 My name is Trent Van Epps. I am a member of the protocol guild and that's what I'm here as a member of However, I do work full-time for the Ethereum Foundation doing Coordination around network upgrades Yeah, that's the kind of work I do there and today. I'm presenting funding Ethereum with a protocol guild But before we jump into it, of course Thank you to the organizers for inviting me and allowing me to share this project with everybody. I really appreciate it So we'll start with some broader context about what Ethereum is and what are its public goods? So if you're not aware, Ethereum is a globally distributed computer that anyone can use. It's it's a blockchain and this means that Ethereum the network and The EVM generally the Ethereum virtual machine are really fundamental public infrastructure for the people that use it sending transactions people who are deploying smart contracts people who are building companies Anybody who's building on top of Ethereum counts on it as an important public good for them And there are four main areas that I'd say make up the the maintenance and support network for What this network is and I'll just go through them quickly here. So there's the research the The work that's done to evolve the protocol figure out where it should go in the future There are the clients. These are, you know, they're the implementations of the the Ethereum protocol in a specific language This is what is commonly referred to as like a node. If you're running a node, you're running a specific client version And then there's the coordination. This is the work that I'm involved in and many others Contribute to this so figuring out what the protocol is going to look like in the future and how we get there Engaging the broader ecosystem in this evolutionary process to figure out when an upgrade should take place The the kinds of features that we want to be including in the next upgrade things like that and then finally, there's there's tooling so the languages that smart contract developers use to Actually create applications that people then interact with so these are the four main areas the four buckets of things that support these public goods and the network itself So we can move into talking about how these are actually funded. You may be aware of the largest one Which is the Ethereum Foundation Distributes tens of millions throughout the ecosystem every year through what's called the ESP the ecosystem support program they do amazing work engaging with the ecosystem finding out what needs to be funded and then getting funds to these people who are actually doing the work and you know constructively engaging with the work that needs to be done and One of the one of the programs that they run is the client incentive program Which gives a chunk of ETH to client teams people who are developing the node software and it allows them to run validators and participate in proof-of-stake And this unlocks over a few years and then there's other other names here Gitcoins CLR fund giveth and optimism. These are organizations that exist within the community that run Every quarter. They'll run a matching round that allows community members to Fund these grants and then there's a matching pool which then boost that funding amount So these are these are kind of the big ones there's a couple more listed on this slide and many many more which I don't have the time to get into but it really underscores the fact that Ethereum has a really rich diversity of funding options for public goods and different mechanisms that are We're able to experiment with and I think this is probably one of the One of my favorite parts of the community is that we're so willing to experiment and try out new things and engage with Different mechanisms to the fund the people that are actually working on important public infrastructure Kevin owaki likes to say public goods are good. So I'll add a little Extension to it is that having many community mechanisms to fund public goods is actually also very good For one it decentralizes power and an influence It prevents this power from being siloed for a single allocator for example the EF doesn't want to be Controlling all the funds that are going out into the ecosystem. They'd much rather disperse this control out When we're funding public goods ourselves, we're participating in this process it helps to remind us of our agency and Gives a bit of intra community engagement having these different groups interact with each other and then finally it Helps us celebrate the pluralism that I think ethereum is is a core value of the theorem community when we have a variety of approaches however existing mechanisms The the ones I mentioned on the previous slide they often face similar limitations and I'm gonna I'm gonna go through those limitations in a bit So in light of this I'll dive into like the framing for what the protocol guild is and and the inspiration for where it came from so this question of What mechanism can help us better retain talent and fund the core protocol contributors? This is not necessarily a new question Especially not if you consider broader public goods these this is a something that's been discussed for many many years and in crypto in ethereum For years as well figuring out. How do we incentivize people to? You know commit to working on this stuff. That's super important that many many people are building on top of and it the discussion came up again last November and I Myself and a bunch of other people who work on the core protocol decided to take a swing at this and and think about What sort of mechanism would best serve this this