[TEMP CHECK] Capital Allocation Governance Research for GG24

TLDR

With GG24 just around the corner, we want to assess the community’s interest in supporting research (initially) entitled, “From Mechanism to Outcome: Towards a Taxonomy of Impact for Web3 Capital Allocation Governance.”

This research will analyze the performance of the capital allocation governance mechanisms deployed during GG24, mapping each mechanism from desired outcomes to actual results. The data will be collected through a combination of documentation reviews, interviews with domain leads, and a retrospective analysis.

We strongly believe such research is crucial as Gitcoin looks to pioneer a multi-mechanism world. It is our hope that the findings will help to better fit future domain-specific rounds with the capital allocation mechanisms that will achieve stated objectives and generally facilitate more effective mechanism experimentation.

Overview

In many ways, web3 has become the preeminent environment for experimentation in novel capital allocation governance mechanisms. Currently, the space is rapidly moving out from under the dominance of plutocratic, simple token voting systems, to a plurality of more sophisticated mechanisms. As a paradigmatic example of this shift, Gitcoin is “expanding the aperture” from allocating funding strictly via QF rounds, to fully embracing a multi-mechanism future, funding dedicated domain areas with tailored mechanisms. In addition to QF and dedicated domain allocation, the upcoming GG24 round will feature deep funding, retro funding, hypercerts, conviction voting, InfoFi / conditional funding markets, as well as hybrid approaches featuring some combination of these mechanisms.

The emergent multiplicity of mechanisms presents a need (and an opportunity!) to evaluate their performance and impact.

While the Mechanism Institute has done a good job aggregating various characteristics and design considerations regarding a large number of mechanisms, and the capital allocation handbook explores real-world implementations, there is a lack of transparent, evidence-based evaluation criteria by which to communicate and analyze mechanism impact within and across ecosystems. But before we can do that, we need to take a step back to answer the following question: how do we make mechanisms—their components and outcomes—more comparable? Comparability will help drive the cross-mechanism analyses, evaluation frameworks, and performance benchmarks that make effective impact measurement possible.

The Global Impact Investing Network (GIIN) has developed a thematic taxonomy for the purpose of “providing a shared language for describing, assessing, communicating, and ultimately comparing impact performance.” Similarly, we propose that creating a taxonomy of impact for capital allocation governance mechanisms in web3 will enable the creation of a flexible framework to map mechanism components to outcomes. This taxonomy will provide practitioners with a common logic that guides mechanism selection, execution, evaluation, and iteration, ultimately ensuring that novel mechanisms are deployed towards initiatives with the strongest alignment to ecosystem objectives and the greatest potential for impact.

Objectives

This research aims to produce an initial taxonomy of impact for capital allocation governance mechanisms in web3. Modelling off of GIIN, this taxonomy will be constructed of hierarchical classifications proceeding from broad-to-narrow (i.e. from high-level objective categories to individual outcomes). To understand a mechanism’s full effects on GG24 results, outcomes will reflect both funding distribution data and funder behavior data.

Building such an evidence-based taxonomy will:

  • Map objectives to actual results
  • Uncover thematic connections within the layers between objective categories and outcomes
  • Enable mechanism comparisons that provide greater transparency and credibility for round operators and funders
  • Reveal behaviors of various actors in the system to better predict future outcomes

As a final deliverable, a paper will be published that allows the community to visualize and assess the performance of the mechanisms deployed in GG24 and enables better decision making regarding mechanism selection for future rounds.

But this is just the beginning! Using the “v1” taxonomy created in collaboration with Gitcoin, we hope to continue the research by extending the analysis to other ecosystems. This "roadshow,” which we plan to start at Devconnect, would aim to convene more stakeholders and inform the development of the taxonomy through more comprehensive data sets.

We also see this research as a way to better engage with social organizations, NGOs, and potential large funders outside of web3, with whom we have yet to find a common language to effectively communicate and compare impact performance.

The long-term vision is to create a living public resource that allows all participants to better understand the distinct outcomes driven by each mechanism and better match objectives with the mechanisms that help achieve them. This will hopefully result in better decisions when setting up or evaluating future funding rounds and position these mechanism experiments towards success.

Methodology

Taxonomy development will be conducted via the qualitative research method known as the grounded method, whereby the taxonomy is constructed by looking at the evidence that exists and building from what is there (i.e. from the ground up).

