Research Report: Lifecycle Architecture for Ecosystem Funding

Feems · May 8, 2025, 12:24pm

Read full report HERE

Abstract

This report is the second in a research series exploring how decentralized funding systems can be made more strategic, accountable, and sustainable. Using the Ethereum Foundation’s Ecosystem Support Program (ESP) as a case study, it examines how the absence of lifecycle structure contributes to fragmented capital flows, reactive decision-making, and repeated grantee dependency. Building on Report 1, which mapped challenges across EF’s layered funding model, this report focuses on the program level to understand how upstream design gaps affect downstream outcomes.

What the report introduces

Funding by Design: Rethinking Grant Systems Through Lifecycle Architecture presents the Ecosystem Support Framework (ESF), a lifecycle model built around five phases: Design, Decide, Distribute, Assess, and Exit or Reinvest. Rather than imposing control, this framework provides decentralized programs with shared structure that supports coordination, continuous learning, and long-term sustainability.

Structure and focus areas

Introduction and context: Outlines the need for lifecycle design in decentralized funding and frames ESP’s current limitations
Lifecycle thinking: Introduces phased funding logic as a way to improve coordination, accountability, and learning
Ecosystem Support Framework (ESF): Proposes role definitions and lifecycle phases that can align funding with outcomes
ESP case study: Analyzes how lack of intake strategy, evaluation, and exit planning impacts capital flow and program effectiveness
Phase-by-phase analysis: Compares ESP’s current practices with lessons from institutional funders like Gates and Rockefeller
Insights and learnings: Surfaces structural gaps and design takeaways to inform ecosystem-aligned grant programs
Conclusion: Positions lifecycle design as essential scaffolding for sustainable decentralized capital systems

Research questions

How can decentralized funding systems support long-term sustainability without centralizing control?
What lifecycle structures and role definitions are needed to align capital with growth, learning, and accountability?
How do upstream design decisions shape the effectiveness and sustainability of funding programs?
What lessons can Web3 programs take from institutional lifecycle models?

Key takeaway

Decentralized funding struggles not because of a lack of tools, but because of a lack of structure. Without clearly defined phases from strategy to exit, capital flows react to what is visible rather than what is needed. Lifecycle architecture provides a non-centralized way to embed clarity, adaptability, and learning into grant systems. Programs like ESP can use this approach to evolve from reactive distribution toward long-term, intentional public goods funding.

Read full report HERE

afo · May 12, 2025, 5:19am

Nice report it provoked some thoughts, my main one rn is what are these systems funding? Given how it’s currently framed it pretty open ended as to what these systems are focused on.

Another thought is who are these systems being made for?

If the framing is just on the ESP I understand well, if this is to make a larger assessment of decentralized funding systems seems like a tall order.

Most of my feedback comes from reading the overview shared in this post.

Last thought linking the previous report would be nice for readers.

Feems · May 12, 2025, 11:25am

Thanks for your question , I’ll answer them below but wanted to first put the context of this report and the reports of the series ( which are hyperlinked) below and they are also linked in the report.

Now to your questions. I’ll respond to each one and show how the series helps explore those themes:

Area of Focus: This series explores allocation design, not program design, where allocation design refers to funding system architecture, while program design concerns the planning of individual initiatives or activities.
What is this: A 4-part series that explores funding as a system-level design challenge examining how decentralized ecosystems allocate capital, where structural breakdowns occur, and what models can support more aligned, transparent, and sustainable funding systems.
Report 1 introduces the concept of a funding design layer to map how capital flows across funding structures and where architectural gaps lead to fragmentation.
Report 2 analyzes how program-level funding layers function without structured lifecycles, showing how design impacts decision-making, prioritization, and sustainability.
Report 3 (upcoming) explores how sustaibility: utilizing networks within the framework for post funding support and susutaibility in the funding model.
Report 4 will consolidate the information to develop the Ecosystem Support Model, infrmed by this phased research approach.
Why focus on funding design? This research investigates funding design architecture: how decentralized organizations structure and distribute capital from the top level (like the original funder) through internal layers such as grants programs, domain allocators, and partner initiatives. The goal is to understand how these layers work together or remain siloed. It identifies where the lack of shared lifecycle structures, role clarity, or coordination leads to inefficiencies, duplication, and misaligned outcomes. The aim is to design systems that connect intent, process, and outcomes without recentralizing control.
What are these systems funding?
Many DAOs run multiple parallel programs; grants, hackathons, accelerators, and partner initiatives all aimed at ecosystem growth. These efforts often fund similar goals but with different assumptions and little coordination. The issue is not only what is being funded, but how those efforts are designed and connected. This research shows that without lifecycle planning or shared strategy, funding becomes fragmented and reactive. Funding design helps make the system visible and intentional.
What are they funding for?
“Ecosystem growth” is the common goal, but it is often vaguely defined and interpreted differently across funding layers. Programs operate with overlapping mandates but no shared process or criteria. The research shows that the deeper issue is the absence of a clear model that links purpose to structure. Instead of just asking what to fund, this series asks who the funding is for, what phase of support it offers, and how to align that with long-term outcomes.

Relevance to Allo
This work is directly relevant to Allo, which is already exploring multiple funding streams such as Deep Funding, Cookie Jar, and Raids. Thinking in terms of funding architecture helps Allo answer core questions:

• How do these programs relate to each other?
• Who are they for, and what phase of funding do they support?
• How does capital move between layers without duplication or misalignment?

Cookie Jar proposal: Using your Cookie Jar proposal as an example ( which would be considered a funding layer or if a component it needs to be tied to something ( eg: grants, domain allocator))

Report 1 introduces the concept of a funding design layer—a way to map how capital moves from original funders through various internal programs. It shows that many ecosystems operate multiple funding layers without a shared structure, leading to overlap, duplication, and drift. Cookie Jar represents one of these layers. Thinking in terms of funding architecture can help clarify:

What role Cookie Jar plays in the overall system
Who it serves (e.g. phase of the builder journey)
How it connects to or complements other layers like Deep Funding or Raids

The report:

Optimizing Capital Allocation with ESF (1/3): Organizational Structure & Funding Design )

Report 2 analyzes how program-level funding layers, like the Ecosystem Support Program (ESP), function downstream from the original funder. It shows what happens when these layers lack structured lifecycles, shared priorities, or coordination with other parts of the system. Cookie Jar, as a funding layer, can draw from this to clarify:

• What decision-making process will guide Cookie Jar funding, and how transparent or structured should it be?

• What part of the funding lifecycle does Cookie Jar serve—early exploration, experimentation, or community-led distribution?

• How will Cookie Jar coordinate with other layers to avoid duplication and ensure ecosystem-level learning and alignment?