Explore the latest trends and insights for ecosystem growth
Get the highlights and key moments from Gitcoin's Ecosystem Growth Summit
Grants enable a new paradigm of growth opportunities
In early March 2024, Gitcoin held the inaugural Ecosystem Growth Summit. The one-day event, held in Denver, was dedicated to fostering innovation and collaboration on topics related to ecosystem growth within the EVM.
2024 Trends
Overview and Trends of Ecosystem Growth in Web3
Originally from Kyle Weiss' presentation at the Ecosystem Growth Summit
Ecosystem Expansion
The Ethereum ecosystem is experiencing dynamic growth, influenced significantly by broader macroeconomic factors, signaling a robust phase of expansion and innovation.
A notable surge in venture capital activity within the Ethereum space is a strong indicator of increasing investor confidence and market maturity, showcasing a bullish sentiment toward web3 technologies.
Investor Confidence and Capital Influx
DeFi Platforms' Strategic Importance
The emphasis on developing and enhancing DeFi platforms highlights their critical role in the ecosystem, with innovative features like liquid staking pointing towards a strategic direction for growth and sustainability.
Revenue Models and Value Propositions
The evolving landscape underscores the necessity for projects to adopt clear revenue models and present distinctive value propositions, essential for attracting investment and achieving long-term viability.
The interplay between global economic conditions and the web3 sector's trajectory is profound, with international financial trends significantly impacting investment patterns and technological advancements in the ecosystem.
Global Economic Impact
Sessions
Take a look at our highlights from all of the sessions at Gitcoin's Ecosystem Growth Summit, held early March in Denver.
Grants as a Growth Vehicle
with Meg Lister, Kevin Owocki
Gitcoin 2.0: Pioneering New Paths in Capital Allocation
As web3 ecosystem leaders and community members, you stand at the forefront of a transformative journey in capital allocation that promises to redefine how we support and scale our communities. The collaborative tools and democratic funding mechanisms introduced by Gitcoin 2.0 offer unprecedented opportunities to foster innovation, support public goods, and cultivate a vibrant, sustainable ecosystem. Embrace these advancements to fuel your projects and champion a more inclusive, transparent, and empowered future for the web3 landscape.
Insights
Introduction of Gitcoin 2.0
Gitcoin 2.0 represents a significant evolution from its predecessor, introducing a suite of advanced tools for capital allocation within the Ethereum ecosystem and beyond.
Diverse Funding Mechanisms
Gitcoin 2.0 expands beyond quadratic funding to include a variety of funding models, such as direct grants, milestone-based payouts, and retroactive public goods funding, offering a multifaceted approach to capital allocation.
Decentralization and Innovation
The new version emphasizes decentralization, aiming to innovate the process of capital allocation by utilizing blockchain technology to facilitate transparent, precise, and scalable funding mechanisms.
Support for DAOs
Gitcoin 2.0 is designed to assist decentralized autonomous organizations in effectively allocating capital to nurture ecosystem growth, emphasizing that well-allocated grants can serve as a competitive advantage.
Democratic Capital Allocation
Emphasizing democratic principles, Gitcoin 2.0 aims to empower community members to have a say in funding decisions, promoting a more inclusive and representative allocation process.
Strategic Collaboration
Gitcoin 2.0 encourages collaboration within the web3 community, integrating successful mechanisms from other projects and innovators to enrich its capital allocation toolkit and foster a more interconnected ecosystem.
Snippets
"The future of capital allocation, we think, is democratic, transparent, accessible, powerful, and it's going to evolve deeply over time."
Kevin Owocki
"For every million dollars given in grants, there are 13 full-time developers who are still associated with that project today."
Meg
"If your ecosystem is doing 90 percent direct grants through a centralized capital allocator, you may want to look at more anti-fragile, democratic, and credibly neutral ways of allocating capital."
Kevin Owocki
"We've been giving out grants for nearly five years now, and we've spent two years imagining and building this system and the tools to enable this next generation of capital allocation."
Meg
Effective Grant Programs
with Meg Lister, Krzysztof Urbański, Coltron, Eugene Leventhal
Championing Transparency and Accountability in Web3 Funding
As stewards of the web3 ethos, it is incumbent upon us to champion transparency, accountability, and inclusivity in our funding mechanisms, ensuring they not only fuel immediate advancements but also lay the groundwork for resilient, self-sustaining ecosystems.