The research will cover all mechanisms used to allocate funds during the round and will consist of 3 stages:

Stage 0: Aggregating, reviewing, and analyzing existing documentation (primarily the Gitcoin forum posts submitted during Sensemaking Szn) relating to what mechanisms were chosen for GG24 and why they were chosen.

  • Analysis will involve coding of the documents in order to capture text regarding specific mechanism objectives, components, and outcomes. The codes will then be clustered based on conceptual similarities in order to generate hierarchical frameworks and initial drafts of taxonomies.

Stage 1: Connecting with domain leads for structured interviews about their mechanism selection process and desired funding outcomes for their GG24 domain.

  • The interviews will help refine the taxonomies, or uncover new ones. Sharing initial taxonomies with the interviewees beforehand will allow researchers to further support or expand findings.

Stage 2: Collecting and analyzing funding data from across all GG24 domains

  • The final stage will surface both funding and behavioral data, the combination of which will provide full context for understanding GG24 outcomes. Researchers will then map each mechanism from objectives to outcomes.

Rough Timeline

  • Sept 29 - Oct 3: Collect feedback from Gitcoin community
  • Oct 6: Stage 0 (documentation review) & Stage 1 (interviews) begin
  • Oct 24: GG24 ends & Stage 2 begins (funding data analysis)
  • November: present initial findings and vision for taxonomy at Devconnect
  • December: publish final research findings along GG24 Retrospective

Team

Sam McCarthy, Ecosystem Lead @ DAOstar (@samccarthy27)

Josh Dávila, The Blockchain Socialist (@TBSocialist)

Mike Cooper, Research @ Metagov / Grant Innovation Lab

Next Steps

This post is a temp check to gauge the community’s interest in supporting this research through collaboration and/or funding. In particular:

  • Are there similar efforts already taking place that we should look to for areas of overlap and places to collaborate?
  • Are domain leads willing to participate in the interviews?
  • Is this research something that Gitcoin would be interested in funding directly?

Feedback on this post will help shape a formal proposal, including specific funding requests.

4 Likes

heres what GPT says the business case FOR doing this would be

Business case:

  1. Strategic Differentiation
  • Gitcoin positions itself as the coordination lab of Web3. By not just running funding rounds but also producing rigorous, evidence-based research, it demonstrates thought leadership. That attracts funders, NGOs, and institutions who demand transparent, measurable impact.
  1. Improved Mechanism Fit
  • Mechanism–outcome mapping helps domain leads and funders choose the right allocation method for their objectives. Better fit → higher satisfaction → repeat participation and growth of the ecosystem.
  1. Ecosystem Legitimacy & Trust
  • Transparent evaluation frameworks reduce skepticism around “experimental funding.” If mechanisms can be compared with credible, standardized taxonomies, Gitcoin’s experiments look less like ad-hoc bets and more like professional, scalable models.
  1. New Market Access
  • A shared taxonomy is a “translation layer” that allows Gitcoin to talk with NGOs, governments, and institutional impact investors. Those groups already use frameworks like GIIN. Aligning with their language unlocks bigger checks from outside crypto.
  1. Revenue & Sustainability Pathways
  • The taxonomy itself becomes a reusable product. Other ecosystems or DAOs may pay for audits, benchmarking, consulting, or integration into their governance. Gitcoin can monetize its role as the reference point for mechanism evaluation.
  1. Data Moat & Network Effects
  • The more rounds Gitcoin runs and evaluates, the stronger its comparative dataset becomes. That dataset compounds into a defensible moat—others can run experiments, but Gitcoin owns the cross-mechanism evidence base.
  1. Risk Management & Efficiency
  • By understanding what mechanisms actually deliver, Gitcoin avoids wasting treasury or funder resources on misaligned approaches. Better resource efficiency improves Gitcoin’s credibility with core stakeholders.

Net: The business case is to transform Gitcoin from “grant platform” into the authoritative capital allocation governance research hub, which enhances legitimacy, attracts larger funders, creates new service lines, and builds a defensible data moat.


i will think on this and whether/how much we can support it $$ wise. and also about what precedent we want to set for meta-work like this. will also confer with @MathildaDV

6 Likes

@MathildaDV @Sov @ccerv1 @paul2 @LuukDAO @MontyMerlin tagging you here for visibility. As stewards and domain leads, it’d be great to get your feedback and interest in supporting this research for GG24.

For full transparency, I’m seeking $10k to cover:

  • Research detailed above
  • Report (i.e. taxonomy “v1”)
  • Devconnect presentation or workshop (at something like FTC or the Governance Community Hub, or both)

Considering the short timeline, and the value I think this research could bring to Gitcoin, I’m exploring starting the research asap and then moving forward with a proposal for some kind of retro funding. Thoughts?

2 Likes

Thanks for the tag @sam_mccarthy . As a steward, I’m supportive of this work.

My two gwei:

  • Team is credible and a long-term ally of Gitcoin
  • The ask in financial terms is reasonable
  • I appreciate that this is focused very specifically on the mechanisms used in GG24, not the more abstract space of “all mechanisms”
  • IMHO, the lack of some taxonomy for measuring impact within and across domains is a huge impediment to more rigorous analysis, eg, are rounds achieving their stated goals, getting better over time, etc, etc. so this could be hugely valuable

My one worry is that this space has a history of commissioning research that is interesting but not actionable. So I’d really want to see a concise set of recommendations that can directly shape the design of GG25+

4 Likes

amazing to be part of concept of community îm proud to be part of so motivated enjoy !

Hey @samccarthy27, @TBSocialist, and Mike — thanks for pulling this research together. It’s a really important piece of work, and I appreciate the clarity you’ve brought to it.

What I’ve been building seems to fit directly with your approach and could help accelerate parts of your methodology, especially around Stage 0 and Stage 2.

I’ve put together a working prototype of a constitutional AI that reviews regenerative project proposals and flags risks of co-optation or hidden capital tensions. What makes it different is that it leaves a fully transparent reasoning trail — so you can see exactly why it reached each conclusion.

Rather than just talking in abstract terms, here’s what I’d like to offer:

Stage 0 support: I could run the top 3–5 most complex GG24 proposals (especially in climate or public goods) through my system. The output would be a detailed analysis of potential “impact divergence” — cases where project incentives don’t match their stated goals. That could give you a richer dataset for your taxonomy right from the start.

Stage 2 context: Once your post-round data shows which projects under- or over-performed, we could cross-check against the system’s pre-funding analysis. That way we’re not just seeing what happened, but also building hypotheses for why.

Just to be clear:

  • This isn’t a funding request or a big integration ask. It’s a low-friction way of contributing a dataset that could strengthen your research.

  • Longer term, my vision is to develop this into a public good for the ReFi ecosystem, and I’ll likely apply for the “Public Goods R&D” round. But for now, I’d just love to collaborate on this piece.

If you’re curious, the full technical architecture is detailed in this paper: [The Wisdom Forcing Function: From Urban Ecology to AI Alignment] (regenerative-ai-architecture/docs/WFF_Paper.pdf at main · CarlosArleo/regenerative-ai-architecture · GitHub)

Happy to share examples and case studies if helpful — I really believe this could add a layer of depth to your taxonomy work.

Best,
Carlos

1 Like

Thanks for putting this together. I am mostly in favor of this, but I have the same reservations as @ccerv1 RE: actionable steps. On top of that it would be important to know an ops/access plan. I want to be mindful of everyone’s time and resources as we’re in the middle of GG24 so I want to make sure we’re setting you up for success here.

I’m mostly supportive of the retroactive model, contingent on:

  • A usable taxonomy that links stated objectives to actual outcomes.
  • Concrete insights that inform mechanism choice, tuning, or evaluation.
  • Clear potential to integrate findings into Gitcoin’s round design or mechanism experimentation roadmap.

I would also expect the final outputs—taxonomy, report, and any supporting materials—to be under Gitcoin’s ownership, so we can integrate and build on them in future rounds. Would that work for you?

The other big question to me around costs: would this 10k be a once-off or would you be interested in doing this work for GG25 onwards as well? If so, I think we should re-negotiate the cost. But either way IMO we should cap (retroactively or upfront) funds for this proposal at $10k if we plan not to do continuous work.

3 Likes

Thanks @sam_mccarthy … dropping a few questions here on the proposal:

  • How do you foresee this initiative translating to a positive impact for Gitcoin? In Gitcoin 3.0, we are looking for ways to drive coalitional funding from others across the Ethereum Ecosystem and build alliances. How will this initiative contribute to that?

  • With the limited number of domains and relatively small number of unique funding mechanisms (less than 5), why is a budget of $10K needed?

