PGF System

Public Goods Funding (PGF) is Namada's built-in mechanism for funding ecosystem development. This guide explains how it works.

What is PGF?

PGF is a decentralized treasury system that:

• 💰 Funds ecosystem development
• 🗳️ Is controlled by token holders
• 👥 Is managed by elected stewards
• 🔄 Operates continuously

Why Public Goods Funding?

The Public Goods Problem

Public goods are:

• Valuable to many
• Hard to profit from directly
• Underfunded by markets

Examples in crypto:

• Core protocol development
• Educational content
• Open-source tools
• Community programs

The Solution

PGF creates sustainable funding:

Protocol inflation → Treasury → Community decides → Funded projects

How PGF Works

Funding Flow

┌─────────────────────────────────────────────┐
│           PROTOCOL INFLATION                │
│         (New NAM created)                   │
└─────────────────┬───────────────────────────┘
                  │
                  ▼
┌─────────────────────────────────────────────┐
│           PGF TREASURY                      │
│    (Accumulates over time)                  │
└─────────────────┬───────────────────────────┘
                  │
        ┌─────────┴─────────┐
        ▼                   ▼
┌───────────────┐   ┌───────────────┐
│   STEWARD     │   │  GOVERNANCE   │
│   GRANTS      │   │  PROPOSALS    │
│   (fast)      │   │  (community)  │
└───────┬───────┘   └───────┬───────┘
        │                   │
        └─────────┬─────────┘
                  ▼
┌─────────────────────────────────────────────┐
│           FUNDED PROJECTS                   │
│   Development, Education, Community, etc.   │
└─────────────────────────────────────────────┘

Two Paths to Funding

Path	Speed	Size	Approval
Steward Grants	Fast (days)	Smaller	Steward decision
Governance	Slower (weeks)	Any size	Community vote

PGF Stewards

Role

Stewards are elected community members who:

• Manage portions of the treasury
• Make funding decisions
• Represent the community
• Are accountable to voters

Election

Stewards are elected through governance:

1. Candidates announce
2. Community evaluates
3. Proposal submitted
4. Token holders vote
5. If passed, steward is elected

Powers & Limits

Can Do	Cannot Do
Approve grants from their allocation	Spend treasury arbitrarily
Prioritize certain projects	Override governance decisions
Represent community interests	Keep funds for themselves

Accountability

Stewards must:

• Report on funded projects
• Justify spending decisions
• Face re-election
• Can be removed by governance

Funding Types

Continuous Funding

Ongoing payments for sustained work:

Project: Core documentation maintenance
Funding: 500 NAM/month
Duration: Until governance stops it

Every epoch, 500 NAM flows to the project

Use cases:

• Core team salaries
• Infrastructure costs
• Ongoing maintenance

Retroactive Funding

One-time payment for completed work:

Project: Built a useful tool
Work: Already done
Request: 2000 NAM recognition/reward

Use cases:

• Completed projects
• Past contributions
• Bounties

Treasury Economics

Income

The treasury receives:

• Portion of block inflation
• Portion of transaction fees
• Community donations

Spending

Spent on approved:

• Development projects
• Education initiatives
• Community programs
• Infrastructure
• Security audits
• Marketing

Sustainability

If: Income > Spending
Then: Treasury grows (future security)

If: Income < Spending
Then: Treasury shrinks (need to reduce spending)

Governance balances spending vs. sustainability.

Governance Process

Proposal Types

PGF Funding Proposal

{
  "type": "PGF",
  "continuous": [...],  // Ongoing payments
  "retro": [...]        // One-time payments
}

PGF Steward Proposal

{
  "type": "PGFSteward",
  "add": "tnam1newsteward...",  // Or
  "remove": "tnam1oldsteward..."
}

Voting

Same as other governance:

• Quorum: 40% of staked NAM
• Threshold: 66.67% approval
• Period: ~5 epochs

Applying for Funding

Steps

1. Develop idea - Clear project concept
2. Community discussion - Forum + Discord
3. Choose path:
   • Small/fast → Contact steward
   • Large/community → Governance proposal
4. Submit - Proposal or steward application
5. Advocate - Campaign for support
6. Deliver - If funded, do the work
7. Report - Share outcomes

See Apply for PGF for detailed guide.

Example Funded Projects

Development

• Protocol improvements
• SDK development
• Tool creation
• Integration work

Education (like this wiki!)

• Documentation
• Tutorials
• Video content
• Translations

Community

• Meetups and events
• Ambassador programs
• Community moderation
• Support channels

Infrastructure

• Public RPC nodes
• Block explorers
• Faucets
• Testing environments

Checks and Balances

Against Misuse

Protection	How It Works
Voting	Community approves spending
Steward limits	Can't spend entire treasury
Transparency	All spending on-chain
Accountability	Poor performers removed
Competition	Multiple stewards

Governance Oversight

Token holders can:

• Elect/remove stewards
• Approve/reject large spending
• Change PGF parameters
• Monitor treasury

FAQ

Where does the money come from?

Protocol inflation and fees. New NAM is created and allocated to PGF.

Who decides what gets funded?

Community through governance, and stewards through their allocations.

Can anyone apply?

Yes! Both individuals and teams can apply for funding.

How much funding is available?

Varies based on treasury balance and governance decisions. Check current treasury on explorer.

Is funding guaranteed?

No. Projects must be approved through governance or steward decisions.

Resources

• Apply for PGF
• Governance Basics
• Create Proposal
• Forum - Proposal discussions