# History of SCF

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#### Last updated: April 2024&#x20;

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The [Stellar Community Fund](https://communityfund.stellar.org) (SCF) and its predecessor, the Stellar Build Challenge (SBC), have supported Stellar-based businesses and developers since 2016. This makes the fund one of the oldest in the blockchain industry! In this time, we’ve had nearly 400 winners and funded almost 200M XLM, Stellar’s native asset, based on community input. And that last part is what makes the SCF so special: not only do projects get a chance to win funding, but they also receive helpful feedback and support from the community, make invaluable connections, and acquire a sense of belonging with the Stellar ecosystem. It sets projects up for further growth and fuels community engagement, which is why so much has been invested in the fund for over six years.

SCF’s history is expansive. And we’ve learned a lot along the way. Read on to discover how SCF has developed since its inception based on community feedback, the colorful ideas implemented (and for some, removed soon after), and what’s in store for the future.

{% embed url="<https://airtable.com/appopNIIwZqhbJpJr/shrPiZp91xI984orU>" fullWidth="true" %}
Find all statistics on [communityfund.stellar.org/stats](https://communityfund.stellar.org/stats).&#x20;
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Throughout the years, SCF has been iterated on many times based on community feedback. Here's a summary of the key version upgrades, explained in detail later on.

* [**SBC— Where it All Began**](#stellar-build-challenge-where-it-all-began) (*SBC #1–5, 2016-2019)*\
  The Stellar Build Challenge launched by SDF founder Jed McCaleb as a no-strings-attached funding for projects to grow the Stellar ecosystem with long-lasting developers, community members, and companies.&#x20;
* [**SCF 1.0 — Dawn of Community-Powered Funding**](#scf-1.0-dawn-of-community-powered-funding) (*SCF #1–5, 2019-2020)*\
  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.
* [**SCF 2.0 — Demonstrating Real Ecosystem Growth**](#scf-2.0-demonstrating-real-ecosystem-growth) (*SCF #6–7, 2020-2021)*\
  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, demonstrating SCF’s capacity to effectively boost large-scale ecosystem growth.
* [**SCF 3.0 — Streamlined Entrepreneurial Support**](#scf-3.0-discord-budget-requests-and-entrepreneurial-focus) (*SCF #8–11, 2021-2022)*\
  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-4.0-bigger-better-faster-soroban) (*SCF #12–19, 2023)*\
  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-5.0-empowering-community-governance) (*SCF #20 — SCF #29, 2024)*\
  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 6.&#x30;**— A Pluralist Approach to Ecosystem Growth**\
  With smart contract functionality live on Stellar, there's a new need — and a new opportunity — to improve the Stellar Community Fund (SCF) so that it not only fosters new innovation, but also incentivizes project launch and growth. Ecosystem experimentation has proven fruitful, many are ready to build for adoption, and SCF needs to adjust its strategy to match.

## **Stellar Build Challenge - Where it all began**

On June 28, 2016, the Stellar Development Foundation (consisting of only a handful of people) [announced the Stellar Build Challenge](https://www.stellar.org/blog/build-challenge?locale=en), a new program that awarded 2B+ XLM to encourage creativity and develop the Stellar ecosystem.

<figure><img src="https://lh5.googleusercontent.com/lJy74DH7QOSi_-ryqjCcyJGpPhJyhQywc3qikhCa-c8sftIFzxTAzbF9OrU2hTjcP5kANFcN4wTawv-kQpx1ya5wM2tqvO8hZwFfu0lV7ve55R7NsLlM0XNYDoSvv72xkbRhxVVB2fTy9G59DM-ImRCdlKfLf0GNI1QXYrw8wminJGSw7UXBoamiJQ" alt=""><figcaption><p>Screenshot taken from <a href="https://galactictalk.org/d/5-2b-lumens-will-be-awarded-to-projects-built-on-stellar">galactictalk.org</a> </p></figcaption></figure>

Developers were encouraged to submit projects in one of four categories: anchors, applications, exchanges, or first-time submissions, with awards distributed annually or quarterly depending on the category.

{% hint style="info" %}
Note: To get data from SBC we took a ride on the WayBackMachine and dug into some ancient blog posts, Reddit threads and outdated spreadsheets. We're still in the process of verifying the award payments mentioned in the blogs. Therefore, the SBC award statistics below, may not be entirely accurate.&#x20;
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<table><thead><tr><th width="110">Round</th><th width="125">Submissions</th><th width="117">Awarded</th><th width="158">Awarded in XLM</th><th>Awarded in USD</th><th width="118">Start date</th><th>End Date</th></tr></thead><tbody><tr><td>SBC #1</td><td>40</td><td>20</td><td>62,400,000</td><td>-</td><td>6/28/2016</td><td>10/1/2016</td></tr><tr><td>SBC #2</td><td>47</td><td>40</td><td>50,000,000</td><td>-</td><td>10/3/2016</td><td>2/13/2017</td></tr><tr><td>SBC #3</td><td>62</td><td>16</td><td>30,500,000</td><td>-</td><td>2/13/2017</td><td>5/22/2017</td></tr><tr><td>SBC #4</td><td>45</td><td>23</td><td>7,950,000</td><td>-</td><td>5/20/2017</td><td>8/21/2017</td></tr><tr><td>SBC #5</td><td>50</td><td>35</td><td>5,700,000</td><td>-</td><td>8/21/2017</td><td>1/2/2018</td></tr><tr><td>SBC #6</td><td>324</td><td>113</td><td>2,700,000</td><td>-</td><td>1/2/2018</td><td>4/16/2018</td></tr><tr><td>SBC #7</td><td>107</td><td>53</td><td>1,620,000</td><td>-</td><td>5/21/2018</td><td>9/7/2018</td></tr><tr><td><strong>Total</strong></td><td><a data-footnote-ref href="#user-content-fn-1"><strong><code>675</code></strong></a></td><td><a data-footnote-ref href="#user-content-fn-1"><strong><code>300</code></strong></a></td><td><a data-footnote-ref href="#user-content-fn-1"><strong>160,870,000</strong></a></td><td>-</td><td></td><td></td></tr></tbody></table>

