What's in a Web3 grant agreement: clauses explained

What is a Web3 grant agreement?

A Web3 grant agreement is the legal document that turns an approved proposal into binding terms. Programs give it different names: a grant letter (the Ethereum Foundation's Ecosystem Support Program, which had no open Wishlist or RFP items to apply to as of October 1, 2026), a contributor agreement (dYdX Grants Program), a funding agreement (Gravity), a commitment agreement (Arbitrum Security Program) or simply a grant agreement. You usually sign it after approval and KYC, and before the first payment.

The other party is often not the DAO or brand you applied to. Many DAOs work through a foundation or administrator that can sign contracts. The 1inch Foundation signs agreements for the 1inch DAO's Aqua Revenue Stream Incubator. Cardano treasury withdrawals are mostly paid through an administrator such as Intersect, which signs a contract with you after KYC or KYB. Prezenti, which runs Celo community grants, signs as a Canadian entity. Its page said both that Season 3 was open and that it had concluded when we checked on October 29, 2026, so confirm its status first.

The entity matters because it usually sets which country's law applies and who you would deal with in a dispute.

The clauses, one by one

Agreements vary, but most contain some version of the clauses below. Programs' own terms quoted here come from web3grant's directory as checked on October 1, 2026.

Scope and deliverables

This clause says what you will build or do, usually by attaching or referencing your proposal. Check that the deliverables match what you proposed and that each has an acceptance test someone can check: a release, a deployed contract, a published report. DoubleZero, for example, has approved teams sign an agreement with deliverables, success criteria and timelines.

Milestones and payment

This clause sets how much you are paid, in what currency, on what schedule and on what condition. Structures in our directory vary widely:

• The Aqua incubator pays in four tranches of 5%, 10%, 35% and 50%, the last when the strategy is live on mainnet and integrated into 1inch.
• Prezenti pays 20% up front after KYC and the agreement.
• The CKB Community Fund DAO pays at most 20% of the budget, and no more than $10,000, before the first milestone.

Check the currency and how a dollar amount converts to tokens, the network, who pays fees, and how quickly the funder must review a milestone. Our guides to milestone-based grants and grants paid in tokens cover these in detail.

Intellectual property and open-source license

This clause sets who owns the work and how it must be licensed. Many Web3 grants require open source:

• Filecoin Open Grants require all work to be open source and dual-licensed under MIT and Apache-2, and you sign the agreement before any work starts. Reviews there look stalled: proposals filed since April 2026 have had no reply.
• Monero's CCS requires a permissive license at every stage of the work.
• ESP requires all outputs to be free, open source and non-commercial.
• The SDF Academic Research Grants ask you to state that you don't intend to patent the results.

Licensing your work openly is different from assigning ownership of it to the funder. Read which one the clause does, and whether code you wrote before the grant is excluded. Our guide to choosing an open source license for grants explains the common options.

Reporting

This clause sets what you report, how often and to whom. Conflux grantees agree to public reporting requirements, and the OpenSats General Fund agreement sets the scope, payment schedule and reporting, with progress reports every 90 days. Check how long reporting continues after the last payment. Our guide to writing a grant milestone report has a template.

KYC, sanctions and eligibility

This clause confirms who you are and that the funder is allowed to pay you. dYdX lets applicants in restricted jurisdictions apply, but they face stricter review and may not be paid in DYDX. OpenSats cannot fund grants tied to countries or programs on the OFAC sanctions list. Expect a promise that your KYC information is accurate and a right for the funder to stop paying if it isn't. Our guide to KYC for crypto grants covers the process.

Token restrictions

If you are paid in a token, the agreement may limit when you can sell it. Conflux Integration Grants require you to agree to a No Sale Rule: CFX received through an Integration Grant may not be sold for one year unless otherwise agreed, though you can use it for user incentives or liquidity mining. Metaplex DAO Grants lock any MPLX granted for one year. Treat locked tokens as unavailable for your budget.

Revenue share, conversion and other strings

Some agreements attach a financial claim to the grant. The Aqua incubator gives up to $50,000 in exchange for a share of your revenue to the 1inch DAO from the first dollar, as its program post on the 1inch forum explains; approved teams so far agreed to between 10% and 50% of a defined revenue base, and after three years you can buy out the DAO's share at fair market value. The Solana Foundation offers convertible grants for public goods with a commercial side, which turn into an investment only if the project hits set milestones, such as raising a priced round.

