[2024] Web 3 Public Goods Funding In 2025 W/ Vitalik

Transcript

Welcome to the green pill.network podcast. If you just joining us, we're building a coordination in network society of thousands of hackers, dreamers, and doers using crypto to bring positive sum digital systems to the world. This podcast features the people who are doing it. If you want to learn more, you can visit our website at greenpill.network where you can download the green pill book for free. Join the discord and become a member of your local greenpill.network chapter. Already, this is an episode that I did with Vitalik Buterin about web3 public goods funding. We start in this episode talking about why public goods matters to Vitalik, why he as the founder of Ethereum imbued public goods into his thinking and into his writing and in in some ways to the design ethos of the

Ethereum ecosystem. We talk about why public goods are good and how Ethereum could eventually export public goods to the world and how public goods are not only a competitive advantage for the Ethereum ecosystem, but also potential way that we could export public good to the world. My goal in doing this episode was to figure out where to direct public goods minded builders in the Ethereum ecosystem to work on in 2025. Um, I did an episode a year ago with Vitalik on the state of public goods funding in 2023 and then the previous year we did an episode on public goods funding in 2022 and so I think that we're creating a body of work that help direct builders to the highest leverage opportunities and just picking Vitalik's brain about

this stuff was my goal with each of those three episodes. Vitalik's third time on the green pill podcast. Super thankful that he's dedicated time to this cause and to helping to direct the web3 builder energy towards the highest public goods and the highest leverage stuff that's happening in this uh ecosystem at 2025. So, this is the first part of a two-part series. In this first part, I review with Vitalik what's exciting about web3 public goods, why public goods. We do our best to provide actionable directions for web3 public goods funders for what to focus on when building public goods and funding public goods in 2025. The next voice you hear will be myself saying hi to Vitalik on

part one of this two-part series with Vitalik. So, I hope you enjoy. Hi Vitalik, how are you? I'm good. I'm glad to be back. How are you Kevin? I'm pretty good, thanks. Excited about 2025. So, as we uh cross into 2025, I wanted to do an episode with you to hear what you're most excited about in the web3 and public good funding space. And hopefully you can direct some builder energy towards those ideas. So, the objective of the episode, Vitalik, is that I'd love to direct builder energy towards building web3 public goods uh on as of 2025. And uh I want to get to what's current for you in terms of web3 public goods, but first I want to start

with why. I like starting with why cuz it tees out the what and the how. Why are public so important to you, Vitalik? I think the uh basic summary of the answer is, right, that for the Ethereum ecosystem and even more broadly for human civilization uh to thrive, there's a lot of different things that need to be done that we all depend on. And some of those things funds themselves, but other things don't, right? So, if you think about a simple example like say the laptop that's I'm using to record this podcast with you right now, right?

That laptop is it's definitely far from being a pure private good, right? Because there's definitely a lot of knowledge information research and things that go into it, but it's like more than 50% probably a private good, right? A laptop is a thing where if you make it, you can sell it to me, and if you sell it to me, then I buy it, and I buy it, and me buying it is the thing that actually gives you the money to pay for creating it. And at the same time, I only buy it if it's useful to me, and if you make something that's uh totally useless to me, then I'm not going to buy it, right? And so, you just have this like very nice alignment where you have one sufficient incentive to actually

create things at all, and two, you have good incentive to create things that are valuable instead of creating things that are not valuable, right? So, that's one side. Now, let's take an example that goes off somewhere in the opposite end of the spectrum, right? Uh take like open-source software libraries, right? With uh open-source software libraries, the uh challenge is that the one, they're just much harder to monetize, right? Uh so, if I make an open-source software library and I publish it and I say, "Hey, here is a thing that does something very important in could be cryptography, could be Ethereum, could be like what, user interfaces, could be AI, whatever. Then, anyone can just go

and download and use it, and um they don't have to pay for it. And like the fact that they don't have to pay for it is actually really good, right? Because uh if there was like a floor price that I set, then like anyone who benefits from it but doesn't benefit from it enough to be able to pay the floor price would not be actually uh be able to benefit from it, right? And uh you know, that's called deadweight loss, and that would be really uh tragic in itself, right? And then on top of that, you know, it makes it much harder to innovate on top of it, it makes it much harder to even decide whether or not you want to use a thing to try things out.