[After the pilot’s submission period ended in October 2016](https://web.archive.org/web/20170905181433/https://www.stellar.org/blog/build-winners-fa16/), a panel of judges consisting of SDF members and the Stellar community voted for their favorite projects. Of the 40 projects submitted (at a time when the ecosystem was virtually non-existent), 20 projects received a total of 62,400,000 XLM! That seems like a huge amount now, but at the time [this article](https://web.archive.org/web/20170905181433/https://www.stellar.org/blog/build-winners-fa16/) was written, the lumen was only worth fractions of a cent and ended up being worth around $169K. Still not a bad payday!

The second and third SBCs built on the pilot’s success. [SBC #2](https://medium.com/@StellarOrg/50-million-lumens-awarded-for-the-second-stellar-build-challenge-fa7656513970) ended in February 2017 and received 47 submissions, 40 of which were awarded 50M XLM. [SBC #3](https://medium.com/@StellarOrg/30-million-lumens-awarded-for-the-third-stellar-build-challenge-9e5429735ff4) ended in May 2017, with 16 submissions receiving 30.5M XLM.

SBC was no longer an experiment but a thriving program working to grow the Stellar ecosystem. Many winners from this period are still in the ecosystem today, including OrbitLens (who later started [stellar.expert](http://stellar.expert)), [Tempo Money Transfer](https://tempo.eu.com/about-us), a digital money transfer company issuing EURT on Stellar and one of the first Stellar anchors, [Rehive](https://rehive.com/) a white-label fintech app builder, and [Lobstr](https://lobstr.co), one of the most popular Stellar wallets to date.

### **SBC #4 + #5 - The age of GalacticTalk**

[GalacticTalk](https://galactictalk.org/d/2-galactic-talk-the-new-stellar-forum) started as a forum to organize discussions better than the Stellar Slack channel (where the community gathered before Keybase and Discord), and was an immediate hit with the community: Jed himself even used it to [announce the first SBC](https://galactictalk.org/d/5-2b-lumens-will-be-awarded-to-projects-built-on-stellar).

<figure><img src="https://lh4.googleusercontent.com/YWw0ETAL3fT_1TfealX6zDzJvF8ZK1MABrzbdrGylb78O2BuKX6LC7GTi9bRn_2Rc96KBkiQtzd6vpACchXmjjLHe4FgbGb7HzB1LpoFCW0LU523lb5xJHpKt-nyY3BCSD_i14yDsm-OdMoH5aUrwWpXNrFWilLjwR0_WxOJozF6BY0h6PbAEKho_w" alt=""><figcaption><p>Screenshot from <a href="https://galactictalk.org/t/april-2017?sort=top">galactictalk.org</a></p></figcaption></figure>

During the [fourth round of SBC](https://galactictalk.org/d/294-stellar-build-challenge) starting in May 2017, we started listing submissions on [GalacticTalk](https://galactictalk.org/t/april-2017?sort=top). This allowed applicants to solicit feedback from SDF and the community before uploading their final projects for review. With this new interactive format, SBC #4 reeled in 45 submissions, of which the judges awarded 23 winners with 7.95M XLM.

Well known Stellar ecosystem players including [StellarTerm](https://stellarterm.com/) and [Chipper Cash](https://chippercash.com/) got their start in this round. Also, one of the winners was [PopCoin](https://galactictalk.org/d/362-popcoin-stellar-backed-usage-based-billing/2), the first ever Stellar project of Tyler van der Hoeven—then an avid community member, now SDF’s very own Ecosystem Engineer spearheading smart contract functionality on Stellar. Who would have thought?!

During the [5th round of the Stellar Build Challenge](https://web.archive.org/web/20180324224626/https://www.stellar.org/blog/fifth-stellar-build-challenge-results/), 50 projects were submitted, of which 35 winners were awarded a total of 5.7M XLM. [SBC #5 ](https://galactictalk.org/t/november-2017?sort=top)saw the birth of [stellar.expert](https://stellar.expert/explorer/public), currently the most used ledger and statistics explorer for the Stellar network. Also, lumen support was added on the [Ledger Nano S](https://www.ledger.com/), which was the first time a Stellar asset had hardware wallet support.

### SBC #6 + #7 - The turn of an era (or was it?)

[XLM hit its all-time high to date on Jan 04, 2018](https://coinmarketcap.com/currencies/stellar/historical-data/). There was suddenly a much higher interest in the Stellar network, and we saw this reflected in SBC #6. 324 projects were submitted to this round, more than all the other previous SBCs combined! 113 winners were awarded 2.7M XLM, five times the prize pool of the previously planned 550K. Among the high-quality entries were popular SDKs [Stellar's Python SDK](https://stellar-sdk.readthedocs.io/) and [Stellar iOS SDK](https://github.com/Soneso/stellar-ios-mac-sdk), Stellar node explorer, [StellarBeat](https://stellarbeat.io/), and Stellar educational platform [Lumenauts.com](https://www.lumenauts.com/).

