The inaugural Gitcoin Citizens Round, powered by Grants Stack, ran from June 13 – June 27, 2023, employing retroactive QF to reward contributions with proven value to the Gitcoin ecosystem. The round had a matching pool of 20K DAI and has been the most successful round to date in terms of crowdfunding versus matching, having the highest-ever matching pool multiplier with quadruple the available matching funds made in donations.
Since its inception, funding what matters and enabling communities to achieve their goals have been at the heart of Gitcoin’s mission. Quadratic Funding, a crowd-funding mechanism first presented by Vitalik Buterin, Zoë Hitzig and Glen Weyl, in tandem with the invaluable contributions of countless Gitcoiners, have been critical to the impact Gitcoin has been able to have on the broader web3 ecosystem.
But how could Gitcoin reward the contributions of Citizens, values-aligned community members who’ve dedicated their time and expertise to the growth of Gitcoin’s ecosystem? This is where retroactive QF can help engage the community and fund work that’s had proven value within the ecosystem, while also signaling opportunities for continued innovation.
While Gitcoin is the world’s largest implementer of QF, a proposal in March co-authored by Shawn Grubb, Kris Decoodt and Umar Khan outlined that Gitcoin was still in the process of implementing QF internally. This highlighted an opportunity to use QF to retroactively reward the contributions of Gitcoin Citizens. The Citizens Round, which ran from June 13 to June 27, was made possible using Gitcoin Grants Stack—a customizable, protocol-enabled solution that allows any community to create, manage and grow a QF grants program.
Previously, Gitcoin Citizens had taken it upon themselves to identify the most pressing needs and concerns of Gitcoin’s stakeholders without a clear process for having their contributions acknowledged and rewarded. From engaging in discussions about shared needs to building the required momentum to expand from the DAO to protocols, the contributions that Gitcoin Citizens have brought to the ecosystem are invaluable.
This case study will explore the Citizens Round, where program managers from the Gitcoin community used Grants Stack to experiment with retroactive QF. The round had a matching pool of 20K DAI, giving Gitcoin Citizens themselves the power to vote on and reward the individuals and grassroots projects that they believe have been the most instrumental to Gitcoin’s success. The inaugural Gitcoin Citizens Round has become the most successful Gitcoin Round to date in terms of crowdfunding versus matching, having the highest-ever matching pool multiplier with quadruple the available matching funds made in donations.
The Citizens Round was informed and inspired by discussions during the Gitcoin retreat on governance and capital allocation, along with posts from Scott Moore and Kevin Olsen, in addition to writings by Vitalik on retroactive QF. The purpose of the Gitcoin Citizens Round was to reward the most impactful, non-technical contributions to the Gitcoin community, as determined by the community itself.
While a typical QF round funds both in-progress and future work, retroactive QF rounds can provide resources to projects and individuals that have already had an observable impact. Retroactive QF also reduces risk by rewarding proven value and track record over speculation, which can encourage higher quality contributions. “Not only will we get more return for our money, but it’ll be much more clear what people are doing,” notes Umar, one of the round’s program managers. “Then, there’s an incentive to be transparent about what you’re accomplishing, because if you’re more transparent, you’ll hopefully get more funding.” The three objectives of the Citizens Round were:
-Gaining experience: Using our new grants tooling solution, Grants Stack, we wanted to run a retroactive QF round to broaden Gitcoin’s ecosystem, showcase efficacy, and collect feedback to improve our products.
-Experimentation: With the deployment of the Citizens Round, we sought to experiment with a new budgeting process that offered greater accountability and less bureaucracy.
-Increasing engagement: By introducing a new type of round to the ecosystem, we aimed to increase engagement within the Gitcoin community at all levels, from contribution to governance.
Although the inaugural Citizens Round can be considered an overwhelming success, there were of course a few challenges. This section outlines some issues encountered throughout the process and incorporates the constructive feedback received from both grantees and program managers. This framework covers how to best address those challenges and offer solutions for future rounds.
-Over/undercompensation: Would retroactive QF reward work that was demonstrably valuable to Gitcoin? “The results were surprising to me,” remarks Umar. “Some of the grantees who got the most in donations were not the ones that I expected.” Another grantee noted that the round felt almost like a popularity contest as opposed to retroactive rewards for past work. (Note: It’s essential to recognize that QF alone doesn’t ensure “fair” funding; offchain forces like marketing and self-promotion are still important.)
-Establish potential thresholds for how much a certain individual or project should receive, as well as metrics for a project’s success, to encourage more objectivity in the voting process and better ensure that contributions that have provided the most value get the most funding.
-Eligibility Criteria/Communication: How can future Gitcoin Citizens Rounds better clarify who can participate? One grantee didn’t believe they were eligible as they thought the only individuals qualified were those who taught people how to donate. This lack of clarity likely means that other Citizens decided not to apply because they didn’t believe they were eligible.
-Improve the lines of communication and increase awareness, whether through Twitter Spaces, posts, email blasts and more. Updating and widely disseminating the eligibility criteria will also make it clearer which types of contributions the round aims to reward.
-Grant Setup: Was setting up a grant intuitive enough for grantees? Many of them mentioned that even for seasoned users within the Gitcoin community, the grant setup process can sometimes feel daunting since there are multiple steps — first creating the grant itself, then applying to a specific grants round for your grant. How can Gitcoin streamline the process or better support grantees ahead of and during the process?
-Share more resources on the grant creation and application process with grantees. From run books, knowledge base entries or Twitter Spaces Q&As, there are plenty of opportunities to support grantees so they feel confident in how to apply and use the tools effectively.
-Airdrop Farming: How can Gitcoin better identify and prevent airdrop farming from infiltrating future Citizens Rounds? “We found significant evidence that over 50% of round donors were airdrop farmers,” mentions Umar. “These are people who basically wanted to donate to the round with the hopes that they would qualify for some money in the future. We don’t have any plans to do anything like that, but that also drove some activity.” “This generated an interesting discussion,” Kris adds, “and led us to more research into how airdrop farmers potentially influence the community signal.”
-Identify airdrop farmer donations and remove them from the data to better be able to glean signaling insights from the community.
The Gitcoin Citizens Round received a total of 60 applications, with 33 being accepted. Initially with the 20K DAI matching pool, we were hopeful to get $2K from the community but ended up receiving $82,968 from over 17K donors. We achieved a ~400% (!) amplification of matching funds — a new Gitcoin record. The top three recipients were Karma, rewarded over $13.6K, which offers a number of tools for DAOs to gain visibility into their members’ contributions and increase engagement; Biteye, a Blockchain research organization focusing on DeFi and web3, was rewarded $10.4K; and BanklessDAO’s Gitcoin Citizens, rewarded $10.3K, empowering web3 explorers with open-source educational hyperstructures and self-sovereignty.
The Citizens Round encouraged more community engagement in recognizing and rewarding the most beneficial contributions to Gitcoin’s ecosystem. “Some of the takeaways here,” Umar outlines, “are how do we improve the voter experience so that voters are more informed about the impact when they’re making their donations? And how do we also encourage voters to spend more time voting?”
Powered by Gitcoin Grants Stack, the Citizens Round was a meaningful first step towards:
-Understanding and employing retroactive QF distribution mechanisms internally
-Inspiring and rewarding innovation within the Gitcoin ecosystem
-Signaling to the community that creating value for Gitcoin and its members is valuable and will be rewarded
Combined with the insights from both program managers and grantees, we’re hopeful that future Citizens Rounds, along with the power of retroactive QF, will encourage more engagement and meaningful development within our ecosystem.