What is CGP2.0?

We’re bringing back the beloved compound grants program. Larry Sukernik and team did a great job in 2020-21 running the first version of the compound grant program. Unfortunately, after that there has been no one who has kept it going. The primary reason seems to be burn out of the grant managers and bandwidth issues in keeping such a large ecosystem grant program going.

So in June this year, we decided we’ll roll up our sleeves and set up CGP2.0. This time we tried to understand all the short comings of 1.0 and tried to see which ones we can fix in the next iteration. The most promising improvement was to setup Delegated Domain allocation. I think that is the core essence of CGP 2.0 - how can we set up a large ecosystem grant program that is effective, efficient and community led?

What is delegated domain allocation?

Delegated domain allocation is a way to replace centralized committee’s blind spots with individual community member’s expertise.

To implement delegated domain allocation, we identify the domains in which Compound wants to disburse grants. We ran a snapshot vote for 2 months to get a pulse from the community. We froze on Security Bounties, Dev tooling, Dapps, Multichain Strategy. These are things that the community cares about. We then hunted for the best active community members to give out grants to each of these domains. So Michael from Open Zeppelin, AllTheColors one of the most active Devs on compound community, Bobby from Stable Node were picked to run one domain each.

So instead of a proposal being reviewed by all the members of a committee, each proposal is reviewed only by the relevant domain allocator. The key insight here is that when we observed how grant committees are working, we realized that there was only one person - who had most experience with respect to the incoming proposal - who was putting in the first vote. All the other committee members just followed what this expert voted. So, we said you know what, let’s cut the crap and admit that this is a decision made by a single person. Give that person more discretionary powers to make the decision singlehandedly.

So now in this new framework there is no consensus needed. Each allocator is given a budget. They can make independent decisions on which proposals should get a grant in their domain. Ofcourse, there are some stop gap mechanisms to ensure money isn’t getting siphoned.

So yeah, essentially this allows the load to be distributed because all the committee members don’t have to reveiew every proposal. Michael who’s leading Security bounties never needs to review a New App idea which will be reviewed by allthecolors. Also, Michael will be able to make his decision faster because he doesn’t need to lobby for support among other committee members, who are any way not experts in security to be able to judge. But most importantly, the builder benefits. They get feedback from an expert and a decision faster because all the inefficiencies have been removed from the review process.

Why did this take over 5 months to get it going?

Yeah, we put up the post for a temp check in June 2022. However the work had started even before that - especially talking to community members and Larry Sukernik who led the previous grant program. Everything we did was decentralized. So our tools really were - weekly community calls, discourse forums for discussions, snapshot for getting pulse of the community. For example just to decide the domains we’re going to run, it took us 2 months of snapshot voting. Decentralization comes with it’s own inefficiencies right? For example, even though we knew that Robert was in support of the program infact he has also already voted for us but it wasn’t enough. Even the founder of Compound doesn’t have a voice strong enough to make the decision go one way or another. We have to rally the entire community. But it’s also very rewarding because once something goes through you know that the entire community stands by you and your decision. This was my first experience working with a community that is actually decentralized.

So, who should vote?

Anyone with a comp token should go to the compound governance dashboard and cast their vote!

https://compound.finance/governance/proposals/136?target_network=mainnet

Vote now :)