<figure><img src="https://4004211959-files.gitbook.io/~/files/v0/b/gitbook-x-prod.appspot.com/o/spaces%2F4IGHJeoWQzABoSBkKBxt%2Fuploads%2Fv2ocRC9vIPHTaB6LCGDs%2FFrame%204.png?alt=media&#x26;token=04beb224-ab35-4dec-a5ef-65d34e5b1a5f" alt=""><figcaption></figcaption></figure>

While the increased number of submissions was great, we struggled to keep up with the demand. There was only one person to handle the initial review rounds, with Jed McCaleb making the final decisions. As the [blog post announcing the results](https://stellar.org/blog/sixth-stellar-build-challenge-results) indicates:&#x20;

> “Confusion. Disorder. Darkness. Without form. Without meaning…Then, suddenly, from chaos, order. Behold! Obey!”

Encountering these scalability problems forced SBC to shift strategies. During the seventh and last iteration of SBC, some [major changes were introduced](https://stellar.org/blog/announcing-the-7th-stellar-build-challenge) to bring back the spirit of community and collaboration. Changes included:

* In previous rounds, applicants could resubmit their project every round to receive ongoing support. As SBC was found not to be a great framework for this, SDF decided to support previous winners outside of SBC.&#x20;
* That said, developers were allowed to submit new contributions to ongoing and meaningful open-source projects such as SDKs, wallets or exchanges, and ledger explorers (many of which originally supported through SBC).&#x20;
* Developers were encouraged to directly collaborate with SDF to build one of four new project ideas: a better quorum explorer, a trade bot maker, social trading, or a peer-to-peer wallet. SDF’s own Zac Freundt joined the panel to judge submissions, with final decisions still made by Jed McCaleb.&#x20;
* Since discussion was helpful for projects, SDF expressed plans to start rewarding users who gave productive feedback on GalacticTalk and GitHub.

SBC #7’s [results](https://stellar.org/blog/stellar-build-challenge-7-results) weren’t disappointing: out of 107 submissions for open-source project contributions, 53 received awards totaling 1.62M XLM. In addition, 1.9M XLM was awarded through the new support initiative that encouraged growth and development for cornerstone projects, which later turned into SDF’s [Infrastructure Grant](https://www.stellar.org/foundation/mandate#direct-development) to support projects that provide crucial network utility.

## SCF 1.0 - **Dawn of Community-Powered Funding**

***SCF #1 - 5***

Many of SBC’s winning projects became foundational to the Stellar ecosystem, making the program essential to driving network growth. However, there was one request the community expressed several times that ultimately led to the shift from SBC to SCF: community participation in guiding lumen distribution, which was not possible with how SBC was structured. At the end of 2018, the [Stellar Community Fund (SCF)](https://stellar.org/blog/2018-ecosystem-updates-community-vision-part-1) was announced with the goal of using community input to award high-value projects. And that remains our goal today!

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While it did turn out that way, SCF was not originally designed to be a replacement for SBC. As all kinds of projects could be submitted to SCF, there was a desire to have a more bounty-style developer-focused program as an iteration on SBC, and the two programs were meant to be partners. While we have several developer support programs now, at the time there was insufficient bandwidth to pursue them, and only SCF prevailed.
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The SCF planned to distribute 12,000,000 XLM each year through quarterly rounds (3M XLM for each round), starting with the [first round on April 17, 2019](https://medium.com/stellar-community/stellar-community-fund-13b722ca45f4) as a beta test. From the beginning, we expected SCF to evolve significantly, and invited the community to help shape future rounds. Similar to SBC, submissions lived on [GalacticTalk](https://galactictalk.org/), but in contrast, SCF invited developers to submit all kinds of proposals, including applications, tools, content, and events, as long as they weren’t just a proof-of-concept. Also, a channel to host general discussion was created on [Keybase](https://keybase.io/), a secure messaging and file-sharing platform with a Stellar wallet [supported by SDF since March 2018](https://keybase.io/blog/keybase-stellar).

Now here’s where it got really interesting: SCF introduced community voting. Voting took place in two phases: *1) the Nomination phase*, and *2) the Award phase*. Existing community members could ‘like’ proposals on GalacticTalk, where the seven most liked proposals were nominated. To prevent voter manipulation, new accounts could not participate in the current round and had to wait for the next one.

After getting nominated, the seven projects of the first SCF round moved to the Award phase: a week-long festivity on a poll thread of [/r/Stellar](https://reddit.com/r/stellar). Users could vote by selecting one of the seven options in the poll and leaving a comment confirming the project they were voting for. After one week, votes were counted, and winners were awarded proportionally based on final vote percentages.

With this new design, an unprecedented problem arose that would heavily influence future iterations of SCF: voter manipulation. Reddit was not designed to prevent anyone from manipulating votes which opened the door for bad actors to set up sock puppet accounts and farm votes. In the end, the votes of 142 eligible unique individuals were taken into account to distribute the first 3M XLM of the Stellar Community Fund.

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Originally, there were plans to have a delegate-based voting system instead of the more open approach described above. Similar to political democracy, the community would delegate their votes to trusted experts of their choice (delegates) to sort through proposals and award based on their determinations. Delegates would have been given a pool of XLM to use during a six-month cycle (to give sufficient time for the amount of effort it would take) and when it was depleted - no new grants could be given out. The benefits of this voting mechanism are that not everyone needs to vote, and it’s likely that better and more informed decisions will be made in the best interest of the ecosystem. However, after much feedback and internal discussion, this system wasn’t adopted. Some of the major issues with the original concept were:&#x20;

* In delegated systems, bribery and corruption could manipulate decision-making which breeds claims of conspiracy.&#x20;
* It puts a lot of pressure on delegates: they would need to campaign for votes, and the community can easily become fractured on which side to pick.&#x20;
* There weren’t enough people up for the task, so there wouldn’t have been enough rotation between delegates.&#x20;
* Delegates would need to budget their pool over the 6-month cycle, which may lead to inconsistent awards. This would confuse submitters as they would have no idea of what to expect for their effort.
  {% endhint %}

### **SCF #2 + #3 + #4 - New voting mechanism**

In SCF #2, previous SBC winner Tyler van der Hoeven joined SDF and came to the rescue. He ingeniously designed a custom voting interface with an algorithm that prevented users from farming votes. Instead of voting on a poll with a Reddit account, you needed a Keybase account where you clicked on a confirmation link to complete the sign-in process, which needed to be done by an actual human.

