Proposal: Grant program + Incentives for node runners & hodlers

HOPR DAO v0.2 DAI Discussion
1

DESCRIPTION

There are a number of proposals that rightly aim to spread the word about hopr and facilitate its smooth adoption within cryptoworld. There are also others that rightly cater for the early adopters, mainly the hodlers and the node runners. I strongly believe that you need to implement both approaches at the same time, to ensure relevance while not eroding your base. You need to actively develop the case and the use cases for hopr, strengthen security, and prevent disruptive price drops and fluctuations, e.g. after mass sale. That is why I put forward this proposal that caters for both groups of stakeholders.

Basically, you want to maintain those who are already “in the system”.
So, a portion of the tokens should definitely be distributed to hodlers and node runners.
In addition, there should also be in place incentives that would attract others to enter this ecosystem and to build it. This can be through grants and competitions supporting the development of dApps, sites, and use cases; developing solutions to enable smooth transition into mainnet, and awareness raising about hopr and its use cases, e.g. through YouTube videos, training packages, as well as memes.
This way, you would hold on to your existing tribe and invite others in. This is especially important now, when there is not much clarity about the token, its use cases, and potential. This would provide an easy and sustainable way towards rapid adoption.

JUSTIFICATION

In order for a project to grow, there is a need to attract more people into the ecosystem. This is very important, however, it would not be as efficient if you are losing people who had joined early on. That is why you need to maintain early adopters and ensure they hold on to the tokens and/or promote its use; and you also need to make the project attractive for outsiders. There are two key reasons why one may hold on to their tokens: they see or believe in its current or future value; there are incentives in it for them. Building use cases through grants and hackathons achieves the following:

  • more use cases are built and revealed, making the token more valuable and more useful;
  • more outsiders are attracted to the project. If you do not own tokens, or are not interested in buying tokens, maybe you can earn some DAI as you develop; and
  • it advertises the project and the token more widely, facilitating adoption.
    However, this takes some time (not a lot). In such an early phase of the project, it needs to hold on to the early hodlers, node runners, and stakers. So incentives would be good for that; keeping those folks incentivized to stay in the system while it grows and gains traction. I specifically propose giving DAI, and not HOPR (at least not much), in order to prevent a strong sell pressure driving token prices downwards. Whether you use DAI to buy hopr or to do something else, this is not expected to have a negative impact on hopr price. In the meantime, your nodes are secured, the token is decentralized and staked, with less reasons to withdraw.

IMPLEMENTATION

A portion of the tokens would go to incentivize node runners, ensuring security and decentralization.This would be an airdrop divided equally among node runners. Another portion would be airdropped to incentivize stakers and hodlers. This would be distributed proportional to the amount of tokens owned. This would further stabilize token price by reducing sell pressure. Finally, the last portion would go towards a grant program. (Here I was thinking something similar to e.g. UNISWAP’s grant program, at a smaller scale for starters.) The grant program would lay down criteria for submission of proposals focused on developing use cases, awareness raising on those use cases and the ecosystem, and around social marketing. Grants vary in amount from around $5,000 to $20,000.

BUDGET

  • 40,000 DAI to node runners,
  • 40,000 DAI to stakers and hodlers, and
  • 70,000 DAI for the grant program.
    This roughly divides the DAI in half between the grant on one hand, and the node runners and stakers/hodlers on the other. Had we had more DAI, we may have split this equally three ways, but it would be good to have more tokens on the grants’ pot as this is relevant for both outsiders and insiders. It would be useful to possibly have some HOPR tokens to complement some of this for the node runners and stakers/hodlers, but it is not necessary.
18 Likes
2

Interesting idea, thanks

1 Like
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how do you plan to split the distribution? you mention grants , marketing and a lot of activities in your proposal

4

I am glad you like it :slight_smile:

5

Thank you for your very good and important question. To be honest, I did not think about that so far, and I am not sure we need to specify the breakdown at this stage. First, I think there needs to be an agreement that we need to support both “insiders” as well as current “outsiders”. Then, we can agree on a split there, maybe 50-50. For the outsiders’ part, there are many ways we could do this. We can, for example, focus on three streams (e.g. infrastructure/security/testing, dapp development, educational/training material/memes)and split the funds equally. One other way to do this could be to put all these (and possibly others) under one grants umbrella (think uniswap grants with a twist). Under the grants program, you can list selection criteria. Proposals are reviewed and winners can include dapps, training, social marketing, etc. Eventually, it is not difficult to assign percentages. However, I think that phase and the breakdown is very important and should not be rushed. It should be designed carefully to ensure “the biggest bang for the buck” as they say. And I believe this is a key first step in that process. However, these are my thoughts and I would love to hear your suggestions. Thank you once again.

1 Like
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yes I like the option of putting it under grants umbrella. this way you can have a series of applicatons and the team(perhaps together with token holders) could choose the best application to receive the funds for development

7

Yeah, and you could vary the tokens/incentives used under the grants program, as things evolve. Glad you like it :slight_smile:.

