Exploring Gitcoin Grants for Open Source Funding
Diving into the historical implications of Gitcoin's CLR funding and an overview on Round 4
In a world where open-source code is rarely incentivized, Gitcoin sets a vital foundation for developers, designers and more to get paid for their hard work. Through the issuance of bounties, projects can leverage Gitcoin’s deep network of web 3 specialists to find the right individual(s) for their needs.
One of the more novel aspects of Gitcoin is that of Gitcoin Grants - an initiative that leverages a tokenized subscription model to allow anyone to fund any grant with as little as 1 DAI.
Beyond the unique opportunity for crowdsourced web 3 funding, Gitcoin Grants has also served a test grounds for quadratic funding - a scheme in which Gitcoin matches grants relative to the number of individual contributors to any given grant, rather than the total amount of that grant. In practice, this means that a grant which receives 50 2 Dai donations will receive more in matching than one that receives 1 donation of 100 Dai. More information on how quadratic funding works can be found here.
This past Monday marked the start of Gitcoin Grants Round 4, with a pool of $200,000 up for matching as follows:
Community Pool ($75,000) - Supporting media, community, and marketing projects
Infrastructure Pool ($125,000) - Supporting Ethereum infrastructure projects (ETH 2.0, DeFi, wallets, UX, etc.)
The beautiful part about this initiative is that it is entirely community-driven. There are no favorites and grant proposals with the most community support (in terms of the number of contributors) will receive the largest portions of the matching pool.
In this article, we’ll be diving into:
Which Gitcoin Grants have seen the most success in the past
Round 4 Grants to watch
How to make a compelling grant
Let’s get to it!
The first Gitcoin Grants CLR round occurred from February 1st to February 15th, 2019. The initial pool of $25,000 from the Ethereum Foundation, ConsenSys, and a few other prominent individuals was met with $13,242 in total contributions across 126 unique community members. The leading projects to receive funding in the first round were Prysmatic Labs with $5,929, MolochDAO earning $4,061, and Uniswap receiving $2,765.
In the first round, the top 10 projects received an average pre-match contribution of $145 from ~8 unique contributors. Post-matching, earnings rose to an average of $415 per contributor, or a 2.86x increase in total funds raised.
The average top 10 project raised nearly $3,000 with a total of $38,242 contributed towards Ethereum infrastructure over the course of the two-week contribution period. Three major ETH 2.0 clients received funding including Prysmatic Labs ($5,929), LodeStar ($2,070) and Lighthouse ($2,107) while a leading decentralized exchange, Uniswap, received $2,765.
Gitcoin CLR Grants’ first-round was rather a successful experiment on the Liberal Radicalism matching algorithm and ultimately sparked a recurring quarterly wave of CLR funding rounds.
Given that the first round was a major success, Gitcoin Grants bumped up the total matching pool to $50,000 in the second round to support a total of 42 well known Ethereum projects. The second round ran from March 5th to April 19th, 2019, extending the contribution period by almost a full month. In total, the second round aggregated $56,535 from 214 unique contributors - resulting in an average of $264 per contributor. The Official ProgPow Audit was the largest recipient, earning a total of $13,575 from 7 contributors with an additional match of $13,547 from the grant pool.
With the Gitcoin’s matched funding, the average contribution within the top 10 projects soared to $808 (compared to $415 from Round 1) per contributor, up 2.3x from the $351 average pre-match contribution. On average, the top 10 projects received contributions from ~10 unique individuals per project, up from ~8 in the first round.
Generally speaking, the second round was another success as 9 out of the top 10 projects received around $2,000 or more where all projects who participated in the second round received over $1,000 in grant funding.
The third Gitcoin Grant CLR round occurred in Q3 between September 15th and October 2nd. Round 3 featured a $100k matching pool directed towards 65+ open source projects listed on Gitcoin Grants. Relative to the other two rounds, round 3 was by far the biggest round in terms of both participation and grant distributions. In total, Round 3 distributed $270,000 across 1,982 unique contributors - a massive increase in community participation from previous rounds.
Within the top 10 projects, Lighthouse was the largest recipient in terms of total funds, earning nearly $51K in grants. With that said, EthHub, one of the most popular information resources for Ethereum, received the highest amount in terms of a CLR bonus, earning $16,209 from the matching pool alone with a total of $21,006 in funding across 131 unique contributors. Other notable projects and individuals to receive funding in this round included Austin Griffith ($23,911), rDai ($10,193), and the Vyper Dev Fund ($14,218). The top 10 projects raised capital across an average of ~84 unique contributors, up from ~10 in Round 2 and ~8 in Round 1.
Round 3 was a monumental shift for Gitcoin Grants as community participation soared to new levels while the matching pool also reached its highest ever.
A New Wave
Round 4 will feature a new record-high for the matching pool, reaching $200,000 for a combination of community projects, including media, marketing, and other similar projects along with the infrastructure pool used to support ETH 2.0 development, DeFi applications, UX improvements and more. Round 4 will last just over two weeks between January 6th and January 21st, 2020.
