Public goods funding on Ethereum: past, present, and future | Martin Hansen (September 2026)

Okay, I'm going to talk a little bit about public goods funding today. I guess it's a pretty wide topic, so we'll um I'll try to get around it as much as possible and if anything is missing, you can always ask me about it afterwards. I don't claim to know everything about it, so I'll I'll try to cover it as best as possible. But um I want to look a little bit about back about how public goods funding has evolved on Ethereum and then talk a little bit about where we are today and some of the things that my team is working on. I'm working at the funding coordination team at the Ethereum Foundation.

And we do spend a lot of our time thinking about where public goods funding could come from and how it could get allocated in the best ways and so on and so forth is a really hard problem. Um, I think many other ecosystems haven't figured this out yet. Um, if we look at the open source software industry, I think there they're still struggling with this and we might get a little bit into that. So, I'll first talk a little bit about what public goods are and why they're good, why we should fund them, and then we talk a little about about I'm calling them the four errors of public goods funding on Ethereum. And then lastly, the future of public goods funding or different ways it could go.

First, if you don't know what a public good is, it has basically two core properties. It's non rival rules, which means that if um one person is using a public good, it's doesn't reduce um it availability to others. So anyone can use it and it doesn't change. Um the second property is that it's nonexcludable. Um so you can stop you you cannot stop people that are not paying for this thing from benefiting from it.

And um there's some examples in this little quadrant here. I'm not sure it's the best ones. I think if you look on um on Ethereum for example, I think some of the most critical public goods is probably client software. So the what you use on your node to to run Ethereum is is a is a is a core one. Um I would also say there's a ton of tooling and all kinds of tools that comes to um security that comes to accessibility and so on.

You can imagine something like uh a safe multisec. A lot of these are open source uh projects that that you can use free of charge and that um gives you more security and gives you custody and some of these things. Um, so there's a ton of um of public goods on Ethereum that that add a lot of value to our ecosystem and um let's talk about why they are good and why they're so good for Ethereum because I do think that public goods enable a lot of the values and the properties that we want to see in Ethereum and that makes Ethereum special. One of them is that when you have public goods, you generally generally have neutrality. it comes it's it's open source by default um and it's something that anyone can use.

It also makes it much more accessible when you have public goods because anyone can access it. It's not gatekeep um there's no one charging you and that that um generally is what we want to see on Ethereum. That's what gives it this permissionlessness and so on. And then of course I think it um it helps build some of these properties around crops that Ino was just talking about censorship resistance open source probably the biggest one relating to public goods but also privacy and and security. Um public goods enable these properties much better than than most other projects uh on on Ethereum.

So again I think a lot of these things get enabled by public goods um and that's why we should fund them. Another thing is generally with open source software, most studies and one study here in particular um show that it opens source software provides a ton of value to the world. We're just not very good at finding ways on how we can efficiently fund it and which types of open source software projects are most valuable and so on. I'll get into that. One study, I believe it was done by Harvard Business School, um found that for every dollar invested in open source software, basically generated $2,000 of economic value for society.

Um so this is just this is just one. I think that's that's crazy proportion when you think about it, but um even a fraction of that is still a a massively positive investment for for the world, for society. And I think it goes to show what um why public goods are good. Um, of course it also has some challenges. One of the main challenges and something we keep coming back to in public goods funding is the free rider problem.

Um, because you are not paying for it, you don't necessarily have an incentive to help fund it, right? Because you're not paying for it via usage and some people are getting a lot of benefits out of it. um and are choosing not to not to provide anything back. And it's a public good, so you are obviously not required to do so. But it does mean that um public goods are systemically underfunded because they don't have a a mechanism to to charge built in like many other projects are.

The other thing is that it's really difficult to price a public good. Like most other projects, uh they're priced by the market, right? you set a price and you see what people are willing to pay and and and that's how it works. And public goods are kind of free and anyone can use them by default. And therefore, it's much harder to actually determine which of these public goods are most valuable like how do we measure the impact of the various public goods um and what is its value to society?

Some public goods are very very valuable to society to Ethereum. Some maybe not so much. And that's much much harder to determine with the public good because you don't have the same kind of mechanism there. And then of course the last thing is that uh when it especially when it comes to public goods funding uh mechanisms there are always clear trade-offs. We'll get into some of those later but uh quadratic funding is one we'll talk quite a bit about.