There's a lot of transaction costs. So, on the other hand though, if you make an open-source library and say, "Okay, it's free people to use, people can build on top of it, people can uh make other programs that depend on it." Like by default, I can't make any money from it. And uh now, then the question is, well, how do these things actually get funded or incentivized or you know encouraged or whatever we were where we want to use maybe the best word is like motivated, right? Like why why do these things get done at all? And there's a certain level that can be done entirely through intrinsic motivation, right? And I think you know Wikipedia is kind of the you know the great crown of success of

intrinsic motivation, I think, right? There's a huge amount of resources on a huge number of topic that are just put out there by enthusiasts and often even quite sophisticated enthusiasts and they don't expect compensation, just a hobby and they go and do it. But there's other things that don't really fit into that model, right? And things that require sophisticated groups of people that have to work together over long periods of time, cooperation, persistence, even you know like physical resources if you get into AI training, for example. Like you're not just going to get that off of a volunteer here, And then the question is, well, who funds it? And the challenge is like you have a large number of different group that all benefit from the thing existing, but

there's no single one that actually captures a large share of the benefit, right? And so it's like even if everyone benefits from it collectively, from each individual actor's point of view, they don't benefit enough to actually be willing to fund the thing, right? And then on top of that, there's this challenge that, well, let's say we go and set up like some kind of central body, right? And you know, this could be a government, this could be like everyone putting things together into a pot. This uh you know, could be someone even launching a meme coin, it could be all kinds of things, right?

Then the challenge is, well, okay, you have this pot and then how do you actually decide like what are the useful things that need to be funded the most, right? And there's like a lot of ways that in which that can also break, right? There's a lot of ways in which like the game of convincing people that your thing is useful in a very far more abstract sense is like a game that's very gameable, right? The nice thing about me buying the laptop is like the connection is super direct. If the laptop is useful to me, like I have experience with laptops, I know if it's useful to me, and I could go and buy it.

And then if I yeah decide that it actually yeah doesn't work like the uh ASUS laptops that I bought in uh January got uh played around with some uh more local um AI-ing on the GPU and uh the motherboard ended up frying literally three times over the course of 2 months. Then, you know, potentially it has a risk of getting a negative review, potentially on a podcast such as this one, and uh you know, there is like negative feedback in the market, right? Um so, you know, the company is ASUS, ASUSTeK. Please, guys, do better next time. The feedback it comes from this like very near-mode thing. It's like very concrete thing. Like, is this thing useful to me, right? And for public goods, like you don't get that feedback, right? And it's very easy to get into

this like very airy-fairy, almost like religious, and abstract lens where you try to think about how valuable something is versus how valuable other thing other things are. And especially when you think about the contribution of a very small piece to a very big hole, right? Like, imagine, you know, you have a very big hole that a lot of people care about, like say the environment, and then you start thinking about like here is a one very specific project that reduces the pollution in a couple of uh specific uh rivers uh in uh the middle of Bosnia, right? And like, how do you actually value this? And uh like, these problems are hard, right? And so, the the reason why I think these things are

especially yeah important in Ethereum is because one, our ecosystem is a completely digital ecosystem, and in the digital sphere, public goods tends to be even more prevalent than uh they are everywhere else, right? So, you know, I think it's not at all a coincidence that when I gave you an example of a of a private good, I said a laptop, and a laptop is like a very hard physical thing, right? And there definitely are physical things that are public goods too, right? And you know, the environment is an example, right? But when you go into the digital world because everything is copyable like that, blob just gets dialed up to 11, right? And I think there's also another more subtle reason which is that like so I wrote this sub blog post I

think about a year ago, forget exactly when, and it was called the revenue evil curve, and in that post I argued a bit against the traditional economist grading of public goods as being about being non-rivalrous and being non-excludable, right? And the thing that I argued is basically that the thing that really matters is is the thing a thing that has the property of that any attempts to make money off of it just like inherently pollutes the thing, right? So, if you think about a podcast for example, right? Like it's going to be freely available, people can go and download and listen to it, right?

