Death by Grant Proposal: Rethinking Funding for Builders | Eomji Park - Encode Club

[Music] so hello everyone I am OMG from inot club uh today I'm going to talk about yes just like the previous speaker a bit about funding in rap three funding Furious rap three Innovation but what if it also driving Builders away so today we will explore how why funding mechanism may not work and how we can rethink incentives better so we can help each other first I'm omj as s uh I'm had a research operations at incote club incote club is the web three education Community uh if you have some questions or other things you want to chat like you can easily uh drop me a DM on my Twitter first funding in web three is broken not because there's not enough money but because Builders and protocols see grants differently so let's break it down from protocol perspective grants are meant to attract and retain Talent so when protocol is giving away the grant what you expecting if they stay and building longterm but they often see grants going to some Builders who take the money and disappear so with no measure of impact like grants are just keep going away and protocols start to think how can we protect that adding more restrictions oversight slow approval process trying to fix the problem but then backfires on the other hand Builders aren't just looking for fast money they're looking for support resources and real reason to stay because if you want decide to come to that ecosystem build you need way more than just money money is everywhere in web 3 if you're just looking for money there's like tons of protocol who going to give you money away so you are looking for some differentiator which is the right support to make your business grow does the protocol provide mentorship distribution Channel developer tooling Community has a great Vibe or not you name it depending on what project you are building what kind of person you are what kind of team you are you may looking for one two of those strongly aligned with your project otherwise it may just not work for you if Grant F transactional just money without no ecosystem support Builder also going to be moving on because as sad it's transactional so this is the general funding Gap protocol wants long-term commitments Builders want something just more than money without serving this we will keep seeing ecosystem losing talent to more supportive Community might be even people are going to be hopping around to find their right fate the question is how do we align it so there's a three pillars I want to uh share today just to discuss like how we can think about funding is being structured so there's a core Demag and I divide in three just to think about different combination of the funding one is the timing when we are giving away funding what is the decision making who is deciding to distribute to who and then last is the form of the funding first timing is everything so some funding happen proactively to pay your work in advance and some other fundings are retroactive and both approaches have tradeoff proactive funding is great for kickstarting retrospective uh retroactive funding you can also reward someone who make the impact without committing in the beginning and these days some people start to even coming up hybrid model let's try to see a bit more breakdown so you can see that um you can see that like it's not always working there's some broken part and we need to think about how can we fix this broken part proactive funding hard to credi which projects will stay long term it's not necessarily because they are grifter they also don't know about their product they didn't find the product Market fit yet they may just pivot it attracts the grand Chasers maybe often slow approval and distribution process going to be just happening retroactive funding is very very like interesting especially optimism did great job it doesn't support all St Builders who need upfront money so they like they can pay for their bill but still it recognize ear time Builders who have committed to your project even without expecting anything so this is a great way to reward people but hard to Define what counts as impact as well maybe you may see there some retroactive funding there's always a bit of noise that who should be paid or not people going to debate and of course it's still unpredictable from Builder point of view your contribution going to be paid off or not the next is uh who is deciding so community-driven funding or commune driven funding or hybrid recently uh gcoin was trying curated quadratic funding so they try to balance between Community input with the expert validation but the thing is none of these are perfect solution for every ecosystem it's rather you need to use them differently depending on your stage and goal you can say that also that AG of like them what is the great part of this and what is not working today we're going to focus on what broken part because we want to fix it together Community Driven funding what's the broken part we know that fake identities can manipulate funding so civil attack happen also popularity bias in the community there's some people who are much more exposed to community they know people then of course funding can be very biased as well and it requires certain infrastructure to go through them so if you don't have such yet and then if you don't have good coordinator in your governance it may just get a little bit lost on the other hand committee based funding is it not biased of course it can be very political as well centralized groups can have their like a favism and of course slow bureaucratic depending on what committee you handling but you're going to have a gatekeeper so this is the reason why like you may consider how we can combine these or use one or another depending on the timing size of the Grant and the goal of the grant another one is a what types of funding you can give Bounty grants hack Rivers airdrops there's many different way to reward your community and Builders you can see that like a again a bit of the different case so ha rewards often you may see their protocols complaining Le follow up many projects die after event price alone the retain Builder longterm you cannot attract opportunistic uh you can attract only opportunistic teams but at the same time it's the best way to have a refresh energy kick way to attract people or TX Bay Bounty if you put it's more like a freelancer system so that if you have like some task someone take care of it you have a payout it's great way to have some clear task clear viewer system but also not ideal for long time because you don't have like stability as the person who is working for those bounties and also it can create big economy but not committed ecosystem so you may at certain point realize that you don't have too strong Community or like a proposal based grant it's often um good for the long-term one but of course