The Cost of Tribalism in Grant Distribution

Chain-specific grants fund redundant, inferior oracles while ignoring the universal data layer. This fragments security and liquidity.

• Wasted Capital: Billions in TVL secured by ~10 oracle networks vs. hundreds of redundant, smaller ones.
• Security Dilution: Niche oracles lack the $10B+ economic security of a universal network, creating systemic risk.

Grants fund new bridge contracts, not the shared messaging layers (like LayerZero, Axelar) that make them possible. This is building roads but not the postal service.

• Redundant Audits: Each new bridge requires a $500K+ security audit for similar logic.
• Fragmented Liquidity: Capital is trapped in dozens of bridge pools instead of a unified layer like Across or Synapse.

L2 grants fund individual sequencers, entrenching validator-level MEV. No major grant program funds shared sequencing infrastructure like Espresso or Astria.

• Extracted Value: $1B+ in annual MEV remains opaque and extractive without neutral sequencing.
• Fragmented Finality: Each L2's sequencer adds ~2-12s of unnecessary latency for cross-domain composability.

Every new ZK L2 funds its own trusted setup ceremony, a critical security bottleneck. Universal systems like Ethereum's EIP-4844 or shared provers are afterthoughts.

• Trust Multiplication: 100+ trusted setups vs. a handful of continuously secure, universal ones.
• Capital Inefficiency: $10M+ in grant capital diverted to redundant cryptographic rituals instead of verification hardware.

Grants subsidize redundant RPC endpoints for individual chains instead of funding the JSON-RPC evolution or decentralized services like Pocket Network.

• Centralization Pressure: ~80% of traffic flows through 3-4 centralized providers despite grant programs.
• Developer Friction: Teams must integrate dozens of unique RPC methods instead of a universal interface.

Grant committees, focused on immediate deployments, ignore the middleware that abstracts complexity. UniswapX, CowSwap, and Across solve the same user problem but build solvers in isolation.

• Solver Fragmentation: Competing solver networks for intent fulfillment cannot share liquidity or information.
• Missed Network Effects: No grants for a universal intent layer, forcing each application to rebuild MEV protection and routing.

Grants from Optimism, Arbitrum, and Polygon are locked to their native stacks, forcing builders to choose a tribe. This fragments developer mindshare and creates redundant work.

• ~$500M+ in locked grant capital across major L2s.
• Zero portability for funded tools or research.
• Incentivizes maximalism over solving user problems.

Fund foundational, chain-agnostic primitives like zk-proof systems, intent-based architectures (UniswapX, CowSwap), and universal state layers. This elevates the entire ecosystem.

• Examples: Privacy for all chains via Aztec, bridges like Across and LayerZero.
• Creates public goods with network effects beyond a single L1/L2.
• Attracts top-tier researchers, not just protocol mercenaries.

Measure grant success by developer liquidity—how easily talent and code can flow between ecosystems. This is the real bottleneck for scaling.

• Track cross-chain deployments and fork rates of funded projects.
• Penalize grants that require proprietary tokens or exclusive contracts.
• The goal is composable innovation, not captive dev teams.

Adopt retroactive funding models like Optimism's RPGF or DAO-driven prize competitions. Pay for proven, widely-used outcomes, not speculative roadmaps.

• Aligns incentives with actual utility and adoption.
• Reduces grantor overhead; the market identifies winners.
• Projects like EigenLayer demonstrate demand for credibly neutral infrastructure.

VCs and protocols must treat grant programs as strategic R&D, not marketing line items. Fund the boring, hard problems that no single chain will solve.

• Pool capital into consortiums (e.g., for decentralized sequencer research).
• Accept that the best work may benefit your competitors—that's the point of L1/L2 agnosticism.
• Increases the total addressable market for everyone.

Continued tribalism leads to technical stagnation and regulatory vulnerability. A fragmented ecosystem is easier to dismantle and fails to attract mainstream talent.

• Unified infrastructure (e.g., shared security models) is a defensive moat.
• The alternative is irrelevance as monolithic chains or traditional tech out-innovate a divided crypto space.
• This is a coordination game; the winning move is cooperation.