[DAO:d0c373f] Building a Web3 Esports Epicentre in Decentraland

[palewin]

We had the initial onboarding meeting with the grantee. The team is very enthusiastic about the project. In parallel, we are exchanging information with the team to ensure that the DAO is funding a project that complies with Decentraland’s Terms of Use and Content Policy .

Additionally, we detected that the project will last 7 months and not 6 as described in the proposal.

Although the rule is that contracts are created 15 days after the proposal passes, we request the DAO Committee (@HPrivakos @Tobik @rizk) to wait a few days for all issues to be clarified before creating the corresponding Vesting Contract.

Thank you!

[Zino]

Dear @LeonardC

We want to address a few concerns and outline additional requirements regarding this project.

1. Clarification on Project Model (Predict-to-Earn vs Raffle System):
We have noted an initial description of the project as a ‘predict-to-earn’ model, which later transitioned to a ‘raffle’ system. This shift in the project’s fundamental engagement model raises significant concerns. There must be absolute clarity and consistency in the project’s description and execution. We urge you to provide a detailed explanation and justification for this change.

2. Requirement for Public Smart Contract Audit:
An integral part of ensuring the security and reliability of your project involves conducting a thorough audit of the smart contract, as you mentioned.
**We require that the results of this audit, along with proof of payment to the auditing company, be submitted to us and here within the next month before March 28. **
Furthermore, these audit results need to be made publicly available to uphold transparency and trust within the Decentraland community.

3. Verification of Audit by Decentraland DAO:
Upon submission of the audit report, we will independently verify the audit’s authenticity and comprehensiveness. This step is to confirm the audit’s integrity and the project’s adherence to the highest standards of security.

4. Compliance with AFFIDAVIT OF LEGALITY:
As we mentioned in this message ([DAO:d0c373f] Building a Web3 Esports Epicentre in Decentraland - #21 by palewin), we wanted to make sure that the project complies with DCL’s Terms and Conditions and Policy of contents. That’s why, in light of these concerns, we want to tell to the community that the Decentraland Foundation has executed an AFFIDAVIT OF LEGALITY concerning this project. This declaration delineates the legal and ethical standards expected in your project’s execution. We require your rigorous compliance with these standards as a condition for ongoing support and collaboration.

Please respond with detailed information addressing each point at your earliest convenience. We are committed to supporting projects that align with our community’s values and standards, and we look forward to your continued partnership in this endeavor.

Last but not least, we request the DAO Committee (@HPrivakos @rizk @Tobik) enact the vesting contract within a 7-month duration, starting the 15 of February (because the grantee explained that seven is the real-time duration of the project).
Also, the Public Roadmap has been done and agreed with the grantee.

If you have any questions or need further clarification, please contact me.

Best regards,
Zino

[Banned]

@Zino

We want to address a few critical concerns

@Zino

Last but not least, we request the DAO Committee (@HPrivakos @rizk @Tobik) enact the vesting contract within a 7-month duration, starting the 15 of February

Don’t you want to make sure he addresses CRITICAL Concerns before you start paying him?

[Zino]

The Smart Contract (the pink elephant in the room) should be ready when the contests begin. And that will happen in the month 2. So, for now, it is not a problem, and the vesting contract can be paused.

Thank you for the input.

[LeonardC]

Dear Zino,

Thank you for your message and for outlining the concerns and additional requirements regarding our project. We appreciate the opportunity to address these points and provide clarity on each matter.

1. Clarification on Project Model:
   We understand the concerns raised regarding the project model, particularly regarding the initial description of a ‘predict-to-earn’ model and its transition to a ‘raffle’ system. We want to clarify that this issue was addressed promptly in the community comment session on January 11. We reiterated that our intention was never to engage in any form of betting activities, and the term ‘predict-to-earn’ was a regrettable miscommunication. Our project has always been centered around a voting and raffle system, and we apologize for any confusion caused by our choice of words.

