Authors: @sejalrekhan97, @devansh76
Special thanks to Audrey Tang for her thoughtful feedback, Jason Chaskin, @owocki and Julian Zawistowski for the review, Clement Lesaege for his provocative insights and David Dao for valuable discussions.
This proposal does not represent any particular entity, nor does it aim to promote any specific individual organization. It is a response to a prompt given by @vbuterin recently: “What can we do to push Ethereum’s public goods funding and governance ecosystem to the next level this year, ideally something that major L2s, DAOs, even NFT projects would be willing to deploy? Basically, “rally the troops” within Ethereum land and really push funding across Ethereum to a much higher standard by the end of 2025"
Note: This is designed as a structured experiment. And like any good experiment, it aims to elicit feedback, iterate, and evolve based on what actually works.
I. The Problem
The Ethereum Foundation currently acts as a stopgap for the ecosystem, funding the core open source repos that make Ethereum work. At current prices under $2000, the EF has a finite runway remaining. So it is imperative that we solve the public goods funding challenge within the Ethereum ecosystem by each L2/DAO/dapp funding the software that it relies on, else we risk falling into a self-reinforcing spiral where
a) People are scared Ethereum is gonna lack funding in the future.
b) They decrease their estimates of Ethereum’s success.
c) They decrease their valuation of ETH.
d) ETH price decreases.
e) EF has even less funding.
And then cycles back to a)
If we talk about the EF underfunding, it risks FUD and makes it even more underfunded.
If we don’t talk about it, nothing will be done to fix it. We can look at the case study of BTC core development, without any impartial, neutral foundation. This has created a conflict of interest into not scaling BTC itself; for example, Blockstream funds BTC core developers at risk of bias towards creating demand for their Liquid Network
And BTC development is at least two orders of magnitude less complex and expensive than Ethereum. Without the Foundation, Ethereum would have similar issues as BTC but far worse. If we don’t find a way to pay the consensus and execution clients, dev tooling repos, and other EF grantees, down the road, someone else will (or the project dies), and they may not have the same incentives.
Overall, Ethereum’s public goods ecosystem requires a scalable, legitimate, and sustainable funding system independent of the EF that:
-
Respects Cultural Pluralism: Accommodates the various ways in which L2s and DAOs support the ecosystem, such as Arbitrum funding Prysm, ENS having its public goods track, Optimism support via retro funding, etc
-
Ensures Legitimate Governance: Good processes for deciding what should be funded and for how much, including clear mapping of shared infrastructure and community consensus on its relative importance
-
Secures Financial Stability: Taps reliable, long-term funding streams like staking or sequencer revenue, MEV, and other recurring revenue to ensure funding predictability
-
Provides Funding Transparency: Offer a clear, unified view of who relies on which repos and how much they are funding it.
II. The Solution (TLDR)
We propose a three-phase roadmap:
-
Phase 1: Broad Listening
-Surface what Ethereum values, what needs funding, and what orgs consider critical shared infrastructure. -
Phase 2: L2Beat-Style Dashboard
-Visualize who’s funding what, identify gaps, and publicly track contributions across Ethereum. -
Phase 3: Ethereum Pledge to Fund Your Dependencies
-Get a commitment from apps, chains, or DAOs to create their own unweighted dependency graph, assign weights using mechanisms of their choice (deep funding, QF, futarchy, etc) and allocate 2% revenue to it
III. Phased Rollout
Phase 1: Broad Listening Pilot
We need a shared understanding of what Ethereum considers open source infrastructure worth sustaining, particularly who is using it and should contribute to its maintenance. This exercise will determine the eligibility set of what projects should be included in a funding round.
We begin with ‘broad listening,’ a concept introduced by Audrey Tang, using tools like Polis or Talk to the City to run structured deliberation processes across Ethereum’s key coordination layers, including preconfirmation calls, All Core Devs, L2 syncs, governance forums, and dApp collectives. Eg of talk to the city that we ran here & here
Together, we’ll surface answers to core questions:
- What does the ecosystem value? E.g.: here
- What kinds of open source work are most worth supporting?
- What principles, outcomes, or metrics should guide how funds are allocated?
