The EIP-1559 Community Fund was the top grant in Gitcoin Grants Round 6 (July 2020), raising $65,473 from 412 contributors to fund implementation of Ethereum's most significant fee market reform. The grant served a dual function: it provided direct funding for client implementations, research, and economic analysis, and it generated a credible, non-plutocratic community signal demonstrating broad demand for the proposal. EIP-1559 went live in August 2021 as part of the London Hard Fork, introducing a base fee mechanism that reduced transaction wait times by over 40% and established ETH fee burning — a foundational change to Ethereum's monetary policy.
Background
EIP-1559, originally proposed by Vitalik Buterin in 2018, proposed replacing Ethereum's first-price auction fee model with a base fee that adjusts algorithmically based on network congestion. Users would pay a predictable base fee (burned by the protocol) plus an optional priority fee (paid to validators), dramatically improving transaction inclusion reliability and user experience.
By 2020, the proposal had strong community enthusiasm but limited implementation funding. Multiple client teams needed to build and test implementations, economic analysis was required to validate the mechanism's game-theoretic properties, and coordination across the Ethereum development community was necessary. As Vitalik Buterin noted at the time: "Many people in the Ethereum community are very excited about this proposal, though so far there has been fairly little funding toward getting it implemented."
The EIP-1559 Community Fund was created on Gitcoin Grants to address this gap, seeking community contributions to fund client implementations (Besu, Geth, Nethermind, Open Ethereum), research and simulation, and economic analysis by mechanism design expert Tim Roughgarden.
The Mechanism / Program
The EIP-1559 Community Fund participated in Gitcoin Grants Round 6 (July 2020), which distributed $227,847 in contributions from 1,526 contributors and $175,000 in matched funds across 695 projects in three categories: tech, community, and a special Crypto For Black Lives round.
The grant's contribution pattern demonstrated quadratic funding's mechanics clearly. Early contributions were dominated by a few large donors — including roughly $2,400 each from Vitalik Buterin and Eric Conner — resulting in an initial ratio of approximately $20,000 contributed but only $4,000 in matching. The formula was working as designed: concentrated funding from few donors generated proportionally less matching. A subsequent social media campaign then brought in a large wave of smaller contributors, rapidly increasing the matching amount to over $35,000 as the contributor base broadened.
No formal Sybil resistance mechanisms beyond basic platform-level checks existed in Round 6. The grant operated within the standard Gitcoin Grants infrastructure of the period.
Outcomes
The EIP-1559 Community Fund raised $65,473 total — approximately $30,000 in direct contributions and $35,578 in quadratic matching — from 412 unique contributors. It was the highest-funded grant in the tech category and the top grant overall in Round 6.
The funds supported concrete implementation work: Besu and Geth implementations running on a test network, additional client team funding (Nethermind, Open Ethereum), agent-based simulations of user and miner strategies, and an independent economic analysis commissioned from Tim Roughgarden. This analysis provided rigorous game-theoretic validation that proved important in building confidence among both developers and the broader community.
Beyond funding, the grant produced an unexpected second outcome. As Vitalik Buterin wrote in his Round 6 retrospective, the grant "served as a credible community signal of the level of demand for the proposal." The Ethereum community had long struggled to gauge community preferences on contentious protocol changes.
Coin votes were plutocratic — in the DAO governance vote, a single voter controlled more ETH than all opposing voters combined. The EIP-1559 grant demonstrated that quadratic funding could function as a preference-expression mechanism, producing a democratic signal weighted by breadth of support rather than wealth.
EIP-1559 went live in August 2021 as part of the London Hard Fork. It reduced average transaction inclusion wait times by over 40%, introduced algorithmic base fee adjustment, and established ETH fee burning. Combined with the later transition to proof of stake, fee burning made ETH deflationary under normal network conditions — a foundational change to Ethereum's monetary policy.
Challenges and Solutions
Challenge: Concentrated early funding skewing matching
The grant's initial contribution pattern — large donations from a few prominent individuals — produced a low matching ratio, demonstrating QF's intended behavior but potentially discouraging early momentum if contributors misinterpret low matching as lack of support.
Solution: A social media campaign successfully broadened the contributor base, dramatically increasing matching. This pattern — seed contributions from committed supporters followed by community mobilization — has become a recognizable strategy in subsequent QF rounds.
Challenge: Quadratic funding as governance signal: scope and legitimacy
The grant's dual function as both funding mechanism and governance signal was unexpected and unplanned. This raises questions about whether QF rounds should be explicitly designed to serve signaling functions, and what the boundaries of that legitimacy are.
Solution: Vitalik's retrospective acknowledged both the value and the limitations of QF as a governance signal, noting that it produced a more democratic measure of community preference than coin voting while still being imperfect. The EIP-1559 case has since been cited as evidence for the value of "quadratic signaling" alongside quadratic funding.
Challenge: Funding a protocol change opposed by miners
EIP-1559 was controversial among Ethereum miners because it redirected fee revenue from miners to fee burning. Community-funded implementation of a proposal opposed by a powerful constituency raised questions about the politics of protocol development funding.
Solution: The broad contributor base — 412 individual donors — provided legitimacy that could not be easily dismissed as elite capture or special-interest lobbying. The QF mechanism's emphasis on breadth of support over size of contribution was particularly well-suited to demonstrating genuine community demand in a politically contested context.
Lessons Learned
- Quadratic funding can finance protocol-level infrastructure, not just applications. The EIP-1559 case demonstrated that QF can effectively fund core protocol implementation work — client development, economic analysis, and testnet coordination — extending its reach beyond the application-layer public goods that dominate most rounds.
- QF generates governance signal as a byproduct of funding. The grant's unexpected second function — serving as a credible measure of community demand — revealed that quadratic funding rounds produce democratic preference information that has value independent of the capital allocated. This "quadratic signaling" insight has influenced subsequent mechanism design thinking.
- Broad contributor bases provide political legitimacy for contested changes. In a politically divided environment (community vs. miners), the 412-contributor base provided a form of democratic legitimacy that neither coin voting nor foundation fiat could match, demonstrating QF's value in contentious governance contexts.
- Small-donor mobilization transforms matching dynamics. The shift from a few large donors ($4k matching) to many small donors ($35.6k matching) within a single round illustrates how QF's incentive structure rewards community organizing, not just financial commitment.
- Community-funded research builds confidence for protocol changes. The Tim Roughgarden economic analysis, funded through this grant, provided independent academic validation that proved essential to building consensus. QF's ability to fund rigorous, independent analysis — not just code — was an important contributor to EIP-1559's path to adoption.
Conclusion
The EIP-1559 Community Fund is a landmark case study in quadratic funding, demonstrating that the mechanism can simultaneously finance critical protocol infrastructure and produce democratic governance signals for contested changes. The grant's trajectory — from concentrated early funding to broad community mobilization to successful protocol deployment — illustrates QF operating at its theoretical best: amplifying genuine community demand to fund work that benefits the entire ecosystem. For protocol communities evaluating how to fund and legitimize contentious upgrades, the EIP-1559 case establishes a replicable pattern.