February 8, 2022
- 2021 Year in Review
- MolochDAO Network/Ecosystem Overview
- Grant Strategy
- MolochDAO - Looking Ahead
- MolochDAO’s plans regarding ETH ecosystem development
- Moloch Rises!
Skip this if you already lived it. It's meant to provide context for readers outside the DAO.
MolochDAO was summoned on Valentine's Day 2019 at ETHDenver. Since the DAO Hack in 2016, the DAO concept was more or less on ice, with few people working on it. Ameen Soleimani, who had started at Consensys the very week that the DAO Hack started, had continued to think about the concept. In 2019, he set out to create a minimum viable DAO - few lines of code with less complexity to reduce risk.
At ETHDenver, Ameen asked a bunch of people for 100 ETH each to summon a grant-making DAO. (One ETH was worth ~$115 USD then.) Those became the first members of the DAO, along with Vitalik Buterin and Joe Lubin.
As James Duncan described in a Medium post at the time:
"The beauty of Moloch is similar to that of the EVM. It is rudimentary, but the system works."
Moloch was active in 2019, and fairly dormant in 2020. However, it still had funds in its treasury, and that ETH had appreciated in value considerably. In late 2020, Stellar Magnet started an initiative to reboot the grants program, and get the money working in the ecosystem as originally intended. She applied to MolochDAO for a grant to create an operational guild, which became known as The ReallyBoringGuild (RBG), which administers the grant program.
In 2021, The ReallyBoringGuild spearheaded an upgrade of the DAO. Shortly after MolochDAO was summoned, MetaCartel had forked the contract and launched an entire class of DAOs called Moloch DAOs, eventually upgrading the contracts to Moloch v2. But the original MolochDAO remained on version 1 - more correctly, MolochDAO WAS version 1 - while an entire ecosystem grew up around it. To solve for some issues in grant administration, RBG recommended the upgrade to v2, and after conducting due diligence and an open comment period, the upgraded DAO was summoned.
Two grant rounds were conducted in 2021, and we see new activity and new life in MolochDAO.
This is a look back at 2021 and what was accomplished, and a look forward at MolochDAO's evolution.
- First grants round (January)
- Creation of Guild One, later renamed "The ReallyBoringGuild". (January) Background & most recent grant proposal is here.
- The first MolochDAO Handbook was published, co-written by TravisWyche and StellarMagnet
- Grants awarded, including a second grant to continue the work of RBG (June)
- RBG engaged with DAOstillery to create an upgrade path to Moloch v2 to solve for issues of v1 (such as 10 ETH sponsorship requirement). Shout-out to Ven, Dekan & Spencer for their expert guidance and support! (July)
- Community notification and open comment period was held to gather consensus on the upgrade (August)
- DAO upgrade was completed. ~$6M in funds (at the time) were moved to a new v2 DAO (September)
- RBG represented MolochDAO at MCON in Denver and Wyoming Blockchain Stampede (September)
- A new provisional MolochDAO Handbook was published (October)
- Second grants round was conducted (November)
- $30k of the RBG grant was allocated to RaidGuild to provide: brand identity, website update, annual report & sustainability model work (December, January)
- Grants awarded (December)
Since 2019, MolochDAO has distributed approximately $1.4m in grants.
- In 2019, 31 grants were given, with an average $ amount of $8,800.
- In 2020, 21 grants were given, with an average $ amount of $17,390.
- In 2021, 15 grants were given, with an average amount of $49,615
Note that the dollar amount is always estimated. Grants were previously given in ragequittable shares, and it is difficult to correlate the presumed value of the grant when it was given, the value of the grant when the shares were ragequit, the price of one share on the grant date, the different between the value of ETH when the proposal goes on-chain vs the value when the proposal passes. Assigning value to past grants has been done in USD for that reason. Going forward (in Moloch v2 or greater) the DAO can keep a record of grants in ETH, which maybe more straightforward.
This chart shows that MolochDAO's priorities were split between ecosystem development and ETH 2 development in 2019. In 2019 and 2020 there was work done on DAO ecosystem development, including work on Moloch v2. In 2021, priorities are centered on ecosystem development in a range of subject areas.
The chart below shows a snapshot of the DAOs funding priorities from 2019 - 2021. You can see that in 2021, grants largely continued and extended the grant priorities from the prior year.
Note that Comms (member & public-facing communications) is not shown for 2021 because it was absorbed into ReallyBoringGuild's budget. The one new item in 2021 was Grant Matching - which is the MetaMoloch initiative. This initiative is a collaboration with MolochDAO, so to some degree it can overlap with Moloch's funding interests (but may also diverge in some areas.)
