The Cost of Voluntarism: Why Impact Must Be Recognized and Rewarded

Unrewarded work leads to attrition of critical infrastructure operators. Why run a costly, high-availability node for a DAO or L2 when you get no yield? This creates centralization pressure and single points of failure.

• Result: Network security degrades as only altruists or whales remain.
• Example: Early Ethereum staking pools vs. the professionalization driven by rewards.

Without a reward mechanism, protocol upgrades and maintenance stall. Core devs burn out, and governance becomes dominated by those with extractive, not constructive, incentives. See the "volunteer's dilemma" in action.

• Result: Technical debt accumulates; innovation moves to incentivized competitors.
• Data Point: Compare the pace of development in funded ecosystems (Solana, Avalanche) vs. purely volunteer-driven forks.

Impact must be cryptographically proven and financially rewarded. Systems like EigenLayer (restaking), Gitcoin Grants, and Optimism's RetroPGF create flywheels where measurable contribution fuels sustainable development.

• Mechanism: On-chain attestations convert work into reputation and yield.
• Outcome: Aligns individual rationality with network health, turning public goods into profitable utilities.

Protocols capture billions in fees while core contributors and infrastructure providers operate on grants or goodwill. This creates a single point of failure in development and security.

• Key Benefit 1: Align protocol revenue with core development via fee splits or treasury streams.
• Key Benefit 2: Mitigate key-person risk and protocol stagnation by creating sustainable career paths.

Optimism's RetroPGF and Gitcoin Grants are experiments in post-hoc value recognition. They reward impact after it's proven, not promises.

• Key Benefit 1: Funds flow to proven contributors, reducing grant proposal overhead and speculation.
• Key Benefit 2: Creates a market signal for which public goods (docs, libs, tools) are most valuable to the ecosystem.

Block builders, sequencers (like Arbitrum, Optimism), and validators extract billions in MEV and fees that are not shared with the applications generating the value.

• Key Benefit 1: Implement MEV redistribution or app-specific chains where apps capture their own sequencer revenue.
• Key Benefit 2: Use intent-based architectures (UniswapX, CowSwap) to return value to users and integrators, bypassing extractive layers.

Essential infrastructure—RPC providers (Alchemy, Infura), indexers (The Graph), oracles (Chainlink)—operate on thin margins while enabling $10B+ TVL. Their failure cripples the stack.

• Key Benefit 1: Protocols must budget for reliable, paid infrastructure as a core operational cost, not an afterthought.
• Key Benefit 2: Support decentralized alternatives (e.g., POKT for RPC) that align incentives via service tokenomics.

DAO delegates and active governance participants perform critical security and strategic work for token rewards that don't scale with responsibility.

• Key Benefit 1: Implement salaried delegate roles with clear accountability, moving beyond one-token-one-vote plutocracy.
• Key Benefit 2: Use soulbound tokens or proof-of-personhood to reward consistent, quality participation, not just capital.

Mandate that a fixed percentage of protocol revenue (e.g., 10%) is automatically directed to a curated list of essential public goods and core teams.

• Key Benefit 1: Creates a predictable, non-voluntary funding stream for critical dependencies.
• Key Benefit 2: Embeds sustainability into the protocol's economic design, making it a competitive feature for attracting top-tier builders.