Gitcoin's Governance
Author: CoachJ
Original Doc: https://docs.google.com/document/d/1QrF0WH_113_BEgXi0WQJzfxWaKT0BOQo2FPKehmuOMg/edit (opens in a new tab)
Governance lies at the heart of our collective endeavor, shaping the very foundation upon which Gitcoin is built. It's more than rules and decisions; it's the essence of our shared commitment to decentralization, transparency, and community empowerment.
The ultimate purpose of Gitcoin’s governance is to ensure the longevity of Gitcoin[a][b][c], allowing it to fulfill its purpose and see its vision come to reality.[d][e][f] The exact path to this idyllic future is not set in stone but will follow some key principles and milestones to ensure we get there.
The ultimate purpose of Gitcoin’s governance is to fulfill its purpose and see its vision come to reality. What this tangibly looks like:
- Governing Gitcoin’s protocols
- Enabling clearer structures for community engagement
- Determining future plans for Gitcoin Grants
- Allocating resources for the DAO
- Sensing and responding to community feedback
The exact path to this idyllic future is not set in stone but will follow some key principles and milestones to ensure we get there.
Current State of Governance
Overview of Current Governance Structure
Gitcoin is governed by our governance token, GTC. Token holders often have voting power proportional to the number of tokens they hold. This mechanism ensures that those with a larger stake in the DAO have more influence over decisions.
Token holders having voting power when it comes to the following types of proposals:
- Release of funds from Gitcoin’s Treasury and Matching pool
- Changes to Gitcoin’s governance structure
Day-to-day operational decision making is reserved for internal DAO contributors, not token holders.
Most conversations about governance take place in our Governance Forum (opens in a new tab) and documentation for our governance process is captured in our Governance Manual (opens in a new tab).
Strengths and Achievements
On the path to progressive decentralization, we have managed to establish basic governance processes around fundamental aspects such as proposals and voting rules, as well as the funding of workstreams.
We have managed to curate a small group of high context Stewards that are able to weigh in and help expedite decision making at the DAO governance level.
Challenges and Limitations
One Governance Structure to Rule Them All
When Gitcoin started as a DAO in 2021, it (mostly) only comprised the program. As of the writing of this document, Gitcoin is home not just to the program but to Grants Stack, Allo Protocol, Passport, and PGN. In addition to this, the roadmap and purpose of Gitcoin Grants has changed drastically over the years.
What got us here won’t get us there, and the same goes for Gitcoin’s governance – what was initially envisioned as a one-size-fits-all governance structure no longer matches Gitcoin’s current reality.
Value of Governance
In relation to the previous point, token holders play a very small role at the DAO. Things that get voted on include budget proposals, the ratification of Gitcoin Grants eligibility criteria and payouts, and the odd proposal that goes through the forum. Most important decisions end up getting made by core contributors.
Over time this will change, but for now this likely diminishes the desire for token holders (beyond core contributors) to deeply embed themselves within governance. As you’ll see below - we are making strides towards changing this, and have set out to do it in an intentional way without sacrificing velocity.
Concentrated Voting Power
The proportion of token power concentrated to core DAO contributors is high. About 20% of total tokens available for voting have been delegated to 7 contributors internally. This has allowed Gitcoin to make decisions and move more quickly over the past +1 year, but it has come at the cost of turning Gitcoin’s governance into an insider’s game.
Context Building
Even the average full-time core contributor at Gitcoin has difficulty keeping up with all the things happening at the DAO. That is made exponentially more difficult to outsiders since there is so much information and nuance to take into account about how the DAO operates.
This information asymmetry prevents Stewards from meaningfully contributing and ultimately disengages them. Instead of having Stewards stick around for a long period of time and build up that context, they often stay for a while, realize how difficult it is to meaningfully participate, and then move on to the next project.
This also impacts our ability to retain potentially high-value contributions from Stewards who have specific expertise. Without the ability to build up context quickly, the DAO is unable to tap into an expert’s intelligence and experience before a decision has to be made.
Community Feedback and Insights
Desire for participation: The community is hungry for opportunities to participate in a variety of capacities – the Gitcoin governance forum is ripe with proposals and discussions.
Lack of direction: Based on the low number of proposals made by Gitcoin community members that get passed, there is an opportunity to provide more direction as to where contributions can be made.
