DAPPCON 2025: Protocol Guild: 3 years of impact & Institution Building - Trent Van Epps

Transcript

Hi everybody. Uh yeah. Oh, sorry. Waiting for this. Okay. Yes, I am Trenan Apps. I work on Protocol Guild full-time and I also contribute through the EF2 core development, but spend the vast majority of time on Protocol Guild and bootstrapping it. Um, thank you to the organizers for having me here. Um, it's a pleasure to be here. Very well-run event and a ton of interesting talks. So, thank you for having me. Uh as the title says talking about protocol guild uh three plus years of impact and institution building.

So quick show of hands. How many Ethereum core contributors can you name? 1 to 10. It's hard to see but I can see some representations. All right. How about 10 to 30? Fewer hands. Three uh 30 to 100. I see two hands. Okay, there's hundreds of people involved in Ethereum core development. And this isn't to shame you for your lack of knowledge, but just to demonstrate that there are uh many many people who are working behind the scenes to maintain the infrastructure that we all depend on that we're all building on whether it's Ethereum and L2 or an EVM compatible chain. Um it's all happening behind the scenes in the same way that you know there's city services that you don't think about but you depend on

every day. So there's two main things I want or I hope that you'll take away from this this talk. So one, protocol guild is the leading independent institution which is funding Ethereum core protocol development. And two, we need your help as uh members and people who are engaging in the ecosystem to help close that funding gap to support these people doing important work. Um, one frame I really like to return to is the idea of Ethereum as a commons. Um if you're not familiar with this term, this is the idea that there are uh shared systems or systems that uh have collective production of shared resources. Um historically this has been in the natural domain. Um whether it's

pastures or fisheries, forests, or even like shared irrigation systems. And these are things that communities do together to reduce the overhead or the cost of of producing this infrastructure that they all benefit from. And uh we all know well that this doesn't just apply to the natural realm. This can also apply to the digital uh goods software. Um so within this frame I think there are three shared Ethereum resource types. One the network um whether it's the mainet state uh EVM chains history forks layer 2s they're all within this umbrella of a distributed system network type resource. Then of course the asset ether can be taken in different contexts

whether wrapped, rest or bridged. And then finally the software media specifications research uh the EVM itself and all three of these um at their confluence we know to be Ethereum mainet um and they're they're interwoven and they interlock in very interesting ways. Um one of the challenges that uh we don't have a complete value loop for how the software is produced. Uh you know cordvs release uh software which is then run to produce the distributed systems. Uh the distributed system defines how the asset is produced or burnt. However, there's no in protocol funding. We don't have any mechanisms to direct some of this value back to the

people that are actually maintaining the software long term. So what do we have in place of this is a lot of ad hoc um funding experiments. Of course there's the EF but um I I assume most of you know what the EF is and how it operates. So I'm going to look more at the path that led to Protocol Guild as this independent funding institution. So uh these are specifically projects that I was personally involved with. There's many more in the ecosystem but I'm not going to talk about them. So 2019 Makda uh I was first a shout from Amin. There we go. Um I was a first as a grantee and then as a member um my first experience really participating in some of this funding of shared resources that the Ethereum the

broader Ethereum community would benefit from. Uh from 2020 to 2022 I helped with open grants which was a larger ETH stream to people that were working specifically on Ethereum core development on Ethereum 2 or ETH2 as it was called at the time and the merge. In 2021, I I worked on some NFT projects. Uh maybe some of you are familiar with the Beacon book and uh the 1559 NFT series with some other collaborators. And then um over the years I've engaged with Gitcoin, Giveth, the Optimism Retro Funding. And over the years I've I've come across uh some shared challenges.

Not all of them apply to all of those examples I just gave, but um there's some themes that uh where they where they meet their limits or have some constraints. So one um some of them are not long-term oriented, right? They have an immediate distribution and this makes it hard to plan longterm around how much funding is going to be available uh today or in the future and whether you're funding the people who are here today or newcomers who will show up in the future. Two, they're centrally curated and governed. specifically the ones that I worked on, some of the NFT projects, it's just me kind of at the at the helm um deciding who's going to get the funding or trying to make the list myself, but it doesn't engage the broader set of beneficiaries who are actually going to receive this funding.