SCF #2 saw eight winners out of the 38 projects submitted and had a total of 415 eligible unique voters. [Lobstr](https://lobstr.co/), arguably one of the most popular Stellar wallets and a previous SBC winner, was a winner this round. [Litemint](https://litemint.com/) and [Skyhitz](https://skyhitz.io/), two NFT projects that are active today, were also nominated in SCF#2 but didn’t win at the time.

Still using Tyler’s interface in SCF #3, eight winners out of 31 submissions were allocated funding from 406 eligible voters. [Litemint](https://litemint.com/) implemented feedback from the last round and was declared one of the winners.

After three rounds of SCF and tons of feedback from the community, SDF decided to continue the program into 2020 with additional resources and new owners. Tyler van der Hoeven and Kolten Bergeron from SDF’s Ecosystem team took over for Zac, who had been shepherding the program for the past few years.

SCF #4 attracted 17 proposals, and 190 unique eligible voters voted for eight winners. Included in the winners was a German project called [COINQVEST](https://www.coinqvest.com/), which is still active today as an Enterprise Cryptocurrency Payment Processor on Stellar.

### **SCF#5 - When the entire world voted twice**

[SCF #5](https://medium.com/stellar-community/stellar-community-fund-round-5-2116acfa7a58?source=collection_detail----89c348dcf743-----60-----------------------) was off to races stronger than ever: improved support guides for submission, and even an ability to select relevant project categories. New rules were also introduced that prevented a project from winning more than once per year (or per block of four rounds), and losing proposals could re-enter no more than twice per year pending entry improvements. The reason? Most projects from previous SCF rounds originated in the SBC, of which many enjoyed regular paychecks from the fund over the years but weren’t actually on a path to becoming self-sustainable. This behavior contradicted the purpose of the SCF to foster the growth of the Stellar ecosystem, so things needed to change radically:

> “The SCF is a fund for work completed or proven not for a promise of future work. For applications and content there must be significant work and effort put into proving the viability and commitment to your project and for events you should have a history demonstrating your ability and qualification to carry out your intentions.” - Tyler van der Hoeven, June 20 2020 in [Stellar Community Medium](https://medium.com/stellar-community/stellar-community-fund-round-5-2116acfa7a58).&#x20;

Voter manipulation happened in previous SCF rounds, but it was manageable: ineligible votes never exceed eligible votes by more than 23%. Until [SCF #5](https://medium.com/stellar-community/stellar-community-fund-round-5-finals-postmortem-b7b627531fff)! In the Nomination Phase alone, a record number of 376 votes were manipulated out of the 671 total votes. And out of the 4,137 unique Keybase accounts voting in the final Award phase, 4,058 were fake.

<figure><img src="https://lh5.googleusercontent.com/IXYwbGxLNYCwj8rJoxje2XizuAxMNq5H_cK1QqXWVTNi8BUZFo6wb7k0CUh4nrYR7m_JzjOv6wQS7JUJWiMtpER5k1wnN33lKRZDGXmf3gUP1PD6-lyXD7dL8RhJuId00U9hKzSvKjQxBpDlfxVLVNKfSdkOgukiq2QOqy-Ghnhlk9bj0yTdCzC86w" alt=""><figcaption><p>Graph showing voter manipulation in the final Award phases of different SCF rounds, Aug 12, 2020 on <a href="https://medium.com/stellar-community/stellar-community-fund-round-5-finals-postmortem-b7b627531fff">Stellar Community Medium</a></p></figcaption></figure>

The current system wasn’t designed for that kind of volume, which meant the team spent days and nights combing through thousands of votes and making lots of tough calls. To keep things fair, all accounts with duplicate IPs, zero proofs, inactivity, or bounty hunter proofs were removed. As were accounts created after the nomination voting started. One particularly suspicious project was disqualified, and another two took its place to reflect community sentiment. These were by far the most dramatic steps SDF took to preserve the integrity of SCF, as a decentralized, open, hands-off approach was always preferred. SCF, as it was designed at the time, wasn’t well suited to deal with manipulation of this magnitude.

## **SCF 2.0 -** Demonstrating Real Ecosystem Growth

***SCF #6 - 7***

After five rounds of experience and tons of feedback from participants and voters, the team made some [significant changes to SCF](https://medium.com/stellar-community/stellar-community-fund-2-0-4b67d62005ec). There are two main audiences submitting to SCF, each with a distinct goal for funding: 1) full-fledged companies who are interested in kick-starting development on Stellar, and 2) community developers wanting to get paid for building smaller, more experimental projects and tools. Both are valuable, but treating them the same led to undersupporting the first and overpaying the second: a business can’t get far on $5k, and a tinker project shouldn’t get $50k.

1. The **Lab Fund** with the goal to inspire experimental use cases, open-source software, documentation, events, market presence, and real-world stress tests. Planned to be held four times per year, with 500K XLM being split between \~12 projects.
2. The **Seed Fund** with the goal to help viable, innovative, first-mover businesses and utilities get started on Stellar. Planned to be held two times per year, with 5,000,000 XLM being split between 3–5 projects.

