Funding the Comons | Story of a Network Funded Team

[Music] [Applause] [Music] welcome back to the funding the commons virtual summit for those of you just joining us this event is centered on new models of public goods funding i'd like to welcome our first speaker in this session raul jordan raul is co-founder of prismatic labs and an ethereum core developer and he's going to tell us the story of a network-funded team how prismatic labs develop prism and other public goods using new funding method mechanisms welcome raul thank you so much for for the invitation i'm glad to be here okay great so i'll get started uh let me share my screen okay everything good to go yes okay excellent uh great so thank you everyone my name is rahul jordan i am a co-founder of prismatic labs one of the developers that worked on ethereum proof of stake and still working on bringing that to the entirety of the ethereum network happening next year so a lot of big things were happening and really it wouldn't be possible where not for the continued support from the ethereum community especially at say the ethereum foundation that has put together a very aggressive campaign towards public goods funding we've been very grateful to you know as one of the earliest grant recipients from the ethereum foundation and really that that relationship that we built over the long term helped us really break into the industry bring in new talent and also just give back and try to make an impact into this technology so i'll chat about kind of our story how we got here why we did it some of the lessons learned about what works and maybe what doesn't work in an open you know open public goods funding environment and wrapping up with some tips for other teams that might be thinking about going down this route so you know my team prismatic labs we basically are fully grant funded and we created this project called prism which is currently the most popular ethereum 2.0 implementation so today ethereum is upgrading to this massive multi-year roadmap where a lot of things will change namely we're going to be transitioning off proof of work and instead going into you know a more environmentally friendly and you know more robust implementation of proof of stake so we've been working on this since the start of 2018 we started in a completely grassroots manner so we assembled only from basically open source volunteers that we found on the internet today we shipped a prism ethereum improved stake of phase zero in december first of 2020 and at the time of writing there's probably over 25 billion dollars worth of heat at stake today so a non-trivial amount of people are actually staking on mainnet today and trusting you know our software and trusting you know other team software with this big responsibility and we wouldn't have imagined really reaching this point when we first got started on this idea so kind of why did we start right to us really ethereum is you know one of the most interesting blockchain projects it has the you know biggest developer community and really feels like a place where developers can thrive um you know everyone that we met in the beginning was super welcoming like most important conversations were done in the open and we felt that we could really come in and you know and build and do something with everyone's support basically it was a it was at the start of 2018 when really a lot of builders were looking into ethereum from the promise of its technology and everyone was talking about you know what the technology is missing to really make it big uh you know everyone was talking about how scalability is not here yet um how like you know we want to move proof of stake how come it hasn't happened yet and really all these problems that people were talking about and a lot of developers on the sidelines were curious about but never really had an opportunity to to tackle right so i was kind of asking that question to myself i was like why is really nobody working on this who is building out uh like scalability who's building out proof of stake and the answer was a few people were interested in it but i couldn't really find any serious effort or push towards doing this right so i started voicing a message on different places such as reddit you know discord github and just asking hey does anyone want to work together on something like this right i was really fortunate to find uh you know some of the core members of my team from the very beginning that were just interested in thinking the same things really one thing that we notice is that when there are difficult problems there will always be really great people willing to tackle them and i think that you know web3 offers this kind of this uh this foundation where where people can come together and you can meet people you whenever you imagine working with and really uh work towards a common mission um so i sent out this email kind of back in the day and kind of that's that's what led us to where we are today at the time basically the only thing that existed regarding like you know e2 was this faq um that vitalik put together it was called a shouting faq so it explains kind of like what would a scalable ethereum layer one look like um and at the time there was kind of like there were a lot of fuzzy concepts nobody really um nobody really unders nobody really you know wrote this out in like more like a formal specification and this is what we had to work with right we were like okay there are a lot of ideas floating around how do we actually do some work how do we actually put something together what was really awesome is that you know our team we started building out a prototype of this faq and at the same time this is when opportunity really came to us we noticed that in january 2nd of 2018 the ethereum foundation announced that they're doing you know a development subsidy program essentially a public grants program the idea was that they think it's really important to outsource a lot of the difficult problems and core development to the community right like teams from the community could apply and work on solving you know on basically providing scaling proposals to the ethereum blockchain this was awesome news it was like really one of the first time that we had uh you know grant program of this size really being done in such a transparent manner so of course you know we applied we were very fortunate to be one of the first recipients of the of the program and we did so because we had a prototype to show a lot of us were just volunteering and doing this for fun and we kind of had something basic to show at the time and really this allowed us to to continue and and pursue this as a serious effort so basically uh as of december 1st of 2020 we shipped the first phase of each proof of stake it was approximately 20 000 validators each with 32 each on main net uh today a large amount of each is at stake but still only a small amount of the eat supply and full proof stick to ethereum is coming in q1 of 2022 so it's really been quite a long journey and here we are cool so how has i guess the grants program and ethereum evolved over time one thing that's really interesting is that you'll find a