The ReallyBoringGuild's most recent grant proposal articulated a variety of operational duties with a focus on grant coordination. MolochDAO's all-time operations cost averages 8.6% of the grants program. It was 10% in 2019 and 2020, and 7.6% in 2021. $56,400
Trueblocks is a lightweight & local index of the Ethereum blockchain. RBG recently published this interview with founder Thomas Jay Rush. TJay remained a member of the DAO after getting his grant, which he used to add a developer to provide additional functionality. $75,000
Ethereum Cat Herders has been supported in part by MolochDAO since 2019. Headed by Pooja Ranjan, who recently joined MolochDAO, ECH is a decentralized project management group for Ethereum blockchain. In particular they work with processes around Ethereum Improvement Proposals (EIPs). RBG recently interviewed Pooja about Ethereum cat herding. $135,000
Apache Tuweni is the brainchild of Antoine Toulme, who has been involved with Moloch since 2019. It is a set of libraries and tools to help people develop for blockchain An RBG interview with Antoine is forthcoming soon. $50,000
DeathGuild is an ambitious research and content production project which is probably best described by grant recipient Travis Wyche! $26,650
Rotki is a privacy-focused and open source crypto portfolio manager. $100,000
Flashbots is a research and development organization concerned with miner-extractable value (MEV) and the risks to smart-contract blockchains. $100,000
The proposers of EIP-3074 turned to MolochDAO to support their work on this issue. The EIP is currently under review. $18,000
Umbra Protocol is a protocol for simple stealth payments on Ethereum. $100,000
Sybil Resistance is a proposal from Ameen which focuses on adversarial testing of identity systems Proof of Humanity and BrightID. $100,000
MetaMoloch is an innovative proposal to create a matching grants program as a collaboration between MetaCartel and MolochDAO, creating signaling between the two DAOs, and exploring grant strategies in common, as well as leveraging the different spins on grant-making in each DAO. It is proposed as large grant in tranches, and MolochDAO agreed to test the concept with an initial grant of about $20,000.
A working history of all grants can be found here.
In addition to grants coordination, The ReallyBoringGuild prioritized collaboration with other DAOs in 2021. An entire ecosystem of DAOs grew up around MolochDAO since it was summoned,but because it was not very active, many assumed MolochDAO itself was dead. We felt it was important to establish its unique history and place, and to reinvigorate and inhabit the brand. We found there was significant interest from the community in MolochDAO's revival. We also found it valuable to engage with the community and collaborate on the DAO upgrade.
Here are our main collaborations in 2021:
The DAO upgrade enabled easier flow of the grant pipeline. We realized that some of the pain points and issues we were solving for had already been addressed in Moloch v2. It was essential to engage with experienced devs who could help conduct both a community outreach process and a technical execution. Ven Gist, Dekan Brown, and Spencer Graham were incredibly generous with their invaluable time and guidance.
Meta Gamma Delta is an early Moloch DAO (summoned at ETHDenver in 2020) that supports women-led projects through their grants program, and is known for their inclusive and friendly onboarding. Both DAOs benefited from collaboration and bringing women from each DAO into the other.
UberHaus is a DAO comprised of DAOs, and Travis is MolochDAO's Uberhaus rep. We are one of the largest holders of Haus tokens in UberHaus.
The MetaMoloch grant grew from many conversations with MetaCartel, which was the first to fork Moloch v1. With the creation of DAOHaus, a no-code method to put up a DAO, the number and kind of DAOs exploded. This collaboration is two-fold: it claims a respected position in the community for MolochDAO, and enables the DAO to make impact in the ecosystem with influence as well as grants. Both Moloch DAO and MetaCartel have a mission to accelerate and drive mass adoption of Web3.
We sponsored a RaidGuild cohort for $20,000 in return for an ambitious slate of work to be picked up by members of the cohort. Essentially, cohort members work pro bono, but are rewarded for successful work from the sponsorship. They get experience working on projects, and successful project members will be able to onboard to RaidGuild.
This was a valuable way to temporarily increase the pool of hours and skills available to RaidGuild, and the funds paid for the sponsorship replaced work that would have otherwise been done by ReallyBoringGuild members over several months. We also provided a great learning opportunity for new members onboarding to RaidGuild.
We provided an initial list of possible work to RaidGuild for the cohort to choose from.
RaidGuild members selected tasks, formed into teams on the following projects:
- This annual report, providing research and writing, as well as analysis for the sustainability model, below
- A new brand design and website (in progress)
- Community-building strategy
The RaidGuild team reviewed the grant strategies of four other Ethereum ecosystem funders (Gitcoin, Ethereum Foundation, Metacartel, EF RFP) and have some recommendations for MolochDAO to consider for its own grant making strategy in 2022. They include:
These programs often were very explicit about what they do and don't fund as well as their process. This helps people know when to apply and what to expect as they consider grant options.
Some programs offer informal conversations with select grant proposers to help answer questions and give guidance on what would help the grant get approved. ReallyBoringGuild offers this as well.
