Exploring Protocol Guild: 177 members, awarded over 100 million dollars, a solid support for Ethereum L1 development and maintenance
What organization is Protocol Guild, which is self-funded by ether.fi and Taiko, and has mandatory donations from LayerZero?Author: Karen, Foresight News
Projects like ether.fi and Taiko have made donations to Protocol Guild, and LayerZero has mandated that airdrop users contribute, sparking widespread attention and discussion within the community, along with some confusion and questions.
As a solid backing for the development and maintenance of Ethereum L1, Protocol Guild plays a crucial role in the ecosystem. So, what are the membership requirements, donation situations, and donation release mechanisms behind this mysterious and powerful organization? This article will explore these questions.
What is Protocol Guild?
Protocol Guild is an organization established specifically for the development and maintenance of Ethereum L1, dedicated to providing financial support to core contributors in the Ethereum ecosystem through incentives from the native tokens of Ethereum ecosystem projects, ensuring the vigorous development and continuous innovation of the Ethereum network.
Since the beginning of 2022, Protocol Guild has completed its mechanism design and started recruiting members. In May of the same year, Protocol Guild launched the Protocol Guild Pilot program. After two years of careful operation and continuous improvement, by the end of January 2024, Protocol Guild will disclose its official commitments and conclude the pilot project, while launching PGv2, aimed at making Ethereum L1 development contributors directly identifiable on-chain and showcasing the individuals currently contributing to the protocol and their contribution duration through a time-weighted list and clear membership criteria.
Protocol Guild's commitment suggests that Ethereum-based projects allocate 1% of their native tokens to donate to Protocol Guild, primarily to attract and retain high-quality contributors, providing them with more substantial expected potential returns, and ensuring that these tokens ultimately flow into the hands of valuable contributors. It is worth mentioning that this 1% of native tokens will not be released all at once but will be gradually released over four years.
Why choose the ratio of 1%? Protocol Guild's consideration is that if 33% to 66% of projects can adopt this donation standard, then each member can expect to receive between $500,000 and $1,000,000 annually.
Currently, Protocol Guild has received a total of $76 million (current value) in donations. In the past year, the median donation amount received by members has reached $54,000. Meanwhile, the number of members in Protocol Guild has grown from the initial 90 to 177.
Who are the current members of Protocol Guild?
As of now, Protocol Guild has gathered 177 members, primarily from the Ethereum Foundation and Ethereum mainnet clients.
The clients include Geth, EthereumJS, Erigon, Hyperledger Besu, Lighthouse, Lodestar, Nethermind, Prysm, Reth, Nimbus, Teku, etc., with 6 to 15 contributors from each client included in Protocol Guild, making client contributors account for nearly 60% of the total members in Protocol Guild.
In addition, Protocol Guild members also include the Ethereum Foundation's Application Research Group (ARG), ethPandaOps (a subgroup of the Ethereum Foundation), the Ipsilon development team (focused on EVM research), the Ethereum Foundation's Portal Network (dedicated to redefining how resource-constrained devices participate in the Ethereum network), as well as several key teams such as Protocol Support, Cryptography, Consensus R&D, Robust Incentives Group, and Testing.
Some well-known members include Tim Beiko and Danny Ryan from the Ethereum Foundation's Protocol Support team, as well as Justin Drake from the Consensus R&D team. However, it is noteworthy that Vitalik Buterin is currently not listed among the members of Protocol Guild.
What donations have Protocol Guild members received?
The thriving development of Protocol Guild relies on the generous donations from numerous projects. Which projects have donated to Protocol Guild? How have Protocol Guild members benefited from these donations?
ether.fi, as the first project to commit to donating to Protocol Guild, pledged to donate 1% of its token supply to Protocol Guild to support the ongoing development of Ethereum before Protocol Guild's commitment disclosure at the end of January this year.
Subsequently, the DeFi lending protocol PWN, the zkRollup-based Ethereum Layer 2 project Taiko, the decentralized lending pool Ethereum Credit Guild, the modular decentralized storage Layer 2 project EthStorage, and several other meme projects followed suit by allocating 1% of their tokens to Protocol Guild.
