New Budget Category: Incubator

Although hackathons are a potential motivation for individual developers to build something on Sia, the prize money is normally quite small and not enough to sustain the application or project for longer periods of time. This is especially true for teams with multiple people. Although some developers stick around, many of them leave to the next thing. This results in many applications that come out of hackathons to either be abandoned over time or turn into hobby apps that are maintained on the weekends. Even if developers stick around, it takes significantly more effort and time to build a full product or service from a simple prototype.

Fundamentally i think a distinction should be made between applications developed in a hackathon and fully fledged companies already building on Sia with multiple full-time team members. Examples of these are StoreWise, Filebase and Arzen. It is these companies that are doing most of the work, taking the most risk and building the best products on Sia that will eventually drive adoption of the entire network.

The motivation of this proposal is to increase the probability that these embryonic companies are able to grow and become successful. For that to happen we have to fill the gap between hackathons and eventual profitability or a later VC round.

Unfortunately bridging this gap is one of the main hurdles startups face today, that includes startups building on Sia. As VC’s move towards already companies with significant traction, startups struggle to get their project off the ground and drive initial adoption. The road from an idea to a product and eventually customers is very long and hard, especially for those working with complex technologies like blockchain.

The European Horizon 2020 program is a good example of a program that addresses this by driving innovation without forcing startups to rely on traditional venture capital financing. Many blockchain incubators have received funding from Horizon 2020 to give out as equity free grants to viable small scale startups to drive product development to prototyping and later piloting their product.

I hereby propose that the foundation dedicates a portion of their yearly budget to setting up and running a Sia incubator that in the form of equity free grants and dedicated development time supports ecosystem startups and helps introduce their solutions to market. This is not a unique idea, many incubators exist within other blockchain related foundations.

  • Budget Amount: 200,000,000 SC per year, from block subsidy ($500,000).
  • 5-10 Individual checks on a yearly basis between 25,000 – 100,000$.

Some additional thoughts:

i. Projects must be legal entities, demonstrate a track record, propose a solid plan and go through a selection process.
ii. Each startup can only receive one check and the funds are intended to take the projects over the initial product development and pilot phases.

As an example this also makes it possible for Skynet app developers that have built out apps in the past, either through hackathons or otherwise (and are actively looking to continue working on their project full-time) to be able to expand on their initial prototype and build a healthy company.

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I don’t love this idea - I feel like the core Sia team is going to have enough trouble maintaining adequate funding over the next several years that funding a bunch of other startups with the limited block subsidy resource isn’t something the Foundation needs to be getting into, at least over the first few years. There are many other resources to fund startups, both on local and national levels in many countries, and the majority of actual legal entities building on Sia now are essentially just reselling Sia storage, such as those you listed.

I support this proposal. Time and Funding is hard part esp when someone is working on self-funded project over weekends/evening. This proposal will help accelerate converting PoC/hackathon project to marketable MVP product ( right features/branding/UX).
I have lot of features documented to take SkySpaces and Skynet Appstore to next level in next 1 year. Some of these features are getting implemented right now and targeting to release with skynet registry but not as fast as I wish. I very well see positive impact of such proposal to accelerate development of Sia/Skynet based products/StartUp.

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I like parts of this, but I agree with RBZL, I think at least for the first few years monetary funding should come from other sources.

I could see the Foundation providing indirect financial resources to potential startups though. Either through connections, legal/developer time, or just as simple as technical guidance.

This is a tough one for me. I love the idea of being able to allocate funds to support real businesses building on top of Sia, however there are two main concerns that prevent me from advocating from this:

1) Equity-free grants for startups are largely ineffective at what its supposed to do.

This is likely going to be a hot-take, but I don’t understand EU’s obsession with the grants process. The bureaucracy around applying for a grant is a daunting process (not to mention a distraction from building), and on top of that many impose restrictions around how to use the money, which once again, makes the lives of the startups harder.

Most of the money in that EU grants space is going to grant-chasers imo, and is not conducive to fostering a free-market, competitive startup environment. Most EU grants once given out are forgotten about, never to be brought up in public discourse ever again… unless its to talk about how large of a grant it was.

Not to say North American VCs are perfect (looking at you WeWork / Theranos). But ultimately, VCs are making a financial bet, with their money (or their LPs), and not taxpayers. And because of that they have a responsibility to perform due diligence, review cap-tables, and ensure they’re making smart bets. On top of that they have the resources to ensure their portfolio teams are on track, as they continue to monitor and reassess their assets.

And unfortunately as a Foundation, I’m not sure if we would ever be able to operate the same way as a VC fund without tripping all sorts of legal / conflict of interest wires.

2) It signals winners and losers, and I’m not sure it’s a good thing.

Ultimately, the Sia Foundation is trying to play a balanced role as it operates between the community, the developers, the companies, and all other stakeholders that are a part of the network. Due to the importance of this role, I think the Foundation needs to try and be extra considerate of how its brand + influence is used.

For example, in your proposal, you list quite a few interesting businesses on top of Sia that I’m sure the community would consider backing. But what if the Foundation backs one company, but not the other? How is that criteria determined? And what about the companies on Sia that don’t exist yet? Would they be deterred from building a competing product, because the Sia Foundation has put its stamp of approval behind it?

I’d much prefer the Foundation to be in a supportive and neutral position, wishing companies like StoreWise and Filebase best of luck, but not necessarily deciding who the winner is going to be upfront.


What I do think the Foundation should look into building is a funding pipeline similar to what Mercury Raise does. We can accept applications from any business building on top of Sia, and the Foundation can at least vet through and ensure these businesses are in fact serious, before putting it in front of VCs in our network.

Open to other ideas as well ofc.

TL;DR I agree that we as a community want to support startups building on Sia, but I don’t think grants are the right approach.

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I agree with Eddie, I don’t think the foundation is in a good position to do incubation effectively

But I also think that the foundation, as well as Skynet Labs, could be helpful in putting together a ramp between the Sia community, the Sia hackathons, and early stage startup bodies like incubators.

Then you have people who spend their whole lives helping early stage companies vetting and investing in our projects, and I think they will be much better equipped.

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I am trying to get better understanding of what type of community projects will be funded to grow Sia ecosystem and what’s not in near term purview of the Foundation.

I am of the opinion that Foundation shall fund non-profit opensource project (existing plus new) with some cap that brings value to Sia ecosystem. That will foster ecosystem growth. Its easy to identify and approve funding(operational cost) for existing projects as we know they bring lot of value to Sia and Skynet ecosystem.

However, I am not clear how “new ideas or project development” will be funded by Foundation. Lets say as an Example - Today someone has a clearly defined proposal with plan, skill and team to build opensource Sia mobile wallet for android and iOS for $5000 in 2 months, (Assuming Foundation and community approved/liked the proposal) . Will Sia Foundation be interested in evaluating such proposal for funding ? if yes, we will need a Grant Program/Framework to formalize the process.

Per my recent learning, sharing an example of Grant program by other newly formed Foundation:
//stacks.org/stacks_grants_beta
//github.com/stacksgov/Stacks-Grants/issues?q=is%3Aissue
Example of proposal: //github.com/stacksgov/Stacks-Grants/issues/5

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Beyond hackathon prize sorts of sums, I don’t think the foundation should be looking at giving grants for development. That role is best served by venture capital style incubators, who are much better equipped to both evaluate a project and also give it a chance to grow into being self-sustaining.

For core development, the foundation can fund specific projects, but they should have clear ecosystem objectives and ways of being sustainable. Things like wallet improvements, hardware wallet support, or other network upgrades would qualify, but things like filesharing apps would probably not qualify.

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