In our v2 DAO, proposals can be made from non-DAO members and there is a refundable fee of 1 ETH to do so, as a spam prevention measure. We therefore can no longer require proposers to have these sessions; it is voluntary. In the last grants round some used this service, and others did not. In 2022, we could promote the availability of this, as it can help increase the likelihood of success (though there is no guarantee that the advice will result in a passed proposal - the DAO votes as it will.)
The EF Ecosystems grant process offered many kinds of support beyond just monetary support. Some public goods goals require connections, publicity, mentorship, and advice. Offering incentives beyond money is a big value add to the ecosystem.
MolochDAO provides some publicity through RBG, but the DAO can grow its support for grantees in 2022.
Some of the best programs we examined both mentioned fast responses and others said they heard back quickly.
MolochDAO has multiple grants rounds per year and we can evaluate the idea of a rolling grants round in the future.
By the time someone has gotten a grant approved they often have an exciting project. Some of the other grant programs examined offered matching donations as a way to multiply the effort of the grant application and impact of the proposal.
MetaMoloch is a first effort; we can also look ahead in 2022 and how we can collaborate with other relevant DAOs to provide signaling and help leverage the opportunity for grantees.
The idea is create a model the DAO can use to discuss and decide how much money to give away each year, depending on desired outcomes. Some questions are proposed here for discussion.
Should the fund clear out its treasury quickly, and then shut down MolochDAO, having served its purpose? Or should the DAO give away measured amounts of ETH annually, in order to create more longevity as ETH rises? Ameen suggested that we give away 20% of the available funds for 5 years to create this effect; this sustainability model is an evolution of that, considering some different scenarios.
It may be worthwhile for the community to discuss MolochDAO's lifespan - what was intended at the beginning, and what is Moloch's ongoing value to the community?
If an ongoing purpose for the DAO is envisioned, we can use the model to make some predictions about when fundraising would be necessary and/or advisable.
If so, this suggests the amount of funding to allocate to grant administration on an annual basis, and creates some metrics for measuring success, relating the funding to the amount of grant funds managed.
Non-profits are rated more highly if they use less than 25% of funds for overhead and administration. For MolochDAO, this was 10% in 2019 and 2020, and Really Boring Guild delivered 2 grants round and a DAO upgrade for 7.5% in 2021. We have used 10% in the model, but again the DAO can apply actuals each year in order to evaluate what it wants to pay.
Depending on consensus around these questions, the DAO can evaluate its future direction and make annual choices to support that.
The sustainability model spreadsheet contains scenarios that can be adusted in several ways:
- You can play with the numbers to create your own scenarios and test assumptions. Maybe you think ETH will rise more dramatically over the years, or want to see a scenario where all the money is given away in two years. Feel free to make a copy and experiment!
- Annually, the DAO can input actuals such as the average price of ETH from the prior year to refine the model and make course corrections as needed.
The model is not a set of rules, but a way to generate information for decision making.
The analysis examines three main factors:
- the yearly USD price increase of ETH,
- the recommended grant budget in different scenarios, and
- the amount the DAO can expect to pay for grant administration services each year, expressed as a percentage of the total annual grants budget.
Obviously the hardest factor to predict is the future price increase of ETH. Creating a scientific price prediction model is beyond the scope of this report. We therefore have made an assumption that the price will continue to increase on a yearly basis and the only difference will be how much it will increase. We have typically used the average price of ETH in a year ($2775 in 2021 according to an average of reported CoinGecko prices) - and this is where annual updates will be very helpful to account for actual prices. Using an average price for predictions is important so as not to make assumptions based arbitrarily high or low rates on a particular date.
You will see in the spreadsheet that there are both linear and non-linear progressions used to estimate the future price of ETH. These are just supplied for modeling and estimation, but in no way represent projected actual prices.
The chart below shows some sample recommendations from the scenarios in the spreadsheet.
Other factors can be evaluated, such as measuring impact of the grants in USD, and deciding whether to give away a similar amount annually, or whether there is a steep rise in the USD value of giving along the way.
Again these scenarios are meant to generate discussion in the DAO.
RBG plans to conduct three grant rounds this year: April, August, November, following the process established in 2021. See the Annual Grant schedule for details.
ReallyBoringGuild's additional priorities include:
- Continue evolving grant strategy by gathering information and expertise directly from members
- RBG is assessing the impact of past grants by interviewing grantees
- Continue work on community strategy
- Consider ideas for progressive decentralization of RBG
- Migrating all of our RBG documentation into Github to increase transparency to the ecosystem
- Providing a roadmap of proposed work to the members
The DAO has risen on DAOHaus.
Moloch who entered my soul early! Moloch in whom I am a consciousness without a body! Moloch who frightened me out of my natural ecstasy! Moloch whom I abandon! Wake up in Moloch! Light streaming out of the sky!