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Quadratic Funding Hits the Mark | BanklessDAO Weekly Rollup
Catch Up With What Happened This Week in BanklessDAO
Dear Bankless Nation 🏴,
One constant at BanklessDAO is the unity among members. Our shared values make us close-knit regardless of where we live in the world, as we help each other progress the Bankless Nation. To that end, DAO organizational units are encouraged to post their Season 8 funding proposals to the Forum before April 7 for review by the Grants Committee.
In this week’s editorial, Lucent presents a review of the proposed pilot of a Gitcoin Grants Stack, whereby BanklessDAO will run our own Quadratic Funding round. The idea is to test the new Gitcoin Grants interface while also ascertaining market fit for some of our established projects.
Speaking of retroactive funding, in Optimism’s recent RetroPGF2, 27.5K OP tokens were awarded to our Newsletter, Bankless Publishing, IMN, and ‘The Rug’ projects. A further 58K landed on Bankless Academy! Congratulations on impressive efforts all round, and well deserved success.
This week’s Community Call concluded with an open roundtable discussion where members expressed praise and gratitude for their peers’ sustained hard work within the DAO. By the way, if you haven’t used the Praise bot in the bDAO server yet, now’s the time to share some gratitude of your own.
It’s with such gratitude that we thank you for reading this week’s Black Flag Rollup edition and wish you a great weekend!
✅ Action Items
📖 Vote: Review, comment, and vote on the various Season 8 funding proposals.
🏫 Learn something new in the Education Department knowledge sessions.
🎙 Listen: Tune in to our various podcasts and stay on top of all things crypto.
Following the previous discussion on Establish and fund a Governance Department, the proposal passed the soft consensus check by achieving 36 votes in favor and 9 against. If successful on Snapshot, the mandate of this department will be to:
Steward the governance conversation in BanklessDAO
Update and maintain governance docs and constitution
The initial budget for this Department will be 800K BANK.
We Are the Black Flag 🏴
To be bankless is to seek freedom.
Freedom to do what you want to do — to be who you want to be.
Throughout history, people have hoisted the black flag in the face of authoritarian rule.
The black flag is a declaration of our intent to be free.
It is a symbol of our resolve.
BanklessDAO was created to steward the bankless movement.
We fly the black flag as a beacon for all freedom seekers; to create a space for us to gather and grow.
We welcome all. Country, creed, age, language, race, religion, gender, and everything else are secondary to our purpose. As long as you seek freedom, BanklessDAO welcomes you.
We teach our ways. With every person taught, we swell our ranks. Our members are a rising tide, and a rising tide lifts all ships.
We are relentless. Step by step, we pursue our mission. Brick by brick, we build the means for others to follow. When we fail, we take stock, make adjustments, and keep moving forward.
We value contribution. Large or small, each contribution is a step closer to freedom. Contribution is BanklessDAO’s true currency.
We are strong together. Even when we can stand alone, we stand together. When one of us falls, another steps up to carry the banner. When one of us flies, we all soar.
To be bankless isn’t a goal, it’s a way of life. It is the decisions you make every day towards self-sovereignty. Slow or fast, as long as you move towards freedom, you are bankless.
And if you are bankless, you fly the black flag. As a beacon. As a symbol. As a reminder.
The black flag is the pursuit of freedom, and the bankless always seek to live free.
We are the black flag. Let’s fly! 🏴
Links, one of the great connectors in the DAO, and someone who lives both to inspire and be inspired, was inspired to write this inspirational piece. Well done links, and thank you for continuing to inspire us on our bankless journey!
Quadratic Funding Hits the Mark
Communities are built upon participation. One way to participate in the larger web3 community is through the Gitcoin Grants program, which pioneered an allocation system known as Quadratic Funding. This recent bDAO Forum post seeks to trial Quadratic Funding for our projects. If approved and launched, the plan is to study the outcome, analyze the feedback, and with the right improvements and community support, perhaps implement the system as part of our seasonal funding process. For that reason, it’s a good idea to learn some more about Quadratic Funding.
How Quadratic Funding Works
Quadratic Funding is a mechanism that involves prioritizing the number of people who vote over the value of a single vote. As Kevin Owocki puts it: “I imagine moving from a web that is one-token-one-vote… to one-person-one-vote, and I think that's fundamentally more democratic”. With Quadratic Funding, the aim is to fund projects that appeal to the majority, rather than leaving the decision to a ‘whale’ (someone with a disproportionately large amount of tokens).
Quadratic Funding works by matching the funds allocated by individual supporters to a larger pool provided by an investor.
The Quadratic Funding mechanism is calculated with a formula created by Vitalik Buterin, Zoë Hitzig, and E. Glen Weyl in their paper titled A Flexible Design for Funding Public Goods. This formula is expressed in the paper as follows:
The authors explain further:
In a standard linear private market, the funding received by a provider is the sum of the contributions made by the funders. In our “Quadratic Finance” (QF) mechanism, the funding received by a provider is the square of the sum of the square roots of the contributions made by the funders. Holding fixed contribution amounts, funding thus grows with the square of the number of members.
The elements of the formula are included in the paper, but for those of us not hanging out in Genius Club with Vitalik, the following image from a blog post by Ishita Srivastava gives an example of its application, as does the video at wtfisqf.com.
To understand the technical view of Quadratic Funding and voting, read Vitalik’s paper on the subject in his blog.
Introducing the Gitcoin Grants Stack
Gitcoin launched the first Quadratic Funding mechanism in early 2019 with the Gitcoin Grants program, which according to the Gitcoin website has since “generated $50+ million of funding”. Gitcoin’s latest initiative is the Gitcoin Grants Stack, which replaces the centrally run grant rounds and paves the way for other communities in the ecosystem to begin trying out the quadratic matching mechanism.
