This proposal was created by a group of community members who care about the Shimmer ecosystem’s development and the network’s success. We have met every Tuesday and Thursday in the IOTA Discord general voice channel, and all these topics have been publicly discussed, and the proposal was developed and fine-tuned in these meetings. Core contributors have been: @Deep_Sea @AndyW @gman @overclocked @Werner @TonyO2 and many others that took part in the calls and added context to the proposal.
You can watch all recordings of those meetings here: https://youtube.com/playlist?list=PL5joP0FyJQU4eKPWfQWradNVjMIPq86ID
Please read carefully and leave comments and suggestions in this thread.
The selection process for potential committee members will be introduced in the next days.
If you like the idea, please show your support at the end of this post here
The Shimmer Network will start with an allocation of 181.362.051 SMR to a community Treasury. This is 10% of the total token supply of the Shimmer network and can be a powerful tool to support the successful and sustainable growth of the Shimmer network and, through the developments in Shimmer, also the IOTA network.
Optimally using these funds to create a flourishing Shimmer ecosystem and increase the value of the Shimmer tokens needs an efficient approach. Managing funding requests, evaluating if those requests should be sponsored, distributing funding, and tracking that the provided funding has been used in the proposed manner are crucial to the success of such a program.
These tasks need to be handled by a dedicated group of individuals who act in the community’s best interest and can allocate sufficient time to this critical work. We have seen in many other projects how successful a community treasury can use a committee-based structure to boost adoption and growth in a project if the funds are managed professionally.
Please watch the recording of our Bankless Townhall session, where they explain the Aave system: https://youtu.be/D_epzJC0Ap4.
The 10% community Treasury funds currently have no structure, and no rules are defined to guide how and if the community should use them. Not using these Tokens to support growth in the Shimmer Ecosystem would result in a massive loss of opportunity for the Shimmer community.
As there is an immediate need to support teams, create outreach and marketing campaigns and incentivize builders to make Shimmer a successful network, we need to establish an organization, rules, and guiding principles to use the community funds to support the growth of the Shimmer network as soon as possible.
The Shimmer community will be the biggest token owner in the Shimmer network. With this, there also comes a responsibility to actively do something for the network’s success, creating a win-win situation for all participants.
After researching and reviewing how other communities have bootstrapped a token treasury and brought measurable growth and adoption into their ecosystem through a committee-based Grant program, we believe this is also the right approach for the Shimmer community to start its journey in supporting valuable builders and initiatives in the network.
We need a committee of knowledgeable and trustworthy members with the time, skills, and resources to bring the community funds to the best use.
Otherwise, if we leave any grant application to a lengthy proposal process and a community vote, we don’t think the needed incentives for builders and community growth can be established.
We would, therefore, not be able to get Shimmer to the same level as our competitors in the DLT and Web 3 space. Other networks like Aave, Uniswap, and Compound have similar systems and successfully bootstrapped their ecosystem.
Builders’ teams constantly look to where they find the best conditions and see the most significant chance of growth and success for their applications before allocating their resources (time, knowledge, workforce).
Shimmer and IOTA need to be on the same level as those competitors to convince builders, which can facilitate the Shimmer protocol’s technical growth and adoption. Without sufficiently easily accessible incentives, Shimmer cannot compete in the current market against projects that get support from big VC funds and have access to funding in the 2-3-figure millions.
Some examples are taken from Kappys proposal that initiated the launch of our community treasury:
- Avalanche Foundation Announces $180M Defi Incentive Program 9
- Avalanche Developers and Investors Form $200 M’ Blizzard’ Investment Fund 6
- Announcing 370m FTM incentive program 1
- New 335m FTM Incentive Program with Gitcoin Grants
- $300M incentive program backs 100% rally in Harmony (ONE) price 1
- NEAR Protocol raises $350 million in new funding round led by Tiger Global 4
- Privacy startup Nym brings in outside backers for $300 million developer fund
Those programs have often not brought the effect that the community hoped for because the execution was done poorly or they have been set up to incentivize the wrong growth metrics (like focusing purely on TVL).
