A Funding Readiness Framework for ReFi and Beyond
Trinity Morphy summarises the results of the research sprint the CARBON Copy team conducted as part of the Allo Research Quest.
By Trinity Morphy | November 25th, 2025
In July of this year, Allo Capital launched the first edition of its six-week research sprint where selected participants explored practical questions about capital allocation from the allocator’s perspective. That program became known as the Allo Research Quest (ARQ).
Before ARQ kicked off, we had been having conversations about the growing funding drought in Web3 regenerative finance (ReFi). Many builders were struggling to raise capital, and we wanted to understand why. After weeks of comparing notes, one thing stood out: the ecosystem didn’t have a clear way to measure funding readiness.
We define funding readiness as the point where a ReFi project is genuinely prepared to move toward financial sustainability with the help of external capital. During the early ReFi boom, many projects rushed to digitize carbon markets. They raised funds fast but most failed just as fast, leaving behind skeptical funders and a dented reputation across the space. ReFi went from being a funding magnet to a grant-dependent ecosystem.
Yet even now, years later, there are solid projects trying to scale but struggling to attract capital because of that lingering perception. That is what pushed us to design a Funding Readiness Framework within ARQ to help funders evaluate projects objectively without relying too much on intuition or bias. The framework gives each project a clear percentage score that communicates how ready it is to responsibly take on funding. This article walks through how the framework was developed, the thinking behind its design, its potential use cases, and where we go next.
Challenges and gaps
The ReFi ecosystem has always been full of vision and enthusiasm but not enough shared structure. Many projects have the right mission but lack a clear sense of how to prove their operational maturity. Funders, on the other hand, often make decisions based on relationships or vibes, not consistent signals.
Through ARQ, we realized that the ecosystem has three big gaps.
- There is no reliable way to signal which projects are truly ready to handle larger, growth-level funding.
- There is no reusable document or application that projects can submit across multiple rounds or platforms as a single proof of readiness that evolves with them.
- There is no collective memory around project evaluations. Each funding round existed in isolation, so there was no shared understanding of what readiness actually looked like.
These gaps hurt both sides. Funders have no objective signal to trust, and founders have no roadmap for what readiness even meant. The Funding Readiness Framework is designed to bridge that divide and make readiness something visible, trackable, and comparable.
The research process
The framework took shape over six weeks of structured research under ARQ. We started by mapping out what funding readiness could mean in practical terms. To do this, we reached out to grant round operators, ReFi power users, and impact market places. Everyone had slightly different definitions of readiness, but some patterns emerged. Funders valued transparency, traction, strong teams, and governance. They cared about how projects used funds, how they measured impact, and whether they had a realistic path to financial sustainability.
The framework
The Funding Readiness Framework is a structured assessment tool designed to evaluate how prepared an impact project or product is to receive, manage, and effectively utilize external funding to achieve and maintain financial sustainability. It enables projects to identify strengths and gaps within their internal operations while also serving as a standardized signal to potential funders about the project’s operational maturity and capacity for responsible capital allocation.
The Funding Readiness Framework ended up with eight key categories, each representing a pillar of project maturity:
- Problem Identification: How clearly does the project define and prove the problem it is solving?
- Product/Service: What is its core value proposition, and is it ready to handle growth?
- Users: Does it understand its market and demonstrate real user traction?
- Impact: Can it show measurable, verified impact and explain how more funding would scale that?
- Team: Does it have the right people, reputation, and governance to deliver?
- Finance: Is there transparency, a path to sustainability, and a history of responsible fund management?
- Risk: Has it identified key risks and prepared mitigation strategies?
- Marketing: Is there a clear story and a strategy to grow its community or user base?
Projects are limited to 300 words per answer to encourage clarity. Evaluators read each response and rate the statement. The combined results produce a percentage score showing how funding-ready the project is.
When we tested it, patterns appeared immediately. Project A scored high for readiness because of strong governance and consistent traction. B and C scored lower, showing areas to improve around transparency and internal systems. Those differences confirmed that the framework could distinguish readiness levels effectively.
We also realized readiness is not static. Projects evolve, and their readiness score should evolve too. That is what makes this framework valuable. It can serve as a living reflection of progress over time.
Implementation and use
The framework was never meant to stay as a research artifact. The vision is to turn it into a living tool for any ecosystem, a platform where projects, funders, and ecosystem partners can interact around a shared definition of readiness. In practice, projects can use it to build a reusable readiness profile that they update as they grow, funders can use readiness scores to pre-screen applicants, reducing noise and improving allocation efficiency, while ecosystem builders and researchers can analyze aggregated data to identify what correlates most with long-term sustainability.
The long-term goal is to turn the framework into a Funding Readiness dApp, a public, open-access platform where projects can submit and evaluators can score asynchronously. Over time, it could integrate with existing ReFi infrastructure such as Gitcoin, Octant, or Karma GAP, creating a unified signal across funding ecosystems.Instead of every platform reinventing the wheel, this framework could become a signalling mechanism that communicates one thing clearly: this project is ready to scale impact responsibly.
Reflection and design decisions
A few big lessons stood out during the process:
- Keep it simple: Specific questions often boxed projects into narrow answers. Broader questions allowed projects to reveal how deeply they understood themselves. Sometimes, what a project includes or leaves out says more than the answer itself.
- Separate readiness from application: The framework is not a grant form. It does not ask, “What will you do with the funding?” It focuses on whether the project is prepared to handle it.
- Balance speed of completion and depth of submitted details: The biggest paradox was finding that middle ground. Too much detail made the framework unusable, too little made it meaningless. We found a working rhythm where depth served clarity, not complexity.
By the end of the sprint, the framework had matured into a practical, repeatable tool that both sides, funders and builders, could understand and use.
Conclusion
The long-term vision is simple: make readiness visible. By turning subjective project evaluations into a consistent signal, we can rebuild trust between funders and builders, reduce friction across funding processes, and attract more funding to ReFi.