The new direction appears to have support from many communities in the web3 ecosystem as Gitcoin Grants is acknowledged as a strong driver of funding for projects with good market fit.
BanklessDAO Pilot Program
As detailed in the Forum post, the idea is to pilot “a gated BanklessDAO quadratic matching round in S7 with the intentions of testing the process, evaluating the results and presenting the analysis to the DAO for next steps in decentralised project funding.”
Part of the Grants Committee's remit is seasonal project funding. Although project teams must first post on the Forum to ask the community’s feedback and achieve a level of consensus, it falls upon Grants Committee members to decide whether the amount of BANK requested is appropriate for the project’s anticipated market fit. It’s noted in the Forum post that while Grants Committee members are trusted members in the community, they are seldom investment experts.
According to the proposal, by running its own QF round the DAO will be able to “generate a strong signal on which of our projects have an early product market fit” reducing reliance on the Grants Committee and shifting the decision-making power to the Bankless community.
In the selection of which projects should be funded by the DAO for the pilot round, the proposal squad believes that limiting eligibility to projects previously funded by the DAO, which have run for more than two seasons, will enable us to establish which of these existing projects have good market fit. The idea is that the community can provide a strong signal of support to the projects they want to see continue through this retroactive donation of funds. It will be possible to donate with the BANK token.
Everything in Moderation
Running our own grants round will require that we nominate moderators to manage the configuration, administration, and distribution of the donations and matching funds. The suggestion from proposal authors is that “one or two members from governance and one or two members from Grants Committee be selected…to run the pilot on behalf of the DAO.”
One of the most important features of the Gitcoin Grants program is the ability to build in Sybil resistance via the Gitcoin Passport. The passport enables an individual to amass a collection of ‘stamps’ or verified credentials from various web2 and web3 ‘identity providers’. For this pilot, it’s suggested that anyone with a passport score of at least 21 is eligible to donate.
Prepare for Take Off
The Forum proposal is a request for 1.1 million BANK. The bulk of this (1 million BANK) will be used to create the matching pool, with the remainder to be distributed via Coordinape to those involved in administering the pilot. As one of the early adopters of the Gitcoin Grants Stack, it is anticipated that bDAO will receive a good amount of social media attention as well as being in a position to test and provide feedback on the user interface.
The poll associated with this proposal received 47 votes with 89% in favor. That means that the next step is review by the Grants Committee; if the BANK funding is approved, the pilot program will commence one week later.
This program has the potential to usher in a new era for BanklessDAO, altering the way in which new and existing projects are supported. Project teams who can develop ideas with mass-market appeal will be the big winners here, but we must be careful to consider the implications for teams designing projects on the cutting edge too. Stand by, passports ready, and let’s fly.
👀 In Case You Missed It
📺 Weekly Rollup Recap With Allyn Bryce
Allyn Bryce brings the magic, and this most recent recap is no exception. Catch up with last week’s Rollup and hear about BanklessDAO’s involvement with the new Collab.Land DAO.
📚 Bringing Crypto Education to the Masses
Bankless Africa teamed up with Bankless Academy to discuss the state of crypto education in Africa and to share details on how they are integrating Bankless Academy’s content on their website. Listen to this informative discussion, here.
📈 Season 7 Project KPI Measurements
All Project Champions with projects that were part of the seasonal funding program must report their mid-season KPIs to qualify for and receive the next tranche of funding. If you still need to submit your KPIs, you can do so in your project thread in the #grants-committee channel and tag your Grants Committee reviewer. If you don’t know who your reviewer is, please refer this document.
🍔 Grab It While It’s Hot
🏃🏽 BanklessDAO x Gritti Metathon
BanklessDAO has collaborated with Gritti for the upcoming Gritti Metathon in Paris. This Metathon aims to bring runners from around the world together using Gritti’s social fitness dApp. Sign up here to take part in this global running revolution!
👩🎨 d’Art Drops
Title: Greedy Paws
Artist: Dark World Arts
Description: Despite an abundance of resources available to sustain human growth and potential, all it takes is a few greedy hands to introduce scarcity and inequality into a system. We are fully experiencing this in the current financial system; unless we are diligent in our work, we will see this come to fruition on the blockchain as well. We have an opportunity for abundance in crypto; will we capitalize on that opportunity, or squander it?
Cost: 0.02 ETH
🎙 BanklessDAO Podcasts
🗓 Set A Reminder
CopperX offers blockchain payment APIs for businesses. To learn more about CopperX, join this demo in the Amphitheater on Wednesday, April 5 at 18:30 UTC. Learn how to start accepting crypto payments, recurring billing, invoices, and more with just seven lines of code.
Coordinape is a platform that enables peers in the DAO to reward each other for their contributions. Join the Education Department on Tuesday, April 4 at 14:00 UTC in the watercooler voice channel to learn the basics of Coordinape. To set a reminder, RSVP to the event. Hop in 15 minutes before the event start to be onboarded to the Zep platform. Check the async learning resource here.
Understanding wallet mechanics and safety are fundamental in the web3 ecosystem to ensure your funds don't get into the wrong hands. If you want to learn how to be safe regarding your web3 wallets, join the Education Department on Wednesday, April 5 at 14:00 UTC. Remember to hop in 15 minutes before the event start to be onboarded to the Zep platform. Check the async learning resource here.
Sobol is a web-based platform that allows teams to govern themselves and run their organization according to their unique culture. If you want to know the organization of the DAO and how to find different information about roles, guilds, Notion pages, multi-sigs, and members of our community, RSVP to this Education Department event on Thursday, April 6 at 14:00 UTC in the watercooler voice channel. Hop in 15 minutes before the event start to be onboarded to the Zep platform. Also, check out the Ops Department’s Sobol Workstream for further training.