Market Analysis of Gitcoin — A Platform Incentivizing Open-source Software Development

I. Introduction

Gitcoin is a decentralized collaboration platform based on Ethereum network. It provides a community for developers to collaborate by offering a reward or applying for “funding” from the Ethereum Foundation.

Gitcoin’s core function is to use the “Quadratic Voting” method for crowdfunding and grant allocation. The original intention is to solve the issue of inefficient financing of Public Goods in Ethereum ecosystem.

The so-called “ Quadratic Voting “ means that the “square root” of the voting outcome is counted as the voting points, for example, 1 point for 1 vote or 10 points for 100 votes. The advantage is that bribery costs can be raised. In this voting model, the cost of voting points increases exponentially as the number of votes increases.

Well-known projects funded through Gitcoin include Tornado. cash, Uniswap, 1inch.exchange, Dune Analytics, and MolochDAO.

II. Tokenomics

III. Financing Situation

At present, Gitcoin has completed $11.3 million USD of financing. The leading investor is Paradigm, joined by IDEO, 1kx, Electric Capital, Naval Ravikant (the founder of AngelList), Balaji Srinivasan (the former Chief Technical Officer of Coinbase), The LAO, MetaCartel Ventures and other institutions.

IV. Analysis of the Token’s Value

GTC is GitcoinDAO’s governance token. According to Gitcoin’s latest announcement, GTC has no economic value for the time being and will be mainly used to govern GitcoinDAO. As the perfect Gitcoin product, it will be used to decentralize Gitcoin and is a voting tool to optimize Gitcoin’s funding mechanism. This includes voting on issues such as distribution of funds, mediation of disputes, financial balance etc. as well as the incubation of new Grant projects.

It operates similarly to Compound and Uniswap and hopes to highlight the characteristics of the decentralized autonomous community where authority is more decentralized.

IDO

On the evening of May 25, Gitcoin tweeted that it would officially issue GTC, the governance token, and airdrop 15% of its total circulation (15 million in total) to addresses that had previously made valuable contributions to the Gitcoin platform.

On May 26, GTC carried out IDO (liquidity mining) at a price of $3.5281 USD on platforms such as Uniswap, with an all-time high price of $10.489 USD.