Partnership Proposal: Inverter Network <> UMA

Dora · February 8, 2023, 10:33am

Name of Project: Inverter Network
Project Treasury Address: It is a new Safe deployed by the RiskLabs, with
multi-sig: 0x5C834fC6F167c8965cc0e271E4601d4704c6D3B0
The funds will be deposited at this address. It’s currently a single-signer Safe with no oSnap module attached.

After the passing of the proposal, RiskLabs will add the voting wallet Inverter nominates to the multi-sig to participate to put proposals and voting. The multi-sig will delegate to Inverter’s nominated voting address for Inverter to participate in UMA’s governance.
oSnap will be deployed to specify the rules around:
- a maximum cadence of claiming
- a limit of claiming
- conditions for UMA DAO recovery of principle.
The Risk Lab wallet in the multi-sig is added as a controller in order to recover the funds at the end of the program or if it is felt that the invertor protocol was no longer appropriately engaging with votes.

Proposer:
Ataberk Casur → metaberk@inverter.network
Dora Celebi → dora@inverter.network
Proposal Summary
We propose a partnership with UMA to bring optimistic mechanisms to funding management, by integrating UMA’s technology we aim to reduce administrative overhead and encourage community participation while promoting trust-based flows in a trustless infrastructure. Inverter wants to be the platform for UMA to grow its adoption by organizations and experiment with impact funding. The partnership includes becoming a UMA voting delegate and offering UMA staking on Inverter, directing a portion of staking rewards to fund regional projects.

Project Description
The Inverter dApp is inspired by the Operation Portals that are used to fund over 1.2 trillion USD in development projects worldwide by organizations like the United Nations, World Bank, and European Union. Our goal is to connect the novel technologies of web3 with the established funding infrastructure of traditional organizations, in order to improve access to funding and promote distributed ownership for the builders and funders of the next generation of the internet, regardless of their backgrounds.

In simpler terms, Inverter is an “Operations Portal” for funders and projects to coordinate streamlining of performance-based funding with integrated processes of treasury management & operations, one-for-all project funding management, on-chain equity and asset issuance, automated multi-asset funding & liquidation to a single asset, and project & credentials database.

Inverter Product Main Features TLDR:

Initial Release:

Milestone-based long-term project/workstream funding and joint funding with reduced overhead
Transparency around funded projects for communities
Organizations can manage and track incoming and funded proposals from one organizational page
Teams can have one standard proposal that can be used for applying to, streaming funding from, maintaining accountability with, and receiving continuous feedback from many organizations
Ability to withdraw funding from a project

(2023)

Funder Treasury accounts that can run yield earning and diversification strategies with continuous payment abilities
On-chain milestone-based investment based on KPIs and due diligence
Multi-token funding with fluid funding governance
Convertible loans and customizable grant&investment programs
On-chain organization (DAO, Association, etc.) establishment
On/Offramp integrations for creating virtual debit cards and connecting to bank accounts
Community conviction signaling and matched funding

Value Add
UMA is one of the few special organizations driving true innovation in incentive alignment and optimistic mechanisms. As Inverter, we feel strongly aligned with the vision of building infrastructures based on optimistic principles.

We prefer to explore optimistic mechanisms because we believe that it can be an effective tool for reducing administrative overhead in funding management while maintaining accountability. In Inverter, we bring optimistic streaming to milestone-based projects. Projects receive milestone-based funding where each contains a set of deliverables/KPIs, a timeline, and a requested budget. Projects report documentation or data to complete each deliverable and unlock the next milestones. A project receives streamed funding until a funder objects. Funders can withdraw their funds if the project doesn’t produce a satisfactory report. With UMA, we aim to integrate Optimistic Oracles to provide a softer check for milestone completion in addition to withdrawal ability without compromising the reduced administrative burden.

We also see optimistic mechanisms as offering a novel way to encourage community participation. As optimistic oracles open transactions to dispute, they allow the community to have a say over transactions and check on malicious activity. It only takes one community member to say that a transaction or a report doesn’t look right, which then takes it to a vote. This is an effective way of giving the community a voice beyond simply participating in governance voting. In other words, it offers a different paradigm than the discussions around the “problem” of voter apathy and enables new approaches to scale delegatory governance.

