Explore Protocol Guild: backed by a solid foundation of over 100 million US dollars in gifts for Ethereum L1 research and maintenance

Original author: Karen, Foresight News

Projects such as ether.fi and Taiko have made donations to Protocol Guild, and the measures of LayerZero’s mandatory airdrop donation have attracted widespread attention and discussion within the community, along with some confusion and questions.

Protocol Guild, as a solid backing for the development and maintenance of Ethereum L1, plays a crucial role in the ecosystem. So, what are the membership requirements, donation situation, and donation release mechanism behind this mysterious and powerful organization? This article will take you to explore the truth.

What is Protocol Guild?

Protocol Guild is an organization established for the development and maintenance of Ethereum L1, dedicated to providing financial support to core contributors in the Ethereum ecosystem through 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 the 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, at the end of January 2024, Protocol Guild disclosed its official commitment and ended the pilot project, meanwhile launching PG v2, aiming to make Ethereum L1 developers identifiable on-chain and showcase the current contributors and their contribution duration through a time-weighted list and clear membership criteria.

Protocol Guild has committed to proposing that Ethereum-based projects allocate 1% of their native tokens for donation to Protocol Guild. The main reason is to attract and retain high-quality contributors, providing them with a more substantial expected potential return 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 4 years.

Why choose a 1% ratio? Protocol Guild’s consideration is that if 33% to 66% of projects can adopt this donation standard, then each member is expected to receive an annual income of $500,000 to $1,000,000 on average.

Currently, Protocol Guild has received a total of 76 million US dollars (current value) in donations. In the past year, members have received a median donation amount of up to 54,000 US dollars. At the same time, the member team of Protocol Guild has grown from the initial 90 to the current 177.

Who are the current members of Protocol Guild?

Protocol Guild has gathered 177 members so far, mainly from members of the Ethereum Foundation and Ethereum mainnet clients.

Among them, clients include Geth, EthereumJS, Erigon, Hyperledger Besu, Lighthouse, Lodestar, Nethermind, Prysm, Reth, Nimbus, Teku, etc. Each client has 6 to 15 contributors who are included in the Protocol Guild, making up nearly 60% of the total members in the Protocol Guild.

In addition, members of the Protocol Guild include the Ethereum Foundation’s Application Research Group (ARG), ethPandaOps (a sub-group of the Ethereum Foundation), Ipsilon development team (focused on EVM research), the Ethereum Foundation’s Portal Network (dedicated to redefining the way resource-constrained devices participate in the Ethereum network), as well as Protocol Support, Cryptography, Consensus R&D, Robust Incentives Group, Testing, and other key teams.

Among them, 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 worth noting that Vitalik Buterin is currently not listed in the Protocol Guild’s member list.

What donations have Protocol Guild members received?

The thriving development of Protocol Guild is inseparable from the generous donations of many projects. Which projects have donated to Protocol Guild? How do Protocol Guild members benefit from the donations?

As the first project committed to donating to Protocol Guild, ether.fi has promised to donate 1% of its token supply to Protocol Guild before Protocol Guild’s commitment is disclosed at the end of January this year, in support of the continued development of Ethereum.

Later, DeFi mortgage lending protocol PWN, zkRollup-based Ethereum Layer 2 project Taiko, decentralized lending pool Ethereum Credit Guild, modular decentralized storage Layer 2 project EthStorage, and several other Meme projects followed suit, allocating 1% of tokens to Protocol Guild.

In addition to the 1% token commitment, Protocol Guild has also received various donations during the pilot period, including 500,000 UNI, 200,000 ENS, 2,000,000 LDO, 3,000,000 ARB, etc.

Source: Dune

Even the US spot bitcoin ETF issuer Bitwise recently donated 50% of its Ethereum advertising NFT proceeds to Protocol Guild. Similarly, in September last year, another ETF issuer VanEck announced plans to donate 10% of the profits from its Ethereum futures ETF to Protocol Guild, in gratitude for the contributions of Ethereum contributors over the past decade.

And a few days ago, the LayerZero Foundation implemented mandatory donations during the token airdrop claiming process, requiring airdrop users to donate $0.1 USDC, USDT, or native ETH per ZRO token, which will be directly used for the Protocol Guild. This will result in a donation of approximately $18.5 million to the Protocol Guild. In addition, the LayerZero Foundation will match all donations, up to a maximum of $10 million.

According to Dune data, the total amount of donations received by Protocol Guild is currently worth over 76 million US dollars, with ether.fi and Taiko donations accounting for 66% of the share. If we add LayerZero’s mandatory donation, the amount received by Protocol Guild will exceed 100 million US dollars.

As of this month, the median donation amount received by each member of Protocol Guild in the past 12 months was $54,000, which is expected to increase to $81,000 in the next 12 months. Within the next four years, $57 million in donated funds will be attributed and released to Protocol Guild members, and this is only limited to the current received donations.

What qualifications are required to become a Protocol Guild member?

Protocol Guild can be seen as a donation and fund allocation mechanism for Ethereum developers and maintainers. So, what qualifications are required to become a member? According to the official documentation of Protocol Guild, here are some basic requirements:

• The project/organization is completely open source;
• Regularly active in the Ethereum specification repository, research forums, feature prototype design, and regular Ethereum protocol calls;
• Focus on researching protocol specifications, maintaining and developing core Ethereum protocols (such as contributing to Ethereum mainnet clients like Erigon, EthereumJS, Geth, Hyperledger Besu, Lighthouse, Lodestar, Nethermind, Nimbus, Prysm, Teku, and Reth, etc.), and conducting research and implementing experiments related to potential protocol changes or Protocol Guild research.

However, meeting the above criteria is only the foundation and is not enough to ensure qualification as a member of the Protocol Guild. Applicants also need to have worked continuously for at least 6 months in relevant organizations/projects, and expect this work to continue without interruption for more than one quarter. For non-full-time members, their profit sharing will be reduced accordingly based on the actual situation.

The share of income of Protocol Guild members is directly proportional to the square root of their contribution time to Ethereum (in months), ensuring a fair correspondence between contribution and reward.

Currently, in Protocol Guild, it seems that new members need to join through invitation and nomination from existing members, followed by review and discussion by all existing members. If there is a conflict of interest between the nominator and the nominee, it needs to be disclosed in advance to ensure the fairness and transparency of the process.

How to release donations from Protocol Guild?

When it comes to the funding release mechanism of Protocol Guild, the core lies in its smart contract architecture. Protocol Guild uses the smart contracts created by Splits to manage the ownership, distribution, and flow of donated funds. All donations are processed through a 4-year ownership contract on the mainnet, which assigns the funds to a designated wallet (Pass-Through Wallet), and then the designated wallet sends the funds to the splitting contract for distribution based on the contributions of the members.

Among them, the split contract contains the addresses of all Protocol Guild members and their respective shares of the proceeds, which are updated quarterly to reflect changes in membership, changes in the number of members, and adjustments to the weights of each member.

In addition, Protocol Guild uses DAOhaus’ Moloch V3 contract for on-chain governance, giving each member equal voting rights to approve or reject changes to on-chain membership. Once a decision is made, Protocol Guild’s multisignature will be responsible for processing these changes and updating the split contract to reflect the latest membership list and fund allocation.

In the vast universe of Ethereum, Protocol Guild has attracted core contributors dedicated to Ethereum development and maintenance with its unique donation and fund allocation mechanisms. As a bridge between funding and contributors, Protocol Guild not only ensures the reasonable allocation of funds, but also injects a steady stream of power into the thriving development of the Ethereum ecosystem.

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