The selection and voting processes also changed. Of all entries, nominated projects would be chosen by a jury of ten randomly selected SDF and community members. With a solid panel of judges electing the best projects, it was deemed safe to open the voter participation floodgates: no more Keybase verification, no more weird caps and limits on votes, just one week of SMS verified voting open to the whole wide world.

\
A key component of the new community vote was flaggable quadratic voting. Community voting used to be one-dimensional, leaning towards a linear distribution that made it impossible to recognize exceptional projects — either positively or negatively. Implemented by popular blockchain funding programs, including [Gitcoin](https://gitcoin.co/), quadratic voting promises to be better at capturing community sentiment and enables the community to help police bad actors and thwart manipulation.

<figure><img src="https://4004211959-files.gitbook.io/~/files/v0/b/gitbook-x-prod.appspot.com/o/spaces%2F4IGHJeoWQzABoSBkKBxt%2Fuploads%2FI24B3yXHLTmu5wKVbJqi%2FFrame%204%20(1).png?alt=media&#x26;token=548d3efb-39d8-463e-bc78-dcdabcbc861c" alt=""><figcaption></figcaption></figure>

**How it worked:**

Each voter had 100 credits and could give a max of ten votes for any single project. In addition to upvoting, voters could also downvote a project. The more votes you gave a project, the weight of the vote would increase quadratically:

<figure><img src="https://lh5.googleusercontent.com/KJA0ZHDF2IBn64riKMY6xNZHFmj1Yqze9ipayf0VuDqhHcKFWTJXKwsbwyHUqvZYus5zI63dhQFXmhm0jtBsRWxIhtJolaEh5sNxowgGK772XVcnaVTM-64jBQK-Nw_q0wFTwP_Vrz6KC1BjJ7CIopk8J-aszUTBLEpw5RLpbOmzd_59wmTn7VUjSQ" alt=""><figcaption></figcaption></figure>

Voting was live and open, which meant that you could see how many votes a project had already received. If voters suspected foul play, they could use some of their credits to flag an entry and the SDF team would take a closer look.

A new website, [communityfund.stellar.org](https://communityfund.stellar.org/), was also introduced (look at those cute astronauts!). The site contained all SCF rules, including details about each fund and how to submit your project. GalacticTalk was still used sparingly, but the new site was the primary place to see and vote on projects.

<figure><img src="https://4004211959-files.gitbook.io/~/files/v0/b/gitbook-x-prod.appspot.com/o/spaces%2F4IGHJeoWQzABoSBkKBxt%2Fuploads%2F60NbWapR5b63MyZrtMDu%2FFrame%204%20(2).png?alt=media&#x26;token=8a18f35b-4da5-4631-b216-15b70ba7a10d" alt=""><figcaption><p>communityfund.stellar.org during SCF#6 and SCF#7</p></figcaption></figure>

### **SCF#6 - The Lab Fund for developers to experiment**

On August 31, 2020, the [Lab Fund (SCF#6) opened for submissions](https://medium.com/stellar-community/stellar-community-fund-2-0-4b67d62005ec?source=collection_detail----89c348dcf743-----44-----------------------), receiving 19 submissions, of which the jury panel deemed nine finalists ready for participation. While counting the votes it turned out that while the new SMS verification method did slow down bad actors, it couldn’t prevent them entirely: out of the 491 votes, 310 were deemed valid after an objective review.

The new system tracked statistics to get [more insight into voter behavior](https://medium.com/stellar-community/scf-lab-fund-1-retrospective-6fc4d9fa7ce7?source=collection_detail----89c348dcf743-----31-----------------------): of the ‘valid’ 310 voters, the average time spent selecting and confirming votes was a mere 90 seconds. Also, the percentage of votes from users who voted for all credits on one project was very high. This indicated that most voters were likely friends and family of the projects who didn’t read the proposals and simply voted for their friend.

The mechanics of flaggable quadratic voting (FQV) produced the intended result of a more logarithmic sentiment distribution versus a stagnant linear one but did nothing to prevent voter manipulation. Also, the inherently complex system was difficult to understand, and many of the ‘real’ voters wondered if they had voted correctly. A lot of time and effort was spent building a complex voting system that did not make much of a difference in the end.

Also, votes were heavily influenced by the number of votes a project had already received. Voters wouldn’t only upvote the projects they liked but also downvote projects that, in their opinion, already had too many votes. While initially seen as essential to express people's thoughts, many community members questioned the use of ‘negative sentiment’.

### **SCF#7 - The Seed Fund for businesses looking to scale**

Even though we learned a ton in the Lab Fund, the Seed Fund (SCF#7) was a real game changer for SCF history. This fund supported many projects still successful today with hundreds of thousand dollars each. Its first round opened on January 18, 2021, when penny stocks skyrocketed, and the bull market was in full swing. The competition was fierce, with 58 great submissions! It was by far one of the best competitions in terms of the sheer number of high-quality entries.

After two months of deliberation, a [panel of 20 judges narrowed the field to eight finalists](https://medium.com/stellar-community/announcing-stellar-community-seed-fund-1-finalists-3e9e95d41793?source=collection_detail----89c348dcf743-----22-----------------------) (not the 3-5 originally planned due to a four-way tie for fifth place). Learning from the Lab Fund, the team made necessary, although unannounced, changes to open up voting to only a select group of SDF and community members (about 50 handpicked at the time). This abrupt decision-making received some pushback but ultimately resulted in a better and fairer approach than all previous SCF rounds.

Each of the eight finalists walked away with $200K-350K worth of XLM, amounts SCF had never given away before, setting the tone for yet another iteration of community funding.

## **SCF 3.0 - Discord, budget requests, and entrepreneurial focus**

***SCF #8 - 11***

After much feedback collection and internal and external discussion, a renewed framework for SCF was born. Tyler officially handed Anke Liu, Program Manager at the Stellar Development Foundation at the time, the SCF baton as he shifted focus to Stellar Quest. Heading SCF’s execution and strategy became one of her key responsibilities.

