Governance Proposal UP1.2: Community-Enabled Analytics

Thank you to the Flipside team for bringing this proposal to the table, and thank you to the community at large for providing helpful feedback. The Flipside team has proven itself to be a valuable community member, delivering high quality tools like the Uniswap V3 Fee Calculator. Furthermore, we appreciate their introduction of an innovative funding method that does not require the sale of UNI tokens.

We at a16z value Flipside’s work initiating this proposal, but voted no.

We wish to share some thoughts about this proposal to provide insight into our thinking about how to approach something similar in the future:

  • While allocations to private entities to provide services are okay, community grant programs should be left to neutral community actors to administer.
  • Oversight committees associated with grants should be composed of community members that are independent of the grantee.
  • Flipside proposed a compelling funding method, albeit one that requires oversight and a thorough specification.

We explore each of the aforementioned points in greater detail below:

While allocations to private entities to provide services are okay, grants programs should be left to neutral community actors to administer.

The proposal had two components: (1) funding earmarked to fund a private service provider’s operations, and (2) funding earmarked for a community bounty program run by that same service provider.

We think (2) is inappropriate when the administrator of those funds has a conflict of interest with potential grantees–the allocation of community grants should be left to neutral actors. The original Uniswap Grants Program is an excellent example of how to create such a program.

Alternatively, we have no problem with (1)–DAO treasury funds going to a private service provider–given that the service provider demonstrates a compelling use for the funds and sufficient community oversight is in place.

Oversight committees associated with grants should be composed of community members that are independent of the grantee.

If a proposal involves an oversight committee to hold a grantee accountable, it’s crucial for members of that oversight committee to be independent of the grantee. Ideal members of that committee would be active community members who don’t stand to benefit from the grant directly.

Flipside proposed a compelling funding method, albeit one that requires oversight and a thorough specification.

Flipside’s proposal of using yield generation strategies to avoid selling allocated UNI is worth exploring.

This approach, however, requires the deployment of a large amount of UNI to generate yield. This should entail oversight in accordance with the guidelines above, as well as a thorough specification of the management of the funds over time.

An alternative funding method that requires less oversight is a stream grant (for example, see an implementation by Compound). While this eliminates the benefit of not selling the governance token, it allows for much more control from the DAO, as the grant can be stopped at any point via a proposal and vote.

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First off we’d like to give @davebalter and Flipside credit for working on this proposal and for attempting to put the UNI treasury to work. We acknowledge that we’ve been passive here, and apologize for showing up late.

As UNI holders and stewards for hundreds of Uniswap dashboards creators we called attention to this proposal because it is risky and biased, and was seemingly passing without much community attention. Our objections to this proposal are largely echoed by a16z’s thoughtful comment above and is summarized below.

UP1.2 is essentially bundle of three things

  1. Funding grants with yield farming
  2. UNI analytics grants
  3. Funding of Flipsides operations

In our opinion there’s no obvious reason to bundle these together.

1. Funding grants with yield

While funding grants with yield is an interesting idea at large, this proposal was essentially for a data analytics provider to manage $25M of the UNI community’s treasury. There are plenty of important questions around risk, operations and checks and balances of capital management in and of itself. What happens if the money is lost? What is the appropriate amount of risk? Managing capital is a profession for a reason and from our perspective a totally separate matter to an analytics grant. If the UNI community wants to allocate funds in this manner, we encourage a separate proposal to deal with that and there’s already a discussion of this in another thread initiated by @wijuwiju.

2. Analytics grants

We are super excited to see UNI funds go towards creation of great analytics dashboards by funding community creators and education. However, this proposal is not credibly provider neutral. Flipside employees and investors were overrepresented on both the allocation committee and the oversight board.

3. Flipside Operational funding

Our take is that grants from the UNI treasury towards analytics should go to community creators, not Dune and not Flipside. Creators are the scarce resource for Uniswap, not the actual data tables.

There are plenty of analytics tools and providers that get funding from VCs, tokens and/or revenue. There’s no obvious reason for UNI holders to subsidise one of these, but if they want to it should be an explicit vendor/DAO arrangement, with clear SLA, the option to cancel etc. This is something different than a community analytics bounty program.

Summing up

All in all we think the proposal is overly complex and is not vendor neutral.

We would love to help funnel UNI grants to dashboard creators with a proposal that ensures that the actual community creators get the money and it is straightforward for UNI holders to understand what they are paying for.

With this as the backbone we are already working on a UNI community analytics proposal. We’d love to discuss how to best enable UNI analytics with everyone that voted last week, data providers and the Uniswap community broadly.

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Thanks for articulating your perspective here @hagaetc. Excited to have Dune engaged and interested in the governance process.

In mischaracterizing Flipside’s model structure and benefits, you’ve failed to identify that we’re recommending the treasury funds the ability to provide all analysts unlimited access to data and a free open API that can be used to develop anywhere.

An effective vendor-neutral program would need to avoid:

Charging any community member for any premium data solutions.

  • The very nature of a subscription model for analytics distinguishes the have and have nots. A fantastically talented individual of lower means will be unable to fully utilize all of the benefits of a fee-based platform. The data should allow all members to have equal access to all capabilities in order to create fairness for bounties.

Activating data that is held hostage in a single platform.

  • The production and delivery of data should occur wherever an analyst is most comfortable. In the event an individual has expertise with Tableau or Rstudio or Dash (Plotly) … or their own custom builds, they should be free to design within those platforms. If not, bias is given to those who have developed specialized expertise on a single platform.

We remain big fans of Dune and certainly of premium-upsell models; while different from Flipside, it’s no less valuable for the ecosystem (Dr. Ethereum, who utilizes both platforms, breaks down the distinctions in the models quite well.)

That said, in this specific case, we’d have to reflect on how charging creators and restricting data decentralization is vendor-neutral - or ensures the creator is truly the beneficiary.

What we’ve proposed is quite different: the treasury enables anyone to build anywhere. No restrictions. This allows value creation to move from pure analytics, to the onboarding and retention of as many community members as possible.

Flipside believes there will be multiple models of value creation over time; all of them should have the equal benefit of evaluation and experimentation.

With community feedback in hand, we may be recommending an update to Uniswap Proposal 1.2. In the short term, we’d love to see a Dune proposal for a structure that is vendor-neutral and keeps data free and accessible to creators anywhere.

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Hi folks, grateful you got the ball rolling on grants for analytics.
I’m the founder of Revert (https://revert.finance), an analytics tool for LPs. For a few months after the release of Uniswap v3, Revert was the only tool where Uniswap LPs could see the PNL and APR for any v3 position. Given that context, I would like to respectfully provide some feedback on the previous proposal and the ensuing discussion.

As originally proposed the analytics grant had some problems that for me made it unviable. Fundamentally:

  • An operational budget for Flipside seems like a waste of community treasury which would be better used in funding analytics solutions creators directly
  • There is a claim of a 30% yield target which seems high for a conservative estimate. If the target was arrived at by some methodology it should be described so as to be reproducible. It is not even clear if that yield target is only taking into account fees accrued and ignoring IL
  • A committee has discretionality in deploying grant funds to the projects it selects
  • Finally I would like to say that while, without a doubt, Dune and Flipside are great platforms for DeFi analytics, ideally a lot of the analytics tools will be built outside of those platforms as web3 products. So credible neutrality will start by completely removing the mention of either platform directly from a fair analytics proposal.

A neutral way to think about analytics grants is for the community to spec out the analytics solutions it is looking to fund, and then builders can build the tools that meet the specs, grants can be assigned retroactively and independently of how or where they get built. Would be great to be able to start thinking about what we want to fund in those terms and work together towards that.

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