Mumbai variant "Fund the Foundation"

Research and Development
1

Mumbai variant: Fund the Foundation

I am proposing an alternative Mumbai protocol, identical to PtMumbaiiFFEGbew1rRjzSPyzRbA51Tm3RVZL5suHPxSZYDhCEc, except for one thing:

At activation, my proposal mints 100,000 tez (one hundred thousand tez) and credits them to Foundation Baker 1.

The proposal’s true name is its hash: PtMumbaiveNjgvoAng9E3AtNqtBtCQWqpXJdPEdAanAYCZbCgey.

Here is the code diff and the associated Merge Request.

Hash Description
Mumbai initial PtMumbaii... Mumbai proposal, as described in the blog post
Mumbai variant PtMumbaiv... Mumbai Variant “Fund the Fundation”, grants 100,000 tez to Foundation Baker 1

To vote for the Mumbai variant:

tezos-client submit proposals for YOUR_ADDRESS PtMumbaiveNjgvoAng9E3AtNqtBtCQWqpXJdPEdAanAYCZbCgey

If you have no opinion and want to pass, you can always vote for both Mumbai Initial and the Mumbai variant:

tezos-client submit proposals for YOUR_ADDRESS PtMumbaiveNjgvoAng9E3AtNqtBtCQWqpXJdPEdAanAYCZbCgey PtMumbaiiFFEGbew1rRjzSPyzRbA51Tm3RVZL5suHPxSZYDhCEc

Or use browser-based voting tools tezocracy.xyz or tezgov.app.

Note that if you have already voted for one proposal, you can still vote for another one later, but it won’t cancel your first vote. It will just add to it.

The past two proposals (Kathmandu and Lima) paid on-chain invoices directly to contributors:

Mumbai does not contain any such invoice but I want to keep this momentum going.

The process of paying people on-chain for features delivered is not optimal:

  1. it can be difficult for bakers to evaluate the merits of one given proposal,
  2. the price fluctuations make it hard to come up with a good number,
  3. this process is limited to core protocol work.

The Tezos Foundation has been good stewards of the 2017 ICO funds, however the ICO was a long time ago and this money is slowly running out.

I believe that the Foundation has proven themselves as a responsible spender of the ICO funds by:

  • fostering an ecosystem built from scratch, by funding the development of protocols, clients, wallets and dapps, among others,
  • delivering and evaluating grants based on a vision,
  • funding various initiatives to increase adoption.

It is in the baker’s best interests that the Foundation is able to continue doing its job.

This amendment is to be used at their discretion towards advancement of the ecosystem. Besides, it acts as a “vote of confidence” in their work.

The amount proposed is small - 100k tez is less than one day of baking-reward inflation.

For more information about the Tezos Foundation, I encourage you to download their reports: 2019 - H1 2020 - H2 2020 - H1 2021 - H2 2021 - H1 2022 - H2 2022.

More resources for your consideration

Q&A

The foundation bakers already have a large share of the network, I don’t want to make it bigger.

The foundation assets consists of tezos and other assets. Their tez currently constitues 12% of the baking power, which is far from 33% required to affect the network. The current proposal will not meaninfully affect this.

When the foundation is holding tez, it makes sense for them to bake. Otherwise, their tez would be worth less over time.

Why not have an on-chain DAO to grant money directly to contributors?

This is not realistic. The work of the foundation can not be replicated by on-chain processes just yet. It makes sense for bakers to defer this duty to the foundation, since it has several years of experience in supporting the ecosystem. Besides, the foundation has established a network of relationships (with vendors, auditors, regulators and so on) to fulfill its duties. Recreating this from scrach and on-chain is a difficult task.

What about independent teams building on Tezos without the help of the foundation? How do they benefit from this?

Blockchain is a layered ecosystem. Everyone (including independent teams) benefits from the base layer being developed and keeping up with the state of the art.

Are there precedents in other ecosystems?

Yes. Other decentralized blockchains are commonly using inflation to fund their technological development.

  • Cosmos funds a “community pool” funded on a per-block basis. The contribution was recently increased to 10% of staking rewards, or 4.2M ATOM per year (currently, 50M USD for a 3.5B USD market cap)
  • Polkadot has a treasury pool of roughly 38M DOT (currently 228M USD) but it is regularly burned if unused.

Disclaimer

I am Nicolas Ochem, I have been building on Tezos since 2020. I am making this proposal in my name only.

My company MIDL.dev has received about 120,000 EUR of grants from the Tezos Foundation since 2020, that went towards fostering the ecosystem through development of cloud infrastructure software, and more recently the Flashbake project. We have also received a 10,000 tez invoice for the consensus key contribution in the Lima proposal.

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I’d rather see the 100k tez go directly to Nomadic Labs, Marigold, TriliTech, Oxhead Alpha, Tarides, DaiLambda & Functori, distributed to their teams as bonuses.

7 Likes
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Totally agree

4

I love this idea but not for funding TF at this point. They should be focused on utilizing the funds they have as investments as well as funding Tezos growth. The goal should be to make the current war chest sustainably fund TF for as long as possible and not have to be replenished…at least not yet.

I would much rather like to see a community led treasury. Either a combination of core team members and community members such as yourself or just bakers with their own agenda separate from TF and Trilitech.

edit: Actually I would love to see something like this go to TC to help fund their small grant program.