In contrast of previous SCF rounds, SCF 3.0 focused efforts to other areas besides preventing voter manipulation:&#x20;

* To ensure projects received a reasonable funding amount based on their project scope, entrants self-select their project budgets in USD (the final payout was still in XLM, but this made budgets easier to reason through).This idea was adopted from a proposal by Nebolsin, a valuable community member.&#x20;
* Instead of going through nomination and final voting phases, submissions must pass a selection panel before reaching the community, distilling the total amount of submissions to a manageable number for reviewers and voters.&#x20;
* To build on the voting method of SCF #7, only a select set of community members were able to vote. These individuals are referred to as verified members and need to provide proof of interest in beneficially growing the Stellar ecosystem through an open application. Instead of complicated quadratic voting, voting was simplified to a simple ‘yes or skip’ vote for each proposal and budget: “Does this project deserve the budget it’s requesting?”. To sort any ties, voters could also rank their top three favorites.&#x20;
* To accommodate smaller and larger projects, entrants could choose from two submission form templates: one more detailed for full-fledged businesses and another more simple for post-hackathon projects.&#x20;
* Instead of communicating on Keybase, a brand-new [Discord server](https://discord.gg/stellarcommunityfund) was set up to provide easier community access and organize discussions.

### **SCF #8 + #9 - Gaining traction**

The new changes worked: [SCF#8 received 68 submissions](https://medium.com/stellar-community/announcing-the-winners-of-scf-8-d3d31167a52d) and [SCF#9 received 80](https://medium.com/stellar-community/announcing-the-winners-of-scf-9-db1e0c770e54?source=collection_detail----89c348dcf743-----10-----------------------), an increase in 280% from the 2020 SCF rounds!

Before SCF #9’s submission deadline, SDF held two exciting events: 1) the first Blockchain Bootcamp to support Stellar-based fintechs operating in Africa, and 2) a virtual Techstars Startup Weekend Latam with Stellar and Visa aiming to boost innovation in Latin America. The majority of participants in both events applied to the Stellar Community Fund, which led to an increase in diverse participation.

The last two SCF rounds of 2021 funded long-lasting projects including [Alfred Pay](https://communityfund.stellar.org/projects/alfred-pay), [GetPaid](https://communityfund.stellar.org/projects/getpaid),  [Quidroo](https://communityfund.stellar.org/projects/quidroo), [Stellar Global](https://communityfund.stellar.org/projects/stellar-global), [SkyHitz](https://communityfund.stellar.org/projects/skyhitz), [Tip Me](https://communityfund.stellar.org/projects/tip-me-the-global-tip), and[ xBull Market](https://communityfund.stellar.org/projects/xbull-market) as well as [several SDKs and tools](https://communityfund.stellar.org/projects?tab=round-9). But you don’t need to win the SCF to gain value- bootcamp participant and previous SCF candidate [Stax](https://communityfund.stellar.org/projects/stax-africa-s-offline-payment-superapp) recently received a [Matching Fund Grant ](https://stellar.org/press-releases/fintech-stax-gets-additional-backing-from-stellar-development-foundation-to-build-affordable-borderless-payment-solution-in-africa)of $500k because of their experience! The increase in both quality and amount of submissions wasn’t the only win: Discord helped the SCF become more organized, allowing for more project-specific discussion and feedback conversations, which increased the overall community participation and size. The SCF server grew to almost 1,800 members, a \~235% increase from the \~500 members on Keybase.

### **SCF #10 - Pitching projects to the community**

In February of 2022, submissions for SCF#10 opened. In-person events were officially a thing again, and SDF hosted and sponsored conferences, hackathons, and bootcamps across the globe during the springtime. As a result, 152 companies and developers submitted to SCF #10 and 44 were selected to move forward as candidates. This round introduced [Candidate Pitches](https://medium.com/stellar-community/scf-10-candidate-pitches-7e5c137df858), where the Stellar community had the opportunity to interact live with candidates during five pitch sessions. Almost all SCF #10 candidates presented their Stellar-based solutions in a matter of minutes, and community members provided support, asked questions, and gave feedback. A new record of community engagement on the SCF Discord!

\
Since SCF #10 had an unprecedented amount of high-quality projects, the pool amount was doubled from the originally planned 6M XLM to 12M XLM to support the community’s choices. This decision increased the annual award pool to up to 24M XLM, and awards were adaptable to the fluctuating submission quality and amount. After two weeks of deliberation, a panel of 52 judges drawn from both the SDF and the Stellar community and ecosystem [voted to award 15 projects](https://medium.com/stellar-community/announcing-the-winners-of-scf-10-317a7da78209) their requested budget, awarding a grand total of over 10.5M XLM. Winners included [Beans App](https://communityfund.stellar.org/projects/beans-app), [The Blue Marble](https://communityfund.stellar.org/projects/the-blue-marble), [SmilePay](https://communityfund.stellar.org/projects/smilepay), [Sentit](https://communityfund.stellar.org/projects/sentit-2), [Link](https://communityfund.stellar.org/projects/link), and a [set of useful SDKs, tools, and innovative approaches to games, NFTs, and DeFi](https://communityfund.stellar.org/projects?tab=round-10).

### **SCF #11 - Renewed guidelines and community-driven bootcamp**

During the selection phase of SCF #10, many projects put a lot of work into their submission but were deemed ineligible to participate. In SCF #11, the team worked to improve guidelines to set up future submitters for success, and from that, the [SCF Handbook ](https://stellar-development-foundation-1.gitbook.io/stellar-community-fund-handbook/)was born: a source of truth document for everything related to the Stellar Community Fund, including all information, rules, and recommendations for project submission and community participation.

