Gitcoin faces accusations ‘power was abused’ over diversity grant process

Crypto fundraising platform Gitcoin faces accusations of conflict of interest surrounding a recent funding round.

Gitcoin introduced a diversity, equity, and inclusion bonus that aims to allocate $50,000 to projects with teams from diverse backgrounds. This is part of the larger $1.25 million pot for the Gitcoin beta round.

Among the reviewers is Daphne Charles, a member of an organisation called Blu3 Global — formerly Blu3 DAO — along with four others. Charles’ dual role as both a judge on the committee and a member of a project vying for the DEI grant has raised concerns about the selection process’ integrity.

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“The DEI round is different from the others in that it doesn’t require community contributions to access matching funds,” Devansh Mehta, a Gitcoin beta round participant, told DL News. “So, getting entry into DEI is as good as a cash grant, which gives a lot of power to reviewers.”

“Unfortunately, this power was abused by Daphne as her own project got selected in the round,” said Mehta.

‘No conflict of interest’

Gitcoin grants usually have two parts: a crowdfunding round where the public contributes to eligible projects, and a matching pool of funds allocated by Gitcoin. The amount a project receives in the crowdfunding round determines how much it will earn from the matching pool.

The DEI bonus round is the only grant without a community round, according to the grant website.

Since there is no community round for the DEI grants, the selection committee has complete control over which projects receive funding.

“As part of the review process, committee members do not review their own grant,” Charles told DL News in an interview. “This means, in the case of Blu3, the other reviewers reviewed the application according to the criteria. This is to ensure fairness and avoid any potential conflict of interest.”

Charles also said that her work on the committee was as a volunteer along with the other members.

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“No single person within the review committee has the sole power to approve or reject any grant,” she said. Charles also explained that each grant submission for the DEI round required multiple reviews before being added to the pool of approved grantees.

Gitcoin’s executive director Kyle Weiss told DL News that Charles’ role as a grants reviewer for a grant in which her project was also in the running as a possible grantee was not unusual.

“It’s common for a grant owner who has a project in the round to also review other grants,” Weiss said. “In this instance, we ask folks not to review their own grant.”

Willing volunteers

Charles is not the only DEI round reviewer who has faced accusations of conflict of interest. Another member of the panel, a pseudonymous figure known as Catalyst, is also the founder of a nonprofit project called 40acres DAO, one of the grant applicants.

Catalyst told DL News the one shouldn’t expect “resource-starved” projects like 40acres to not to participate in a funding round simply because they volunteered to be on the grants review committee.

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“The people reviewing grants were asked by Gitcoin and or volunteered to do what nobody else was willing or capable of,” Catalyst said.

“They needed people to review grants and nobody else offered to review them, so would you rather DEI not have a round? DEI be judged by someone that’s outside of your community? Or step up and do the work?”

The small size of the DEI matching funds compared to the overall grant has distorted the controversy.

“This is a separate pool of funds being distributed to projects with diverse teams — not the entire round matching pool — and people are mad. Why?” said Jihad Esmail, a core developer at Web3 social content aggregator Forefront.

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But other commentators have pointed to the optics of the judging for other reasons.

Laurence Day, co-founder of now-defunct DeFi protocol Indexed Finance, told DL News that it is “weird” to see Charles as a reviewer for the round. At a developer conference in Bogota last year, Charles publicly accused another conference goer of harassing her and other Blu3 DAO members.

The conference goer, a software engineer who goes by Bejzik and came to be known as “the brown backpack guy,” told his side of the story on Twitter. The fallout fuelled controversy around Charles and Blu3 DAO.