Protocol Guild has played a crucial role in the Ethereum L1 ecosystem, receiving high donations from multiple projects in the past year. This article will delve into the membership requirements, donation recipients, and the operation of the donation release mechanism behind this mysterious organization.
Introduction:
Ethereum | Tim Beiko proposes allocating 200,000 ENS tokens to support Protocol Guild Pilot.
Background:
MT Capital research report: Breaking the liquidity dilemma of public chains, Berachain may become the new generation of super L1.
Table of Contents:
What is Protocol Guild?
Who are the current members of Protocol Guild?
What donations have Protocol Guild members received?
What qualifications are required to become a member of Protocol Guild?
How are donations by Protocol Guild released?
ether.fi, Taiko, and other projects have made donations to Protocol Guild, while LayerZero has implemented measures to require airdrop users to make donations, which has sparked extensive attention and discussion within the community, along with some confusion and questions.
As a solid support for Ethereum L1 development and maintenance, Protocol Guild plays a crucial role in the ecosystem. So, what are the membership requirements, donation recipients, and donation release mechanisms behind this mysterious and powerful organization? This article will take you on a journey to explore.
Protocol Guild is an organization established for Ethereum L1 development and maintenance, aiming to provide financial support to core contributors in the Ethereum ecosystem through native token incentives of Ethereum ecosystem projects, ensuring the vibrant development and continuous innovation of the Ethereum network.
Since the beginning of 2022, Protocol Guild has completed the mechanism design and started recruiting members. In May of the same year, Protocol Guild launched the Protocol Guild Pilot program. After two years of careful operation and continuous improvement, Protocol Guild officially disclosed its commitment at the end of January 2024 and ended the pilot project while initiating PGv2. PGv2 aims to make Ethereum L1 development contributors identifiable on-chain and demonstrate the current contributors and their contribution duration through time-weighted lists and clear membership qualification criteria.
Protocol Guild’s commitment suggests that projects based on Ethereum allocate 1% of their native tokens for donation to Protocol Guild. The main reason is to attract and retain high-quality contributors, providing them with substantial expected potential returns and ensuring that these tokens ultimately flow into the hands of valuable contributors. It is worth mentioning that this 1% of native tokens is not released all at once but gradually over 4 years.
Why choose 1% as the proportion? Protocol Guild’s consideration is that if 33% to 66% of projects adopt this donation standard, each member can expect to receive annual income ranging from 500,000 to 1 million USD on average.
Currently, Protocol Guild has accumulated donations worth 76 million USD (current value). In the past year, members have received a median donation amount of up to 54,000 USD. At the same time, the membership of Protocol Guild has grown from the initial 90 to the current 177.
Protocol Guild has gathered 177 members so far, mainly from Ethereum Foundation members and Ethereum mainnet clients. These clients include Geth, EthereumJS, Erigon, Hyperledger Besu, Lighthouse, Lodestar, Nethermind, Prysm, Reth, Nimbus, Teku, and more. Each client includes 6 to 15 contributors who are part of Protocol Guild, accounting for nearly 60% of the entire Protocol Guild membership.
In addition, Protocol Guild members also include Ethereum Foundation Application Research Group (ARG), ethPandaOps (a sub-group of the Ethereum Foundation), Ipsilon research team (focused on EVM research), Ethereum Foundation’s Portal Network (dedicated to redefining the participation of resource-constrained devices in the Ethereum network), as well as Protocol Support, Cryptography, Consensus R&D, Robust Incentives Group, Testing, and other key teams.
Some well-known members include Tim Beiko and Danny Ryan from the Ethereum Foundation’s Protocol Support team, as well as Justin Drake from the Consensus R&D team. However, it is worth noting that Vitalik Buterin is currently not listed as a member of Protocol Guild.
The flourishing development of Protocol Guild is inseparable from the generous donations from numerous projects. Which projects have made donations to Protocol Guild? How are the donations received by Protocol Guild members?
ether.fi became the first project to commit to donating to Protocol Guild. Before the disclosure of Protocol Guild’s commitment at the end of January this year, ether.fi committed to donating 1% of its token supply to Protocol Guild to support the continuous development of Ethereum.
Subsequently, DeFi mortgage lending protocol PWN, zkRollup-based Ethereum Layer2 project Taiko, decentralized lending pool Ethereum Credit Guild, modular decentralized storage Layer2 project EthStorage, and several other meme projects followed suit, distributing 1% of their tokens to Protocol Guild.
