Note: As of 15 May 2022, v1 of the grants program is replaced by v2

The 0x Ecosystem Value Experiment (0xEVE) is designed as an ambitious, six-month (26 weeks), experimental initiative focused on value creation and capture for the 0x protocol and its broader ecosystem.

Potential areas of experimentation include:

• Adding features and improving protocol functionality

• Performing tokenomics review, optimization, and potential revamp

• Incentivizing and improving support for new and existing market makers

• Providing liquidity to select ZRX pairs

• Incentivizing order flow and trading volume, including via relayers, dApps, etc.

• Improving the user experience for staking

• Building and updating developer and user tools, including documentation refresh

• Developing more sophisticated research and analytics capabilities

• Assisting with dApps and new integrations, especially projects using order books

• Experimenting with new business models and monetization paths, including new use cases for Mesh

• Strengthening our community through outreach and rewards

• Ramping up marketing

• Driving support for strategic initiatives

• Conceptualizing and executing social media campaigns

• Hosting and advertising 0x hackathons

• Engaging with emerging developer communities, such as BSC, Polygon, Solana, etc.

Operations team:

• Lead: @nikita

• Core Team: @SonOfPegasus, @0xSHA

• Council: @JoaoCampos89, @gabririgo

• Advisors: @mintcloud + others TBD

Dates

Addresses

ZRX Treasury: 0x0bB1810061C2f5b2088054eE184E6C79e159110

0xEVE Multisig 1 (ZRX): 0xf9347f751a6a1467Abc722eC7d80bA2698dd9d6c 0xEVE Multisig 2 (ZRX + MATIC): 0xAB66CC8FD10457ebC9D13B9760C835F0a4CbC487

Links

Vote: https://0x.org/zrx/vote

Snapshot: https://snapshot.org/#/0xgov.eth/

Stake: https://0x.org/zrx/staking

Forum: https://gov.0x.org/

Discord: https://discord.gg/d3FTX3M

Twitter: https://twitter.com/0xCommunityDAO

Github: https://github.com/0xProject

Q: If I submitted a v1 application, will it automatically be considered for v2?

A: No; if you meet the v2 eligibility criteria, please submit a new application

Q: How do I apply for a grant that falls outside the v2 criteria?

A: See the large grant (> $50k) process described in v1

Note: Effective 15 May 2022, v2 supersedes v1

Background

Building on momentum, outcomes, and learnings from v1, 0xDAO Grants v2 is structured as an experiment focused on a specific use case, with tightly defined qualification criteria and active support commitments.

Qualification Criteria

• Must incorporate NFTs in some way (not necessarily a marketplace)

• Must use 0x(v4) + NFT Swap SDK (limited exceptions may be made for v2 or v3)

• Must support Polygon Network

• Must use the feeRecipient or affiliateAddress parameter in orders

• Must have a path to launch an MVP within 60 days of grant receipt

• Stackable bonus for projects that also incorporate Lens Protocol

• Preference will be given to bootstrapped projects, i.e., projects that don't have VC funding

Note: Grants are intended to support new development and initiatives and generally will not be awarded retroactively for work already done unless there are unique or extenuating circumstances

Our Commitments

• Up to $150k allocated in $5-10k grants (disbursed in $ZRX and $MATIC)

• Developer support in dedicated trader.xyz Discord channel

• Shared, hosted orderbook (trader.xyz)

• Additional support for projects meeting certain metrics (TBD)

• Bonus grants may be awarded for projects that contribute new features to the SDK

Application Form

https://docs.google.com/forms/d/e/1FAIpQLSfZOZfdHSDU9dzz0G82Qrnb_Usm7Kp4w3mpRT6lUFLlGGiLRg/viewform

0xDAO is still nascent, which presents an awesome opportunity for self-motivated contributors to actively participate in shaping the various workstreams that will manifest the protocol's mission. For inspiration, other protocols have individuals and/or teams working in areas such as:

• community outreach, onboarding, and support (+ rewards and recognition)

• content generation

• marketing and media

• data analytics

• risk assessment and other protocol parameter analysis

• strategy and business development

Workstreams can be generally categorized into top-of-funnel, where the goal is to attract new community members and optimize the onboarding experience; mid-funnel, where the goal is to optimize the meaningful productivity output from engaged members; and bottom-of-funnel, where the goal is to empower leaders that drive outcomes.