super broad ecosystem that grants support you'll find everything from like really hardcore cryptography to something as basic but impactful as translating educational materials for you know into different languages i think that ethereum really does offer an opportunity for everyone and the fact that you know there there is no aspect of the whole stack that is not covered by the grants ecosystem makes it really special i think that anywhere from you know individuals that want to make an impact and break in to more serious teams that have very interesting proposals are able to you know receive funding from the ethereum foundation and other organizations to really make this happen so to us that was super encouraging and just seeing that grow over time made things just that much more rewarding and interesting of course you know grants are not guaranteed so one of the one of the big challenges of working basically as a fully funded grant team is that you don't have a guarantee that there will be a next one right um you know it's not like you're receiving you know it's not like you're raising a seed round and you're on tradition you know going going to a series a round or raising money in that way or for example making revenue for example like there may not be an x1 which i think is a double-edged sword i guess in some ways it encourages teams to really try their best to make sure that they you know they work and they meet the milestones but of course there is no guarantee one other thing is that retaining talent can be difficult of course you know like we see we see how how how much web 3 popularity has skyrocketed over the past few years and really having people you know stay focused and stay working on working on a grant funded project can be difficult compared to alternatives that exist in the market today um i do think however that some of the hardest problems do you know some of the hardest uh you know the problems and teams that are working on them you know have a really good moat to retain talent as as you know some of the best talent wants to continue working on difficult problems so based on our experience here is what i would say i consider as important elements of successful public funding ecosystems and i think that this you know this is from the perspective of being a grantee and also from what i see as being an effective grantor so some of the elements i believe are important are being value driven right so for the grantor perspective say you're creating a public goods funding environment like you think you think you know think hard about why are you doing this right why is it important um you know a lot of the times it's you know is it to is it to actually solve some very difficult problems in the space and outsource that to the community or is it just for the sake of building community you know for you know as a as an end in itself right um another aspect is is there enough funding for folks to make a full-time leap into building web3 third i think empowering newcomers to learn and make an impact is super important to be honest a lot of us when we first got started in ethereum we were pretty new to crypto i think a lot of us you know we had a software engineering background we had worked in web 2 companies or startups but it was the first time we were learning a lot of the jargon and terminology that was being thrown around in core development and you know even more amazing is that even within a few months we're working on this we were as deep as you can possibly go we were working with some of the existing ethereum researchers and core devs uh you know at a research summit uh chatting about the road map of the project so really knowing that you know it it you have this this huge a welcoming environment to newcomers was just uh was very refreshing right and uh and fourth here is it uh you know we believe that a really good public good funding ecosystem encourages teams to tackle the hardest problems right so for example uh like you know giving giving agency uh hey like we're opening up grants to like this super difficult technical problem right can you guys apply and do it i think it's very special and uh compared to like for example just uh outsourcing some examples some tooling or some application layer work uh to grants part two is on the grantee side i think it's also very important to build long-term incentives for them um you know it's it's a it's very important to have uh you know a long-term game where you know they keep shipping really good quality work uh they keep getting recognized and they keep getting supported and they also have some incentives where like you know if uh you know that multiply beyond just getting a cash salary so uh if you know if their work is impactful enough to really really push the technology forward right uh both the grantor and the grantees should win uh from the collaboration we believe that another important aspect which you know could be a little bit controversial is we think that healthy competition here is super important and and a grant system that encourages that uh you know stands to win a lot from it so for example like by opening up a difficult problem to a team and to multiple teams you can have different teams competing based on merit on the best solution and i think that's a really good way to add kind of pressure and an open source ecosystem and also find you know the optimal approach it also helps weed out you know maybe teams that might not be as serious about working on something versus teams that really want to want to solve a problem right and a third i believe a healthy ecosystem also encourages the teams to find sustainable revenue beyond grants right so like you know grants are not forever what can they do beyond that and i think setting them up for success on that regard is is really critical so what is it like to build out a team that is fully grant funded you know as mentioned early on i think a lot of grants exist to support individuals but they don't really offer what's needed to build a full team of engineers right so like especially if you want to you know like nerd snipe a bunch of engineers from like top tier companies uh you're gonna have a really hard time um i think what's you know you have to approach approach recruiting differently one thing that's it is interesting though is that milestone-based grants offer a path towards growing a team that's based on merit so if you have like actual milestones you're targeting and like you have very clear you know dylan delineated uh you know grants for each milestone then the team has a direction the team has something to aim for and as mentioned previously i think that the best talent really wants to work with like-minded people on hard problems so i think using that to your advantage and recruiting is very important we've been very lucky that every time we put out a notice for recruiting we get some you know amazing individuals that you know we would never have imagined would apply for us if we were just working say on let's say like a traditional startup right just the quality of people is is really amazing and the quality of people that's out there is really amazing um additionally