Funded [LAYERTECH-001] Core Code Development Grant

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#1
This grant proposal is for core code development. LayerTech commits to contribute one senior developer to work on core code full time. He will focus on patching outstanding security concerns and accelerate improvements related to scaling (refactoring, tps scaling, and sharding).

As required by document 153 that governs Factom grant round 2019-01: This is the thread for grant proposal FACTOM-GRANT-GUIDES-004.
The review process starts at 2019-01-31 00:00, so please refrain from starting public review or questions before that time. If you notice clear errors in the proposal you can contact the author of the grant proposal directly.
 

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#2
Thank you for your proposal.

This is a generic question I ask in each grant thread.
This is currently the 3rd grant round. I consider that one of the very important criterion to select a grant (apart from its potential value) is the capacity of the grantee to deliver in time what it pledged. Therefore past grants can be used as an indicator.

If you did receive grants in previous rounds, could you please fill the following fields? This would increase transparency and help the standing parties to select grants.

- Have you, or one of your partners, previously received grants : Yes/No. If No, then you can stop here :)
- List of grants received : grant X1 from round Y1, grant X2 from round Y2...
- Status for each grant : grant X1/Still ongoing or Completed, grant X2/....
- Description of the work accomplished so far and Links supporting it : Discord Group/Factomize thread/Github/Reports/...
- Description of the residual work to be completed : XXXXXX

Thank you for your cooperation.
 
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#4
Go Immutable has worked with @tomjm before and came away extremely impressed. We have full-confidence that he will do a tremendous job.

Go Immutable will be ranking this grant near the top of our rankings (or potentially at the top). Decentralizing development (as well as adding more core dev horsepower) is the most critical challenge we face. We simply cannot be in a position where we are burning less than 1 FCT a day year from now. We need to get mainnet in a position where it can reliably support enterprise clients and their (hopefully) high TPS. We have a lot of work to do to get there. This is a big step in that direction.

Go Immutable 100% supports this grant. Thanks to @LayerTech for stepping up!
 
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#5
Hi Xavier,

Thanks for the initiative, however at this time, for several reasons, I don't think we can support it

1. We believe that recurring grants should be sustainable even at a depressed floor price range of .0007 - .001. If we consider all the current recurring grants right now, we are already over that threshold.

2. The % of the grant pool going to the core development initiative would be higher than what we feel comfortable with. Having too much money going to core development is going to delay the funding of other good initiatives like good documentation/good open source libs/marketing/small, open source proof of concepts that are going to help enterprises integrate Factom.

3. While having a stable network, more TPS, etc is desirable, we believe that allowing projects to develop,test and integrate Factom at a cheaper cost is a bigger priority to us at this point. More EC burned will improve the price which in turn will improve our ability to support this initiative. If Factom Copy Cat is 50% cheaper to develop and test on because of the better supporting tools, we might lose a lot of interest from outsiders and the better network might not be enough of a selling point at this time. We would like to not be the Betamax, blockchain edition, with a better overall technology/network but too costly to develop on vs the competition .

4. The signal we are perceiving from Factom Inc is that the network infrastructure might be sufficient for now. If this was a priority to them, we believe they would not try to subsidize 100% of their maintenance/development contribution to the community and would take more risk on that side. They would invest further instead of seeing this as an opportunity cost.
 
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#8
De Facto supports this grant.
If this grant is awarded, will you increase LayerTech’s efficiency, as @tomjm will be onboarded as full-time core dev using grant pool?
Regarding LayerTech's efficiency -- I think one of the things that may be getting lost in the shuffle is attorney @Shuang Leng's (a member of LayerTech) contributions via the Legal Working Group. She alone provides more value to the protocol than a decent amount of ANOs and it's not even close. As such, layerTech could easily justify an efficiency lower than 35%.

From a math perspective, the difference between 50% efficiency and 35% efficiency using a $6 FCT price is a paltry 337 tokens per month ($2000 USD). The community is getting a steal.
 
