Grants programs are one of the most effective mechanisms for funding ecosystem development, but they require structure to avoid waste.

The most successful models share a few traits: clear evaluation criteria published in advance, milestone-based disbursement (not lump-sum payments), domain-specific reviewers (not general-purpose committees), and transparent reporting on outcomes.

Optimism's Retroactive Public Goods Funding (RPGF) demonstrated that rewarding impact after the fact produces better outcomes than prospective grants, because it eliminates the problem of funding teams that never deliver. Uniswap's grants program and Arbitrum's STIP showed that even well-funded programs can underperform if the evaluation process is slow or criteria are vague. Start small, iterate based on results, and scale what works.