I’m curious about the idea you raised regarding supporting applications that could assume and subsidize gas fees to onboard new users to the ecosystem, which is interesting. Has this been experimented with elsewhere? How scalable would it be? and what could be the best indicators for making an objective choice of eligible applications?
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Hey @david, I spontaneously wrote to RTP yesterday evening to ask you to join the space and so that we could talk about both proposals. To be honest with you, I was very busy when your proposal came out and I couldn’t cover it as much as I wanted beyond featuring it in the recap. Regarding Jane’s proposal, I consider it a complementary proposal rather than a competitive one to yours since the moment I’ve read it. Thank you for considering me an Influencer btw, much appreciated 
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yes, this is just the beginning of Starknet, hope you guy can improve the tx speed
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Hi @david , thanks for your comment.
I wanted to share my response to clear the air. First of all, I want to clarify that my intention is not to compete with your proposal, but rather to offer a broader perspective on the matter. I understand that this is not a proposal that can be voted on by delegates, but rather a decision made by the Foundation Board. My view is that the more we, as an ecosystem, bring up this topic, the more the Foundation will see the need for it.
Regarding your suggestion that my proposal is unnecessary, I respectfully disagree. I believe that the Starknet Growth Fund should have a broader mandate, encompassing incentives, marketing, and user education to support the growth of the entire ecosystem. The latter two points were not explored at all in the comments and warrant a separate section. I felt that your piece was too focused on user incentives, which may ultimately make the Foundation uneasy about the sole focus. Of course, you have the right to disagree, just as I have the right to raise a proposal of my own.
However, I would appreciate it if you refrained from making hurtful comments, such as “rallying influencers behind yours for what appears to be some political game”. The only public figure I shared this with was Nurstar, with whom I have a good relationship. He received no remuneration of any kind to provide feedback. Those who have worked with him in the past know how much he cares about the ecosystem and tries to cover all the activities.
I agree that we should keep things professional and take our competitor hats off, and I promise to do the same. Look forward to getting this discussion fired up, flushing out the details, and integrating into one big ask for the Foundation, come at us!
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Hi David, this is a great idea to have a open discussion about starknet incentive reward for the community.
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personally i hope we will see many different proposals for a lot of topics. this is really the place for that.
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Thank you so much for your response! Following our research (@raho), one of our main takeaways was that self-organization without proper guidance/KPIs is inefficient and could potentially create a toxic environment. The latter is avoided via thoughtful, thorough discussions, so thank you! After reading the proposal by @jane0mac , we have a few thoughts to share.
Taking a step back, the Starknet Foundation allocation was divided across multiple sub-categories with specific instructions, including:
- Community Rebates (9%): Retroactive funding for onboarding community to Starknet from Ethereum.
- Grants (12%): For research and work done to test, deploy, and maintain the Starknet Protocol.
- Strategic Reserve (10%): An ecosystem fund for mission-aligned activities.
- Unallocated (8.1%).
It would be worthwhile to discuss which aspects of these strategies the StarkNet Community might best equip the community to support. It could get messy to conflate the ecosystem marketing (platform developer audience) and general marketing (consumer audience) under one committee’s purview, considering the clear separation in allocations outlined above and the varying roles the two would play. Additionally, we were slightly confused about the statement in the @jane0mac post stating, “The GC will provide guidance, governance, and monitoring of the usage of “Starknet Governance Fund,” and think that more clarity is needed on this front before seriously considering the proposal laid out in the alternative GC post.
Regardless, it would be helpful to have the public input (and support) of the Starknet Foundation. That way, we may better understand their intent/plans. After becoming more mission-aligned with the Foundation, the community can rally to fill in the details and discuss the optimal design/structure.
In the meantime, our colleague Ally Zach recently published an analysis of Optimism/Arbitrum retention that may be worth a read. Its findings generally suggest that incentives attract users (eg. Aave on Optimism), and native apps (e.g. GMX) may be able to attract users organically and more effectively retain them.
Once the community has better understood the potential scope of the Foundation’s plans, we would be more than happy to assist in any way possible!
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I agree pretty heavily with @darkosnightmare
What we need in my opinion are:
- Token economics clarity, regardless of outcome
- Incentives to create lasting TVL
- Incentives that support lasting usage, that will reduce short spikes that don’t last
Everything StarkWare has done this far has prioritized a focus on builders. Ultimately, if we can provide some incentives to actually build within these proposals it will increase the amount of builders.
Additionally, giving some STRK to projects that have already been building on Starknet will be beneficial to the ecosystem IMO and amplify growth.
Lastly if “Growth” means more builders, more TVL, and more active users, we should likely create a pot of incentives that are directed towards marketing efforts that grow net amount users in Starknet and be seen as a premier L2 ecosystem to build on.
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- In my mind this would show up as a cohort-based model. That would mean that we can have a clear way of tracking changes to the program, and recognize when a change we make results in better or worse results. Simultaneously, it focuses the community on moving fast instead of becoming content and possibly lazy.
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As long as you can maintain track of and record where each batch of funds is going, I don’t believe that’s required. The solution might be as easy as keeping an eye on the two primary treasury wallets. Although, in most circumstances, a team with present financing should be less likely to acquire concurrent grants.
The debate around user gas fee subsidies is undoubtedly worthwhile, but in our opinion, it should be an addition to any incentive scheme rather than a replacement. There shouldn’t be a single method that works for everyone. In any case, Starknet has lower gas prices than other networks.
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Thank you for your analysis, david. Indeed, Starknet has a fairly well-developed ecosystem. Only 14 are currently working on the main network. Obviously, the idea of developing ecosystem projects is paramount and fundamental. In my opinion, the most effective development is the idea-money policy. Let me explain: I refer to the ideological policy as the organization of the interaction of projects at the initial stage with the active participation of the Starknet team. Involvement of Starknet developers in the development of projects within the ecosystem, including work in hackathons and personal assignment of Starknet team members to areas (NFT, Defi…). This is often much more important than the allocation of funds. At the same time, stimulating projects is no less important in the development of the ecosystem. But I like your point here. Thanks
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Hi!
Briefly jumping in to make a few points:
- Starknet foundation is ramping up and will make a few announcements, including regarding token allocations based on various criteria in the coming days/weeks.
- As said initially in the 3-part blog that announced the STRK token and the SNF (Starknet Foundation), “developers first” is a principle we believe in, and the rationale is explained there. The exact mechanics of how to adhere to this in a way that is sustainable and fair, is something the SNF is working on.
Will read this thread and get back w/ specific inputs later today/this week.
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I think that the establishment of the Governance Fund is a great idea to incentivize users and builders to participate in the Starknet ecosystem. The proposal seems to be well-thought-out, with clear guidelines and a plan for the allocation of tokens.
I appreciate that the proposal considers the potential of Starknet in different areas such as GameFi and NFTs, which could attract a wider range of users and projects.
In terms of the application process, I think it is fair that projects must demonstrate their efforts to build the Starknet ecosystem and onboard users before applying for incentives. The questions listed in the proposal provide a clear framework for applicants to follow.
Having a Selection Committee to oversee the program and make unbiased decisions is also a positive aspect of the proposal. It would ensure that the allocation of tokens is fair and transparent.
Overall, I think the proposal has great potential to drive growth and adoption of Starknet. I look forward to seeing how the community responds to this proposal, and I hope that it will be implemented soon 
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Great ideas and programs.
I think it should be noted that at present, the TVL of starknit is very small and the number of users is not large. The daily activity is about 4000.
In addition to attracting more projects, it is important to attract more users first.
When the number of users increases, more projects will enter. I hope Starnet Foundation can consider this issue. At the same time, it should be noted that many users have been lost due to the poor experience of the starnet network before (these users are powerful experienced users, and they will provide for the project), and they need to be saved
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You said that before reapplying, projects should have used up their resources, but I can see how outages may be problematic if the money stream were to suddenly halt, even momentarily. This element of your proposal will be changed so that projects may reapply even while they still have the current allocation; however, no additional incentives will be given out until the current allocation has been used up. As a result, worthwhile projects in the Starknet ecosystem won’t experience periods of unpredictable volatility as they wait for backing.
I concur with every other point. The reward programme, in my opinion, should only be available to teams that agree to a thorough board evaluation and agree to utilise the best.
It’s crucial to make sure the committee is made up of people who are unbiased and free from conflicts of interest. Can you elaborate on the criteria used to choose the committee members and their backgrounds?
Further details on the token distribution process and the safeguards in place to guard against fraud and abuse would be beneficial. Further information on the program’s plans to guarantee that tokens are used wisely to foster the expansion of the ecosystem would also be beneficial. 
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Hey @Tnorm, I think there are some great points here. Just to make sure I understand your message correctly, you’re saying that the ecosystem should have a view of areas they are best equipped to support (growing consumer or platform developer audience), but that the Foundation’s token allocation does indeed have “funding” carved out for both types of activities.
Question for you: Lets just say that DAO coordination may indeed prove difficult for things like User Education, do you think then that the Foundation should still find a way to make sure these types of activities are executed, albeit centralized such as hiring an Education team to lead? Or do you think that this mandate should fall back under the StarkWare team?
As for the statement around guidances, governance, and monitoring of the usage of Starknet Governance Fund, my point is that if the Foundation can indeed carve out an allocation to support user growth, be it for incentives, education, or marketing (all or only one) there should be a Goverance Committee that assesses the merits of each proposal and does the follow up work rather than the Foundation Board itself.
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Thanks, @david, this is a well-thought and timely proposal. I want to share a bit of info on what’s going on with the Starknet Foundation (SNF) for context. Going back to the blogs that announce SNF and STRK, notice that:
- 18% (1.8B STRK) are allocated towards end users, via Provisions and Rebates
- 12% (1.2B STRK) are allocated towards developers of infrastructure via Grants
Regarding the mechanics and process of distributing STRKs per the rationale explained in those posts, the SNF has appointed a number of committees to initiate work on these items. Details about the progress made so far and next steps will be posted quite soon. We have now also made some progress on this front as well, and will be introducing members of the SNF in the coming weeks. The reason for the lack of communication on the SNFs part in the months that passed since the initial announcements is that it took time to start staffing the SNF. We must ensure that the excellence associated with Starknet be also reflected in the SNF team, and I’m quite optimistic on this front.