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#9
Regarding LayerTech's efficiency -- I think one of the things that may be getting lost in the shuffle is attorney @Shuang Leng's (a member of LayerTech) contributions via the Legal Working Group. She alone provides more value to the protocol than a decent amount of ANOs and it's not even close. As such, layerTech could easily justify an efficiency lower than 35%.

From a math perspective, the difference between 50% efficiency and 35% efficiency using a $6 FCT price is a paltry 337 tokens per month ($2000 USD). The community is getting a steal.
Right now the LT team uses 25% efficiency (1650 FCT month).
But funding 1 team member via grant pool intends full-time work on core and little works on ANO activities.
I see no reasons to continue operating at 25% eff in this case, but I would support this core dev grant + increasing efficiency as @David Chapman suggested for Factomize.
 
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#10
Right now the LT team uses 25% efficiency (1650 FCT month).
My mistake, thank you.

But funding 1 team member via grant pool intends full-time work on core and little works on ANO activities.
I am not sure how you arrive at this conclusion... LayerTech hiring a core developer to work for the community has absolutely no bearing on Shuang's legal contributions (or the other contributions their team members make). The team members will not be doing less work.

As for David, the reason he would be raising his efficiency is because WHO has done a ton of work for Factomize and would no longer be doing it if he becomes a core developer. Therefore, Factomize would be contributing less as an ANO.

To summarize:
Factomize: Doing less work so would raise efficiency.
LayerTech: Doing the same amount of work, so efficiency would stay the same.

And, once again, the legal contributions from LayerTech vastly outweigh their current efficiency. For perspective, lawyers in the blockchain/crypto space charge upwards of $1000 an hour. Feel free to do the math. Here is the Legal research Working Group's last report:
https://factomize.com/forums/threads/legal-research-working-group-update-jan-2019.1454/

Thank you
 
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#11
My mistake, thank you.


I am not sure how you arrive at this conclusion... LayerTech hiring a core developer to work for the community has absolutely no bearing on Shuang's legal contributions (or the other contributions their team members make). The team members will not be doing less work.

As for David, the reason he would be raising his efficiency is because WHO has done a ton of work for Factomize and would no longer be doing it if he becomes a core developer. Therefore, Factomize would be contributing less as an ANO.

To summarize:
Factomize: Doing less work so would raise efficiency.
LayerTech: Doing the same amount of work, so efficiency would stay the same.

And, once again, the legal contributions from LayerTech vastly outweigh their current efficiency. For perspective, lawyers in the blockchain/crypto space charge upwards of $1000 an hour. Feel free to do the math. Here is the Legal research Working Group's last report:
https://factomize.com/forums/threads/legal-research-working-group-update-jan-2019.1454/

Thank you
You posted above that @tomjm is the core dev of LT? Or I understood this incorrectly?
 
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#12
Thank you for stepping up on the core development front!

Two questions from my side:
  • Will this be a recurring grant, similarly to other core development proposals?
  • What is your plan of action if FCT price drops further? Are you paying the core developer their salary in FCT or will you need more FCT in the upcoming ground rounds (provided that the grant is recurring)? Or will you discontinue core development if the price of FCT drops too much?
 
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#14
We have a dedicated, motivated set of talented devs in the community - who can work effectively together and push each other on.

Something I'd like to see from all the ANO core dev grants is educational content created alongside for outsiders, with shared lessons to fast track future developers. It will be a hard task at first, but we can create the foundations for expansion later.

The proposed forum to learn together will make these efforts much more productive, both in short and long term.
 
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#16
Hi Xavier, thank you for making this application.
I am asking a similar question of most ANO applicants:
Assuming the grant is funded please break down what will be delivered by this grant proposal funding and what will be delivered by your ANO efficiency set at 50% over the next 3 months?
 
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#17
Thank you for your proposal.

