Hi! I’m a reviewer for the Compound Grants Program (CGP). I thought it might be constructive to share some of our relevant wins and pain points at CGP to inform Morpho’s framework. Compound’s specific priorities and opportunities naturally differ from Morpho’s, but there are enough commonalities to make a comparison relevant.
A quick recap of CGP’s origins: after an ad hoc community-led trial grants program in 2021 with good outcomes but operational challenges, CGP relaunched in 2022 under a delegated domain allocation (DDA) model powered by Questbook (https://questbook.app). DDA is similar to an appointed/elected grants council but reduces overhead and friction by empowering the allocators to use their best judgment within their domains to decide whether a proposal requires multiple reviews or can be assessed adequately just by that domain’s allocator. CGP was last renewed in September 2024 for one year.
Questbook has been such an effective platform for us that I’ve started collaborating with them on growth opportunities, but my focus with this post is on wins and misses at CGP that hopefully help inform what kind of grants framework will best serve Morpho.
Comparing the MORPHO allocated to grants against other uses like LP incentives makes sense; in practice, we’ve found this difficult to do for Compound on a proposal-by-proposal basis. I would argue that this assessment is better made on a grants program as a whole and conducted at the stage where the program is authorized by governance (e.g. setting the amount of MORPHO to allocate to the program for and for what grant cycle duration).
My experiences lead me to agree strongly with @OneTrueKirk 's first two top-line recommendations:
We do this in CGP with dedicated program details and RFP documents for each domain.
We do this in CGP by establishing milestone-based funding (built into Questbook) with required KPIs attached to milestones articulated in the proposal.
Regarding evaluation of grants at infrequent intervals: this is essential if grants are all expected to be reviewed and approved by governance. Infrequent, cyclic (e.g. annual) grant review is quite common outside of web3, albeit for different reasons. However, the web3 landscape moves quickly, and we concluded for CGP that infrequent review would result in missed opportunities and a smaller, less nimble pool of builder-applicants. This is one of the major benefits of CGP’s Delegated Domain Allocation model that reduces overhead for delegates and number of onchain votes by dedicating resources to a small team of domain allocators who can take on this effort on behalf of the DAO with maximal transparency.
I’d like to signal-boost a few other comments from this thread:
From PGov: (I’ve reached my new-user quote limit)
“We think it could be beneficial to split grants into two categories like OP, builders and growth.”
Agreed with PGov here; we have four domains in CGP that are basically for different sub-categories of the OP builders’ track. Growth in Compound is managed by a different service provider.
From Hubert:
“The best system I have experienced so far was the Binance one, which I believe we could replicate in a decentralised manner by also taking inspiration from the Polygon one.”
The description following Hubert 's quote here more or less describes the functionality provided by Questbook: it’s a web3-native grant management platform for proposal intake, community feedback, review management, KYC/KYB, contracts, and milestone payouts including multisig transaction construction.
From WinVerse DAOplamats:
“On conditional funding, avoiding upfront disbursal sounds logical. One suggestion here would be streaming grants via Hedgey”
Streaming makes a lot of sense for certain grant types, especially ongoing infra/maintenance of established projects and reimbursements for DAO-related expenses. We have a dedicated domain for these types of grants at CGP. We have not implemented a streaming solution for these, but that hasn’t yet presented an issue for the folks seeking mini-grants in this area. Compound itself, however, does have streaming payments infrastructure in place for service provider agreements that can be invoked by governance.