Protocol Guild: funding the Ethereum commons by Trent Van Epps | Devcon SEA

[Music] thank you Miss purple um yeah so the title of the talk is protocol Guild funding the ethereum commons uh my name is Trent veps I'm a member and one of the organizers of this tool and um just a shout out to the Devcon organizers uh I've presented at a number of events in the ethereum community and it never gets old so thank you for putting on an incredible event um and hi to any family or people that are watching on the live stream so let's start off with some crowd engagement raise your hand if uh you think that there are 25 to 100 ethereum core contributors show of hands okay and by core contributors these are people who are working on client development research uh people that help with test Nets people that do support for testing in security specifically related to ethereum main net that's what I mean by core protocol contributor all right so not too many hands uh raise your hand if you think it's 100 to 300 roughly okay okay and then uh raise your hand if it's you think it's the the last option 300 to a th000 all right most of you were right so good job um I think roughly in my estimation there's there's probably 100 to 300 people who are involved uh mostly in a full-time and probably some in a part-time capacity working on the software that underpins ethereum another question raise your hand if you wanted to buy some of them coffees how many of them could you name today um so 1 to 10 how many of you could name one to 10 you think okay put your hand down if you thought of italic or Justin okay all right how about 10 to 30 you think you could name 10 to 30 core ethereum contributors and then finally 30 to 100 all right if your hand is still up come talk to me I want to I want to meet you after this if I don't already know you um why does this matter this matters because ethereum is a software Commons and uh the term I like to use if you're not familiar with it is Commons uh and the definition I use is this is a system of peer production which manages shared resources and um this is really important for how uh ethereum is stewarded over time to think of it in this Commons frame and when we know A System's peer contributors we can do specific things with it for one we can get more certainty around the nature of the shared resources that it produces uh and specifically the production process secondly we can fund their work help to avoid capture from malicious entities coming and engaging with the the stewardship process and finally we can stabilize this contributor set with particular incentives and maybe if you are familiar with the commons term you've heard of it in the term uh in the context of a fishery or a forest or you know a pasture that people share together um like natural resources that people figure out how to maintain standard of the resource and then they all benefit collectively but this can also be applied to digital Goods or intangible goods like the internet is u a common infrastructure that we all use today we're using it right now for the live stream and I I would be surprised if there's many people who don't use the internet every day but they don't necessarily think about it as this shared infrastructure uh similarly for something like Wikipedia or Linux this is software infrastructure um software is is often times produced within this common context and when we think about ethereum uh we might think about different parts of it but we don't necessarily think about it as this holistic Commons kind of mechanism so the three resource types from from my perspective uh I think there are three main ones the first is the network um and derivative forms of it so the chain State the chain history different Forks of main net and layer twos would I think fit into to this this resource type of distributed system secondly the asset in the bottom right side of the diagram ether we all use it for paying for transactions and then it can be put into different forms whether wrapped or restak or bridge to different networks and then finally one that maybe you don't think about as being a resource type is media and this can be the specifications which Define bits of the protocol or research about what ethereum can look like in the future uh software generally but it also includes things like the transcripts of governance calls all CV's calls or the eips which describe future changes I I I bucket these all within uh the term media um hopefully these three uh resource types make sense to you as well and all three of them are interwoven in a very unique way they can't necessarily exist without the other um and so there's this there's this uh interlocking where each of them uh refers to and is informed by the other three each of these resources is also produced through protocols and by protocols here I mean like uh rule sets or guidelines for um how the resource comes to be so for the network there's specific rule sets technical rule sets for the fork Choice rule or blobs if layer tws are using EIP 4844 um or PTP gossip for nodes coming to consensus and passing data to each other the asset you know it's minted through proof of stake issuance and then it's destroyed as part of the the 1559 burn these are rule sets which describe how the asset this resource um operates and then finally the media is produced through open- Source Norms permissive licensing um public by default uh governance and and rough consensus um and these rule sets are really important for defining how the actors engaging in the production of this work really operate it it defines what they can do and what they can't the constraints which guide their behavior so this brings us to the question of like who and in what context is the