The (long) path to decentralization: There is also a desire to participate in the process of decentralization. A gap exists between how far along this process outsiders think Gitcoin is (far along) vs. where Gitcoin actually is as an organization (not far along at all).
Implementation Roadmap
North Stars
Our north stars guide all our governance decisions in the near and long term. The two are listed in order. Most of the time they shouldn’t come into conflict with each other. For the times that they do, we will rely on contributors and Stewards at the DAO to guide us through the decision making process.
- Market Success
Without profits, a business cannot persist to exist. Market success means that we are providing something of value, creating impact and therefore extending our runway and ability to further make an impact. We cannot decentralize (North Star #2) if we don’t exist as an organization.
- Progressive decentralization
Aside from being a part of the Ethereum Ecosystems’ ethos, progressive decentralization of Gitcoin’s functions is imperative to create a credibly neutral public goods infrastructure.
The primary driver of this north star is more democratic decision making. This is important because:
- Provides equal access to individuals from anywhere in the world
- Helps make decisions that benefit the many vs the few
For more on why this is one of our north stars, refer to Vitalik’s article “DAOs are not corporations: where decentralization in autonomous organizations matters (opens in a new tab)”.
Design Considerations
Governance system options
The two dominant governance systems in web3 these days are token-based governance and reputation-based governance. Both have lots of pros and cons, benefits and limitations (opens in a new tab), neither being a clear winner. A strong determining factor should be whether the project is considered economic or civic (opens in a new tab) in nature, with the former being more suited for token-based governance (aligning decisions with economic incentives) and the latter being more suited for reputation-based governance.
Decision making speed
Highlighted in Andrew Hall’s article Governance FAQ (opens in a new tab), one particular consideration when deciding what decisions a DAO would want their constitution to put in the community’s hands is “governance minimalism”:
If a decision doesn’t absolutely need to be decided democratically, it probably shouldn’t be. Democracy is an extremely powerful tool, but it is also slow, inefficient, and risky. Moreover, voters can do their job best when they are not asked to do more than is realistic.
Over the next 18 months, Gitcoin will continue to focus on one thing above all - market success. To find PMF, Gitcoin needs to move through OODA loops (opens in a new tab) as quickly as possible. This means that making many community-involved, democratic decisions at this point in Gitcoin’s journey is not a good idea.
Once a product shows clear signs of hitting PMF (ex: Gitcoin Grants) and is beginning to scale, Gitcoin can consider revisiting the role of governance with respect to the scaling product.
Product-based Governance Plans
Gitcoin is made up of several different components, each requiring their own unique governance solution. To understand Gitcoin’s governance over the next couple of years, we’ll dive into each product’s governance structure before zooming out on Gitcoin as a whole.
Below is a TLDR table for how we will proceed with governance in the coming months. Below that is a deep dive into each product and their governance roadmap.
Product
Governance Structure
Other Details
Gitcoin Grants
Reputation-based
- Currently experimenting with Ethereum Round Council (EIRC)
- Greatest potential for further decentralization
Allo Protocol
Token-based
- Focus on security and aligning development with incentives
- Follow best practices of other protocols in the space
Grants Stack
Token-based
- Minimal governance other than approving budgets
- Treated like a SaaS product under “Gitcoin Labs” private company
Passport
TBC, likely token-based
Gitcoin Grants
Current governance structure
Today, token holders vote to:
- Ratify eligibility criteria set by the Grants Program Team
- Ratify payouts calculated by the Grants Program Team
There have been past experiments (opens in a new tab) in an attempt to decentralize aspects of the program that have not been repeated.
As of GG19, the Grants Program Team is focusing on supporting only OSS, ETHInfra and Web3 Community rounds, while have any other causes set up as their own external entity (opens in a new tab) in an attempt to further modularize the program (opens in a new tab).
The ETHInfra round is also undergoing a gradual decentralization process, beginning with a council of well-known actors in the ETHInfra space curating projects to be eligible for funding in upcoming rounds (LINK TO SOMETHING WHEN IT BECOMES PUBLIC). There is not yet a roadmap for how this experiment will evolve.
Future governance structure
Beyond modularizing aspects of the program, there are no plans for further decentralizing the program (opens in a new tab) beyond the ETHInfra Council over the next 6 months.
Allo Protocol[g][h]
Current governance structure
At the time of writing, Allo v2 has just recently launched and they have proposed a basic improvement process (opens in a new tab) structure for their product.
