Gitcoin's Allo Protocol: Protocol Layer Infrastructure for Community Grant Programs

Forward the Original Title‘速览 Gitcoin 推出的 Allo Protocol：社区赠款计划的协议层基础设施’

Allo Protocol, launched by Gitcoin, is an open-source, decentralized, and modular digital public product designed to enable any community project to establish corresponding donation funding programs based on its needs, facilitating fund-raising and distribution.

The ongoing Gitcoin Grants Beta Round donations are running on the decentralized Gitcoin Grants Stack based on Allo Protocol. In this article, Foresight News will briefly introduce the basic information, mechanism design, and characteristic advantages of Allo Protocol.

Allo Protocol: Supporting Community-Led Funding Programs

Since its launch in 2019, Gitcoin Grants has provided substantial support for community projects in areas such as Ethereum infrastructure.

Meanwhile, every different type of community also hopes to implement similar grant programs. However, Gitcoin’s traditional grant platform, cGrants, does not support the implementation of customized community funding functions due to limitations in design.

Therefore, Allo Protocol is specifically introduced by Gitcoin as a solution to this problem. It makes more modular technical improvements based on cGrants, allowing anyone to establish a grant system in their community to raise funds for the respective development needs of different communities.

In summary, as a decentralized open-source platform, Allo Protocol aims to support community-led funding efforts (i.e., Gitcoin Grants) on a large scale outside the Gitcoin community, thereby providing financial support for a wide range of developers and innovators and driving the success of their projects.

Mechanism Design of Allo Protocol

Allo Protocol’s core goal is to make open-source collaboration more equitable and inclusive, thereby promoting innovation and progress, and its mechanism is designed around this vision.

Modular design

Under normal circumstances, the community needs to make many key decisions in the allocation process of grant funds (who is eligible, who can vote, how many funds are available, etc.), and Allo Protocol modularizes these key parts. Communities can plug and play with off-the-shelf tools to build and upgrade their grant programs.

Integrability

Allo Protocol is also designed to be easily integrated with a range of tools. Currently, it has integrated Gitcoin’s Passport protocol and anti-sybil mechanism and retains an interface that is easy to integrate with payment protocols, etc.

Democratic Fundraising Mechanism

Allo Protocol enables funding programs or grant ecosystem builders to launch with a customizable funding mechanism, while community members vote on which projects should receive financial support, ensuring the rational allocation and use of resources.

Decentralization

Allo Protocol does not rely on any centralized organization. All data and funds are stored on the chain, ensuring transparency and fairness, making it easier for project applicants to obtain financial support and avoiding the limitations of traditional centralized organizations. Developers can write and extend its features without permission.

Round

The core mechanism of Allo Protocol is Round. Each round is a cycle, lasting several weeks or months, for community members to vote on which projects should receive funding.

Each round has four stages: application, selection, voting and payment, and these stages are timestamped to ensure that all activities are completed on time:

1. During the application phase, project applicants can submit their projects;
2. The selection phase, where community members can choose the projects they want to support;
3. In the voting stage, community members vote on the selected projects;
4. During the disbursement phase, funds are allocated to projects that receive the highest number of votes;

Allo Protocol’s round mechanism ensures that all projects have the opportunity to receive financial support while avoiding the abuse and waste of funds.

Voting Strategy

The voting strategy determines the way community members vote, which can affect the fairness and reasonableness of the decision. Allo Protocol’s quadratic funding matching model is based on the calculation method of the quadratic function, making small votes receive greater weight, and large votes receive greater weight. The weight of voting will be smaller, which can encourage more people to participate in voting and avoid the monopoly of large households.

Payment Strategy

The payment strategy determines how financial support is allocated and ensures the rational allocation and use of funds. Allo Protocol provides a variety of different payment strategies, including Merkle payment strategy and proportional payment strategy.

Merkle payment strategy

The Merkle payment strategy uses the algorithm of the Merkle tree to ensure the security and transparency of funds. Each beneficiary has a unique address, which can be found in the Merkle tree. When funds are allocated, only the corresponding “leaf nodes” need to be updated in the Merkle tree.

Prorated payment strategy

The proportional payment strategy allocates funds according to each beneficiary’s share, ensuring that everyone receives appropriate financial support.

Gitcoin Grants Stack based on Allo Protocol

At present, Allo Protocol has become the protocol layer infrastructure of Gitcoin Grants Stack, the Gitcoin community grant program solution. Any Web3 project can design a community grant program through Gitcoin Grants Stack developed based on Allo Protocol.

To some extent, Gitcoin Grants Stack is to Allo Protocol what Lenster is to Lens Protocol, that is, Gitcoin Grants Stack is one of the DApp applications built on the protocol layer Allo Protocol.

The Gitcoin Grants Stack provides a simplified management process for grant projects — from grant plan setup and application management to fund allocation — to help them easily manage and develop their grant plans. It primarily consists of three components: Builder, Explorer, and Manager, which provide support as follows:

Builder allows project owners to create corresponding profiles to establish reputation and management procedures, and directly accept donations.

Explorer encourages donors to discover and support different plans and projects.

Manager is used to deploy plans, track and manage beneficiary applications, and streamline approval processes.

On this basis, the Gitcoin Grants Stack can be seen as a self-service product suite for hosting grant projects. With this suite, users can run Gitcoin-style grant forms in any ecosystem. It also plans to expand to other forms of grants in the future. Currently, the product suite provides all the functionality needed to run a grant mechanism, and users don’t need to write any code.

Disclaimer：

1. This article is reprinted from [Foresightnews]. Forward the Original Title‘速览 Gitcoin 推出的 Allo Protocol：社区赠款计划的协议层基础设施’.All copyrights belong to the original author [Frank, Foresight News]. If there are objections to this reprint, please contact the Gate Learn team, and they will handle it promptly.
2. Liability Disclaimer: The views and opinions expressed in this article are solely those of the author and do not constitute any investment advice.
3. Translations of the article into other languages are done by the Gate Learn team. Unless mentioned, copying, distributing, or plagiarizing the translated articles is prohibited.