Why do blockchains give grants? What funders want back

1. Attracting and keeping developers

Developers are the scarcest resource for any chain, and grants lower the cost of choosing one. A team that gets paid to build on a chain is likely to stay there, hire there and bring its users.

That is why programs test ecosystem fit so hard. Solana Foundation grants ask why your project needs Solana, and Uniswap Foundation Open Grants, which are spending down their remaining budget, reject work that could be submitted unchanged to another protocol. Some programs go further and pay to grow the developer base itself: the Ethereum Protocol Fellowship trains developers for core protocol work, and Btrust pays Global South developers to contribute to open-source Bitcoin.

2. Usage, fees and liquidity

Usage-focused grants pay for activity on the chain: transactions, fees, total value locked (TVL) and active users. They favor live products over ideas, and they ask for numbers.

• Unichain Grants require DeFi projects to have $250,000 or more in TVL.
• Ink Spark asks you to back claims about users, volume or TVL with data reviewers can verify.
• Ronin Proof of Distribution pays RON each 30-day season from a Builder Score built on volume, gas spend and paying users.
• SDF Marketing Grants pay up to $500,000 for user acquisition for products already live on Stellar.

Optimism Retro Funding applied the same logic at scale, rewarding apps for the transactions, gas fees and users they brought to OP Chains, until it was paused in January 2026.

3. Public goods nobody else will fund

Public goods are tools, research and infrastructure everyone uses but no one can easily charge for: client software, open-source libraries, documentation, security research. Markets underfund them, so foundations and DAOs step in.

The Ethereum Foundation's Ecosystem Support Program funds only free, open-source, non-commercial work, though as of October 1, 2026 it had no Wishlist or RFP items open. TheDAO Security Fund uses staking rewards from roughly 69,000 ETH left over from TheDAO to pay for shared Ethereum security work such as wallets, compilers and incident response. On Bitcoin, independent nonprofits such as OpenSats and Brink fund this kind of work. More on this in public goods grants.

4. Decentralizing development

A chain that depends on one core team is fragile, and its community knows it. Grants pay independent teams to build alternative clients, tools and infrastructure, so knowledge and control spread out.

Several programs say so in their rules. The Canton Development Fund funds only work that is a common good for the ecosystem and asks who will maintain it. DoubleZero's grants are for external teams independent of its foundation, for work that complements rather than duplicates core development. On Polkadot, the treasury itself is controlled by token holders through on-chain votes, with no foundation or committee in between.

5. Treasury mandates

Many grant budgets exist because a protocol was designed to spend on its own ecosystem. Once a share of inflation, fees or staking yield flows into a treasury, governance is expected to put it to work.

• Inflation: Rocket Pool's GMC receives 25% of the Protocol DAO's share of RPL inflation, and Livepeer's community treasury is funded by a share of LPT inflation.
• Emissions: Canton has no premine or treasury, so its development fund takes 5% of future Canton Coin emissions.
• Staking yield: Golem Factory staked 40,000 ETH and sends 75% of the rewards to Golem Ecosystem Fund grantees, and Nym refills its community fund with staking rewards each season.
• Protocol revenue: half of Metaplex's protocol revenue buys MPLX for the Metaplex DAO, which funds grants.

A mandate does not guarantee generous funding. Rocket Pool's GMC declined every application in Round 41 because funds are tight. The guide to blockchain treasury funding explains how these treasuries decide.

6. Competition between chains

Grants are also a bid for builders who could go elsewhere. Chains compete for the same teams, and money is the simplest lever.

Gravity Developer Grants of up to $200,000 require projects to run only on Gravity or treat it as their primary network. The Arbitrum Security Program covers audits for projects migrating to Arbitrum from another chain, the Horizen Builder Ecosystem Fund has a lane for projects migrating to Horizen, and Cardano PRIME funds teams coming to Cardano from other chains. If you are multichain, expect each funder to ask what you will do for its chain specifically.

How the funder's motive should shape your proposal

Reviewers score proposals against the reason their program exists. Match your framing to it.

The how to write a Web3 grant proposal guide turns these into sections, and who funds Web3 grants maps them to each kind of funder.

The 2026 shift: RFPs, performance and investment

In 2026 many funders stopped paying for open-ended proposals and started paying for outcomes they choose in advance. From web3grant's October 2026 checks:

• RFPs instead of open applications. ESP has accepted applications only against Wishlist and RFP items since November 2025, and the Aztec Foundation funds builders through one-off requests for grant proposals on its forum, though none had been posted since January 2026 when we checked.
• Performance instead of grants. Linea's developer docs say it operates on a performance-based model and does not offer grants to apps that are not live; successful live apps may get co-funded user incentives or investor introductions.
• Investment instead of grants. The Sui Foundation now offers founders long-term support, "not grants", plus direct strategic investment, and Polygon's Community Treasury replaced grants with treasury investment funds. See Linea's dApp support page for the performance model in its own words.
• Fewer, more strategic grants. Optimism's Grants Council was dissolved in July 2026, and the Optimism Foundation says it will only make select strategic grants itself. The Interchain Foundation now funds Cosmos work through teams it owns.

The motives have not changed; the method has. Funders still want developers, usage and public goods, but they increasingly specify the work (Web3 RFP grants) or pay after results. For a broader view, start with what Web3 grants are.

FAQ

Where does the money for blockchain grants come from?

The money for blockchain grants usually comes from token reserves held by a foundation or DAO treasury, refilled in many cases by inflation, emissions, staking yield or protocol revenue. Rocket Pool's GMC gets a share of RPL inflation, Canton's fund takes 5% of future emissions, and Golem funds grants from staking rewards on 40,000 ETH. Company and nonprofit programs pay from their own budgets or donations.

Why do some blockchains stop giving grants?

Blockchains stop giving grants when budgets shrink, strategy changes or the chain itself winds down. Optimism paused Retro Funding in January 2026 to reassess how it fits its strategy, SSV Network suspended grants indefinitely in August 2026 after first pausing them to conserve funds, and Lisk is shutting down its chain on October 31, 2026. In our October 2026 check, 26 programs were discontinued and 23 paused.

Do blockchain foundations fund projects on other chains?

Blockchain foundations rarely fund work that mainly benefits other chains, because grants exist to grow their own network. Multichain projects can still apply, but expect to explain what you will build, deploy or integrate on that chain specifically. Some funders are chain-neutral by design: six programs in web3grant's directory are multichain, including The Graph Grants Program and Tether Grants and Bounties.

What does ecosystem fit mean in a blockchain grant application?

Ecosystem fit in a blockchain grant application means how directly your project serves the funder's own network and priorities. Reviewers check whether you build on their chain or product, whether you answer one of their published RFPs or focus areas, and whether the work could be submitted unchanged to another ecosystem. A strong fit names the chain-specific users, integrations or metrics your project will move.