But there are ways to get money from it that, you know, things like ad sponsorships, and you know, potentially if you want to go even more extreme, you could you could pay pay walled and there's like a curve, right? And the a lot of business models, especially the crazy successful business models, they depend on things like walled gardens and lock-in and domination, right? They depend on like really basically holding a sword over users' heads and being able to raise prices, being able to lock out competitors, being able to change the rules of your system, being able to do all kinds of things that are like socially harmful that and just generally

like becoming this very centralized actor that has a lot of political control, and we as a crypto ecosystem are precisely against that sort of thing, right? We're in favor of decentralization. We're in favor of enabling cooperation without domination. Like that's exactly to me what the crypto space is about, right? And I think it's like exactly that synergy, right? Like you know, you can say well, you want to avoid domination, but you don't care about cooperation. Um and that's like a kind of different ideology, but then I think I in practice it just ends up decaying into just people becoming completely crazy pretty quickly, right? Because the reality is that actually maintaining a civilization

or even a piece of a civilization requires huge amounts of cooperation, right? And blockchains are about cooperation without domination. Open source software is about cooperation without domination. The entire region space is about cooperation without domination. These are all like like this is the core of what we're trying to do. And the challenge is then well, if domination is the usual source of successful business models, then and that's exactly the thing that we don't like, then there's like a lot of stuff that needs to be motivated. We have to scramble to find better ways to motivate people to actually get produce those things and to produce those things in ways that actually are open, right?

And to me really solving that problem and solving all of the different subproblems that I mentioned at the same time is like the core of this really hard puzzle that we're trying to figure out. Thank you. That was beautiful. I want to ask one more question about the why and then we'll get into the what. Do you think that public goods funding is a competitive advantage for the Ethereum ecosystem? Do you think that public goods funding is a competitive advantage for any ecosystem that does it? In so far as my my third of logic is that if you can cooperate without dominating, then that's going to help you win in the marketplace and therefore get more adoption.

I think absolutely. Um I think So there's two levels to this, right? Like the private versus public distinction as Glenn often says, right? It's ends up like it's a simplification and the real world generally has more than two levels. And if we want to like add just a little bit of nuance but still keep things tractable, we could say there's three levels, right? There's private goods, so like if I have it is and then it provides value to me. Then there is Ethereum-wide uh public goods. And then there's like potentially global public good, right? Ecosystems that are able to internally provide uh public goods uh definitely have a strong competitive advantage, right? Because if Ethereum is able to provide

Ethereum-wide public goods but Bitcoin is not able to provide Bitcoin-wide public goods, then like that makes uh Ethereum into a stronger ecosystem, right? And these are things that are not necessarily visible in the short term, right? But long term, you know, the effects compound. And I think the effects they always manifest themselves in two ways, right? One way is that if you have good funding, then you just have more stuff happening at all, right? And the second way is, well, if you have funding that does not depend on domination, then your ecosystem becomes less reliant on domination, right? And you know, there there are definitely big parts of the crypto space that are just totally comfortable with trusting everything to centralized exchanges and

uh you know, to people that just uh are happy trusting one guy because he looks trustworthy because he uh goes on panels with Bill Clinton and then uh you know, two years later it turns out that he uh had double spending relations with your assets and you know, it turns out you don't have your assets anymore, right? So you know, like actually if you want to avoid points of centralization and then enabling funding for things that don't require them is important and that improves the ecosystem's resilience, right? And resilience is like inherently a long-term bet, right? Like valuing resilience is like inherently this high conscientiousness thing where if you're

just like a fund chaser, then, you know, like resilience is not going to come naturally to you by default, right? Because what does chasing resilience mean, right? It's like if you think back to 2020 and 2021 when like big parts of the crypto space that were getting incredibly excited about Terra and Luna. And then uh in I think it was early 2022, like Anthem, like one of those Twitter influencers, had this that tweet where it said like something like, "Hey, why are those ETH guys always fading Luna, right?" And it's like the mentality is like, "Oh, you know, these are old grandpas and you know, over here we're having great fun and we're getting our 19% APY." But uh and uh you know, why are these curmudgeons just refusing this, right? And like it doesn't feel

fun while the numbers are going up, but then of course eventually Luna ended up just like crashing 100% and like anyone who had the volatile coin or the stable coin ended ends up completely screwed, right? You need conviction to really play that game, right? And support I think public goods are inherently more resilient. They increase the resilience of an ecosystem and they increase the resilience of an ecosystem precisely because they're all about creating things that are valuable and that meet people's needs without introducing ideas, central points of domination that also become central points of risk, right? So those are all things for where we're we're still talking about Ethereum funding Ethereum

internal public goods, right? Then the question is, well, is there value in Ethereum going out and funding broader public good? And there's definitely like a pragmatic limit to this, right? Like I think Ethereum as an organism going out and trying to save the whales does probably doesn't make sense because it's just uh like there's not enough of a thematic match. There's not enough of an expert community in Ethereum to be able to tell apart like actual whale saving from you know, virtue signaling, larping, or whatever, right? And like there isn't this kind of nice feedback loop of you know, the whale saving happens and then we're able to actually determine like was this successful or not, right? But there is a lot of things

that are bordering, right? So for example, if you think about operating system security, right? If a person's computer gets hacked, coins can get stolen from them. And so operating system security is upstream of Ethereum security, but at the same time Ethereum is not the only beneficiary of operating system security, right? And so there is this like very fuzzy boundary right of things that somewhat benefit Ethereum, but that also have these knock-on effects to other ecosystems. And I think my argument there for why we should keep support those things and judiciously is that I think it's good to be a good citizen. Like it's good to be an ecosystem that has good effects on its neighbors and you know, it's the

sort of thing that wins friends and that's sort of thing where you know, the costs definitely do come immediately, but the benefits often come from you know, places where I end up totally not expecting it. One more thought on the why and we'll get into the what, but my thought on the Ethereum funding the world's public goods had been that there's an ability for us to test gadgets where we can do cooperation without domination within the Ethereum ecosystem, use those public goods funding mechanisms to enhance the viability of our own ecosystem. Ethereum wins and then it starts to fund real world things like digital public goods like open source software we talked about a lot on our last podcast. And once we reach an escape velocity of there's such a competitive advantage

burgeoning around the Ethereum ecosystem. We can reach escape velocity and start to fund the world's public goods as Ethereum gets more adoption across the world. And that can be everything from saving the whales, dealing with people's everyday creating impact in their community and getting paid with it, paying their mortgages by receiving a crypto economic payment, which is you know, quite a different first experience that people would have with crypto than what they have right now buying some asset and some speculative asset. And so I guess I'm just wondering about this escape velocity theory if I could run that by you real quick.

What do you think about this us reaching escape velocity and then in 10 or 20 years funding more of the Ethereum or sorry, the IRL real world public goods. Yeah, and I think as we grow more and as we succeed more being able to support more is definitely a good thing. I think obviously there's a balance, right? And like we don't want to overextend the mission too early. In addition, I think one other thing that's really important to keep in mind, right? Is that there's two ways in which Ethereum public goods work can benefit the the wider world.

One way is that is of course we can go and support things in the wider world directly, but another way is just demonstration, right? We just show the world here is another way. Here is a way to be an active and energetic ecosystem that actually produces things that it collectively needs that are important and while avoiding all of the weaknesses of more traditional approaches to doing that that. And that's something that we can make itself as a public good and then not maximally open source the knowledge and even make an effort to go and spread the knowledge and then that's something that other people can go and apply as well, right? Like if some of

these public goods funding mechanisms that we're going to get into actually succeed and become very high quality at an Ethereum scale, there's no reason why you can't see a yet, you know, other corporate ecosystems, potentially, yeah, parts of governments eventually. And that even you know, like other kinds of you know, like new age internet tribes, you know, like whatever kinds of structures that you know, if you want to get into science fiction-y, yeah, you know, the governance of Mars or you know, like actually get, you know, using them beyond, right? So, yeah, demonstration value should not be underlooked.

Well, this concludes my questions about the what. Let's move on into the what. What are you excited about in public goods funding as we turn into 2025, Vitalik? First, let me list what I think the successes are, right? So, one success is that we actually do have an increasingly diverse set of public goods funding entities, right? And this includes the more traditional centralized ones, right? So, the Ethereum Foundation released a transparency report about a month ago, and there was a really nice pie chart, and the Ethereum Foundation was only a small share of all the treasury is available, and it was less than half of the amount that was spent this year, right? So, even including the centralized bodies, funding within the