If you're interested in contributing and have expertise in one or more of these workstreams, please join the Discord, comment on the forum, or reach out to us on Twitter to get started!

• Discord: https://discord.gg/d3FTX3M

• Forum: https://gov.0x.org/

• Twitter: https://twitter.com/0xCommunityDAO

• Grants: Open Grant RFPs

Below are some topic areas that the 0xDAO would like to fund. If you are interested in applying for a grant in one of the areas below or in another area where you have special expertise, please reach out using the process outlined in Grant Program Framework!

Branding and Marketing

The mission of the 0x protocol is to create a tokenized world where all value flows freely. While the protocol has achieved product-market fit and is a market leader in its class, the story of how 0x protocol is actively enabling and shaping this future world needs to be told in a powerful and compelling way that resonates with various user communities. As we are not branding and marketing experts ourselves, we need help with developing and sharing this story.

Documentation Refresh

0x is a protocol that facilitates the peer-to-peer exchange of tokenized assets. The protocol serves as an open standard and common building block for any developer needing exchange functionality. 0x provides secure smart contracts that are externally audited; developer tools tailored to the 0x ecosystem; and open access to a pool of shared liquidity. Developers can integrate with 0x at the smart contract or application layer. However, as the protocol has evolved, the documentation has become out-of-date, confusing, and not easily usable by developers. We need help with updating developer documentation to keep it fresh and accurate.

Developer Outreach

0x protocol and the liquidity that flows through it is foundational to enabling performant DeFi and non-DeFi applications, but the developer community may not be aware of its powerful features or may need help with technical knowledge and integrations. For example, active participation in hackathons, tutorials, and best practice sharing could draw more developers to build on 0x. We need help with growing this capability within the DAO.

Protocol Upgrades (NFT Support)

0x v2 and v3 included support for NFTs (ERC 721/1155), but v4 does not. We need help to port NFT support from earlier versions into v4 and to also add new NFT capabilities. This work will require an in-depth understanding of the protocol and will also be required to undergo an audit.

Note: Effective 15 May 2022, v2 supersedes v1

Background

The 0x protocol’s mission is to create a tokenized world where all value flows freely. Currently, this manifests mainly through a set of performant, hardened smart contracts that enable the exchange of assets on various blockchain networks, along with a staking mechanism that incentivizes professional marketmakers to provide best-in-class, highly efficient liquidity and rewards ZRX token holders for optimizing liquidity rewards distribution.

The protocol has enabled over $25B in trading volume across more than 485K unique traders worldwide, while powering the backend exchange infrastructure for dozens of top DeFi applications.

Additionally, the network has generated over 3.6K ETH in fees paid to ZRX holders and marketmakers, underscoring the value that the network can create while aligning long-term incentives for token holders and network participants alike. Protocol usage consistently ranks in the top three DEX/DEX aggregator protocols as measured by volume, market share, and number of users.

To further accelerate ecosystem growth, the 0xDAO is establishing a grant program.

Funding Priorities

Generally speaking, we prefer opportunities that have the potential to grow protocol volume exponentially via win/win partnerships with balanced risk/reward.

Specifically, we have identified the following areas for prioritization:

• Projects that increase 0x protocol volume (preference for orderbook-based volume)

• Projects building on 0x protocol and Polygon

• Protocol feature development (for example, integrating NFT support from v3 into v4)

• Non-DeFi business models and use cases (social, games, etc.)

• Research, simulation, and analytics related to tokenomics design

• Branding strategy

• Community engagement

• Developer engagement and support

Note: Grants are intended to support new development and initiatives and will not be awarded retroactively unless there are unique or extenuating circumstances.

High-level Grants Framework and Workflow

Note: This is a dynamic environment and we expect changes to funding levels, workflow, data requirements, and evaluation criteria to happen frequently.

Funding and Decision-making Authority

The 0x community recently approved the 0x Ecosystem Value Experiment (0xEVE) and allocated an operating budget of 400K ZRX from the Treasury. 0xEVE has the authority to award grants that can be funded with its own budget. Given the current budget valuation, these will be smaller grants (<$50K). Larger grants (>$50K) will be awarded from Treasury funds and will require community approval via an onchain vote. In some cases, 0xEVE may award a grant for a prototype or MVP in advance of a larger award being proposed for community approval at a later date.

