Tangle Community Treasury “Yearly Review” — Part 3: Success Metrics

TLDR:

After assessing the previous year the Tangle Community Treasury found that 47% of grants were a success, 35% are pending grant completion, and 18% did not result in cost-effective positive growth of the ecosystem. Most importantly with content creation funding, the Treasury committee showed they can conduct lessons learned, iterate, and create a process that is successful and empowers the community. With developer grants the same analysis was applied seeing challenges and seeking solutions. By partnering with the Akkodis team the Treasury is set to scale to the next level. The Treasury committee could have avoided action due to not having a perfect process in place; however, given the crypto industry is so fast moving the committee felt it was better to act and move forward and iterate along the way. With a 47% success rate and pending 35% of grants, the Tangle Community Treasury has shown they beat the odds of industry standards. More importantly, this was the first year of operations in a bear market with a declining treasury (token price decline). The odds were stacked against the Tangle Community Treasury yet it persevered and met the challenges with great success.

SUCCESS METRICS

The difficult position for any new organization is to assess and show success metrics. Primarily because in year one, many funded projects and processes built take time to show their true potential and success. However, this article assesses the 31 grants approved for funding during the first term of the Tangle Community Treasury. This article will show whether a grant has been successful, pending success (due to needing to be completed), or unsuccessful.

At the beginning of the year, the committee focused equally on five categories to fund, which will support the ecosystem in the short term.

• Dev Tooling
• Marketing & Content
• Project & Application Support
• Utility Applications
• Web3 Applications|

An overview of whether grants produced a successful outcome (positive results) are simply pending results due to needing to be completed or were unsuccessful in which there was no ecosystem growth resulting from the grant completion.

Dev Tooling

Our community always brings up how Developer support and tooling is required and should be prioritized. However, the committee found it difficult to judge what will help community developers and what won’t. More difficult to assess is who will and how much will be required to manage deliverables, such as libraries that will need to be updated if not used. Regardless of the challenges, the committee decided to support developer grants despite not having a perfect process. Instead, we decided to take action, learn what works and doesn’t work, and then adapt and revise—the Treasury funded four developer tooling grants.

• TCT-19: Tangle Bay — Infrastructure & Services
• TCT-6: IOTA for Flutter
• TCT-23: Shimmer — Qt/C++ Libraries
• TCT-52: C# SDK
• TCT-20: Open-Source Integration for Unity
• TCT-78: Provide additional RPC endpoints to Shimmer EVM

Regarding development, we found some challenges that were presented to such developers. First, many of these grants were supported and approved ‘prior’ to the IOTA SDK release. Yet, overcoming this challenge, the developers have worked together (collaboratively as grantees, which was a great success in itself) and gained significant support from IF developers. All four of the developer projects are progressing towards their final deliverables.

One metric that can be proven is addressing the requirement for consistent up-time for decentralized nodes. Many industries are building PoCs on the Tangle networks; having a reliable node is essential. Aside from the community having a reliable entry point and wallets like Bloom, they need dedicated and independent infrastructure nodes. The Tangle Bay team has supported the ecosystem with node services for some time. Meanwhile, there is always the chicken and the egg dilemma where a network needs supported infrastructure that has costs before the network scales up and provides the required revenue. This is where the Treasury can help!

The following pages have a detailed, in-depth analysis of highlighted projects defining what factual data supports that the grant was a success, showing positive results, unsuccessful, or simply the results are pending due to the grant needing to be completed.

TCT-19: Tangle Bay — Infrastructure & Services — SUCCESS!

Data provided by Tangle Bay gives us an idea of how much their nodes are used. Over the past 30 days, we can see in the data charts that the nodes processed 79.1 million requests and 220+ gigabytes of bandwidth, and another data graph, which was not shown, recorded 37,000+ unique visitors. On top of those states, the Tangle Bay nodes are the default nodes in the Bloom and Firefly wallets. The data shows that, without a doubt, the Tangle Bay infrastructure is used, and if our network is without it, there would be a void to fill.

TCT-78: Provide additional RPC endpoints to Shimmer EVM — SUCCESS!