In addition to the 1% token commitment, Protocol Guild also received various donations during the pilot period, including 500,000 UNI, 200,000 ENS, 2 million LDO, and 3 million ARB.
Source: Dune https://dune.com/protocolguild/protocol-guild
Even Bitwise, a U.S. spot Bitcoin ETF issuer, recently pledged to donate 50% of the profits from its Ethereum advertising NFTs to Protocol Guild. Coincidentally, last September, another ETF issuer, VanEck, announced plans to donate 10% of the profits from its upcoming Ethereum futures ETF to Protocol Guild in gratitude for the contributions of Ethereum contributors over the past decade.
Recently, the LayerZero Foundation also implemented mandatory donations during the token airdrop claim process, requiring airdrop users to donate $0.1 USDC, USDT, or native ETH for each ZRO, with the donations going directly to Protocol Guild. This will result in approximately $18.5 million in donations to Protocol Guild. Additionally, the LayerZero Foundation will match all donations, up to $10 million.
According to Dune data, the total donations received by Protocol Guild are currently valued at over $76 million, with donations from ether.fi and Taiko accounting for 66% of the total. If we include LayerZero's mandatory donations, the total amount received by Protocol Guild will exceed $100 million.
As of this month, the median donation amount received by each Protocol Guild member over the past 12 months is $54,000, and it is expected to grow to $81,000 in the next 12 months. Over the next four years, $57 million in donation funds will be allocated and released to Protocol Guild members, and this is only for the donations currently received.
What qualifications are required to become a Protocol Guild member?
Protocol Guild can be seen as a donation and funding distribution mechanism for Ethereum developers and maintainers. So, what qualifications are needed to become a member? According to the official Protocol Guild documentation, here are some basic requirements:
- The project/organization must be fully open-source;
- Regularly active in Ethereum specification repositories, research forums, functional prototype design, routine Ethereum protocol calls, etc.;
- Focused on researching protocol specifications, maintaining and developing the Ethereum core protocol (such as contributing to the implementation for Ethereum mainnet clients like Erigon, EthereumJS, Geth, Hyperledger Besu, Lighthouse, Lodestar, Nethermind, Nimbus, Prysm, Teku, and Reth), conducting research and experimental implementations related to potential protocol changes, or Protocol Guild research, etc.
However, meeting the above conditions is just the foundation and is not sufficient to ensure membership in Protocol Guild. Applicants must also have worked continuously in the relevant organization/project for at least 6 months, with the expectation that this work will continue, and the interruption period of contributions must not exceed one quarter. For non-full-time members, their earning weight will be proportionally reduced based on actual circumstances.
The share of earnings for Protocol Guild members is proportional to the square root of their contribution time to Ethereum (measured in months), ensuring a fair correspondence between contribution and reward.
Currently, in Protocol Guild, the admission of new members seems to require an invitation and nomination from existing members, followed by a review and discussion among all existing members. If there is a conflict of interest between the nominator and the nominee, it must be disclosed in advance to ensure the fairness and transparency of the process.
How are donations to Protocol Guild released?
When discussing the release mechanism of the donations received by Protocol Guild, the core lies in its smart contract architecture. Protocol Guild utilizes smart contracts created by Splits to manage the ownership, distribution, and flow of donation funds. All donations are processed through a 4-year vesting contract on the mainnet, which allocates the funds to a designated wallet (Pass-Through Wallet), and then that designated wallet sends the funds to the split contract for distribution based on members' contribution shares.
The split contract contains the addresses of all Protocol Guild members and their respective vested shares, updated quarterly to reflect changes in membership, additions or reductions of members, and adjustments to each member's weight.
Additionally, Protocol Guild uses DAOhaus's Moloch V3 contract for on-chain governance, granting each member equal voting rights to approve or reject changes to on-chain membership. Once a decision is reached, Protocol Guild's multi-signature will be responsible for processing these changes and updating the split contract to reflect the latest member list and fund distribution.
In the vast universe of Ethereum, Protocol Guild attracts core contributors dedicated to Ethereum development and maintenance with its unique donation and funding distribution mechanism. As a bridge connecting funds and contributors, Protocol Guild not only ensures the reasonable allocation of funds but also injects a continuous driving force for the prosperous development of the Ethereum ecosystem.
