The Journey to Grants Stack
Since its inception in 2019, the Gitcoin Grants program has used the Quadratic Funding distribution mechanism to enable individuals to democratically fund projects and initiatives that matter to them.
To date, Gitcoin Grants has garnered and distributed over $50M, growing from 200 contributors and $38K raised in Grants Round 1 to nearly 40,000 contributors and $4.4M raised most recently in Grants Round 15.
Now we want to empower communities of all sizes to successfully start and grow their own grants programs, which is why we’ve launched Gitcoin Grants Stack—a protocol-enabled solution that enables any community to create, manage and grow a grants program. The product suite utilizes three core apps: Manager, Explorer and Builder, plus an integration with Gitcoin Passport, that make it possible to easily manage, discover, donate to and participate in grants programs.
This post will focus on Manager, which allows program managers to easily:
- Receive, review and manage grantee applications based on their own round eligibility criteria
- Customize round features set up
- Deploy a grants programs
- Execute bulk on-chain payouts following the conclusion of a round
You also might be wondering what factors should be taken into consideration before running a round to set your Grants Program up for success. While the list below is not exhaustive, we hope it provides a helpful starting point based on best practices we’ve learned over the last four years of running and scaling the Gitcoin Grants program!
Before the Round
Before deploying your round with Grants Stack Manager, you’ll need to make some important decisions regarding target applicants, timeframes, integrations and round promotion.
To help ensure a robust yet values-aligned applicant pool, we recommend starting with the following:
- Eligibility Criteria: Do you want to run a highly curated round to fund specific projects or a more open one? Who are your target applicants? This is arguably the most critical decision to make before setting up a round. The more specific your grantee eligibility criteria is, the more curated your round will be and you’ll have an easier time determining project fit. However, if you want to run a more open round that distributes funds to more projects, it may be preferable to have less strict eligibility criteria.
- Theme: Is there a theme or focus for the round? Will it be tailored to a specific ecosystem? Is it for a protocol, general community or a specific initiative? Keeping this in mind will make it easier to filter applicant relevance.
- Round Timeline: How much time should you allot for reviewing and approving applications? We recommend dedicating two weeks to application reviews. And what about the timing of the round itself? While Gitcoin usually runs two-week long grants rounds, it's completely possible to run a week-long, three-week-long or even a month-long round! We’ve found two-week rounds perform best because they offer enough time to generate hype and urgency for donor participation, while still maintaining engagement. The longer a round runs, the more difficult it is to hold your community’s attention.
- Fundraising Requirements: Is there a minimum amount of capital needed to fund your matching pool – the amount of grants funds that will be distributed via community vote? While there is no minimum, we suggest starting with at least $2K to begin illustrating the benefits of QF.
- Matching Cap: This feature puts a limit on how much of the matching pool a single grantee can receive. For example, in larger rounds like OSS, the cap was 2.5%; but in rounds with fewer grantees, we’ve seen larger matching caps of 5%, 10% and even 20%.
- Sybil Defense: How can you protect your round from Sybils? Gitcoin Passport (comprised of “stamps” or verifiable credentials) is an effective initial gating mechanism that defends against bots and Sybil attacks. After finalizing the eligibility criteria, you can choose a Passport Score Threshold requirement (between 1-100) for the round. We generally recommend running most rounds with a Passport Score Threshold of 20 because it offers enhanced security while also being reasonable for real users to achieve.
Note: While having a higher Passport Score means less Sybils, it also means that some real humans may not be eligible to have their donations matched, although they can still donate to their favorite projects.
- Round Promotion: How should you promote your round? Thoughtful marketing is necessary to attract hype and the right applicants. We will be releasing a detailed article on this in the coming weeks, so keep an eye out.
During the Round
Once the above questions have been answered, you’re ready to deploy your round. Below is a list of items to take into consideration during a round:
- Approve/Reject Grantees: How do you approve or reject grantees for your round? The Manager app allows you to do this in one place. After creating your round, you can either approve or reject each grant application individually, or you can batch multiple reviews together. Keep in mind that applications cannot be submitted while a round is running, but grant review decisions can be rendered during the round.
- Manual Workaround: The Manager app works best for rounds with 1 or 2 people making executive decisions; if it’s a broader group voting or sharing feedback, we recommend downloading the CSV (containing the round data) and setting up a review process in your own environment.
- Appeals Process: What if a grantee wants an appeal? Starting last round, if an application is rejected, Gitcoin will typically deploy a “Request For More Information” form, where Program Managers identify the reasons for rejecting a profile; it also provides the opportunity for grantees to ask questions and receive real-time feedback from Program Managers.
- Fake Projects: How can you best protect your round from sybils, airdrop farmers and robots (oh my)? We believe strong eligibility criteria facilitate safer rounds where it’s harder for big projects to dominate, while also removing much of the incentive for Sybil attacks. On a tactical level, it’s imperative to foster transparency and clear lines of communication with your community who can tell you if they see something wrong as a second line of defense. This is why Gitcoin Passport is essential: collecting stamps validates your identity and online reputation to mitigate the risk of phony voters voting for fake projects.
- Note: It’s also worth teasing Gitcoin’s experimental approach to adapting and protecting rounds; we’re currently piloting the Q.E.D. (Quadratic Experimentation and Development) Program to implement collusion-resistant QF mechanisms for Gitcoin Grants.
After the Round
After you’ve run your first grants round, here are steps you can take to ensure your grantees receive their funding and to evaluate how your round performed:
- Fund Allocation: How do grantees receive funding once a round has ended? The Payout Strategy contract uses the QF mechanism to determine the exact amount each grantee receives and how they receive those funds; funds will be distributed to projects commensurate with how many votes they receive.
- Round Reporting: How can you evaluate your round’s performance? Grants Stack Manager includes a “Round Results” dashboard to see how a given QF round performs both during and after the round, making it easy to not only finalize the results of your round, but also distribute funds to grantees.
Over the past four years, we’ve successfully grown and scaled the Grants Program to fund the needs of communities through the power of QF. With the launch of Gitcoin Grants Stack, we want to further empower communities of all sizes to expand the funding of public goods by making it easier than ever to run a grants program.
We understand that running a grants program is a serious undertaking and hope this list of considerations helps demystify the processes before, during and following your grants round so you can run your first round with confidence.
Interested in trying Grants Stack? Book a demo with our team.