It's in some ways it's a fantastic mechanism and in some ways it has very clear downsides. There's I don't think anyone has found a public good funding mechanism that's that's perfect or covers all of these. So you have to be aware that there's clear trade-offs and some mechanisms are going to do certain things really well and certain things quite badly. That's a little bit about um public goods. Now we'll talk a little bit about the four errors of public goods funding on Ethereum as I'm as I'm calling it here um and how things have changed over time.

And first we'll go back all the way to 2015. I'm calling it like the first era here, the beginning of public goods funding on Ethereum. Sort of like the foundationled era. Um, Ethereum Foundation in 2015. Um, it's a bit hard to see, but in April in 2015, that's before mainet mainet launch.

Um, Tim Foundation launches the dev grants program. So, already giving out grants at this point in time. Quite a small program, but it is specifically only funds public goods. It writes in the blog post, only those applicants creating an open source public good for public benefit will be considered. You can keep this in mind on the next slide when I tell you about some of the projects that got funded.

Um, but these are very very small grants at the time. It tells you a little bit about the scale like it's $1,000 to $10,000. Some grants end up being a little bit more, but it even says in the article enough to cover a few months of living expenses. like that is quite a different era than what we're in now and what we've been in more recently in recent years. Um it was a very different time back then of course and um it was early days.

My best guess would be that in this era maybe the EF gives maybe 1 to three million or so. It's it's it's a little bit hard to estimate and it's worth of course mentioning that this it becomes the beginning of public goods funding on Ethereum. And of course from this day and onwards the Ethereum Foundation is kind of like the most consistent public goods funder. And so when I go through all these different eras expect that Ethereum Foundation has some role but I'm I'm not going to mention them in every single era because that would be a little bit boring. Um at Defcon 1 in 2015 Wendell Davis here from the Foundation.

He gives an update about the state of the dev grants program and um he mentions a few of the projects that that it has funded and I just wanted to point out a few of them here because I think these these both these numbers and the names are are pretty cool. So there's a 5,000 pound uh grant to Zing or it was called Ethereum Android at the time. It later ends up becoming Status and and Jared Hope, who was doing that at the time, he makes Institute of Free Technology, Status, Keycard, Nimbus, uh, and several other projects. So, pretty cool to see that some of that dates all the way back to back then. And a 5,000 pound grant is is um, yeah, maybe it was the beginning of of something much bigger.

There's also a 3.6,000 six,000 pound grant to something called embedded Ethereum to do Ethereum on embedded devices. Four guys were sharing that that grant which I just thought was again quite fascinating. And then um the project called Casper um by Vlad Sier got a $25,000 grant and then Metamas got a $30,000 grant at the time. I believe I haven't I'm not 100% sure but I think at the time MetaMask was not part of consensus.

It was like an independent project and um got some funding to to build a wallet. So um yeah, pretty cool program back then and um most of this era was was mostly Ethereum Foundation giving out some grants and some others that were supporting these efforts. Now when we go to the next one, I call it like the experimentation era so to say. Um we're moving from foundation grants to actual like public goods funding campaigns. Um, I was like, Gitcoin is the one that pioneers a lot of this stuff.

They run 10 campaigns in this period. They end up raising uh 38 million uh dollars for 3,000 projects. So, they really spread out the funding across many different projects. And I think what's most fascinating here and where I think they hit some kind of product market fit at this point in time is that they they raised $22 million in matching funds is is one side of it. That's them going out and asking others to contribute to these campaigns and so on.

But what's most fascinating to me is that they end up having 16 million in direct donations. So that's like people users going in on Gitcoin and um donating their own their own funds to to these kinds of campaigns. So quite a quite a big big deal back then. You also started to see some Dows experimenting with public goods funding experiments. Um this is of course also the era that just came a little right after the whole ICA ICO boom.

So you have these projects that have some of them have a good amount of funding and they they start trying to find ways to fund public goods. Moolog Dao was one of the first ones and many others start um going after that. And then I wanted to point this one out because I this is a recurring debate happening in Ethereum land. Maybe you followed it for a few months ago when there was somewhat similar EIP brought up, but this was EIP 2025. Um, nice number.

And this was an idea to take to add some block rewards um to every single block that was mined at the time and sent them to fund critical protocol development. Um, I think the intention of this is is um is great. um but obviously didn't didn't go anywhere and it's something that's very controversial and very difficult to to to agree on. So um but it was already a topic back then to to kind of find new ways to to fund uh protocol development and indirectly public goods. Might also be worth noticing I'm mostly going to talk about digital public goods.

There's of course also lots of public goods in out in the real world. Um and and when we talk about Ethereum, we're talking about a digital network. So we're mostly going to talk about digital public goods here and especially open source software. One mechanism that really breaks through during this era is quadratic funding. And um I guess the the I try I put the the formula here so you obviously know exactly what I'm talking about.

