Written by: Techub News Compilation

Introduction

In the latest episode of the Green Pill podcast, Ethereum co-founder Vitalik Buterin (known as V) returned as a guest, engaging in a deep dialogue with hosts Kevin Owocki and Devanch Meta on the core topic of “Public Goods Funding in the Ethereum Ecosystem by 2026.” This traditional December conversation aims to review the developments in public goods funding throughout 2025 and provide forward-looking guidance for builders on their priorities in 2026. Against the backdrop of the current cryptocurrency ecosystem shifting from enthusiasm to rationality and tightening funding, Vitalik Buterin's insights on how to sustainably fund crucial public goods for the ecosystem (such as open-source software, privacy technology, protocol development, etc.) are of key significance.

Summary

• The public goods funding ecosystem is shifting from a broadly “atmosphere-driven” model to a precise and sustainable model based on verifiable value and specific dependencies.
• Future funding should rely more on the underlying logic of “funding its own dependencies,” rather than solely depending on blockchain block rewards or charitable donations, and it should explore embedding funding mechanisms into software licenses and broader economic flows.
• Builders should prioritize emerging fields and projects that are in a growth phase (such as privacy chains and new L2s), rather than attempting to reform old, entrenched systems.
• Programmable cryptography and AI will become two key technologies for innovating public goods funding mechanisms, addressing issues of privacy voting/bribery prevention and scaled dependency assessment, respectively.
• Diversity in the funding ecosystem is healthy, preventing the formation of a single power center and ensuring that various perspectives and needs for public goods receive support.

Public Goods Funding: Why It Matters and the Paradigm Shift

At the start of the dialogue, Vitalik Buterin (V) first explained why public goods funding is crucial for the crypto space. He provided answers on two levels. The first is the direct reason: public goods themselves are the cornerstone of modern society, from the air we breathe and the water we drink, to the open-source algorithms and software on which the internet and blockchain rely. Particularly in a field that champions openness and decentralization, reducing dependency on centralized “pinch points” is a core objective, but this simultaneously undermines many traditional, corporate profit-seeking pathways. Therefore, better funding for public goods can elevate the quality standards of the open world, enabling it to compete with proprietary, commercial worlds.

The second layer of reasoning pertains to the fundamental spirit of the crypto space. Vitalik Buterin (V) pointed out that several key directions have existed since the inception of the crypto field: anti-censorship, providing alternatives for those marginalized by traditional systems; the "digital upward" wealth effect (a double-edged sword); and institutional design. Public goods funding is an important cluster within institutional design. It relates to how to design alternative organizations and capital allocation mechanisms that can be sustained over the long term, avoiding becoming “new bosses like the old bosses,” such as quadratic funding, quadratic voting, and belief voting. Exploring these designs and applying potential solutions to broader spaces is one of the long-term missions of the crypto field.

In response to the current heated narratives around DeFi, stablecoins, RWA (real-world assets), and other applications, the host asked why builders should still focus on the seemingly “low point” of public goods funding. Vitalik Buterin (V) believes now is the best time to reform and strengthen this sector. Many old paradigms have reached their end or are facing bottlenecks, while new ideas and technologies (such as programmable cryptography and AI) have only emerged in the past two to three years. In contrast, creating a new DEX or stablecoin might only increase the number in the market from 100 to 101, as competition has become quite saturated. Public goods funding is what the world truly needs right now, currently situated in a “trough of disillusionment” of paradigm shifting, where successful innovation that introduces new technologies will have a high leverage effect and can reactivate this crucial aspect.

Where Does Funding Come From: From “Atmosphere” to Sustainable Mechanisms

Confronted with the sharp question of “where does the money come from,” Vitalik Buterin (V) acknowledged the stark contrast with the era in 2021 when “atmosphere-driven” fundraising could gather billions of dollars. His long-term vision is to create a robust enough mechanism to directly tap into large-scale funding flows that demand high stability and legitimacy.

