Hey @Britt. We appreciate the constructive nature of your reply and enjoyed getting some of the guys in front of the community last week. Our position has been and remains that this grant should be symbiotic and we are willing to make changes to the original proposal to get something across the finish line. I will address your specific points below.
Vesting - We are open to a vesting structure or some creative distribution schedule. Our only hesitation is that it ends up creating significantly more work (upfront and recurring) which creates a distraction to our focus of building a world-changing prediction market. We believe we demonstrated with the last grant a high level of responsibility in regard to fund management (slowing down distribution, adjusting to timelines, iterating on methodology quickly to maximize efficiency) albeit with a significantly smaller grant.
Utilization Plans - We will commit to using 100% of the granted funds in our liquidity mining and incentivization programs. 100% of the funds will be distributed to market participants on Polymarket. The program and its current methodology is outlined in detail in our docs and in this blog post. In its current form, the program rewards users that place resting limit orders on specific markets. It borrows heavily from the supply-side methodologies of dYdX’s and Blur’s successful liquidity mining rewards programs. We have and continue to iterate on the methodology to increase efficiency and catalyze specific activities, so the equations and strategies will be subject to change which we believe is in the interest of the UMA DAO as well.
Path to profitability - Polymarket will take fees on trading at some point. The exact fee schedule is not yet decided, but the fee mechanic is built into the underlying exchange smart contract and outlined in the documentation here. There are also other routes of profitability/sustainability that we are looking at, many of which are tried and tested for a product of our type. If we can continue to build on the success of the last month, it’s very likely we can operate profitably.
Efforts to support the purpose of $UMA - We agree this makes sense as a core consideration of the UMA DAO. We believe that Polymarket already converts a lot of users into UMA voters and community participants, but we have plans to do more - specifically on the product side. Soon, we will be adding more details to each market about where it is in the request/propose/settle lifecycle with links to the UMA OO page and DVM votes. By making users more aware of this process we assume more will become involved. We would also be open to working with the UMA team and community on publishing longer-form content on our new Mirror blog. We have a few of our own UMA-resolution-focused pieces in the pipeline already. We would also be open to working on an analysis of what % of staked and voting UMA originated from Polymarket distribution. We’ve looked at it in some detail and decided that it was impossible to get an accurate figure due to the amount of wallet changes that happen as users move their UMA to Ethereum from Polygon (and in the initial claim process). With that said, we could supply more detail into our work on this front and collaborate on a longer-term strategy to evaluate this metric. Empirically speaking, we know that the vast majority of Polymarket-related OO requests come from Polymarket users, which means that the vast majority of all OO requests are from Polymarket users. A number of the largest Polymarket users actively participate in UMA as stakers and voters (though they are still relatively small given we’ve distributed <0.2% of UMA to date.
We’re confident that this proposal will be a net positive for everyone involved, and, as discussed, we’re happy to collaborate on measures that can be taken to assure you of that. How should we best move forward? Perhaps it’s best that UMA token holders share their thoughts on the terms we’ve proposed here to help us better understand what would comprise a proposal everyone can feel excited about. Thanks again for your enthusiasm to engage in this dialogue.