Beyond the Grant

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Ecosystem grants are no longer marketing spend, now they’re becoming governance infrastructure.

Protocols are shifting from high-volume disbursements to funding models tied to milestones, KPIs, and retention. Those that fail to adapt risk losing their best builders and long-term competitiveness to ecosystems already making the shift.

This shift is not aesthetic. It is structural, and it is happening fast.

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Cross-Ecosystem Scan

Scroll DAO – Governance-Built Capital Deployment
In July, Scroll DAO launched its Ecosystem Growth Council (EGC), a formal oversight body responsible for aligning funding decisions with long-term KPIs. The EGC holds bimonthly sessions, publishes transparency reports, and operates under a six-month charter. Scroll is embedding capital deployment directly into governance design, treating it as an infrastructure function rather than a marketing exercise.‍

Key Insight: Moves funding from discretionary spend to a governance mandate, strengthening legitimacy and community trust.

zkSync – Tranche-Based Builder Incentives
Ignite Season 6 introduced tranche-based funding, releasing ZK tokens only when builders meet performance targets. Metrics include total value locked (TVL), APR competitiveness, and fee activity. While no public dashboard exists for Season 6, the tranche logic mirrors earlier Ignite frameworks and has been previewed in governance updates and community reporting.

‍Key Insight: Aligns builder incentives with measurable impact, reducing the risk of capital being spent without tangible results.

Uniswap Foundation – Milestones with Clawbacks
In Q1 2025, Uniswap approved $12.4 million in new grant commitments but had disbursed only $2.1 million by the report date. Remaining funds are tied to delivery milestones and include clawback clauses, creating operational accountability for recipients.‍

Key Insight: Demonstrates how milestone-based models can slow capital outflow while still backing high-potential projects.

Cardano – Treasury Governance at Scale
Catalyst Fund 14 is the first funding round fully managed under Cardano’s new community governance framework. Proposals are debated, voted, and funded entirely through decentralized decision-making, making Cardano one of the largest blockchains to operationalize community-led treasury management. This is funding oversight as a living governance process, not just milestone tracking.‍

Key Insight: Proves that large-treasury blockchains can run funding programs fully through community governance without sacrificing operational discipline.

Arbitrum – Reform from Within
Grant reform is now a recurring theme in Arbitrum’s governance discussions. Forum proposals often push for tranche-based systems and KPI validation to ensure funded projects deliver sustained value.‍

Key Insight: Highlights how grassroots governance pressure can drive professionalization of funding structures.

Polygon – Incentives Linked to Infrastructure Deployment
Through its CDK and AggLayer programs, Polygon has been observed by the community to tie ecosystem incentives to infrastructure rollouts. While no formal funding architecture has been published, developer and governance channels suggest a strong preference for rewarding projects that create compounding value within the network.‍

Key Insight: Shows how incentive design can be used to steer builders toward strategically aligned infrastructure goals.

These examples signal a broader structural shift in how ecosystems think about funding. The days of distributing tokens to drive short-term activity are giving way to models that hardwire accountability, retention, and strategic alignment into capital deployment.

Why now?

The last cycle made the weaknesses clear: grant programs without accountability delivered shallow impact. Builders followed the money but rarely stayed once the funds ran out. In the current market, where governance communities are more active and capital efficiency is paramount, ecosystems are being pushed to evolve.

This is more than better selection. It is the transformation of grants from a marketing expense into a core instrument of protocol stability.

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Three key reasons this matters:

1 - Retention is replacing reach

Leading protocols are prioritizing fewer, deeper integrations over high-velocity experimentation.

What it means: Loyalty is becoming the growth engine, ecosystems that keep builders long-term will outpace those focused on constant acquisition.

2 - Governance integration strengthens legitimacy

Funding decisions backed by transparent oversight bodies are less likely to trigger backlash or accusations of favoritism.

‍Strategic advantage: Embedding funding decisions in governance builds trust and protects against political friction.

3 - Milestone-based funding creates defensibility

With increasing scrutiny on token disbursements, conditional grants provide a flexible compliance buffer.

‍Risk management lens: Linking disbursements to milestones protects both operational integrity and regulatory positioning.

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Forward-Looking Scenarios (12–18 months)

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Many ecosystems are still behind. Some continue to disburse funds through ad hoc committees or open applications with little monitoring. These programs are expensive, opaque, and vulnerable to gaming.

Strong ecosystems are not built by distributing tokens. They are built by designing for alignment, then reinforcing it through governance, funding architecture, and incentive structure.

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STORM Partners advises L1s, foundations, and grant recipients across Europe and the Gulf. We support clients in building funding strategies that promote builder loyalty and infrastructure entrenchment.

If your ecosystem is debating how to evolve its grant model, we can bring comparative insight from those already moving forward.