Cradle-to-unicorn public goods funding


@ccerv1 + @owocki


  • This post discusses the end-to-end funding lifecycle for Ethereum public goods, inspired by this thread.
  • We believe that solving these problems creates a sustainable competitive advantage for crypto ecosystems.
  • We outline the lifecycle of public goods funding,
    • the cradle stage focuses on building and gaining initial funding,
    • the maturity stage involves community building and surviving the “trough of sorrow,”
    • and the unicorn stage is about achieving significant impact and receiving retroactive funding.

Private Goods Funding Project Lifecycles

There’s a famous whiteboard drawing that shows the life of a startup, from getting its first coverage on TechCrunch, to its wearing off of novelty, to a prolonged “trough of sorrow”, to its finally crossing the chasm and getting sold for billions of dollars.

Startups of this type typically get funded by VCs. Most of them die in the trough of sorrow because they run out of money before finding product-market fit.

The funding infrastructure for startups is pretty well-established: they get some initial VC funding to build a product around their idea, they get more VC funding (and revenue) if they enter a growth phase, and eventually, if it all works out, everyone gets a large return on what they put in when the company has a liquidity event.

There’s also a value chain of different funders who specialize in funding different types and stages of startups. Early stage investors tend to be very different from late stage investors. Early stage investors are mostly betting on the people, so they need specialized domain knowledge and networks to find good deals. Late stage investors are more numbers oriented, so they will closely inspect the company’s metrics and the macro picture. Investors along this spectrum can provide valuable resources - including education, recruiting, mentorship, and more.

Public Goods Funding Project Lifecycles

It’s interesting to consider what a similar funding lifecycle diagram might look like for the Ethereum public goods ecosystem, ideally funding teams before, during and after they achieve impact.

To accelerate innovation, there should be funding for every viable project from the “cradle to unicorn” stage of a public goods organization’s life cycle.

There will also need to be ongoing funding, validation, and other resources available, to help projects get through the “trough of sorrow” between the initial build and the path to becoming a unicorn. Not all projects will make it. In fact, most won’t. There should be no stigma if projects end up in the grave and teams move on (we should especially encourage learnings from these teams to be made public so that future teams do not make the same mistakes).

1. Cradle: the prospective funding stage

During the cradle stage (the early-to-middle of the graphic above), funding is needed to de-risk the upfront costs of starting something. People are afraid to quit their jobs. It’s difficult and time-consuming to apply to lots of grants programs.

But funding should not come without scrutiny. To truly enable builders, builders also need validation of which things create value and for how many people. The funding can come along with validation that your work is important.

Bounties and hackathons are good ways of seeding ideas, but they are unpredictable and create incentives for teams to keep switching projects / jumping ecosystems. There should be better pathways from winning a few small hackathons to getting a large builder’s grant, perhaps with a couple medium-sized fast grants in between. This would help more projects get off the ground and give proven builders an easier road to quitting their job and working full-time on something. This could also help keep builders focused on a particular ecosystem instead of jumping around from grant to grant.

During the cradle phase, projects should be focused on the most important thing: building. They should be building in public as much as possible. Anything that can be done to simplify their life + enable them to focus on building/learning, be it finding insurance or hiring a good smart contract auditor, is welcome. Ideally they are also not spending too much time worrying about where their next funding is coming from.

In our diagram, this stage starts with winning a hackathon and ends with getting a small grant from the Ethereum Foundation. They haven’t had any real impact yet, but they have proven worthy of a good amount of prospective funding to go build something.

2. Maturity: the community funding stage

Now the project has some money, but it is running very lean. It is building and experimenting with different things, but often no one actually cares yet.

The “trough of sorrow” is like the bear market for your project. It’s even harder when your trough of sorrow coincides with a funding bear market.

To survive the “trough of sorrow” and grow into a mature public goods project, you need to build a community and start having real provable impact for those people. This is the phase where community-funding mechanisms like QF and direct grants can be most valuable.

Although most projects won’t raise $100K this way, many should be able to get enough coins to survive and keep going. These mechanisms force projects to have a close ear to the community and generate awareness.

The projects that consistently do the best on Gitcoin grants are ones that have been around and built a reputation, not the ones that announce their presence to the world through Gitcoin. The same is true in our observation for grants on other funding platforms including and Giveth.

The best projects mature during this stage with a good reputation in the community for offering a useful public good.

3. Unicorn: the retroactive funding stage

At some point, the project passes an inflection point where it is having much more impact on the ecosystem than it is being fairly compensated for. The hope is this is where large pools of retroactive funding come into play.