Previous bootcamps successfully led high-quality submissions to the SCF, but it was relatively difficult for them to gain popularity with voters, causing some to lose confidence. So in SCF #11, the bootcamp element was integrated into the program, and selected SCF #11 candidates can participate in a [virtual bootcamp](https://communityfund.stellar.org/bootcamp) from November 1–4, 2022. Bootcamp participants will work with SDF and Stellar ecosystem members to define a problem, storyboard a solution, and develop a rapid prototype before getting feedback from the Stellar community.

Since verified members provide critical input and decide how to allocate funding to Stellar-based projects, the team expanded its efforts to grow, diversify, and engage the verified member panel. Verified members were able to join the submission screening selection panel and provide technical and facilitator support in the [SCF#11 Startup Bootcamp](https://communityfund.stellar.org/bootcamp).

As demonstrated in previous SCF rounds, funding isn’t the only thing candidates walk away with from SCF: the program also unlocks opportunities for continued development and growth. The team will continue to expand efforts to get (select) candidates connected with support from SDF’s Partnerships team, other SDF grants (Marketing, Infrastructure, etc.), and external accelerators, incubators, and investors.

## **SCF 4.0 - Bigger, Better, Faster, Soroban**

***SCF #12 - 19***

The largest change to the Stellar codebase resulted in the largest change in SCF thus far. The arrival of smart contracts on Stellar (Soroban) with its nearly infinite possibilities for innovation spurred SCF to over 5x award amount, as well as awarded projects versus previous years. As part of the $100 million Soroban Adoption Fund, [the 4th iteration of SCF was designed](https://stellar.org/blog/ecosystem/stellar-community-fund-4-0-bigger-better-faster-soroban) to create even *more* fertile ground to allow projects building on Soroban to sprout, grow, and blossom. The Stellar Community Fund's main goal shifted to build the [Minimum Viable Ecosystem for Stellar's new smart contract ecosystem](https://stellar.org/blog/developers/building-sorobans-minimum-viable-ecosystem-pt-2).

Significant changes had been made to make this major ecosystem growth possible:

* **Increased Round Frequency:** SCF moved from bi-annual to monthly, effectively speeding up round frequency by 6 times.&#x20;
* **Removing Upper Cap on Funding Pool:** The upper limit each round was lifted to remove the competition aspect from SCF and allow for more flexibility for varying inbound per round.&#x20;
* **Proof of Intent:** Projects could request up to $150K in XLM\* to fund development for \~3 months, and any eligible project was accepted by a panel consisting of both SDF and community members to receive 10% of their requested budget (also referred to as Proof of Intent). Upon finishing those deliverables, the project was to go through Community Vote for the remaining 90%.
* **Community Vote became non-determinitive, but onchain:** The simple voting system used in prior rounds didn't always prove effective in determining which projects should receive funding. This was a large risk perceived in order to grow Soroban's ecossytem. To reduce this risk, Community Vote lost it's determinitive power to solely signal award allocation. On-chain voting allowed the community to have transparency in the voting process, while keeping the individual voters’ identity hidden.
* **Changing Platform**: Moving award management to a dedicated platform (Submittable) to streamline operations.&#x20;
* **Move to the Stellar Developers Discord**: To provide improved developer support to projects submitting, the SCF Discord moved over as the 'Community Fund' category to the [Stellar Developers Discord](https://discord.gg/stellardev).&#x20;

### SCF #12 - Pilot Round

The first round with this new structure (SCF#12) was a soft-launch on January 23, 2023, invite-only pilot to test the new structure in advance of the public launch of the updated program on February 8, 2023 with SCF #13. 24 projects our of 30 invited submitted in this first round, mostly consisting of individuals and teams who've shared interest in the public form posted late 2022, as well as those from the Sorobanathon hosted in late 2022.&#x20;

Review was done by 12 panelists (8 SDF members and 4 verified members), which approved 16 submissions, which were subsequently awarded with their 10% payment, totaling 1,502,914.58 XLM, valued at the day of payment of $134,433.30.&#x20;

Distributed decision in award allocation is a must in SCF to allow for a fair and transparent review process, but is not always the most efficient. The new review process to balance the two, which has proven effective and we received mostly positive feedback from reviewers.

{% hint style="info" %}
To note: SCF 4.0's award distribution was a two-step process, so a later refactor of the [public statistics](https://communityfund.stellar.org/stats) counted the round when the full (or latest) award payment was distributed, so most awards of SCF #12 approved projects are recorded in SCF #13.&#x20;
{% endhint %}

### SCF #13 - Off to the Races!

On February 8th, 2023, SCF's new structure went public with SCF #13! 94 projects submitted (including 3 resubmissions from SCF #12). 13 out of 94 were selected and awarded with the 10% payment. Review was done by 29 panelists (15 SDF members and 14 verified members).

* **Too many reviewers**\
  SCF#13 had too many reviewers, which made matching of projects difficult. Reviewers also can have very different opinions on projects. It was also difficult to figure out what reviewers really meant in some cases, as half of the reviewers didn’t attend the Collective Review meeting.&#x20;
* **Favoring Progress**\
  Due to the new Proof of Intent structure, this was also the first round with Community Vote in the new structure: all of the projects (12) who submitted their Proof of Intent (10% completed deliverables) received the remainder of the budget awarded.&#x20;
* **Lower Community Vote**\
  Serious concerns were not expressed about the projects, but less than half of the voters (21) participated in Community Vote as opposed to previous rounds (\~50)
* **Many projects weren't ready to submit**\
  In the open-application version, too many submissions didn’t look closely enough into Stellar and Soroban and lacked detail especially of the technical integration.

