New models reward impact and community support, not paperwork and promises.
Digital public goods are the invisible infrastructure of Europe’s digital society. They are resources everyone relies on but no one owns: open-source software, open data, common standards and civic platforms. Examples include OpenFisca, the software governments use to model tax and social benefits; Decidim, the platform that allows citizens to shape local decisions; and the European Open Science Cloud (EOSC), which lets researchers share data across borders.
Europe’s approach to digital tech does not have to look like that of the United States or China (and anyway, it’s too late to really catch up). They are focused on closed platforms, scale, and heavy state support. Europe has always worked differently. Its strongest assets are openness, cooperation and shared standards. Digital public goods make those strengths visible. And like roads or electricity grids, they need steady public investment to remain secure and reliable.
Europe already spends more than €100 billion on research and innovation through Horizon Europe, Digital Europe and other programmes. But these schemes are built for large consortia and long cycles, not for small builders. Applications drag on for months, payments arrive long after the work has started, and co-funding rules demand up to half the costs. Ask anyone who has applied with a two-person team and they will tell you the same thing: it is a game for the well-resourced, not for the bold.
As a result, universities and large companies with dedicated grant writers secure most of the funding, while the small, fast-moving teams that maintain Europe’s digital commons struggle to survive.
Ethereum has faced exactly this challenge. How do you support the small projects that drive the ecosystem forward when no single actor can carry the cost? The Ethereum Foundation helps with direct grants, but it cannot do everything. Out of that gap came two new funding models that Europe should take a closer look at.
Quadratic funding looks like crowdfunding at first, but the way the matching works makes it very different. People contribute small amounts to projects they support. Those contributions are then matched from a larger pool, and the size of the match grows with the number of unique supporters.
That means a project with 500 people each giving one euro will receive more matching funds than a project with a single donor giving 500 euros. So instead of rewarding the projects with the deepest pockets or the best lobbying, quadratic funding rewards the projects that matter to the widest group of people.
Through Gitcoin, this model has already channelled 60+ million dollars into open-source tools, civic technology, and climate initiatives.
https://medium.com/media/7a74fc3be38a792e02ace5e42b3f8e29/hrefRetroactive funding reverses the way most grants work. In the EU system, projects are funded based on proposals, promises, and projected outcomes. Retroactive funding only allocates resources after results are visible. Teams build first, and then receive rewards in proportion to the impact of their work. This creates two benefits. First, it lowers risk, because funds only go to projects that actually delivered value. Second, it changes incentives. Instead of optimising for grant-writing, teams optimise for impact.
The Optimism Collective has already tested this model at scale, distributing millions to developer tools, education initiatives, and infrastructure.
https://medium.com/media/839ba9d181b9d390d340a5b002ef1a23/hrefThese models show that funding does not have to be slow, centralised or buried in paperwork. They are not perfect. Quadratic funding can be gamed. Retroactive funding depends on good judgment about what counts as impact. But the point is not perfection. What matters is breaking old patterns and evolving how we fund the digital commons. Public money can work smarter, and taxpayers deserve transparency and real value for their investment.
Europe is starting to recognise the problem. Germany has already set up a Sovereign Tech Fund to support critical open-source infrastructure. In Brussels, groups like OpenForum Europe are calling for an EU-wide version. Such a fund would be a big step, but it needs to be accessible to smaller teams as well as established players. That is where experiments with new models can add real value.
Of course, EU programmes operate under legal and political constraints that make direct adoption of these models hard. But pilots can still be designed within those boundaries. The Next Generation Internet initiative already funds open-source projects and could test a quadratic round. The European Innovation Council could run a small retroactive prize for digital infrastructure. Cities such as Madrid and Paris that already use participatory budgets could add quadratic mechanics to make them more representative. Even within the European Commission, there is room for experiments. Small reward pools could be set up under existing tenders or framed as prizes, especially in areas like cybersecurity or interoperability where the Commission already relies on open-source tools.
These would be modest pilots, cheap compared to the billions Europe already spends. But the learning value would be high. At a time when budgets are tight, it makes sense to test smarter ways of funding for small builders. Europe can take inspiration from experiments already tested in the Ethereum community.
If you’re interested in my broader take on Europe and Web3, you might like Why the EU Still Doesn’t Get Web3 — And How We Can Change That. And for a deeper dive into why Ethereum matters for Europe’s digital sovereignty, see Why the EU Should Embrace Ethereum for Digital Sovereignty.
What the EU Could Learn from Ethereum’s Public Goods Funding Models was originally published in Coinmonks on Medium, where people are continuing the conversation by highlighting and responding to this story.
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