This is a generic question I ask in each grant thread.
This is currently the 3rd grant round. I consider that one of the very important criterion to select a grant (apart from its potential value) is the capacity of the grantee to deliver in time what it pledged. Therefore past grants can be used as an indicator.

If you did receive grants in previous rounds, could you please fill the following fields? This would increase transparency and help the standing parties to select grants.

- Have you, or one of your partners, previously received grants : Yes/No. If No, then you can stop here :)
- List of grants received : grant X1 from round Y1, grant X2 from round Y2...
- Status for each grant : grant X1/Still ongoing or Completed, grant X2/....
- Description of the work accomplished so far and Links supporting it : Discord Group/Factomize thread/Github/Reports/...
- Description of the residual work to be completed : XXXXXX

Thank you for your cooperation.

Hello @Matthias Fortin, thank you for your question.

Last grant round LayerTech received FCT as part of the FAT team. As part of that grant proposal, LayerTech is responsible for business development and wider FAT adoption. LayerTech also takes part in refining the FAT Whitepaper, participates in discussions about technical roadblocks (security, scalabilities, etc) and actively developing new standards for FAT.

Right now we are actively working with industry partners to adopt various use cases for FAT. This includes usage in real estate, financial instruments, and programmable currencies. Similarly, we are working with several academia contacts to write and publish research papers around this various use cases and how they impact existing economic and financial theories.

LayerTech's work with FAT is ongoing. We are not listed on the current grant proposal because last month I started an adjunct teaching position (information system and blockchain) as part of that academic outreach. We decided that it makes sense to subsidize LayerTech's continuous FAT work with that earning so more of the FCT goes to rest of the participants.
 
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#18
Hi Xavier,

Thanks for the initiative, however at this time, for several reasons, I don't think we can support it

1. We believe that recurring grants should be sustainable even at a depressed floor price range of .0007 - .001. If we consider all the current recurring grants right now, we are already over that threshold.

2. The % of the grant pool going to the core development initiative would be higher than what we feel comfortable with. Having too much money going to core development is going to delay the funding of other good initiatives like good documentation/good open source libs/marketing/small, open source proof of concepts that are going to help enterprises integrate Factom.

3. While having a stable network, more TPS, etc is desirable, we believe that allowing projects to develop,test and integrate Factom at a cheaper cost is a bigger priority to us at this point. More EC burned will improve the price which in turn will improve our ability to support this initiative. If Factom Copy Cat is 50% cheaper to develop and test on because of the better supporting tools, we might lose a lot of interest from outsiders and the better network might not be enough of a selling point at this time. We would like to not be the Betamax, blockchain edition, with a better overall technology/network but too costly to develop on vs the competition .

4. The signal we are perceiving from Factom Inc is that the network infrastructure might be sufficient for now. If this was a priority to them, we believe they would not try to subsidize 100% of their maintenance/development contribution to the community and would take more risk on that side. They would invest further instead of seeing this as an opportunity cost.
@Miguel Proulx, while I respect your position, I strongly disagree with your conclusions. For the sake of brevity, I want to response to some of your assumptions that led to our differ in opinion.

  • While open source documentation, marketing, and open source PoC help enterprises adopt Factom, those are the not primary considerations. From working with large enterprises directly, they are more concern about securities (attack vectors), scalability (how much of their business can be moved onto Factom network?), and transparency (development roadmap). To be honest, there are so many low hanging fruits for those large businesses that building use cases is not hard. It's where we go from there that we cannot answer because there are neither clarity nor game plan to tackle above mention issues. At least publicly.

  • You mentioned allowing Factom to develop at cheaper cost is a higher priority. Yes it would be cheaper to avoid putting money into core development at this stage. However, that bill will eventually come due and the cost will be more substantial later down the line. Remember that Factom Inc and BIF estimated 6-9 months to fully ramp up new core development effort. Even more to see quality contribution to the code base. This is not something we fund when we see the threat in front of us. We really need to proactively invest in that capacity so when we see the threat we are ready to respond. Otherwise, the expense paid by the community to play the catch up game can be fatal instead of merely costly.

