🔥 Vitalik Buterin Wants to Replace “Public Goods” with Open-Source Funding

Ethereum co-founder Vitalik Buterin has proposed shifting from the broad and often-misused concept of “public goods” to a more precise focus on funding open-source projects. In his latest post, he argues that open-source funding is a clearer and more effective way to support valuable initiatives in digital ecosystems, especially within Web3 and decentralized finance (DeFi).

🧐 What’s Wrong with “Public Goods”?

The term “public goods” has long been used in economics to describe projects that benefit many people but lack a clear funding model. In the crypto space, this includes open-source software, blockchain research, and educational content. However, Buterin highlights key problems with the term:

• Confusion in meaning – “Public goods” is often associated with government-funded projects, even when they don’t fit the actual economic definition.
• Social bias in funding – Many so-called public goods receive funding based on popularity or insider influence rather than their actual value.
• Lack of clear incentives – Without a transparent funding model, innovation in blockchain and Web3 spaces can be stifled.

This leads to inefficient funding decisions and dilutes the impact of truly valuable projects.

💡 Why Open-Source is a Better Alternative

Buterin suggests replacing “public goods” with “open-source products” because:

• Clear definition – Unlike “public goods,” open-source has a well-established meaning, maintained by groups like the Free Software Foundation (FSF) and Open Source Initiative (OSI).
• Transparency & accountability – Open-source projects are publicly accessible, making it easier to evaluate their value.
• Global scalability – Open-source work can be adapted and expanded worldwide without centralized control.
• Stronger incentive models – Funding models like Gitcoin Grants and quadratic funding ensure open-source projects receive sustainable financial backing.

Projects like Ethereum clients, decentralized research, and educational content fit perfectly within this model, ensuring funding is directed toward initiatives that benefit the entire ecosystem.

🌎 Open-Source Beyond Software

Buterin also points out that open-source principles can extend beyond digital projects:

• Clean energy tech – Innovations in renewable energy could be more impactful if shared openly.
• Scientific research – Open-access research fosters collaboration and accelerates progress.
• Decentralized finance (DeFi) – Open-source smart contracts and blockchain protocols help create transparent financial ecosystems.

In contrast, national defense projects or other localized initiatives might not fit this model, but on a global scale, open-source principles maximize benefits.

📢 The Call for Change

Buterin’s main argument is that shifting from “public goods” to “open-source” funding ensures resources are directed toward impactful, transparent, and scalable initiatives. Instead of funding projects based on vague or socially-driven criteria, the focus should be on maximizing value through open, verifiable contributions.

This perspective aligns with Ethereum’s broader commitment to decentralization and transparency. For example, in February 2025, the Ethereum Foundation donated $1.25 million to support the legal defense of Tornado Cash developer Alexey Pertsev, reinforcing its stance on protecting open-source development.

📌 TL;DR: Vitalik Buterin argues that “public goods” is a vague term that leads to inefficient funding. Instead, he calls for focusing on open-source projects, which provide transparency, accountability, and global impact. This shift is crucial for the future of blockchain, Web3, and decentralized finance (DeFi). 🚀