Navigating Growth: An In-Depth Retrospective of 2023 Grants

Over the past 15 months, the Atom Accelerator DAO (AADAO) has been supporting innovation and growth for the Cosmos Hub and the Atom Economic Zone.

Established by Prop #95, in 2023, we awarded 40 grants to various projects, each chosen for its potential to contribute to the ATOM community and the Cosmos Hub’s growth. (Under our renewal mandate, Prop #865, we have thus far awarded a further 14 grants.)

It’s only natural that with such a wide array of projects, some have hit the mark while others have fallen short. One of our core ethos at the AADAO is the continual improvement of our processes – in the way we filter, evaluate and administer grants.

In pursuit of this improvement, this publication is a thorough retrospective of every grant issued in 2023. Unlike our Transparency Reports, which are published by the Oversight Committee, the Grants and Ops teams at AADAO are publishing this retrospective.

Atom Accelerator DAO is fully owned by and accountable to the Cosmos Hub community, and we believe this publication underscores the DAO’s commitment to evolving operations with accountability.

How many grants?

Since our grant application form went live in March 2023, 200 grant applications were received and reviewed in 2023.

Of these 200 applications, 40 grants were approved. Of which:‍

• 24 grants have been completed‍1
• 1 grants are currently still in progress‍5
• grants were discontinued

35 of our 40 grants (88%) have either been successfully delivered or are on track to complete their deliverables. Of the five grants that were discontinued:

• One was rescoped and the new grant it created was delivered successfully (#4 Stride: Trustless Liquid Staking for the ATOM Community Pool)
• One was discontinued despite development progressing, due to issues with integrating it with the Cosmos Hub’s codebase (#5 Escrow Module)
• One was vetoed by our Oversight Committee while the grant was in progress (#18 Cosmozens Assembly: Deliberative Governance for the Cosmos Hub)
• One was discontinued due to lack of adoption and inability to compete against alternatives (#24 MetaMask Snaps Infrastructure for Cosmos)
• One was discontinued due to the team disbanding, but their work-in-progress is available for other teams to use (#31 Compounding Interchain Security Rewards to staked ATOM)

Anecdotally, grant-making bodies, especially in their first year, have success rates of less than 30%, increasing to 20-40% for established foundations. For teams in blockchain, their average lifespan is about one year, and less than 10% succeed.

While our grant completion rates are significantly higher than these, that does not mean that there was no room for improvement in the grants’ performance. As with any retrospective, the most valuable are those that focus on areas for improvement, and that is the lens through which we are conducting this retrospective.‍

Key lessons from our retrospective

During our retrospective, it became clear to us that a subset of grants held valuable lessons in improvements we need to make. We are solely and directly responsible for those shortcomings.

Despite a variety of imperfections (which we will discuss in this post), we are also encouraged by the clear set of improvements that we need to make to tackle these shortcomings, many of which are already well underway, including (but not limited to):

• A more refined set of criteria for screening applications:To both better inform applicants before they apply, and help us be more efficient at screening through applications who would not be a good fit for our grants programs.
• Better accountability procedures for grantees:To reduce instances of missed deliverables and timelines.
• Better definition and negotiation of milestones:This is especially pertinent to ensure grantees don’t request Quadratic Funding for work already covered by regular grants.
• Better communications:Adding qualitative and quantitative detail to transparency reports, and ensuring our comms are synchronized across primary channels to prevent information fragmentation.
• More hands-on support for every grantee:From helping them problem-solve, and make connections, to supporting their GTM strategy and its execution.

On that last point, it was also clear throughout the past year that our grantees, while talented teams, sometimes need much more hands-on, active support and guidance—and not just funding—to allow their potential to be fully realized. With our team growing this year, we are actively implementing this – becoming a Proactive Grants program.‍

How 2023 grants shaped our organization’s trajectory

As we reflect on the grants from 2023, it’s clear that they’ve significantly influenced our organization’s direction in 2024, beyond just improving our grant processes. Here are the main changes we implemented:

• The success of Prop 72 and the subsequent clawback of 45 million NTRN inspired the creation of the Venture Grants program to maximize the ROI for the Cosmos Hub. This was an additional motivation to grantee teams like Shogun Fi and Astrovault who offered us equity as gratitude for the support they had received from the Cosmos Hub (through AADAO).
• Embracing the need for proactive outreach, we restructured our team to become an ‘outbound first’ organization. As part of being a Proactive Grants Program, we now actively seek out and engage with the most promising projects and diverse partners, or partners who can deliver specific deliverables required for the Hub and the AEZ. We’re on the hunt for innovation and ready to support groundbreaking ideas.
• We acknowledged and acted on the need for more effective planning and strategy. By involving strategic communications experts and bringing in external advisors like Carter Woetzel, Shade Protocol co-founder and talented researcher, and Riley Edmunds, Stride co-founder, we’ve gained fresh perspectives and a product-first mindset that help us think outside the box and plan more effectively.

These changes underscore our commitment to continuous improvement and strategic growth, ensuring that we continuously and effectively drive value to the Cosmos Hub.

‍Please also read the Lessons Learned section of our 2023 Impact Report.

Our motivations for this retrospective

As a fully funded and owned organization of the Cosmos Hub, transparency and accountability are vital to us. We believe in learning from our experiences, so we’re not only reviewing each grant we awarded last year but also openly sharing our evaluation process. Our goal is to provide an honest assessment of what worked, what didn’t, and how we can improve moving forward.