there's a higher friction if you have a committee to review it can be very bureaucratic and you need to wait it need a higher accountability because you are giving away usually larger size of money but at the same time that's difficult to have those type of accountability unless you have a great tracking system system or you have a team members who can actually track them down air drob and incentive same thing um that one of the funding it's more broadly impacting your community but of course it's often ineffective for retention but it's a still great way to create interest around community and distribute to your community members in a smaller size so those are like a over three dimension funding outside like if you're perhaps like designing your funding you may think about what timing to choose what decision makers and what form and then you can think about if it going to be matching matching with what aligning incentives with your stag of project is really important so this is the typical uh typical CM graphed like a how Techni compan is getting adopted to the market if you see that in early adopter those early adopters even perhaps don't care Financial incentives it can be almost inserting if you give small incentives by their larger contribution that's the reason why you may see that like what kind of pariza you're handling maybe for those developers you front run them to get Fast Pro request Reserve it's maybe better than actually they get like 100 bucks a month or like 1,000 bucks a month they just want maybe recognition and they want their problem getting solved and get merged on the other hand like if it's later stuff it's a little a little different maybe they're less aligned with your ethos so if your ecosystem get bigger we must admit that not everyone is completely full fully aligned so we need to rethink about how to keep them around with a what incentives another thing is of course aligning incenst with the goal not the stage only because your stage is maybe early stage later stage it doesn't mean that you always have one goal but your goal might be different in different campaign and different action and I see that of we confuse them and expecting different things such as attracting new Builder if you're doing attracting new Builder maybe hackaton gr for education program air Dr s are great but of course when we are doing this one we need to think about that this alone will not bring people in longterm goal sustaining Court contributor for longterm we need to think about salary contributor Bounty based funding we need to think about proactive brands with Milestone that they can continue their activity if they don't have those like follow-ups if hackaton rewards getting end after their first contribution they have no reason to come back let's be realistic after thousand bucks if you're expecting them to commit their life or your ecosystem that doesn't work but we need to also think about how to follow up and continue helping them so that they can be successful in your project a little bit more mat so when there when you want to encouraging encouraging their business growing in your ecosystem here comes the like a bit Venture like investment ecosystem incubating but also important thing is value adding because they need to make business successful on your project which means that it can be higher support maybe you need to like share distribution Channel maybe you do Revenue sharing there's a different model to support but we often wish that they going to be growing and you see them as aside but you may not see them to be successful in your ecosystem so these kind of things like we cannot expect Public Funding going to be solving our problem it's okay to have a venture like system we need to be sure that they need a extra support to grow last is like driving adoption and retention so when it become even like a bigger so when you see that your ecosystem is flourishing and there's another members coming in maybe this is a great time to recognize other contributors who has been contributing to your ecosystem without getting some incentives so retroactive funding be become very handy this time because seeing this people start to remember that and this going to be like a creating interesting dynamic in ecosystem once when I contributing now I may get rewarded in the future you cannot use retroactive on the in early stage because it anyway doesn't make sense there's not so many things to do retroactively your ecosystem is still small it's better to support proactively maybe more eff driven approach but going towards okay in a bigger Community it makes sense to say that this Community Driven approach try to give them retractive funding and see uh how it can how to say encourage other people to do so just one thing we should be careful is that front-loaded grants I think not so many protocols as this anymore but it used to be around like one two years ago just keeping a huge amount of money and expecting that they going to do everything and be hands off that's not Freedom that's just you abandoning them with the tons of money so you need to still follow and helping them startups need more than money all of you especially if you have some experience so like funding your own startup you will soon realize that there's a tons of money out there but you don't have others supposed to grow your business properly so same thing for the relationship with a protocol and uh project we need to give proper hands that they can grow beyond the money so one last thing is so that like practical framework this is so easy thing not easy to design funding but it's not like I I brought up something groundbreaking it's a simple but it help us let's think about what is our goal now you can have a multiple goal but you cannot fulfill all the goals in one initiative so you need to think about what are we optimizing for second is you need to identify those Builder parona with this goal if you're working with a long-term goal maybe you want to have senior developers getting on boarded or Founders if you want to have like a new initiative with a like fresh U more marketing activity you may want to look for some of who are fairly new to ecosystem doesn't need to be senior so such as you need to identify and match them and play toose right funding model and iterate so we need to track evaluate and improve the system so one last thing I would love to bring up is the best way to predict our future is funding effectively because we have a lot of money here we don't know how the blockchain future going to be so weight align funding doesn't just help developers it help entire ecosystem so if you want Innovation we need to we need better incentives not just bigger grants so I leave you with discussion how is our funding will enabling or hinder Innovation future web three depends on how we fund it and let's make it right that's pretty much it and just on time [Applause]