v1 Final Report and v2 Outlook
A review of activity, results, learnings, and recommendations for the future
Purpose
0xEVE was originally designed as a six-month, experimental initiative focused on value creation and capture for the 0x protocol and its broader ecosystem. To accommodate extenuating circumstances related to delivery timelines and other factors, the time period was extended at no additional cost to the original budget.
This report summarizes our overall activities, learnings, and recommendations. Because new opportunities with high potential have been developed during this experiment and because we haven't yet expended all allocated funds, we also summarize our plans to continue to drive these opportunities.
Activities
In our Half-time Report we described the activities and workstreams we undertook in furtherance of our objectives. Here we frame them in terms of strategic goals, execution strategies, and outcomes. Note that some execution strategies may be related to more than one goal but are shown with the most relevant and/or immediately impactful one.
Finances
The table below summarizes inflows and outflows of funds.
Note: Although it isn't listed here because the funding came directly from the treasury rather than our budget, we took on an active role in shepherding the $950k proposal and community-approved grant to trader.xyz (noted in the table, above)
MS1 is the original multisig wallet, used for operational and 0x-specific expenses MS2 is the second multisig wallet, used for joint 0x/Polygon initiatives
MS1 0xf9347f751a6a1467Abc722eC7d80bA2698dd9d6c MS2 0xAB66CC8FD10457ebC9D13B9760C835F0a4CbC487
Learnings
Note: In addition to the overall learnings below, please see the Half-time Report for a summary of learnings from the first 90 days.
Scope - We feel the scope was appropriate, although including an expansive list of possible areas of experimentation in the proposal may have inadvertently set expectations that all areas would be addressed, rather than focusing on the ones we felt would have the most impact and probability of success (even though we did indicate that this would be our approach in the proposal). Similarly, in retrospect and as we indicated in our previous report, we would have placed more emphasis upfront on 0xEVE being a focused experiment, rather than a proxy for a full-fledged DAO. Finally, some of the areas where we hoped to have more impact were stymied by factors outside our control, most notably in the developer support and tokenomics areas, which were in many ways dependent on 0x Labs' prioritization and resourcing. That said, the 0x Labs team has steadily grown over the past year, adding team members in key roles. We expect this will lead to deeper engagement over the coming months, and we are confident that further improvements related to developer and technical support are on the horizon. Additionally, the recent 0x Labs Series B raise will have a substantial and positive impact on resourcing across all operations.
Budget - As described in the original proposal, we allocated compensation in ZRX at a fixed conversion rate for six months that in retrospect was too high (or too low, depending on how you look at it). This shifted risk from the protocol to the individual contributors and had the effect of compensating contributors well below the market rate for the entire period of the experiment. While it had the benefit of preserving capital and enabling the extension, this model clearly would be unsustainable over an extended period of time for full-time contributors without some upside, such as an additional vested allocation, and/or some portion of compensation in a stablecoin. To fairly compensate contributors for the extension period, a one-time, parity adjustment payment was made to offset the underpayment for the period 12/6/21 - 3/28/22, which was beyond the original commitment and financial risk / opportunity cost assessment. This retroactive payment does not change the conversion rate for the original commitment period, which was calculated last May and then fixed for 6 months (ZRX = $1.22), but accounts for the SMA price during the 112-day extension period (ZRX = $.64). See v2, below, regarding the updated compensation methodology for future payments.
Recommendations
Conduct more experiments, especially ones designed to create or amplify ecosystem agency over future protocol development and ones that are focused on specific networks and/or use cases
Convert some portion of the funding coming from the treasury for future experiments into USDC (or some other stablecoin) concurrent with (or prior to) the initial budget allocation
Establish an official grant program with a budget and charter commensurate with other similar protocols with similar growth goals, while keeping foremost the unique needs and dynamics of the 0x community
Establish an active communications and support channel between the grant program and 0x Labs development teams until robust, expert-level, protocol-specific technical capacity is readily available outside 0x Labs
Seek out treasury contributions from other networks and protocols deriving benefit from 0x protocol (especially new deployments and integrations) and develop a model structure to accelerate collaborative grant funding, especially if strategic in nature
Evaluate emerging organizational structures, such as foundations and trusts, that have the potential to provide a more sustainable legal and regulatory framework for grant operations
v2
In our opinion, the most beneficial outcomes driven by the experiment so far are the recent upgrade of v4 to include NFT support, and the work being done by trader.xyz to accelerate the deployment of 0x-enabled NFT marketplaces, especially on non-mainnet chains. The strategic benefit of prioritizing protocol NFT support was recently confirmed when Coinbase chose 0x to power its social marketplace, and we expect to see additional second- and third-order effects going forward.
With that as context, we want to leverage this momentum to greater effect with a targeted initiative. Our hypothesis is that focusing on NFT projects on Polygon will have outsized impact, in large part because Polygon is aggressively growing its ecosystem via initiatives like Polygon Studios, which is highly concentrated around NFTs and gaming. Our goal is to grow awareness and adoption of 0x early in tech stack decisionmaking, where the impact could be exponential over time if 0x becomes the de facto standard. We hope that this type of focused approach will become a repeatable model for accelerating 0x ecosystem growth on other chains and networks.
We will also continue to work closely with the trader.xyz team and other teams building NFT projects using 0x technology. For potential opportunities that exceed our budget, such as the previous grant to trader.xyz, we will work with those projects to request funding directly from the community treasury and, if allocated, will also work with them during the delivery period to help de-risk, unblock, and accelerate.
Incorporating learnings from the experiment so far, the contributor compensation rate will be calculated using the 100-day SMA at the time of payment, and split 50/50 between ZRX and MATIC (split rate subject to change depending on market conditions and remaining budget).
Contact Info
Core team: @nikita, @0xSHA Council: @JoaoCampos89, @gabririgo Advisor: @mintcloud Twitter: https://twitter.com/0xCommunityDAO Discord: https://discord.gg/d3FTX3M
Last updated
