The Gitcoin’s fundraising and partnerships lead, Azeem Khan, discusses how Gitcoin grants work with Decrypt‘s Andrew Hayward and Liam Kelly at Mainnet 2022.
Previously, according to Ukraine’s Ministry of Digital Transformation, Gitcoin Grants donated almost $1 million in Ethereum to local NGOs and the Ukrainian government during the Russian invasion.
“We need to almost reframe public goods,” said Azeem Khan.
Creating The Dream
According to Khan, Gitcoin envisioned a world in which Web3 enable people own their financial transactions, search engines, and social media, replacing private companies that exploit people.
He said, “For us to be able to do that, the infrastructure needs to be built. So instead of thinking about clean air and libraries and things like that, it’s the roads, tunnels, and bridges of Web3 that will allow us to get to that place.”
Therefore, Gitcoin use quadratic funding in order to be able to do this.
The concept of quadratic funding for public goods, services, and causes was first proposed by Ethereum co-founder Vitalik Buterin and economists Zoë Hitzig and Glen Weyl in 2018. A quadratic funding model allows a community to vote on projects it deems to be valuable.
“The purpose of it is sort of an anti-whale mechanism. In traditional worlds, when capital is allocated, it goes to a venture capitalist or an angel, but it’s usually a friend of a friend who ends up getting the money,” Khan said.
Providing Funding Mechanism for Web3
Although Gitcoin does support global events such as Ukraine, it is primarily concerned with providing funding mechanisms for Web3. As part of its 14th grant round, Gitcoin launched the Lootverse Round, a $130k round funded by the Loot project to support Loot projects.
Almost 390,000 donors contributed to Gitcoin’s 15th grant round, raising $1 million.
“Gitcoin is evolving 🦋. Gitcoin Grants will continue to be a public good on which the web3 ecosystem can rely. Soon, though, we’ll also be launching a concurrent offering: Grants Protocol 🍃,” tweeted Gitcoin.
With quadratic funding, Khan explains, funds can be directed to the projects that need them the most, not just to a small group of projects headed by investors’ friends.