- What do different orgs already fund and what do they believe should be funded?
- Which organizations are relying on what open source repos that they need for their product to work?
Broad Listening will help us:
- Identify categories of infrastructure that need funding (e.g., ZK-EVMs, light clients, high-level languages, mechanism R&D)
- Understand how different communities define “shared” vs “local” infrastructure
- Highlight underfunded categories that Ethereum as a whole relies on
- Gather structured input that can be the training dataset for AI models and determine the eligibility set for various ecosystem funding rounds and dependency graphs
It sets the stage to rally the ecosystem around what actually matters so we can align, act, and evolve together. We see Broad Listening not as a one-off exercise, but as the foundation for a culture of continuous sensemaking helping Ethereum stay in tune with its evolving needs and values. This complements Gitcoin 3.0 and Octant’s vision of identifying and funding Ethereum’s biggest problems through repeated cycles of listening to create a more coordinated and adaptive ecosystem.
Results from Broad Listening will power phase 2, an L2Beat style dashboard providing a public view into which categories and priorities need support, what’s already being funded by whom and for how much, and where gaps remain
Phase 2: An Ecosystem-Wide Open Source Funding Dashboard
Right now, there’s little visibility into what open-source infrastructure is being funded across Ethereum and by whom. For example, is Arbitrum spending more to maintain Ethereum or Optimism?
We propose building a transparent, real-time dashboard that tracks organizations (L2s, DAOs, dApps) and the funding they provide to repos they depend on
This dashboard would:
- Aggregate ecosystem-wide funding data (e.g., Arbitrum funding Gitcoin Grants or paying salaries to Prysm developers, EigenLayer contributing to Protocol Guild, etc)
- Decide on which open source repos and categories surfaced via Broad Listening are valuable to Ethereum’s long-term resilience, and contributions to it should be included in the funding leaderboard
- Track contributions across shared infra, mechanism R&D, and local dependency graphs
- Present a leaderboard-style view, inspired by L2Beat, that makes contributions to Ethereum public goods visible and comparable between L2s, dApps, and DAOs
In 2023, the Practical Pluralism prototype attempted to visualize what people believed should be funded. Our goal now is to go from belief to action, mapping what is getting funded, what isn’t, who is stepping up, and who needs to be pulling more weight.
This will:
- Help the ecosystem recognize gaps and overlaps in support
- Create reputational incentives to contribute
- Provide a live pulse on what the ecosystem values in practice
- Provide a shared map of support and neglect, helping guide coordinated funding
Phase 3: Ethereum Pre-Commitment
3.1. Ethereum’s Ecosystem-Wide Funder
With visibility from Phase 2 (dashboard) and clarity from Phase 1 (Broad Listening), we invite L2s, DAOs, and EVM apps to make their Ethereum alignment more legible by committing to a recurring, public commitment funding the open-source infrastructure they rely on.
Protocol Guild is an inspiration for solving Ethereum’s looming public goods crisis. We propose augmenting their pledge as follows;
-
To Protocol Guild: We encourage ecosystems to contribute 1% of their token airdrop supporting them, aligning with PG’s stated need for volatile assets to fill the risk/reward gap for L1 maintainers.
-
To Their Own Dependencies: We propose a separate, recurring contribution of 2% protocol revenue or fees toward their own key open source dependencies (e.g., libraries, ZK tooling, clients, etc).
This bifurcation allows ecosystems to support both critical protocol maintenance (via PG) and the broader open source commons, both of which would receive visibility on the funding dashboard
This pre-commitment (enforceable at the code level in later stages) enables any revenue-generating entity to give back to their dependencies and create a self-sustaining ecosystem independent of exogenous capital injections from the EF. The alternative is a looming crisis of underfunding the shared dependencies that the EVM universe depends on. Some promising ideas have been proposed over the years by Vitalik, Karl, and others.
Ethereum has spent over a decade proving that decentralized, permissionless infrastructure can change the world. But now, we must demonstrate that the Ethereum community can not only build infrastructure but also fund, govern, and grow their own public goods that keep it alive.
