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#212 Encointer Lease2 Treasury Proposal 2/2
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This is the second of two planned treasury proposals for the current lease of the Encointer common-good parachain. The first share for Q1 and Q2 2023 had been approved by Kusama OpenGov in Dec 2022.
Since the previous proposal, significant changes have occurred around Kusama's Treasury. The implementation of OpenGov resulted in unsustainable spending levels, leading to a restrictive voter backlash aimed at safeguarding the remaining funds in the KSM Treasury. Considering the remaining funds available, Encointer recognizes the need to adapt its funding strategy. Instead of solely proposing to the KSM Treasury, we will now extend our proposals to the DOT Treasury as well, supported by the assertion that Encointer benefits not only Kusama but the entire Dotsama ecosystem. As DOT treasury proposals experience congestion and OpenGov is soon to be implemented on Polkadot, it is imperative to secure uninterrupted funding for our team and prevent any disruptive downramp-upramp scenarios. Therefore, we propose the following measures:
- This proposal to the KSM treasury shall cover our expenses for July and Aug 2023
- As soon as OpenGov lands on Polkadot, we shall submit a proposal to the DOT treasury to cover our expenses from Sept onwards
The amount of the proposed spend (1.) is CHF 213’000 ≃ USD 234’000
A growing part of KSM voters is in favor of retroactive funding by the treasury. Encointer claims that enforcing retroactive funding for common goods has significant downsides: Asking teams to front the costs themselves in cases where there is no return on investment will keep those teams small and impacts low. Besides Encointer’s established track record, we’d like to emphasize that the founder of Encointer, Alain Brenzikofer, has worked for Encointer without pay from the beginning, which amounts to well above a person-year by now. So, if you insist on retroactive funding, please consider approving this proposal on the grounds of Alain’s pre-investment.
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ESQz...LwX6
Hello, we think the Encointer project is very promising. It's something totally different, than other parachains offers, so we think it's worthy to support your treasury proposal. Actually we even discussed to form a Czech community in some not-so distant future. It might improve social engagement in our local social bubble and motivate people to be part of a community.
EyXc...t3Xm
Thank you for your supportive comment. Please reach out to us regarding a new community in Czech Republic
Eatp...a332
Irrespective of how treasury funding has changed, it is useful to hear teams be self-critical - with that in mind it would be useful to hear all of things you don't think are working or are going well - there are many (that's to be expected).
Would you say Encointer's plan for adoption is ahead or behind your anticipated schedule?
Do you think that current approaches to onboarding people / communities is ineffective?
With these issues in mind what help you would like to receive or hope to inspire?
A growing part of KSM voters is in favor of retroactive funding by the treasury. Encointer claims that enforcing retroactive funding for common goods has significant downsides: Asking teams to front the costs themselves in cases where there is no return on investment will keep those teams small and impacts low
Retroactive is just one model of funding - it has only recently been normalised. There is no reason other structures could not or should not emerge. Are there any that you would consider better suited to common goods?
Further, how do you the encointer team define "common goods" - both within the context of this ecosystem and more broadly? (politically, economically and culturally)
Besides Encointer’s established track record, we’d like to emphasize that the founder of Encointer, Alain Brenzikofer, has worked for Encointer without pay from the beginning, which amounts to well above a person-year by now. So, if you insist on retroactive funding, please consider approving this proposal on the grounds of Alain’s pre-investment.
Does Alain take a salary from Integritee and how does the relationship between the two networks relate? It would be useful to outline the structure of the networks with some financial disclosures in the public interest, without it context is missing.
EyXc...t3Xm
Would you say Encointer's plan for adoption is ahead or behind your anticipated schedule?
There is no single answer here. Details in our reports. But in all brevity:
- Launching new communities worldwide, especially in the global south: behind schedule, but pipeline looks promising
- Integrating/collaborating with other parachains: behind schedule, but outlook is promising with new use cases and lower hanging fruits that can instantly be used by anyone (i.e. faucet / personhood oracle)
- Growing participant population for Leu Zurich: more or less on track, but there is room for improvement for sure
- Growing acceptance points for Leu Zurich: ahead of schedule, which is very rewarding because that may be the hardest part of all for every community.
Do you think that current approaches to onboarding people / communities is ineffective?
