As the bear market continues to weaken venture capital in the crypto industry, grants are emerging as an alternative funding option to support the community and help established projects grow in a challenging crypto environment.
Grants gaining traction
Data from Blockchain Grants reveals that there are currently 40 crypto projects offering grants for developers working on Web3 solutions. Meanwhile, Cointelegraph Research reports a 30% drop in funds injected into Web3 projects over the past year due to the decline in crypto venture capital.
Grants vs. Venture Capital
Grants and venture capital are different funding mechanisms with distinct purposes. While grants support projects that align with specific objectives and values, venture capital seeks startups with high-growth potential and a focus on financial returns.
However, according to Cumberland Labs CEO Naveen Agnihotri, grants can only benefit projects if the funds are reinvested into the work. Agnihotri highlights that venture capital can help bootstrap a project, as both parties have incentives to engage in such a way.
Open call for grants
SingularityNET has updated its Deep Funding grant program to hold projects accountable for the funds received while fostering innovation. The program, which is now in its third round, will reward teams based on achieved milestones, deliverables, and peer-to-peer revisions. With over $1.5 million available, proposals for AI-related projects can be submitted until Sept. 3.
Similarly, the Interledger Foundation is using its grant program to support initiatives that enable payment networks for unbanked communities worldwide. The program will award grants over $100,000 and is accepting applications until Nov. 21.
Applying for grants: What to consider
To increase the chances of success when applying for grants, it is crucial to understand the goals and priorities of the grantor. Engaging with the community, seeking feedback, and refining proposals accordingly not only improves their quality but also demonstrates commitment to collaboration and improvement.
According to Agnihotri, projects should focus on solving real problems when positioning their proposals. He suggests using the bear market period to think deeply about significant problems and write thorough grant proposals.
Despite the scarcity of money during these times, Agnihotri believes that good ideas will attract funds. "There is still money and that money is attracted to good ideas," he confirmed.
