Gitcoin is excited to finally share more details about Allo, a protocol for the onchain allocation of capital. Throughout this post, we'll expand on what this means for you and your community.
Gitcoin is the primary driver behind quadratic funding (QF) and grants in the web3 ecosystem. To date, we've distributed $50M+ through our grants program, like the Beta Round that just finished, with an estimated impact of $29.2 billion. Past grantees include Uniswap, Optimism and Dune Analytics - projects that are crypto's equivalent of household names. Past grantees also include Kotani Pay, Somleng, and AEDES, who received funding through the UNICEF Innovate round, and a number of small businesses up and down Pearl St in Boulder, Colorado, in a round we supported as part of the city's COVID relief program.
Gitcoin's Grants Stack, which we also announced recently, allows anyone to run a QF round. It is powered by Allo, which allows anyone to build novel tools for capital allocation.
The smart contracts for Allo started off as the backend to Gitcoin's Quadratic Funding rounds. Over the course of running our program, however, we’ve learned that the ways in which communities want to deploy their funds is highly nuanced. Different community goals will require different mechanisms, and we think the design space for those mechanisms is massive. We want to create a platform for innovation in this arena, and we've abstracted out our original contracts into their own modular protocol that can support a wide variety of fund allocation mechanisms. This modular structure unlocks a whole world of resourcing use cases.
Imagine being able to spin up an always-on, light-touch grants program for your protocol. You could start with an Aqueduct, a new contract to which you can stream funds like ongoing protocol revenues. The Aqueduct regularly creates new funding pools based on your settings, so you could spin up a new pool whenever it reaches a certain dollar amount or every N months. That pool could be distributed using any of the allocation mechanisms available in Allo — take quadratic voting for example. Anyone who’s a member of your community (verified by NFTs, address allowlists, token holdings, attestations, whatever) is eligible to submit a proposal and vote on the outcome. All you have to do is click to distribute the funds when the voting is over.
Or you could create a wrapped voting system that integrates with your current products. Anytime someone takes a predefined action (minting an NFT, staking a token, etc) you can treat that action as a vote in your funding pool. Now an NFT platform can distribute funds to whichever projects receive the most number of mints or a staking protocol can distribute additional staking rewards to whichever pools add the most new stakers.
At the lighter end of the spectrum we envision quick-use mechanisms for small-group decision-making, where anyone who antes funds into the pool has a say in how it’s used. No more endless text threads debating where the next dinner or vacation will be — just create a quick pool and use a mechanism to decide.
Allo is also flexible in how it can distribute funds, too. Higher-touch grant programs, RFPs, or investment programs can leverage milestone-based payouts, ensuring that work is completed before funds are unlocked. Naturally, the protocol is interoperable with the rest of web3, so communities can pay out funds through their favorite streaming or splitting protocols.
Over the course of the summer we are planning to progressively introduce Allo to the world. Soon we are releasing a whitepaper and the newest version of the protocol. We’ll be bringing our community along with us as we move through audit and testnet deploys to being live on mainnets. After we’re live, we’ll continue rolling out to different networks and showcasing the exciting use cases being built on the protocol. We'll be hosting a series of different events tied to EthBarcelona, EthCC, Funding the Commons, Permissionless, EthBerlin, and DevConnect. Follow us on Twitter to stay in the loop about opportunities to partner with Allo.