Problem and Impact
Privacy is a human right, essential to human dignity, autonomy, and freedom. Without privacy in the digital age, our individual autonomy, safety, democratic participation and economic freedom is at risk.
The Ethereum ecosystem lacks robust and well-adopted privacy infrastructure. While Ethereum secures billions of dollars, the vast majority of transfers, trades, and votes happen in the open for everyone to see. There are no default privacy features in major Ethereum wallets - privacy roadmaps, such as Vitalik’s simple L1 privacy roadmap, acknowledge these gaps.
While privacy tooling usually benefits everyone, they can generate little direct revenue. How can we ensure that protocols that aim to improve people’s lives and freedom are properly funded? While there is documented usage of privacy preserving voting and funding applications like Gitcoin, clr.fund, and MACI, none of these rounds were specifically targeting privacy protocols. Using a privacy preserving voting system such as MACI aligns closely with the goals of such a round.
Why funding privacy projects matters
Privacy projects face obstacles in securing sustainable funding. Traditional venture capital models can often align poorly with privacy-focused development, and recent regulator insinuations have caused additional chilling effects on funding. Some privacy projects are public goods without revenue sources, so have little upside for investors. And while it is possible to attract funding, many privacy endeavours can be viewed as risky, as they carry regulatory risk and uncertainty. The recent privacy market report by Web3Privacy Now states that “the post-Tornado Cash investment climate in privacy remains mild”. According to their research, in Q1 and Q2 2025, about $161.6 million was invested in privacy, with B2B decentralised privacy projects attracting the most funding. When compared with broader crypto funding, this is tiny, leaving privacy builders fighting over a smaller slice of the funding pie.
Stepping outside of the Ethereum sphere, being able to fund initiatives privately has tangible impacts in the real world. For example, if you fund a Ukrainian project via some onchain mechanism, this information is publicly visible and could have tangible impacts on you if Russian authorities linked it to your identity. In a scenario where Russian is your home, this would be incriminating information, and would strongly disincentivise you from contributing to the funding in the first place.
Consider journalists working in authoritarian regimes who need to receive funding for investigative work. Public transactions create permanent records that can be used for persecution years later. Activists organising protests or supporting dissidents face similar risks if their financial support is publicly traceable. These real-world scenarios demonstrate why privacy infrastructure deserves dedicated funding rounds that recognise their crucial role in protecting day-to-day actions and also critical societal functions.
Why MACI?
Using a private voting protocol such as MACI aligns closely with the theme of a privacy project funding round and offers several benefits. In the context of capital allocation, privacy is critical to enabling a fair process:
- Prevents collusion: if votes can be seen at any point, the door is opened to undemocratic methods of collusion, such as vote buying.
- True preference expression: Allows participants to express their true preferences free from judgement and bribery.
- Reduces bandwagon effects: This is where participants fund the projects already getting the most attention and votes. If a project can be seen to already have all the votes, what is the point in voting for less popular options?
Gitcoin’s Unique Role & Fundraising
As a pioneer in quadratic funding for public goods, Gitcoin is in a unique position to help fund privacy projects, and doing so in a privacy-preserving manner using private voting protocols. By taking on this challenge, Gitcoin addresses one of the core contradictions in the privacy space: privacy tools need funding, but traditional funding mechanisms compromise privacy.
In addition, Gitcoin is seeking to reposition itself around Ethereum’s biggest problems. In the context of the recent pivot of the Ethereum Foundation into Defipunk, and more strongly advocating for privacy on Ethereum, the time to accelerate the funding of privacy projects is now.
Success Measurement & Reflection
Success can be measured by:
- Participation and feedback by donors/voters
- Funds received by projects part of the round(s)
Additional metrics could include the development of new privacy tools, increased adoption of existing privacy protocols, and the emergence of sustainable funding models. Long-term success could mean creating a funding environment where privacy developers can focus on building rather than constantly seeking funding, ultimately strengthening the broader Ethereum ecosystem.