These funds should be redirected to better support people who develop apps and use cases on Algorand. I am thrilled to see the Foundation reach out for feedback on the future of governance, because rewarding passivity doesn’t strengthen the Algorand ecosystem. That said, rewarding DeFI “participation” (which is often quite passive) in certain protocols distorts markets and will effectively pick winners via short-term subsidies. It would be nearly as untenable as the high risk-free reward rate for governance. If we want a flourishing DeFi ecosystem, we should reduce the risk-free rate and further invest in the people helping build the ecosystem.
My perspective is shaped in part because I applied for a grant and was rejected. The story could be distilled down like so (these are direct quotes):
Algorand Foundation: “It is fair to say you have provided a pretty clear value proposition here.”
Algorand Foundation: Application Denied
Me: Any feedback I can work on?
Algorand Foundation: “At the moment our focus is different, if you want to work on your use case and also get funding, it might be better to look for another chain honestly.” (emphasis mine)
That is a concerning statement to hear as a developer, it should give pause to any participant in this ecosystem, and it brings into stark relief how urgent it is to rework how hundreds of millions of Algo are being deployed for the benefit of the ecosystem.
So in response to what @Massimo said:
The main purpose of this discussion is… users talking directly to developers and entrepreneurs to find ways to bring more and more users to Algorand.
Based on my experience, I would say as a developer to the user community: it is time to accelerate toward community-directed grant funding if the Foundation is telling developers to “look for another chain.” The Algorand ecosystem needs more and better developer/entrepreneur support to realize valuable and sustainable use cases that arise organically from the community, not just where the Foundation is “focused.”
I want to call out some other commenter’s remarks to voice my support to their suggestions, as well:
If Algorand does not help these builders they would build on other protocols. Web3 is the future but it is risky, so any help dApps developers can get is important to kick-start and popularise the protocol.
Instead I think the foundation should focus on rewarding (i) entrepreneurs and innovators who are challenging the status quo of projects built in the crypto ecosystem, (ii) Active developers who contribute to open source protocols/new use cases
I would have no problem taking some significant Governance rewards away from Governors (that’s me too!) in order to aggressively advertise specific dApps to parts of the public, or to help assist in developing useful dApps to begin with so there exists something to market, but choosing “any DeFI with over $X TVL” as “the winner” doesn’t resonate with me.
I think the vast majority of the money should be here. Instead of giving money to people rehypothecating on DeFi platforms, money should be given to developers to attract them into the algorand ecosystem.