Three, not really a comprehensive coverage. Some of them uh will focus on specific features EIP559 or ETH2 um but they don't really fund the entire uh Ethereum core development process. Four, they were unable to provide ecosystem exposure largely being funded in ETH. Um ETH is a great asset but it it it operates within the proofofstake system and it doesn't give necessarily uh broader ecosystem exposure. Finally, um the insufficient funding scale. When you have to do ad hoc um experiments or projects every single time, it makes it hard for the community to center on uh specific a specific project as the

shelling point or the destination for where this funding should go. So, now we're getting into the protocol guild origins. Um as it so happens in the Ethereum community and crypto broadly, there's some topics that the community comes back to very frequently. And one of these is the idea that core contributors are undercompensated relative to the broader market. And so you'll see a screenshot from Danny Ryan. Um this discussion came up in October of 2021 and he proposed a simple idea to hopefully tackle this challenge which is you'll see uh he proposes um an organization that accepts um 1.5% of their tokens that then goes to the individuals who are doing this work. So

that's kind of the genesis of the idea. And later that year, a couple months later on New Year's Eve, we published the initial uh rough sketch of what Protocol Guild could be. Um after, you know, some deliberation and talking with core devs about what the structure could be, how it could be allocated, etc. And this is a snapshot of uh the set of mainet contributors today. So this is um there's a lot of detail. Um, you don't necessarily have to pick all the details out of it, but what I want to communicate is that there's a lot of people that are engaged in Ethereum's political economy, and this is good. We want to have a diversity of thought. We want to have many people who have agency within this system to produce and maintain this software. Um, however, uh,

prior to protocol guild, we didn't have a way to fund them collectively. And what this mechanism does is that it shapes itself to better fit how the software and the system is produced in practice, not in theory. Um, so Protocol Guild is kind of a meta organization that maps onto all of these individuals and and teams uh these hundreds of people that are working on Ethereum core development behind the scenes and it gives a a pathway or a vehicle for the broader ecosystem to actually fund this work um at scale and quick overview of of how it actually works. So we specify on you'll see on the left side um we specify an

eligibility framework which defines what work we're interested in funding which projects or specific repos. This produces a member list of active contributors who are uh meet the the requirements that we set as a as a collective body and then every quarter we put that into a split on chain. Um uh and then the funding flows into it and people can withdraw funds as they as they please. And crucially this goes directly to individuals. There's four main characteristics that protocol guild is uh that differentiates it from the broader ecosystem of uh public goods or common goods funding mechanisms that that we try to um anchor ourselves to. So one, it's focused on

the future. We vest all of our funds through a 4-year vest and this ensures that uh people can have asurances about that if if they're here today and they continue contributing in the future, there will be funding available to them. It's an immutable uh vest contract. Um but not just maintenance, also innovation, right? Ethereum has a lot of things left to do to scale, harden, and um improve um L1 and and the relationship between L1 and L2. There's still a ton of work to do. Um two, effective capital allocation. Like I touched on, this goes direct to individuals. Um, today we use time weight which recognizes longevity and tenure and sort of the the local

knowledge that you've you've accumulated over the years, but we're now looking at layering on impact waiting in the near future. Three, uh, we really try to have comprehensive coverage. We don't target a narrow set of teams or a narrow set of projects. We want to cover all of the people that are working on Ethereum core development. Um and finally four, we we as much as we can are interested in having this be a credible institution. So transparent where we can. All of our funding flows are onchain. Anybody can create doing queries to see uh the distribution of tokens, the assets that we have, how much uh runway is left on the on the vesting contract. Um and it's all on

chain like I said. Um and finally, yeah, demonstrated impact. And this is growing over time. We've been working on this since 2022. And as we continue to distribute funds, we build trust with the broader community. And uh hopefully the the impact is uh meaningful to the individuals. So today we have 190 funded members. You can see the growth of the membership since the pilot in 2022. Um and these members are across research, client implementations, and coordination. And these are all really crucial to delivering Ethereum network upgrades and again scaling the L1 hardening it making the guarantees more secure. Um and I really love this next uh stat which is this is 670 years

cumulatively of contributions and I don't think there's any other um mechanism which captures this uh historic knowledge of you know a bug that happened in the past how can we avoid it in the future and this really represents um the accomplishment of Ethereum core devs and just the experience that they have over the years. So, more context into how uh we've we've executed on this. Like I said, we ran a pilot with a one-year vest. That's the small orange triangle on the left side. Just really wanted to test the mechanism, validate our assumptions, and hope we didn't break anything downstream. Um once we were happy with that, we moved into a 4-year vest, and that's the much larger

triangle there. And we just recently crossed 30 million in uh various assets distributed directly to individual core devs which is uh I'm really excited for that milestone. Also last year we launched the 1% pledge which as the name suggests is a commitment by projects that some that have some existential or uh crucial relationship to Ethereum whether it's the the distributed system itself mainet or L2s or the EVM and um it it asks them to make this public commitment and then they follow through on it with with actual uh material funding in the end. Um I won't go too deep into this but the diagram

