Half-time Report

A review of activity, learnings, and results from the first 90 days

Purpose

0xEVE is a six-month (26 weeks), experimental initiative focused on value creation and capture for the 0x protocol and its broader ecosystem. This report summarizes the activities and emerging learnings from the first 90 days. A second report will be produced near the conclusion of the second 90 days to inform a community decision on whether to continue, modify, or let the experiment expire.

Activities

Our overall goal as we got started was to get some operational constructs in place to set in motion the different workflows needed to accomplish the goals we had laid out in our establishment proposal.

Initially, this consisted of setting up a Google workspace for collaboration, Twitter account for social media, Gitbook for public-facing content, Gnosis multisigs, establishing connections with the team at 0x Labs, and group chats with other teams building on 0x. We also sought out legal services and conducted research around grant program best practices and treasury investment and diversification so as to learn from others and minimize missteps.

In parallel, we worked through some strategy exercises designed to identify areas of high potential and/or critical gaps related to the protocol's position in the marketplace. This helped us determine where to focus our time and efforts to achieve the most meaningful results. At a high level, we decided to align our focus with 0x Labs’ primary goal, which is to increase protocol volume.

The framework for a grant program was established, along with a scoring mechanism for evaluating grant applications. We engaged in outreach to projects already or potentially building on 0x to deepen or open channels of communication and support, particularly in the context of shaping grant opportunities, and published a summary of topic areas we want to fund. This proactive engagement led to two early grant awards (Thales and sudoswap). Now that a process has been established, we actively work with applicants and grantees to provide advice and assistance throughout the evaluation process and delivery periods.

An effort to better define how the 0x protocol mission can be reflected and enabled through a refreshed, sustainable tokenomics model was undertaken. We tackled the issue of improving the protocol’s business model and value capture by exploring two main paths: 1) paying for research, analysis, and recommendations on fee models from external, independent research organizations; and 2) enlisting the help of the data team at 0xLabs to perform similar work.

After community discussion and consultation with 0x Labs, we proposed experimenting with adjusting the protocol fee to assess the impact on volume and human behavior and hope to use the data collected to help determine a path forward for sustainable network economics. We also worked with the 0x Labs data team to prepare a dashboard for the community to track metrics during the fee pause period.

In addition to the work on tokenomics, we evaluated options for conducting brand positioning research and workshops to help guide us in how we tell the story of the protocol and its mission as we transition to accountable, community-led governance. We believe that a deeper understanding and more compelling articulation of the 0x brand may also inform the tokenomics model, as the tokenomics model functions as an economic expression of the protocol’s mission. To help us in this area, we commissioned research, workshops, and advisory services from Other Internet (https://otherinter.net/), a highly regarded, decentralized applied research organization specializing in social technology. For those interested in learning more, we recommend reading their Headless Brands and Market-Protocol Fit reports as examples of the areas we are seeking to explore.

We worked with the 0x Labs team to establish a more robust governance process, including integrating Snapshot for polling and expanding the information available in the governance portal. We also participated in day-to-day engagement with the community in the forum, Discord, and social media.

Finances

The table below summarizes payments made to date for grants and operational expenses. MS1 is the original multisig wallet that is used for operational and 0x-specific expenses, and MS2 is the second multisig wallet that is used for joint 0x/Polygon initiatives.

MS1 0xf9347f751a6a1467Abc722eC7d80bA2698dd9d6c MS2 0xAB66CC8FD10457ebC9D13B9760C835F0a4CbC487

Note: There was no fixed schedule for team compensation payments, but the first payment in August (shown above) covered the first 9 weeks, a second payment in October will cover the following 8 weeks, and the third (final) payment in December will cover the last 9 weeks, for a total of 26 weeks.

Learnings

Learning is an ongoing process. Insights and conclusions can evolve over time, but here are some things we've learned so far.

‌First, as other early grant programs have noted, announcing funding availability does not immediately result in a deluge of quality applicants with compelling value propositions. We felt that most of the grants awarded didn’t present substantial technical or execution risk, but there was some general risk regarding how much value the community would realize in return for the amount of capital provided. We hope that in time more applicants will propose grants that provide even stronger risk/reward value propositions i.e., more potential upside, innovation, and differentiation.

Second, our plan to actively develop a recommended strategy for treasury investment and diversification became more complicated due to the increasingly hostile regulatory and compliance environment. Combined with the fact that EVE is a short-term experiment and this task wasn’t core to our success, along with a change in our team composition (SonofPegasus, who was our designated domain expert and lead for that effort, stepped back from an active role on the core team), we decided to table this workstream. Similarly, we decided to not engage in token swaps with other projects as part of a grant package, as we felt doing that could introduce some liabilities that might persist post-EVE. Given the current circumstances, we feel it is probably better that proposals for treasury investment and diversification originate directly from community members and external projects and be voted on by the community vs originating from EVE.

Third, even though we are consciously focused on protocol value creation and capture, operational mechanics and expectations can consume a great deal of time and energy and it is easy to fall into the trap of acting more reactively than proactively. We will continue to try to find balance here with regards to being involved in activities that aren’t necessarily core to our charter and would likely provide short-term impact, but at the expense of progress towards our longer-term goals.

In that context, we also struggled somewhat with regards to varying expectations from a mixed group of stakeholders across the community, the broader ecosystem, 0x Labs, and even amongst ourselves. For example, we became aware that even though we were seeing our work as somewhat bound and focused, others may have been expecting a much more robust and expansive portfolio of responsibilities including broad DAO "management" functions. As a small team with only one full-time person, context switching, remaining current, and depth of knowledge for diverse subjects is challenging. Technical engineering, in particular, continues to be a difficult area to maneuver as deep protocol technical knowledge resides mostly in 0x Labs, which makes it hard for us to lead or even scope protocol engineering work. That said, we are actively working to find ways to improve this situation so that we can expand the developer ecosystem and the number and types of projects building on 0x.

Early Results

It’s too early yet to objectively assess what long-term results will be derived from the EVE, but all things considered, we’re pleased with where we are. We’ve put some repeatable processes in place, developed some good working relationships with ecosystem partners, awarded four grants to projects with potential, and have set in motion the two things that we were most confident would contribute to real value capture over time -- actionable branding improvements via the work we are doing with Other Internet; and sustainable tokenomics improvements via the data collected from the protocol fee experiment. In combination with the grants already awarded and the pipeline going forward -- in particular, the likely grant award to trader.xyz -- we're optimistic that EVE will prove to be a success and will enable further progress on the path to decentralization.

Contact Info

Core team: @nikita, @0xSHA Council: @JoaoCampos89, @gabririgo Advisor: @mintcloud Twitter: https://twitter.com/0xCommunityDAO Open Funding Opportunities: Open Grant RFPs Discord: https://discord.gg/d3FTX3M