Ideally, we will start to see a variety of complementary mechanisms funding these projects. Yield from ETH staking or ETF profits (like Van Eck) being awarded to projects with a strong reputation. Increasing Optimism RetroPGF rounds with allocations decided by a group of badgeholders.

Right now these are mostly technocratic mechanisms, but over time there will hopefully be more bottom-up recurring revenue from public goods projects. and Drips v2 are different composable ways of funding dependencies. This idea could be extended to any form of public good. The better we get at tracing impact and creating a culture of rewarding upstream impact, the more this could become a viable source of recurring revenue for public goods projects.

Finally, it would be amazing to see the equivalent of X Prizes or large Advance Market Commitments (AMCs) for public goods projects. These could be the equivalent to the public goods IPO. If these types of large retroactive funding mechanisms start to proliferate, then it will encourage more participation during the prospective and community funding stages.

4. Death is (sometimes) a feature, not a bug

Many projects will not reach sustainability, or unicorn status, and will die along the way. On some occasions, this is a feature, not a bug.

When a project fails, it can provide valuable lessons for entrepreneurs, investors, and the wider community. One of the primary lessons is the importance of market need: many projects fail because they create a product or service that doesn’t meet a strong demand. This highlights the necessity of thorough market research and continuous customer feedback. A failing project can also underscore the significance of timing. Even the most innovative ideas need to be timed to when market demand is beginning to happen.

Another key learning is the importance of flexibility and adaptability. Projects often operate in fast-changing environments, and the ability to pivot in response to market changes, customer feedback, or technological advancements can be crucial for survival. Failures also teach about the significance of team dynamics and leadership. A common reason for project failure is internal conflicts or a lack of clear leadership and vision. Thus, building a strong, cohesive team aligned with the startup’s goals is as important as the idea itself.

What is important to us as ecosystem builders is to:

  1. Do not let projects die because of a lack of funding, if they are on the right path.
  2. Accelerate the path towards death/retrospective/renewal if a builder is on the wrong path.
  3. There should be no stigma if projects end up in the graveyard and teams move on. We should especially encourage learnings from these teams to be made public so that future teams do not make the same mistakes.

5. Not every successful project needs to be a unicorn.

Perhaps “unicorn or death” is the wrong frame. Many projects don’t want to become a unicorn. In fact, the unicorn worship is a legacy of the VC model where the entire thing hinges on finding a 100x exit that will return your whole fund.

There needs to be the lifestyle-business equivalent of public goods projects - There are opportunities to build tools that are small in scope, and provide immense value, but will never get to exponential growth - world changing/unicorn status.

Recommendations & Open Questions

1. Always grow the pie

One parallel we could draw from the VC / startup is that successful founders can become the next generation of investors.

We could see the present generations unicorns funding the next generation of public goods projects at the cradle stage. This is already happening with projects like 1inch and Uniswap going from being Gitcoin grants recipients to being matching pool donors + donors to protocol guild. This should be encouraged at the social layer.

We could enhance this social layer momentum by creating credible cryptographic commitments to fund the next generation. If each new project that receives funding in their cradle stage issues an EAS attestation that they plan to give 5% of their tokens to the next generation of projects, then that creates a quantifiable future commitment to public goods funding for the next generation.


  1. How do we attract the next builders to make high integrity commitments to give back to public goods if they become unicorns?
  2. How do we build a social movement that makes doing this trendy?
  3. How can we aggregate these commitments to create credible commitments of future funding?

2. RetroPGF provides the opportunity to converge around the meme “Impact = Profit”

VCs push startups to accelerate and capture as much value as possible. The public goods push should be to create as much value as possible for the ecosystem.

Retroactive Public Goods Funding offers an opportunity to push for a different value capture mechanism that converges on the meme of “impact = profit”.

By introducing Retroactive Public Goods to an ecosystem, we can create a credible commitment to a big monetary payoff for public goods that create the most impact. Since it’s easier to judge quality retroactively than ahead of time, it is much easier to converge on “Impact = profit” retroactively.

But then, prospective public goods funders could change the earlier steps in the funding lifecycle. Allowing speculators to speculate on which public goods are most likely to get a retroactive reward later. Tools that allow users to “angel invest” in public goods earlier in the cycle may begin to create some movement here.

Another opportunity is to create Impact Attestations to credibly track which projects are having the most impact. These impact attestations at scale will form a Web of Trust which allows projects to all attest to each other’s impact. Tools like EAS and hypercerts can provide the foundation for these impact attestations. They become increasingly valuable when whale funders use them as signal detection for what to fund, and they can also be a valuable tool for builders to know that they are on a good path.


  1. Build hypercerts/EAS into existing public goods funding projects.
  2. Build new Impact Attestation services that help people tell the difference between impactful projects vs not impactful projects?
  3. Build new prospective public goods funding tools that take advantage of future retroactive rewards.

