Today, we are thrilled to introduce the first continuous mechanism for funding public goods: “Continuous Dependency Funding” (CDF).

Over the last few years, the Ethereum community has established a cultural norm of funding public goods. Platforms like Gitcoin and Optimism have been at the forefront, introducing groundbreaking funding models such as quadratic funding and RetroPGF, ushering in a new era of support for public goods.

Current public goods funding mechanisms are round-based, come with a lot of overhead (especially for reviewers) and are hard for recipients to plan their future around.

Continuous Dependency Funding represents a different take on the problem, empowering protocols to continuously allocate a percentage of their fees/revenue/assets to their critical software dependencies. Continuous Dependency Funding centers on the idea of maintainable, publicly-fundable lists. Each list has its own Ethereum address, it can support any curation mechanism, and can even contain more lists.

As DAOs accumulate fees, revenue, or assets, its members choose a percentage to be continuously allocated to its critical software dependencies.

DAO members collaboratively curate a list (or many) of critical software dependencies that are impactful to their operations.

Decisions on modifying the list(s) or adjusting allocation percentages can be made dynamically via governance (onchain or offchain) based on changing priorities and needs.

As dependencies are onboarded to the system, they create their own lists for their dependencies. This creates a network of dependencies, a dependency graph, curated by people in real-time.

Every time capital flows through this dependency graph, it effectively cascades where it matters the most, organically flowing to the most impactful projects in an ecosystem.

Use Cases: How you can use CDF for your organization

Continuous Dependency Funding draws inspiration from traditional finance’s revenue-sharing models but introduces a novel twist by leveraging smart contracts, a continuous attribution model and a graph of interconnected projects and developers. Organizations can implement CDF in many ways, including:

Continuous Revenue Distribution An on-chain protocol programmatically shares 1% of its fees/sequencer revenue with its critical software dependencies.
Yield-Driven Funding A DAO generates yield through staking or lending of its assets dynamically allocates 1% of its yield to essential software dependencies.
Continuous Native Token Distribution A crypto project commits to distributing 1% of its native token over the next decade, ensuring a sustained and continuous commitment to critical software dependencies.

Why CDF?

Simple & Scalable CDF localizes allocation decisions to each project and its maintainers, empowering them to assess which projects had the most impact to their work. This simplifies the allocation process, allowing the mechanism to scale to millions of projects, without overwhelming a single reviewer body.
Reliable Unlike round-based funding mechanisms or bounties that leave recipients in a state of uncertainty, CDF offers a dependable alternative. With CDF, recipients can count on a continuous stream of support, making it possible to plan for the long term and carry out impactful work with confidence.
Capital Allocation CDF entrusts maintainers with the authority to evaluate which projects have had the most significant impact on their work. This not only reduces the tendency towards popularity contests, but also fosters a funding environment rooted in transparency and meritocracy.
Dynamic & Sustainable CDF stands as a sustainable mechanism wherein organizations seamlessly link their assets to their allocations. This is achieved through a continuous distribution of a percentage of income or assets, ensuring that the donated value dynamically adjusts based on the performance of the funding organization.

CDF in use

Today there is already nearly $2m in Drips, a toolkit for Continuous Dependency Funding. Organizations such as Octant, Snapshot, OpenZeppelin, Ethers, Wagmi, and Radworks are already dripping to their dependencies.

Learn more