2. Requirement for Public Smart Contract Audit:
   We acknowledge the requirement for a thorough audit of the smart contracts implemented in our project. We confirm that all smart contracts will undergo auditing by a reputable third-party firm. The audit report will be submitted to the Decentraland DAO and shared within the community under this proposal by the specified deadline of March 28.

3. Verification of Audit by Decentraland DAO:
   We understand and support the need for the Decentraland DAO to independently verify the authenticity and comprehensiveness of the audit report. We are fully committed to ensuring the integrity and security of our project, and we welcome the DAO’s verification process.

4. Compliance with AFFIDAVIT OF LEGALITY:
   We affirm our commitment to adhering rigorously to the standards outlined in the AFFIDAVIT OF LEGALITY executed by the Decentraland Foundation. Compliance with these standards is essential for maintaining ongoing support and collaboration within the community.

We appreciate your thorough review of our project and the opportunity to address these concerns. Should you have any further questions or additional concerns, please do not hesitate to let us know. We are committed to providing any necessary clarification and ensuring that our project aligns with the values and standards of the Decentraland community.

Best regards,
Leonard

[HPrivakos]

The vesting contract can be created retroactively (which you already know, as you ask to start it on Feb 15th and we are Feb 22nd).
It might be better to resolve the critical concerns before enacting the vesting contract and being asked last second to revoke a grant that cannot be achieved.

@LeonardC

The audit report will be submitted to the Decentraland DAO and shared within the community under this proposal by the specified deadline of March 28.

That should be posted BEFORE the first payment (March 15th), not after…

All those responses feel like direct copy paste from ChatGPT…

[Zino]

The first Milestone of this grant is to Build the scene.
During month two, they will start with the contest, and at that moment, the Smart contract should be audited and checked.
For that reason, we can not assume things from the future, but we can use the DAO rules, for example, to pause a vesting contract or request more information if something goes wrong.

regarding the date were the grantee should submit the information.
As I mentioned, the first step of the vesting contract corresponds to milestone 1 -Build the Scene-and what we are requesting (the audit of the smart contract) corresponds to milestone 2. During month 2, the pause can be applied, and the grantee will not be able to release the funds corresponding to that month.

Thank you for your input HP

[dao]

Building a Web3 Esports Epicentre in Decentraland

This proposal has been ENACTED by a DAO Committee Member (0xbef99f5f55cf7cdb3a70998c57061b7e1386a9b0)

Vesting Contract Addresses: 0x14BAB489C0d38d46BB58f7d716fF110c1b80F023

[Zino]

Hi Community,

We had scheduled our 1st monthly check with the grantee (@LeonardC ) for today. We waited for you for 15 minutes, but the Grantee didn’t attend

Also, the grantee missed the first update.

Since we don’t have news about the status of the project, and considering six days left to the due date established ( the 28 of March) to show the audit of the smart contract, we request that the DAO Committee (@HPrivakos @rizk @Tobik ) pause preventively the vesting contract.

The deadline (28 of march) settled remains to:

• deliver the audit of the smart contract.

• prove that the first goal is achieved

Grant Support Squad.

[LeonardC]

Hello Juan,

I hope this message finds you well. I wanted to extend my sincere apologies for missing our call yesterday. Would it be possible to reschedule for another time in the next few days?

I wanted to take a moment to update you on our progress. Our team has been diligently working on building the scene, and we’re excited to share the link with you later today.

In the meantime, I would greatly appreciate your input on a couple of matters:

1. Regarding the first update, I noticed there may have been a miscommunication. The deadline for this update is March 15, as outlined in our Notion file. We had previously discussed and confirmed completing it by March 14 with Pablo. Could you please clarify why there seems to be a discrepancy? (Notion – The all-in-one workspace for your notes, tasks, wikis, and databases.)
   

   

2. Additionally, I wanted to confirm the deadline for the smart contract audit. As of now, it is set for March 28, which aligns with our timeline. We plan to initiate the audit after the scene has been completed in mid-March 2024.

I sincerely apologize for any inconvenience this may have caused. Your understanding and cooperation are greatly appreciated.

Once again, I apologize for not attending the call. Looking forward to hearing from you soon.

