Fantom is an EVM-based L1 for DeFi, dApps, and enterprise applications. Their QV round ran on Grants Stack from August 20 - September 20, 2023, with their matching pool generated from transaction fees on their network. Using GitcoinVote (GCV), a valueless token created specifically for the round, they distributed 750,000 FTM across nine projects without requiring users to donate.
This case study showcases the role of Gitcoin Grants Stack in simplifying and democratizing the funding process for the Fantom community. Fantom, an EVM-based L1, introduced the Ecosystem Vault to provide decentralized funding for developers in their ecosystem. Grants Stack facilitated Quadratic Voting (QV) using valueless GitcoinVote tokens to promote transparent, inclusive, and secure funding decisions without the need for direct donations. This enabled the democratic distribution of 750,000 FTM tokens across nine curated projects. The collaboration between Fantom and Gitcoin Grants Stack represents a new opportunity in decentralized, community-driven funding with a strong emphasis on transparency and inclusivity. In this case study, we will discuss:
On January 19, 2023, Fantom launched the Ecosystem Vault, which provides builders on the platform with a decentralized way to fund their projects, ideas, and creations. The Vault collects 10% of the transaction fees on Fantom and offers builders the opportunity to secure funding to create innovative dApps on the platform and enrich the ecosystem. It also allows the Fantom community to shape the platform's future through its funding decisions.
Previously, decentralized applications (dApps) had to submit governance proposals to request funds from the Vault. The community would then decide how to allocate funds through a decentralized governance process, allowing FTM stakers to vote on proposals submitted by projects seeking funds. This voting process would ultimately determine which projects would receive funding. However, the criteria for receiving funding from the Vault proved too strict for most projects. In particular, the requirement of a 55% quorum for vault proposals made it nearly impossible for most proposals to be approved.
Before their QV round, Fantom first used Grants Stack to run a QF round as part of an Alpha Test Season at the end of 2022. At the time, Gitcoin was transitioning from its centralized grants platform to Grants Stack and looking for partners to help test the new product suite. The Fantom Foundation used the opportunity to run their Revamping the Fantom Incentive Program round, which helped distribute 125,000 FTM in matching incentives to support projects building on Fantom and enabled more avenues for community feedback and transparent funding. During the week-long quadratic funding contribution period, the community generously donated approximately 240,942 FTM to support over 85 projects. This initial partnership led builders in the Fantom ecosystem to utilize Grants Stack to secure matched funding, which has been instrumental in sustaining and expanding their projects.
This early success led Fantom to adopt Grants Stack to grow its grants program. On July 5, 2023, the Fantom community approved a governance proposal to form a partnership with Gitcoin, utilizing Grants Stack to allocate FTM to support the development of projects on the Fantom platform. This would enable the distribution of the funding from the Ecosystem Vault to projects through quarterly rounds on Grants Stack. During these rounds, users can vote on participating projects, ultimately determining the amount of funding each project receives from the Vault.
Unlike a typical Quadratic Funding Round that requires users to donate actual FTM to vote, the Vault funding rounds instead provide users with unique valueless tokens called GitcoinVote (GCV), eliminating the need for users to personally contribute to projects. Projects participating in the round must give out GCV tokens to users in order for them to be able to vote. These tokens allow community members to vote for their preferred Fantom projects. To ensure the integrity of the voting process and help prevent Sybil attacks, only votes from users with Gitcoin Passport scores above ten were taken into account.
During the initial Vault round, the Foundation carefully selected a limited number of applicants to ensure that only projects committed to utilizing the funds to advance the Fantom ecosystem could participate. Once approved, these projects were allocated 1 million GCV tokens, which they distributed among their users for voting purposes during the round. Each user had a maximum voting power of 100 GCV tokens. Additionally, 1 GCV was the minimum amount a user could contribute in order to cast their vote.
Tapping Into the Power of Decentralized Funding Using Grants Stack
From August 20 to September 20, users could vote for their favorite projects using Grants Stack. As a result of the round, the Fantom Foundation will distribute 750,000 FTM to nine outstanding participating projects based on the allocations decided through quadratic voting. The round enabled the Foundation to tap into community intelligence to support decision-making on how to allocate the Vault funds. Grants Stack will continue supporting the Fantom community to easily launch, manage and grow their quarterly grants program. This round also showcased how Grants Stack can be utilized for the democratic allocation of funds using Quadratic Voting (QV), where a token with no intrinsic value made it possible for participants to vote without contributing personal donations. Additionally, through the integration of Gitcoin Passport, the Vault round had enhanced security to help prevent donor fraud and ensure that the funds are distributed to and by real individuals.
When asked about the performance of the first Vault round, Sam Harcourt of the Fantom leadership team said, “Our round successfully allocated the FTM we intended to distribute! It was more positive than our first round as users only had to vote, not donate, and the GCV token worked well on the platform.” He also highlighted the need for driving awareness and user engagement to increase participation from legitimate users with a high Passport score in future rounds.
The collaboration between Fantom and Gitcoin Grants Stack showcases the potential of decentralized funding mechanisms. By leveraging Grants Stack’s integrated product suite, configured to use a valueless token for quadratic voting, Fantom has set a precedent for community-driven funding grounded in transparency and democratization. Grants Stack is a testament to Gitcoin’s commitment to decentralization and credible neutrality. It is open and accessible, allowing any individual or entity to leverage its capabilities to foster innovation and community engagement in the decentralized ecosystem, irrespective of their affiliation with Gitcoin.