Joint Grant Program

Avalanche's Multiverse is a $290M+ incentive program designed to accelerate subnet adoption. It represents a joint effort between the Avalanche Foundation, Ava Labs, and selected subnet deployers to co-fund ecosystem growth. The program targets:

• DeFi-specific subnets with custom virtual machines.
• Gaming and NFT ecosystems with tailored fee models.
• Institutional use cases requiring compliance features.

A Joint Grant Program is typically governed by a multi-sig wallet or a Decentralized Autonomous Organization (DAO) where representatives from each funding partner hold voting power. Proposals are evaluated against predefined eligibility criteria and strategic goals, with funding disbursed in tranches upon milestone completion. This structure ensures transparency and shared accountability among the participating entities.

These programs are commonly formed by a coalition of entities with aligned interests, including:

• Protocol Foundations (e.g., Ethereum Foundation, Solana Foundation)
• Venture Capital Firms specializing in web3
• Corporate Ecosystem Funds from major layer-1 or layer-2 networks
• Decentralized Grant DAOs (e.g., Gitcoin DAO) The partnership diversifies risk and combines expertise in technical review, go-to-market strategy, and ecosystem fit.

Programs often segment grants into tiers (e.g., small builder grants, project grants, ecosystem grants) with corresponding funding amounts and reporting requirements. Common focus areas include:

• Core Protocol Development (scaling, security, interoperability)
• Developer Tooling & Infrastructure (SDKs, indexers, oracles)
• End-User Applications (DeFi, gaming, social)
• Research & Education (academic partnerships, documentation) This tiered approach allows support for projects at various stages of maturity.

The process is typically formalized and transparent:

1. Request for Proposals (RFP): The program publishes specific thematic rounds or open-ended application periods.
2. Technical Due Diligence: Proposals undergo review by technical committees from partner organizations.
3. Community Sentiment: Some programs incorporate community feedback or voting via snapshot or forum discussions.
4. Milestone-Based Payouts: Approved grants receive funds contingent on verifiable deliverables, often using smart contract-based vesting.

Notable examples demonstrate the model's effectiveness:

• Ethereum Ecosystem Support Program (ESP): A long-standing program supporting Ethereum's core protocol and community.
• Solana Foundation Grants: Collaborates with partners like Jump Crypto to fund development on Solana.
• Polygon Village: A joint initiative with venture partners to bootstrap the Polygon ecosystem. These programs have been instrumental in funding critical infrastructure like the Prysm Ethereum client and the Serum DEX.

Compared to a single-entity grant program, the joint model offers distinct benefits:

• Reduced Bias: Decision-making is distributed, mitigating individual organizational bias.
• Resource Pooling: Larger total capital enables support for more ambitious projects.
• Network Effects: Grantees gain access to the combined network and expertise of all partners.
• Ecosystem Alignment: Forces partners to collaboratively define and fund towards a unified roadmap, increasing strategic coherence.

Governance is typically enforced through on-chain voting mechanisms. Grant proposals and their funding decisions are recorded transparently. Key components include:

• Proposal Submission: Formalized process, often with templates.
• Voting Power: May be based on token holdings, committee membership, or a 1-entity-1-vote model.
• Execution: Approved proposals automatically trigger fund disbursement from the multisig, creating a verifiable audit trail from vote to payment.

To mitigate legal and reputational risk, joint programs often implement Know Your Customer (KYC) and entity verification for grant recipients. This process:

• Confirms the recipient is not a sanctioned individual or organization.
• Ensures funds are disbursed to a legally accountable entity.
• Provides a layer of due diligence that complements technical grant evaluation. This is often managed by a dedicated grants administrator or through integrated third-party services.

A critical security practice is to disburse funds in tranches tied to verifiable milestones, rather than as a lump sum. This contingent funding model protects the grantors' capital by ensuring progress before releasing subsequent payments. Milestones are defined in the grant agreement and often require deliverables like code commits, audit reports, or demo deployments to trigger the next payout from the treasury.

Formal conflict of interest (COI) policies are essential for governance integrity. They require committee members or voters to:

• Disclose any personal or financial ties to grant applicants.
• Recuse themselves from evaluating or voting on proposals where a conflict exists.
• These policies, often enforced off-chain, prevent biased decision-making and maintain the program's credibility.

Security extends beyond the payment event. Effective programs enforce post-grant accountability through:

• Reporting Requirements: Mandatory final reports on outcomes, code, and fund usage.
• Code Audits: For software grants, requiring a professional smart contract or security audit before final milestone payment.
• Clawback Provisions: Legal or smart contract-based mechanisms to recover funds if terms are violated, acting as a strong deterrent against fraud.

A Decentralized Autonomous Organization (DAO) specifically structured to manage a treasury and collectively vote on grant proposals. It decentralizes the grant-making process, moving away from a single entity's control to community governance. Key features include:

• On-chain voting using governance tokens.
• Transparent treasury management visible on the blockchain.
• Programmable funding streams via smart contracts. A Joint Grant Program may be administered by a Grant DAO or collaborate with one to leverage its governance framework.

A funding model that rewards projects after they have demonstrated value and impact, rather than funding based on a prospective proposal. Pioneered by protocols like Optimism, it addresses the underfunding of public goods by allocating funds based on measurable, past contributions to the ecosystem. This contrasts with a Joint Grant Program's typically prospective funding model but can be a complementary phase in a project's lifecycle.

A capital pool, often managed by a foundation or core development entity, dedicated to fostering growth within a specific blockchain ecosystem. It is a broader umbrella term that can encompass various initiatives, including:

• Direct grants to developers and researchers.
• Liquidity incentives for DeFi protocols.
• Bug bounty and security audit programs. A Joint Grant Program is often a specific initiative launched from an Ecosystem Fund, involving multiple coordinating partners.

A funding mechanism where one entity pledges to match contributions made by others, effectively doubling (or multiplying) the capital available to a grantee. This is a common tactic within Joint Grant Programs to:

• Leverage capital from multiple sources.
• Align incentives between partners.
• De-risk investment for individual contributors. For example, if Partner A pledges a 1:1 match, a $50,000 grant from Partner B becomes a $100,000 total award.

A formal, structured solicitation issued by a funding body to address a specific technical challenge or research gap. Unlike open-ended grant rounds, an RFP defines precise objectives, deliverables, and evaluation criteria. Joint Grant Programs frequently use RFPs to:

• Focus developer effort on high-priority ecosystem needs.
• Attract specialized teams with proven expertise.
• Ensure deliverables are standardized and comparable across applicants.

A disbursement model where grant capital is released in tranches upon the successful completion and verification of pre-defined project milestones. This mitigates risk for grantors and ensures accountability from grantees. It is a critical operational component of most Joint Grant Programs, involving:

• Smart contract escrows for automatic, trustless payouts.
• Technical committee reviews to verify milestone completion.
• Clear key performance indicators (KPIs) established in the grant agreement.