DAOIP-5: Making Web3 Grant Programs More Efficient, Transparent, and Connected

The beginning of a new paradigm for grants programs in web3 with the DAOIP-5 grants metadata standard from DAOstar

Top Level Points

• DAOIP-5 is a metadata schema developed by DAOstar to standardize the web3 grants ecosystem to improve transparency, interoperability, and a whole lot more.

• We have built an MVP data lake and API with our partners at Open Source Observer which has been tested during the Funding the Commons Hackathon and is publicly available with historical data from 5 different grant programs.

• The Stellar Community Fund is the first grants program to be fully compliant with the standard!

• We are working to onboard more grants programs into the standard so that there is a larger set and moving forward all parties can have more transparency around grants. Join our telegram group to stay connected and ask questions.

• Expect to find more documentation and an SDK to come out with the standard soon to help builders integrate with it through an OAuth “Connect with DAOIP-5” button.

• You can find more high level information here and more technical documentation linked here.

• At the Funding the Commons Hackathon in Bangkok, held just before Devcon 2024, DAOstar awarded prizes for innovative apps utilizing the DAOIP-5 grants metadata standard API. Two standout projects, Grantscan and Ecosystem Vision, emerged as winners.

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As the Web3 space has grown in recent years, grant programs run by protocols and projects have themselves exploded in size and popularity. Over a billion dollars in capital have been deployed or committed, grant programs have come and gone, and many organizations are now assessing the progress and impact of their issued funding.

There have been a wide range of approaches, from transparent (e.g. Aave) or closed (e.g. Ethereum Foundation and Solana Foundation) to communally architected (e.g. Stacks Foundation) to being launched by a compensated team (e.g. Mantle), from prospective (e.g. Uniswap Foundation) to retroactive (e.g. Optimism) to research-focused (e.g. Protocol Labs Research Grants) to quadratically funded (e.g. Gitcoin), to RFP-based (i.e. Protocol Labs, Uniswap Foundation, Solana Foundation, etc.). The diversity of thought on how to best run such programs has led to innovative approaches for grants management but has also fragmented capital and led to many other issues.

The web3 grants ecosystem faces several challenges, including a lack of interoperability among grant tooling and programs, limited data availability, and transparency issues. Grant farming practices can undermine the integrity of funding, while measuring impact remains difficult. The constant cycle of grants places a strain on the system, leading to burnout among contributors and resulting in the loss of valuable collective labor on numerous small grants that yield minimal returns. A standard that would make the data about grants more legible would create the foundation for creating solutions to these issues.

What is DAOIP-5?

DAOIP-5 is a metadata schema developed by DAOstar to standardize the web3 grants ecosystem to improve transparency, interoperability, and a whole lot more. It lays out a set of off-chain data schemas for grant programs looking to deploy funding and for projects looking to receive funding, as well as a simple attestations architecture. It is intended to increase interoperability between grants tooling, improve the transparency of grant programs, and ultimately make grant programs more efficient for funders, administrators, and grantees. The standard lays the groundwork for a “common application” for grants as well as easier coordination between grants programs. The standard, similar to previous standards released by DAOstar are in json format to make it easy for builders to utilize the standard in applications.

By having one standard for posting grants metadata, we avoid the continued fragmentation of data and capital that occurs with each new tool and program developing their own way to post metadata about grants programs. The standard is designed to ensure data legibility while staying flexible enough to ensure the next innovative grant mechanisms can be compliant with the standard and doesn’t constrain the publishing of more metadata fields if desired.

The standard also builds upon previous grant standards from DAOstar including DAOIP–2 which creates a metadata standard for registering DAOs and other entities that form the foundation for identifying grantees and grantors. In the standard, grantors (grant systems) are able to create grant pools and grantees are able to create applications (projects) that vye for funds within a grant pool. Within the four levels of the standard are several relevant data fields to describe the actions and agents taking place. Both grant systems and projects come from DAOIP-2 registered entities which also provides the flexibility for an entity to be a project or a grant system.

What is the full vision for DAOIP-5?

First and foremost, it is to be the best data source for grants publicly available to help grantees and grantors. This is in the hopes of creating a common application framework that covers 80% of grant programs’ needs to speed up the process for launching and applying to grant programs. This could be facilitated by a “Connect with DAOIP-5” OAuth button which connects with a DAOIP-5 API that can increase interoperability between grant tooling.

The best version of this vision includes a live pipeline of data from grant programs that are compliant with the standard. With this setup of compliant near real time grants data, grant programs can limit grant farming, more easily verify impact and enable more innovative forms of retroactive funding. On top of this, it creates the foundation for reputation systems for grantees and grantors to be held accountable in numerous ways.

What do we have so far?

For the past six months DAOstar has been working on bringing some of the major stakeholders in the web3 grants ecosystem together in order to collaborate on making a better grants experience for everyone through the standard. We have developed an API with our partners at Open Source Observer so that you can see how to begin adopting the standard. We were recently at Funding the Commons and Devcon 2024 in Bangkok speaking to share about the improvements the standard would help kickstart.

In order to facilitate the API though we need more grant programs to add their data to OSO in which there are several ways to do it through their documentation here. The more live the pipeline of data, the better results a grant program can expect to have. In the existing MVP data lake we have the data of grant programs from Optimism, DAODrops, Octant, Arbitrum, and the Stellar Community Fund which has become compliant with DAOIP-5.

At the Funding the Commons Hackathon in Bangkok, held just before Devcon 2024, DAOstar awarded prizes for innovative apps utilizing the DAOIP-5 grants metadata standard API. Two standout projects, Grantscan and Ecosystem Vision, emerged as winners. Both projects created user-friendly interfaces to organize and search the current grants data lake, demonstrating the practical value of the DAOIP-5 standard and providing a strong foundation for further development. With a $3,000 prize pool for this track, the funds were split equally, with $1,500 awarded to each project. Grantscan was a brand-new initiative, while Ecosystem Vision built on an existing tool providing valuable feedback to help refine the standard.

In the meantime we will continue to work with grant program managers to become compliant with the standard, build out more documentation, and an SDK for connecting with the API. You can expect to find grant management tooling like Allo to soon be compliant with the standard as we are working closely with the Gitcoin team to make this a reality.

If you are a grant program manager and would like your program to become compliant with the standard, join the DAOstar Telegram group to get connected with the team and consider supporting the development and adoption of the standard by providing a grant to the Grants Metadata Standard Open Collective.