Gitcoin, crowdfunding platform for open source software, votes for Seed Staked ETH Index for staked ether on Ethereum

Community members from Gitcoin, an organization created to fund open-source software and other “digital public goods” like blockchain code, voted to provide initial liquidity for its Staked ETH Index (gtcETH).

The vote comes amid growing interest in liquid staking as the Ethereum blockchain moves toward the much-heralded “Shanghai” hard fork that will allow investors to withdraw staked ether for the first time.

One benefit for Gitcoin could be that if gtcETH were launched, the new effort could generate fees that could help fund the organization’s grant program.

On Friday, members of the Gitcoin community, with almost unanimous support, passed a governance proposal to formalize a relationship with index provider Index Cooperative and transfer $164,600 worth of 100 Ether (ETH) into two liquidity pools to “provide greater liquidity.” and reduce swap fees for moving into gtcETH,” reads a snapshot.

The creators claim that the Gitcoin Staked ETH Index is the first on-chain offering where holders can simultaneously support the funding of digital public goods and earn rewards from a variety of liquid staking tokens.

GtcETH, built on Index Coop’s EVM-based protocol that enables asset management strategies, consists of three tokens from the top liquid staking protocols on Ethereum: Lido, Rocket Pool and StakeWise. These three liquid staking protocols were chosen based on several factors, including a secondary market liquidity of at least $25 million on the Ethereum and open source mainnet.

Gitcoin’s gtcETH vote comes as the project moves towards running the grants program solely on “grant stacks” — described on its website as the “first decentralized, customizable, smart-contract-enabled solution that grants managers, Project owners and community members connect.” The decision was announced in January. The system relies on the Allo protocol.

One of the motivations behind gtcETH is the unpredictability associated with raising funds for digital public goods – think digital infrastructure like open-source code, a blockchain, or an open dataset that could be used by all. Without a clear profit motive, funding is sometimes hard to come by.

Here’s how it’s supposed to work: gtcETH token holders pay a 2% annual streaming fee, with 1.75% allocated to Gitcoin Decentralized Autonomous Organization (DAO) and the balance to Index Coop.

If gtcETH had a total locked value (TVL) of $1 million, gtcETH would contribute about $17,500 per year to Gitcoin Grants and place the index in the top ten in Gitcoin’s Funders Leaderboard, according to Index Coop’s voting snapshot for the introduction of gtcETH.

GTC is Gitcoin’s native token that governs both Gitcoin Grants and GitcoinDAO. Despite Gitcoin support documents suggesting that the governance token has “no economic value,” GTC has a market cap of $125 million.

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