We believe that we onboarded more active users doing meaningful interactions with our platform and using it in their everyday lives than most other parachains so far. Many of these users had no prior exposure to crypto. Those users, however, are concentrated around Zurich, Switzerland where the Leu community is located. Our success rate in onboarding new communities globally cannot yet satifsfy. We certainly need new strategies to lower the threshold without compromising on quality. We may need to try entirely new ways for global user engagement..
With these issues in mind what help you would like to receive or hope to inspire?
We'd like to encourage people to try it out themselves, wherever they live. For this, we could use help with exposure: Share the word about what we do and why. And we're again reaching out to NGO's to help with field work in the global south.
Further, how do you the encointer team define "common goods" - both within the context of this ecosystem and more broadly? (politically, economically and culturally)
This is a very interesting question indeed, but it merits its own thread, maybe in the forum?
Does Alain take a salary from Integritee and how does the relationship between the two networks relate? It would be useful to outline the structure of the networks with some financial disclosures in the public interest, without it context is missing.
Alain does take a salary from Integritee, which he co-founded and where he acts as CTO. None of that salary covers any of Alain's part-time work for Encointer. The two networks (Integritee and Encointer) have an overlap in personnel, also with @clangenb and @mosonyi but their budgets are strictly separated. To understand the history of the two projects: Alain designed Encointer in 2018 and included a solution for privacy and scalability. That solution was of more general interest than just Encointer's and became independentl, first as SubstraTEE (by Supercomputing Systems), then Integritee. Luckily, the mentioned devs stayed loyal to both projects and synnergies (especially regarding know-how) can be leveraged.
What financial disclosures would you like to see? Our proposal has all the numbers already about Encointers income, expenses and liquidity. Do you have specific questions about financials?
Eatp...a332
thanks for response.
Re the common good question, i'll start a thread per your comment. do you mean here or in polkadot forum?
The phrase common good is used in many different contexts and framings (much like other buzzwords like decentralisation) so it would be useful to outline this topic in more depth and create some context dependent definitions.
What financial disclosures would you like to see? Our proposal has all the numbers already about Encointers income, expenses and liquidity. Do you have specific questions about financials?
In general, if a team (or members of the team) are seeking public funding, you would expect some disclosures or clarifications around potential conflicts of interest - real or perceived. I noted Alain's role in Supercomputing - is this a separate company, or is this the legal entity / group behind both Integritee and Encointer?
Making this information clear at the outset would help people understand the relationships - of course not everything needs declaring, but often this information is useful or ensures there is no miscommunication.
There is very little information or experience in general in the community around business operations - and indeed in salary expectations / fee structures. Given the relatively small amount of businesses providing network services to the treasuries / ecosystem, the more these groups share their internal working structures / collaborate on their processes (across geographic boundaries / regulatory scopes) the more capable the wider collective will be.
EyXc...t3Xm
Re the common good question, i'll start a thread per your comment. do you mean here or in polkadot forum?
Your choice, we'll chime in
In general, if a team (or members of the team) are seeking public funding, you would expect some disclosures or clarifications around potential conflicts of interest - real or perceived. I noted Alain's role in Supercomputing - is this a separate company, or is this the legal entity / group behind both Integritee and Encointer?
Agreed. To clarify: Alain is no longer with Supercomputing Systems AG (since March). Integritee AG is the only entity paying him a salary. Encointer Association does not reimburse Alain for his work. Neither Encointer nor Integritee are related or in any way controlled by Supercomputing Systems AG
Integritee AG is a limited company in Switzerland and is unrelated to this proposal (Due to a shortage in specialized developers, Encointer is currently contracting one of Integritee's developers to work on the personhood oracle, as stated in the proposal transparently). In this setup, it does not seem appropriate to ask Integritee for any financial disclosures.
As Alain claims that he doesn't take any financial benefit from Encointer directly or indirectly, this can only be a statement which you, the reader/voter, ultimately chooses to believe and trust in Alain's good intentions - or you chose not to, then you can just judge the proposal itself and Encointer's track record.
Eatp...a332
E5qF...tqrg
Hello! We invite a member of the team to join AAG this Monday at 3:30pm UTC to help us understand the status and progress of this initiative!