3. Surviving the Cradle Stage

Creating a credible path to surviving the Cradle Stage is the most important unsolved set of problems in this space.

Open questions here include:

  • If a builder is failing to attract funding/validation, is that because the ecosystem is broken, or because that builder has not yet found a problem area that is important enough to warrant funding?
  • What kinds of safety nets do public goods builders uniquely need? Thinking adversarially: How can these be built such that they won’t be exploited?
  • There are definitely some services like legal, back office, recruiting, audits, office hours, etc that all teams need. Will these be key to allowing small teams to be able to be independent on their own?
  • Which of these are the services that would be most valuable to builders at the cradle stage? What’s the TAM for each new service in the cradle? If the TAM is large enough, we will begin to see firms pop up that service each of these niches. If the TAM is large enough how can we aggregate DAOs who pool resources to provide those? How do we attract builders to build services to provide these services?
  • While grants are a good start, once the devs and the ecosystem work well together, there needs to be a second step to that relationship, one where the dev can feel comfortable and “at home” for the long run. Devs do their best work when we know the protocols in and out and can build long term relationships within an ecosystem. The touch and go model is not great. How do devs transition from point-in-time funding to recurring funding?

4. Are we just reinventing Venture Capital?

In some ways, this ecosystem funding lifecycle can begin to resemble the reinvention of venture capital.

In venture capital, it is common for a fund to accrue a talented roster of developers + other service providers that can assist founders with whatever they need.

We should carry forward what’s working here, but also be mindful of the opportunities available to reinvent these ecosystem services from first principles.

Composable funding models offer the opportunity for builders to have many different sources of capital and services (as opposed to one VC firm).

Retroactive public goods funding offers the opportunity for builders to focus on public goods, not just things that can extract value. Value is captured by the network and fed back into the network.

The supermodularity of web3 systems is also an opportunity. Because smart contracts are anti-rivalrous and accrue value the more people use them, there is an opportunity to provide momentum towards an exponential growth curve earlier on that will pay off later.

Solving this problem is the META

Does solving the “cradle-to-unicorn” public goods funding problem create a new META (most effective tactic available) for crypto ecosystems?

We believe that as crypto matures and fundamentals matter more + more, that funding your ecosystem’s public goods will become a sustainable competitive advantage, in the same way that access to jobs, schools, health care, and recreation are the competitive advantage of cities.

Prosocial behavior has evolved dozens of times independently in economies/natural ecosystems the world over (Wolves hunting prey together, humans banding together to form companies or nations, etc). It seems obvious to us it’ll also evolve into cryptoeconomic systems.

In a sense, it’s already happening with the meme of “Ethereum Alignment”. The projects that adopt a pro-Ethereum mindset and business model enjoy the many privileges of being in a network that supports each other (whether out of altruism or a rational economic interest to see both succeed).

As the ecosystem grows, there is an opportunity to extend this mindset to 1000s of DAOs that proliferate in the Ethereum ecosystem. Each competing for a place to add value in the value chain, these projects will bootstrap pro-social environments within their communities.

In this post, we looked at how to do it across a complete life cycle of a public goods project - from cradle to unicorn or cradle to death.

There are many open questions and opportunities in this design space that we can make progress on in 2024. If you are working on these problems and have something to add, please leave a comment below or in this telegram group.


Thanks @ccerv1 and @owocki – this is a really thoughtful look at the public goods lifecycle! I’m still digesting, but adding a few initial thoughts below. For context: I’ve been going deep with builders lately on their funding experience and have emerged feeling a bit skeptical about drawing lines between “public goods funding” and “non public goods funding.”

1 I’ve personally seen a rise in accelerators/incubators for early stage crypto projects and heard good things about them from many builders. Surprised not to see them mentioned here, especially bc they can be so helpful w many of the “back office” stuff you mention in cradle stage. Do you not think of them as a good fit for public goods?

1a to the point above… I talked to a builder recently who said “for things that I know will always be lifestyle projects, I go for grants and public goods funding. For things that I know could be big, I go for accelerators or RFP grants.” Interestingly, he considered both the lifestyle and “big” projects public goods (and both have been recipients of things labeled public goods funding.)

2 In talking to lots of public goods builders about their funding expectations lately, many of them had an expectation that they would raise VC funding when they got big enough. I wonder if “avoiding” VC funding is an unnecessary burden?


This is a great point.

Personally I think a lot of things in the space are combination public/pivate goods.

And Vitalik does too.
Screenshot 2023-11-28 at 9.21.48 PM

Take Ethereum for example. Its free to read from, but it costs $$$ to write to. Its a public good to read the state, but a private good to write the state.