### SCF #14 - 19

* **SCF #14:** 13 submissions out of 63 (42 new submissions and 21 resubmissions) were selected and awarded with the 10% payment. Review was done by 12 panelists (8 SDF members and 4 verified members). 13 submissions that were approved in SCF#12 and SCF #13 received their 90% payment based on voting outcome of 24 voters.&#x20;
* **SCF #15**: 20 submissions out of 72 (48 new submissions and 24 resubmissions) were selected and awarded with the 10% payment. Review was done by 12 panelists (6 SDF members and 6 verified members). 10 out of 12 submissions that were approved in SCF#13 and SCF #14 received their 90% payment based on voting outcome of 23 voters. In addition, this round saw the first resubmitting, already awarded project that was awarded their full requested budget after approval from community.&#x20;
* **SCF #16**: 14 out of 49 submissions (34 new submissions and 15 resubmissions) were selected and awarded with the 10% payment). Review was done by 12 panelists (6 SDF members and 6 verified members). 16 out of 17 submissions that were approved in SCF#14 and SCF #15 received their 90% payment based on voting outcome of 24 voters. Also, 3 resubmitting awarded projects received their full payment at once.&#x20;
* **SCF #17**: 8 out of 39 submissions (23 new submissions and 16 resubmissions) were selected and awarded with the 10% payment). Review was done by 12 panelists (6 SDF members and 6 verified members). 17 out of 18 submissions that were approved in SCF#12, SCF#14, SCF#15 and SCF #16 received their 90% payment based on voting outcome of 26 voters. Also, 1 resubmitting awarded project received their full payment at once.&#x20;
* **SCF #18**: 15 out of 59 submissions (43 new submissions and 16 resubmissions) were selected and awarded with the 10% payment). Review was done by 12 panelists (6 SDF members and 6 verified members). 9 out of 9 submissions that were approved in SCF#16 and SCF #17 received their 90% payment based on voting outcome of 18 voters. Also, 5 resubmitting awarded projects received their full payment at once.&#x20;
* **SCF #19**: 12 out of 63 submissions (37 new submissions and 26 resubmissions) were selected and awarded with the 10% payment). Review was done by 12 panelists (6 SDF members and 6 verified members). 14 out of 16 submissions that were approved in SCF#17 and SCF #18 received their 90% payment based on voting outcome of 31 voters. Also, 1 resubmitting awarded project received their full payment at once.&#x20;

Throughout these rounds, small iterations on guidelines, review, and submission form were done, including:

* Adding a verification tool to the submission form so developers can add their Discord (with requirement to join Stellar Dev Discord) and wallet to prove ownership of SQ / FCA00C NFT badges, i.e. knowledge of Stellar and Soroban.

### SCF Startup Camp

The SCF 4.0 version of the SCF Startup Camp was set up as a quarterly 5-day bootcamp organized by SDF and DFS Lab, and concluded two cohorts in 2023, supporting over 60 teams accross the globe, many of which later applied for awards. By providing guidance and support, the bootcamp offers a valuable opportunity for teams to refine their ideas and develop innovative solutions within the Stellar and Soroban ecosystems.&#x20;

Spanning two time zones, the bootcamp also boasted a remarkable lineup of 30+ mentors, comprising experienced developers, industry veterans, and successful entrepreneurs. These mentors generously shared their expertise, guided participants through challenges, and imparted invaluable knowledge about launching and scaling successful startups.

* [April 2023](https://stellar.org/blog/developers/empowering-global-defi-innovators-recap-scf-startup-camp)
* [August 2023](https://stellar.org/blog/ecosystem/sdf-x-dfs-lab-blockchain-startup-camps-are-here)

## **SCF 5.0 -** Empowering Community Governance

***SCF #20 - Current***

Two types of awards were introduced to reduce issues experienced with the earlier Proof of Intent model: a one-time Activation Award up to $50K decided by the selection panel for first-timers to build an initial MVP in 1-1.5 months, and once the activation deliverables were deemed complete, the project can request a Community Award up to $100K in XLM to further build out their project in the following 2-3 months.

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. \
\
A new user dashboard and redesigned website were added to improve user experience, both for submitting projects and reviewing community members.

The SCF team expanded with Gemma, who gradually took over day-to-day operations of the fund from Anke. With the additional internal bandwidth on SDF, SCF was able to i.e. restart [round recap blogs](https://medium.com/stellar-community/scf-20-recap-88ef88935257?source=collection_detail----89c348dcf743-----5-----------------------) on the Stellar Community Medium.

***

## 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](https://discord.gg/stellardev) 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](http://discord.gg/stellardev) (and make sure you’re opting in for the Community Fund role) and become [SCF verified](https://stellarcommunityfund.gitbook.io/scf-handbook/community-involvement/governance/how-to-become-verified).

***

<figure><img src="https://4004211959-files.gitbook.io/~/files/v0/b/gitbook-x-prod.appspot.com/o/spaces%2F4IGHJeoWQzABoSBkKBxt%2Fuploads%2Fsi7V4VNRQKSyARr7phwQ%2FFrame%204%20(3).png?alt=media&#x26;token=f2b9ae2d-0d50-4171-befa-ffcfcec8c9b0" alt=""><figcaption></figcaption></figure>

{% hint style="info" %}
If you've been part of the Stellar Community for a while and some of what is documented here seems inaccurate, let us know through the [Stellar Developers Discord ](https://discord.gg/stellardev)or email us at <communityfund@stellar.org>. We strive to have a complete, candid, and transparent historic overview we can learn from as we work on future iterations of SCF.&#x20;
{% endhint %}

[^1]:
