The Future of Grant Funding: Verifying Results Without Seeing Raw Data

Funders act as centralized oracles, relying on self-reported metrics from grantees. This creates massive information asymmetry and moral hazard.

• No real-time verification of claimed KPIs like user growth or transaction volume.
• High overhead for manual due diligence, scaling poorly beyond a few dozen grants.
• Vulnerable to Sybil attacks where teams inflate metrics across multiple grant applications.

Grantees resist sharing raw user data or proprietary code, but funders need proof of execution. The current model forces a binary choice.

• Full transparency exposes competitive moats and user privacy.
• Opaque reporting kills accountability, enabling "ghost projects" that deliver nothing.
• Zero-knowledge proofs (ZKPs) exist but are not integrated into grant frameworks like Gitcoin Grants or Optimism's RetroPGF.

Releasing funds after manual milestone review creates cash flow cliffs for builders and delays innovation cycles.

• Capital lock-up stifles agile development and rapid iteration.
• Milestone fraud is common, with teams submitting fabricated deliverables.
• Contrast with DeFi: Protocols like Aave and Compound verify collateral autonomously in ~12 seconds, not quarterly reviews.

Grant decisions rely on off-chain reputation (GitHub, Twitter) which is not portable, composable, or fraud-resistant.

• No sybil-resistant scoring for past grant performance.
• Fragmented history: Success with Ethereum Foundation doesn't inform a Polygon grant.
• Projects like ARCx and Gitcoin Passport attempt this but lack enforceable, programmatic outcomes.

Models like Optimism RetroPGF reward past contributions but struggle to objectively measure "public good" impact without verifiable data.

• Voting-based allocation is prone to popularity contests and lobbying.
• Impact metrics (e.g., "developers onboarded") are qualitative and un-auditable.
• Creates perverse incentives to market over build, as seen in some Layer 2 ecosystem rounds.

Grant programs often mandate using tools like Google Analytics or Mixpanel, creating data silos and vendor lock-in.

• Funders cannot independently verify the data's authenticity.
• Grantees lose control of their analytics pipeline.
• Contradicts web3 ethos of verifiability and ownership, unlike transparent protocols like The Graph for querying public chain data.

Funders demand proof of work, but builders won't expose sensitive code or user data. This creates a trust deadlock that stifles innovation.

• Result: Grants favor marketing over R&D.
• Cost: ~80% of funds misallocated to verifiable, low-impact work.
• Alternative: Teams pivot to VC funding, ceding control.

Replace progress reports with verifiable, privacy-preserving proofs. Builders generate ZK proofs of execution (e.g., a circuit ran, a model trained) without revealing the raw data.

• Tooling: Use zkSNARKs via RISC Zero or SP1 for general compute.
• Standard: Adopt EAS (Ethereum Attestation Service) or Verax for on-chain, portable credentials.
• Outcome: Funders verify proof-of-work, not promises.

Flip the script: fund based on proven, on-chain utility, not proposals. Inspired by Optimism's RetroPGF but with automated verification.

• Mechanism: Smart contracts release funds upon verification of a ZK-attested milestone.
• Ecosystem: Integrates with Allo Protocol for grant management and Hypercerts for impact tracking.
• Result: Capital efficiency shifts from >6 month cycles to real-time, merit-based distribution.

Don't build a monolithic platform. Use a network of attestations where reputation compounds. Builders accumulate a verifiable resume across projects and funders.

• Stack: Gitcoin Passport for identity, EAS for attestations, Chainlink Functions for off-chain verification triggers.
• Benefit: Reduces grant application overhead by ~70% through reusable credentials.
• Future: Enables sybil-resistant, algorithmically managed grant pools like Clr.fund.

Grant committees today operate on faith. You submit PDFs and spreadsheets, hoping they're accurate. There's zero cryptographic proof of results, leading to fraud, wasted capital, and an inability to scale funding programs like Gitcoin Grants or Optimism's RetroPGF.

• Manual reporting consumes ~40% of a project's grant time.
• Opaque outcomes prevent data-driven allocation of subsequent funding rounds.
• Creates a moral hazard where marketing outperforms execution.

Replace narrative reports with cryptographic receipts. Projects generate a ZK-SNARK (using frameworks like Risc Zero or zkVM) that proves a specific computation was performed on private data, without revealing the data itself.

• Prove user growth without leaking user emails or wallet addresses.
• Verify code commits and infrastructure uptime directly from source.
• Enables automated, milestone-based disbursement via smart contracts.

Verifiable claims need a shared, immutable ledger. Ethereum Attestation Service (EAS) and Verax become the canonical registries for grant results. Each ZK proof is stored as a cryptographically signed attestation linked to a project's on-chain identity.

• Creates a portable reputation graph across grant programs.
• Enables sybil-resistant filtering for future rounds.
• Optimism's AttestationStation demonstrates early use for RetroPGF.

The endgame is removing committees. With verifiable, on-chain results, funding can be algorithmically allocated based on proven impact. This mirrors Uniswap's fee switch debate but for public goods.

• RetroPGF rounds evolve from subjective voting to objective formula.
• Project teams are incentivized to prove real work, not write reports.
• Grant DAOs (like MolochDAO) can automate treasury outflow based on KPIs.

Not all outcomes are on-chain. Proving "educated 1000 developers" or "published research" is harder than proving TVL. This requires oracle networks (like Chainlink Functions) to attest to off-chain events, creating a hybrid proof system.

• Hybrid ZK-Oracle proofs for complex, real-world metrics.
• Standardized schemas (via Schema Registries) are needed for interoperability.
• Remains the final frontier for fully autonomous grant systems.

The financial upside is institutional. By automating verification and disbursement, foundations and DAOs can reallocate human capital from administration to strategy. Ethereum Foundation, Polygon, and Aave Grants could deploy capital 10x faster.

• Near-zero marginal cost to verify additional grantees.
• Transparent audit trail for regulators and token holders.
• Unlocks billions in dormant ecosystem funds waiting for credible distribution mechanisms.