Traditionally, blockchain block rewards have been a source of funding (as seen in practices related to Filecoin and Zcash), but he prefers to explore answers beyond the crypto domain. He emphasized a proposal: to redesign open-source software license agreements. Current open source licenses (like MIT or GPL) do not address profitability issues. He suggested embedding a “Haberger tax”-style clause in the licenses: if you use the software for free, that's fine; but if you create proprietary, exclusive products based on it, you need to pay a certain “tax.” This design is a form of “efficiency taxation” that can both funnel funds into a redistributive “funding pool” and marginally incentivize people to reduce closure and shift towards sharing.

However, the core challenge lies in: who controls this “funding pool”? How to ensure its long-term stability and prevent it from being corrupted or deviated from its original purpose? Vitalik Buterin (V) pointed out that once a viral license is released, it's like hardware etched on a silicon chip, difficult to change. Therefore, it’s necessary to design a stable pointer mechanism that can be relied upon long-term. The solution need not be a massive DAO; it can even simplify rules, such as requiring “funding your dependencies,” allowing funders to choose which specific dependencies to fund, as long as they adhere to the “prohibition of self-dealing” rule, which has existed for a century in the nonprofit sector. Tools like “deep funding” can serve as the default excellent option chosen by people out of inertia.

In summary, Vitalik Buterin (V) emphasized the need to broaden sources of funding outside the crypto realm, moving beyond the assumption that “there will always be blockchain capital flowing based on atmosphere,” and seeking more sustainable, genuinely impactful alternatives.

Core of New Paradigm: Verifiable, Dependencies, and Precise Accountability

The host distilled Vitalik Buterin’s (V) viewpoint as: funding mechanisms are shifting from a broadly “atmosphere” model (like quadratic funding) to a model inclined towards verifiable public goods under a “scarcity mindset,” such as the Protocol Guild and deep funding, the latter being closer to “proof of work,” focusing on core, provable value public goods of Ethereum.

Vitalik Buterin (V) agreed and further noted that mechanisms like quadratic funding, which are completely “general-purpose,” assume the existence of a “world government”: funds would flow to any projects favored by humanity per a formula, regardless of whether they belong to the Ethereum, Solana, or ChatGPT ecosystems. But in the current world, which is more scarce and “chaotic,” persuading people to invest in a funding pool that at least somewhat relates to their own concerns is far more realistic than contributing to an abstract pool of “making the world a better place.” Deep funding embodies this: funders first choose a “vertex” they care about (such as a core library), and the funds then flow downstream along the dependency graph.

This shift denotes moving from assuming global governance “top-down” to a more “bottom-up” multi-centered structure that adapts to the chaotic world better. The host painted a decentralized picture: the Ethereum ecosystem and its L2s and applications form a tree, with each node prioritizing funding its directly dependent public goods. Vitalik Buterin (V) believes that if designed correctly, there may not even be a need to hard-code the “80/20” rule. As long as the principle of “funding your dependencies” is followed and funding is conducted through the relationship graph, theoretically, if the participation scale is large enough, it will ultimately cover all upstream public goods (including clean water and air). The brilliance of this design is that each local participant only needs to make decisions based on their understanding of local knowledge, without everyone needing to judge which is more important: “water management” or “air management.”

This naturally leads to the accountability dilemma in the public goods space. In private goods, market feedback (such as not buying something leading to closure) creates natural accountability. In the realm of public goods, especially during bubble periods, many projects may continue receiving funding due to good social relations even when they lose value. Vitalik Buterin (V) argues that it is more feasible to establish accountability through technical means in the software world. For instance, the complex mechanism of deep funding is intended to assess the importance of dependencies at scale. If the users of a software library decrease, its evaluated “dependency weight” will gradually lower, eventually leading to zero funding. This accountability is based on the concrete question of “whether the things you built are actually used by others,” rather than large-scale political lobbying or popularity contests. It’s like transitioning from relying on low-information crowds voting with a “shotgun” approach to using a “sniper rifle” based on expert evaluations and dependency analyses.

2026 Builder Action Guide: Focus on Growth and New Projects

So, what should builders, who are in the “singularity period” of paradigm transition, specifically do in 2026? Vitalik Buterin (V) provided clear advice: collaborate with emerging projects rather than the old systems. Reforming existing projects means grappling with current stakeholders, countering the inertia of “if it’s not broken, don’t fix it.” Emerging projects start from scratch and are more eager to showcase their uniqueness and achieve differentiated competition in novel ways. For example, rather than trying to persuade a long-existing EVM L2 to reform its funding mechanism, it is better to collaborate with a new privacy chain like Aztec.