Um the project's total funding is proportional to the square of the sum of the square roots of individual contributions. And very quick way to explain it is this example over here is like if there's one single donor that gives $100, then there's $100 in matching funding. Whereas if there's a 100 donors giving $1 each, there's $10,000 in total matching funding, right? Um the intention here is that even if uh there's a lot of let's call them lot of small fish that make donation and say that a project is valuable to them it would actually be more valuable than one whale making one large donation and quadratic funding is something that was um incorporated a lot by by Gitcoin and several of the other campaigns that that we're going to look into later. um Vitalic authored a paper way back about quadratic funding and helped pioneer a lot of this movement.

So that was a key key mechanism in this era but actually also in the next one that we're going to talk about now because in this era between 2022 and 2024 um solid um bull market at the time public goods funding goes goes quite big. Um, we have a lot of big public goods funding programs uh launching with lots of backing and we have some some uh projects that really lean into public goods funding as part of their brand. Of course, optimism is one of them. Gitcoin had already been doing it. Gitcoin ends up launching in layer 2 called public goods network which is centered around public goods funding as well.

Um, and what's different maybe in this era. So if you take the previous era that was maybe a little bit following the ICO boom, what happens in this era is that a lot of new projects come out with um with their own tokens. So and and a lot of these tokens help fund these public goods funding programs. So um and this is uh yeah very much the the bull market vibes and and and and things are good. I'm going to talk a bit about a couple of initiatives that I think are maybe most relevant or raised a lot of funding during this era.

Um, but I think that's those are some of the high level things that characterize this this era. Um, I think one thing that really changed things quite a bit was the optimism collective and them them launching in 2023. Um, as you can see here, they really lean into retroactive public goods funding. um when you go on the GitHub for from back then and you look at how the OP token was allocated across the different um uh yeah different um sort of tiers so to say they allocate 20% of all OP tokens to retroactive public goods funding. So it's it's a really really big bet.

At the time that OP launches as a token it's $140 per OP. It's a bit less today, a lot less today. Um so at that point in time it's really 1.2 billion that they set aside for for public goods. Um so really a a massive allocation at the time.

Um and of course worth mentioning that they give out a lot of public goods funding approximately maybe $100 million equivalent. It depends a little bit on when you take the token price and so on but they also give out a lot of public goods funding in in during this era. Then you have protocol guilt. they sort of um pioneer this guild format where they have a lot of these Ethereum core developers and researchers that are part of a guild and then they collect funding um through one vehicle and distributed um to all the members of the guild. So they any donations that comes in it is streamed and is um goes to to the members over a 4-year vesting period.

So quite a different approach and um and they launch a pilot first in in 2022. They get a lot of big baggers like Lido, Uniswap and so on. And then um later on they um they start the 1% pledge which is new projects that are launching a token. They pledge 1% of the token supply to protocol guild. They uh ra they receive a bit over 100 million um dollars in in funding.

It's again not super easy to estimate this uh number directly because all of these funds are in different tokens and the prices change a lot but fairly confident with this number and um has approx today it has a bit less than 200 um maybe 180 or so um but yeah it gets distributed directly to these people and not to organizations which is usually what we saw in many other campaigns. would go to the organization to the project and in this case with protocol guild it goes directly to the individual. So I would say it's one of the most successful initiatives from from this era of public good funding. Um and then I also wanted to mention Octin because I think that's a really interesting one because they have a slightly more sustainable model I want to say. So Golden Foundation has a large east treasury.

They stake that and what they do is they take some of the staking rewards and um distribute them as public goods funding. Um they also used a lot of quadratic funding in the past and they have been um experimenting with different types of funding mechanisms. So they launched this first in August 2023 and it's it's still going today. They're doing they're going through different epochs and they're changing things up once in a while. My estimate is that they distributed roughly 4 million during this era.

Um and it's still going which is really cool. Um I also wanted to me mention airdrops because obviously airdrops are not a public goods funding mechanism um directly but several projects they specifically allocated part of their tokens to open source software developers Ethereum core developers and so on. Um, for example, the stagnet number is very hard to verify because that token was very very volatile, but they specifically allocated some to Ethereum and open source software developers um and gave the Stark token. Celestia um they gave to Ethereum, Bitcoin and Cosmos developers. Uh that was a bit of a crazy one because the token initially launched and just flew up and 9xed or so.

Uh so a few months afterwards that allocation to to to contributors to developers uh was worth over over 400 million which is quite crazy. Um scroll did the same also for open source contributors and researchers and and and CK sync the same. So um again not a public goods funding mechanism but it went to the people that built public goods. So it was again a way to to reward um this kind of work in this era that I would maybe call like the abundance era. It was a good it was a good time for public goods funding.

Um what I think characterizes this era is these token treasuries that I mentioned before they were um spreading funding across many different um many different projects and um it was lots of different tokens whereas earlier on in earlier eras it was dollars or ETH but this was much more all kinds of new tokens that were quite volatile. again um quadratic funding was a uh was a primary um uh funding mechanism for for optimism and for octant and so on. Um and then I think what was really cool as well was this this new guild format by protocol guild was was pioneered as well which was quite quite new for Ethereum and I guess quite new for for the open source development world. Um some of the learnings, this is maybe some of my critique in in some ways or some things that I think maybe could uh that we could learn from is that um when you have quadratic funding because I I showed you earlier how quadratic funding works. What you really want you want to get as many donors as possible, as many votes as possible, but people are voting with their dollars of course.

So it becomes more of a popularity contest because you're trying to get as many people as possible to donate to you and you're not using impact and these kinds of measurements and value delivered by the public good as much as possible. Right? Of course, as I mentioned, it is a challenge with public goods and open source software to value how much something is worth because you don't have the same kind of pricing discovery. But um I think that was something that that uh was maybe not great. And um another thing that I wanted to uh highlight is that because you had this quadratic funding mechanism, it kind of takes the whole pool of funding and essentially tries to distribute it across the different projects.

Um and therefore many projects realized that they're better off applying with multiple sub projects in a campaign. So instead of just having your main project and your main organization being the one that you apply with, you would have five sub projects and then you would actually get more funding this way around. So it was kind of getting gamed a little bit that way around. Uh I think another big problem is that the criteria were not clear enough and you ended up taking this public goods funding and sending it to organizations that weren't really building public goods. Like they were doing some open source software but they were mostly or to some degree commercial entities.

some of them had raised equity uh equity funding already and I think you can argue it's not the best use of public good funding to send it to to these kinds of organizations. So I think that was an an issue as well. Um and like I mentioned when you have quadratic funding as well you spread the funding very thin and it's good because it makes a lot of projects get going get some funding but it's not very sustainable and it's yeah it's not very targeted and specific. Um and then most of this was retroactive funding. So you're looking at what happened in the past and then you give funding based on that but you're not looking very much as like how useful is this thing actually for the future and how can you help fund this the future of this project.

Okay. Then today I'll make that a little bit short because it's still ongoing and I would say that's a quite a recent era. We're seeing many more like structural programs. So I'm going a little bit away from more like donor based treasure token treasury projects but more to some more structural uh funded pro uh funded programs. So I think Octin is is actually an example of that.

Um we're seeing fewer public goods funding programs as well. either some have been reduced or some have been shut down completely. And then I think a big change has also been that we're seeing more and more of a shift towards like RFPs, requests for proposals where you're more clear in what you as a funer would like to see in the world. So you put out an RFP and then you you get proposals for for projects that can build that thing. Um the EF have moved much more towards RFPs.

Um the the DAO security fund is is quite a recent funer as well. they're also moving towards this and I think you are also seeing this indirectly with some of the L2s that are looking more at like funding public goods that um deliver direct value to to them. And then we also saw the launch of deep funding which is uh I would say quite the alternative to quadratic funding in the sense that deep funding looks directly at what the dependencies and essentially the value that is uh delivered by different public goods projects and then uh weights them and then funds them accordingly. Um so that I think is almost a response to quadratic funding to to some degree which is quite cool. Um yeah, where are we today and and what can we learn from this sort of high level?

I think we're seeing much more um yeah specific focus much more consolidated focus um projects are spreading their funding much much less and they're being more much more targeted about funding about strategic areas that benefit them. We also see more mechanisms come up now. Uh optimism themselves have um experimented with like different types of algorithms and having AI assisted um allocation. And then I think one maybe critique when we zoom out and we look at these different eras is that it's very based on market cycles. And the problem with that is um you have the most public goods funding when the projects needed the least and it should really be the other way around.