Insights
Strategic Funding Allocation
Emphasize the need for grant programs to strategically allocate funds, focusing on initiatives that drive meaningful ecosystem growth and align with long-term objectives.
Defining and Measuring Growth
Establish clear criteria for defining growth within ecosystems and implement robust mechanisms for measuring the impact of grant-funded projects, ensuring they contribute to the ecosystem's advancement.
Balancing Support and Accountability
Highlight the balance between providing financial support to grantees and maintaining a level of accountability, ensuring funds are utilized effectively and objectives are met.
Sustainability and Self-Sufficiency
Stress the importance of nurturing projects and entities towards financial sustainability and reduced reliance on grant funding, fostering long-term resilience within the ecosystem.
Leveraging Community Insights
Advocate for leveraging the insights and feedback from the community to inform grant-making decisions, ensuring that funding aligns with the needs and priorities of the ecosystem.
Adaptive and Evolving Programs
Recommend that grant programs remain adaptive and open to evolution, incorporating learnings and feedback to continuously improve their impact and relevance in supporting ecosystem growth.
Diversification of Funding Sources
Encourage the exploration and adoption of diverse funding mechanisms beyond grants, providing a more stable financial foundation for ecosystem entities and projects.
Snippets
"It's crucial upfront to clearly define the target users, understand their reasons for engagement, and consider how this initiative can serve as the seed for prolonged interactions that foster meaningful connections."
Eugene Leventhal
"We can put all of these complicated systems together and measure impact 5,000 different ways. But grants are only as good as the builders that they're actually funding."
Meg Lister
"I also think that from the grant side, there's a lack of developing the projects they fund and adding tools to help them. It's about helping these projects leave the nest and grow. I'd like to see more support beyond just giving money; it's about fostering a community and broader relationships to help these projects become profitable or develop revenue streams."
Coltron
"We can't lose this fight again... we need to as a community figure out ways of making open source and public goods sustainable."
Krzysztof Urbański
Venture Funding
with Curtis Spencer, Jeff Ren
Developer Engagement as a Key to Crypto Growth and Innovation
The discussion emphasized the necessity of a robust developer community, noting that a strong, engaged developer base is essential for the sustained growth and innovation of crypto projects. By nurturing and investing in talent and collaborative networks, projects can fuel technological advancements and ensure long-term viability.
Insights
Data-Driven Investment Decisions
The significance of thorough, data-backed analyses in guiding investment choices in the crypto sector cannot be overstated, ensuring decisions are well-informed and strategically sound.
Adaptation to Market Cycles
Recognizing and adapting investment strategies to align with the cyclical nature of the crypto market can significantly enhance the effectiveness and sustainability of investments.
Bitcoin Ecosystem Evolution
The maturing Bitcoin ecosystem presents new investment avenues and opportunities, signifying its continued relevance and potential for innovation within the broader crypto market.
Clear Fundraising Objectives
Crypto startups should approach fundraising with clear, well-defined objectives, articulating specific needs and expectations from potential investors beyond just capital.
Token Utility and Investment
Understanding and articulating the utility of tokens within a project is essential, as it impacts investor interest, project valuation, and long-term viability.
Engagement with Emerging Technologies
Staying abreast of and engaging with emerging technologies and trends within the crypto space is imperative for investors and founders alike, ensuring they remain competitive and innovative.
Snippets
"We focus on five major sectors... there's a lot of infrastructure and scalability build out that needs to happen... The next sector that we're really excited about is security and dev tools... The next sector, I'd say, is NFT marketplaces, creator economy."
Curtis Spencer
"Crypto founders are built a little different... it's really hard to get it right. And it's more like, does the founder have this resilience to build in this 24/7, somewhat adversarial, market... it's part software innovation, but part societal movement and religion even."
Curtis Spencer
"Yeah, in the crypto project, web3 project, more often than not, things are built around the tokens itself, especially the incentive programs. And when you get to that stage, it's inevitable that you need to think about the utility of your tokens and how it is going to work or address the growth or the eventual kind of business case."
Jeff Ren
"Don't raise when you see the market changes… this is getting up, why don't we go out and raise, right? I want you to know, we would love to see the projects come with a need…plan ahead and have a very clear ask: why now and what you need."
