Round 2: Potential Grant Solution - Town Hall Approach

Hi everyone! Thanks for taking the time to read through and comment on all the previous grant solution proposals. I know this is tedious, so all your hard work is appreciated. We’re definitely making tremendous progress. As always, if you have more grant solution ideas, please publicly post them by making a new forum thread. The community needs to drive this decision, not the guides.

A Little Refresher:
As stated numerous times, we all feel the grant pool is integral to the Factom protocol's success. The only issues are "how” and “when” it is fully implemented and not "if" it gets implemented. As you all know, the main issue is making sure that we do it in a way as legally compliant as possible. There are concerns surrounding FCT being a security (according to the US SEC chairman's current views, all utility tokens are securities), there are centralization concerns (too few voters/signers), and there are digital signature concerns for both the Guides and Authority Set regarding the grants.

The New Proposed Solution:
1. We amend the "Initial Grants" section of the proposal
A. We review the Factom Inc "Initial Grants" that are already in the proposal. Since Paul wrote much of the Governance, in order to be decentralized, these need to be revisited and be confirmed separately from the Governance document (they were approved when we originally voted on the passage of the Governance town Hall). This should address some centralization concerns that have been raised.

B. We add in a "legal review" Initial Grant. The legal review grant would allow for a law firm (or firms) to analyze the governance document from a risk standpoint (e.g., Guides making digital signatures, centralization concerns, etc.). The law firm(s) would also provide guidance regarding how to properly setup the grant pool as well as if we should set-up a foundation to offer proper legal protection.

C. “Onchain voting tool development” grant: We need this tool for all future votes.

D. The community can propose any other ideas they deem essential "Initial Grant" worthy

2. We will work towards a consensus on Initial Grants that will should be voted on

3. We will hold "Town Hall #2 - Initial Grant Amendments"
A. Each Initial grant will be voted on by the entire community

B. 2/3rds majority is needed for approval

4. Approved Initial Grants will be amended into the "Initial Grants" Section of the Governance

5. Factom Inc will hardcode the approved grants into the protocol

6. The node operators will update their code, which will include the new Initial Grants

This ensures that proper legal review of the Governance document and the grant pool is executed. Simultaneously, it also ensures essential protocol projects are not being held up.

We have quotes from a few law firms and are awaiting one more. The timeline given for legal review is 4-6 weeks. Once legal review is completed, the Governance document can be amended to support the legal Guidance should the proper amendment procedures be executed. Therefore, we hope that this potential grant solution only has to act as a stopgap for two months. After that, we should be ready to rock-and-roll with a fully functioning grant pool and proper legal in place!

As always, please contribute your thoughts. It’s up to the community to drive this one.

Thanks for the update and glad to hear some concrete progress! When will potentially the town hall be held? (In 1 week, 2, more?) To have an idea of how long people have to propose other initial grants. I assume the 3 initial grants already proposed will also be more detailed by then (including a "quote")?
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MattO - "The law firm(s) would also provide guidance regarding how to properly setup the grant pool..."

Is there thought to provide a community-preferred grant fund structure (such as a US Public Charity 501(c)(3) entity) to allow the law firms to analysis its suitability as well as alternatives, or is the intent to provide a blank slate and leave it to the law reviews to provide their "grant pool" structure recommendations? My sense is that the later might produce ambiguous recommendations requiring further legal consolation, whereas the former might produce a clearer recommendation. Just a thought.

Xavier Chen

Thanks Matt for all of your work. I'm in full support of this solution. However, I want to echo @Luap's questions. Can you clarify how long review of Factom Inc's initial grants will take? And how quickly can we hold the town hall #2?
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@Luap and @xavierwjc. It really depends on how fast we can come to a consensus on this proposal. If everyone is behind it, then we can hopefully begin discussing Initial grants by Thursday (grants will be in much more detail then @Luap). Maybe have the ones we will vote on decided 4-5 days after that, then have the town hall shortly after. In a perfect world, I would say 10-14 days start-to-finish. Please rally the community and have them comment on this proposal. The sooner they do, the sooner we can get moving!

@Emulvera A lot of research has already been done regarding structures. @SL has put together some great stuff and I know LegalBadger's firm has actually setup a foundation for a large blockchain project project also. There are a few other balls in the air regarding law firms with experience in this area also. We are in really good shape. I think we will be able to move rather quickly on that front.
Personally, I have two points to make:

1) I feel the grant pool is a very complex issue that anyone who is casually involved in cannot hope to follow. I would propose that an official Working Group is set up who can handle the grant pool issue and report back to the community at regular intervals. Discord, forums, voice chats, and PMs are fine for discussion by those who are "in the know", but a working group filled with interested and competent individuals who MUST report back in a clear and understandable way would be much easier for the wider community to follow.

With the technical and legal discussion taken into the WG, the rest of the community would be freed up to concentrate on my second point:

2) I think that anyone coming to the community (even those who are long-standing members) and saying "I need funding" without a concrete grant proposal should be told that:

a) this is not the way things are done, and
b) there are many people (including myself) who are willing to help you put together a grant proposal; contact them if you need advice.

Who would visit their bank and say "I need money for my idea" without any documentation and expect to receive a loan?
Thank you everybody for your time and effort on this endeavor...especially MattO! I see Matt’s proposal as a well thought out and researched angle to approach this situation and all of us at Matter of Fact stand behind the proposal. There are components of BennyJ’s first point that would be good to incorporate imo....but, ultimately we are in favor of progress :)

David Kuiper

Bedrock Solutions
Therefore, we hope that this potential grant solution only has to act as a stopgap for two months. After that, we should be ready to rock-and-roll with a fully functioning grant pool and proper legal in place!
Will the initial grants will be limited to ~2 month timespan, or are we allowing those grants to extend past the release of the fully functioning grant pool?
C. “Onchain voting tool development” grant: We need this tool for all future votes.
Lots of questions to be asked here. Mostly related to who would be allowed to vote. Weights of different voters/parties etc... We obviously all want what's best for the protocol and so we need to think about who would make the best decisions on accepting/rejecting grants. Is it an equal voting effort by the whole community? Or do the Operators have more weight in their vote since they understand the protocol much better and are furthering it themselves.
@liveanddie the voting app will be a general tool that is configurable/flexible. The person using the app to create a vote will be able to make specifications for that particular vote (including who can vote etc). So your questions are not about the voting tool itself but how this is going to be used in the context of Factom governance. But that is a separate discussion about governance/Grants (and we have a thread exactly for that topic actually!)
It's probably worth asking the question if any thought has been put into the recipients of these grants? Would they be hard coded to an address controlled by a single entity, by a committee, by the guides? I realize that's probably what steps 1 and 2 have to figure out but am wondering if there has been any discussion on this yet that I have missed.