Gitcoin Labs, the primary software development unit of Ethereum public goods funding protocol Gitcoin is shutting down

The decision was made in part because a “path to profitability” was unrealistic, Gitcoin co-founder Kevin Owocki said in a statement.

Gitcoin, the Ethereum public goods funding protocol, is shutting down its primary software development unit, Gitcoin Labs, the project announced on Friday.

The decision was made in part because a “path to profitability” was unrealistic, Gitcoin co-founder Kevin Owocki said in an email.

“The financial overhead of Grants Lab has outpaced its financial runway in the current environment, and so we’ve made the difficult decision that Grants Lab will be winding down later this year,” Owocki said. “This decision was made in consultation with the top stewards of Gitcoin and lead of Grants Lab, and is being shared in accordance with the legal and technical requirements of Gitcoin’s Organizational Structure, and the financial reporting obligations of Gitcoin’s legal entities.”

The remaining funds will go towards paying severance “to all whose employment is affected,” Owocki noted.

Native token GIT was up around 4% at press time.

Gitcoin is a platform that empowers communities to fund and support open-source projects and public goods in the web3 ecosystem, primarily through its Grants Program, which has distributed over $60 million using a mechanism co-created by Ethereum co-founder Vitalik Buterin called Quadratic Funding.

The platform, which is part of the wider “regen” (short for regenerative finance) movement that is focused on staying true to crypto’s founding cypherpunk ethos, has backed notable projects such as Optimism, Polygon, Sei and Celo.

“We're not retreating — we're refocusing. Gitcoin will continue, but with a leaner team aligned around a more focused Gitcoin Grants program and managing its portfolio of assets. And Gitcoin remains a vibrant, resilient community with many years of runway, and which is more than any one team or product,” Owocki added.

The move comes about a year after a strategic overhaul of the community-led project, which saw it take a more streamlined and capitalistic approach. In February 2024, Gitcoin condensed several constituent DAOs, sunsetted its Layer 2 Public Goods Network, and invested in money-making opportunities like for-profit projects and yield strategies.

As part of the latest shift, Gitcoin will be shutting down Grants Stack, a tool for managing grants programs, as well as wind down the Allo Protocol, its blockchain system for democratic capital allocation. The project, however, does intend to continue maintaining the Human Passport digital verification system.

"To our partners and users: the tech you rely on isn’t disappearing overnight. We’re working to ensure a smooth transition, including evaluating tech handoffs and continuing support where we can," Gitcoin wrote.

"Today marks a big shift for us at Gitcoin — and while it’s a tough day, I’m feeling incredibly hopeful about what’s ahead and the opportunities to build on the foundations we've laid and the momentum we've built," Gitcoin Grants Program lead Mathilda DV said on X. "The Grants Stack era is coming to a close, but the Gitcoin Grants Program isn’t going anywhere. In fact, we’re doubling down on it." Notably, the project has also announced that the Grants Program is funded until "2029ish".

News data source: kdj.com

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