In May, Divvi partnered with Celo Public Goods to launch Proof of Impact: a results-based reward campaign for apps consuming gas on Celo Mainnet – gas consumption being a reliable proxy for network activity.
Instead of relying only on manual and resource-intensive retro-funding mechanisms, Divvi’s protocol allows DAOs like Celo Public Goods to automatically and transparently reward onchain outcomes.
The set-up for CeloPG was straightforward: gas usage on Celo was chosen as the onchain KPI and the Divvi reward pool smart contract was funded by CeloPG. Divvi then began tracking and attributing gas usage to registered apps, and rewarding builders permissionlessly.
This enables builders to register for CeloPG's campaign without preparing a time-consuming application or wait time. After the builder integrates 10 lines of code, Divvi can attribute their users' impact!
If you’re a builder in web3, you’ve heard of gwei: it’s the gas fee every onchain transaction has to pay. You also know that the price a user pays for their transaction varies based on the volume of traffic on the network. What you might be less familiar with is how the math behind it works.
To understand how to calculate the fee for a transaction, it is first important to know what the variables in the formula are:
Gas usage = the units of gas consumed by a tx
Gwei = the price of a unit of gas
The formula to calculate how much a user pays in gas fees is:
Gas fees = gas units x gas price (gwei)
Divvi calculates builder rewards based on the total gas consumed by the transactions their app referred in a given reward period. Each builder’s reward is proportional to their share of total gas consumed by all registered builders in that period.
It’s important to note here that gas fees (meaning: the price paid for the gas consumed) is not factored into the reward formula.
Reward Formula:
Builder's Reward Share = (Builder's Gas Consumption) / (Total Gas Consumption by All Builders participating in the Divvi campaign)
Now that we’re a month into the CeloPG campaign, let’s take a look at the results.
The easiest way to examine the results yourself is to look at the Divvi's Dune Dashboard for the Proof of Impact Campaign.
The diagrams below look at the first round of rewards from May, and show that there was one app that had a notably higher proportion of gas usage compared to the others. In the second diagram we’ll exclude that app to get a perspective on all other apps’ impact.
Diagram 1: May Reward Distribution for CeloPG Campaign
Diagram 2: Without Top Earner in May Reward Distribution for CeloPG Campaign
As you can see, the gap between the first and second place apps is quite large, and then again between the second and the rest. You can already see on the Dune board that the second round competition is starting to level out; this was a breakout performance in the first round.
With traditional funding, builders often compete for winner-take-all funding opportunities where only a select few walk away with rewards. Let’s compare that setup to Divvi’s Proof of Impact campaign to understand how the mechanism changes the long term outcome.
How it starts:
How it ends up:
How it starts:
How it ends up:
Looking at the data for Round 2, we see builder registrations and gas consumption double within the first week: it is apparent that competition is growing and more builders are lining up to get funded for their impact. This round is already bigger than the last one, and Divvi isn’t slowing down!
There is active support ready for any builder who wants to get paid for onchain user activations. The best way to get started and stay up to date on new campaigns is to join our Telegram Group.
Divvi has also been cooking up something entirely new that will address proportional weighting for reward payouts to provide an additional incentive for newer and smaller apps/builders that won’t have as high of volume right away. This will be a new style of campaign that funding protocols can opt-in if they want a campaign that targets a more specific kind of growth incentive.
Stay tuned on telegram!