Warm regards,
Leonard

[mazafaka]

Please do not miss any important calls nor grant updates. You were one of many looking after the DAO money!

[Zino]

Hi Community,

The grantee (@LeonardC ) has successfully published its first update, and based on the content provided, it has achieved some of the promised milestones of the first Goal.
Additionally, it has demonstrated transparency by including the Wallet address to track the payment made to its Developer. It’s worth noting that this payment was made without DAO funds, as the vesting contract was paused before the initial release.

Furthermore, I would like to remind you that the due date for providing information regarding the audit of the smart contract remains unchanged (March 28)

Also, we have coordinated a new monthly check-in with the grantee that will happen this Tuesday, 19. There, we will check the rest of the milestones about Goal 1 to get more information about whether the vesting contract has to be resumed.

Thank you for your attention to this matter. If you have any questions or require further clarification, please do not hesitate to reach out.
Zino.

[Zino]

Dear Community,

The Grant Support Squad was created to support the grantees in achieving their goals and taking care of the DAO treasury.

After thoroughly reviewing this project, the Grant Support Squad wants to communicate that we recommend to the Revocations Committee (@bay @dax @maryana @MetaDogeisme) revoking its vesting contract due to multiple issues that have arisen during the project’s development, notably shifts in the project model, legal and compliance uncertainties, and unmet deliverables.
According to your governance process, the Revocations Committee, the only body responsible for revoking grants, will analyze this case.

This triggers an automatic pause of the Grant’s vesting contract, executed by the DAO Committee, but in this case, it will not be necessary because the Vesting Contract is paused.

The arguments behind the recommendations are the following:

1. Project Model Clarification: It took a few back-and-forth emails and two meetings (onboarding and check-in) to clarify the project Model, which is distant from the original proposal.
   This fundamental shift, initially described as a ‘predict-to-earn’ model and later transitioning to a ‘raffle’ system, raises concerns. We appreciate the Grantee´s confirmation that the project will solely develop a raffle system and not involve a ‘predict-to-earn’ model.

The significant alterations from a ‘predict-to-earn’ to a ‘raffle’ system not only led to confusion but also raised concerns regarding the project’s consistency with its original proposal. Such fundamental shifts suggest a need for greater clarity and stability in project planning and execution within the DAO framework.

2. This triggered a second problem: Legal and Compliance Assurance.
   The legalities surrounding the project, especially in compliance with gambling laws and Decentraland’s content policy, are of utmost importance. The Grantee´s acknowledgment of not running gambling activities and the commitment to adhere to legal standards, including signing an affidavit and indemnity letter, it was a positive step forward.
   Also, The foundation legal team recommended signing a KYC document for purposes that have been received.

The project’s navigation through legal complexities, especially concerning gambling laws and adherence to Decentraland’s content policy, represents a positive but challenging aspect of operating within Web3 environments. The requirement for KYC documentation and adherence to legal standards, including the signing of affidavits and indemnity letters, highlights the critical importance of legal compliance in virtual space projects.

3. For that reason, the grantee mentioned that they will be implementing a Smart Contract
   -staking contract- to prevent bot attacks. How? The user needs to stake 1 $MANA to participate in the raffle event.
   They sent the first audit, and our internal advisor found the issue pretty easily, in 3 min an issue. The contract has a variable called phase, and asked the grantee How you can change its value because once the contract is created, the value is locked
   Later the grantee deployed a new smart contract (without a new audit).
   We recommend to pay for an audit using Trail of Bits, Quantstamp or any other well-known firm, but the grantee mentioned that it was out of budget.

After that, the grantee provides a walk-around removing the smart contract part and replacing it with wallet screening.

4. Building the Scene: The grantee showed the progress of building the virtual scene for the gaming exhibition, with different floors and functionalities of the scene, including live streaming and interactive elements.
   This goal was achieved according the roadmap.

5. Acquiring Users: The Grantee explained their network in the Chinese gaming industry and their collaboration with gaming projects, that could bring users to Decelentraland. It´s a good opportunity.
   But, the grantee mentioned that the number of unique users to onboard for each event will be lower than they promised according to the proposal (24.000).