This review isn’t just about looking back—it’s about building a stronger future. By understanding our successes and missteps, we aim to ensure that future grants are even more impactful, helping to create a thriving, innovative Cosmos Hub and AEZ.

As you read the full retrospective, please comment on the Cosmos Forum with specific questions, comments and further queries you may have.

Evaluating the 40 grants of 2023

For this publication, we have examined each grant by looking its purpose, the context in which it was awarded, and the lessons we learned from it.

‍As with any retrospective, the most valuable are those that focus on areas to improve on, and that is the lens through which we are conducting this retrospective. As such, you will find that we have listed Challenges We Faced and Lessons Learned on every grant – it is not to say the grant’s performance was bad, but ideas on how we could improve a similar grant in the future.

‍The full list is too long to include here (44 pages), so please visit this doc to view the full report.

Conclusion

2023 was a pilot program for us. Our mandate effectively covered just 9 months, including 6-8 weeks to bootstrap the organization and another 4 weeks to prepare for the renewal of our mandate. Additionally, 70% of our staff were part-time, which severely limited our operational capacity.

Armed with the learnings from 2023, so far this year, we have significantly improved our operations and extended our reach. We now have 7 full-time staff members dedicated to driving value to the Cosmos Hub and the AEZ. So far this year, we have:

• Invested on behalf of and expanded the Cosmos Hub: We’ve made strategic investments like that in Elys Network for a sizable token acquisition for Community Pool, helped to bring CosmWasm and DAO DAO to the Hub, and developed the PSS Calculator, which is now used for proving the case for Interchain Security to potential Consumer Chains.• A focus on use cases: In addition to the increased use cases CosmWasm will bring to the Hub, one of which is DAO DAO (mentioned above), we have been prioritizing new use cases for the ATOM—from liquidation-risk-free DeFI loan protocols like Amulet Finance to inscriptions on the Hub with Asteroid Protocol and, soon, an ATOM Creators Fund and ATOM-only mints on Stargaze. These grants expand ATOM’s use case and have the potential to significantly drive up onchain activity.
• Supported vital infrastructure for the Hub: We funded a working group of 26 of Cosmos Hub’s IBC Relayers to ensure the smooth and reliable operation of the Hub’s IBC channels, without which IBC relaying on the Hub was set to trickle down to a halt. We also supported the ISLE testnet for Interchain Security v2, facilitating rapid development and deployment of the technology, which would have otherwise been delayed, and renewed our funding for Hypha’s Testnet Incentives Program, ensuring mainnet validator participation to make Hub upgrades reliable.
• Supported the Hub’s marketing efforts: Since May’24, we have supported the Cosmos Hub’s first-party marketing as co-maintainers of the Hub’s Twitter account, helping to establish a consistent brand voice, providing continuous updates on social media, and supporting the organizing of weekly Atom Zones. In addition, we have organized the Hub’s first-ever first-party event – with almost 900 registrants, and over 100 individuals wishing to take part in the AEZ Pitch Night.
• Expanded the Cosmos Hub’s grants programs: On behalf of the Cosmos Hub, we now operate three funding programs to better suit the level of support and needs grantees have, and offer more funding flexibility – Regular Grants, Venture Grants, and Quadratic Funding (in conjunction with DoraHacks). Our shift to this more flexible funding model acknowledges that public grants alone are not enough to build a healthy ecosystem. This makes the Cosmos Hub the centerpiece of the Cosmos ecosystem when it comes to funding innovation and growth.
• Transitioned to a Proactive Grants Program: In line with our transition to being a Proactive Grants Program, we now spend a significant amount of resources on outbound grants. Rather than passively waiting for proposals, this proactive approach means we actively seek out and engage with promising projects and partners, using a rigorous and neutral evaluation framework. While we prioritize teams with established track records for product delivery, we remain committed to also trialing teams who are new to our ecosystem.‍

This shift has resulted in more specific and targeted grant applications, yielding better ROI for the Hub and greater capital efficiency.  For example, our recent grant to PYOR to build a web front-end for the PSS Economic Model demonstrates this approach in action. PYOR, a relatively new team, was selected through a competitive pitching process to solve a specific need. This grant will not only make PSS economics more accessible but also result in much lower costs compared to other teams.‍

Another example is our grant to Miwa Events, a team with expertise in event organization but new to the Cosmos ecosystem. For less than the cost of securing 1-2 speaker slots and a booth at other EthCC events, we have organized a dedicated Cosmos Hub event featuring 8 hours of programming and over 900 registrants so far. We at AADAO identified the need for a Cosmos Hub presence at EthCC to introduce PSS to ETH audiences and complement Informal’s engineering efforts. We found a capable team to deliver this and are managing all aspects of the program and marketing for it.

The newly formed Strategy Committee has played a pivotal role in our progress – bringing fresh perspectives to our initiatives. Through their support and guidance, we have launched the aforementioned Venture Grants program, effectively deliberated on these venture deals, and deepened our involvement with Cosmos Hub governance via proposals on Hub’s infrastructure and tokenomics.

While each of us hold ourselves to high standards, we do of course fall short at times, and more often than not, take longer than we would like to respond to messages from the community. This is why we are grateful for Grace to have been elected as a member of our Oversight Committee, who will be holding weekly Office Hours to provide more insights into our work.

If you have specific questions, comments or concerns about the grants mentioned in this post, please post a comment on the Cosmos Forum.