Also, many grant-giving entities have done very little due diligence on the grant receivers, and follow-up processes have been poor or non-existing.
We believe it is now time that the community takes action and executes what is needed to increase the adoption and value of our networks. For a long time, it was an ongoing critique that the IOTA Foundation did not do enough marketing, outreach, etc.
The community can now take care of those points with this grant program and the proposed committee structure.
Such a program can support community members in creating the needed outreach and awareness in the broader crypto space.
Attending conferences and events, producing campaigns, sponsoring hackathons, etc., are now possible. We need engaged community members to take on those opportunities and a grant program that can quickly fund such initiatives.
There are hundreds of great opportunities to bring more developer teams and applications into the project. Now is the time to act and enable growth through well-placed incentives and initiatives.
We, therefore, propose the following setup to manage the Shimmer Community grant program leveraging a budget supplied from the Shimmer community treasury:
A community-led committee-based grant program to support the Shimmer network and empower its ecosystem
The committee will initially be set up with five members.
One of them is the Program Lead and, besides reviewing funding requests, takes care of all administrative tasks and reporting and coordinates the committee members’ work.
- The lead also promotes the program, identifies directions for funding, and has a thought leadership role in guaranteeing the program’s success.
Roles can be adapted, and the number of members can be changed through governance votes if there is demand.
- Further, an important part is ongoing coordination with the second ecosystem funding program run by the Tangle Ecosystem Association to ensure effective alignment in the goals and directions of the community grants program. This will be one of the Tasks for the Programs Lead
The 4 Grant Reviewers will process funding applications part-time and ensure that the lead acts in good faith and is effective in the role.
- The committee operates a 3 of 5 Gnosis multi-signature wallet that requires 3 out of 5 signatures for a payout of funds.
- The committee members will select one of the four reviewers as the co-Lead. The co-Lead acts on behalf of the committee lead in cases of sickness, holidays, or leaving. If the Lead leaves, the co-Lead continues the operation and organizes an election of a new lead by a community vote.
This committee will serve for a period of 12 months. Toward the end of this period, The committee will prepare an extensive report of the success, and the community can extend, adjust, or cease the program through a governance vote. Decisions to continue or end will have to be made one month before the current period ends to enable a graceful shutdown of operations or a transition into the next period. (Costs of operational shutdown need to be secured)
The community may replace members during the program’s period at any time through a governance vote.
- This can happen either if committee members find they cannot dedicate sufficient time to the program or ask for a replacement or if the community has valid concerns about the motivation and professionality of a member or has any proof of fraud or betrayal.
- Grant reviewers are free to leave the position based on the terms stated in their contract. A 4-week prior notice is usually required before leaving the committee.
- Replacement positions will be offered to the runner-up candidates that have received the largest support during the committee selection process.
- Members that leave the committee will be replaced in the Multi-Sig Wallet.
- All committee members will do a KYC process and sign a legally binding contract with the legal entity.
- All committee members must reveal any conflicts of interest in becoming a committee member. They need to reveal if they currently are or have been holding a position in any DLT project or have other connections to projects or teams that could cause a conflict of interest.
- The Lead is not allowed to be in a paid position with any other Crypto project. A co-lead is also held to these higher standards.
Committee members must be sufficiently incentivized to deliver professional work to the community and not be targetable with bribe attempts by projects that ask for funding.
Compensation that is in line with industry standards needs to be set up to attract the most skilled members:
- The lead should receive a salary of 70 dollars per hour paid in USDT for 30 - 40 hours per week.
- The committee members should receive a compensation of 50 dollars per hour paid in USDT for 10 hours per week.
- To increase the utility of the Shimmer network and attract new builders.
- To promote Shimmer and make it more visible and attractive in the DLT space.
- Applications and integrations (front-ends, Defi, Gaming, and other applications that use the Shimmer protocol on L1 or L2)
- Incentivizing established successful projects from different ecosystems to deploy their application on the Shimmer network
- Developer tooling
- Incentives for Validators, Node operators, and infrastructure
- Analytics tools and dashboards
- Community Education
- Marketing and outreach initiatives
- Code audits
- Events, Community meetups, and hackathons
- A proposal must be relevant to the Shimmer network and its ecosystem.