While Tangle Bay supports primarily layer-1, some applications were experiencing throttling by the provided RPC endpoints for the Shimmer Network due to high traffic use. Interestingly, the Shimmer EVM network hasn’t even started to get busy and reach its true potential. This became a clear sign that there was an issue to address. Spyce.5 submitted a grant seeking the Treasury to cover the community’s costs of a public and open RPC node. Not only does this grant support the current infrastructure, but it also provides an aspect of redundancy that all networks need. Yet what was even better was that with TCT-79, we saw our first community project co-fund a grant along with the Treasury! The Blockbytes team agreed to pay half this grant in a co-funding partnership! The community Treasury is tiny compared to other crypto treasuries. With that fact, the only way to compete against larger, better-funded ecosystems is to partner and work together! This alone was a success, as was having a dedicated entry RPC node to support network growth.

Developer Support for the Treasury

The committee knew the process wasn’t perfect and looked at the challenges when reviewing, funding, and supporting developer grants. There were key aspects that stood out.

• Most projects seeking funding faced the challenge of keeping their developers funded when they hadn’t yet reached a funding round.
• Sometimes, the community needs developer support or documentation to be updated.
• The committee has a fundamental technical limitation when evaluating a developer grant, milestones, and final deliverables.

An easy solution to the above challenges would be to have a committee full of developers. However, if a developer is really that good, their hourly compensation will be much higher than the Treasury pays.

The committee had the idea of creating a technical consultant database filled with community developers. These devs could be contracted part-time for consultation. However, this became difficult as no community developers responded to requests.

So what is the solution?

The Treasury put up an RFP to seek a technical consulting firm. Even with a database, there are so many different specialties (front-end, back-end, full-stack, solidity, rust, etc.) that filling the required needs becomes difficult. The Treasury could hire a developer for an annual salary to support the committee and community projects; however, there is no way to find that magic dev that can do everything! This led the committee to seek a developer firm and issue an RFP.

After interviewing three firms that had applied, the committee decided to partner with Akkodis. Akkodis is a global technical firm with a developer team dedicated to the IOTA and Shimmer Tangle. Additionally, the Akkodis team supports many projects and the IOTA Foundation within our ecosystem.

By having a firm experienced in Web3 and experienced explicitly in developing the IOTA and Shimmer networks. The Treasury now has a technical support team that can be used on a call-out basis when presented with technical issues. This includes specific problems with the Treasury but also can support community projects when they face technical challenges. The particular services that Akkodis supports the TCT with are shown below.

• Review Developer or Technical Grant Submissions
• Review Developer and Technical Grant Milestones
• Review Developer and Technical Grant Project Deliverables
• Support Community Project Technical Needs or Support
• Provide a Technical Support Team when the TCT Provides Network Infrastructure

Future Governance Collaboration

Some attractive and innovative governance solutions are on the horizon. One promising project is Quadratic Funding & Quadratic Voting. This is the holy grail of Web3 governance. However, overcoming the proof of identity sybil attack is a significant challenge. We can sit back and never seek a solution despite such adversity, or we can use the current tools to innovate and build a solution! After meetings with the Gitcoin Passport team, JD Sutton (Program Lead) is working on quotations of what would be involved in creating a passport and identity solution specific to the Shimmer & IOTA networks. With this Identity (Passport) solution, the Shimmer and IOTA community can participate with public good funding on Gitcoin Grants with Quadratic Funding integrated. The Treasury seeks to bring together the Gitcoin Passport dev team, Impierce Technologies, and Akkodis to find a cost-efficient solution and bring the IOTA & Shimmer community into the future of governance.

A team like Akkodis will help the Tangle Community Treasury should a need arise, such as taking ownership of the layer-zero bridge (ShimmerBridge.org). The unique DAO status of the TCT helped bring the Layer-zero bridge to our network without delays. Yet this brought an issue to the forefront. The Treasury needs developers to support such an integration or overview, and Akkodis can fill these voids.

Marketing & Content

Marketing and content have always been a topic of discussion within our community. Once the Treasury started, there was an immediate influx of grants from content creators, which led to some lessons being learned. The committee was happy to support our content creators; however, judging the cost of such content is difficult. In general, marketing outcomes become very difficult to quantify how much growth this gives to an ecosystem.

One thing was sure: it became time-intensive to go through, analyze, and review content creator grants. Finanzegoblin brought forward a potential solution based on Coordinape. After discussion and an RFP submitted, IOTA Penguin submitted a grant request to test out a 6-month airdrop campaign for content creators in our ecosystem.

The treasury committee believed that an Airdrop program could support the ecosystem in two ways.

• By airdropping tokens, the Treasury can empower and incentivize the community.
• With an airdrop campaign through Coordinape, the community group can govern themselves. This would save reviewer salary costs for the Treasury and return more engagement online compared to funding direct grants.