empowering newcomers is is is something that is underrated i think um public good funding would benefit a lot from being accompanied by mentorship so having like apprenticeship from top tier developers is a great way to onboard talent i believe that dear foundation recently launched a core developer apprenticeship program where they have you know a legendary eath dev piper merriam that basically mentors you know basically a cohort of people that apply to this program to learn everything there is about you know the core blockchain infrastructure how to write code for it where to contribute and you know awesome is that some of these graduates from the first cohort already have received offers of employment in the industry so these are people that just came in uh knowing next to nothing and now they're you know we're we're minting new new core devs uh you know with these programs so uh additionally i think encourage encouraging you know teams to apply to the hardest problems is a really huge huge deal i think that granters have the incentive to tackle the hardcore parts of their product in-house so say like you have some breakthrough innovation right like you're gonna probably want to build that yourself um however outsourcing to grantees offers really good benefits right if you encourage the community to build the infrastructure of your protocol that leads to further decentralization and that's very special right like any two for example we have five teams in production today that have an implementation of the protocol not just prism right um we have teams that you know that write them and write their implementation different programming language um they come from different perspectives different countries different motivation and i think that's really nice like there is it's a protocol that has many implementations um and and you know when you outsource something like that to the community you stand a lot to gain from it so yeah so there are you know these are some of the some of the teams that are currently in production today there's one not pictured is loadstar which is a javascript client that is doing a lot of good work for browser tools for ethereum and the next generation of the blockchain and uh you know i think it's very important to build long-term incentives so we want to make sure that their work is recognized and impactful you know as a grantee that can make a world of difference if you know that basically what you're doing the community appreciates that they see you they they you know they they see the work that you put out and and they can actually see the results along the way um that's massive and especially having an endorsement from you know the grantors and the people that are funding this team is you know makes a big difference but of course we need better incentives in just cash um although cash does go a long way i think some of the ideas that you know are going to be presented today are extremely interesting i'm not nearly as qualified to talk about them but you know i know there's been a lot of discussion about how to how to best allocate money from dial treasuries how to do vested token schedules like native even native token investing offered by the project foundation i think is a really great way to align these long-term incentives and we built out incentive models over the last you know 100 years of you know of corporations and startups but we have far you know far more transparent methods now with web3 that we should be utilizing more so i'll leave that to the other speakers of course and uh you know one more thing is you want to foster healthy competition in a public goods environment so i think for us in the beginning when we first started there were almost 10 teams doing the same exact thing right so like that was a really good push for us to work harder and to really ship faster and and do things differently by doing this i think you get you get a very strong system where you know where different solutions uh you know come to say come to a similar problem and you can adopt parts from both uh you can also have teams that you also have an external driver for teams to compete and do better right you know instead of just knowing that if you do put in some base on the work you'll get the next great milestone knowing that there is no guarantee of the next grant milestone because there are so many other great people that has some layer of pressure that i do think is important for for having a team uh do some for having a team really grow and finally you know we want them to become sustainable right so we want to you know ground funding is not forever it's important to continue retaining the talent and helping building out the promise of the project in the first place uh so i'll wrap this up and then really open up some questions but for some teams out there that are considering uh you know applying for grants is really consider what are the problems that you care about the most think about long-term plays so like you know if i work on this major problem right i might not see results until two to three years from now but once i do it'll be massive seek the hardest problems and you'll find motivated individuals to join you and really seek opportunities for mentorship and you know ask of the grant program you're applying to offers i think these these are things that um you know will will will be net multipliers for your career if you are breaking into web 3 and trying to work in like public goods ecosystems um great so i'll leave it with my contact info i would love to open it up to any question from the audience thank you great thanks rahul for going into the elements of building a public goods funding system from creating incentives to building a team to empowering newcomers i think we have time for one question we'll go with decentralist dan asks do you see teams building public goods being able to fund development by staking their grant funding on eth2 and using rewards for funding into the future uh good question i think i think like putting up your your grant funding uh you know like at risk uh you know it could be a gray area i think we for example definitely stake a lot of of our eth i think the team personally does um and you know i think but you know there are of course some conditions on grants right you can't just like use all your grant funding to go and gamble on d5 or do other stuff like that um so you have to be careful to make sure you maintain a sustainable runway for your team and make sure that you know you you have enough to sustain yourself um but i i do think that like i said native token investing allocations having incentives built into native tokens um is really important like knowing that uh you know if if if we succeed then each staking succeeds and therefore ethereum succeeds is a really great way to align our incentives um and really the best way to do that is by by holding the coin by staking the coin um like i said we do that like uh like the majority of of what i own is staked on eth and like i'm not afraid to admit it because i'm working on it and i think it's the ultimate skin in the game so yeah thanks again roll [Music] [Applause] [Music]