illustrates kind of the dynamic we're working with. Um core devs have a very specific uh skill set that's in quite high demand in the entire ecosystem. They have a lot of local domain knowledge that's um very useful for a lot of projects that are trying to build things and uh however they don't have the same exposure to upside that the broader ecosystem can avail itself of whether it's um you know equity in a new startup or starting a project on your own or even a larger project that might have uh a new token or like I said equity um this just doesn't exist for Ethereum the token already exists it's Ether um so what we want to do is move uh these contributors to Ethereum L1 R&D just a little bit up the riskreward

curve with the understanding that we're not really ever going to be able to completely match this upside potential, but we should at least uh close this discrepancy somewhat. So, current funders um I'm just going to go through them here and give them a shout out because this is important and it recognizes we should we should celebrate these individuals uh the these projects. Um so the IEN foundation, the Ether 5 Foundation, Layer Zero, Tao, Puffer, Optimism, uh Starknet, Enterdo, Octant, and Zay Sync have all uh they're the top 10 current funders, and they've done incredible work in um actually just providing funding and following through on this vision that we have for uh funding all of Ethereum core

development. Um, and a special shout out to the the projects that have actually taken this 1% pledge again, Ether, FI, Tao, IEN layer, Pondow, and Puffer. And we have public pledge commitments from shape L2, align layer, and many more um in the near future and hopefully in in the far future to come. So, uh there's been other funders that have participated. Um uh if you have sent money to the contract, apologies if you're not included here, but this is inclusive of the pilot and and all the different um work that we've done over the years and projects that have supported us. So, so thank you for that.

In terms of impact, the median member funding over the past 12 months has been about 70K uh to the indivi each median individual. Um, and over the next 12 months, we'll provide about $63,000 to uh the median individual. You can see some of the weights there. Um, and this is just using time waiting. So, the longer you're around, the higher your weight is in the membership. And from an internal survey last month, 70% of members say this funding is very or extremely important to their continued protocol contributions, which is uh a very good signal to anchor to. We want to make sure we're actually having impact where we hope it will be.

However, this funding gap is still here. So, if we assume 150k median salary for all of these people who are working on um Ethereum core development, say around 200 people, though there are more, um this is about $30 million per year to baseline fund Ethereum core development. And this is, you know, uh targeting salary, but this doesn't consider equity or bonuses. So, likely the the real number is much higher. Um, right now Protocol Guild only funds $10 million a year through the mechanism. Um, that's $41 million roughly over the next four years. Um, while this may seem like a really huge gap, it is actually possible. Um, and so we invite the

broader community to engage with this mechanism, understand that they have a an important role to help us close this commons funding loop. Um, right devs write software, the distributed system uses the software. We have an incredibly rich ecosystem of projects that are building on Ethereum, experimenting, innovating, providing new products and services to people all across the world. Um and and we should be able to construct a mechanism and and use it uh in the case of protocol guild um to route some of that value back to the individuals, provide them with consistent support um that they can come to depend on and in doing so uh scale Ethereum to um the global impact that we

we hope it will have in the the near future and for many many years to come. So what's next? Always more funding. We're engaged in as many funding conversations as we can. Um so if you are an application or a layer two and you find something about this pitch compelling, please do reach out to myself or uh he is another team member. Um we're always happy to talk to people and help you understand how the mechanism work. We can go into more details. um please reach out and of course 1% pledges are um where we find the most impact but we're happy to take funding at any scale. We want to continue norm building which is uh hard.

It doesn't the norm doesn't exist until you've built it. So it's this chicken and egg process where you kind of have to grind for many years. Um I'm very excited about the progress we've made, but there's still a lot to do to get people to understand what we're doing, why it's important. Um, as I touched on, we want to layer on impact incentives to recognize people who are going above and beyond. Um, as Ethereum's roadmap changes, um, or, uh, shifts slightly or the focus changes, we should proactively manage the eligibility scope. And then finally, we want to increase member accountability. Um, because if we're asking people to provide funding and then it ends up going to somebody who's been uh, you know, not actually engaged in core development, we are kind of

working against ourselves. So hopefully I was able to communicate um how Protocol Guild is the leading independent institution funding Ethereum core protocol development and also that there's still a lot to do. We need your help. Uh thank you for listening. Give it up for Trent please. Thank you Trent. We have time for one question. All right. If no questions then we'll we'll