Survey of distribution mechanisms in Ethereum

Research
,
1

I want to start with a very simplified description of how monetary value is generated:

Value and redistribution

A group of investors make a pool of money to finance a new operation. The money is used to pay the salary of a group of employees, equipment, and services. The operation generates new money that is then distributed.

(can we simplify and generalize this even more?)

Definitions

There are many ways to distribute this new money:

  • Salaries
  • Payment for services
  • Dividends
  • Grants: people apply presenting a project, a budget, and scope. They are usually rewarded partially at the start and fully upon the completion of the project.
  • Donations: passively received, with no requirements for receiving the funds other than the reputation of the organization, but new funds are conditional on their use.
  • Retroactive funding: checks an already executed project and pays for it after it shows to be successful.

Should we add shares? cheap fees? loans?

(can we make a list that is comprehensive and clear?)

Organizations

Now, let’s make a list of the organizations in the Ethereum ecosystem and describe how they distribute money.

In progress: Flashbots, Ethereum Protocol, Ethereum Foundation.
Next: Lido, Rocketpool, Uniswap, Gnosis, Coinbase, Optimism, Giveth, Gitcoin, zkSync, gtceth, golem.

(which are the organizations with interesting distribution roles?)

Ethereum Protocol

  • Block proposer reward
  • Token burning

Ethereum Foundation

The Ethereum Foundation is a non-profit that supports the Ethereum
ecosystem.

Sources:

Flashbots

(last update: 2022-03-30)

Flashbots is a research and development organization formed to mitigate the negative externalities posed by Maximal Extractable Value (MEV) to stateful blockchains, starting with Ethereum.

  • Full time collaborators: 35
  • Part-time collaborators: 4
  • Volunteers: A lot of people contribute in the forum. Not too many internally, probably less than 10. Earlier there were some external contributors.
  • Grants paid: 25
    • Money paid in grants: $112,500
  • Public donations: None. We have discussed what to do with the dust collected in our relay, funding a non-profit? Informing regulators? Usually we don’t charge for attending our events, but when we have charged, what should we do with the money from tickets to events? So far we haven’t used any of this money.
  • Token: None.
  • Services fees: None explicitly. Implicitly we are charging users, the MEV goes to validators and searchers, we haven’t kept any of it. Average MEV payment in the last 14 days was 0.054067 to validators, per block.
  • Redistribution plan: We are working towards it. MEV-Share is a plan towards that.

Source:

  • personal communication with @McNut.

Gitcoin

(last update: 2023-03-30)

Gitcoin is an organization that supports funding projects through a platform for grant allocation using quadratic voting.

  • Full time collaborators: 54
  • Part-time collaborators: ~20
  • Volunteers: None. They make sure that anyone working is paid, to not take advantage of anybody.
  • Grants paid: 3,715 projects
    • Money paid in grants: >$50,000,000
    • Unique donations: 3,800,000
  • Public donations: None. They are a vehicle to allow it to happen, though they’ve started to explore ways they can do donations.
  • Token: GTC - https://etherscan.io/token/0xde30da39c46104798bb5aa3fe8b9e0e1f348163f
    • Distribution:
      • Retroactive Airdrop: 15%
      • Gitcoin DAO: 50%
      • Existing Stakeholders: 35%
    • Governance: yes, used to vote in the Gitcoin DAO governance proposals. Some proposals are funded in GTC tokens taken from the Gitcoin DAO treasury.
  • Services fees: None. They are looking to change that in the near future, but there’s been a lot of conversation as to how they will meaningfully do that.
  • Redistribution plan:
    They did an air drop to people that were helpful in getting Gitcoin to where it was.
    They are discussing another air drop at some point since they haven’t really rewarded the people since.
    They think about increasing the size of everything they do. Success is in finding ways to expand on grantees, funders, and donors. Decentralizing the protocol opens up access to all three pieces of they marketplace, giving more people access to use the tooling across different industries and verticals that can’t be done in a centralized format.
    They want to start exploring other industries and avenues not yet considered: non-governmental organizations, sports agencies, record labels, venture capital companies. Create a flywheel that allows grants to happen in a recurring format.

Sources:

A questionnaire to collect useful information from the organizations:

  • How many full-time collaborators are in the organization?
  • How many part-time collaborators are in the organization?
  • Are there any volunteers in the organization?
  • Does the organization have a grants program?
    • How many grants have been paid?
    • How much money has been paid in grants?
  • Has the organization made any public donations?
    • How much money has been donated?
    • Who are the recipients of the donations?
  • Does the organization have its own token?
    • How was it distributed?
    • Does it give access to the organization governance?
    • Does it give access to the organization profits?
  • How much does the organization charge for its services?
  • Does the organization have a redistribution plan?
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