  • To add to the previous point, we also need to be concern that we will be left behind by our competitors. If it takes us more than half of a year to ramp up core development, imagine how quickly we can get left behind when a genuine competitor come to the scene. Half a year is a life time in the crypto space.

    You mentioned concerns about Factom Copy Cats and that we need to compete by providing better supporting tools. I agree with your concern but do not think arms race in providing supporting tools is sustainable. If we really want to compete against them and new competitors, our competitive edge is in our core developers and ANOs. Our core developers keep our code base secure and scalable while ANOs bring in businesses. Our competitors can compete all day on churning out supporting tools, but they can't compete on core development and ANO community. They will need to invest significant time and resource to build their own community and go through the same growing pain we experienced. By the time they are ready to compete, we would be at a higher level. Pushing this necessary investment in core development until later dates will actually heighten the threat from our competitors (Factom Copy Cat and others).

  • Lastly you believe that percentage of the grant pool going to core development is too high and since Factom Inc believes network infrastructure is sufficient, we should defer to them. With respect to Factom Inc, I disagree. From various interactions with Factom Inc, I believe that they operate under a very different time table when it comes to core development (measure in decades) and have different priorities due to their investors. With both of our concerns regarding competitors in mind, we cannot operate under the same time table and follow the same priorities. If we do, we are in serious trouble when a legit competitor tries to take away our market niche before we build it into a fortification.

    Large percentage of the grant pool goes toward core development not because of LayerTech, Factomize, or BIF's recurring grant proposal. It seems large because significant chunk is taken by Factom Inc's core development. I am not saying that to object to Factom Inc's large grant size (I'm planning to rank it at the top of the list). I am saying that because large part of Inc's grant goes toward core development, but we have no idea what that means. Instead of making proper comparison between the four ANOs interested in core development, we ended up critiquing those who are transparent. This is why part of LayerTech's proposal is to provide regular update on core development for the community. Hopefully other ANOs will do the same and we don't have this information asymmetry.
 
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#19
Hello @Anton Ilzheev, @Mike Buckingham, and @Valentin Ganev. I'm going to combine your questions about efficiency together so it is easier for other people to follow along.

De Facto probably supports this grant.
If this grant is awarded, will you increase LayerTech’s efficiency, as @tomjm will be onboarded as full-time core dev using grant pool?
Right now the LT team uses 25% efficiency (1650 FCT month).
But funding 1 team member via grant pool intends full-time work on core and little works on ANO activities.
I see no reasons to continue operating at 25% eff in this case, but I would support this core dev grant + increasing efficiency as @David Chapman suggested for Factomize.
Thank you for stepping up on the core development front!

Two questions from my side:
  • Will this be a recurring grant, similarly to other core development proposals?
  • What is your plan of action if FCT price drops further? Are you paying the core developer their salary in FCT or will you need more FCT in the upcoming ground rounds (provided that the grant is recurring)? Or will you discontinue core development if the price of FCT drops too much?
Hi Xavier, thank you for making this application.
I am asking a similar question of most ANO applicants:
Assuming the grant is funded please break down what will be delivered by this grant proposal funding and what will be delivered by your ANO efficiency set at 50% over the next 3 months?
To properly answer this question, I need to provide a bit of context on where LayerTech's FCT is going. Right now we are funding:

1. Community legal work
2. Infrastructure cost
3. Development cost associated with ANO pledges
4. Development cost outside of ANO pledges
5. Misc Operating expense

Since the ANO election, we aimed to set efficiency at 50% with the understanding that income from the remainder 50% will be enough to finance #2, #3, and #5. Similar to many of ANOs here, that didn't work out as planned due to substantial change in FCT price. In ideal situation, our base line efficiency should have dropped below 50% to account for the price change in order to continue funding of #2, #3, and #5. That would be in line with what many non-infrastructure ANOs have done. We did not do that and are currently running at deficit based on 50% efficiency.

