Funding Taxonomy & Issues for Ethereum Ecosystem

Funding Taxonomy

Below is an attempt to create a taxonomy of types of funding and support required. This is the same whether it is at the ecosystem level – that is, how might the Ethereum community as a whole tackle these items – or at the level of a single entity such as the Ethereum Community Fund, or a project or private company that may want to support funding.

Not covered is venture capital (VC) / private business investment. From my POV, getting small teams to sustainability is more interesting than generating venture returns. VCs will do their diligence and follow their own theses to decide what will make them a return.

A good question for each of the items below is, “How do you measure success?”.

1 - Grants to get things started

This is mainly where the community has been to date. One time grants or bounties that build a new project or a new feature. Short time horizon, and generally “smaller” projects.

Bigger grants have been handed out as well, but mainly to companies that are already up and running. And, a $500K grant is really only a year of runway for a team of 5. You can argue that in different ways to stretch it out, but if we’re talking mainly engineering talent being paid close to market rates, that’s the number. And, if it’s to a brand new team forming, setup costs must be considered.

  • What is the purpose of grants?

2 - Long term funding for research & maintenance

Once something has been created, it needs to be maintained with feature requests, bug fixes, and regular open source community management over time.

Research in many cases also needs to be matched with long term funding – 6 months, a year, 2 years.

This category includes “core” infrastructure funding.

  • Which clients, research, testing, or other infrastructure should have long term funding in the ecosystem?

3 - Sustainability for individuals and small teams

Which is kind of (2) but is basically different revenue streams other than constant grants. What is the business model? Is this a project that should look to sell support, services, custom work for business needs, etc.? Is there a sponsorship or patronage model that results in more sustained funding over time?

  • As part of grant funding, how to support projects in finding sustainability?

4 - Operational & financial support

Some of the areas would be where projects hit the real world e.g. budgets & cash flow, treasury management contracts, entities in different countries, back office, operations – I talked about some of these items along with posting my template spreadsheets.

The obverse of real world financials – help with decentralized aspects like best practices and tools for crypto management, different DAO setups for different projects – would also be super useful to gather together.

Common Applications for Funding Considered Harmful

I have seen suggestions that there is “waste” in having multiple funding bodies, and that moving towards a single application is something that should be worked on.

Since there is no one entity in charge of Ethereum, I think this is harmful.

It only encourages further insider discussions and group think, rather than a diversity of approaches, which should lead to a diversity of outcomes.

If groups DO move towards a common application – then you don’t need the overhead of people employed by these different groups to manage the process.

As mentioned with VCs at the beginning, I think different funding bodies should have different hypotheses. This might be providing different kinds of funding (#2 one off grants vs #3 long term) or focus on different aspects of the ecosystem. This might be different layers of the stack, could focus on research over implementation, could be on code outputs vs community or design & UX research.

I do think that a highly transparent, anyone can submit, DAO-like system would be super interesting.

At the end of the day, it’s really up to the entities providing the funding how they want to run this.

Ecosystem Funding

One of the meta questions really is:

  • How should the Ethereum ecosystem work together to fund ecosystem level initiatives?

If there are people that truly want to work together on this – we can!

The dynamic of large funded companies, private companies, and foundations – all working on infrastructure together – is very interesting.

Part of this dynamic is that foundation supported projects have limited exposure to market pressures. But it’s up to each foundation to decide which projects to keep funding. The “community” might sway them in some way (stop funding project X!) but that really seems extreme.

Rather, lobby different entities to fund your favourite project Y.

Fundamentally, everyone working in the Ethereum ecosystem is working with a shared resource – a single global chain. Standards and specifications are the base of this, then layering on testing, client implementations, interoperability, and so on.

How much of this should be shared? How do you prevent tragedy of the commons? How do different companies make a business case for contributing or not contributing to shared resources? What is the business model of certain entities building infrastructure that is a common good?

I have also been doing research into broader open source sustainability and licenses. For instance, this maintenance focused Fair Share Clause – companies using open source giving a portion of their revenue to projects they rely on.