He further pointed out that builders should consider this issue not just as a technical problem but also in regard to interface with the traditional world, and even legal aspects. For instance, thinking about how to design a license model that can attract large open-source software developers (including teams developing open-source LLMs), embedding dependency funding into it.

In specific fields, both Vitalik Buterin (V) and the host believe that open-source software and privacy are clear growth points and priorities at present. Open-source software is a survival dependency for all digital infrastructures, including Ethereum, and funneling funding into it is also a form of “terminology offensive,” able to win over the goodwill of external developer communities with similar values during times when the overall reputation of the crypto industry is low. Privacy has a dual nature: it itself is a public good (in tension with many business models) while also being an upstream prerequisite for many public goods funding mechanisms (like voting and rankings) to operate effectively. Privacy prevents bribery and social manipulation, while programmable cryptography (like zero-knowledge proofs) is the key technology for addressing this issue.

Aside from programmable cryptography, AI is listed by Vitalik Buterin (V) as another transformative technology. Its application directions are mainly twofold: one is as a “voting assistant” to address the problem of low participation due to laziness among DAO members, allowing AI agents to vote based on modeling members’ values; the second is to programmatically assess the weights of massive dependency boundaries in mechanisms like deep funding, with human jurors conducting sampling checks to achieve large-scale, detailed value evaluations.

Mechanism Evolution, Diversification, and Future Outlook

Looking back at the development of public goods funding mechanisms, innovations emerge approximately every two to three years (like quadratic funding, Protocol Guild, deep funding). For the next step, Vitalik Buterin (V) believes the current focus should be on refining new mechanisms like deep funding to mature, achieving their original vision: on-chain, continuously auto-running, multi-layered, and becoming a standard tool that anyone needing to “fund dependencies” can easily plug and play. At the same time, continue exploring sustainable funding source solutions.

Regarding the existing phenomenon of “diversification” in public goods funding sources within the Ethereum ecosystem (like Gitcoin, Optimism, Arbitrum, Protocol Guild, etc.), Vitalik Buterin (V) believes this does more good than harm. The greatest benefit of diversification lies in preventing “excellent projects that deserve funding from being overlooked by a single funding source,” while also allowing for “shopping comparisons” and minimizing the authority of individual participants, which is crucial for maintaining the ecological diversity of thought and healthy debates. This is similar to the principle of free speech: the risk of erroneous views being expressed is far less than the risk of necessary views being suppressed. Diversification ensures that even with the presence of powerful commercial agendas, builders still have alternative options. However, care must also be taken to avoid excessive fragmentation leading to dilution of each entity’s influence, preventing them from counterbalancing large commercial entities.

Finally, in response to the question of “what would count as success by the end of 2026,” both the host and Vitalik Buterin (V) shared their respective outlooks. Kevin hopes to see that the median developer capable of building DeFi protocols participates at least part-time in public goods funding work, sustaining their families and building careers, thus attracting talent and execution capability to prevent stagnation of this field during the paradigm transition. Devanch hopes to see progress in deep funding both on “horizontal expansion” (adopted by more ecosystems and projects) and “vertical expansion” (evaluative coverage becoming broader, more precise, with continuous funding flow). Vitalik Buterin (V) has more specific hopes: he wishes to see a mechanism that can operate sustainably and in real time, continuously allocating funding to projects month after month. He drew a comparison to the maturity and prevalence of privacy payments in 2025, wishing public goods funding to reach a certain level of success, where even if not every funding comes from new mechanisms, a steady, continuous flow of value could be seen towards an important group of contributors.

This conversation paints a clear roadmap for the development of public goods funding in 2026: from concepts to funding sources, from technology to cooperation strategies, with a core focus on a more sustainable, precise, and deeply rooted future in authentic value networks. For every builder concerned about the long-term health and innovation of the crypto ecosystem, these insights undoubtedly provide valuable “alpha.”

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