During the election we also pledged to put 25% aside to fund an internal grant pool that can be used to fund non-pledge projects. We offered to pay for part of the website development out of this 25% but that turned out to not be needed. And we picked up some cost of the retreat based on the budget from this 25%. Based on my experience dealing with community building, I figured it will take a long time to get the ANOs to sort out community needs versus individual needs when dealing with the grant pool. By having this 25% internal fund, we have more freedom to make that determination ourselves instead of fighting against human nature. What we really want to fund is legal efforts to reduce systematic legal risks impacting all ANOs (e.g. BlockParty).

With that goal in mind, we anticipated significant part of that 25% going into legal expense. At that time, FCT price gives this 25% internal fund pretty healthy amount to fund both legal and other projects. As before, the financial projection did not work out as intended. By the time we were on-boarded as an ANO back August, this 25% internal fund provides barely $2500-$3500 a month to cover the legal cost. As @Matt Osborne rightfully pointed out, the legal cost is way above this amount despite discounts offered by @Shuang Leng. (Shuang has also been turning away non-Factom businesses so there are opportunity cost on her part that I'm not taking into account) Also we have been incurring legal costs for the community since election (four months before being on-boarded).

Needless to say, this 25% internal grant pool is not enough to cover existing legal cost, let alone past legal costs. The Legal Grant did subsidized some of the work done by Shuang, but a lot of the cost had been internalized by LayerTech. We anticipate the same negative cash flow moving forward since there are still a lot we need to accomplish: Non-profit creation, governance cleanup, various ANO document, process management, and efforts related to decentralization like IP, FIP, trademark, CLA, and committee works.

Lastly, while Tom is moving to core development, we are still continuing #3 and #4. While the community only interacts with @Shuang Leng, @Jason Chen, @tomjm and myself, we have other individuals working on pledged and unpledged projects that burn EC and benefit Factom community.

So to answer everyone's questions:

1. I don't think it's financially prudent to raise efficiency above 25%. Going above that will only worsen our negative cash flow and it doesn't make sense to commit to a position that I will later regret.
2. With that being said, once the FCT price significantly improve, I will obviously consider raising efficiency.
3. Yes like other core development grants, this will be recurring.
4. We pay in USD so if FCT price drops further, we need to reassess. We don't think it is prudent to discontinue core development, but as community we should consider scale back. (But right now we don't have enough understanding of the core development to even prioritize what we should or shouldn't scale back.)

I hope this clarify the situation. Let me know if you have any more follow on questions!
 
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#20
Thank you for stepping up for core development LayerTech!
Is there any public material available of the preparation work you mentioned made by Thomas during those last couple of months? Either PRs, commits, docs or notes etc. Thanks.
Hello @Paul Bernier, the development time @tomjm put into Factom core code doesn't include preparing any publicly available material. He has been reading core code directly, read publicly available notes and watch videos produced by other core developers and Inc, but nothing he can share.

I do want to note that he is able to start working full time from day one. So instead of spending FCT recruiting a new core developer, the community has the opportunity next three months to evaluate his performance right away. If unsatisfying, the community can vote down future grant proposals. In my opinion, the risk/reward ratio is very favorable for the community. With what @tomjm brings to the table, I'm confident that the community will get its money's worth.
 
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#21
We have a dedicated, motivated set of talented devs in the community - who can work effectively together and push each other on.

Something I'd like to see from all the ANO core dev grants is educational content created alongside for outsiders, with shared lessons to fast track future developers. It will be a hard task at first, but we can create the foundations for expansion later.