purpose? So as we were going through the discussion process We settled on three main challenges that we wanted to address in this mechanism Which ended up being the protocol guild and so I'll go through these three here as well as What we responded to the challenges with the specific features that we wanted to include so their curation is hard incentives are imbalanced and Contributor churn is bad. It has negative effects. So the first one Curation is really hard Applications layer 2s whales and individuals. They all want to sponsor the core protocol But knowing where to send money is is really hard There's no single mechanism that gathers everybody who's working on a client or doing research or doing this this coordinating activity There's no single mechanism that somebody can just send some assets to and then they're you know They have confidence that it's gonna end up in the right hands You know there there are exit like I said, there's existing funding mechanisms that do some of this but There's often it's a patchwork of different solutions and they they end up missing some key contributors So what we wanted to respond to in the design of this mechanism was we should just create a single address a contract which represents many addresses that people can just send to and then we'll take this list The list of addresses and individuals who opt into this will put it on chain and start to build norms around You know the broader community giving financial contributions to this contract And so going back to the other side that the the follow-on challenge is like protocol contributors are very interested in You know broader funding mechanism that that's specifically tailored to their work As well as token upside, but there's no existing structure So again put it on chain and start to build norms around people contributing to this The second challenge related to curation is that existing solutions You know among the variety that we have today. They usually favor teams and they don't do the best job surfacing all contributors That are actually doing the work You know teams are much easier to curate if you have Five people per team. It's much easier to just find the one address that corresponds Roughly with the people who are doing the work rather than drilling down into the individual level and finding an address You know to send to so the way we wanted to respond to this when we're again designing a protocol guild Was have the members themselves self curate and this is really important I'll get into it more later but self curation we think is is the the best way to drill down into a domain that has experts doing work and they can Make sure that anybody who's who's involved in this key protocol work is actually being included in the mechanism and Crucially we want to give individuals Agency and make sure that they're the base unit. So we're surfacing part-time contributors people who aren't interested in you know marketing themselves during a matching round for example or people who just don't have time to be engaged with these processes The second big challenge is that the incentives are imbalanced so Financial incentives are usually skewed towards newer projects that have tokens Ethereum doesn't isn't launching new so you have people who have been contributing for years They may have had earlier exposure but today somebody who's just joining isn't gonna have the same exposure to working on the base layer as somebody who's starting a new application or a New l2 or even another layer one This is just sort of the reality of the context that we're working in And of course, I don't I want to say we don't fault people or projects for using leveraging financial incentives To or weighting them appropriately This is just sort of the context that we have to deal with so the response that we wanted to Build into this mechanism is that we should generally increase financial incentives available to contributors with the caveat of course Financial incentives aren't the only or best motivation for people. We think it's just one tool in the toolset. That's under leveraged The second challenge underneath this this incentive question is the existing solutions may not target tokens and the associated Upside that could come from having a basket of tokens. That's allocated to core contributors So the second response is that we'll nudge the incentive balance back to the protocol a bit and again build norms around Sponsors and projects sharing a percent of their tokens At launch or you know some recurring revenue back to the core protocol And like I said financial motivations are one thing but we think that this also has an important psychological effect of core contributors understand that the broader network is interested in their well-being and They under they they have this Awareness that the people that are building on top of their foundational infrastructure They care about their their incentives for the long term And then the final challenge is that contributor churn is bad. It has negative effects Core protocol work is is a very much a niche area for people to contribute. It can take quite a while for somebody to Join a client team and start contributing, you know often six months to nine months They're just understanding the code base figuring out where they can best contribute It's it doesn't happen overnight And that's totally fine. Again, that's just the reality of the context for core protocol work So what we wanted to do is that membership eligibility for the protocol guild mechanism only happens after six months of regular contributions And this weight is then included in the the final