- A proposal that segregates individuals, organizations, or communities based on sex, race, color, ethnic or social origin, genetic features, language, religion or belief, political or any other opinion, membership of a national minority, property, birth, disability, age or sexual orientation will be declined.
- The committee will prioritize projects with the highest potential and positive impact on the ecosystem compared to the received funding.
- Projects that can guarantee a backflow of capital/investment into the community treasury will be evaluated more positively.
- The proposer or team must be capable of delivering the proposed project. Evaluating this is the responsibility of the committee.
- All funded projects must be open source (under MIT or Apache 2.0 license). Projects in development must allow the grant committee to access any private repos for review and these projects will only receive 50% of the proposed budget untill they fully open-sourced their code.
- The requested budget must match industry standards for comparable tasks. If a proposal requests way above fair market value, the committee may either reject the proposal or cut the funding to settle at fair market value.
- If a project has already received funding from the Tangle Ecosystem association, it cannot receive funding from the Community Treasury for the exact scope of work again. But, the committee can grant additional funding for extensions or further developments of such a project.
- A proposal that creates any conflict of interest from members of the proposing team or committee members must be reported to the committee lead. Committee members with conflicts of interest are not allowed to process, comment, or vote on a proposal.
- Any attempts of Bribery or offer of future payments, token ownership or compensations / gifts of any form to committee members will lead to the immediate cancellation of a proposal process. Accepted bribes by committee members will lead to the immediate removal of the members from the committee.
Easy and quick access to funding is essential to a successful grant program. Numerous examples in the space have shown that this is one of the most critical reasons teams consider when choosing a network.
The grants committee will discuss all Tier 2, Tier 3, and Tier 4 applications in a public meeting (weekly or once demand exists) of the grant committee in the IOTA / Shimmer Discord, where the community is invited to ask questions and observe the evaluation and decision-making process.
Proposing the following tiers and requirements:
As long as the market cap of Shimmer is low, we need to take a considerably more secure approach in the early stages. Therefore we should define a threshold based on the Shimmer market cap, which will lead to the halt of funding, the start of funding with low tiers, and the funding with normal tiers. \
No grants are given out as long as the Market cap of Shimmer is below 50 Million USD
Grants will be given out with low Tier values if the market cap of Shimmer is between 50 and 100 million USD
Grants will be given out with the normal Tier values if the market cap of Shimmer is above 100 million USD
Tier 1 - up to 5.000 USD: One reviewer handles the proposal and approves or declines it within 48 hours after submission. No KYC is required from the proposer. The reviewer will decide based on the provided data in the application and especially consider if the submitter has a positive history in our community.
Tier 2 - 5.000 - 25.000 / 5.000 - 50.000 USD: Two reviewers review the proposal. As a minimum, the Team lead of the applying Team must do KYC. The Team presents the idea in a video interview with two Grant reviewers. A minimum of two milestones will be defined, and payments will happen based on these milestones. After completing the KYC process, the committee will pay up to 50% of the requested funding upfront.
Tier 3: 25.000 - 100.000 / 50.000 - 200.000 USD: Same requirements as the previous tier apply. The whole Project Team must do KYC. Additionally, applications need approval by the whole grant committee. The Team is presenting the idea in an extensive live interview with the whole grants committee. A minimum of three milestones are defined, and payments happen based on these milestones.
If the project is accepted, the program lead will assign one of the reviewers as a project steward. The steward is responsible for keeping close contact and doing regular (minimum every two weeks) checks with the project team. Milestones are reviewed by the steward and approved by the committee lead. After completing the KYC process, the program can pay 30% of the requested funding upfront.
Tier 4: Above 100.000 - 250.000 / 200.000 - 500.000 USD: Applications will be reviewed by the entire grants committee. Same procedure as in Tier 3. The final decision if the project receives funding will happen in a vote by all token holders.
- Suppose the grants committee supports that a particular project shall be funded It forwards these applications to the community as a proposal in the governance forum and asks for approval by the community in a vote by all Shimmer token holders.
