Open-source software funding platform Gitcoin will be doubling down on grants this year as it seeks to reach $1 billion in funds distributed. The period that Gitcoin has called “the end game”, comparing it to the last phase in every chess game, will see the project become all about “explosive growth”.
The approach is intended to allow the Gitcoin team to reach its $1 billion milestone over “the next several years” by using its funding allocation protocol Allo. So far, Gitcoin has distributed over $56 million through its Gitcoin Grants program, cementing its position in the grants space, especially in the Ethereum ecosystem.
Change Is on the Way
While Gitcoin has been providing funding to projects with high impact ever since it launched its “Gitcoin Grants” program in 2019, this year will see significant changes in how this is achieved. With a focus on “building the tech and showcasing best practices”, the Gitcoin team will not only revamp its selection process and infrastructure but also increase its research and experimentation efforts.
These efforts come in the form of two new business units for Grant Labs and Passport, with the plans for the latter including becoming its own standalone project. By creating these two units, Gitcoin seeks to increase the autonomy of the teams to allow the projects to become market fit faster by removing competing priorities and allowing roadmaps designed by those with intimate knowledge.
The Gitcoin team will also be winding down the Public Goods Network (PGN) over the next six months. The decision was made after a review of metrics like usage, incentives, and costs, which led to the conclusion that the project failed to gain enough adoption and interest to be sustainable.
The Year of the Grant
Thanks to the increased autonomy the new business units will get to enjoy, the Gitcoin team will get to focus on “fostering community” and “creating more opportunities”. The new Ecosystem Collective subDAO will be in charge of dealing with governance and community-related matters.
???? Inspired by the incredible creativity and innovative spirit within our community, we’re thrilled to launch the Ecosystem Collective subDAO! Aimed at nurturing the Gitcoin ecosystem and the broader web3 grants industry, this initiative will guide our community and governance.
— Gitcoin (@gitcoin) February 5, 2024
While a roadmap and charter are still being developed, the Citizen Grants Program has already been announced and is currently under. The program will allow community members not only to receive retroactive funding but also proactive funding through a system of direct grants instead of quadratic funding.
Each of the three parts of this project will focus on a different need of the ecosystem. Citizens Retro will focus on retroactive funding, Citizens Innovate on community Proposals, and Citizens Forward on requests for proposals. Whereas Citizens Innovate and Forward will launch as a 6-month pilot, with its excess funds being returned to the DAO afterward, Citizens Retro will operate as a separate initiative.
Support Public Goods Through Blockchain
Quadratic funding has been core to Gitcoin’s grants model since the mechanism was first proposed in 2018 by Vitalik Buterin, Zoe Hitzing, and Glen Weyl. The mechanism allows community members to vote on funding allocation through donations, which then decide how the resources of a central fund are allocated based on the number of donors instead of the value of the donation.
Not only was Gitcoin the first implementation of quadratic funding but it also became the most famous, gaining widespread support from organizations outside the blockchain space. Some of these partnerships, however, have raised criticism from community members who believe companies like Shell are using the project for their Greenwashing efforts.
Since 2019, Gitcoin has allowed 3715 projects to raise funds from over 3.8 million donations, totaling more than $56 million designed for public goods. The revamp of Gitcoin’s “corporate” structure and its new focus on grants will decide whether that funding pace is just a warm-up or the explosive growth it seeks to achieve.