softer software media actually produced um some of you I know had your hand raised until the very end but sometimes this isn't necessarily something we think about sometimes uh because ethereum is so dependable we don't necessarily think about something which just works by default um but it really is uh an interesting question to start to consider is who's actually making this stuff um and this is a map um I'm not going to go too deep into it but this is my perspective of who's actually working on mainnet these days uh a range of different project sizes different project types there's commercial entities there's nonprofits like the ethereum foundation um it's a really broad array today probably around 10 different uh 12 different in independent institutions and um I would say uh maybe 30 different projects within that and maybe you knew some of these but maybe there's others that you don't and in the middle there's like this whole range of other org affiliations hopefully if you're not listed here you don't get offended consider yourself part of the middle there um and this is this is what comprises the main net stewardship this set of projects that make up the software that then Powers the network that we all use in some way or are aware of right so what protocol Guild does is it takes the individuals that are working Within These team contexts within these projects uh and it surfaces them to a different level of legibility so it makes them um uh visible from a longer distance let's say so the protocol Guild mechanism binds these individuals together in a collective mechanism um that then you can do interesting things with you can fund it you can set common standards you can you know uh we we'll get into that um so protocol Guild today is a list of 187 of these main net contributors and collectively they have more than 600 years of cumulative contributions which is uh when you put it that way it's pretty incred incredible right you have people who've been here a long time uh people who have just shown up but together it's a lot of brain power that's working on this software um and generally you can also think of it as just a collective funding mechanism like I mentioned there are a couple things which make protocol Guild very very unique in the landscape of the ethereum space um specifically regarding funding protocols and I'm going to go through them here the first is that it has a very narrow mandate it's only concerned with maintaining the mechanism and driving funding to it it doesn't engage in protocol governance it doesn't direct the day-to-day efforts of these individuals uh it has a very narrow mandate for what it's supposed to do and that way we can make sure that we're focused on that mission and we don't have this this scope which uh expands over time and then the mechanism loses its focus um it also focuses on a very narrow domain specifically the core protocol set of contributors it doesn't um think of anything much beyond that and tries to approximate where the edge where the boundary condition of the edge of the main net protocol actually is whereas things like gitcoin or optimism retr funding they have a much broader domain that they try to put funding to protocol Guild specifically focuses on the individuals doing this specific work the second thing which is unique is it has an open membership of individuals so uh to compare it to like um a nonprofit or a for-profit entity which you know they hire and fire people depending on their budgets we've committed to having an open membership so if you meet the eligibility requirements you show up and you know you've been doing this work for six months and you expect to continue doing it the eligibility is obligated to add you and this is how we build up legitimacy over time by not necessarily gaing the membership uh which could be dangerous longterm and we focus on individuals instead of uh what many mechanisms do for uh their their funding approach which is focusing on the team or the project itself we think it's really important to return as much agency to the the the people themselves that are working on this software um and uh make sure that they have as much much flexibility for how they engage in this Commons production process third it has a comprehensive quarterly curation so we're regularly updating the mechanism the set isn't static every quarter we go around and try to find anyone that's missed that now meets the eligibility and we add them to the membership if they want to uh ultimately it's opt-in we do have core contributors who decide not to be part of this it's totally fine so it's an opt-in mechanism U into this particular domain and not necessarily seeing somebody who's doing valuable work that's maybe lower profile or um harder to make legible at a certain scale the third or sorry the fourth uh unique aspect for this this mechanism this tool is that all of the funding goes through a 4-year onchain vesting contract and this is different um it's an opinionated frame for how funding should be distributed um we use time waiting to allocate funding so that if the earlier you show up and the longer you stick around the more funding you'll get through the mechanism um and this creates assurances in a number of ways for both the funders the uh the members and the community that's observing this mechanism and engaging with it funders know for sure that the anything that they allocate will be there in the future it's going to sit in this immutable contract onchain and they know for sure that it's going to vest linearly each block I can't run off with it they can't take it back so there's a there's a nice characteristic that we get by having it in this immutable contract on chain um and then for for members they