Please reach out on Matrix @ jay-chrawnna:matrix.org
Thanks! 🙏
EyXc...t3Xm
Alain will be on the upcoming AAG call to address this proposal and answer questions
EyXc...t3Xm
(Edited)
We did have a few interesting conversations since publishing our proposal, many about Encointer's growth potential and speed. We'd like to share a fresh idea how Encointer could grow quickly, with a lower-security sybil-resilience based on social graph.
This could quickly become relevant for many Polkadotters as we could use conferences and social meetups and even virtual video calls all over the world to spread the trust graph
This new idea should be understood as a potential additional "low security, fast-growth" product of the Encointer platform, without compromising the "high security, slow growth" product we already have, but complementing it. Before we dive too deep here, we'd be curious to hear feedback.
HqRc...fVZn
(Edited)
Dear team,
Unfortunately, I'll have to vote against this proposal on Kusama. My reasons are as follows:
- It is a high ask for two months of operation
- It comes at a time when treasury expenditure is not-sustainable
- I have not seen much value from previous disbursements (20,000 KSM Q4 2022)
My assessment was made looking at the above points collectively. I wish you all the best with the referendum as my vote is comparatively small.
Regards,
EyXc...t3Xm
@paradox Thank you for giving us the chance to reply to your argumentation.
It is a high ask for two months of operation
Well, have you thought about how much money goes into Statemint, BridgeHub, Collectives? We claim that we aspire to solve an equally important problem if not more important. But we have a significantly lower budget. So, we think we really don't ask for too much. The question is if you see value in what we aim to deliver
It comes at a time when treasury expenditure is not-sustainable
It doesn't come out of nowhere. We built a team and we pay salaries. We can't just postpone salaries and hope for better times. Of course, we can ramp down - and that's what we'll have to do if we cannot secure continuous funding. And this may jeopardize what we have built so far. I think Keynes is still not out of fashion when he stated that public funding should increase in times of depression. That's what the treasury already does in a way. And we believe it is what it should be doing. The treasury can recover by design
I have not seen much value from previous disbursements
Big ambitions usually don't show quick results. Still: Show me any other parachain that has made a higher impact on people's everyday lives: 150-300 people using our system at least once per week to prove their personhood and collect community income or buy local goods in Zurich using that income. This may seem little on a global scale. But our protocol has a local focus and you should measure local penetration. And consider that for some of our users, Encointer makes an impact on their quality of life. Having 44 Leu (!=CHF) more to spend every 10 days makes a difference to some (this value comes from LEU's acceptance point's commitments, not from Encointer's funds). Moreover, most of our users didn't know about Polkadot before.
GqC3...m8Jj
@paradox I would encourage you to reconsider. Having worked closely with the team and seeing their developments over the past few months, they have certainly used their funds in a productive manner. They have shipped many new features for their mobile app and are extremely helpful and supportive to implementers.
It's really hard finding a team like this willing to maintain and evolve such a complicated technology. Nothing else on Kusama can attest personhood like Encointer can.
If you feel capable of continuing to develop Encointer, please go ahead and do it yourself for free. I'll be sure to regularly request measly tips on your behalf buddy.
HqRc...fVZn
In light of your post I'll give it further consideration.
HERT...afdU
(Edited)
We're looking forward to seeing Encointer's new proof method that will allow conference, hackathon, etc participants to testify for each others existence. Our hope is that the easier on-boarding will increase turn out in the app which may spawn more regional POP clusters, like the Green Bay Dollar.
I'm not sure many voters appreciate the time it takes to develop and test features. It might be good to go on AAG and explain how long it takes to develop features so people understand why it's so expensive and slow.
GP7L...po99
There is value in Sybil resistance. The real trick is to figure out how to get Sybil resistance to work in an economic way where all parties participate voluntarily because it is in their self interest to do so. If Encointer have solved that problem then they should have already received enough economic activation energy from Kusama treasury to become self sustaining.
Suggest the local demurage currency/coupon aspect is bad economics that will not become self sustaining.
Other system parachains like Statemint, Bridgehub and Collectives have plausible pathways to self sustainability or least deminimus sustaining cost .
EyXc...t3Xm
So, Encointer should already be self-sustaining, but for Statemint, Bridgehub and Collectives it is ok to just have a plausible pathway there?
