On Gitcoin Grants
I slowed down my pace of public writing when I started 1confirmation a few years ago. When investors trust you to manage their money, communication with them becomes the priority. But I enjoy the random conversations that come from writing publicly and plan to do more this year. Gitcoin Grants is top of mind today.
On the surface Gitcoin Grants is a simple crowdfunding initiative. But there are some key differences from initiatives we’ve seen before like Kickstarter and ICOs. Gitcoin is built on Ethereum which allows for global participation. And unlike what we saw during the 2017 ICO craze, Gitcoin Grants activity is not driven by people looking to get rich quick from a new token. Gitcoin Grants is facilitating crowdfunding from like-minded people around the world who want to see new public goods built that bring long-term value to Ethereum. The long-term focus on Gitcoin is refreshing given the short-term focus we saw during the ICO craze.
Recurring contributions are encouraged instead of max contributions up front so that contributors can monitor execution ability over time and allocate capital accordingly. With recurring contributions, if execution is not proven the funding goes away. Teams getting massive amounts of capital upfront based on ideas rather than proven execution was a problem the ICO craze that led to lots of people losing a lot of money and far less urgency from teams in the space generally.
I recently contributed to several projects working on projects working on Ethereum privacy, user experience, and data analytics. Now is a good time to start contributing — the Ethereum Foundation is currently matching donations via a quadratic funding mechanism, which allocates the EF’s sponsorship to projects based on how the crowd allocates their grants. This mechanism can turn a $100 grant from an individual into a $1000 donation. The industry has seen a number of “ecosystem funds” pop up to fund public goods in the past several years. I suspect that community-driven quadratic funding initiatives like this will end up being most effective in getting meaningful public goods built.