- The proposal in the governance forum will be submitted by the committee lead and includes the project team’s full proposal and a detailed statement by the grant committee on why it recommends funding this proposal.
- 2 weeks after publishing this funding request and recommendation, the Firefly vote will begin.
To establish transparency, the grants committee must present all Tier 2, Tier 3, and Tier 4 applications they consider for funding in a public grant committee meeting (weekly or once demand exists) in the IOTA / Shimmer Discord.
All decisions by the grant committee will be published without naming the individual grant committee members who worked on a proposal to avoid becoming vulnerable to potential complaints and attacks from declined projects.
The following details must be provided by the teams in an application questionnaire form:
- Applicant Name (Full names preferred)
- Applicant Email
About the Team
- Number of Team Members
- Details per member (write about every Team member. Education and work experience, link to relevant portfolios)
About the Project (Write about your project - idea, use cases, process, goals and how it helps our ecosystem)
- Project Name
- Project Links
- Project Details (Write details about your project - requirements, deliverables, and milestones - as detailed as possible.)
Project Goals (Write about what your team plans to achieve with this project)
- Project Milestone 1,2,3,etc
- Expected Milestone Reward in USDC (How much money would you need to achieve this milestone)
Funding & Budget Breakdown (How much money would you need in total and explain how you would spend this money if your application is accepted)
- Funding Ask in USDC
- Funding Breakdown (Write about how you plan to use the funds in your project i.e., marketing, developers, etc.)
- Will you publish the code of your projects under an open-source license (under MIT or Apache 2.0 license)?
- Telegram Handle: (All Team members)
- Discord Handle: (All Team members)
- Whitepaper (if available)
- Pitch deck (if available)
- GitHub repository (if applicable)
- GitHub handles of Team members (if applicable)
Category?(Please put exactly: DeSci, DeFi, DAOs, NFT, Gaming, Enterprise, Metaverse, Tooling, Marketing, Outreach, Education, Event, Hackathon, Social, Other)
Grant reviewers will use a scoring system to evaluate funding proposals.
|Scoring Qualities||Outstanding (4 points)||Good (3 points)||O.K (2 points)||Needs Improvement (1 point)||Missing or Extremely Low Quality (0 points)||Score (out of 4)|
|Relevance to the Shimmer/IOTA Ecosystem||The project is very relevant to the Shimmer/IOTA Ecosystem and exclusively builds on the Shimmer Network. They may currently have an MVP on Shimmer already.||The project is relevant to the Shimmer Ecosystem and either builts exclusively on Shimmer or plans to deploy later onto IOTA Mainnet as a second instance.||The project is somewhat relevant to the Shimmer/IOTA Ecosystem, and the Shimmer network is a main network of choice, but not the only one.||The project treats Shimmer as one of many chains and doesn't seem loyal to the Shimmer/IOTA network.||The project shows no signs of Shimmer development or doesn't seem to be faithful to building on Shimmer.|
|Plan and Funding Model||The team has clear, realistic expectations on their milestones and how the funding will move the team closer to these goals. They follow the expectations of the grant system.||The team has somewhat clear, realistic expectations on their milestones and how the funding will move the team closer to these goals. They somewhat follow the expectations of the grant system.||The team has clear, descriptive expectations of their milestones, but they are not entirely realistic.||The team has a semblance of expectations for their milestones, but they are not realistic.||The team has no clear vision of what funds would be used for.|
|Execution||Several critical steps have already been taken toward their project goals. This could be seen in the form of a significant MVP, high traction, etc.||Some critical steps have been taken toward their project goals. Their MVP is currently being built with signs or some sort of traction.||Initial critical steps have been taken (interesting website, socials, etc.), and it seems like a decent project, but extremely early.||Initial steps taken are poorly executed or sloppy. If there are socials (Twitter, Discord, etc.), their following looks inorganic (fake).||The team has taken no steps to execute their project.|
|Verifiability and Quality of the Team||Team is doxxed, and backgrounds can be easily verified. The team is also high quality and seems capable, trustworthy, and ready to take action on the project.||The Team is somewhat doxxed, and backgrounds decently easy to verify. They are trustworthy.||The team is somewhat doxxed, but may be a little difficult to verify background information. They are more trustworthy than not.||The team is somewhat suspicious and hard to verify.||The teams' background and information cannot be verified or is fake.|
Originality of the Idea
|The project is unique and would greatly impact the Web3/crypto ecosystem.||The project would significantly impact the Web3/crypto ecosystem and is decently unique.||The project would somewhat impact the Web3/crypto ecosystem as a whole and is somewhat unique.||The project would have little impact on the Web3/crypto ecosystem as a whole and is somewhat unique.||The project/idea is a copycat or extremely weak.|
A project should reach a certain score to be eligible for certain funding Tiers:
- Tier 4(Funding budget 200.000 - 500.000 USD) - required score minimum 17 of 20
- Tier 3(Funding budget 50.000 - 200.000 USD) - required score minimum 15 of 20
- Tier 1 & 2(Funding up to 50.000 USD) - required score minimum 13 of 20
The scoring system is a guideline for reviewers. We understand that it may not always be applicable to all kinds of different projects that apply.
