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Of course grants distort the market, that is their purpose. People giving money have preferences, or at least grantees try to guess them and act accordingly, even subconsciously.

I really like this trend of people thinking more deeply about it. There is an important control given to the granters.

Philanthropy is tainted with money/power dynamics, even with good intents, which I don't assume.

Unfortunately the more funded bitcoin projects are in the spotlight, the less non-funded projects are.

There is also the possibility of hiring great talents uniquely to keep them busy so they cannot create a rival project.