The Future of Grantmaking is Algorithmic and Transparent

An open-source protocol suite for running quadratic funding rounds and other mechanisms. It turns community sentiment into capital allocation.

• On-chain identity via Gitcoin Passport prevents sybil attacks.
• Algorithmic matching multiplies small donations with pooled funds.
• Transparent ledger for all contributions and disbursements.

Traditional grantmaking is a black box. Decisions are made by insiders, funds are locked for months, and impact is rarely measured.

• High overhead: ~30% of funds consumed by administrative costs.
• Long cycles: 6-12 month delays from application to funding.
• Opaque criteria: Selection bias and politics undermine meritocracy.

Smart contracts execute grants based on verifiable, on-chain metrics. Think Uniswap's governance for public goods.

• Programmable criteria: Auto-fund projects that hit milestones (e.g., TVL > $1M).
• Real-time accountability: Funds are streamed or clawed back based on performance.
• Composable stacks: Integrates with Safe{Wallet} for multisig, The Graph for data.

A massive experiment in retroactive public goods funding. It rewards builders after they've proven value, using a reputation-based voting system.

• Volume 3 allocated $30M based on badgeholder votes.
• Attestations from EAS (Ethereum Attestation Service) create a web of reputation.
• Iterative design: Each round refines the algorithm to better map contribution to reward.

A lean protocol for running trustless QF rounds on Ethereum L2s. It removes centralized operators via MACI (Minimal Anti-Collusion Infrastructure).

• Fully decentralized: No single party can censor projects or manipulate results.
• L2 native: Runs on Optimism or Arbitrum for ~$1 transaction fees.
• Modular design: Can plug into any token or funding source.

Algorithmic grantmaking evolves into a capital allocation layer for all of crypto. DAOs like Uniswap, Aave, and Compound will automate chunks of their $10B+ treasuries.

• On-chain KPIs: Fund protocols that increase your own protocol's revenue.
• Cross-chain coordination: Use LayerZero or Axelar to fund ecosystems on any chain.
• VCs become LPs: Endowments provide capital to the most efficient algorithmic fund managers.

Automated systems are prime targets for Sybil actors gaming reputation scores. Without robust identity layers, funds flow to the most sophisticated botnets, not the most deserving projects.\n- Collusion Rings: Groups can coordinate to upvote each other's proposals.\n- Reputation Washing: Attackers can farm 'legitimate' contributions before launching an attack.

Grant outcomes often depend on off-chain data (GitHub commits, user metrics). Corrupting these price oracles or data feeds allows attackers to trigger undeserved payouts.\n- Data Source Centralization: Reliance on a single API becomes a single point of failure.\n- Subjective Metric Gaming: Teams optimize for vanity metrics instead of genuine impact.

The algorithm's objective function is its god. Poorly designed incentives can systematically defund critical but hard-to-measure work (e.g., security audits, public goods) in favor of hype-driven metrics.\n- Short-Termism: Algorithms optimized for engagement favor quick wins over long-term R&D.\n- Homogenization: Similar projects (e.g., DeFi clones) crowd out diverse innovation.

Control over the algorithm's parameters is ultimate power. Whales or concentrated token holders can vote to tweak rules, directing the treasury to their own projects or affiliates. This turns decentralized funding into a plutocracy.\n- Parameter Warfare: Constant governance battles over scoring weights drain community focus.\n- Stealth Control: A seemingly neutral algorithm can be tuned to favor specific entities.

Programmatic, milestone-based payouts in native tokens can create toxic selling pressure. Grantees are forced to sell to cover operational costs, crashing the token and depleting the shared treasury.\n- Vesting Cliff Dumps: Synchronized, predictable sell pressure from multiple grantees.\n- Death Spiral: Falling token price reduces treasury value, forcing further cuts.

Automated, anonymous disbursements to global recipients are a compliance nightmare. Regulators may classify the grant pool as an unregistered securities offering or the DAO as an illegal general partnership.\n- KYC/AML Violations: Cannot trace ultimate beneficiary ownership.\n- Tax Liability: Unclear tax treatment creates liability for both treasury and grantees.

Traditional grant committees are slow, prone to bias, and lack accountability for fund deployment. Decisions take weeks or months, with no on-chain proof of impact.

• High Administrative Overhead: ~30-40% of grant budgets consumed by process.
• Limited Scalability: Manual review bottlenecks growth beyond a few hundred applications.

Pioneered by Optimism's RetroPGF, this model funds proven value after it's delivered, using a decentralized jury of badgeholders.

• Pay for Outcomes, Not Promises: $40M+ distributed across three rounds to developers and educators.
• Sybil-Resistant Attribution: Uses Attestations and on-chain activity to prove contribution.

Platforms like Sablier and Superfluid enable continuous, algorithmic fund distribution based on predefined, verifiable milestones.

• Real-Time Accountability: Funds stream only while KPIs are met; stops instantly if not.
• Composable Logic: Integrates with oracles (Chainlink) and DAOs (Aragon) for autonomous governance.

Systems like Gitcoin Passport and Ethereum Attestation Service (EAS) create portable, sybil-resistant reputation to automate grant eligibility.

• Automate Due Diligence: ZK-proofs of contribution history replace manual background checks.
• Composable Identity: Reputation scores integrate directly with grant smart contracts.

Algorithmic grantmaking flips the unit economics, driving capital to the highest-impact builders with minimal overhead.

• Radical Transparency: Every decision and dollar is public and auditable on-chain.
• Global Scale: Permissionless participation unlocks a global talent pool of builders.

Fully on-chain entities like Moloch DAOs and MetaCartel evolve into self-governing funds that vote and distribute via optimistic governance and Hats Protocol.

• Minimal Governance: Rage-quitting and shamans protect against malicious proposals.
• Composable Treasury Mgmt: Integrates with Gnosis Safe, Llama, for sophisticated fund management.