Ethereum ecosystem is getting pretty distributed. But then also, if you start moving looking to mechanisms that are more interesting and then like more decentralized than just that you know, in org that has a board and that has staff, then we're actually starting to see growing success, right? So, obviously, Gitcoin has been doing rounds for a long time, and you know, it's been amazing to see you guys' growth ever since you know, we did the original round one, I think it was with a 25 key match back in like was it 2018? Then obviously, Optimism RPGF, and that's been continuing to grow. Then Octant is like right now, like they have Golem's

treasury in their mechanism, right? And that one's quietly pushing out quite a bit of money and it's not really being talked about much, but it exists. Then protocol guild and they're giving out quite a bit of money to Ethereum protocol researchers. Uh, so quite a lot of things are starting to already happen and I think that's good. And I think there the other thing that's good is like they're happening at enough of a scale that you can actually yeah, gather real world information. You can iterate, you can keep on improving these type mechanisms and so on, right? That part is all good. Uh, so let me yeah, get to what I think needs to be done. Uh, so I think the public goods funding problem,

it's always a two-part problem, right? And you know, economists are also going to say this, right? I think this is something like Alex Tabarrok has mentioned that many times, right? One problem is just how do you gather the money to fund things and another problem is how do you choose what things to fund? And those problems are both very important, right? So let me get to first of the question of how do we gather more funding in order to fund things, right? So I think so far within the Ethereum ecosystem, we've been relying on some degree of project and also individuals and a lot of one-off decisions, right?

So a lot of like one-off decisions to go and fund the rounds. Then I mean optimism, you know, making that public commitment that I think is like amazing. I'm just very shining exception, right? Generally it's like something where it's relatively individual actors are deciding to do it and not to do it and that's something that is limiting and I think one concern that I have is that it relies on idealistic energy that could eventually burn out, right? One of the ways in which idealism dies is if you just have a world where you just see a constant long running pattern where the idealistic people do the idealistic thing but then they just never get rewarded and then no one pretty much

even cares that they had did the idealistic thing, right? And the challenge is like if you just rely at individual donations to keep on doing things then like you always run the risk of getting into that hole, right? And then the other problem is like scale, right? The challenge that I see is that in the generally in the Ethereum ecosystem if you have like a really good and valuable idea and all you want is $300,000 to make a demo, you can generally find $300,000. But if you wants to go from a demo to something that's production grade and that can compete with other leading infrastructure then you don't need $300,000, you need $30,000,000. And the problem that we have right now is basically that once your scale flips

from the $300,000 level to the $30,000,000 level then the incentive structure basically flips from like being essentially full socialist kumbaya happy bubble to being like full on you know cutthroat like venture capitalist, right? Basically yeah the the challenge is like at the small scale you do have these incentives where you have like a lot of different funders and a lot of funders are motivated by what's good for the ecosystem and if you're a well-meaning person you can convince them of that you can get some money but then at the $30,000,000 level like it's all based on you know do you have a thing that has a business model and that there's basically not any any extrinsic incentive left to

like actually do things in a public good way instead of like solely transitioning into just being like a regular you know a dominator and money abstractor, right? And a big part of where the chasm is right now, right? Like the Ethereum ecosystem in general we're in the process of upgrading from making demos to making big live things that can make real world impact at a large scale and things that make real world impact at a large scale, like they need a larger amount of resources to get done, right? And so the question is how do you actually gather those resources? So, I have two like proposed solutions to this. So, one of them is that I think we need to explore hybrid for-profit non-profit funding options. And what I mean by that is funding options where people put in

money where they expect to make that money back even expects to make a return, but they are willing to take a small hit on the return in exchange for some medium level of assurance that they're funding things that are helping the ecosystem instead of harming it. And supporting something like that, like it can even be a selfish choice, right? Like if you're an Ethereum whale, then you know, you you yourself are heavily exposed to the Ethereum ecosystem and you want to support things that are good for the Ethereum ecosystem, right? And so exploring vehicles that are like profit-making that have a lot of the core aspects of VC funds, but at the same time have some kind of baked-in

structure that actually get like heavily pushes them to also support some other values, you know, it's open source, open standards decentralization being positive sum toward Ethereum, toward the world, like all of that. Things that I talked about in my post on making Ethereum alignment legible, right? And like making that hybrid is a challenge, right? I think in our heads we all have the example of Open AI, right? And you know, they started off being this idealistic non-profit that was funded because, you know, there's all these like really bad big AI companies that we don't want the big AI companies to control everything. And so let's make this a nice open alternative, but then as we saw what happened is that first they gave up

openness for safety and then they gave up safety for domination, right? And so now we have closed AI and you know, Elon who originally funded them is suing them, right? And so, like you really need to think about making those structures robust. So, that's solution one. Solution two is like actually institutionalizing and enshrining funding on some level, right? And so, there's a scale, right? And at the extreme end of the scale, you have something like Zcash, right? Where in Zcash, like you have 20% of the actual L1 block reward that just goes into public right?