Notable Tech & Infrastructure Projects ($125,000)
DeFiZap is a system of smart contracts, called Zaps, that can deploy a single asset (like ETH and soon Dai) across multiple DeFi protocols in a seamless fashion. DeFiZap has recently surged to prominence after winning the Kyber Network Hackathon in November by leveraging its liquidity protocol to create a frictionless mechanism for participating in multiple DeFi protocols in a single transaction.
Nodar, DeFi Zap Founder, also founded DeFi Tutorials and is an active contributor to the Ethereum ecosystem. After winning the Kyber Hackathon, DeFi Zap was deployed on main-net in early December and recently received a grant from MetaCartel.
Generally speaking, Nodar thoroughly outlines his previous accomplishments within the DeFi ecosystem along with highlighting his plans to improve the protocol through adding a number of “Venmo-like tools” to make the process as intuitive as possible. DeFi Zap currently has 20 participants contributing 272 DAI with an estimated 1,319 DAI in CLR matching.
If you’re looking to contribute towards intuitive mechanisms for participating in DeFi protocols, visit DeFi Zaps grant page here.
Trinity Migration Research & ETH 2.0 Client
The Trinity Team submitted two proposals for this round of grants. In short, the two proposals encompass migration research for Ethereum 1.x to 2.0 to ensure a clear migration path for the upcoming transition to the beacon chain as well as seeking a grant for the Trinity ETH 2.0 client. The python-based client is one of the few clients supporting both the Eth 1.x and 2.0 chains. With the grant, the team intends to play a large role in the beacon chain as both infrastructure for application developers and for those looking to participate as validators.
While the proposal is not nearly as detailed as DeFi Zap, Trinity is a well-known Ethereum development team playing an important role in the Serenity upgrade. Given that ETH 2.0 infrastructure has historically done well in previous rounds, it should come as no surprise if the Trinity team receives a substantial amount of support from the community. The proposal currently has 1,564 DAI contributed from 10 participants with an estimated 5,231 DAI in CLR matching.
Notable Media Projects ($75,000)
For those unfamiliar, David Hoffman is a prominent independent writer within the Ethereum community. Some of his notable articles include Ether: A New Model for Money, The Two Faces of Ethereum and Dai is not 1 Dollar. All of David’s articles are public goods for the Ethereum community as all articles have been published without any compensation. His grant currently has 13 contributors for 166 DAI with 539 DAI estimated in CLR Matching.
If you’ve read David Hoffman’s articles before and you’ve enjoyed them, you can support his grant here.
MetaCartel is one of the biggest Decentralized Autonomous Organizations (DAOs) in the Ethereum ecosystem. Their goal to fund the Ethereum application layer has lead to over 10 projects receiving an aggregate of $30k+ in value. A list of these proposals can be found here.
If you’re interested in giving MetaCartel additional bandwidth to support Ethereum applications, visit their proposal page here.
The SustainWeb3 Event is an event in Boulder, Colorado for discussing novel Open Source Sustainability funding techniques. As the proliferation of web3 continues, establishing sustainable mechanisms for supporting open-source software is vital to its long-term success. The SustainWeb3 Event has decided to forego sponsorship funding and instead rely entirely on community funding to bootstrap the event. The proposal currently has 5 contributors for 38 DAI and an estimated 60 DAI in CLR matching.
Even 1 Dai can drastically help the SustainWeb3 event. If you’re interested in supporting sustainable mechanisms for funding open-source software, visit their proposal page here.
Tying these ideas together, it’s important to recognize what a vital role grants are playing for the ecosystem at large. Unlike the sale of tokens or equity, grants are largely altruistic, meaning there is no expectation of future profits.
This allows grant recipients to be far more focused on how funds are being used as there is no rush or obligation to get early investors a 10x return.
Similarly, the “pressure” associated with Gitcoin Grants can be seen as something broadly positive in the sense of community reputation. Teams behind these grants are hard-pressed to make compelling cases for why they deserve funding, thus further motivating them to deliver on those expectations from those who are giving them a shot to succeed.
It’s been proven that the grants receiving the most funding are commonly the industry’s most pressing issues, a notion that is more guided than randomly funding speculative bets as we saw with the ICO boom back in 2017.
To quantize these ideas, let’s categorize factors that make a compelling grant:
Valuable - Is the project adding value to the ecosystem at large?
Actionable - Has the project outlined a clear need for the funding they receive?
Accountable - Is there a strong roadmap highlighting how progress will be made?
If all three of these items check out, it’s likely that Gitcoin Grants could be for you.
If you or your project is interested in learning more about Gitcoin Grants or submitting a grant proposal for Round 3 of CLR Funding, give us a shout!
Until then, be sure to stay up to date on all things blockchain via the official Fitzner Blockchain Twitter.