allocation and then secondly we wanted assets to Vest in order to help knowledge transfer between cohorts if you have somebody who's been around for five years And they're working with somebody who just joined within the last year We want to be able to keep them around to transfer that important institutional knowledge about how to do a specific work related to the core Protocol and we we think that vesting is is a good first approach to figure out how to get that Institutional knowledge to transfer between these different cohorts and then secondly contributor value grows over time But once you're an expert, there's less incentives to stick around. There may be more attractive opportunities And so our response to that is we should time weight allocations again There's a bit of yin and yang balance here We want to recognize that new contributors should be valued But there's also a consideration for people who have been around years and accumulated a lot of this important knowledge So if you've been around longer, you'll have a more significant weight in the set as you may have guessed from these we created the protocol guild which is a collective of 110 Ethereum contributors who actively maintain an on-chain membership registry again in the in the four main areas I mentioned at the first slide and This this on-chain registry allows ecosystem sponsors to directly fund our work and the public goods that everybody else depends on They're building throughout the stack And this is just a simple diagram showing sponsors will send an asset some recurring revenue stream It could be governance tokens It could be fractionalized NFTs Pretty much any asset besides individual NFTs to this vesting contract over time it'll then be distributed to the weighted registry and Directly to the people who are actually doing this work And the key thing about the registry is that it's consistently updated so that people don't have to worry about You know does this represent the core contributor set from a year ago Does it represent the core contributors set from six months ago or today? And so we want to make sure it's actively maintained so people can come to depend on it as reasonably updated mechanism So I'll dive into some of the details about how this thing actually works and how we operate it so I've mentioned waiting a few times and one of the larger goals we wanted to focus on when we're Considering how to operate this is to reduce the number of knobs or things that the the members have to Tweak or modify it throughout the operation of this mechanism. That's for a couple reasons one It's less contentious if you don't have to decide, you know I'm waiting myself X and you why there's gonna be it's gonna be contentious if you have to continually rank other people against each other so it it allows us to have a Workable waiting system without spending too much time actually figuring out what this waiting system should be and secondly As I've mentioned the core protocol contributors are already very much engaged in Maintaining and evolving the Ethereum the base layer and spending time working on you know Fiddling with little knobs here and there isn't in our best interest And it's not in the best interest of everybody else throughout the stack So we went with a very simple a waiting mechanism It's the square root of the total months you've been contributing multiplied by a time wait whether it's full-time or part-time and the square root has a nice effect of Compressing the range a little bit So there's not this massive disparity between somebody who just joined versus somebody who's been on for many years and you can see in these two graphs the effect of using a time waiting mechanism versus subjective peer ranking Mechanism you can see in the blue. That's at the start of a one-year pilot and then in the red You'll see it normalizes over time. So again, you have a more equitable distribution of any assets that are sent to this protocol guild mechanism regarding eligibility and self-curation again, this is The four areas a meaningful contribution to the core protocol whether you're doing research Whether you are working on a client Coordinating or tooling it has to be meaningful contribution for at least six months again to reduce churn And make sure that people that are actually committed to this idea before we include them on chain in the protocol And then I'll touch on self-curation a little bit I think this is one of the most important aspects of the mechanism because you get the The insight of people who are domain experts who are directly involved in doing the work and you can avoid dependence on an external curation mechanism, whether it's Quadratic funding or some some council of people who are evaluating these the individuals who are doing the work It's much more effective to have the people who are engaged directly in it to say. Oh, yes This is my colleague. I work with him on x and y and yes, they should be included in this mechanism for you know for this weight and We think this is incentive compatible for two reasons Adding new members dilutes existing ones So you don't have to worry about I'm not going to add somebody in my family or you know a random person because it directly removes Financial benefits from accruing to me however the All eligible contributors have to be added to this mechanism if you're contributing you should be added In order for this to maintain its legitimacy to the broader community So the ecosystem of sponsors people who are just broadly Engaged in the community if they start to distrust that this is actually representative of people who are doing core protocol