This week marked the launch of Gitcoin Grants Round 4. Gitcoin Grants is a new, experimental funding mechanism for open-sourced initiatives. As a leader in web 3 talent sourcing, Gitcoin introduces a novel matching approach by leveraging quadratic funding to further boost contributions to popular projects.
Quadratic funding places emphasis on the quantity of contributions, rather than the total size of those contributions. This means that the more people who contribute to a campaign, the larger portion of the matching pool they will receive. Specifically for Round 4, Gitcoin is offering $200k in matching split between infrastructure ($125k) and community ($75k) initiatives.
To provide some perspective on the power of quadratic funding, 1 DAI donations can lead to upwards of 100 DAI in matching for top grant recipients.
Given the immense opportunity for projects to receive funding through Gitcoin Grants, we’ve decided to support 10 DeFi projects, some well-known and some not, in the hopes to expand the DeFi ecosystem at large with some additional capital to further enhance their products in the coming months.
All in all, our contribution of 100 DAI yielded over $2,400 to the following projects!
DeFi Rate Gitcoin Grants
DeFi Zap: https://gitcoin.co/grants/235/defizap
DeFi Zap is a tool to allow anyone to quickly and efficiently enter into a suite of DeFi investment vehicles. The project removes the need to convert ETH to a variety of unique assets, effectively saving end-users time and money when earning passive income off of DeFi’s endless revenue opportunities. As the winner of the Kyber DeFi Hackathon, DeFi Zap supports notable projects like Compound, Uniswap, Set Protocol, Synthetix and bZx to offer composable solutions for liquidity fees, leveraged positions and savings. For more background on DeFi and their future, check out our interview with cofounder Nodar Janashia.
Tornado Cash: https://gitcoin.co/grants/198/tornadocash
The nature of public blockchains creates a fully auditable and transparent record of all transactions. While there are multiple benefits to this level of transparency, having transaction history and account balances available for anyone to see is not an ideal situation for many users. As such, Tornado Cash is a privacy solution built on Ethereum allowing users to send Ether and Dai (and soon other ERC tokens) with 100% anonymity in a non-custodial fashion. Privacy is a big need for DeFi and Ethereum at large, and the support for this grant goes to show the community largely agrees.
Sablier: https://gitcoin.co/grants/253/sablier
Sablier is a protocol for real-time finances on Ethereum. With Sablier, DeFi users can leverage continuous, autonomous and trustless payroll with Dai. In essence, Sablier is a new way of establishing trust in financial contracts which can be especially useful for contractors and other remote workers. To learn more about Sablier, check out our review here.
Uniswap: https://gitcoin.co/grants/48/uniswap
Unless you’ve been living under a rock (or just don’t know DeFi), you’ve probably heard of Uniswap and its rise to prominence. With nearly $30M in liquidity, this decentralized exchange is quickly becoming a vital backbone to the Ethereum ecosystem at large. Uniswap has no native token (there was no ICO), doesn’t take platform fees, and has bootstrapped the network with fairly little in comparison to some of its peers like Kyber and Bancor. Given its growing importance as a liquidity protocol within the DeFi ecosystem the intuitive interface it provides, Uniswap has won our hearts and our Dai. In the coming months, Uniswap is expected to launch v2 of their exchange which supports Optimistic Rollups as illustrated by the Unipig experiment.
Zero Collateral: https://gitcoin.co/grants/241/zero-collateral
Unsecured loans represent the vast majority of debt in traditional capital markets and should be considered a key piece to the DeFi puzzle. As such, Zero Collateral provides a unique solution to tackle under collateralized loans in an attempt to open DeFi lending to the broader public. The project has expressed interest in trying to integrate with legacy financial providers such as Nerd Wallet and Credit Karma, signaling that if successful, Zero Collateral could have huge implications for DeFi at large. To learn more about Zero Collateral, check out our writeup here.
rDai: https://gitcoin.co/grants/250/rdai-2
rDai is a permissionless ERC20 token that allows users to re-direct interest earned from Dai staked in DeFi lending protocols without requiring the underlying collateral to leave the user’s wallet. There’s a massive amount of potential with interest-directed payments as it essentially creates a mechanism to pay for services without actually paying any of your hard-earned cash (just the passive income from it). We’re extremely excited about the future of rDai and the possibilities that will emerge with this type of token.
Wildcard Picks
Many of the projects we’ve mentioned have garnered a fair amount of traction within the DeFi community. However, all of these projects started from zero with little funding and recognition and were able to grow thanks to the dedicated founders with clear cut visions. As such, we’ve decided to dig through some of the lesser-known Gitcoin Grants to support new initiatives in their attempt to improve the DeFi ecosystem.
Rotki: https://gitcoin.co/grants/149/rotki
Rotki is an open source portfolio tracking, account, analytics, and tax reporting tool embedded with privacy at its core. When using the application, all of your financial data is stored locally on your computer in an encrypted manner. The Rotki team has been hard at work and have accomplished some amazing things within the past year. As such, we’ve decided to reward their efforts with a contribution towards their proposal (and hopefully some additional recognition to their project!).
Groundhog: https://gitcoin.co/grants/190/groundhog
Founded at ETHDenver in 2018, Groundhog is a suite of tools to create recurring crypto payments and subscriptions in an intuitive and seamless fashion. The API and e-commerce platform plugins allow for any website, business, or application to plug in Groundhog and begin accepting subscription-based payments. These payment types are a critical piece of infrastructure for DeFi and the Ethereum ecosystem in general and therefore, we’ve decided to kick them some Dai.
Floatify: https://gitcoin.co/grants/257/floatify
Floatify aims to abstract the complexities of Dai and DeFi at large to enable borderless banking and financial services for non-technical users. Floatify provides better functionality and a stronger UX than most legacy banking solutions by leveraging Torus for easy key and login management, meta transactions, native Chai integration and local currency displays. Floatify’s first version is live on mainnet and development for the next version is already underway. There’s some interesting things coming from the Floatify camp which we believe warrants a grant!
CuraDai: https://gitcoin.co/grants/229/curadai-a-defi-based-stable-coin-for-curacao
Curadai is a Dai-based stablecoin for the Lesser Antilles island in the southern Caribbean sea. Its local currency, the Netherlands Antillean guilder, is pegged to the price of the US dollar to provide stability and liquidity but inherently suffers from some significant downsides. All international transactions are required to pass through an American corresponding bank, adding unnecessary costs and frictions to the transactions for both the individuals and local banks. CuraDAI introduces a fully-collateralized version of DAI which leverages the DeFI ecosystem to meet the needs of Curacao’s local population. The project is also connected to CuraDAO, a DAO focused on social impact on the island. Ultimately, this project is strongly aligned with the long-term vision of DeFi and we’ve decided to support its initiative through our contribution!
Conclusion
Gitcoin Grants offers one of the best ways to support open-source projects. The addition of quadratic funding creates a powerful bootstrapping mechanism as the community can signal towards where funds *should* be flowing.
We’re extremely excited about all the projects we’re contributing towards and hope our contributions are well-received by both the teams and community at large.
All in all, it’s shaping up to be one of the best Gitcoin Grant rounds to date and we’re excited to be a part of it and support the DeFi ecosystem!
To check out other DeFi grants, head on over to Gitcoin Grants and browse the “DeFi” tab!
Analyst at Bankless – one of the leading resources for open finance. Lucas is an active contributor to the DeFi ecosystem with appearances in other notable DeFi outlets including The Defiant and Our Network. He has years of experience working with dozens blockchain and token startups where he focused on token economics, marketing, and growth.