How Gitcoin Uses Community Voting To Raise Millions In Crypto

Despite the industry being stuck in the worst crypto winter ever, Gitcoin is on the way toward bringing a positive chain with cryptocurrencies.

Funding projects for the good of the public, Gitcoin Grants was able to send about a million dollars in Ethereum donations to the government and organizations working in Ukraine.

This was back in March when the Ukraine Ministry of Digital Transformation announced that the country had received a grant amid the Russian invasion.

A Need to ‘Reframe’ Public Goods, Says Gitcoin Lead

According to the fundraising and partnerships lead at Gitcoin, Azeem Khan, there’s a need to completely reframe public goods.

In an interview with Decrypt, he explained that Web3 is where people can own their social media accounts, search engines, and financial transactions.

This is a stark contrast to the current way of doing things, where private companies use people as means to earn revenue.

By users having a stake in the very platforms they use, they become owners instead of just consumers. But to do that, there needs to be infrastructure, according to Khan.

Instead of focusing on the more fancy aspects of Web3, there should be some basic infrastructure that helps in reaching that level.

Gitcoin Relies on Quadratic Funding

In 2018, the co-founder of Ethereum, Vitalik Buterin, along with economists Glen Weyl and Zoe Hitzig, proposed the concept of quadratic funding.

It allows a more democratic means of providing funds for public causes, services, or goods. Thanks to this model, any useful project for a community could get funding via community voting.

The whole purpose, in Khan’s opinion, is that this has an anti-whale mechanism. In conventional financing, much of the capital is provided by an angel or venture capitalist, but it’s usually someone else getting the money.

Gitcoin Focused on Funding Web3 Mechanisms

Although Gitcoin continues to support major events in the world such as the invasion of Ukraine, its main focus is to fund Web3’s mechanisms.

In June, Gitcoin held GR14, its 14th grant round. Gitcoin launched what it called the Lootverse Round, which was a $130k round meant to support the Loot ecosystem’s projects.

Just recently, Gitcoin ended its 15th grant round, getting about 390,000 contributors to raise over a million dollars.

Khan elaborates that with quadratic funding, Gitcoin is able to ensure that the gathered funds actually go to projects in need of money instead of smaller projects owned by friends of bigger investors.

Gitcoin usually prioritizes marginalized communities by funding grants for projects that will help benefit people of color, working-class women, and the youth. One such project is Dream DAO, which invests in Web3 as well as different causes of social impact all over the world.