What was very impressive was the community group, particularly IOTA Penguin and Finanzgoblin, being very active in managing and supporting the group.

What is interesting is the data that was evaluated after the program when compared to directly funded grants. After assessing the engagement rates of both groups and the cost-of-engagement between the Airdrop vs. Funded grants, it is clear that the Airdrop campaign is much more cost-efficient than direct grant funding for content creation. The analyzed data is shown below.

• Airdrop Program: $0.33 cost per engagement
• Grant Funding: $2.46 price per engagement

This indicates that the cost per engagement is 745% higher with directly funded community content creation grants. As well as this does not include the salary costs saved by empowering the community with such activities.

It is excellent when an initiative goes well, like the Content creator program; however, we still need to tackle the challenge of mainstream marketing for the ecosystem. As our content creators are great and support our community, their posts rarely get outside the IOTA & Shimmer bubble. Months went by after posting ‘RFP 1: Professional Marketing Campaign’, with only a few submissions that the committee felt did not meet the standard to be funded. This was mainly because Shimmer EVM would deploy without a bridge or lending platform then; thus, there wasn’t much reason to fund an extensive marketing campaign with nothing really to market.

Along the way, the committee funded some side events with TCT-56 to support the side event at the blockchain week and TCT-59 to support the side event in Singapore at Token 2049. As those events were done well, there was little follow-up marketing content. This is something that community members have seen in our ecosystem. Where there are big marketing releases, such as the United Arab Emirates (UAE) announcement, there isn’t much follow-up as the projects and ecosystem take a while to get fully set up.

TCT-86 Capital Inflow and Grant Treasury 3.0 — Success Pending

A current proposal that is in the process is TCT-86- Capital Inflow and Grant Treasury 3.0, where, aside from building a due diligence process for the Treasury by venture capitalist, the grantee's Mike Klein and his marketing consultant Frank Dolan will put together a side-event for Eth Denver 2024. The specific call to action at this event is to bring VCs and project builders together to show them the benefits of building on the IOTA and Shimmer networks.

What was particularly interesting is that Frank (marketing manager) is using the side event to gather content that can be used for the IOTA & Shimmer brand uplift over the next six to nine months. The focus is more than just a single event; it is on regularly getting the ecosystems in the spotlight and showcasing them to investor capital.

Another excellent benefit of TCT-86 is the Due Diligence process. This grant builds a framework to bring capital inflow to our community projects within the ecosystem. Primarily built in an open and permissionless process. The treasury due diligence 27-page draft is already underway and includes highlights such as:

Utility Applications

Utility applications are critical to our ecosystem. Throughout the year, we have approved and funded five utility projects, three of which have been completed or near completion and have shown success. Two are still to be decided pending completion.

• TCT-12: IOTA & Shimmer Identity Wallet
• TCT-4: Auditone
• TCT-31: IOTA MPC
• TCT-55: Block Monitor
• TCT-69: Fluent Stable Coin

IOTA MPC — SUCCESS!

The focus from day one was proposed by the IOTA Foundation that the Shimmer network would be a top 10 DEFI platform. With that direction, the committee focused on supporting the Shimmer EVM DEFI ecosystem. After the multichain bridge collapsed, two things became apparent. We need a solid bridge trusted in the crypto ecosystem as a primary bridge and another bridge for redundancy. While the Tangle Ecosystem Association shifted to find a new bridge, the Tangle Pay team submitted a grant to build and manage the IOTA MPC bridge (TCT-31).

At the present day (25-Jan-24), even with the layer-zero bridge in place, we can see on GeckoTerminal that sIOTA holds the $2, #4, and #6 ranking of liquidity for the Shimmer EVM Pools with a combined amount of LP Pools 1.377 million dollars which makes up 13.5% of all of the $10.17 million TVL (25-Jan-2024).

More so, the sIOTA/SMR pairs made up $134,220 of the daily volume on 25 January 2024, equating to 39%. These numbers do not even include all the other assets that the IOTA MPC bridges into the Shimmer Network, such as wBTC and wETH.

The MPC bridge successes can be bulleted below.

• The MPC bridge was the only bridge allowing wBTC and wETH into the network before the Shimmer Bridge (Layer-Zero).
• To date, the MPC bridge is the only bridge that connects IOTA to the Shimmer Network.
• The MPC bridge has, and continues to, support liquidity and volume. TVL is undoubtedly an excellent data metric that can easily be manipulated. Liquidity and volume are the absolute critical supportive metrics to a DEFI ecosystem. The IOTA MPC supported and still supports both of these highly.
• The validators are public and have been elected by the community, which supports decentralization and transparency. This is a huge success that supports the original ideologies of crypto.