Now, doing that obviously has a lot of challenges, right? And if you do that, then uh basically, yeah, you need to be super confident in the mechanism. The mechanism needs to be extremely legitimate. You're you know, taking um a big risk on the um you know, credibility and usability of the asset. So, there's like a lot of downsides in going that far, but at the same time, it's like breaking 20% of the block reward, which is a lot, right? But now, on the zero side side of that spectrum is like individual donations, right? One thing that I want to explore is that is like are there things in between that zero and one side of enshrinement that Ethereum as an ecosystem could really could consider to introduce, right? And uh so, like one

example that already exists is ENS, right? ENS, I would call it semi-enshrined in the sense that all the wallets support it. There's now a chain-specific EIPs or chain-specific address EIPs that are being designed around it. There's uh it's a default in this like very heavy and ingrained way, but at the same time, it's not an L1 core feature, right? But at the same time, like ENS, it has a DAO. It has its own source of funding. You have to buy domains. It has revenue. It funds things. I mean, that one it even ends up ended up having its own token, right?

And so, I would call that being like non-zero enshrinement. To just like throw out an idea, one idea I have is uh there's been a lot of discussion around the question of like should major Ethereum ecosystem players come together and basically make their own you know like not enshrine layer twos but sort of neutral layer twos, right? Like layer twos that only carry the brands of Ethereum and that don't try to like support some other interest. And so we saw you know Nethermind with their surge announcement is looking to push in that direction. Like I think that's interesting and I think that's like especially interesting for the category of rollups that are trying to like roll

basically be very minimal on the features just basically copy Ethereum and say no, we're based rollups. We're just copying Ethereum values. We're copying the exact EPM and we're scaling it, right? It's that's something that happens then like I personally think there should be a fee switch in there and like 25% of you know congestion fees should go into a public goods funding gadget, right? And like that I also call that you know non-zero enshrinement, but that's also again very far from you know Zcash style where like you literally have an L1 protocol feature where like 20% of the points are going into a thing. So those are like my two solutions as or like scale of funding. Now I want to go back into the why a little bit, right? Basically the reason why I think it's important for us

to really scale up the funding, right? Is that this is one of these other secondary reasons why I care about this that like really uh pushing forward on public goods funding in 2025 is that one of the challenges that I see in the ecosystem, right? Is that we as Ethereans, we value Cypherpunk, we value regen, we value open source, we value open standard. We you know even value state and whales. We you know value a lot of different things and we value a lot of things that don't fund themselves, right? But then the challenge is like that's what we value and that's what all of the uh intellectuals love to you know blab

about in presentations and blog posts. But at the same time like there isn't enough hard power behind it, right? Like there's the Ethereum Foundation, but then what else is there, right? And the challenge is like when you have a lot of uh soft power behind ideas, but you have zero hard power, then you often end up falling into this trap where like as an ecosystem you over index on moralism, right? You're basically over indexing on this mechanism of yelling at people, "Dude, you must do things in this way. You must not do things in that way. If you do things in this way, then you are bad, right?" And the challenge with uh I mean so I think a healthy society needs a non-zero moralism and the reason why is because I don't think it'll ever be

possible to use formal incentives to capture 100% of uh you know what is beautiful and true and good. But if you over index on it, right? Then the problem is that eventually you start getting a community that uh just does well, "Why do we even have to do these things? I want to do things my way. You know, why are you being uh authoritarian? Why are you Why are you telling us to what to do?" And uh like you start getting this growing group of people that are just not interested in those things. And then eventually it just ends up being polarizing and eventually at some points it collapses, right? And I think uh recently there have been examples of uh ecosystems and uh outside of crypto where they have

gone through this like collapse of uh relying too much on moralism, right? And uh you know, I'm sure readers can probably guess at uh a few of them. It's a common pattern lately, right? But uh basically yeah, I think uh one way for us to be able to rely less on moralism is to actually uh have a mechanism with teeth, right? It's uh you actually have something where one of instead of the message being either you do things in this way or you are bad, the message is, "Hey, if you do things in this way, then here is extra concrete support that you get from from these mechanisms." And so, basically, yeah, you know, if you come along with us,