Finally, it offers a robust way of bringing trust-based flows to a trustless infrastructure. It is true that the blockchain ecosystem expanded with the protocols built upon the principles of trustlessness, yet the social layer of the p2p economy needs communities to delegate trust to give agency to the initiators and decentralize away from red tape bureaucracies. Enabling impact and innovation requires trust-based systems that provide free, agile, and unbureaucratic movement space for creation with checks against the abuse of the trust.

We want to be the flagship platform for the UMA community to grow the adaption of their optimistic mechanisms by organizations. Starting with an optimistic oracle, we want to expand the set of stakeholders and use cases UMA’s mechanisms can offer value.

We aim to become an UMA voting delegate and offer UMA staking on Inverter dApp to enable UMA takes to direct a percentage of their staking rewards to fund or invest in regional projects that Inverter onboards to Web3. While helping UMA decentralize through expanding its delegate pool, we will be experimenting with a novel way of impact funding by funneling a portion of the value generated through validating the oracles towards on-the-ground projects.

Deliverables
Proposal Timeline 5 months

Visual Representation of the Proposed Roadmap

Total Budget Requested
Proposal Total Ask 150K UMA for Voting Delegation
Inverter aims to use $25k of the staking rewards from the allocated UMA to fund scoping, developing, and auditing for integrating UMA’s optimistic mechanisms to Inverter Protocol. Rest of the funding from yield will be used to allocate to regional funding pools that Inverter will set up to funnel sustainable funding to on-the-ground projects. The UMA staked for voting participation will not be sold.

If we give as a StartingAmt:	Inverter gets in 12 months	Est. Balance in 1 year	At $2 UMA, worth	Funding Funelled to Regional Investment Pools	UMA Tokens Participating	UMA Fixed Emissions
-	-	-	-	-	20,000,000	5,677,200
100,000	28,245	128,245	$56,490	$31,490	20,100,000	5,677,200
125,000	35,262	160,262	$70,524	$45,524	20,125,000	5,677,200
150,000	42,262	192,262	$84,524	$59,524	20,150,000	5,677,200

Team
Inverter Core Team
Alp Ergin: Strategy & Business
Head of Partnership & BD @PrimeDAO
https://www.linkedin.com/in/alp-ergin-401a9883/

Ataberk Casur: Product & Mechanism Design
Ex-Steward at PrimeDAO; Researcher and Designer at Curve Labs
https://www.linkedin.com/in/ataberk-casur-136513196/

Baran Baloglu: Product Owner & Solutions Architect at Inverter
Ex-Solution Architect at Vodafone.
https://www.linkedin.com/in/barancanbaloglu/

Marvin Kruse: Protocol Architect
CEO and Founder at Byterocket; developed with Kollektivo and PrimeDAO

https://www.linkedin.com/in/marvinkruse/?locale=en_US

Lea Filipo: Design
Ex-DAOStack/Genesis, Gnosis DAO, Glassnode

Pablo Carra: Smart Contracts

Bora Baloglu: Backend
Ex-Raspodo
https://www.linkedin.com/in/bora-baloglu/

Elif Nisa Polat: Lead Program Manager at Inverter
Consultant at World Bank
https://www.linkedin.com/in/elif-nisa-polat-b122b6141/

Carlo Mallone: Technology Advisor
Ex-Molecule
https://www.linkedin.com/in/carlomallone/?originalSubdomain=it

Additional Information
On Mutual Governance
The granted UMAs for voting participation will not be sold. Inverter aims to be a long term participant in UMA’s governance and active contributor to the UMA ecosystem.

Moreover, Inverter will also give UMA Inverter Guardian Badges, which are the initial set of key stakeholders that will underpin the gradual decentralization process of the Inverter Network. Their first active governance role will be approving the steward squads who will be forming and managing regional funding pools. The Guardians will direct the funding budget Inverter accumulates through different forms of revenue and validator yield amongst the regional funding pools. Lastly, through Optimistic Governor, they will have a veto right over the funded projects the regional funding pool stewards allocate funds to. This mutual governance staking ensures that both communities participate in helping each other’s governance serve its purpose.

Do you support moving forward with this proposal?

Yes
No

0 voters

Admin-UMA · February 9, 2023, 3:15pm

Thank you for your proposal.

Before the proposal can go forward to a temp check by adding a poll to the opening post, a wallet address where the funds would be transferred to in the event of a successful outcome is required.

Dora · February 9, 2023, 4:56pm

Thank you for the info, I updated the proposal.

Clayton · March 29, 2023, 10:23am

Can you explain what you mean to do here? It would help me if you explained how Inverter would use an optimistic oracle as part of your org?