AUDIT ONE — Succes / Pending

AuditOne proposed a funding grant to launch their token and develop insurance contract LP pools. AuditOne was provided their initial payment and a partial milestone payout, but the remaining balance awaits the project’s deliverable and official launch. AuditOne has become an excellent KYC partner for the Treasury and community as the official project is yet to be assessed as successful. Supporting them by being active in our ecosystem is for sure a success!

Due to the minimal KYC request the Treasury requires, traditional KYC providers offered high contract costs due to minimum requirements when quotations were requested. AuditOne worked with the Treasury by allowing it to ‘pay-per-KYC,’ providing an efficient and low-cost solution. Additionally, the Treasury has used AuditOne to perform a QA/QC verification of the Gnosis Shimmer SAFE contract, ensuring no code changes were committed after the fork. Their extensive experience makes them a trusted TCT and community partner.

BLOCK MONITOR — Negative Results

Block monitor is a wallet monitoring service and one of the few available worldwide, including China. This grant funded the integration of the Shimmer network into the iOS and Android app. This grant is yet to be seen if the community is using it and will be followed up over time to see if it supports expanding the use of the Shimmer ecosystem. Additionally, as the application focuses primarily on layer one, it may be less likely to be used.

FLUENT FINANCE — Success!

One of the grants the committee is more excited about is Fluent Finances USPlus. Kowei connected Bradley Allgood (CEO) with the Tangle Community Treasury. What impressed the Treasury most was Fluent’s already-in-place connections within the Middle East. The grant funded the integration of USPlus within the Shimmer Network. This further supported discussions between Fluent Finance and Shimmer DEXs, setting up the foundation to have real-world assets (RWA) tokenized as liquidity pools. You can listen to Bradley, interviewed by Spec Weekly, where he discusses how, in quarter one of 2024, he will be bringing $50 to $100 million to the Shimmer and IOTA networks!

Fluent Finance is a win for the ecosystem and the IOTA Foundation. The two have created partnerships to support projects in the United Arab Emirates and the Trade Logistics Information Pipeline (TLIP).

Not only is the tokenization of Real World Assets one of the most innovative use cases in the spotlight today, but having a stable deposit on a regulatory-compliant and interoperable chain with core banking systems is undoubtedly the future we want to see. Not only is it regulator-compliant, but USPlus is always held at a 1:1 asset backed ratio. The backing is also not used in risky investments, which have caused the collapse of several stable tokens to date. We look forward to what Fluent Finance can build in the UAE and throughout the globe.

Web3 Applications

One of the most innovative aspects of distributed ledger technologies is moving from Web 2.0 to Web 3.0. This is why we are here as a community! With that, the Tangle Community Treasury supports projects that bring more Web3 integrations with the IOTA and Shimmer networks. Some of these projects that were funded are detailed below.

TCT-21: The Soonaverse — Open Sourcing Initiative — Success / Pending

The goal of supporting the Soon Labs team was to see a project become community-driven, as well as a chance at a global enterprise partnership. During our discussions with the Soon Labs team, they assured us that this grant would not support them in leaving the Soonaverse platform and community high and dry. Instead, they said they would lead and mentor the community to truly transition to the long-term phase that almost all projects are planning, which is to have a fully Decentralized Owned Project. The results are pending if the Build.5 group can finalize the partnership agreements and if the Soon Labs team can ensure a smooth and successful transition of the Soonaverse to the community.

Let’s look at the three points directly.

Soonaverse Community: When this grant was approved in May 2023, the Soonaverse platform was the only active project built on layer 1, accounting for the majority of the network traffic. At that time, there were no other active projects, as all the projects were waiting on EVM. Shimmer EVM was supposed to be launched in September 2022, and it launched thirteen months later. Such delays bankrupted many projects, but the Soon Labs team kept building despite these circumstances. The community experienced not only a brutal bear market but also Shimmer EVM delays, and on top of that, put a lot of strain on our community. The committee considered the risk of the Soon team having to shut down and hand over the platform to the community when they weren’t ready for it at the time. This would have been detrimental to the Soonaverse community and ultimately killed the entire IOTA and Shimmer community sentiment. This grant kept the Soonaverse community afloat until the Shimmer EVM launch and the community as a whole.