GP7L...po99
Statemint, Bidgehub and Collectives have clear value propositions that make sense to me. I do use, or would use, these services/features. Sybil resistance also makes sense to me if we can get it to work well, but Encointers proposed solution does not appear to do that. If it worked well from an economic (human action) perspective, it would self propagate. If you had created a service that people wanted to use voluntarily then those people would pay to use it. For example, once people understood how Uber worked, Uber was able to stop offering free rides because Uber makes economic (human action) sense. Uber found a solution to better utilize available resources in a way that voluntary participants benefited. That is what good economics look like.
Ideas sometimes need money to get started. Encointer has received money to get started and appears to still have a significant portion of those funds. It is time for the market participants to decide if the Encointer Sybil solution makes economic sense to them or not, which will be evidenced by their voluntary participation.
Kusama treasury should be used to support unique ideas, and we have done that with Encointer. Kusama treasury is not a welfare program to keep funding ideas that don't work though. If your business plan is to rely on the treasury to support you indefinitely, unless you are supplying critical infrastructure, you need a better business plan.
EyXc...t3Xm
You argue as if Encointer could and should be a profitable business and just needs kickstarting. For us, digital personhood is a fundamental human right which every person should be able to enjoy even if they can't pay for it. In other terms, it should be non-excludable and non-rivalrous. That makes it at least a common good for Polkadot - if not even a public good. Our more elaborate writeup on our reasoning on inclusivity can be found on the Polkadot blog
E5qF...tqrg
Brenzi joined AAG on June 5, 2023. Watch the clip 👇 (10:26) https://twitter.com/TheKusamarian/status/1666104336433258499
Great proposal
HBtJ...1hJs
Hey Encointer team,
Thank you for the proposal.
Here's the Referendum audit for this treasury proposal.
Notes
- This audit was not influenced by previous audits.
- This audit reflects only the quality of information presented in the proposal and not the Quality of the project/idea itself.
The following proposal Audit is created as a part of the extension for Proposal#67. More information about the Treasury proposal template and the Audit process can be found on the link above. All templates are free for everyone to use. For any questions or feedback regarding the Audit templates use the discussion link from above.
EyXc...t3Xm
(Edited)
As just presented on today's AAG, we'd like to answer two questions that got a lot of attention recently:
- How can Encointer grow to a global scale quickly?
- Why does the DOT/KSM go up thanks to Encointer?
Two slides shared on today's AAG call
tl;dw
Encointer will announce a new product which will enable a proof-of-attendance for any kind of Event worldwide. Similar to POAP.xyz, but better. stay tuned for details. This can make Encointer grow to thousands of users within months.
Encointer makes DOT/KSM go up because it:
- fosters community engagement: Encointer gives people one more incentive to attend meetups, conferences and other events (attendees receive POA and possibly proof-of-personhood)
- sybil-free social media activity is an attractive signal to investors: Today, investors often measure community by the number of members in the telegram channel and activity on twitter. These indicators are too easy to fake. Encointer’s personhood-oracle enables sybil-free telegram channels, twitter, mastodon, discord…
- Onboarding the long tail of the wealth distribution opens up a multi-billion-market. Encointer enables onboarding of people who are new to crypto and may even be unbanked. The Encointer Faucet can bring these people in first contact with DOT and all other Dotsama tokens.
Hbux...3wPR
The team's ask for money is unsustainable and not useful. I dont know how we will grow as an ecosystem if we keep funding such things. I can go on to highlight so many things but mostly everything has been discussed in the comments already. Sad to see it getting passed even with OpenGov. Teams that work their really hard struggle to raise funds here(even though they bring significant value). I really dont see value being created. Spending more than $1m on this, what is the ROI?
CzJS...4z4y
EyXc...t3Xm
(Edited)
We want to thank the Kusama community for their approval and support of our project. We take the controversy in this thread seriously and we will come up with answers, especially about the growth imperative.
Please find the second part of this proposal on Polkadot Treasury Discussions
HUj6...GLD6
Hello,
We are in the process of validating a true need for a service to assist teams with crafting and completing successful treasury proposals, so they can focus on building. We would love to hear about your experience with this proposal. If you are willing to take a few minutes, please fill out this form about your experience with the OpenGov treasury proposal process: https://forms.gle/MwDij4adXEQd7Um79
Feel free to leave out any details that your team is not comfortable with sharing, but the more info you can provide, the better we will be able to assess the potential need for our services.