So you need to build far more sustainable um sustainable funding mechanisms that are also there in the in the tougher times. Um I I just mentioned or I just outlined the the three errors here as well and put try to put some some numbers on it. Um it's hard to estimate and and second error is mostly from from Gitcoin and of course we can put a number on on what the current error is but you can see that it has grown a lot and I think there's there's a bit of a contraction right now. Um now I want to talk a little bit about um some of the initi initiatives that we are working on in my team in funding coordination that address some of these challenges and um yeah look at new hopefully more sustainable ways to fund public goods to build organizations that are um that are developing public goods. The first one I want to talk about here is um project called project Odin that my colleague Raul has started and it's a frontier research lab for resilient Ethereum public goods.

Um and uh if you don't know what um Frontier Research Lab is or uh the organization type that's called a Frontier Research Contractor, it's basically um organizations that are building public goods open source software uh while still um finding commercial avenues to get revenue. So they're trying to as I mentioned here, they're trying to find mission aligned revenue. So how can you find things that um can fund your organization but are still in line with your road map with your overall focus with your mission and so on. Um this the the overall program also has has the the purpose of trying to create more sustainable funding for different organizations that build really critical public goods. Um so having a diverse fund having diverse funding sources makes you much more resilient as an organization.

you're not as subject to capture as you other otherwise might be if you just have one funer. Um, and we've started this pilot as a 12-month program where we're working with a with a number of public goods in the Ethereum space. Um, well wrote a fantastic blog post here about the about the program and we also have a website here where you can learn learn more about it. Um, and yeah, that's project Odin. Then uh we have something here that's a bit of more of a new initiative.

We're calling it Ethereum circuits and um you don't have to think too much about this. This is more just to illustrate how uh funding flow and a value flow could look like and the idea of Ethereum circuits is basically an a way to redirect funding on Ethereum. So it can be an opt-in mechanisms mechanism that applications can do to redirect um redirect funds from the value flow and you could use it to fund public goods, you could use it to fund other things. Um but this is something that they will be talking more about and they will try to to push more. Um if I had to very briefly um explain what what what what's happening right here.

Um it's basically that as a user interacts with an application part of the value flows that's happening from this transaction gets redirected to it could be a public goods fund it could be something else. Right? So, um, here an RPC provider captures some ME. It sends part of that ME rebate to Fund Public Goods. Let's say they do a swap on a DEX.

There's a fee from the DEX and the DEX chooses to send part of that fee to um to fund public goods. Um, and then um there has of course also been this proposal about potentially having validated rewards fund fund public goods as well. So, this is more like an example that I that I would try to show here. And I think the overall idea is that um as activity is happening on Ethereum, some of that activity could fund um fund public goods uh even with a with a fraction can actually make a difference and it can be a sustainable and a scalable way to um to fund it. So it's more of a new idea and something that we will we will be talking more about but I wanted to give a little bit of a sneak peek here.

And then of course lastly uh Ethereum kernel which talked more about how you can do um allocation to public goods. I've talked a bit about this uh a while ago in February here and did a talk about it and we've evolved our thinking a lot about um what the the Ethereum kernel looks like. What we basically try to do here is try to map out what are the most critical elements of Ethereum and how much might it cost to fund these things because as I mentioned it's very hard to price the value of these things but we can price uh who are doing this right now and um what does that does that their cost base look like kind of like minimally right um so then the second thing that we also look a lot into is if any of these elements on of the Ethereum stack don't get public goods funding, don't get neutral funding as I like to say, what could be the risk? What could be the capture risk? Right?

We talked a lot about what how valuable public goods are for Ethereum. If some of these public goods are captured and potentially no longer public goods, it changes uh things quite a lot because then suddenly people can gatekeep, they can charge and it um it removes a lot of the benefits that Ethereum actually has. So um that's a lot of uh what I'm thinking about with the Ethereum kernel is what are actually the risks if we don't get public goods funding to these kind kinds of projects um and and how much does it cost? And my latest analysis it's it's about 15 million like very very narrow view on like what does the protocol need to work and you can uh you can put applications on it you can access it as a user but very very narrow view and very minimally we're looking at something like 15 million so you can see in the grand scheme of things with some of the other numbers that I mentioned here is fairly low but it still has to come from somewhere and ideally it has to come from sustainable diverse mechanisms. Okay.

Uh, I'll just sum it up quickly here. I don't know if I I'm probably a little bit over time, so I hope you're staying with me here, but uh, my summary here is that, um, public goods are good. That's one takeaway that I want you to go away with here. They're very good. Um, and they're also essential to Ethereum.

