Hi @dob and the Livepeer community!
My name is Traver, and I’m a Governance Lead at Messari! Mihai Grigore, the author of the Livepeer Quarterly Reports, passed this proposal along to our team (@raho and I), and we put together some thoughts on the proposal that we hope might be useful to the Livepeer community as it continues its decentralization journey.
From our standpoint, there are a few key tensions here:
1. Examining the Tradeoff Between Orchestrator Revenue and Treasury Funding
If Orchestrators and Delegators support diverting LPT inflation revenue to fund grant programs, they will likely expect those programs to align with their long-term goals. As such, the proposal might benefit from a more aggressive alignment between the objectives and KPIs for grant distribution and increasing protocol revenue.
Projecting the financial impact for orchestrators, transcoders, and delegators is an essential analysis for the Livepeer community. While our Governor team is relatively new to the Livepeer protocol, we used some basic assumptions to complete a simple aggregated analysis of the impact for stakeholders. We found that if inflation revenue drops at “TreasuryContributionPercent” values of 1%, 5%, or 15%, it would necessitate a corresponding year-on-year growth in annual streaming minutes by 229%, 1,145%, and 3,437%, respectively, to generate enough usage fees to replace the diverted LPT tokens. A more detailed analysis to demonstrate the impact across each stakeholder group could deliver a “north star” objective for the community regarding program outcomes and goals.
This exercise is especially prescient since usage fees comprised only 2.4% of rewards in Q1 2023, and usage fees (both “Estimated Usage (7d)” in mins and “Fees Paid (7d)” in USD) are in decline.
2. The Design and Efficacy of an Additional Livepeer Grants Program
Livepeer might also analyze the success and shortcomings of the existing Livepeer grants program. The Livepeer Grants Program has committed $585,207.34, with a significant percentage committed towards tooling and streaming apps. As Livepeer looks to fund more aggressive programs, it could be worth looking backward to inform best practices and standards for new subDAO programs under this structure. The perceived ROI and size of previous funding might indicate how much inflation the DAO wants to divert to new grant programs.
Retroactive funding can be a powerful incentive, but its efficacy in incentivizing new development is largely untested. By creating quantitative, measurable goals for the program, funding might also be distributed to recipients more aligned with stakeholder goals. One way might be to fund creators with stipulations, i.e., funding could be allocated for a broad list of reasons but only claimed for specific use cases (Further Livepeer-related development, LPT incentives for new tools or projects, or explicit compensation for Livepeer projects and work).
Regardless of the structure, our team feels strongly that all good grant programs have a clear objective with actionable reporting on grant distribution, grantee accountability, and grant effectiveness.
3. Stake-weighted Voting vs. Alternatives
As mentioned on the community call and above, stakeholders have already provided valuable thoughts on the governing model. Given the diversity of stakeholders in the Livepeer economic system, a council model is intriguing, especially if existing governance participation is low or lacking (a topic that requires further analysis). One model worth exploring is the Graph Council, which aims to represent multiple stakeholder groups and is tasked with many responsibilities, including ecosystem/grant funding.
Given that new governance models require technical development, it would be helpful to have a clear view of the resources each alternative would require (R & D, funding, etc.), so the community can make a more informed decision.