  • If the research is funded and all goes according to plan what is your desired outcome for how this data will be used moving forward for Gitcoin and the wider Ethereum Ecosystem?

3 Likes

@ccerv1 @MathildaDV and @Sov - thanks for your comments, I’ll try to address them all.

My one worry is that this space has a history of commissioning research that is interesting but not actionable. So I’d really want to see a concise set of recommendations that can directly shape the design of GG25+

One of the main priorities of this research will be to produce actionable findings. Specifically, helping future funders, domain leads, and governance participants better understand the distinct outcomes (in funding patterns and behaviors) driven by each mechanism, thereby, increasing the chance of designing successful funding programs during GG25 and beyond. To this end, I’d be happy to work with the team to integrate my findings into any educational resources Gitcoin distributes to domain allocators and other stakeholders leading up to future rounds.

On top of that it would be important to know an ops/access plan. I want to be mindful of everyone’s time and resources as we’re in the middle of GG24 so I want to make sure we’re setting you up for success here.

I’m connected with most of the domain leads and feel comfortable reaching out to them. That being said:

  • Is there a place where I can view all of the leads to ensure full coverage?
  • If I don’t know a couple of them, would you be willing to help connect / intro me @MathildaDV?

I definitely aim to be respectful of everyone’s bandwidth and will only ask for ~30min of their time over the next couple weeks.

I would also expect the final outputs—taxonomy, report, and any supporting materials—to be under Gitcoin’s ownership, so we can integrate and build on them in future rounds. Would that work for you?

All DAOstar research is published as a public good - freely available to be accessed, viewed, and iterated upon. Accordingly, Gitcoin would be welcome to integrate and build on the final outputs in future rounds as long as there is attribution to the original authors and DAOstar, however, Gitcoin wouldn’t retain any formal ownership over them. I hope this is ok!

How do you foresee this initiative translating to a positive impact for Gitcoin? In Gitcoin 3.0, we are looking for ways to drive coalitional funding from others across the Ethereum Ecosystem and build alliances. How will this initiative contribute to that?

This research should contribute to coalition funding and alliance building by revealing overlapping objectives and strategies, linking outcomes across mechanisms and domains, and generally demonstrating the interconnectedness of GG24 funding. These findings should help drive greater collaboration in the building and designing of future funding rounds.

In addition, through the subsequent “roadshow” starting at Devconnect, I plan to engage a wider group of capital allocators across the Ethereum Ecosystem with this research, growing visibility around and interest in these mechanisms and Gitcoin 3.0.

If the research is funded and all goes according to plan what is your desired outcome for how this data will be used moving forward for Gitcoin and the wider Ethereum Ecosystem?

Initially, I hope to expand the research beyond Gitcoin by engaging a wider set of stakeholders and ecosystems, both within and outside web3. I’d like to invite as much public comment as possible to help refine the taxonomy and inform specific decisions regarding its development (similar to how GIIN does it). This way, we’ll be able to create a more robust, credible data set around these mechanisms that can be utilized by both practitioners and academics.

Ultimately, it’s my hope that this research will help move us beyond the experimentation phase in web3 capital allocation and governance, and grow the space exponentially by making larger orgs and funders feel more comfortable with engaging with it. All of this will support Gitcoin as the champion of a multi-mechanism future and see more money flow through the wider Ethereum Ecosystem.

The other big question to me around costs: would this 10k be a once-off or would you be interested in doing this work for GG25 onwards as well?

With the limited number of domains and relatively small number of unique funding mechanisms (less than 5), why is a budget of $10K needed?

For simplicity, I’m thinking we keep the $10k as a once-off covering the research around GG24. If we want to update the results for GG25+ we can discuss then and I’m happy to draft a separate proposal at that point.

For GG24, I count 6 domains, with at least 5 additional sub-domains, covered by 20 domain leads and 9 mechanisms (QF, DDA, deep funding, retro funding, hypercerts, conviction-based funding, Trust Graph, bounties, and conditional funding markets), as well as multiple hybrid approaches. Please lmk if I have any of this wrong!

I’m budgeting a total of 130-150 hours to cover this and see $10k as a reasonable ask for a team of 3 experienced researchers in the space producing valuable insights that can help shape the future of Gitcoin and Ethereum ecosystem funding.

Looking forward to partnering with Gitcoin and moving this to a formal proposal!

2 Likes