Dot Leap 2024-4: Project Conviction

Can we avoid a race to the bottom by paying out "desirability incentives" to projects?

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Project Conviction

Recently, our friendly neighborhood whale Giotto presented another idea: optimistic project funding.

The gist of it is very similar to creator staking on Polkaverse, dapp staking on Astar (see our last dogfooding video for how that works), or Optimism Retroactive Public Goods Funding.

  • projects would apply to be whitelisted, where DOT holders vote them in

  • DOT holders vote for their favorite projects

  • projects get the proportional share of an earmarked amount of DOT inflation distributed to them, based on the votes they have, per day or some unit of time

  • DOT holders can also vote to NOT FUND projects, to discourage or eliminate projects they feel are grifty, malicious, or otherwise undesirable

  • DOT holders can vote with conviction, and the locks overlap with governance votes. This means Bob voting with 5x conviction for Alice's Wallet, but 6x on Referendum 666 will carry a 6x lock, not an 11x lock.

  • DOT holders can also vote to remove a project from the whitelist

First and foremost, I simply must suggest a different name. Rather than once again trying to catch up to Ethereum-land even in naming things, I propose renaming the effort to Project Conviction and will refer to it as such going forward.

On its surface, Project Conviction is a pretty cool mechanism, especially as the era of parachains draws to a close and projects will need a different kind of funding. The "Not Fund" vote also seems useful to discourage straight up grifts.

What ChatGPT thinks a "race to the bottom" looks like

There are, however, two possible problems I see occurring but not directly addressed in the proposal:

  1. Submission process

  2. Race to the bottom

The submission process for the whitelist needs to be thought up really well. It cannot be a simple majority acceptance, because a whale could easily vote a million of his projects in, and then vote for them to get the money with more DOT than anyone else put together, and all we've done is redirected the inflation into a private wallet. The process cannot be democratic, because people are largely uninterested in voting, and cannot be plutocratic for the reason above. It also cannot be oligarchic, like with the Technical Fellowship, because it turns the TF into the gatekeeper of yet another aspect of Polkadot. I do not have a solution other than decaying categorial meritocracy, but this is a can of worms not many are willing to open. At the very least, there need to be deposit lockups, deposit burns, curved voting like it was in Gov1 based on turnout, biased to fail by default and approaching simple majority as turnout approaches 100%, and other failsafes.

The other problem is the race to the bottom. Like in Astar dapp staking (for which I am still not clear how it avoids this problem - please msg me or comment here to clarify if you know) - projects will likely promise kickbacks to those who vote for them. As they all compete with each other for greater relative claim to the inflation bucket, they will inevitably offer bribes to get votes. The voters will vote for money, not utility or project desirability, and in almost no time at all we should be seeing projects keeping but 1% of their Project Conviction income, and giving out 99% to the stakers. Some will undoubtedly further spice up the deal with native tokens, NFT drops, memecoins, and more. The purpose of the program will self-defeat, by preventing the projects from actually making any meaningful amounts of money.

Granted, I may be taking a too cynical view and maybe the people will vote with love and care rather than wallets, but if there's no failsafe built-in, we have to assume failure. Optimists are usually successful, but pessimists are usually right. I wanna be an optimist here, but...

What do you think about this? How can we avoid this? Is this a good idea, or is there another way to incentivize projects to remain involved with the Polkadot ecosystem? Let's discuss!

Polkadot and Kusama Updates

Development

Governance

Dogfood of the Day

  • Today we dogfood HydraDX and go through everything it offers. What mysteries lie in wait?

⛓ Connected Parachains, dApps, and others

🌎 Community & Ecosystem

🔧 Tools and Releases

🌠 NFT Review

  • Testing Frenpet, a web3 game.

  • Polkadot-native NFT projects are invited to apply for ArtsDaoFest.

  • New utilities have been added to the RMRK code examples, making building equippable NFT collections easier than ever.

Read more in the online edition.

🗣 Incentivized Feedback

  • For this edition's incentivized feedback, I would really like to hear from readers about the question posed in the editorial. Please leave an at least 50 word comment about the Project Conviction program on this post on Paragraph. Let's discuss. Leave your DOT address along with the comment to get 5 $LEAP.

That's it for this week - I hope this was as useful for you to read as it was for us to write!

Many thanks to Bill Laboon for his daily digest which helps us not miss some important updates!

DotLeap is put together by Bruno Škvorc.

Got any links for the next edition? Reach out on X, or via email at editor@dotleap.com. or through our ingestion bot on Telegram.

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