The project’s potential to attract users through its network in the Chinese gaming industry is promising. However, the revision of expected unique user numbers points to the need for realistic goal setting and the establishment of specific, achievable KPIs.

6. The company behind (SILICON MOUNTAIN LIMITED) was created on 01/24/24, which means that the DAO with these funds could be seen as seed fund capital. This is risky in terms of legality because the DAO is not a legal entity, but this is a problem for the future.

Conclusion:

Given these observations, the recommendation to revoke the grant’s vesting contract reflects a prudent approach to managing the DAO’s resources and treasury, ensuring that funded projects remain aligned with Decentraland’s values, legal frameworks, and community expectations.

Further recommendations to the Revocations Committee:

Given that the grantee has shown a willingness to address all concerns and has made progress in the development of the scene, we believe there is room for the Revocations Committee to review the project and evaluate the possibility of its continuation, considering that there are several issues that need clarification:

• Define with the grantee achieve KPIs
• Define with the grantee how they will avoid the Bots
• Ask the grantee to Present the marketing plan
• Clarity on Purchasing the prizes, gaming peripherals, and shipping costs for prize distribution.

Last but not least, we recommend paying the 1st month that corresponds to GOAL 1, which was achieved.

[LeonardC]

@Zino

SILICON MOUNTAIN LIMITED

Hey Zion, I wanted to express my gratitude for your swift feedback.

It’s sorry to hear that the Grant Support Squad has recommended to the Revocations Committee the revocation of our project’s vesting contract.

I would like to address some points for clarification:

1. Project Model Clarification - As discussed via email, our team has consistently emphasized that the model in question functions as a raffle system, distinct from a betting model. These clarifications were publicly disseminated prior to the proposal’s acceptance and preceding any interaction with The Grant Support Squad. While we acknowledge that the phrasing employed may have been suboptimal, we maintain that it does not constitute a ‘significant alteration’ to our project.

Furthermore, it is imperative to note that this matter was thoroughly reviewed and definitively confirmed during a consultation with Pablo from the Grant Support Squad team on February 10, 2024. Therefore, the rationale behind Zino’s recent inquiry on March 25, 2024—occurring 35 days subsequent to the aforementioned clarification and confirmation by the Grant Squad Team—presents a perplexing situation warranting clarification.

2. Legal and Compliance Assurance - We have duly signed the agreement as requested by the DCL legal team and have diligently addressed all the legal concerns raised by them. This process proceeded smoothly, culminating in the creation of a vesting contract. To date, the DCL legal team has not raised any further concerns. Therefore, it is my belief that our project does not warrant any description as triggering problems in terms of Legal and Compliance Assurance.

3. Smart Contract Deployment - The reason ‘phase’ was omitted from the initial version of the smart contract stems from its sole usability within a specific environment. Consequently, our developers opted against integrating a phase unlocking function, deeming it unnecessary and not detrimental to the contract’s security. Moreover, the smart contract underwent thorough review and auditing by a reputable third-party smart contract auditing firm based in Hong Kong.

• 1st version: StakingRewards | Address 0x638ED49981eE49064225029Fc5029914BF160CFc | PolygonScan
• 2nd version: StakingRewards | Address 0x7d208f25771B21C4035eddcABc94B7e42A973064 | PolygonScan

In response to concerns raised by both The Grant Support Squad and the advisor regarding smart contract security, we proposed implementing a user wallet screening mechanism as an alternative to staking $MANA, in order to alleviate everyone’s concerns about smart contract security.

4. Acquiring Users - To clarify, our estimated number of participants per event was 2000, not 24000. The latter figure represented the total estimated participants across all 12 events. While we are confident in achieving the projected numbers, we seek clarification on any potential consequences from the DAO should the actual participation fall short of the target in a single event.

We are eager to address any further inquiries or provide additional documentation that may assist in reconsidering the revocation recommendation.

Thank you for your attention to these matters. We appreciate your guidance and look forward to your response regarding the next steps.