Then with regard to your 80/20 split for accepting vote delegations, this opens up a security concern due to having a voter with more influence in the game than skin, since you’d be voting with more tokens than you actually own. There are ways around this, including by accounting for TVL of Inverter’s that is secured by UMA as part of Inverter’s exposure–But this is just a the stage of conversation and nothing has been built around that yet.

I like the novel funding mechanism, which is earned through participation in the network. It does have the same security concerns, since again you’d have power without skin in the game, though–But of an amount modest enough it doesn’t quite worry me.

But I’d really want to understand the OO use case here with as much detail as possible and would say my personal support hinges on that. Thanks!

Dora · March 29, 2023, 12:35pm

With Optimistic Oracles, Inverter protocol will enable automated KPI based conditional payments by unlocking funding with submission of verifiable data.

Inverter’s contracts enable conditional streaming between multiple entities. This can be used in a funding platform as in Inverter’s dApp to enable milestone/KPI based payments and investments, or by other applications that integrate Inverter’ architecture.

Inverter’s funding platform currently supports optimistic milestone based payments, where a project’s contract has set of milestones with required budget and estimated duration to regulate the pace of streaming, coupled with deliverables that the project team commits to complete within a milestone. Project teams unlock a new milestone after a current milestone’s duration ends and after they upload documentation for the deliverables. Funders can decide to withdraw their funding from locked funds that haven’t been streamed, if they are unsatisfied with the documentation. However, if the project team maintains the consent of their funders, they don’t need to seek approval for the completion of a milestone from each funder they have, thus reducing a lot of bureaucratic overhead in managing a long-term project.

With Optimistic Oracles, we want to enable connecting milestone completion requirements to verifiable data that is validated through Optimistic Oracles. Optimistic Oracles also enable Inverter to still maintain the benefits of optimistic funding, which removes the need for intervention and friction unless something goes wrong. So a project team or another recipient entity would upload the data with their claim to have completed the requirements of a milestone to UMA’s Optimistic Oracles. And if it successfully passes the Oracle process, it would be allowed to unlock streaming for the next milestone.

Using Optimistic Oracles here allows Inverter Protocol to support an efficient and transparent solution to automate payments based on the achievement of predefined performance indicators:

Integrations with a large variety of data can be supported through Optimistic Oracles.
Funding operations can be scaled and automated through Inverter contracts without increasing administrative overhead.
The dispute mechanism that is open to community participation alleviates the burden of overseeing a large number of funded project contracts for organizations while enabling effective ways of community participation.
New use cases can be supported to enable dynamic investments into projects with credible data, such as tying ecological data to unlocking of future funding or issuing of an ecological asset.

With regards to 80/20 split: this is a conversation we actually had with other UMA team members as well, and we understand the concerns for delegation in regards to UMA’s purposes. And as you said, this is a stage conversation that hasn’t been built yet. We wanted to propose an exploration path to enabling new ways of community engagement and channeling some of the value created to the ecosystem and regional projects that the community can signal towards.

For the security concerns around delegation, the reason we actually wanted to come up with this novel funding mechanism was to find a way to have deeper skin in the game. While we earn rewards through successful participation in the UMA network, we also intend to include UMA in the first batch of Inverter Guardian’s, which will be the first path of stakeholder participation in governance of Inverter Network. I would like to understand better how you think the concerns you have in regards to the security concern can be addressed!

Please let me know if these answers were clear or you have any other questions in mind.

kevin · April 4, 2023, 4:17pm

Sorry I missed voting on this. As an UMA token holder I think the main thing to weigh is whether committing 150K UMA and effectively rewarding $25k of UMA “to fund scoping, developing, and auditing” is a worthwhile investment. I know the Risk Labs foundation does provide a lot of support to the many projects who are interested in building with the OO, but these projects don’t request funds. So I am curious as to why there should be a grant for this integration. Also I was not clear as to what some of the funds would be used for when you mention this: “Rest of the funding from yield will be used to allocate to regional funding pools that Inverter will set up to funnel sustainable funding to on-the-ground projects.”

