The Future of Public Goods Funding: Filtering Out the Bots

Sybil attacks exploit the core mechanism by generating thousands of fake identities to illegitimately capture matching funds. This corrupts the signal and drains treasuries.

• ~$30M+ in OP tokens distributed across rounds, with significant leakage.
• Collusion detection is reactive and manual, creating a cat-and-mouse game.
• The system rewards gaming prowess, not genuine community building.

Projects like Worldcoin, BrightID, and Proof of Humanity create cryptographic attestations of unique humanness. These become a foundational layer for contribution graphs.

• Sybil resistance shifts from detection to prevention at the identity layer.
• Enables one-person-one-vote models without centralized KYC.
• Creates a portable, composable credential for all governance and funding applications.

Protocols like Gitcoin Passport and Civic's Identity.com aggregate verifiable credentials to score an identity's on-chain and off-chain legitimacy.

• Weighted scoring based on GitHub commits, NFT holdings, governance participation, and POAPs.
• Programmable trust: Funding rounds can set minimum passport scores for eligibility.
• Moves beyond binary human/not-human to assess quality and history of contribution.

Teams like Jokerace and 0xPARC are building tools to analyze past airdrop data to identify Sybil clusters. This creates a feedback loop to harden future distributions.

• Graph analysis exposes funding-round hopping and coordinated wallet patterns.
• Pre-screening allows round operators to filter known bad actors proactively.
• Turns the attacker's past success into a liability for future attacks.

Maximum Sybil resistance often requires maximum personal data disclosure (e.g., biometrics). This creates a centralization risk and excludes privacy-conscious users.

• Worldcoin's Orb represents a hardware-trusted, biometric singleton.
• ZK-proofs of personhood (e.g., Anoma, Sismo) are nascent but critical for privacy.
• The ecosystem risks bifurcating into high-security/high-trust and low-trust anonymous layers.

The endgame is a credibly neutral hyperstructure for identity and contribution—unstoppable, free, and valuable to all. Think Ethereum for proof-of-personhood.

• Protocols, not platforms: No entity can censor or de-platform users.
• Positive sum: The graph becomes more valuable as more dapps and funding rounds build on it.
• This neutral base layer is the prerequisite for scaling retroactive public goods funding to billions.

Unverified identity allows a single entity to create thousands of fake accounts, skewing voting and grant distributions. This is the primary attack vector for draining quadratic funding rounds like Gitcoin Grants.

• Sybil resistance is the core challenge for any decentralized system.
• Attackers can capture >50% of matching funds with minimal capital.
• Legacy solutions like Proof-of-Humanity are slow and have low throughput.

Funding mechanisms relying on external data (e.g., price oracles for retroPGF) are only as secure as their weakest data source. A manipulated price feed can misallocate millions.

• Oracle failure creates a single point of failure in a decentralized system.
• Projects like Optimism's RetroPGF are inherently exposed.
• Requires robust oracle networks like Chainlink or Pyth, adding complexity and cost.

Even with perfect Sybil resistance, concentrated token holdings (e.g., VC funds, early teams) can dominate decision-making. This turns decentralized funding into a plutocracy.

• Vote-buying and delegation cartels are emergent risks.
• Seen in major DAOs like Uniswap and Compound.
• Undermines the legitimacy of "community-led" funding outcomes.

A patchwork of incompatible attestation protocols (Ethereum Attestation Service, Verax, EAS) and identity layers (Worldcoin, BrightID) creates user friction and composability breaks.

• No universal identity graph exists across chains.
• Developers must integrate multiple, competing standards.
• Slows adoption and increases integration overhead for grant platforms.

Retroactive Public Goods Funding (RetroPGF) relies on subjective judgments of "value delivered." This leads to inconsistent outcomes, community disputes, and makes the system difficult to automate at scale.

• No objective metric for public good value exists.
• Creates political contention and forks, as seen in early RetroPGF rounds.
• Hampers the development of reliable prediction markets for funding.

Funding pools are often one-off donations or finite treasuries, not sustainable economic engines. This creates a boom-bust cycle for builders, unlike perpetual protocols like Uniswap with fee switches.

• Grant dependency stifles product-market fit discovery.
• Protocols like Optimism must continually replenish their RetroPGF treasury.
• Contrast with Ethereum's block reward/MEV-based funding model.

Programs like Optimism's RetroPGF are gamed by low-effort bots, diluting rewards for genuine builders. The core issue is verifying the quality of past work.

• Sybil attacks can inflate contribution counts by 10-100x.
• Subjective evaluation is slow, expensive, and doesn't scale.
• Capital efficiency plummets, with a high percentage of funds wasted.

Move beyond simple transaction counts. Build verifiable, weighted graphs of on-chain activity to measure impact, not just presence. Projects like Gitcoin Passport and Hypercerts are early experiments.

• Weight edges by transaction value, contract calls, or governance votes.
• Use attestations (EAS) to create a web of trust among builders.
• Enable automated, algorithmic distribution based on provable graphs.

Replace episodic grant rounds with always-on funding streams. This creates a sustainable flywheel for builders and better signal for funders.

• Protocol-owned liquidity (e.g., Public Goods Allocators) can auto-compound yields.
• Frictionless donation via mechanisms like Ethereum's PBS tips or Safe{Wallet} modules.
• Real-time metrics allow funders to track ROI on public goods like infrastructure (e.g., RPC providers, indexers).

Static KYC or one-time checks are obsolete. Funding systems must be continuously stress-tested by adversarial actors, similar to optimistic rollup security models.

• Bounty hunters are incentivized to find and report Sybil clusters for a reward.
• Slashing conditions can penalize provably fraudulent claims.
• This creates a self-policing ecosystem where the cost of fraud rises over time.

Move from "funds distributed" to a measurable ROI framework. Impact Per Dollar measures how much verifiable public good is generated per unit of capital.

• Quantify impact via on-chain adoption metrics (e.g., contract deployments, active users).
• Benchmark projects against each other to allocate capital efficiently.
• This turns philanthropy into a data-driven portfolio optimization problem.

No single protocol will solve this. Build and fund interoperable layers: Data (Ceramic, Tableland), Reputation (EAS, Gitcoin), Distribution (Superfluid, Sablier), Curation (DAO votes, Jokerace).

• Composability allows for specialized, best-in-class solutions at each layer.
• Avoids monolithic, capture-prone systems.
• Enables rapid iteration as new anti-Sybil and impact measurement tech emerges.