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Yesterday, Ethereum co-founder Vitalik Buterin announced that $1 million has been distributed to 58 projects developed for the Ethereum ecosystem.
Review of Optimism retroactive funding round 1, an exciting new mechanism-design experiment which distributed $1 million among 58 Ethereum ecosystem public-good projects in recognition of their good work for the ecosystem so far.https://t.co/ydq45x6m5w
— vitalik.eth (@VitalikButerin) November 16, 2021
Ethereum projects funded
The project that received the most funding was Ethersys, with $51,345, followed by go-ethereum and EthGlobal. Other funded projects include WalletConnect, Solidity and Etherscan.
This funding was provided last month by Optimism, thanks to the first round of retroactive funding for public projects on Ethereum. The aim is to reward the good work these projects have already done for the Optimism and Ethereum ecosystems.
According to Buterin, this is the first major retroactive experiment in funding public projects for general use, and the first experiment in a new type of governance through badge holders and a quadratic vote among a medium-sized group of 22 participants.
The whole process was transparent, as the rules the badge holders were supposed to follow were public, as were the list of nominated projects and all discussions among the badge holders. The votes of the individual badge holders and the complete results were also made public.
Successes and ambitions of the Ethereum funding system
Buterin believes that this first funding round of Optimism has been a success.
He says that many interesting and valuable projects were funded, and there was a lot of discussion before deciding who and how much to fund.
But at the same time, he suggests some ideas to further improve the process.
First of all, he proposes to increase the number and diversity of badge holders, so that there are no issues that only a small number of badge holders are experienced enough to deal with.
He also proposes to introduce some sort of two-tier appointment structure, to reduce the decision-making burden faced by the entire set of badge holders.
He would also like to increase discussion channels and ways of participation for non-badge holders, and address the issue of how to select new badge holders, or how to remove them in case of malpractice.
Currently, the selection is centralized, but Buterin would like to consider some alternatives.
A system of representative democracy
The first proposal, which is quick and easy to implement, would be to allow existing badge holders to vote for some new badge holders. But Buterin argues that, in the long term, this procedure should be replaced by “something with more open participation”, such as a “proof-of-humanity” vote.
In this case, it would be a kind of “representative democracy” to all intents and purposes, although the question of the actual weight of each individual vote remains to be resolved, since in decentralized systems each person does not have a single vote, but rather as many votes as he or she has tokens. Not being able to verify the identity of the voters in decentralized systems effectively prevents the creation of voting systems in which each individual voter is entitled to one vote, and one vote only.