know for sure that there's going to be funding available to them if they stick up and show around and all of these touch in some way again the common frame software doesn't spring from the Earth like these natural resources a fishery or a forest it doesn't come out of the ground naturally of course you can enhance the development you can make sure it has good conditions but software requires humans to create it and Steward it long term and these really recognize the common nature it's going to take time to do things ethereum is where we are today but there's still a lot to do over the next 5 to 10 years and the way we've structured this mechanism uh deeply considers the reality that uh this stuff takes time and you need people there to Steward this common software over time and so to that point we can look at all this onchain stuff uh through a dune dashboard if you're familiar I recommend go check out our Dune dashboard we try to surface as much information as we can there um so we've been building protocol Guild uh myself and a number of others and the the rest of the membership since 2021 and today we have uh 57,000 per year that goes to the median member um I know we can project out you can see in the bottom the bottom left there's a big lump sum of about $40 million that vests over four years um however you know markets are volatile I can't really guarantee that that level of funding will necessarily be Val uh available um at that US dollar value um so yeah this is this is a great accomplishment but uh I think we we probably need to 10x this and I'll get into a little bit more around the incentives and and um why we think this needs to be higher um but definitely go check out the Dune dashboard it's a great way that we can um lean into this radical transparency because all of the funding coming in all of the funding going out the memberships uh change and and number of individuals it's it's all tracked in in this Dune dashboard so please do check it out and now that this thing exists uh we've been able to fund raise to it and we've been really honored to have many large projects and small projects throughout the ethereum community recognize the value of this common scale mechanism and I just want to give a shout out to them really quickly so massive massive thank you to ethery Tao layer zero the arbitrum community Lio optimism Unis swap ens ZK sync and molocow uh for really seeing the value in this kind of thing and not just uh making a a future commitment or saying you know this is a good idea but actually committing significant funding to it so yeah thank you and other things we can do with the mechanism now that it's on chain and leaning into this transparencies we can start to say okay as funding is coming in how can we ensure that the distribution of funding is uh you know separated out or we have a a a good diversity of assets that are funding these individuals doing the work so we have a this diversity score that compares it relative to all past funding so another cool thing that we can do with with when the funding lives on chain and one thing we introduced earlier this year is the 1% pledge I recommend go and read the uh the full post tim. mirror. XYZ um it's a great post but one of the things that's really um great is this diagram on the right which um visually displays the incentive and balance that you have to work on the core protocol so in the top right you have a crypto project founder right they have a lot of risk going into something like this but there's potential for significant reward and when you're working on the L1 work it's stable you'll get a salary you might get equity in some company but you don't have this exposure to the broader ecosystem success or you know there's not going to be a new token uh for the ethereum blockchain some people have uh the misconception that people who are core developers you know they've been around the Ico and they just have a huge stack of eth I'm here to tell you this is not the case many people you know for whatever reason they didn't have it uh or if they did they've sold it since then to pay for living expenses and there's always new people showing up so uh just to set that straight um cevs are relatively undercompensated to the broader industry um and one thing we can do through the mechanism is shift the incentive IM balance we're not going to ever be able to match what you could get at a uh let's say a VC startup or a layer two that has a new token some of these newer projects that you join early it's clear that you can you can have significant incentives you'll never really be able to match that fully but we believe it's important to um at least slide slightly up on the reward curve and give people more consistency while maintaining the the same level of risk because ultimately at the end of the day this work is really undervalued and less visible than a lot of the more high-profile stuff so uh another shout out there's been a couple projects which have really leapt into this this idea of the 1% pledge and again shout out to ethery Ponda and Tao labs for early on in this year saying you know we recognize the importance of this thing we're going to donate 1% of our tokens to the mechanism and that's been the bulk of the funding this year so uh really thankful that they have uh taken this early thing and and been some of the first people to actually engage with the mechanism in this way uh and like I said we do need significant funding to come into this mechanism to rebalance the incentives there's risks around uh the commons being captured longterm this is something you always have to be vigilant about and paying attention to because as I said the software doesn't just come from the ground fully formed there's it's