appropriately and to be solving the right problems. In this case and for our purposes, abstracting/mitigating the negative impacts of the current governance realities is more useful than reforming governance.

That being said, we are working on an idea for another experiment that has a governance component (which is specific to the core goals of Pathways, not necessarily governance writ large), but that experiment would be dependent on the learnings from E-2. Exposing the details prematurely for this other experiment could skew E-2 and reduce the ability to attribute cause-effect modalities from E-2 in isolation.

This proposal is requesting more money because the “experiment failed”. It was allocated over thousands of ZRX for a failed experiment and you are worried about the language?

We are talking here about a protocol that generate thousands of volume and should be prioritized being secure over innovation. That is incompatible with what is proposed here, changes on the protocol core should not be done with “minimum of variables”, should not be fast, should not be an experiment. Should not take 5 days to discuss an implementation that could impact severely the protocol. Other protocols had exploits because they wanted to move fast, and this experiment wants to rush protocol innovations.

These first two experiments are targeting the desired outcome of making it easier for developers to contribute to the core protocol contracts. Two key factors are enabling faster and more predictable funding, and those are what is being addressed.

You seem to be conflating these process improvements related to funding with the actual technical development. Technical details regarding the pZEIPs under development are available in the Github repo for review and comment. Technical development is not being rushed. Audits will be conducted prior to any development being presented for an implementation vote.

This is not what is happening on pratical. There is barely a discussion on a 5 days timespan. There is no economical criteria on why a pZEIP is being chosen, there is no economic evaluation. 270000 USD was spent on previous “experiment”, where the conclusion is: we need a blank check to spent on pZeips, because we are not able to achieve a minimal quorum of 10M even if the two delegates together that are interested on this ZEIPs have 7M on voting power. This passed a clear message that this experiment will not get success.

What we should being discussing here, as the Experiment 1 not get the desired outcome, are you returning funds? This is what should be discussed, and is aligned on have a minimal accountability for not reaching goals. We don’t want to pass the message that failed grants should get more funding.

Experiment 1 was determined to have had a successful outcome. But even if it hadn’t, there would still have been valuable learnings. That is the nature of experiments. In this case, one of those learnings is that additional improvements need to be made with regard to funding being more predictable for milestone grants, which is why we are proposing E-2.

You also seem to be conflating one experiment with the entirety of Pathways, which is incorrect. Pathways is well on course and will continue to conduct experiments in pursuit of our goal of making the protocol more performant, innovative, and sustainable via the implementation of enabling structures and actionable pathways, providing a better experience for core protocol contributors.

In this proposal, if we hypothesize that the likelihood of approval increases with the hypothesis that the proposal will be approved, then the proposer should first resign as a delegate and make efforts to pass this proposal.

If the intention is to execute the hypothesis that the probability of approval simply increases without distorting the DAO that does not proceed as the proposer wishes, then please agree.

In addition, the voting rules for delegates should be clearly defined. If this is not done, this proposal will appear to be an act of wanting to control the DAO.

I oppose the proposal as it stands.

We have/had a delegate core per the delegate experiment that in my eyes provided data to showcase that quality delegation requires a financial backing to support the energy output required to support the skillsets which support “quality delegation”.

Don’t you feel that a quality core of delegates would have absolved the issue of attaining quorum? Wasn’t attaining quorum do to a lack of involvement not a primary observed issue during E-1 and therefor producing a snag in the framework? Wouldn’t bolstering such a delegate core be first necessary to accumulate new data? Imagine running E-1 with a highly efficient delegate core. That possibly could have skewed results no? Causing different focus towards E-2? It just seems that we are overlooking the delegate experiment and the data that was observed from it.

The delegation is like a foundation. Gotta fix the crack in the foundation before you can keep building upward imo.

I think it’s wonderful when many proposals are approved. However, it seems that anything other than what interests us is being excluded with excuses. I believe the fundamental decrease in attention is due to the lack of benefits for holders in governance voting. Considering the medium to long-term management, relying solely on a few decision-makers may lead to further declines in voting participation in the future.

When staking was suspended, it was justified as a hypothesis or experiment. The hypothesis may have been that lower fees would increase competitiveness. However, that ultimately devalued ZRX as an asset and also lowered the participation rate in governance voting. While the competitive position of the 0x Protocol may have improved as a result, the benefits accrue to 0x Holding, not the holders.

If Nikita & 0xSHA have ambitious goals for core development that directly benefit holders in the future, I welcome and support that. Increasing direct benefits to holders, increasing the treasury’s resources, and being able to operate independently without the protection of 0x Holding are, I believe, the goals of the DAO.

In the medium to long term, I believe it’s important to achieve economic self-reliance, even if it takes another 5 or 10 years. This means benefitting developers, holders, and users alike. I think the transition from a moratorium to the real world has begun over these past few years.

Who defined that E-1 outcome was a success? An independent auditor, 0x Labs, anyone that we can name. Can you please share some kind of report to back your claim that the E-1 was a success?

If delegate compensation were to be added to this experiment/proposal, then no delegates could vote on it, as they would be beneficiaries, and this is the policy that we have been following, i.e., that delegates should abstain from voting if they are a beneficiary. IIRC, this is also why the earlier delegation experiment was never put to an onchain vote. As the experiment/proposal is currently written, no delegates are beneficiaries, so all should be able to vote.

One way of looking at it is that the proposal simply moves a portion of treasury funds to a safe with a different voting mechanism to access them, i.e., Snapshot vs onchain.

I do think this model will be a good test case that if successful could be applied to other use cases in the future.

I’m finding it difficult to understand what you are saying, so I can’t really respond; however, please see my comment above regarding the policy that has been in place with regard to delegate voting.

The success criteria was defined in the hypothesis: “We will know we have succeeded when we see an increase in contributor applications, which is a signal that more contributors are comfortable with the process.” As there was a 200% increase, by definition the outcome was a success.

When you say 200% it seems a huge increase, but is just misleading people that don’t know the history of this “experiment”. There was 2 pZEIP proposed, one failed, another one was done by core delegate that I believe don’t needed this framework to do what he did. It was spent 285K only for delegates to do this “experiment”, more 50K on implementing the pZEIPs.

This experiment failed, and the way you are tweaking numbers just show how failed it was. You even didn’t are able to provide any report or third party to vouch for you.

Again, you are conflating funding to support core development with the actual development itself and also conflating E-1 with the entirety of Pathways.

E-1 was a process improvement designed to accelerate funding to developers interested in developing pZEIPs and was measured on how many developers engaged.

Prior to Pathways, there were no ecosystem-based developers participating in core development. E-1 was successful in that two developers initiated pZEIPs, which is a 200% improvement. The development for both pZEIPs is still underway. No reports or third parties are needed to vouch for what are simple facts and simple math.

My math is 285K in ZRX that was distributed for Nikita and SHA which they were able to bring two developers to the protocol . One was already well-known to the protocol, so technically you bringed one new.

That money was not enough for Nikita, and she wants more. This is so absurd that I didn’t understand even this new grant.

Why don’t use the already allocated 285K in ZRX to fund this grant?