5 Years of Community-Powered Funding

Today marks the 5th anniversary of the Stellar Community Fund (SCF)! Launched on April 17, 2019, SCF has since decentralized funding to fuel the Stellar ecosystem’s growth. Over the last five years, more than 140M XLM (valued at over $25M on the day of payment*) has been awarded to over 400 projects based on community input, furthering significant innovation in the ecosystem.

As of April 17, 2024. Statistics do not include awards from SCF’s predecessor, the Stellar Build Challenge. Detailed and up-to-date statistics can be found on communityfund.stellar.org/stats.

Quick Recap: SCF’s Journey

As the Stellar ecosystem evolves, so does SCF: across 26 award rounds in the past five years, 5 major version upgrades changed SCF’s award, review, and voting structures considerably based on feedback from the community.

“Each round is an opportunity to learn + iterate towards a better design.” — Kevin Owocki

You can read the fund’s entire history in detail in the SCF Handbook, but here’s a TL;DR:

SCF 1.0 — Dawn of Community-Powered Funding

SCF #1–5
Initially, SCF replaced the centralized Stellar Build Challenge, introducing community voting. Each year, 12M XLM was distributed across quarterly rounds, empowering all community members to nominate and vote on projects. This phase supported foundational projects like Stellar Python SDK, Lobstr, and Litemint.

SCF 2.0 — Demonstrating Real Ecosystem Growth

SCF #6–7
Then, funding was segmented into a ‘Lab Fund’ for smaller, experimental projects and a ‘Seed Fund’ for scaling companies. Award allocation was streamlined through a mix of community and panel-driven selections. SCF #7’s awards ranged from $200–350K in XLM* to develop important projects such as Beans App, Leaf Global Fintech, and Script3, demonstrating SCF’s capacity to effectively boost large-scale ecosystem growth.

SCF 3.0 — Streamlined Entrepreneurial Support

SCF #8–11
Instead of voting on the amount a project would receive, projects specified their budget request in USD (the final payout was still in XLM*), and needed to pass a selection panel before moving onto community vote. Voting shifted to a straightforward yes/abstain system, reducing vote manipulation. Noteworthy initiatives from this phase included the introduction of round-based Project Pitches as well as dedicated startup-focused bootcamps focusing initially on Africa, then globally.

SCF 4.0 — Bigger, Better, Faster, Soroban

SCF #12–19
With the introduction of smart contract functionality on Stellar (Soroban), SCF expanded significantly, increasing the award amounts, funded projects and round frequency over 5 times. This allowed for rapid development cycles, accommodating more projects per round. No longer was SCF a competition–any eligible project accepted by the selection panel received 10% of their requested budget (also referred to as Proof of Intent). Upon finishing those deliverables, the project went through a larger community vote for the remaining 90%.

SCF 5.0 — Empowering Community Governance

SCF #20 — Current
In replacement of the Proof of Intent model, two types of awards were introduced: first-timers can apply for an Activation Award selected by a panel to build out an initial MVP, followed by a larger Community Award voted on by the wider community to further build out their project. SCF started to adopt Neural Quorum Governance to support the signaling award allocation, initiating a move towards more inclusive, scalable, and reputation-based governance within the Stellar Community Fund.

SCF Award distribution by year/round as of April 17, 2024. Awards for SCF #25 and #26 are still being added. Detailed and up-to-date statistics can be found on communityfund.stellar.org/stats.

Looking Forward: SCF 6.0

Looking ahead to what’s next for the Stellar Community Fund, we’re gearing up for some big changes. The fund is evolving from a single program into an umbrella of specialized programs and initiatives. This new, multifaceted structure will cater to the varying needs and developmental stages of projects within the Stellar ecosystem, now supercharged with Soroban’s smart contract functionality.

In the next few weeks, a detailed proposal will go through community vote. Active discussions in Discord have already highlighted several key proposed enhancements:

• Boost Go-To-Market Support for Soroban Projects
  The exponential number of Soroban projects deploying on mainnet underscores the increasing need for robust go-to-market support. New post-development award programs will launch to address liquidity needs for financial protocols and provide credits for crucial RPC and indexer infrastructure. Accelerator programs will play a pivotal role to help projects gain adoption in the larger web3 space and beyond. The need for user adoption to request future funding will be emphasized in submission and review guidelines, fostering a community where winners aren’t chosen, but emerge based on market need.
• Ramp Up Education & Community Initiatives
  A new vertical dedicated to empower anyone to launch their own educational and community engagement programs and events to onboard net-new developers and startups into the ecosystem. Startup Camp is being revitalized to support teams to finetune their use case on Stellar to increase their success for SCF awards.
• Scale Operations and Decentralized Governance
  To manage new initiatives effectively, significant scaling is essential. The broader operational expansion will increasingly rely on community members and third-party experts with proven expertise in ecosystem growth and development. SCF’s governance model will become more open and automated through advancements in Neural Quorum Governance, where the community will play a more determining role in award allocation.

SCF is ever evolving, and new structure ideas and additions are under active discussion. You’re invited to participate! Join the Stellar Developers Discord (and make sure you’re opting in for the Community Fund role) and become SCF verified.

Special thanks to SCF’s verified members for your support over the years — you’re the driver of these developments. Shoutout to current / past SDF members Gemma, Anuhya, Tyler, Justin, Zac and Kolten for your support designing and managing operations of the fund.

*The USD valuation of the budget request in XLM has been calculated using the CF Stellar Lumens-Dollar Settlement Price on the day of payment as administered, maintained, and reported by the cryptocurrency index provider CF Benchmarks Ltd. (using the ticker XLMUSD_RR) (available at https://www.cfbenchmarks.com/indices/XLMUSD_RR). Learn more in the SCF Handbook.

---

5 Years of Community-Powered Funding was originally published in Stellar Community on Medium, where people are continuing the conversation by highlighting and responding to this story.