Currently, GTC token holders are invited to participate in governing Allo by voting on their budget every 6 months.
Future governance structure
Being a protocol, Allo will likely benefit most from a token-based governance structure. This kind of structure will prioritize security above all, and align decision-making with incentives.
Like any token-based governance structure, one on-going challenge will be to constantly keep stakeholder engagement at the forefront of activities, soliciting feedback from key users and distinguishing noise from actual market signals.
Grants Stack
Current governance structure
Grants Stack is the closest thing Gitcoin has to a SaaS product. In its search for PMF, the name of the game for this team is speedy iterations based on market feedback.
The main interaction this product has with token holders is a bi-annual budget vote to allow work to continue on Grants Stack. The team has also engaged in RFP-like processes to encourage key features to be built by the community.
Future governance structure
It is likely that Gitcoin will minimize community intervention with this product aside from budget approvals.
One space that Gitcoin could explore in the longer run is some sort of governance around apps being built on top of Grants Stack, however this will depend on the nature of these builds and how much time/resources external builders will need from the core team.
- If developments by the core team deeply impacts a builder, we’ll want to increase the level of community involvement to ensure democratic decisions that benefit the most amount of people
- If plugins are autonomous and don’t require coordination with the core team, then Gitcoin can continue to run Grants Stack with minimal community involvement
Passport
Similar to Grants Stack, in its search for PMF, the name of the game for this team is speedy iterations based on market feedback.
The main interaction this product has with token holders is a bi-annual budget vote to allow work to continue on Grants Stack. There is also the possibility of engaging the community even further than Grants Stack due to the large number and diverse set of stakeholders.[i]
Gitcoin as a whole
The primary function of GTC holders is to support the allocation of resources. This currently (primarily) takes the form of budget approvals.
The primary functions of the individual staffed to oversee Gitcoin’s governance operations is to:
- Oversee stakeholder communications in coordination with the MMM Workstream (ex: keeping external stakeholders informed of the DAO cadence)
- Support product governance functions (Allo, GG, etc.)
- Support general governance forum inquiries and agreed upon processes are adhered to
- Oversee DAO2DAO governance and relationships
Similar to OP’s initiative of the same name, Gitcoin will also be introducing a Missions and Intents initiative to better signal to the wider community what areas their contributions would be most highly valued.
A Note on Community Engagement
Gitcoin is home many different communities:
- Stewards & Steward Council (governance coordinator / MMM)
- “Gitcoin Citizens”
- Allo Devs (Allo WS)
- Grants Round Operators (GPT)
- Gitcoin Grantees (GPT)
- Matching Pool Funders (GPT)
- Passport Holders (Passport)
- Gitcoin Contributors (Chief of Staff / MMM)
Stewards are a core community and arguably the core community that has oversight on decisions being made at the DAO. It is important to invest sufficient time and resources to ensure that Gitcoin has engaged and informed Steward base, which will ultimately help with sound decision making in service of both North Stars.
[a]Consider feedback: this could be be a little more concrete (or maybe detail something more concrete in a following sentence). So an example: the purpose of Gitcoin's governance is to govern it's protocols, enable clearer structures for community engagement, etc etc (i.e., whatever else we want to actually achieve with this). A more concrete purpose will be able to direct a purpose fulled strategy.
[b]Hey @laura@gitcoin.co @meg@gitcoin.co We never got this resolved.
Meg is saying we should be more aspirational, Laura is saying we should be more concrete. Maybe there is a middle path here?
Took a stab at it, plz let me know your thoughts.
[c]Sorry just saw this comment. Added some suggestions
[d]This is a really interesting statement! I wonder if the real goal for governance is longevity vs purpose fulfillment -- in other words do we prioritize "what keeps us alive" vs outcomes towards our vision. I think I'd vote the latter. This may also be too much thought towards one sentence in a 6 page doc.
[e]Sounds good, will incorporate this
[f]Actually re-reading this - ensuring longevity in service of fulfilling our purpose is in the same line. Does that capture what you're pointing to? Or were you hoping it be more aspirational and less about our longevity?
[g]Also realizing this could be the first proposal ready to go for the M&I https://docs.google.com/document/d/1kquFam5T3hD9axoiv8GBx6XKwcPqPWY-NjM20IaIlXE/edit (opens in a new tab)
[h]🔥
[i]@kevin@gitcoin.co let's chat about what governance of Passport could look like