Stacking Public Goods Funding Mechanisms

🧙 🧙‍♀️ Ideas and Open Discussion
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The objective of this post is to envision how funding could flow through a network of Public Goods Funding mechanisms.

Here is a high level visual of what this funding could look like:

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(Please don’t take this visual too literally - at any row, you could sub out a project for other project(s), or sub out one mechanism for another, or one upstream funding source for another - eg Optimism for Gitcoin for Giveth for CLRFund)

In 2023, tens of millions of $$ flowed through public goods funding mechanisms. [see visuals here].

Two things will change in 2024 though:

  1. There will be more funding than ever to PGF.
  2. New easy to use products will come online allowing anyone to do PGF.

At any step of the way in this network … you can…

  • Roll your own funding mechanism.
  • Run your own RPGF round => http://easyretropgf.xyz
  • Run a QF round => Grants Stack | Gitcoin
  • Donate to PG => theprotocolguild.eth
  • Donate to Giveth => donation.eth
  • Donate to CLRFund => 0xFcC41c4614bD464bA28ad96f93aAdaA7bA6c8680
  • Donate to Gitcoin => multisig.gitcoindao.eth

As tools like the above make it easier for anyone to run a PGF rounding, we will start to see these flow through multiple levels of funding. Here’s a before/after.

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Opportunities ahead:

  1. There should be as much bottom up curation as possible.
    1. Example: The farcaster community should decide the distribution of PG funding for farcaster contributions, not the Optimism community
    2. This will help create pockets of bottom-up governance that makes top-down decisions easier, because you can abstract away capital allocation decisions to subsidiary local communities.
  2. As more and more communities do this,
    1. …. there will be more long tail public goods funding + cradle to unicorn public goods funding.
    2. … it diversifies funding sources + mechanisms, helping us reach impact = profit in a more pluralistic way.
    3. it creates a gravity well of impact driven talent into the Ethereum ecosystem and positive sum games for those already in the Ethereum ecosystem…
  3. There’s an opportunity to
    1. get all the OP chains to run their own rounds
    2. help web3 communities see that funding their public goods is a sustainable competitive advantage. Over time, this will grow into an arms race to fund public goods.
    3. work between Gitcoin/Optimism/others to help make it (1) very easy (2) very powerful to run PGF tools.
    4. Build impact attestations through open standards (eas, hypercerts), creating an emergent web of trust that measures impact throughout web3.
    5. Build a “web3 grants common app”. such an app would allow people to manage their grant in 1 place + push it to multiple grant programs. saving time and energy, similar to how the common app for college applications works in the US.

Feedback welcome

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The “stacking” concept can really work well to democratize and localize distribution of funding (so individuals in local communities/team can feel that their personal contribution matters and is valued). This in turn can bring more people into these communities. Perhaps the whole “stack” approach can get wider adoption (in government (federal to regional and local?), non-profits (main branch to grassroots), etc.)
My question though is how can we create effective feedback loops that go in the other direction? In other words, since the purpose is to fund impact, how does this impact generate more funds that can be funneled throughout the stack?

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I too think there is a deeper point on how accountability for gitcoin funding will evolve in the future. currently, most gitcoin grants are given so that builders can create XYZ protocol, with centralized control by a few individuals over how those funds are utilized.

In the future, i anticipate that gitcoin will be the testing ground for funding to be distributed via protocols. Example: gitcoin grant donations to protocol guild are automatically distributed to their contributors

I am seeing more projects that want to reach this stage eventually; for example PledgePost or my own project Voicedeck want gitcoin grant money to programmatically flow to journalists based on rules of our protocol.

This will also solve the evaluation problem for gitcoin, as most projects are efficiently passing on funds received to individuals lower down the funnel that are doing work

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I was just reading about the failures of localism this morning (TLDR that they don’t acknowledge they compete with big systems and they don’t measure the right things).

I love this take on localism: the users of the software being allocated funds to allocate themselves. It remains aligned with the bigger system and the users of the software because the users should theoretically choose allocations that make their lives better and that will grow the protocol allocating the funds.

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Just wrote a sequel to this post! check it out => AlloNets - A Powerful Approach to Manfesting Collective Action in an Onchain World