The larger strategy we propose is a clarion cry to “fund your own dependencies”, with the specific tactics being a leaderboard showing who is doing so and any revenue generating entity on Ethereum being able to easily generate a dependency graph to channel revenue to their specific dependencies.
3.2. Dependency Graphs
While Protocol Guild and dev tooling libraries support infrastructure that benefits the entire Ethereum ecosystem, many dependencies are local to specific protocols and often underfunded despite being critical. For example, Curve finance uses Vyper more than Solidity so relatively more of their revenue should go to supporting Vyper compared to other dependencies. But they currently have no easy way to do so despite it being in their self-interest: a more secure Vyper is a more secure Curve finance.
More generally, we should reframe the current discourse of public goods funding as being a “donation” to tighter integration between revenue & cost centers
Twitter (X) is able to fund a cost center such as community notes, without any veto by the ad division profit center to create an overall better product for customers. They can do so because the C-suite exerts dominance over all centers, but we do not have any equivalent in networks where profit centers hold all the cards.
To stay competitive with corporate networks we need to fund our cost centers without
- Expecting them to become a revenue center
- Dominance over cost centers by the revenue center
To address this, ecosystems will be encouraged to deploy their own dependency graph that maps out all the core dependencies specific to their stack, some of which would include shared key Ethereum dependencies, but also other open source repos more generally used in their product. 2% of revenue earned should flow through the graph. These instances can be:
- Run independently or linked to a common interface, example prototype: deepfunding.app
- Open to anyone who wants to search, explore, and fund key pieces of infra as easily as using Google
After project eligibility is set by generating a graph of all dependencies important to the revenue generating dapp, DAO or L2, weights can be assigned using various mechanisms such as;
-
Those with knowledge of how important each package is use various voting mechanisms such QF, conviction voting, pairwise, deepgov etc to get weights between repos
-
Use metrics agreed upon by core team members, which then auto-assign weights across the graph
-
Start a deep funding style contest where models compete with one another to predict the weights on the dependency graph, ranked by how well they align with judgments made on a subset of repos
-
Getting a list of all contributors to the eligible repos and using Protocol Guild style time weighting to compensate them directly
-
Other experimental methods that might prove themselves in the future, such as prediction market-based funding to repos
However, the weights are determined, the most important aspect by far is the tight eligibility requirements. That way, even if the weights are not fully accurate, the harm is mitigated since only cost centers which are actually contributing to your protocol or product’s success are given money.
Here are some rough estimates for varied revenue generating apps and what the 2% revenue ask would consist of;
- ENS earned $31 million in a 12 month period, of which $620,000 should be allocated between their dependencies
- BUIDL by Securitize (BlackRock distributor) distributed $25.4 million in dividends for the one year since launch, ~92% of it on Ethereum; roughly $467,360 should go to its dependencies
- Nouns DAO sells one NFT every day, with recent sales being around 2 ETH. Projecting this number across a year, around 14.6 ETH would go towards dependencies that Nouns uses
- Arbitrum Timeboost (MEV auctions) is projected to earn $2 million per year for the DAO; 2% to funding the dependencies of this product are around $40,000
IV: We need to do for game theory what we did for cryptography.
There is an entire under-tapped community of game theorists, economists, public goods theorists who are deeply aligned with Ethereum values but avoid engaging with crypto due to the negative reputation of our industry. Many of these researchers:
- Don’t yet realize how open and curious the Ethereum community is to mechanism innovation
- Don’t see how Ethereum is uniquely positioned to fund and implement their ideas
- Don’t know the urgency with which Ethereum needs to solve its public goods problem
The Iceland Research Retreat, which we are organizing under Juan Benet’s leadership, is one step toward addressing the above issues in person. We have a short window of time (around 4 years) before we hit a crisis. Even if runway goes up, we only kick the football down the road before we need to inevitably tackle this issue.
We’d love your feedback and support.
If you have ideas, questions, or suggestions, or if you know teams who might want to help implement this, contribute tooling, please leave a comment with your thoughts.
You can also DM us on X: @Sejal and @Devansh.
This is a starting point. Our next step is to share the metrics and KPIs we’ll use to measure the execution of each phase, so your feedback now will help shape what success looks like.
Let’s make this real, together.