The proposed forum to learn together will make these efforts much more productive, both in short and long term.
Completely agree. I think David's Core Developer section on the forum is a good place to start. @David Chapman and I have spoke at length about how @Who and @tomjm can collaborate in achieving what you mentioned. @tomjm has project management experience and can help facilitate what we need as a community to better onboard future developers.
 
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#22
Hello @Anton Ilzheev, @Mike Buckingham, and @Valentin Ganev. I'm going to combine your questions about efficiency together so it is easier for other people to follow along.









To properly answer this question, I need to provide a bit of context on where LayerTech's FCT is going. Right now we are funding:

1. Community legal work
2. Infrastructure cost
3. Development cost associated with ANO pledges
4. Development cost outside of ANO pledges
5. Misc Operating expense

Since the ANO election, we aimed to set efficiency at 50% with the understanding that income from the remainder 50% will be enough to finance #2, #3, and #5. Similar to many of ANOs here, that didn't work out as planned due to substantial change in FCT price. In ideal situation, our base line efficiency should have dropped below 50% to account for the price change in order to continue funding of #2, #3, and #5. That would be in line with what many non-infrastructure ANOs have done. We did not do that and are currently running at deficit based on 50% efficiency.

During the election we also pledged to put 25% aside to fund an internal grant pool that can be used to fund non-pledge projects. We offered to pay for part of the website development out of this 25% but that turned out to not be needed. And we picked up some cost of the retreat based on the budget from this 25%. Based on my experience dealing with community building, I figured it will take a long time to get the ANOs to sort out community needs versus individual needs when dealing with the grant pool. By having this 25% internal fund, we have more freedom to make that determination ourselves instead of fighting against human nature. What we really want to fund is legal efforts to reduce systematic legal risks impacting all ANOs (e.g. BlockParty).

With that goal in mind, we anticipated significant part of that 25% going into legal expense. At that time, FCT price gives this 25% internal fund pretty healthy amount to fund both legal and other projects. As before, the financial projection did not work out as intended. By the time we were on-boarded as an ANO back August, this 25% internal fund provides barely $2500-$3500 a month to cover the legal cost. As @Matt Osborne rightfully pointed out, the legal cost is way above this amount despite discounts offered by @Shuang Leng. (Shuang has also been turning away non-Factom businesses so there are opportunity cost on her part that I'm not taking into account) Also we have been incurring legal costs for the community since election (four months before being on-boarded).

Needless to say, this 25% internal grant pool is not enough to cover existing legal cost, let alone past legal costs. The Legal Grant did subsidized some of the work done by Shuang, but a lot of the cost had been internalized by LayerTech. We anticipate the same negative cash flow moving forward since there are still a lot we need to accomplish: Non-profit creation, governance cleanup, various ANO document, process management, and efforts related to decentralization like IP, FIP, trademark, CLA, and committee works.

Lastly, while Tom is moving to core development, we are still continuing #3 and #4. While the community only interacts with @Shuang Leng, @Jason Chen, @tomjm and myself, we have other individuals working on pledged and unpledged projects that burn EC and benefit Factom community.

So to answer everyone's questions:

1. I don't think it's financially prudent to raise efficiency above 25%. Going above that will only worsen our negative cash flow and it doesn't make sense to commit to a position that I will later regret.
2. With that being said, once the FCT price significantly improve, I will obviously consider raising efficiency.
3. Yes like other core development grants, this will be recurring.
4. We pay in USD so if FCT price drops further, we need to reassess. We don't think it is prudent to discontinue core development, but as community we should consider scale back. (But right now we don't have enough understanding of the core development to even prioritize what we should or shouldn't scale back.)

I hope this clarify the situation. Let me know if you have any more follow on questions!
Hi Xavier, Thank you for a comprehensive reply which fully illustrates the balancing act you are trying to do with the amount of effort you are applying and the funding you are receiving. I had not fully realised until you described it this way. I think that getting more involved in development work with someone you have already worked with makes a lot of sense and wish you well with your grant application.
 
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