In addition to the 1% token commitment, Protocol Guild received various donations during the pilot period, including 500,000 UNI tokens, 200,000 ENS tokens, 2 million LDO tokens, and 3 million ARB tokens.
Even Bitwise, the issuer of the US spot Bitcoin ETF, recently announced that 50% of the proceeds from its Ethereum advertisement NFT will be donated to Protocol Guild. Similarly, in September last year, another ETF issuer, VanEck, announced its plan to donate 10% of the profits from its Ethereum futures ETF to Protocol Guild, as a gesture of gratitude for the contributions of Ethereum contributors over the past decade.
Recently, the LayerZero Foundation implemented mandatory donations during the token airdrop claiming process, requiring a donation of 0.1 USD of USDC, USDT, or native ETH per ZRO token, which will be directly used for Protocol Guild. This will result in a donation of approximately 18.5 million USD to Protocol Guild. In addition, the LayerZero Foundation will match all donations, up to a maximum of 10 million USD.
According to data from Dune, the total value of donations received by Protocol Guild currently exceeds 76 million USD, with ether.fi and Taiko donations accounting for 66% of the share. If we add the mandatory donations from LayerZero, the amount donated to Protocol Guild will exceed 100 million USD.
As of this month, the median donation amount received by each Protocol Guild member in the past 12 months is 54,000 USD, and it is expected to increase to 81,000 USD in the next 12 months. Within the next four years, a donation fund of 57 million USD will be attributed and released to Protocol Guild members, and this is only limited to the donations currently received.
Protocol Guild can be seen as a donation and fund allocation mechanism for Ethereum development and maintenance contributors. So, what qualifications are required to become a member? According to Protocol Guild’s official documentation, here are some basic requirements:
– The project/organization must be fully open-source.
– Regularly active in Ethereum specification repositories, research forums, feature prototype design, regular Ethereum protocol calls, etc.
– Focus on research on protocol specifications, Ethereum core protocol maintenance and development (e.g., contributions to Ethereum mainnet clients such as Erigon, EthereumJS, Geth, Hyperledger Besu, Lighthouse, Lodestar, Nethermind, Nimbus, Prysm, Teku, and Reth), research and implementation experiments related to potential protocol changes, or Protocol Guild research.
However, meeting the above conditions is only the foundation and not sufficient to ensure membership in Protocol Guild. Applicants must also have worked continuously for at least 6 months in the relevant organization/project and anticipate that this work will continue, with no interruption exceeding one quarter. For non-full-time members, their income weight will be correspondingly reduced based on actual circumstances.
The income share of Protocol Guild members is proportional to the square root of their contribution time (in months) to Ethereum, ensuring a fair correspondence between contributions and returns.
Currently, it seems that the addition of new members to Protocol Guild requires an invitation and nomination from existing members. Subsequently, all existing members will review and discuss the nominations. In cases where there is a conflict of interest between the nominator and the nominee, disclosure must be made in advance to ensure fairness and transparency in the process.
Regarding the donation release mechanism of Protocol Guild, its core lies in its smart contract architecture. Protocol Guild uses smart contracts established through Splits to manage the attribution, distribution, and flow of donated funds. All donations are processed through a 4-year attribution contract on the mainnet, which attributes the funds to a designated wallet (Pass-Through Wallet), and then the designated wallet sends the funds to the splitting contract for distribution based on the members’ contribution shares.
The splitting contract includes the addresses of all Protocol Guild members and their respective share of funds, which is updated quarterly to reflect changes in membership, additions and removals of members, and adjustments to member weights.
In addition, Protocol Guild utilizes DAOhaus’s Moloch V3 contract for on-chain governance, giving each member equal voting rights to approve or reject changes to membership. Once a decision is reached, Protocol Guild’s multi-signature will be responsible for processing these changes and updating the splitting contract to reflect the latest member list and fund allocation.
In the vast universe of Ethereum, Protocol Guild, with its unique donation and fund allocation mechanism, has attracted core contributors dedicated to Ethereum development and maintenance. As a bridge connecting funds and contributors, Protocol Guild not only ensures the fair distribution of funds but also injects a continuous stream of motivation into the prosperity and development of the Ethereum ecosystem.
References:
https://protocol-guild.readthedocs.io/
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