Open-Source Software: The Soon team built a feeless layer one NFT platform and DEX when no one else was building on layer one. The Soon team evolved and set its sights on global enterprise adoption. They faced the issue that the vision was not a single (Soonaverse), but instead building multi-verses. The team envisioned building foundational tools in which we may soon see a banking verse, a data integrity verse, a manufacturing verse, etc. To build this vision, the Soon Labs team understood they needed to open-source the front-end Soonaverse code, allowing anyone to spin up and create a verse. We saw this happen as well, and the Soon Labs team started transitioning the Soonaverse project to be an official DAO. This, of course, is what many of the network projects plan to do in time.

Enterprise Adoption: A global enterprise adoption of any crypto technology is greatly needed. Even better, if it were built on the Tangle, this would expand all our ecosystems (Shimmer and IOTA). The committee saw a unique opportunity for where advisors and partnerships were coming together. We certainly didn’t want to see this opportunity fail simply because it didn’t have the chance. Had the Soon Labs team not been funded, we would not have seen Build.5. Let’s look at the board members and advisors of Build.5 and what this could mean for the crypto space as a whole.

Board Members:

• David Sonstebo (IOTA Tangle Founder)
• Holger Kother (IOTA Foundation Executive Direct for Market Adoption)
• Adam Kundrat (Soon Lab Founder and Developer)
• Regine Haschka (Executive Management and Entrepreneur)
• Kimmo Nurmisto (Director of Growth)
• Andrew Worden (Soon Lab Founder)
• Song Choi (Soon Lab Founder)

Advisors:

• Mike Asaia (Cisco)
• Mariana De La Roche Wills (Board of Directors & Co-Chair at INATBA)
• Daniel Auberty (IBM)
• Jan Nicolas Myklebust (Redhat)
• Guide Greber (Accenture)
• Benjamin Bonisch (ETO Gruppe)
• Maha Al-Saadi (Head of Regulatory Affairs at Qatar Financial Center Authority)

It can be seen that there is a powerhouse of industry leaders partnered together focusing on global enterprise adoption. Assessing simply a risk-reward, there was no doubt this was worth taking. We look forward to seeing the last milestone being completed, which is the confirmation of an enterprise partnership for Build.5 and Demia.

LEDGER INTEGRATION FOR UNITY — Pending Results

In 2016, over 30% of the top 1000 mobile games were built using Unity, which was reported to have 45% of the global game engine market. A layer one Shimmer and IOTA integration would benefit the ecosystem considerably. This grant will not only integrate Shimmer and IOTA networks but will focus on allowing Unity devs to build with this integration quickly. Using ready-made Unity GameObjects and Components created from this grant, a game dev can wire up a user interface and interact with the Shimmer network with only a small amount of set-up, seamlessly switching amongst the IOTA networks. This grant highly focuses on straightforward and easy-to-understand documentation.

Edward has completed the first milestone and shown the quality and standard he is developing. His code has been documented with Doxygen, making an extremely detailed documentation process easy for game (non-crypto) developers to use. Examples are shown below.

PEPPY FINANCE — Pending Results

As the DEFI space on the Shimmer Network starts to grow ($14 million at present), it is essential to ensure that when people outside the ecosystem enter our space, they see enough DEFI Applications of a standard DEFI ecosystem. One thing that needs to be added is a decentralized perpetual exchange that Peppy Finance looks to fill.

Peppy Finance seeks to innovate the perpetual exchange by integrating low-latency pull-based oracle solutions so that our platform ensures that the data feed pulled from the oracle is always real-time and incurs zero slippage. This functionality mitigates potential attack vectors like frontrunning and enhances our users’ overall trading experience. Current solutions are mostly push-based and, due to that fact, can be front-run.

Peppy Finance is in the early stages of development, and the treasury committee looks forward to seeing milestones and project deliverables completed. Once Peppy launches the Shimmer DEFI network, it will be just one more step to seeing all the pieces of an ecosystem we see today.

Part 1: Fiscal Analysis
Part 2: Governance Update
Part 3: Success Metrics
Part 4: New Year with an Active Treasury

Keep an eye out for Part 4 which will give a summary of the Treasury in the new term and how being an active treasury will support the community and even more growth of the ecosystem.

Treasury Donation Wallet: 0xDac6c2470fc3058BBf7E3093B03794996558f164
Website: www.TangleTreasury.org