Jeff Ren
Building Strong Communities
with James Kiernan, Toady Hawk, Shreyas, 0xTangle, Prof Werder
The Bedrock of Community Building - Core Alignment
One of the most critical highlights from the conversation is the emphasis on core alignment within community building. Establishing a core group of contributors who share a deep alignment with the community's mission and values is fundamental to fostering a robust and engaging community. This core group acts as the backbone of the community, driving its growth, culture, and resilience.
Insights
Strategic Adaptability
Communities must remain agile, adapting strategies to the fast-evolving landscape of crypto and decentralized ecosystems, ensuring they stay relevant and effective.
Learning from Failures
Embracing lessons learned from past initiatives that did not succeed is crucial. Understanding and analyzing these failures can guide better strategies and prevent future missteps.
Incentive Alignment
Incentives should be structured to promote meaningful contributions and deter opportunistic behavior. Impact-based rewards are more effective in fostering genuine engagement and value creation.
Importance of Intrinsic Motivation
Beyond extrinsic rewards, fostering intrinsic motivation among community members can lead to more sustainable and passionate engagement, enhancing the community's overall vibrancy and resilience.
Utilization of Onchain Tools
Leveraging onchain tools can provide structure, transparency, and accountability within communities, facilitating better management and engagement.
Educational Emphasis
Providing education and resources to community members, especially newcomers, is vital for their empowerment and the community's long-term sustainability, ensuring informed participation and contribution.
Snippets
"It's way more important to have quality than quantity, so having a group of five people could really empower and attract thousands more to watch and see what to contribute with."
Shreyas
"Just being there so people know where to find you is just a huge part of building a community."
Toady Hawk
"If you have a strong mission that people align with, you find that minimum viable community that is aligned with your mission to start out."
Prof Werder
"Maybe you can have people that are coming and going that are part of the public side of it, but to have a really focused kind of core, having 150 people that are part of an in-real-life community is pretty massive."
0xTangle
Leveraging Airdrops for Community Engagement
with Jeremy, Rok, Callum Gladstone, Dawson Botsford
Strategic Airdrops: Driving Community Engagement and Growth
The future of airdrops is set to become more strategic, focusing on deepening community engagement and supporting sustainable project growth. Embracing sophisticated identity and reputation systems will refine airdrop effectiveness, ensuring rewards reach genuine participants. Innovating beyond traditional models, the industry is poised to leverage airdrops not just as promotional tools but as integral elements that drive user acquisition, retention, and long-term loyalty to blockchain protocols.
Insights
Evolution of Airdrops
Airdrops have progressed from simple community rewards to advanced strategies designed to prevent exploitation and promote authentic engagement, demonstrating their strategic importance in user acquisition and retention.
Balancing Reward Distribution
There's a critical need to strike a balance in airdrop distribution to ensure both significant stakeholders and the broader community are adequately incentivized, maintaining fairness and widespread participation.
Protocol Loyalty and User Behavior
Airdrops can significantly influence protocol loyalty and user behavior, acting as powerful mechanisms to attract and retain users, thereby enhancing network effects and protocol adoption.
Regulatory Challenges
Navigating the regulatory landscape is crucial, as compliance challenges can impact the structure and implementation of airdrop campaigns, particularly in jurisdictions with stringent regulations.
Ongoing Airdrop Campaigns
The concept of continuous airdrop campaigns was discussed as a potential strategy to maintain engagement and reward ongoing participation, indicating an evolving approach to user incentives.
Identity and Reputation Systems
Incorporating identity and reputation systems in the airdrop process can enhance the effectiveness and fairness of distributions, targeting genuine users and reducing the impact of malicious actors.
Snippets
"But you know, comparing that (Uniswap Airdrop) to the next three to six months after that, as an airdrop designer, as a team, you had to be a lot more careful about how you design that airdrop to not capture those Sybil attackers."
Callum Gladstone
"Airdrop Farmers are more a volume thing rather than a size thing. It really starts your grassroots stuff. Ultimately, they're very strong and positive, especially knowing you're probably going to get some token dumped on, but that's just part of it. You go in knowing that."
Rok
"I think the idea of adding something like a Gitcoin passport at the claim part of the process seems like a pretty good idea. I mean, why not as an app developer, as a protocol developer, if you're going to try to weed out a bit more of the Sybil attackers."
