Since the Optimism Collective launched sixteen months ago, Bankless Publishing has been covering that ecosystem, from tokenization and technology to the Law of Chains and the Optimistic Vision. As part of our work, we’re pleased to curate eight of those articles as part of what we’re calling The hOPe Series. These article are available as free, open edition digital collectibles, helping you to curate writings on one of the most impactful ecosystems in web3.
If you are an ardent follower of Optimism Foundation's commitment to Retroactive Public Goods Funding, you are probably already aware that Round 3 — known as RetroPGF 3 — was announced in June 2023. Regardless, read on to learn more about the process, in particular the attention given to ensuring each RetroPGF round builds on the learning from the last.
Adhering to its principle of continuous and iterative governance improvement, the Foundation has constantly evolved the dynamics and process of Retroactive Public Goods Funding through Rounds 1 to 3. This principle is nicely summed up by the Optimism Foundation:
RetroPGF will run frequently and continuously until it becomes the driving funding mechanism behind the entire Optimism Collective economy. This is an iterative process. Each round is an opportunity to observe, learn, and iterate based on the successes and shortcomings of the previous round.
The popularity of the RetroPGF rounds have increased round by round, with some really impactful numbers to showcase:
76 projects nominated
58 projects received funding
Median funding received: $14,670
Funding received by Top 10% of projects: $36,919
195 projects nominated
195 projects received funding
Median funding received: 22,825 OP
Funding received by Top 10% of projects: 140,000 OP
As the popularity of RetroPGF rounds has increased, so has the number of badgeholders — the OP token holders who are selected to vote for funding distribution in each round. For RetroPGF Round 1 there were 24 badgeholders, Round 2 saw 71 participate, and in Round 3 voting badges will be offered to 208 community members. With the growth of each round, there has been a corresponding expansion in expectations about the scrutiny, expertise, and experience that badgeholders will bring to the assessment of each project’s merit.
While RetroPGF as a concept is still in its infancy, there is no doubt that the program itself has merit. Vitalik Buterin wrote a detailed but positive review of RetroPGF 1, which summarized the round as a success, but suggested some improvements such as increasing the diversity of badgeholders.
Following RetroPGF 2, the Optimism Foundation analyzed and published its own detailed report: RetroPGF2: Learnings & Reflections. Some of the interesting findings include:
There was little difference in grants to projects categorized as "high impact" vs. those categorized as "moderate impact" (similar to Round 1).
Token allocation spread was much larger in Round 2 than Round 1. In the first round, 58 out of 76 nominated projects received votes, while in the second, all of the nominated 195 projects received votes.
The types of funded Round 2 projects spread across multiple domains, including infrastructure and education, and projects were also operating in multiple regions and languages. This was an improvement over Round 1, where all 58 projects that received votes for funding were technology projects.
Although RetroPGF 2 extended the positive impact to a larger and more diverse array of projects, it did create significant challenges. These challenges revolved around the nomination process, and the information requested from / provided by project teams — ultimately there was not enough context for badgeholders to make effective decisions from the data collected.
Implementing its principle of continuous learning, the Foundation has introduced enhancements in how RetroPGF-3 will be run, from both the project nomination and evaluation perspectives. A summary of the improvements include:
Key success criteria for each project nomination category. The idea is to help align badgeholders while still leaving room for interpretation, discussion, and more granular definition.
Structured project applications to gather better data, and a better voting UX through a custom-built voting application.
A process for community-sourced recommendations and curation to allow badgeholders to incorporate the research and expertise of the community.
As a start, the categorization of projects at the time of nomination has been made sharper and the intent of RetroPGF-3 has been communicated clearly:
RetroPGF-3 will allocate 30m OP tokens to reward contributions that have supported the development and adoption of Optimism.
Projects can be nominated under four categories, reproduced here from the Optimism documentation:
OP Stack: Work that enhanced the efficiency, security, resilience, and awareness of the OP Stack.
Collective Governance: Work that provided impact to governance participants of the Optimism Collective, or helped bring new governance participants into the Collective.
Developer Ecosystem: Work that provided impact to application developers in the Optimism Collective, or helped bring new developers into the Collective.
End User Experience & Adoption: Work that provided impact to end users in the Optimism Collective, or helped bring new end users into the Collective.
To enhance the voting process and reduce manual data entry for badgeholders, the Foundation opened up a baseline grant amount of 150,000 OP to invite developers who can meet the following strategic objectives:
Objective 1: Building a frontend that powers the discovery of projects and voting by badgeholders in RetroPGF 3. The frontend will utilize the Ethereum Attestation Service, and a combination of onchain and offchain sources (storage bucket, IPFS, etc.) to read data.
Objective 2: Hosting and managing the application infrastructure, including backend infrastructure needed to capture and store badgeholder votes.
With voting for RetroPGF 3 scheduled to begin later in 2023, look out for the proposed enhancements to project description / information (through the new Project Signup Form), clearer voting guidelines (which will be shared with OP badgeholders nearer to voting time), and a significantly improved voting UX.
As the Optimism Foundation continues its significant work on Retroactive Public Goods Funding, we can expect the evolution and enhancements to continue from RetroPGF 3 to RetroPGF 4 and so on. This will benefit the whole public goods funding ecosystem, drawing inspiration from the Foundation’s approach to strengthening coverage, recognition, and impact.
Sandeep is a brand and growth strategist with close to two decades of experience. In his web2 consulting work, he has worked with the likes of McKinsey, Prophet and Interbrand.
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