For more info, follow us on Twitter/X: https://twitter.com/OpenGovAssist
EyXc...t3Xm
We are proud to announce yet another delivery milestone:
please watch our personhood oracle demo on AAG 59:
We can issue privacy-preserving personhood badges on nostr now (PoC)!
EyXc...t3Xm
(Edited)
We're happy to share the first public demo of our faucet deliverable on AAG #54
https://twitter.com/TheKusamarian/status/1689838297357434881
The corresponding slides:
https://docs.google.com/presentation/d/1nNQ_6sYo1Yv7kZEnSQd1d3hrC0jrUsFioknzLQXpCa4/edit?usp=sharing
Why is this cool?
* faucets add utility to being an active member of an Encointer community and therefore help Encointer grow
* faucets are an additional onramp for KSM and (in future version) all tokens in the Dotsama ecosystem
We suggest to direct discussion about this faucet to the polkadot forum:
https://forum.polkadot.network/t/a-sybil-resistant-faucet-for-all-tokens-in-the-dotsama-eco/2755
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#509
Jay Chrawnna
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KSM RFP #1 - Shielded Kusama Hub Transfers - $50k Total Prize!
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Treasurer
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#509 KSM RFP #1 - Shielded Kusama Hub Transfers - $50k Total Prize!
Jay Chrawnna
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This RFP was adapted over several weeks on AAG to turn a treasury proposal in discussion to an RFP with refined scope and oversight.
To apply for the prize pls fill out this form.
Prize Pool: $43,000
Finder’s Fee: $2,000 **
Supervisors: $5,000
Supervisors (Bounty Curators)
- Flipchan
- Byte (Erin)
- James Slusser
Excess or unused funds will be returned to the treasury by Bounty Curators.
Timeline
Monday, March 17 - AAG Discussion & this forum post! ✅
Monday, March 24 - Single-ref Bounty + Curators ✅
4 Weeks after Bounty Funding - Submission Deadline Thursday
July 31 - Project Completion (Pending Kusama Hub Launch)
Project Scope
Smart Contract Development
- A Solidity-based smart contract deployed on Kusama Hub
- ZK enabled for private deposits & withdrawals
- Compatibility with all Kusama Hub assets
User Interface
- Browser-based, mobile-ready UI hosted on IPFS
- Support for: Deposits, Withdrawals, Transfers, XCM Transfers
- Compatible with popular ecosystem wallets (Nova Wallet, Talisman, Subwallet)
Anti-correlation Attack Mitigations:
- Fixed deposit amounts (e.g. 1, 10, 100, 1000 units)
- Batch payouts for withdrawals to multiple users
Interoperability - Ability to receive assets via XCM from any Kusama-connected parachain and transfer them to Kusama Hub for use in shielded pool.
Open-Source Delivery
- All code (smart contracts and UI) published under the MIT license
- Publicly accessible repositories Project updates shared transparently via Polkassembly, Subsquare, or Polkadot Forum from Team with Milestone deliveries
- Developer & User documentation
Milestones
Milestone 1, Initial Pools & Basic UI:
$16,200 USD
1 month
- Tests - Smart contract test
- Smart contract - ZK shielded smart contract with KSM and multi asset support on Westend or Paseo
- Basic UI - A basic UI for interacting with the smart contract
Milestone 2, UI + XCM:
$9,900
1 month
- Tests - tests for all features
- User interface design - UI design
- XCM transfers - XCM transfer assets in UI
- Fixed amount transfer only - Allow fixed amount transfers in the UI
Milestone 3, Mainnet Deployment:
$16,900
1 - 1.5 months
- Contract Migration to Kusama Assethub - Migrate contract from Testnet to Kusama Hub
- Public documentation - Documentation for using Kusama shield and developer integration documentation
- Test - tests for contract
- V1 UI - User tested & something we can be proud of
** re: Finder’s Fee: this payment is set aside to incentivize a broad search for the right implementor. Finder’s Fees are paid out at time of team engagement. Teams that submit themselves can collect their own Finder’s Fee at completion of project.
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