Context & Objectives
Privacy projects struggle to secure sustainable funding due to misalignment between venture capital models and privacy-focused development, regulatory concerns, and limited investor interest in public goods without revenue potential. The Web3Privacy Now report noted that "the post-Tornado Cash investment climate in privacy remains mild," with only $161.6 million invested in privacy during Q1-Q2 2025—a fraction of broader crypto funding.
Gitcoin's Privacy Domain aimed to address this contradiction by funding privacy projects using privacy-preserving mechanisms. Success metrics included participation levels, funds received, and donor feedback.
Round Design & Mechanism
Voting Model: Quadratic Funding distributed voting power across multiple projects, supporting both established teams and promising newcomers.
Eligibility Criteria: Projects qualified in four categories:
- Privacy R&D
- Privacy dApps
- Privacy infrastructure
- Privacy education
Key Design Choices:
- WETH as the sole funding asset for accessibility
- MACI as the voting protocol to prevent bandwagon effects and vote buying
- Human Passport as gatekeeper to ensure voter authenticity
Participation Snapshot
- 121 applications received
- 93 projects accepted
- 7,427 total quadratic funding votes
- ~$13,000 community donations
- 35.41 WETH total raised
- Highest recipient: dev3pack (6.4368 WETH)
- Lowest recipient: WoCo (0.0016 WETH)
Funding Distribution & Thematic Insights
dApps (59 projects): Focused on private transfers, voting, wallets, social apps, AI apps, journaling, communication, health privacy, and wallet recovery.
Infrastructure (60 projects): Included identity solutions, networking, browsing tools, public goods, co-processors (FHE, Garbled Circuits, UTXO-based), private compute, DNS, operating systems, and reputation systems. Notably, Tor received funding.
Education (29 projects): Courses, content (newsletters, blogs, podcasts), and events related to privacy topics.
Research (37 projects): Many dApps and infrastructure projects also selected research, though only one was exclusively research-focused.
Impact To Watch Out For
dApps: Expected growth in user-facing privacy applications, with Privote receiving substantial funding to improve onchain voting.
Infrastructure: Privacy infrastructure enables developer innovation. Worm team's funding should support burnt eth as a privacy mechanism.
Education: Education projects significantly impact the space; Dev3pack, the top recipient, leads developer preparation.
Research: Pure research projects require greater focus in future rounds.
Learning & Reflections
What Worked:
- High application volume despite short notice (121 applications)
- Diverse project portfolio across privacy categories
- MACI's private voting prevented vote manipulation
- Open human-verified participation enabled broad community involvement
What Didn't Work:
- Insufficient matching funding relative to privacy's importance
- Contract deployment issues caused last-minute redeployment and duplicate applications
- Application interface lacked editing capabilities
Process Insights for Future Operators:
- Begin organization early to allow adequate fundraising and project communication
- Provide clearer gatekeeping instructions for proof-of-personhood mechanisms
- Include dedicated fundraising specialists on operator teams
- Allocate time for thorough initial project review filtering
Community Voice
Projects:
Multiple projects expressed enthusiasm about participating in a privacy-focused round using MACI and Privote technology.
Voters:
Respondents reported excitement about privacy projects' future and discovered new initiatives, though some experienced technical difficulties with voting submission and donation processing.
Ecosystem Gaps & Emerging Opportunities
Research funding appears adequate or projects integrate research with development work. Few pure research applications suggest underreach to academic communities. The Tor project's participation highlights opportunities to engage non-web3 privacy projects, potentially expanding public goods funding beyond the web3 ecosystem.
Recommendations & Next Steps
- Organize rounds significantly earlier for extended application windows and fundraising campaigns
- Improve fundraising strategy with dedicated specialists
- Implement latest Privote frontend and MACI V3 to address user experience challenges
- Enhance proof-of-personhood processes with better instructions, in-app minting options, and alternative tools like ZKPassport