For certain projects, we reserve the ability to place them into different tiers even if point scoring disagrees. Still, this scoring system should apply to the majority of projects.
We propose this:
- The Budget for the committee spending during 12 months is 15% of the SMR community Treasury tokens.
- 15% of 181.362.051 SMR will be 27.204.307 SMR available for the committee to spend on grants and cover all costs.
- The committee will need to operate a MultiSig Wallet, starting with fractions/ monthly allocations of SMR tokens from the TEA wallet to the Multisig.
- The committee will pay monthly salaries in stablecoin USDT or USDC to the committee members and will be responsible for handling this.
- Once a project has been approved for funding, the committee will convert the amount of Shimmer tokens that the project needs into USDT so that the funding of this project is guaranteed. Market volatility should, therefore, not have an impact on project funding.
- The needed legal costs and expenses around the setup of the Swiss GmbH and the implementation into the Tangle Ecosystem Association will be covered by the community funds held in IF custody.
- Any excess funds left in the Committee’s MultiSig Wallet towards the end of the 12 months period will be sent back to the Community Treasury wallet by the committee members in case the community decides not to continue the program.
The committee members will need legal status to be aligned with all regulations and operate on safe, legal grounds.
We propose to set up a Swiss GmbH subsidiary of the Tangle Ecosystem Association and either employ the committee members or contract them as individual service providers.
It will make it possible to have a regulated and lawful grant-giving committee that can be held accountable and operates under a transparent and regulated status. The Gmbh will be obligated to pay taxes and follow all regulations of Swiss law.
All committee members will therefore be legally KYC’d and known to the GmbH and can be made responsible if any misbehavior should occur.
Details of this setup will need to be worked out over the coming weeks with our legal advisors.
- Growth in the number of grants applications received quarter-over-quarter
- Growth in the number of projects, ideas, and events funded
- Growth in community engagement (e.g., increased activity on Discord, Forum, Twitter followers, etc.)
- Growth in community rewards distributed from the program towards Shimmer token holders
- Growth in Shimmer market capitalization that is driven by applications/projects funded via grants (e.g., increased TVL in the EVM Chain, active addresses in the Shimmer network and the EVM Chain, value transferred, and unique addresses due to apps funded by grants)
- Improved sentiment and goodwill within the community
- Improve the Shimmer and IOTA protocol’s brand and positioning in the market.
The committee will provide reports on these metrics every six months.
This proposed structure is based on the very successful Aave grants program (original proposal in Aave forum). It also took inspiration from other programs like the Bankless grants and the Polygon DAO grants program.
They all work with committee-based structures and different Tiers of funding that make it easy to apply for small grants but increase the due diligence of higher-tier financing.
Looking at the list of successful sponsored grants and events from Aave should show very clearly where we need to arrive with our grants program:
- Yes, i support the idea
- No, i don’t think we should do something like this
- Yes, i support, but request some changes to the idea (see comments below)