[LeonardC]

Dear Members of the Revocations Committee,

As stipulated in Article 9 of the Revocations Committee Framework (accessible via Notion – The all-in-one workspace for your notes, tasks, wikis, and databases.), it is expected that the Grant Support Squad requests the grantee’s response within four (4) days to the concerns articulated in the formal request, prior to presenting the arguments for evaluation by the Revocations Committee.

Regrettably, our team has yet to receive any communication from the Grant Support Squad pertaining to the clarification of critical concerns raised in the aforementioned formal request.

We kindly request that Zino, or any designated member of the Grant Support Squad, furnish us with a comprehensive list of pertinent concerns requiring our attention. This will afford us the opportunity to respond within the designated timeframe of four days, prior to any deliberation by the Revocations Committee.

Your prompt attention to this matter is greatly appreciated.

[Zino]

Hi @LeonardC
We requested the information during onboarding meetings and emails that we and the legal team sent to you. In fact, thanks to that exchange, you were able to clarify that your project was not a prediction to earn or gambling, a smart contract audit was requested, and a KYC was signed.
So, we went through the process. We detected the concerns and requested more information. You clarified it, and now the concerns have not disappeared.
That is why we are raising the case to the Revocations Committee, a third party that does not participate in the project onboarding process and prevents it from being biased. Furthermore, the Grant Support Squad cannot get involved in your roadmap in relation to the main object of the project, because that could trigger a big change in the original proposal voted on by the community and would be serious.
We have sent the case not only with our recommendation but also with positive arguments so that they can reach an agreement.
Thank you for your contribution, and I hope this clarifies your doubts.
Have a great day, Leonard, and as I mentioned, if you need any help or additional information, feel free to contact me just like I did by sending you the Revocations Committee framework.

[revocationcommitee]

Hi @LeonardC @Zino

We reviewed what you both wrote here and we have the following questions as the next step in the case:

1. Please clarify the current project model, the ways in which it deviates from the original and why.
2. Please clarify how you will avoid botting / measures you will take for user security
3. Please provide proof that your code is compliant with the expectations of the DCL security team
4. Please explain your marketing plan and how you plan to get 2000 visitors per event
5. Zino’s question: Provide clarity on Purchasing the prizes, gaming peripherals, and shipping costs for prize distribution.

Please note these questions were also submitted in your DAO discord channel related to this grant. If you have any questions please feel free to ask here or in discord.

[LeonardC]

Hi Revocation Committee, thank you for your prompt feedback. Here’s our response to the questions raised from your end.

1. Clarification on Current Project Model:

• Our project model has remained unchanged thus far. We aim to establish a Web3 gaming and esports hub within Decentraland to regularly host events and attract external Web3 games and gaming communities, thereby bringing new traffic and projects to Decentraland.

  
  

• The raffle system questioned by @Zino is merely one aspect of our broader engagement strategy, intended to boost user interaction. Additionally, the term ‘predict-to-earn’ (競猜獎勵) used in Chinese doesn’t imply any association with betting; it was a linguistic oversight on our part, which we clarified from the outset that our model doesn’t involve any betting activities

  

2. Measures to Avoid Botting/User Security:

• Here’s our proposed flow/measures to avoid botting in the raffle system (which does not involve any betting or gambling activities/behaviors - users simply need to select/guess an answer without the need to bet any of their capital).

  1. Users temporarily stake 1 $MANA token in a smart contract to prevent bot attacks and verify human participation.
  2. They then answer event-related questions or make predictions regarding esports outcomes.
  3. Correct responses automatically enter users into the raffle for a chance to win prizes sponsored by our Web3 gaming partners.
  4. After the event, users can withdraw their staked $MANA from the smart contract.
  
  • The above flow has been explained clearly to @Zino in our last call and we’ve also addressed concerns raised by @Zino regarding security by engaging a third-party HK smart contract audit company to review our contract. We’ve also suggested alternatives, such as screening participants’ wallets for $MANA holdings instead of requiring staking, to alleviate concerns about the staking mechanism.