it's a human process it's a political and social process to maintain and steward this over time and like I said there's still so much to do in ethereum that we need to make uh we need to start putting ourselves in the posture of recognizing that over time the the commons uh needs to be maintained and stewarded and funded and um while there are risks there's also significant successes in the the natural Commons space uh fishing practices communal rice teres different farming systems have lasted for thousands of years and then in the digital context the internet Linux Wikipedia they've had early successes but we can start to see the challenges that they're experiencing as you know larger pools of capital show up on the edges or the margins of uh the common production system and the challenges that they're experiencing now and so we we we should really start to think of this next year ethereum turns 10 which is incredible to think about uh there's still so much to do but what can we do to start to take on this posture of funding uh the Commons at the scale where it's best recognized and um suited to fund these individuals who are doing this important this important work so I'll end with this is it a core wbi is it a software standards or is it a union is it a compensation package probably to some degree it has little bits of these woven together but above all it's a call to action uh it's an invitation for the broader Community to take on the responsibility to recognize their role of uh participants in this ecosystem um you know the EF is not going to be the sole fun it never was but it should not be looked to as you know it's just the EF will take care of it or you know these large organizations will take care of it all of you if you if you're part of a project or even as individuals you have an obligation to think about uh deeply the ways that we Steward and we participate in these Commons production processes um so my DMs are open if you think this applies to you thank [Applause] you thank you thank you so much for that and uh on your statement actually you mentioned that core devs are not paid enough compared to Industry so how much is enough that's a good question I think I showed 57,000 for the median member um they off they do get salaries in addition to this as part of their um their hosting org whether nonprofit or for-profit so this is an addition to that um it depends on you know what part of the market cycle we're in but we're aiming for to 10x this and provide at least uh 500,000 to the median members some people will get a lot more and some people will get a lot less but this is kind of what we're aiming for for now and um yeah keep in mind that any funding that goes into it is distributed over four years so it's not you might see this really large number on the Dune dashboard but but keep in mind that a lot of these tokens are very volatile and it'll shift over time and who decides who's eligible for the protocol Guild so the members have a an eligibility framework which we try to make as explicit as possible with the awareness that you know things change over time right I keep referencing how the commons is stewarded over time what we think is The Edge today may not be the edge of ethereum core protocol in 10 years right we need to uh have the humility to recognize okay we we think we have a good picture now but it's always going to change it's always going to shift a little bit so the members themselves are deeply engaged in this um decision-making process around where the edge of el eligibility is yeah what benefits do donators have for giving away 1% of their token supply for free what's The Pledge used for uh so for free is maybe it's a bit of a a a bad way to think about it because what you get is the continued operation of ethereum right the maintenance of this software which you're building a business on you're building a project on and again like I mentioned we often take ethereum main net for granted because it's so stable and because it really doesn't have issues and in addition to that we're we're getting much over time we've uh getting much much better at um Doing Network upgrades improving the scalability improving usability and security so people often take all of this work which happens uh maybe behind the scenes or out of the public uh visibility they take it for granted um so I wouldn't say you're getting it for free uh like you just contribute it and you don't really get anything return you're getting something in return already um so I'd first say that um but the money so what is the Pledge use for it goes directly to the individuals that are listed there's no uh discretionary budget where we decide okay we're going to fund this particular project or this software um initiative if you meet the eligibility you you get a wait and then the funding goes directly to you and we don't make any obligation um you could start to get into like the ideas of credible neutrality you don't want funders coming up and saying you know you you I'll give you this if you do this right there's no we don't make any guarantees to people that contribute funding all right we only have time for one more question how do you make sure contributions are failure awarded especially when individual impact can be so varied um fair is subjective at the end of the day right um so we take an opinionated stance that ultimately it's the it's the collective body of software developers that ultimately Steward ethereum in the long term of course there are people that are objectively more impactful or more valuable to the commons but what we can do is pull up everybody together the rising tide lifts all uh all boats and um that's really what we're focused on yeah all right thank you once again