work The entire thing loses its legitimacy. So we we think that these two mechanisms are adequately balanced against each other and Hopefully that holds while we're while we're operating it in the wild So we've taken all of these these features and learnings from the engaging with funding mechanisms over the years and Framed this this protocol guild mechanism and we're taking all those learnings and running a one-year pilot It's already in progress now. We have contracts deployed and we're targeting ten million dollars in sponsoring assets, which Which will vest for one year And we've started to bootstrap the mechanism We've started by plugging into existing funding infrastructure. So this means Proposals to Lido ENS and Uniswap. These are prominent Ethereum applications that we've gone in gone through the governance process and talk to their communities figure out what the best fit amount is and Then secured five million from them. Most of this is already in the contract vesting and then the Uniswap The Uniswap allocation is should be there in the next few days And we've also plugged into the Gitch coin matching rounds and it's it's been successful and we've secured a hundred a hundred thousand from to get coin matching rounds so far and We plan to use other ones like optimisms upcoming upcoming Retroactive funding rounds. We think this is the perfect Maybe not perfect, but it's very well suited for optimisms Looking back seeing who's been contributing And just from these three examples, we've been thrilled to see that the community actually Resonates with what we're proposing. They think it's valuable to give back to the core protocol and It's just been really exciting to see people understand what we're building here for the long term However, we what we want to do for many years in the future is start to build a norm around allocating a Percent of an initial token supply Or annual revenue. We think this is The the way that we're really going to be able to scale up to the incentive size that we want to you know 10 million is is great, but if we really want to balance the incentives against somebody deciding to you know join a Join a new layer to where they can get equity and a significant token allocation This mechanism is gonna have to hold much more than just 10 million dollars So in the future, we want to scale it up And the the main way we think of doing that is by building a norm around if you have a new project that's launching Try to allocate some percentage directly to this and that way we can start to Superpower this this flywheel a little bit better because we don't have to be approaching Protocols and companies that are building every single time it happens And we really look to get coin as the company that's built the flywheel on their own or the protocol they've they've built this this norm around quarterly allocations around the the matching process and Hope that we can do something similar along that again plugging into these existing funding in for infrastructures where we can And post pilot, you know, this is gonna run for 12 months You can you can check this link here if you're curious about how we're going about it But we're really serious about defining and evaluating outcomes so You know, we want to make sure that we take our learnings from this one-year pilot and then tweak the mechanism for the next version We'll probably be scaling it up even further because this first version is It's it's relatively limited in in who the scope of people that are eligible We want to make sure we're getting all the people who are building key core protocol Mechanisms to be included in the protocol guild I'm gonna I'm gonna jump back in building this norm around allocating a percent We're very excited that there have been some projects that have already given us a percent of their initial allocation So the the flywheel is starting to turn and we hope that this will increase in the future So shout out to true freeze noses safe and texture punks Which is an NFT project which has committed to allocating a percent of the sale and ETH back to this mechanism Yeah, and so we we plan to scale this up like I said and in the future it will target We're hoping somewhere around a hundred million to start to balance the incentives between working on an application or a new L2 a new L1 to Really starting to give back to the people and and giving them sustainable funding sources For many years to come and this this next version of the protocol guild will probably have a vest that lasts four years Is what we're thinking So that was a pretty rapid fire. I have no idea how quickly I went through that Maybe we have time for questions, but if you are curious about learning more snap a shot of that QR code and If you're interested in sponsoring so if you're part of a project that is looking to become part of the Regen Alliance, I guess Scott was talking earlier that there's no official membership, but I guess the protocol guild is an unofficial member of this unofficial organization The Regen Alliance, so if you're interested in sponsoring, please reach out to any of the members listed in our docs or Actually, you can just send permissionlessly. This is a smart contract that anybody can send to and it will vest autonomously and go directly to the members who are listed on the split But of course we're more than happy to answer questions and explain how this mechanism works for line of the division for long term That's all I have those two links are me on Twitter and telegram if you have any questions and want to talk to me directly and then You can follow us at protocol guild. Thank you