They enable a lot of the reasons why we want to use Ethereum, why Ethereum is special, why Ethereum stands out, and why it provides a lot of value to the world. Um I would argue we've been through four public goods funding eras or like we are in the fourth one now. Um and and and things have changed a lot over time and we are in a much more I guess mature stage now and things have changed um substantially and we're still searching for sustainable public goods funding mechanisms and we are not in alone in that. Open source software has traditionally suffered from from this as well. Finding ways to sustainably source open source software has been really really difficult.

Even if you look at some of the largest open source software projects out there, Linux for example, they have they have found solutions, but are they sustainable? Are they um are they perfect? Not sure. Um and this is something that we're still working towards. And I think one of the greatest things about the Ethereum ecosystem is that we keep experimenting.

We're very ambitious. We want to solve hard problems and we're not afraid to take that on. And um we will we will keep doing that. We will keep um looking for ways to to sustainably fund public goods. Um and uh yeah, that's it for my for my talk today.

If you have any questions, you are welcome to ask now. Hopefully I didn't go too much over time that we don't have time for that. Or just come up to me afterwards and I'm happy to chat more public goods. Yeah, got it. Um I asked myself you can like still in this era nowadays learn from the past or is it that different nowadays that we have to like kind of find completely new ways that we have to completely think out of the box or

Yeah.

No, I think we we can learn from the past or maybe I should just reiterate the question. Um the question is whether we can learn from the past uh or if we have to start over and and this is a new era that requires new uh funding mechanisms and we can definitely learn from the past. I think one one thing we can learn from the past is that these mechanisms had very clear trade-offs and um in previous eras we mostly defaulted to a few mechanisms and in the future we're probably going to have more plurality there and and try different mechanisms for different reasons and part of my project with Ethereum kernel is that um here I want to have a narrow scope and I want to make sure that these most most critical elements on Ethereum are funded with public goods funding. Anything on top is great and it's fantastic, but it the risks to Ethereum of not funding these projects is is is huge. And um therefore, we need different funding mechanism that's more targeted and then goes directly for this.

then there will be a lot of other public goods that we would like to see on Ethereum and that could make a difference in the future and that can be more speculative and there we can use things like quadratic funding for example for some of those things. Um but I think yeah I think some of the learnings is that different mechanisms for different purposes and I'm hopeful that the the ecosystem is is bringing that forward.

I want to ask you go ahead. Okay. Um as I as I understood right, you said that the bark bull the market of the coin led to increase of um and so is it like otherwise round as well when you increase public goods should it increase the value of the coin or is it like completely separate topics like we see here the infrastructure all this public goods trends going on at a separate point but obviously you cannot always predict and influence it but still the idea of all that is it connected somehow or is it separate things like ideology yeah so the question is whether there's any connections between public goods the value of public goods public goods funding and the value of the network the value of ether the token and so on um I think There is a connection but it's not a it's not a direct connection. It's not like you put this much into public goods funding and then you would expect this kind of price difference. There's value in the way that the value uh the value of the network is higher if it's mostly supported by public goods is is my argument here for its users.

And so what you will see is my thesis would be that you will see more and more users of Ethereum. you will see more and more projects choose to build on Ethereum because it's mostly built on public goods. So that the the the benefits um that I talked a little bit about earlier, the properties of Ethereum is um is supported by public goods and provides direct um value to to to the people building on top of it. And um there should hopefully be a direct correlation between more people building on it, generating more value on Ethereum and and the the underlying value on the token and the network and so on.

Question I would like to ask uh your perspective about merging projects for the public goods and established ones. I guess that's uh the way of funding. This also depends on how you would discover new projects or if you need to fund those projects already exists. Do you have any idea or perspective on how we can discover emerging projects in this?

That's a very good question. The question is like whether I have an idea of how we can better discover new emerging projects. Um I it's I think it's hard to answer that. You probably have to get more specific on what type of of projects you're looking at. Like are you using looking at it as a as a user as a user of Ethereum or are you looking at it more as um Ethereum the network and trying to analyze the infrastructure that underpins the network.

So I think it it depends a lot on on which like which lens you are looking through there. I guess uh from the user perspective.

Yeah. And the user perspective might be that um I would say a lot of the discovery around public goods had generally been been more communitydriven. Um and so yeah, I think it's interacting with uh with people that seem to be at the frontier of of um of what's happening in in a particular ecosystem in the Ethereum ecosystem. And um I think in the past hackathons have been a great way to understand some of some new things that are happening and how new primitives how new features on Ethereum become um uh give you direct benefits as a as a user. So I think I think hackathons in the in the past I feel like we're seeing much less hackathons now and I guess in the era of so much AI development I think hackathons are changing a lot but the people you would find at hackathons would probably also be the ones that would be most knowledgeable about where things are and and new emerging projects that are coming up.

