The following 10 points are based on Vitalik’s interpretation of the 2026 Public Goods Funding (PGF) and a recent survey based on publicly available data and user-reported data.
Original text: Reforming ETH public goods funding in 2026+
Author: Kev.Ξth , Crypto Researcher
Compiled by: Felix, PANews
The following 10 points are based on Vitalik’s interpretation of the 2026 Public Goods Funding (PGF) and a recent survey based on publicly available data and user-reported data.
Possible development directions for the PGF field after reform:
- Traditional funding still accounts for a significant proportion, but innovative on-chain PGF mechanisms are beginning to take shape.
- Verifiable mechanisms replace unverifiable ideas: On-chain PGF has transformed from a charitable model to a verifiable, liquid, and dependency-driven granting model.
- Privacy and open source priority: Focus on public goods that are essential to the survival of Ethereum.
- Funding dependencies: Systems like Deep Funding allocate funds based on actual upstream influence, not popularity.
- Sustainable revenue streams: sorter fees, open-source licensing models, and revenue-based PGFs (such as Octant) create sustained funding support, rather than relying on donors.
- AI + ZK become the coordination technology: AI assesses the massive dependency graph, while ZK achieves privacy-preserving and manipulation-resistant governance.
- Consortium-style funding: L2, application chains, and protocols each fund their own ecosystems. If they have dependencies, they form a consortium—forming a network of numerous PGF funding sources, rather than relying on a single large pool of funds.
- Diversity is an advantage: Multiple PGF-funded innovators (such as Gitcoin, OP, ARB, CLRFund, Giveth Drips, Octant, Nouns, etc.) can enhance antifragility, promote innovation, and reduce the risk of being monopolized.
1. Current sources of funding
a. Primarily from traditional funding sources (reliable traditional channels).
Currently, the vast majority of funding for Ethereum public goods still comes from traditional L1 and L2 funding schemes, such as the Ethereum Foundation, Stellar, Optimism, and Arbitrum.
(Area allocation for each funder, in US dollars – percentage format)
b. The long tail effect of innovation
Gitcoin and MolochDAO were the first exceptions to break the traditional L1/L2 funding monopoly between 2019 and 2021—the funds they independently raised and distributed accounted for only a single-digit percentage of the total ecosystem funding at the time.
In 2022, Protocol Guild emerged and quickly became a major source of funding.
Subsequently, a series of experiments and innovations emerged, forming a fairly long cycle.
(Area map of non-L1/L2 funders disbursing funds in USD – percentage format)
2. Diversity is a characteristic, not a defect.
In the early days of Ethereum's development, the Ethereum Foundation was the primary funder of public goods.
In 2019 and 2021, Gitcoin and MolochDAO provided new on-chain funding methods for Ethereum public goods.
2021 saw a surge in innovation: Protocol Guild, Optimism, Arbitrum, Drips, Octant, DAO Drops, CLR.Fund, Public Nouns, CultDAO, and more.
By 2025, diversification of funding sources for public goods appears to have become the norm. This is a good thing, as it represents a diversity of clients for public goods funding.
Benefits include:
- Reduce the risk of being controlled
- Expand the audience for outstanding ideas and accelerate innovation.
- Redundancy
- To prevent any funder from becoming a "kingmaker".
- Allowing builders to bypass dysfunctional systems
- Highly aligned with Ethereum's philosophy
3. The "Vibes era " has come to a complete end.
In 2021, PGF tended to "regen vibes," with frequent fund flows and people donating to each other.
After a period of ETH price stagnation, industry-wide contraction, and the decline of Vibes-based funding, the tide has turned completely.
The future belongs to verifiable, precise, structured funding derived from income or benefits.
The reformed PGF field focuses on:
- Proof of influence, not vibes
- Precise targeting of funding, rather than "funding everything".
- Mechanisms for surviving in a chaotic and confrontational world
- Focus on the core infrastructure upon which Ethereum depends for its survival
- The funding source is sustainable, such as income or revenue.
The era of Quadratic Funding in 2021 presupposes a more pervasive and abundant altruism.
The 2026 PGF assumes a chaotic, fragmented world and builds credibility from the ground up at the architectural level.
The biggest breakthrough for PGF after the reform: shifting from "praying for donors" to a structural, sustainable cash flow.
Here are some possible directions for development:
4. Structured, sustainable income streams
To scale PGF, the revenue and cost centers must be connected. Currently, most projects' revenue sources are: L1 block rewards, L2 sorter fees, and DeFi protocol fees. These funds are already used to fund a provable public good: blocks. The proof-of-work/proof-stake mechanism makes block production quantifiable, thus rewards can be automatically distributed, forming a clear cycle.