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As a member of Optimism Governance and a participant in DeFi Committee A in Season 2, we have had the opportunity to work on the frontline in the Optimism Collective as a delegate.
I echo @Tnorm comment on identifying a clear strategy for the distribution of funds before setting up the fund. The lack of clarity hindered the potential of Optimism’s Governance Fund, but their seasonal reviews provided an opportunity for the community to review and identify better ways to move forward.
Regardless it’s paramount that the StarkNet community takes the time to discuss different pathways for the Starknet governance fund before its deployment.
Here are some of my thoughts on how the program can be improved:
Strategy
Initially, there will most likely be a focus on DeFi protocols over education or tooling. Still, there should be different pathways to evaluate educational resources or tooling for the Starknet ecosystem. I would suggest that there are alternative templates that cater to these categories that make it easier for these projects to receive funding.
Touching on current proposal template, we could expand further on the template with some of the following; Competitors, USP (Unique Selling Proposition) and Milestones (if applicable)
Accountability
Accountability has already mentioned a couple times. Simply put, a lack of accountability will prevent us from evaluating the success of this program and understand how we can improve it moving forward.
- Milestone/Tranches
- Protocols can unlock more of their grant once they reach certain milestones. This can be tracked in public using Questbook or another tool.
- This prevents protocols from utilizing funds in an unideal way, and ensures they work in a manner that benefits both the protocol and the broader ecosystem.
- Dashboards
- This will help evaluate the success of the growth fund when protocols implement the STRK incentives
- Follow up accountability threads
- Depending on the type of work; education or tooling, they can provide follow up accountability threads to evaluate progress. I.E. ShowKarma on Optimism
- Monthly or Quarterly updates (depending on the expected length of fund distribution) would be helpful
Accountability combined with reflection will be essential in helping Starknet growth fund reach its potential. In practice, there will need to be members in the committee who are focused on the accountability aspect to ensure that receipents adhere to providing updates and also receive their funds at the relevant milestones.
This type of operational work is time-consuming but handled by a specific individual or two, this will help get the most out of the growth fund.
Long-term alignment
As STRK is allocated to recipients, the DAO should consider the following:
- Should these protocols be able to self-delegate with funds provided via the governance access voting power?
- This was a controversial topic in Optimism and should be tackled now rather than later to avoid confusion amongst recipients.
- What type of projects should be prioritized?
- Blue chips such as MakerDAO have dedicated Starknet teams.
- Novel projects?
Selection committee
“A committee from within the Starknet Foundation should look after the entire incentive program and make unbiased and rational decisions on all applications.”
Initially, the committee can be formed by members of the StarkNet foundation but as time passes, it could transition to a hybrid committee formed by members of the Starknet Foundation and the community. Otherwise, it would be a lost opportunity to incentivize participation from community members.
Active members of the community who are well-versed in the ecosystem and possess relevant skills would be incentivized to participate in the ecosystem. It also hands over responsibility to the community in a sustainable manner that doesn’t compromise the quality. Only those who are committed to the ecosystem can become part of the committee.
Reflection
A portion of time dedicated for review will provide the DAO with X amount of time to reflect on the positives and negatives of the program and its processes before moving forward with further fund distribution.
It will also enable flexibility in the process of governance funds instead of sticking to a single process for an indefinite period.
Governance fund/growth fund has been used interchangeably with another in this post.
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I think we can evaluate based on the activities of the project. For example, if they want to apply for incentive, they need to achieve a certain number of transactions on their project and maintain for at least X weeks or days.
As a block chain, the most important thing is the users, not TVL. Both whales and poor users are welcome. So I think to monitor the trasactions on a project it a better way to determine the incentives.
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Right on. Notice that Rebates (9%) are allocated towards onboarding from Ethereum onto Starknet. Additionally, regarding ongoing flow of tokens to those working to maintain and improve the system, recall this quote from the 3rd blog:
Developers build and maintain the software used by Operators to secure the network, and they create apps that enhance the network’s functionality for users. Consequently, a portion of the fees and new minting will go to Smart Contract Developers and Core Developers, as follows:
- Smart Contract Developers: the StarkNet protocol can automatically measure the value provided by smart contracts, via the L1 and L2 fees paid by Users of these contracts. The StarkNet protocol will automatically allocate a fraction of fees and ongoing new minting to Smart Contract Developers. Smart contracts that offer more value to Users — measured by fees paid for them — will receive a larger portion of tokens allocated for this purpose.
- Core Developers: The StarkNet protocol has no automatic way of quantifying the contribution of Core Developers, such as those writing code for provers, sequencers, full nodes, etc. Consequently, token allocation to such Core Developers and other contributors whose contribution is not measurable by the protocol necessarily requires some human discretion. A model will be established for applying this in a manner that is consistent with the goal of decentralization.
- The exact mechanism for allocating tokens from new minting and fees to both types of Developers is yet to be determined. The design principles will include anti-gamification and transparency.
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