2 Likes
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I would much rather like to see a community led treasury.

Yes! That would be fantastic. I’d send tez to a DAO that has the exact same voting rights as Tezos itself with the same voting rights etc. Anyone who hasn’t been able to get a grant from the Tezos Foundation could try to get a grant via this DAO instead.

2 Likes
6

We should rather fund a German e.V. (non for profit) which is a democratic structure in which all entities in the tezos ecosystem can apply for a membership and organize the funding of projects through a DAO voting procedure. A club is a representation of its members only acting on their behalf with a goal like

“Support the development of a strong community and sustainable Tezos community”

Just dropping this here knowing that a lot of details are missing.

1 Like
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TLDR: This should go to the growth of the ecosystem.

Agree with @onebalddude. If this is going to be used to set a precedent, then it should go to an on-chain Treasury voted on by Bakers. Currently there is still over half a billion USD in the warchest, it would be good to have a community led, ecosystem driven mechanism.

Or given to small cap bakers, or devs, or DEX LP, or NFT/DeFi platforms that lack funding, etc…

1 Like
8

Love the idea, but would rather see the money go to Midldev(yourself) or Nomadic. Would be nice to see Nomadic with a proper YouTube studio.

Permanent locked liquidity for the L2 transfer bridge would be nice too. Don’t wanna wait two weeks to withdraw, would rather pay a fee to the locked liquidity providers and have a solid base of liquidity on either side.

So I’m with Kirk/Onebalddude on this one.

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You know what, if the rumours about shutting down TZConnect are true… then I would be even in favor of taking this proposal and just changing the recipient address to one of TZConnect. Maybe the team has a multisig that they can provide… I would be 100x more in favor of something like that for example. @Kittiborissza @newby @johnsnewby

1 Like
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I love this idea and hope it gets traction. We need to make Tezos development sustainable and on-chain funding is the way to do it. To people saying the XTZ should go to the developers directly - ok, not a terrible point, but we know that the only real source of funding for these development teams in any case is the foundation. Targeting the foundation is a good simplification (if not: how much to give to Nomadic? How much to Trilitech? Functori? We are not involved in protocol development closely enough to make those decisions).

Edit - it’s unlikely that at this time this proposal will be the more popular one. Please keep inserting similar amendments in future proposals - it will take some time to change baker behaviour and you cannot expect to succeed in the first attempt.

1 Like
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Considering Tezos Foundation has already huge amounts of money in its chest and huge bakers staking… which is the point of this proposal?

Also, in the time xtz inflation is being discussed among the community, this proposal makes less sense than ever.

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Why 100k? Is there a rationale behind this number?

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Last time 25k tez went towards a feature. 100k can get more done, while still being low enough so as not to cause inflation concerns.

People say that it’s just a bucket in the ocean (the war chest is currently at 500M USD). But it’s the wrong way to look at it: it’s three times more than the Tezos community has ever minted towards development.
Meanwhile, the competition is doing it liberally.

1 Like
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Screenshots_2023-01-18-10-12-00
Screenshots_2023-01-18-10-12-00816×495 106 KB

As the topic is related to funding the Tezos Foundation, I’d like to share this article highlighting the fact that the Tezos Foundation was listed as a holder of FTX stock. I believe that this is relevant to discussion around the Tezos Foundation being “good stewar[d]s of the 2017 ICO funds” considering FTX went bankrupt. While I cannot say that I have maximal insight into the nuances of this situation, I do believe it is reasonable to conclude that this resulted in a (subjectively) meaningful loss of ICO funds. Furthermore, I believe that this could be viewed as a situation that could have been avoided under a different management style.

It is up to individuals to determine whether they are comfortable funding an organization that has a history of managing funds in this manner, and whether this truly constitutes good stewardship of funds.

That is all.

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I don’t think it’s reasonable to conclude that based on the article. The filing lists TF as holding equity in Blockfolio, which was later purchased by FTX.

3 Likes
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I am not in favor of giving the TF just more money now. But this argument makes no sense and in this case I agree with Nicolas. Even if TF held FTX stocks (and not equity in Blockfolio) - so what? If an entity is diversified this is not a big hit. And we all now what a fraud dumpster FTX was at the end, they lied to everyone and thats not TF fault.

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I am mostly just providing the info for the sake of awareness as it is related to the topic of the stewardship of the funds.

There are many ways to manage funds. They could have stuck to bonds. They could have done ETFs. They could have done crypto & cash only. Etc. All different strategies and different outcomes.

Individuals will always have different opinions on good stewardship.

In the end, due to its financial management decisions, the Tezos Foundation owned FTX stock.

FTX has filed for bankruptcy and with a different management strategy the Tezos Foundation may have lost less money than it did owning FTX stock. This may be meaningful information for people considering this proposal.

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I’m not sure when they bought but here it is.

image
image1779×168 7.64 KB

If they bought at around $25 then it’s about a $5 million dollar loss.

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Maybe bankruptcy proceedings will yield something so it’s not a loss?

Also maybe they got something else out of the deal than stock? Like an agreement to put an xtz price ticker on blockfolio?

Hindsight is 20/20. This is not representative of bad stewardship.

2 Likes
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I love ghostnet feature, it was necessary for development ease

1 Like