ENS DAO Selects Superfluid For Their Developer Grants Streaming
ENS DAO has selected Superfluid among all web3 streaming providers, via a public request for proposal in their forum, to stream on-going grants to 9 developer teams for a total of $5.4M over 1.5 years.
Ethereum Name Service (ENS) allows the long alphanumeric strings of Ethereum addresses to be converted into more easily recognizable words, like the name of a person or a brand — very much like DNS services convert hard to remember IP addresses into website urls.
While ENS has been managed as a DAO since 2022, most of the development funds have gone to a single development entity, ENS Labs. Last Autumn, the ENS stewards decided to experiment with new ways to steer towards a more decentralized development for ENS and ideated a funding program that selected 9 teams to receive development grants from the ENS DAO for a total of $5.4M over 1.5 years. The Stewards specifically designed the program to fund these 9 teams via an open ended stream. Once the grants recipients were selected they held a public Request for Proposals to select the streaming service provider.
What ENS Stewards had to say about Superfluid
When asked about why ENS stewards felt the need to stream grants instead of paying them out as a lump sum, Alex Van de Sande, the ENS steward who initiated the DAO proposal said: “While we had grants programs before, these were tiresome to get and a developer would spend months in meetings before anything was accepted. We wanted to fund ongoing and future work in a way that guarantees the developers some certainty about their incoming funding, and the freedom to innovate but also allowed the DAO to stop the funding at any time if it felt it wasn’t satisfied with the deliverables.”
All web3 streaming providers were invited to participate in the Request for Proposal. Details are publicly available here. After reviewing all requirements, features and track record for both projects the ENS stewards selected Superfluid as their provider of choice for these grants distribution.
Beside the overwhelming community support that voted in favor of the proposal to be executed, we were particularly pleased to see that the lack of upfront capital lockup was a major factor that tilted the decision towards using Superfluid Protocol as we designed the system specifically with the intention to avoid locking funds upfront to enable a more efficient use of capital.
“A challenge that Superfluid specifically addressed is capital lockup. Most other streaming providers we looked into require you to create a specific end date for the stream and then lock up all the funds upfront, and that felt burdensome for the DAO since it would mean to lockup over 5 million dollars in a contract for over one year” said Alex.
Superfluid composability was seen as a key protocol strength
The unique composability of Superfluid streams also played a role in tilting the selection towards Superfluid:
“Superfluid also allows us to forward a stream — Alex continues — meaning that the DAO could stream to a Safe multisig which then splits and forwards the stream on to the 9 developer teams. The DAO, by design, is slow and all decisions require a vote. We had to collect all addresses for the developers and each was required to sign terms of use. This would mean that either we would have to wait for all the developers to be ready to execute it from the DAO or we would need to have all the main delegates vote on multiple executables. The “forwarding” of streams allowed us to make a single executable proposal to fund a multisig wallet and that multisig then automatically redirects the funds to the developer teams as it receives them. Since the funds are streamed, the multisig itself does not need to retain more than a few days worth of funds (as a buffer) and the DAO is still in control of the funding capital. Besides not needing an upfront lockup of funds, allowing open ended streams and having the ability to forward addresses, Superfluid also has Safe integrations and a public dashboard that the public can follow.”
The system is effectively a set-and-forget action for the DAO that only needs to execute a single transaction to start the grants streaming, while leaving simplified granular control of the receiving teams to the ENS stewards. With funds constantly flowing into their wallets, the developer teams can be sure about getting paid for their work and are motivated to deliver quality improvements, as Alex puts it: “Ongoing, open-ended streaming provides developers some certainty about their incoming funds, but also keeps the DAO in full control. It’s like treating developers as a coworker which you can count on and rely on, instead of treating them as a one-off charity case after they delivered quality work.”
We are excited to actively contribute to simplifying and streamlining ENS DAO’s operations, and encourage all DAOs to run similar public procurement requests for proposals when selecting their service providers. We’d also like to recommend other DAOs to streamline their grants payouts with Superfluid streams to reduce the operational overhead and provide better incentives to the recipients.
These are some of the benefits of using Superfluid streams for grants distribution:
- Simple. Just import a csv file with addresses and amounts, the system will take care of the rest.
- Automated. Once you set up the payout streams they’ll keep running indefinitely (for open-ended funding) or automatically stop once the total grant amount is reached.
- Transparent. DAO members and communities love it because of the transparency, anyone can see streams going out or into any wallet, via the Superfluid Dashboard and Console.
- Splitting and Forwarding. Incoming streams can be split and forwarded to any number of wallets, based on your specific needs.
- Token price impact. Paying via Superfluid streams has the lowest volatility impact on token prices because it mitigates sudden bulk sale of tokens on exchanges when funds are unlocked.
If you’d like to learn more about distributing grants with Superfluid please reach out to our team, we’d be happy to help.
“I would highly recommend anyone to use streams for all recurring fund transfers, and would recommend using Superfluid above other streaming providers. It has been a pleasure working with the Superfluid team!” — Alex Van de Sande, ENS steward
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