Retroactive Public Goods Funding
Rewards projects after they've demonstrated impact, rather than funding promises. "It's easier to agree on what was useful than what will be useful."
Pioneered by: Vitalik Buterin, Karl Floersch
How It Works
1. Projects build and ship public goods 2. After a period of time, evaluators assess what was built 3. Impact is measured through various metrics and qualitative review 4. Funding is distributed proportionally to demonstrated impact 5. Creates incentive for future builders to focus on real value
Deep Dive
Retroactive Public Goods Funding (RetroPGF) is a mechanism that rewards projects based on demonstrated impact rather than promised outcomes. The core philosophy is that it's easier to agree on what was useful than to predict what will be useful. By funding retroactively, we create better incentives for building genuinely useful public goods. Optimism has pioneered this approach with their RetroPGF rounds, distributing over $100M to projects that have contributed to the ecosystem.
Advantages
- Funds proven value, not promises
- Reduces risk of funding failures
- Creates strong incentives for impact
- Less susceptible to marketing/hype
- Easier to evaluate outcomes than predictions
Limitations
- Doesn't help bootstrap new projects
- Requires upfront capital from builders
- Complex impact measurement
- May favor established teams
- Evaluation can be subjective
Best Used For
- Ecosystem rewards
- Developer incentives
- Infrastructure funding
- Research grants
Tags
Last updated: 12/1/2024