When you're a new developer in blockchain or Web 3 you're looking for support for your startup or project. Developing in such a pioneering industry is very expensive and you may not always have the assets or liquidity that you need to grow your project.
A couple of blockchain companies have put together important amounts of venture funds, most of them in their native coin and they’re allegedly offering developers grants to help them grow their project.
But are they really helping developers or trapping them in their ecosystem?
Let's review 5 of these programs.
XPR Network grants program
XPR network (formerly known as Proton chain) is a bleeding edge blockchain and it recently launched a GRANT application form that uses a DAO blockchain voting system under the hood. The grant program was created with the intention to create more adoption for the network.
Our review
The XPR grants program aims to foster adoption for the XPR network. The chain is very advanced compared to others, being an EOS fork at it’s base. It was referred to as "The chain of chains." by its community.
The XPR chain boasts advanced features, including a Delegated Proof of Stake (dPoS) consensus algorithm, feeless transactions, a remarkable 0.5s block time with a throughput of over 4500 transactions per second (about 1s finality), user-friendly usernames replacing complex addresses, smart contract support in TypeScript and C++, and an optional Zero Knowledge Proof Level 1 KYC.
Additionally, the network's ISO 20022 compatibility marks a significant advancement in financial technology, facilitating secure and standardized communication of financial data across various systems, platforms, and institutions.
This blend of technical sophistication, user-friendliness, and industry compatibility makes XPR Network's grant program an indisputably attractive proposition for developers and institutions alike and it’s focus on decentralization makes it a Web 3 worthy technology.
Ethereum Foundation grant programme
The Ethereum Foundation grant program aims to incentivize the creation of open-source projects that enhance Ethereum’s scalability, usability, and security.
Our review
The Ethereum Foundation has a long-standing reputation in the blockchain space, and its grant program is well-regarded. However, it's important for startups to consider whether their project aligns with Ethereum's ecosystem and goals. The Ethereum ecosystem has seen significant congestion.
It takes an average of 14 minutes to finalize 100K transactions, that's about 100TPS on average, but the block time is at about 12 seconds so there is no possibility for instant transactions. It has high gas fees, so scalability is not the right keyword for the Ethereum network.
Forcing new users to buy ETH (this applies for all other blockchains that have any fees system) in order for them to buy/swap any other token or do any type of transaction / action on-chain is extremely confusing and inconvenient.
The new and obscure language Solidity has a high learning curve and it's extremely hard to find Solidity developers and they are very expensive.
While ETH is widely adopted by exchanges and other platforms and services, startups should assess whether Ethereum is the right platform for their specific use case as it doesn't offer sustainability or longevity. They have failed to innovate fast enough.
Polkadot’s Web3 Foundation programme
The Web3 Foundation aims to foster innovation and development within the Polkadot network.
Our review
Polkadot is a promising blockchain platform known for its focus on interoperability. It leverages NpoS (Nominated Proof of Stake) with a relay chain and parachains. This allows for scalability but just like Ethereum, it has fees for transactions, an obstacle in the face of mass adoption. It has on-chain governance, a token standard, bridge chains, cross-chain messaging and upgradeability.
However, it's crucial for startups to understand the complexities of building on Polkadot.
Polkadot has a way to upgrade the code of the blockchain whenever they want and this means that the blockchain is not decentralized, not safe from tampering, it's more like a fancy centralized system than a Web 3 system and this is a deal breaker for true Web 3 developers and users.
It's very ironic that they use the keyword Web3 in their grant program title isn't it?
The Web3 Foundation's support can be valuable, but startups should be aware of the technical challenges and potential longer development timelines associated with the Polkadot ecosystem, not to mention the security of the entire system.
Cardano Foundation Catalyst Fund
A community-driven project that supports projects in the Cardano ecosystem. The grants range from $10,000 to $250,000.
Our review
Cardano has gained attention for its focus on sustainability and community-driven development. The range of grant sizes is accommodating for various project stages. However, startups should be cautious not to overlook other blockchain ecosystems solely due to grant availability.
Similar to Polkadot, Cardano is designed to be upgradeable through soft forks, enabling the integration of new features and improvements without requiring a hard fork, again, this is going against the idea of a fully decentralized system. Cardano also has fees for transactions, reducing use cases and adoption incentives.
Cardano's ecosystem is still evolving, and the platform's adoption and scalability may require further development to compete with more established networks.
Algorand Foundation and the AXL Ventures accelerator programme
Algorand provides grants for the following categories: Research, Development of Tools and Infrastructure, Community Building, and Education and Applications.
Our review
Algorand offers a diverse range of grant categories, making it potentially attractive for a wide range of projects. However, Algorand is not as widely adopted as Ethereum, and startups should carefully consider the market fit for their project within the Algorand ecosystem.
The availability of specific grant categories may align well with a startup's objectives, but they should also evaluate Algorand's adoption and scalability.
In their documentation they have a very contradictory explanation about gas fees:
Fees are calculated based on the size of the transaction and a user can choose to augment a fee to help prioritize acceptance into a block when network traffic is high and blocks are consistently full. There is no concept of gas fees on Algorand.
The minimum fee for a transaction is only 1,000 microAlgos or 0.001 Algos.
So they say “there is no concept of gas fees on Algorand” while they tell us their gas fee prices. The “gas fee” is nothing but another term for “fee” in blockchain.
In conclusion
In our opinion, the obvious winner out of the 5 is XPR chain. Each of these grants has its merits, but startups should exercise caution when choosing which blockchain ecosystem to build on.
While grants can provide valuable support, they should not be the sole factor influencing a startup's decision. It's essential to assess the technical, community, and market dynamics of each blockchain platform to ensure the best fit for the project's long-term success.
Grants can provide essential support for early-stage projects, but it's vital for Web 3 startups to strike a balance between grant funding and building a sustainable, decentralized user-centric business model.
Overreliance on grants can potentially lead to ecosystem traps that hinder long-term growth and innovation. Startups should carefully consider their funding strategies and prioritize the development of products that genuinely solve real-world problems.
There is no place for rug pulls and ponzi schemes in true Web 3 startups. Don’t even think about it. Unless it’s a meme coin like rugpull.today.
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