ZRX Requirements

There is no requirement to hold ZRX to apply for or propose a grant. However, submitting a proposal for a community vote requires the submitter to hold (or be delegated) 100K ZRX. For a proposal to be approved, it must meet the minimum threshold of 10M ZRX affirmative votes and the majority of all votes.

Process Flow

There are two paths that grants can follow. The first is through the 0xEVE team via an application form (small grants) and the second is directly to the 0x community via the governance forum (large grants). The 0xEVE team will evaluate and score grants proposed in the forum (similar to, but less complex than, the MakerDAO collateral onboarding framework).

Step 1: Grant seekers apply for funding using the application form or posting on the governance forum. If posting on the forum, please provide the same information required in the application form.

• For grants < $50K, use the Google Form

• For grants > $50K, post in the Governance Forum and in Snapshot

Note: If you are thinking about applying for a grant of more than $50K but aren't ready to post a proposal in the forum, please submit your idea using the application form to start a conversation with our team!

Step 2: 0xEVE team begins evaluation and contacts grant seekers if additional information or negotiation is needed. 0xEVE team may award grants that fall within its budgetary authority or publish evaluation and scoring for community consideration. Grant seekers should monitor the governance forum to provide additional information and feedback as needed.

Note: If 0xEVE declines or is unable to fund a grant <$50k, grant seekers can post a proposal on the forum to request funding from the Treasury.

Step 3: After a reasonable time period has passed to allow for community discussion and 0xEVE scoring (we suggest a minimum of 14 days), along with temperature check signalling from Snapshot, proposals may proceed to a vote (see ZRX Requirements, above).

For awarded grants, funding will be disbursed in accordance with milestones or other metric/accountability criteria, such as KPIs.

Note: We are working on establishing consistent KPIs related to volume and users

Depending on the type of grant and the specific work involved, the 0xEVE team will assist with coordination, report on progress and metrics, and share insights and learnings with the community.

Links

Grant Application (Google Form) https://forms.gle/xkhsE8W7jDHuHCK8A Governance Forum https://gov.0x.org/c/governance/ Snapshot https://snapshot.org/#/0xgov.eth Codebase https://github.com/0xProject Building on 0x https://0x.org/docs/core-concepts

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

1. 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

2. 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

3. 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

4. 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

5. 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

6. 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

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

Joao Campos

Teton Finance

bitquery

trader.xyz

PayRue

market.xyz

sudoswap

Thales

Note: Effective 15 May 2022, v1 is superseded by v2

Application Questions

• For grants < $50K, use the Google Form

• For grants > $50K, post in the Governance Forum and in Snapshot

(*) indicates required

What category best describes your grant request? *

• 0x orderbook

• 0x protocol feature development

• Polygon deployment

• Non-DeFi business models and use cases

• Research, simulation, and analytics related to tokenomics design

• Branding strategy

• Community engagement

• Developer engagement and support

• Other:

Grant amount requested (grants will be awarded in $ZRX and/or $MATIC tokens) *

Point of contact information (email, twitter, discord, telegram, etc.) *

Team background (or applicant if there is no team) *

Project background (if existing project)

Description of work to be funded (and how funds will be used) *

Budget breakdown (prefer some mapping to timeline, milestones, or desired outcomes) *

Benefit to 0x ecosystem (prefer quantifiable) *

Risk/Reward factors (not required but will help us assess and score)

Some suggested topics are listed below but may not apply to all types of projects or situations; please use your own judgment regarding which ones may be relevant

• What do you consider to be the critical success factors and do you have a system in place for tracking metrics against them?

• Do you have an existing product? Can you share any adoption metrics to date, such as volume, DAU/MAUs, # of trades, etc?

• How much volume do you expect to drive to 0x protocol per month? Similarly, how many users do you expect to bring to 0x protocol?

• Does your project have a token or plan on having a token? Please share any additional relevant information such as token distribution, token mechanics, and the size of your treasury.

• Does your project have any other sources of funding?

• Are you open to a token swap or other arrangement to share risk and upside exposure? If so, have you done token swaps with other projects/protocols and what are the terms?

• Are there any known dependencies outside of your control that may affect this effort?

• Can you quantify the level of support you may need from the 0x team?

Additional info (anything else you think is important for us to consider)

Application feedback (help us improve!)