1 Like
8

Thanks for the proposal, @SHHS ! I marked your proposal as incomplete, as we’d like a bit more specifics on the portions of token that should be allocated for the different topics.

You definitely very well specified the “How”, but maybe also elaborate more on the “Why” of the single measures. Here’s a template for proposals: UPDATED: PROPOSALS: Making proposals, validity rules and template

@thewanderingeditor and I are around if you have any questions.

9

To elaborate a bit (and here I’m writing in my team member role, rather than my more neutral moderator’s role), I think what you’ve written here isn’t so much a proposal as a meta-discussion about which kinds of proposals to vote on next week.

That’s great, and totally encouraged, but I’m not sure how you could easily make it a valid proposal in itself.

And to clarify something which I think is maybe confusing people: this vote isn’t going to be a winner takes all. So there’s plenty of scope for multiple proposals to be supported.

I agree on the need for proposals of different types to meet different requirements, but I think the best strategy is for people to make specific proposals that meet just one need, and trust in the governance process to produce more proposals that meet the rest, rather than trying to come up with a single omni-proposal that covers all the bases.

10

Thank you for your comments; well-taken. I have revised the proposal to add more details and to align with the template. Please let me know if you have further comments or you need some more elaboration. Thank you.

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Thank you for your comment. I have revised the proposal. Please have a look and let me know if you have other comments. I get your point about a single focused proposal vs a larger proposal, and would like to point out a few points:

  • I do agree that this proposal as well as virtually all other proposals would probably benefit from some “mix-and-matching” and cross-pollination. That would be useful and more efficient, and I have no issues with that;
  • I have revised the proposal so it is much clearer now. Hopefully this helps.
  • The initial guidance provided indicated that the hopr team wanted to get ideas about what to do with the DAI tokens. It may not have been entirely clear whether these proposals should focus on single discrete sets of activities or be more broad. “We’re doing it this way to ensure we can gather your ideas without constraining your imaginations. We want to put everything on the table…” So, where I am coming from is from a place of wanting to ensure that DAI tokens are put to the best use.
  • I am not sure where the impression of “winner takes all” came from. This is a DAO, a team effort. Who knows what the end product will look like? I imagine it will be some nice mix of ideas from here and there. This proposal can easily provide the key parameters and guidance, with other current or future proposals complementing some aspects.
    I hope I have helped clarify matters. Please do have a look and let me know if you have other comments or suggestions.
    Thank you once again.
12

Thanks for the updates and thoughtful response. Re: the “winner takes all” comment, I meant it more as a general note that many people seem to be approaching this as though only one proposal can be selected, and therefore they have to find a way to allocate all the DAI. That wasn’t the intent, and we’re happy for proposals to have whatever budget they need, even if it’s small.

I think that’s definitely a communication issue from our end. We’re trying to strike a balance between being clear and not exerting too much influence, which is tricky.

13

Thanks for the updates. I’ve retagged this proposal as valid and added it to the official list. You can find it here: http://forum.hoprnet.org/t/proposal-6-grant-program-incentives-for-node-runners-hodlers/

If anyone would like to support this proposal, please head to that link and click the heart (like) button to sign it.

14

Great. Thanks.

15

Thanks for the clarification; I appreciate it.

16

how do you plan to split the distribution? you mention grants , marketing and a lot of activities in your proposal

17

This proposal looks well thought out. I gave it a like but would appreciate more info on what “not [giving out] HOPR (at least not much)” means by what number equates to not much.

18

I vote for this idea but needs to be tuned up from the team because the numbers are not as accurate as they could be

19

Thanks. You ask a good question but I am not sure an answer is easy to get. Basically, we want to ensure that the supply of hopr in the market is not (significantly) more than the demand, as this would lead to a fall in its price. So, the release of hopr tokens should be controlled and can be increased with increasing use cases. If you knew nothing about hopr or its uses (where most people are today), and you are given hopr tokens, there is a pretty high likelihood that you will sell those tokens. If, however, you were staking or running a node, and you were making a good return, including in DAI tokens, you would be incentivized to continue staking these golden tokens that generate revenue. As such, you would be putting any hopr you get to good use. While stakers may still sell some hopr, the probability is less. Also, they may want to hold on to their hopr for governance. I wish I could come up with exact figures, but I am not sure anyone can do that. One approach to make this more quantifiable is to look at tokenomics and look at the supply and price of the tokens as well as the distribution. This will inform how much we can release into distribution and if we need to even “burn” some tokens. I hope this helps clarify things. Thank you once more.
On a side note, thank you for your support and the like. I am not sure if likes here count or they should go under the proposal section: PROPOSAL 6: Grant program + Incentives for node runners & hodlers

20

Thank you. Yes, this definitely needs to be tweaked and fine-tuned. As mentioned in another post, some data and details may not be readily available to enable such analysis right now. This proposal, as well as all other proposals, would definitely benefit from more analysis and details.

On a different note, I am not sure if you should voice your support here or in the proposal page: PROPOSAL 6: Grant program + Incentives for node runners & hodlers
Thank you, either way :slight_smile:.

1 Like