then we come along with you. And that's like a much more positive message for builders and for newcomers, anyone coming into the ecosystem who isn't you know, already a yet super indoctrinated into the state religion, right? Uh so, so that's another one of those reasons why like I think there's value in really trying to scale it up, right? So, that's the funding side. On the other side is the question is, well, well, how do we actually allocate this funding, right? And I think it's irresponsible to increase funding without having a solution for high-quality allocation, right? Like high-quality allocation is a problem that has to be solved, right? And now, it doesn't have to be perfect, you

always have to remember like private market allocation has massive failures and massive mistakes being made all over the place, right? And there's this massive amounts of duplication of effort, there's people making huge mistakes, there's it ends up I mean, it'll subsidizing a lot of zero-sum social media behavior, like a lot of problems with the private market method, right? But at the same time, like the mechanism for public goods funding, if we want things to receive like larger amounts of ecosystem-wide funding, then they need to be much higher quality. So, what we've seen so far, right, is like I think we have really started to see more emphasis on quality and more emphasis on rigor, right? And optimism people have been

doing a great job of thought leading on that. Gitcoin people have been doing a great job of thought leading on that. I think in general, we're starting to see this like second wave of thought leadership that's like actually able to be based on empirical real-world results and combining you know inside of crypto and outside of crypto knowledge and experience. And the other thing is that we actually have a diversity of mechanisms happening now, right? Like the rules by which Protocol Guild works, the and the rules by which Optimism RPGF work, and the rules by which quadratic funding work are so different that the factors that make one succeed or fail are pretty disjointed from the factors that make other things succeed or fail, right? So, if Protocol Guild fails, like

I would predict it would fail by being an insider game where you have 200 people scratching each other's back. If quadratic funding fails, I would predict it would fail by base turning into this marketing influencer game where everyone has to be a political campaigner in order to get money. If Optimism RPGF fails, I would predict it would fail by a combination of that, but also like projects currying favor with a smaller group of batch holders who would need evaluations, right? Now, each of those three projects, like I've given each of them those critiques and like they have rebuttals against those critiques. You know, Trent and Carl and you know, yourself and people I love there are great, right? And you know, there's

definitely like strategies involved that address at addressing those things, right? But the logic by which the solution succeeds or fails like on the on those three different projects is pretty independent, right? And having that redundancy is I think really good, right? And so, what I want to see for 2025 is like I want to increase the level of quality in the mechanisms that already exist and really start to push that to the next level. And at the same time, increase the diversity in funding mechanisms that that we see, right? So, I want to continue go up from three things that operate under fairly different principles to saying, you know, can we have like five five to eight things that

operate under uh different principles, right? Another piece is also stability. Like for people to be able to rely on that public funding, then the mechanisms have to not change their rules around every 6 months and like keep writing people, you know, you need to start having stability. And then at the same time, you need to have this like other uh section of the pool that is able to experiment, right? And so, I think we really need to keep leveling things up and like also just having it an open minds in these mechanisms, right? Like the three that I did that I just mentioned, like they already operate under very different logic. They operate under very different uh sets of assumptions. And the way that they've been iterated on is this like already

very empirical approach of like, "Hey, let's go out and let's like see what works and let's uh take feedback and improve based on that, right?" And so, I mean, like really, yeah, upping the diversity and the quality of mechanisms is uh also something that is going to be very important next year for that reason. Beautiful. Let me play back some of these things for the listener just to help them synthesize the information. So, basically, there's two sides of the coin here, funding public goods and then allocating the funding, and there's an impedance matching between the two. We can't increase the funding responsibly without increasing the allocation. So, how do we fund public goods and how do we do it less relying on moralism? You have two proposed solutions. The first is like kind of a hybrid for-profit nonprofit type of scheme, and then the

second is institutionalizing and enshrining funding on some level. So, that's the funding public good side of the coin. The distributing side of the coin, uh how do we allocate the capital once we've got it funded? There's a second wave of thought leaders and experimentation that are happening right now. We covered retro funding, protocol guild, Gitcoin style QF, Octant, etc. Uh we need to solve allocation, and you're excited about the pluralism of mechanisms there because it means that uh we don't have to enshrine any specific one or over rely on any specific one. And pluralism is a meta pattern for anti-fragility. And so from there, the question is how do we increase diversity? Instead of having three things that operate under different principles, how do we get up to five to eight thing? How do we increase quality and push that to the