I have no “next steps” other than I’m trying to figure out how to fund / get to sustainability for the work I want to do, and how to collaborate with others who want to support core infrastructure. And maybe waste less for any grant systems that are put together.

Happy to continue the discussion with any people or groups that find it useful :slight_smile:

Thank you to @Cygnusfear @pet3rpan @GriffGreen for early feedback on the draft.


A great collection of funding opportunities in the crypto ecosystem -

Related: Nadia Eghbal’s review of the Dash, Monero, and ZCash decentralized funding programs.

I’m pretty convinced that the Ethereum ecosystem would be well suited to have an open and transparent system like this.



This is great. Our experience/s have certainly led us to believe that what you ‘propose’ here is more urgently needed than folks may realise.

Point 4 needs to be particularly highlighted. It has been quite eye-opening to discover how little robust questioning - and zero support - is proffered on that front.

One thing I’d like to add is that there is also a need for an accountability mechanism to ensure mission and expectations are being constantly strove for. This would, ultimately, take the form of some sort of oversight body, but that body could easily be managed in an open and transparent manner.


Here is another collection of web3 grant programs:

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At Giveth we have been thinking about this from the Grantee side from the very beginning, we see many projects come through our Social Coding community, some in the very beginning stages and others well formed and organized. There are many needs for these projects ranging from general support and mentorship to funding and structural organization. Bottom line is once projects become self sustaining they will need legal assistance and taxonomy consultation.

There are multiple ways of approaching this, my initial thought is that a collectively funded grant to develop this program would get the most buy in from community and the would benefit from all the hands that want to throw down on this effort. I personally know 6 or more organizations, individuals who are all trying to tackle this independently, so why not pool our resources and efforts on this specific thing that is a burden for everyone?


Fantastic! I’m putting my hand up to help. And rallying around collectively funded grants is a great thing to experiment with and get better at.

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Count me in…I have currently have the bandwidth to “throw down on this”. This fits in with HATCH’s overall mission of supporting the engineers are are and will be in the trenches and coding. We are not focused on building product, but rather, providing service, so this is really in my wheelhouse.

( we have also had whack of experience dealing with the current eco-system of grantees and have seen A LOT that needs to be improved.)

Do you have a ‘next steps’?

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Let me get some heads together, and we will set up a call. How’s telegram for everyone ?

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Created a riot chat room bc i know boris doesnt have telegram (edit: this is wrong, see comment below)

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Perfect, that link does’nt work for me ( maybe because I have the desktop app running) drop your user name @hershy and @boris anyone else interested we can add you to the chat !

Nooooooo. I totally have Telegram. I equally mute all the systems. And if I have to pick between Riot and … anything else … I will pick anything else.


Found this list called Open Source Software Funding Platforms Registry (redirects to a Google Spreadsheet)


Happy to see this conversation is happening, would love to be included in any calls/chats @YalorMewn . We (at Colony) been working on this issue for a few months now and are getting ready to release a mechanism which solves (at least some) of the problems folks are running into. Looking forward to sharing, hopefully by weeks-end, and getting your feedback.


Hey @kronosapiens I am happy to see the Colony Crew here, I have had the pleasure of working with Ryan and Griffin so I know all to well of the things you are working on !

There is a room on Riot, are you there yet ? Share your user name here if you have one

Hey all (cc @boris @jpitts), we finally got our budgeting mechanism out the door!

There’s an intro blog post here:

And the full paper here:

In short, the idea is that we ask people to make simple pairwise comparisons between projects, and use those to determine specific percentage allocations from the budget. By making the inputs as simple as possible, we make it possible to continually update the allocations to reflect new needs and information. Plus, since the budget was developed using a wide voting base, the allocations are more “legitimate” and there’s less room for doubt and controversy.

Would love feedback. What’s missing in our telling is the idea that projects submit proposals for fixed amounts of funding. Rather, in this iteration, we allow projects to receive as much as the voters choose to give.