Dora · April 5, 2023, 7:09am

We understand your concern about grants. Inverter is an open research initiative that has sustained itself through grants from DAOs and protocols with a mutual interest in its use cases and applications. Building the dApp interface and front-end to onboard newcomers easily incurs significant costs for front-end needs, on/off-ramping solutions, audits, and more. However, we are actively seeking sustainable funding resources for Inverter’s long-term development. Our goal is for grants to lead to circularity for grant givers, and so we propose receiving grant funding by contributing to the UMA protocol by participating in OO validation. Additionally, we would like to offer UMA an Inverter Guardian badge that will play an active role in the Inverter protocol’s gradual decentralization.

Inverter’s mission is to support grassroots projects in the global south and open research initiatives. The Inverter dApp will allocate resources for maximum impact, and validator partnerships will help decentralize our partner networks and create sustainable funding resources for ecosystem projects. This will enrich the validator ecosystem and enable circular economic value-flows for development projects by aligning incentives with blockchain infrastructure protocols. We propose piloting this experiment with UMA and building coordination infrastructure for other communities to implement using UMA’s mechanisms. Our draft document outlines the initial governance structure for Inverter’s decentralization and the pilot validator coordination architecture.

Validating this concept for the ecosystem requires UMA’s mechanisms for effective governance with community participation, accountability, onboarding projects, and directing fund flows. Inverter dApp enables transparent following of all funding operations for communities, organizations to run funding delegations and operations, and projects to receive milestone-based funding and issue tokens. Thank you for engaging in the forum discussion. We have a token holder discussion on UMA’s discord today, and we would love to discuss it further if you are interested.

Dora · April 5, 2023, 3:53pm

Here is more information regarding our pilot project with Bambu and Token Engineering Academy

The objective of this initiative is to promote education in Token Engineering to address the skills gap among Web3 builders, particularly in developing regions, and help achieve global equity. Bambu plans to hold a Hackathon in Colombia in collaboration with Sapiencia and C4TA, targeting around 1,000 Web2 developers with the potential to reach thousands more.

After the Hackathon, the winning teams will have the opportunity to enroll in a one-month-long Token Engineering boot camp, with the costs of tuition, engineering, and advisor fees covered by Inverter dApp. Bambu intends to apply for grants to cover the boot camp’s costs, estimated to be around $15k USDC. Additionally, Inverter Network will provide each student with a $250 monthly contribution during their participation in the boot camp, totaling an estimated $2.5k USDC.

Upon completion of the boot camp, 10 students will be offered a summer internship at one of the sponsored projects, providing them with hands-on experience in the field of Token Engineering. This initiative aims to incentivize education in Token Engineering among young minds, creating a pipeline of skilled workers to meet the requirements of the global economy and bridge the skills gap in developing regions.

Admin-UMA · April 6, 2023, 4:15pm

A snapshot vote on this funding request is now open and will remain open for 5 days.

https://snapshot.org/#/uma.eth/proposal/0x82431f9a03e6a5b87d6e3ea156054e63f15ef9494534544a235467a7af89e178

nicholaspai · April 11, 2023, 1:28am

I think this is a really cool idea and I think it’d more attractive to UMA token holders if the grant includes:

A lock up period of 4 years during which the granted UMA must be staked and vote on all proposals.
UMA protocol getting some concrete amount of equity or tokens in Inverted Network. This would provide strong starting incentives for this partnership. I’m not sure what this amount should be so I’ll let the Inverter team expound.

I wish there were a way to vote “YES - conditional upon…” in the snapshot vote.

Dora · April 11, 2023, 2:41pm

Hi @nichloaspai, thank you for your feedback!

The granted UMA is given for one year initially and it is secured in a multi-sig set jointly with Risk Labs and is conditioned by oSnap rules. Risk Labs has established a framework to ensure that the granted UMA will be exclusively utilized for staking and voting on all proposals, and not be sold… Non-participation or misalignment in this partnership can lead Inverter to lose its grant at any point.

We acknowledge that the specifics of the Inverter token are not yet certain. We aimed to create a preliminary list of Inverter Guardians as a starting point toward the decentralization of Inverter Protocol. Our objective is to invite core technology partners to become Inverter Guardians, who will be allocated tokens dynamically based on their participation levels. Despite our attempts to clarify the process, any precise approach at this stage could be misguided.

Admin-UMA · April 12, 2023, 11:54am

The final results on the snapshot vote for this proposal were

For - 2.5m UMA (44.5%)
Against - 3.2m UMA (55.6%)
Quorum - 5.7m / 3.3M

As this proposal did not reach majority, it will not go forward for an onchain vote

Edited to correct the error identified below

UMAisthefuture · April 12, 2023, 6:54pm

You mixed up for and against.