Dawson Botsford
The State of DevRel
with Maria Shen, Austin Griffith
Growth, Diversification, and Global Impact of Ethereum's Developer Ecosystem
The Ethereum developer ecosystem is on a trajectory of sustained growth and diversification. Educational initiatives are key in nurturing a deep and skilled developer pool, enhancing the platform's innovative capacity. The shift towards multi-chain development heralds a future of increased interoperability and collaboration across blockchain networks. With a globally distributed developer base, Ethereum stands to benefit from diverse insights and innovations, reinforcing its leadership in the blockchain space.
Insights
Experience Level Insights
Data reveals that developers with varying levels of experience are contributing significantly, with a steady increase in seasoned developers who provide the bulk of code contributions.
Educational Initiatives
Initiatives like Speedrun Ethereum and ScaffoldEth are pivotal in onboarding and educating developers, accelerating their journey and fostering a deeper integration into the Ethereum ecosystem.
Multi-Chain Development
The discussion underscores a substantial shift towards multi-chain development, indicating a broadening scope of developer interests and a move toward a more interconnected blockchain environment.
Global Developer Distribution
The Ethereum developer community is highlighted as being geographically diverse, with a significant portion of developers based outside North America, emphasizing the global appeal and reach of Ethereum.
Developer Incentivization
The conversation touches on innovative ways to incentivize developers, suggesting that such incentives play a crucial role in attracting and retaining talent within the ecosystem.
Personal Motivation
Insights into personal motivations for building on Ethereum reveal a strong alignment with the platform's ethos and potential, highlighting a passionate and committed developer community.
Snippets
"Developers who have been in crypto for two plus years have grown at a rate of 52 percent per year for the past five years, which is astonishing."
Maria Shen
"In 2023, we had over 47,000 new developers enter crypto, which is despite what was a pretty brutal bear market is still more developers than we had in 2018."
Maria Shen
"We funded 150 people last year, and we did that using custom streaming smart contracts that allow people to withdraw from the smart contract and turn in what they're working on. And we kind of challenge them to do what they think is best for the ecosystem, and when they do some work, they turn it in and withdraw from their stream."
Austin Griffith
"One huge thing is just that everything is permissionless here. If you're coming in and asking, you know someone who owns a repo, what you should be working on, you're doing it wrong. You have full access to all of this stuff. You should get in and look at the issues and find something that you could tackle and just go do it."
Austin Griffith
Token Design and Token Models
with Sid, Ken Deeter, DJ, Aiham
Strategic Token Design and Incentives
The conversation highlights the critical role of thoughtful token design and incentive strategies in blockchain and DeFi ecosystems. Panel experts emphasized the importance of aligning incentives with long-term user engagement and protocol sustainability rather than short-term gains. They discussed various distribution methods like liquidity mining and airdrops and explored the potential of 'points' as an innovative incentive mechanism.
Insights
Aligning Incentives with Long-Term Engagement
Incentive strategies should focus on fostering long-term user engagement and contribution rather than merely attracting short-term speculative interest.
Variety in Distribution Methods
Diverse methods such as liquidity mining and airdrops have their distinct impacts on user behavior and protocol growth, necessitating a strategic approach to their implementation.
Innovation in Incentives
The exploration of 'points' as an innovative incentive mechanism showcases the industry's move towards more nuanced and potentially more effective user engagement strategies.
Importance of User Behavior Alignment
Ensuring that incentive mechanisms are in harmony with desired user behaviors is essential for the protocol's enduring success and resilience.
Mitigating Speculative Behavior
Thoughtfully designed tokenomics can help mitigate speculative behavior that could be detrimental to the protocol's long-term viability.
Protocol Sustainability
The ultimate goal of token design and incentive strategies should be to ensure the sustainability and healthy evolution of the DeFi ecosystem.
Snippets
"We launched a buyback of a program to fund some incentives, and I think that really helped build traction in some of the markets at times when yield or the expected yield was not so high. I think really we built what we call a core user base because of that."
Aiham
"There's this whole space of incentive marketing and incentive expectation setting that needs a lot of research. I would say that RPGF is one example of this, where, in the beginning, people would not build for RPGF because that wasn't the expectation. But now, when we have these incentive expectations, people are, in the latest rounds, building for RPGF, and I think that's huge."
DJ
"It's interesting to see, I think we had an organic explosion, a sort of multi-agent exploration of the design space last time. Some of the things actually did work, and when you promise future rewards and you create a game of accruing status or ownership into a network, that creates a very different behavior than a very front-loaded emission."
Ken Deeter