A big reason that Gitcoin moved from “Build & Fund Public Goods” to “Fund What Matters” is to not get caught in as many technocratic debates about what a public good is or not. Instead just allow people to fund what matters to them - much more visceral / less abstract.

We should probably include accelerators in this lifecycle. For the above reasons, but also because in a post RetroPGF world, public goods will be investable + therefore public goods projects will more commonly go through accelerators (whether traditional accelerators or ones run like a DAO like SeedClub).

I wonder if this is a social norm we can/could change. How might we create a world in which people think big about creating unicorn scale impact (instead of just unicorn scale profit)? Or unicorn scale public goods?

Or perhaps the public goods definition doesnt matter here… And we should just focus more on the narrative of regen/impact or “what matters” projects without having to label the projects we are inspiring people to pursue as public goods.

Accepting VC funding does come with some stigma and many influential community members think VC funded projects should not receive rewards.

Whether there is good reason for that or not is a deep deep rabbithole :). It does seem that in Vitalik/Karls vision for RetroPGF (visualized below and articulated here) that projects funded by other things (denoted in green in the graphic) are compatible with RetroPGF rewards (the orange graphic)…


Interesting, I think we’re at No.2, maybe one day I’ll tell my story🥲

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I need to dive into this more deeply, but I’m very interested to see where these lines of thought lead, in terms of a science of public goods funding.

Not immediately pertinent to the matter at hand, but pertinent in terms of larger economic context: I’m working on some theory for how socially progressive goals, like many of the philanthropic efforts undertaken in the web3 public goods sector, can best be gone about in a neoliberal context, i.e. without unduly empowering the government to facilitate social welfare and public goods programs, but rather handling as much of it in the private sector as possible.

Anyway, I bring this up because I’d be curious if anyone on this forum has thoughts on the matter, re: neoliberalism and building "a new model that makes the existing model obsolete.”

Recuperate the Vanguard: Free Market Collectivism via Self-Regulation in Emerging Technology Sectors

A Progressive Apologia for Neoliberalism (draft)

Also, I very much enjoyed co-managing the OpenCivics round, and am quite happy with the results! Looking forward to iterating and learning for future rounds.


Thanks yall for writing and posting this!

I’m going to have come back to dig deeper into all the insights here. What stands out to me most right away is this:

If retroPGF does come to fruition as an exit and not just a big funding opportunity (as I believe it’s mostly being used by projects right now) then the ensuing investment market may need a platform. I wonder if and how Gitcoin might best position itself to be that platform (and if it should compete with tools like juicebox). In a world with retail impact investors, could the matching fund become the equivalent of a crowd-directed investment fund?

I really appreciate this post


This made me think of a heated discussion that happened during dpact. It was a mix of regens (not necessarily in web3) in the agricultural industry and others building web3 PGF infra.

Initially, many were excited about new public goods funding tooling/infra and how that could be leveraged for their needs, only to be disappointed to see how a lot of the funding was being allocated to web3 projects that they didn’t personally define as “public goods”.

Maybe the public goods meme can be harmful, because debate around its definition kept going in circles. Maybe “what matters” to a specific community is more clear and less up for debate.


i’ve been teasing some of these ideas on twitter:

Screenshot 2023-12-07 at 7.07.37 AM

and have been working in a telegram group with a few folks exploring these ideas…

I’d be interested in seeing the creation of a tool evolving how the web3 community backs budding crypto projects by leveraging Gitcoin’s unique dataset and access to builders to pinpoint rising stars in the space. like AngelList Syndicates, with a token-native twist, this tool could be a vehicle for users to not only support but potentially gain from the projects they believe in through ‘hypercerts’ or token-based incentives.

as regen/public goods begin to flourish with increased retroactive funding, this system could become the seedbed for their growth, offering governance tokens, Impact Certs, or HyperCerts to early backers.

we’ve already seen Gitcoin Grants be a positive signal for value-creation. Uniswap, Gelato Network (plus many more!), all raised funds early in their journey on Gitcoin Grants. What if we took the same ux that’s worked with Gitcoin and apply it to Angel networks? can we fund what matters from Cradle to Unicorn?

DM me if interested in getting in touch with the group thats exploring these themes.


@DisruptionJoe on the greenpill pod this week. kind of interesting to hear how he thinks in general, but one point (about 20 mins in) i wanted to highlight is that he uses QF to get people into grants, and then delegated domain allocation (Questbook proposal for Delegated Domain Allocators | Questbook official blog) once he identifiies good grants from QF.

it feels like DD might be a unique mechanism for getting through the trough of sorrow.