3. Proof of Code Compliance with DCL Security Team Expectations:

• The smart contract code can be found at this address: StakingRewards | Address 0x638ED49981eE49064225029Fc5029914BF160CFc | PolygonScan

• We’ve undergone a smart contract audit conducted by a third-party company, and the audit report is available here: StakingRewards - CyphaLab Contract Audit (1).pdf - Google Drive

  We’ve taken proactive steps to ensure compliance with the security expectations of the DCL security team.

4. Explanation of Marketing Plan and Visitor Acquisition:

   • Our marketing strategy involves collaboration with 4-8 Web3 games for each event, encouraging them to promote and sponsor the event. These games will share our event posts, sponsor in-game NFT items/tokens as prizes, and attract their community members to participate
   
   • Additionally, we’ll partner with Web3 gaming communities and influencers in Chinese and LATAM regions, who will translate event materials and share them on social media channels such as Twitter, Discord, Youtube and so on
   
   • Furthermore, our extensive community network, including 60k+ Twitter followers, 13k+ Discord members, 5k+ WeChat group members, and 2k+ QQ group members, will help spread event information
   
   • Through these efforts, we anticipate reaching an average of 2000 visitors per event

5. Clarity on Purchasing Prizes and Shipping Costs:
   The term ‘prizes’ refers to virtual goods such as NFTs, tokens, or whitelists sponsored by our network of partnered games. These prizes do not involve any purchasing or shipping procedures/costs, as they are digital assets distributed electronically. We’ve clarified this misunderstanding to @Zino during our previous meeting.

Let me know if you need further clarification or assistance with anything else!

[revocationcommitee]

Hi @LeonardC thank you for your quick response! We are doing some research now and will reach out here if we have any further questions.

[revocationcommitee]

Hi Community, @Zino, @LeonardC

Our team, the Revocation Committee received a request from the Grant Support Squad to discuss this case and make a decision in regards to the following proposal:

Building a Web3 Esports Epicentre in Decentraland

Building a Web3 Esports Epicentre in Decentraland

As a result of discussion and the final vote, we suggest that this grant should be REVOKED. (@HPrivakos @rizk @Tobik)

Voting Members:

@bay , @dax & @maryana

Revocation Committee snapshot vote result:

https://snapshot.org/#/revocationscommittee.eth/proposal/0x74d45cdc6691753471dc8576689d9e5bc3886e0eb13349cd147ef2da20e0c9a8

Reasoning for revocation:

The points for revocation made by the GSS are as follows:

1. Unclear project model
2. Legal and compliance assurance
3. Smart contract security concerns
4. Brand new company asking for funds

We believe that points 2 & 3 are the most critical in this case therefore, we have chosen to focus primarily on these points in our assessment

We have heard from the grantee as well as the Security and Legal teams of DCL in this matter as we, the members of the Revocation Committee, do not feel qualified to make decisions based on legal and technical what-ifs.

In the case of point #2, Legal and compliance assurance, the grantee has done what has been asked of them to mitigate risks to the foundation and to Decentraland by taking legal responsibility for their choices by signing affidavits and indemnity letters.

In the case of point #3, Smart contract security concerns, the grantee’s contract was audited and then double checked by the DCL Security Team. The DCL Security team had problems with the code which then cast doubt upon the quality of the Audit. The grantee says the audit comes from a reliable and proven source and that it is out of budget to re-audit with a source that the DCL Security team trusts.

This, for us, is the major sticking point. As we are not experts in smart contracts, we find ourselves forced to rely on the recommendations of the DCL Security team who we feel is likely to understand code relating to DCL the best. In the case of any doubt, we feel it is more responsible to be cautious. Therefore we have decided to revoke this grant.

Further recommendations:

Our recommendation to the DAO Committee is to revoke the grant in its entirety. Our recommendation to the Grantee is to clarify any confusion regarding point #1, having an unclear project model, so the community fully understands what this project offers, also in terms of risks related to legal and security issues. Furthermore we recommend that if the Grantee wishes to reapply, they should earmark additional funds for a security Audit from one of the auditing bodies recommended by the DCL Security Team.

Thank you!

Revocation Committee