I have a question. Uh thanks for very sensual talk. Um I have a question about this um 2022 2024 um phase where a lot of companies were funding public goods like optimism and so on. Um I have two questions. The first one is do you know why these L2 companies are funding holy goods because now I think for example SPR would probably wish that they have this money as a as a buffer or start is also ahead of some people and that's the first question and the second question is if uh when the next uh bull market comes and there are these new um companies are there any ideas or strategies or thoughts about how to motivate also this new um new teams to fund public goods as well.

Yeah. Okay. So, first question is why in the abundance era why did they fund public goods and the second one is um as we once we enter another proper bull market again how could you encourage more public goods funding? I think of the first one um a huge driver of of uh of this public goods funding was that they created these new tokens and basically when you create a new token and you set a price and you have to sort of figure out how much how many tokens go to each area and so on. um you are speculating a little bit and you're you're you're basically just you're you're making some stuff up because you don't have much market signal at the time because you haven't launched the token.

And in this case, many of them had the impression that um funding these public goods would um would probably also generate a lot of builder activity, would get a lot of people to build on on their chain, use their chain and so on. Um and if uh if a project like if we looked at optimism right if they had taken those 20% of tokens and instead just allocated it to like optimism DAO optimism foundation it's quite possible it would have been a pretty bad look at the time because they would have taken like if they have added that to what they already had at the time it's a suddenly quite a significant chunk of to tokens that just sits with the with the with the with the foundation. Um yeah, it was also a very different error like regulation wise and so on. So I think these are all factors that that played into it and I think part of it was also kicking back because a lot of L2s had benefited from public goods and from a lot of research that others had been doing. Um so they wanted to pay it back somehow.

So I think that those were some of the aspects of it and how could we encourage new projects that are either launching tokens or raising funding and so on to uh to support public goods in the future. I I think part of it is um maybe reframing public goods a little bit away from like donations and charity which I think was mostly what how people talked about public goods in the past to talk more about public goods as um risk management and dependencies and so on. Uh, I would argue you would rather want a dependency to be um open source software than you want it to be like a company that's charging you something. And as such, it's it would be in your best interest to to provide some funding for for this open source software to be maintained and be developed further. Um, and it would most likely cost you much less than if you were to pay for a similar service from from from another uh from another company.

Um and um the second the other thing is that it can be much more secure to use public goods because they're open source by default. So um a bug in a dependency should be less likely um coming from from public good in um than than a company that's that's closed source. Um, of course, like AI is changing a lot of ways that we think about security and so on, but I think historically speaking, you you you get a lot of security from um from from open source projects. Um, so I would say that's that's definitely part of it. Like you you have to frame it much more as like risk management and you're funding these public goods to reduce your the risk and the things that you rely on, the dependencies that you rely on.

Um, and I think that's key. Like a lot of people are building on Ethereum and they get a lot of value out of that. Um, if Ethereum needs has to keep improving then you have to fund some of these public goods otherwise it's going to it's going to be very difficult.

Yeah. And just kind of like additionally to that really good reason that Martin said like bare market bull market like obviously projects when funding is more abundant they spend more like they have the tendency like oh yeah it's a bark they have a lot of money and unfortunately times when it's a bare market would be more needed like nobody really has funding so it's kind of like yeah um I'm wondering what's your personal take on um oftent times corporations proprietary software where companies contributing to opensource software because then they benefit from it because open source software is often more advanced because just people have passionately they build on open source and the whole contribution and this is this happened many times then they use that wood and static for comparative software like is is that still a positive um or like overall yeah

I think it's generally positive I think it's better than um strictly or maybe I should just reiterate the question for the for the recording but um um large corporates contributing to open source projects and dedicating um some of their own manpower and resources to to development of open source projects. Is that a good thing or is it something we should not?

Then they turn it into proprietary value

then they turn it into proprietary software and so on and um it's I would say it would be negative thing if some of these corporates go in and and and try to sort of capture the project take the open source and then um change it a bit and make it into proprietary software. I think you can have more synerggetic relationships and between corporate funders and open source projects. We we have some examples of that. I think what you see in the Linux world to some degree works this way. Um some large corporates they give a little bit of funding to Linux but their main contribution to Linux is that they hire engineers to work on Linux improve um improve uh Linux as a as a project and then they benefited tremendously and of course everyone else that's using Linux benefit from it.