Others state the opposite. The Reactive Dev Fund describes its funding as non-dilutive, with no equity, token or repayment obligations, and the Sentient Foundation's grant track has no equity, lockups or claim on your work.

Termination and clawback

A termination clause says when either side can end the agreement and what happens then. Common grounds are missed milestones, a material breach, false information or a sanctions problem. In a milestone-based grant, termination usually means future payments stop.

A clawback clause lets the funder ask for money back, typically unspent funds or funds used outside the agreed scope, and sometimes more. Read the exact triggers, any notice or cure period that lets you fix a problem first, and what happens to work already delivered. Our guide on whether you have to pay back a crypto grant covers this in more depth.

Publicity, confidentiality and conduct

Publicity clauses cover who can announce the grant and whether you may use the funder's name or logo. Confidentiality clauses may cover non-public information; the Hashgraph Association, for example, has you sign an NDA before due diligence. Some programs add conduct rules: the SDF Marketing Grants can't be used for speculative, price-related or yield-promising promotion.

Taxes

Most agreements say you are responsible for your own taxes. A grant can be taxable income even though you never repay it; see our guide on whether crypto grants are taxable.

Governing law and disputes

This clause names the country or state whose law applies and where disputes are resolved, in a court or by arbitration. It usually follows the funder's entity. Check whether you could realistically take part in a dispute in that place and language.

What to check before you sign

Read the whole agreement against your proposal and ask:

1. Is the recipient correct, you or your entity, and does it match your KYC and the wallet that will be paid?
2. Do the deliverables match what was approved, with acceptance criteria you can meet?
3. Are the amount, currency, conversion rate, network and payment schedule written down?
4. How long does the funder have to review a milestone, and what happens if it doesn't respond?
5. What exactly does the IP clause do: require a license, or transfer ownership?
6. Are there token lockups, sale limits, exclusivity or non-compete terms?
7. What triggers termination or clawback, and is there a chance to fix a problem first?
8. How long do reporting duties last, and which law and forum apply?

If any answer is unclear, ask the program in writing before you sign. Terms are sometimes negotiable: in the Aqua incubator you propose the revenue share and reviewers negotiate it, and Conflux's sale restriction applies "unless otherwise agreed".

When to get a lawyer

Not every small grant needs legal review, but get a lawyer when the agreement includes a revenue share, a conversion into equity or tokens, a transfer of IP, exclusivity or a non-compete, personal liability or indemnities, or when the amount is large relative to your project. Ask one too if you are deciding whether to sign as an individual or through a company; see our guide to getting a crypto grant without a company.

Two warning signs need no lawyer. A legitimate agreement never asks for a fee to release the grant, and never asks for a seed phrase or private key. Our guide to crypto grant scams covers these patterns. For where the agreement fits in the whole process, see how to apply for Web3 grants.

FAQ

Does every Web3 grant come with a written agreement?

Not every Web3 grant comes with a written agreement, but most foundation programs use one, signed after approval and KYC. Some DAO-run programs work mainly from the public proposal and program rules: the Rocket Pool GMC, whose funds are tight as of October 2026, pays on the schedule in your application. On-chain treasury requests are recorded in the proposal itself, though Cardano treasury payments usually also involve a contract with an administrator such as Intersect.

Can you negotiate a Web3 grant agreement?

Some terms in a Web3 grant agreement can be negotiated, especially milestone dates, payment currency and scope details. In the 1inch DAO's Aqua incubator, applicants propose their own revenue share and reviewers negotiate it, and Conflux's one-year sale restriction applies unless otherwise agreed. Standard clauses such as KYC, sanctions and governing law are rarely changed. Ask in writing before you sign, not after.

Who owns the code built with a Web3 grant?

Who owns code built with a Web3 grant depends on the IP clause in the agreement. Many programs require the work to be released under an open-source license, such as Filecoin Open Grants' MIT and Apache-2 dual license, which lets everyone use it but is not the same as transferring ownership to the funder. Some agreements do assign IP, so read that clause before signing.

What happens if I can't finish a grant?

If you can't finish a grant, what happens depends on the termination and clawback clauses in your agreement. In milestone-based grants, future payments usually stop, and the funder may ask for unspent or misused funds back. Telling the funder early and proposing a smaller scope or new dates often leads to an amendment rather than a dispute. Read your agreement's exact terms.