The problem is that most other public goods cannot justify their value, so their funding is based on personal connections, grants, and political processes, rather than intrinsic economic mechanisms.
The transformation from 2026 onwards aims to bridge this gap: Deep Funding, open-source licensing, Protocol Guidance, and other initiatives will make more public goods as verifiable as block creation. Once the impact is clearly visible, revenue from L1, L2, and DeFi will continuously flow to these cost centers.
Long-term vision: To expand the scope of provable public goods (PGFs) so that PGFs become structural rather than philanthropic. The flywheel effect can be self-sustaining when revenue centers can see and support their dependencies.
5. Open source licensing as a revenue engine
This is a completely new concept:
- Add a Harberger-style "openness tax" to open-source licenses.
- Incorporating "funding dependency" into the rules
- Profit sharing is only required if someone closes the source code.
This would allow the trillions of dollars in commercial value built on open source to be transformed into a small, sustainable, and continuous flow of PGF funding.
6. Revenue-based PGF
People are more willing to donate profits than principal. This has significant psychological and structural implications.
Octant is the quintessential representative and absolute leader in this market segment.
Privacy and open source are priorities.
These two points are crucial.
- Open source—Ethereum runs on top of open-source licenses. Funding dependencies is good practice. It's also an excellent way to connect the real world.
- Privacy—Privacy prevents PGF and its governance mechanisms from becoming a market for bribery. ZK and programmable cryptography are key technologies for achieving this goal. These two are the pillars of the revamped PGF technology stack.
7. Provide funding for dependencies
Deep Funding is its flagship project.
- Building a realistic dependency graph on the Internet
- Using AI to sort millions of edges
- Using reviewers for random checks
- Funds are allocated based on the actual value of the upstream assets.
Most importantly: internalize accountability. For example, if users stop using your service, you stop receiving payment. There will be no more "laid-back" projects that barely survive because of connections.
8. L2 and the multi-center tree structure of applications
From a macro perspective, the PGF architecture exhibits a decentralized nature: each L2 layer, application chain, and protocol funds its own dependencies, and this funding spreads outward like mycelium.
Instead of a single large donor trying to fund everything, there is now a coalition of funding: many smaller ecosystems each support the public goods they depend on, collectively covering the entire technology stack.
"Universal philanthropy" has been replaced by economic incentives embedded in the architecture. When each layer funds its upstream dependencies and there is overlap between these layers, the ecosystem forms a resilient coalition of funders.
9. The new PGF builder should be compatible with the new system, not the old system.
The new PGF builder should focus on compatibility with new systems rather than old systems:
- Most traditional vaults resisted change.
- The new ecosystem is eager to develop, acts quickly, and is receptive to new tools.
If you are building a completely new PGF infrastructure in 2026, then your efforts should be mainly focused on cutting-edge areas: a new ZK ecosystem, a new application chain, and new open-source software licensing standards.
Note: There are some exceptions to this rule—for example, Filecoin and Gitcoin are prioritizing support for builders of the new PGF mechanism, and there are certainly other organizations doing the same.
10. New PGF builders must make good use of two superpowers: AI + cryptography
The reformed PGF field became possible because of the maturity of two technologies:
AI:
- Assistant Jurors
- Evaluating a large dependency tree
- Provide an interpretable reasoning process
- On-chain mechanisms that support continuous operation
ZK / Programmable Cryptography:
- Protect privacy
- Ensure credible neutrality
- Reduce manipulation
AI provides scale, ZK provides completeness.
in conclusion
Overall, Ethereum's public goods funding is not disappearing, but rather transforming. The veneer of the Vibes era is fading, and beneath it, a more enduring, institutionalized, and scalable PGF ecosystem is gradually taking shape.
The last cycle revealed the limitations of philanthropy, the vulnerabilities of Vibes, and the dangers of relying on any single source of funding. The next cycle will be characterized by diversification, provability, sustainable revenue streams, and new privacy-focused AI technologies that can truly operate at internet scale.
If 2017 to 2021 was about discovering the importance of PGF, and 2021 to 2024 was about bold experimentation, then 2026 and beyond will be about putting what we've learned into practice: funding your dependencies, building provable systems, embracing consortium-style funding, and leveraging AI and ZK to transform funding from an art into an engineering discipline.
We are moving towards a world where funds flow continuously rather than in rounds of fundraising, and open source and privacy are seen as the true infrastructure for survival.
The road ahead is not easy, but it's exciting. This is cutting-edge field. If done correctly, it will leave behind a PGF system that is more trustworthy, more antifragile, and more regenerative than any system before. If you are building in this field: now is your chance.
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