The thing is if they go away and try to fork off um from Linux, they don't get all the benefits from the rest of the community that keeps improving the general Linux kernel. So um that's that's one that's another one. Uh Chromium, the browser that many um or that the open source software that many browsers are based on. Um again also an open source project where um some big companies that depend on it and want to see new features they may fund um developers themselves or fund other organizations to build certain uh features that goes into the open source uh codebase. So ideally you want these kind of synergistic um relationships and I think if you have a large diverse developer base you can get that because the benefits of keep uh uh keep uh contributing to the to the main open source uh codebase outweighs the benefits you could get from from taking it forking it and making it into proprietary software.

So yeah, it's it's hard to answer it whether it's good or bad, but in in some ways it can be good when they make contributions to open source projects.

Are you also thinking to introduce any mechanism for like measuring the feedback and the and the impact of the project you're funding through the quadratic funding since you mentioned like new mechanism coming up in the the future?

Yeah. So the question is um the question is are we introducing or is there more mechanisms being introduced to take impact measurement into consideration? Yeah. Um I think that's um I think we're seeing more and more of that and we're seeing different projects experiment with different ways of doing so. Um I know this is something that Octent is looking at a lot um as they as they develop their program and try to change the funding mechanisms that they have.

Um and I I think it's something that we'll keep seeing. I mean I think defunding is an interesting experiment in that direction because it tries to look at which are the most important repository in the Ethereum ecosystem. Um which ones um which have most dependencies. So you can take something like the solidity codebase for example. A lot of other code bases depend on the solidity codebase and as such it has a lot of impact.

it has a lot of value for the ecosystem and therefore it should get funding with the argument be with with deep funding. Um I think I think those are great uh counters in some ways to quadratic funding and this like popularity contest. Um the the the clear trade-off with something like that is that uh you can have more entrenchment this way. So the project that already has most uh is like has most dependencies is the one that gets most of the funding and then it keeps like you entrench those projects. So um there will be trade-offs with any mechanism as I talked about but I think we are seeing much more impact um taking uh like being taken into consideration and like I mentioned I think it the programs are also becoming much more targeted and specific.

So the a funer will say I need this thing who can do it for me and then they'll put out the call and then um see yeah see who can um who can deliver that project. One thing that I didn't mention that our team at the at the Ethe foundation is also working on is is an uh we have actually sent out an RFP for someone to build what we call an RFP hub which is kind of an open platform an open standard that people can different uh projects can plug into to display the all the RFPs in one place. So, if you're a project and you're looking to um get funding and you're looking to build some stuff, then you you you'll be able to tap into this RFP hub um that is currently being built. And I think it should be um it should be ready quite soon in in production. Um and yeah, I think that's that also characterizes a bit this latest era that's moving more towards like specific asks for proposals.

I think it's also probably easier to um to determine what's valuable for the core protocol and infrastructure itself. um because we kind of know like okay client diversity or there are these different topics that are need to be improved or maintained and they don't make enough money or whatever or some of the client teams they don't have enough funding versus I think a lot of these funding rounds they fund a lot of smaller things or applications like on the application layer I think it's way harder to measure or like decide what are like impactful projects or like yeah it's just a guess kind of like what the founders do maybe.

Yeah. I think what I would also mention there is that um like my maybe controversial take is that some projects need public goods funding more than other projects. Like if you're an application the available funding sources are much wider than if you are like a core critical infrastructure project and the risks of the different funding sources are much lower if you're an application. let's say. So there's like a spectrum or like like you can consider like a circle and the wider you go out from the from the core critical infrastructure.

the wider you go out um the more different types of uh funding sources become available and maybe that's also part of this latest era that um that it becomes more specific in that sense and if it's it's all right if you're an application it's completely all right to to charge like I think one of probably one of my favorite public goods and it's is built here in Berlin so it's a it's a nice shout out but um Learius is building building woodkey and you can obviously use woodkey for is a really nice like portfolio tracker and keeping track of all your yeah all your different wallets and so on. It's it's a that is a probably good right there. But of course he they also need to have a sustainable funding model for that organization employ people and so on. And so they have a premium model where for additional features and add additional services you can you can pay and I think that's a great example of of how you can sustain a public good that is much more out on the application uh side and much closer to the user. Um but part of what we want to do with project Odin is uh helping projects that are doing this type of frontier research and are doing really great technical work to find ways that they can also uh monetize some of it with while keeping the public good a public good.

Maybe we should cut it here. I mean I feel like I've been up here for a long time and uh taking a lot of your time but uh thanks so much for for all your attention. I know it was quite long. Uh, I hope it was interesting and yeah, if you have any other questions, uh, please come out to me afterwards.