next level? And then how do we increase stability so that people can rely on these things? Did I play that back uh correctly? Anything you would add or change? Yep. Yep. That's uh all correct. Okay. Cool. Uh what I would love to do is do uh about 7 minutes of of lightning questions in which I just focus the topic, bring it to your awareness, Vitalik, and you can respond to it in a minute or less. We'll do about 7 minutes of that, and then we'll go into wrap-up questions. How does that sound? Sure. Okay. Let's go. Uh so let's do a minute each on on each of these topics. Uh I want to start with futarchy, which is prediction markets but for public goods funding. What do you think about futarchy? Or information finance, uh I think is a post that you recently uh

wrote. What do you think of futarchy? are only one very specific uh example of uh this primitive that is the useful in a much larger set of context, right? What So a question is what is that uh core primitive, right? And in my post on info finance, I argued that the uh core primitive is the uh the the info finance, right? This idea that you first decide on some facts that you want to know, and uh then you explicitly design a market with the goal of learning that specific fact, right? The thing you contrast that with is basically uh incidental information, right? Like, you know, we can read the stock market, and we can learn things by uh looking at

price movement, right? But the problem is that each individual stock price movement is based on so many different factors, it's relatively hard to read, and it's also much harder to participate in if you have knowledge about specific factors because you have to take in all of this. That can give you a risk of everything else people aren't paying the price, but explicitly create markets around specific pieces of knowledge that you want to gather, right? And who's going to win the election is like the first app, right? And I gave examples of other apps and the the second app that I gave an example of his what I call decision markets, right?

Not what I call, right? This is Robin Hanson's term. He He came up with the term futarchy. I think he's used futarchy at times. He's used decision-making markets at times. And there are the courts will as you make conditional markets, right? You make a market that says, "If this event happens, what will the value of this metric be? If this doesn't happen, what will the value of this metric be?" And then based on that, you can see like which of the two decision options the market thinks will be a better for the metric that you care about, right?

So, I think it's something that's really worth trying. I know there's like some small-scale experiment that have been starting that are based on futarchy. Um so, the natural critique of futarchy, of course, is basically that in any kind of mature ecosystem, the impact that any one decision will have on the price is relatively small compared to the surrounding risk. And so, if you believe wrongly that, you know, replacing the CEO is good for a particular organization's progress, but the challenge is like, "Okay, fine, you know, you buy like shares of the organization on the yes market. You

don't buy You sell shares of the organization on the no market." But then the problem is that you get some exposure depending on who wins based on all of the other unrelated factors that affect the company's stock price, right? And so, the question is like, "Well, will there be actually yeah, enough funding available and willing to take all of those risks to be able to beat out people that are manipulating the market, right? And I think this is one of those open questions, right? And you know, when I raised this critique with Robin Hanson, he feels optimistic that it's not going to be a big deal in practice, but I thought that it's good that we have some actual empirical results, right? So, that's example two. Example

three is a mechanism that I call distilled human judgment. And the mechanism here basically is you know, you have a human jury that's able to do like answering of particular like specific questions, right? And the first example I gave is social media, right? Like basically, yeah, you know, is does this post violate the terms of service? Is this community note for this particular post a good note? And then the challenge is basically that actually using human mechanism is just not scalable.

And so, what you do is you basically create a market mechanism where people can submit AIs that just answer that question for a millionth of different but basically every single post on a social media platform, and then you spot-check the answers right for like random one but basically the AIs play in the prediction market, and then you only actually like activate and you check the ground truth on a small portion of those markets, and then based off of that, the AIs that do a good job of tracking what the human decision-making mechanism ends up choosing are the AIs that actually stay in the game, right? It's This is like adjacent to futarchy in a certain sense, but it's also not quite the same thing, right? because in futarchy, like

you're voting on the metric, and then you're using the market to maximize the metric. Oh, whereas that you're like actually voting on like basically, yeah, a random sample of like actual underlying decisions, right? And then the market is optimizing for basically, yeah, compliance with the small sample that the humans do, right? And so but you can kind of I mean you know stretch the language and fable actually that is a metric, but I think it's probably best to think of it as a mechanism that like adjacent but still kind of its own thing, right? And then I give some a couple of other examples and generally talk about I mean you know

AI's participating in prediction markets markets and info finance is something that's really worth exploring. So basically, yeah, the way that I think about it is that info finance is like a new Lego, right? So I mean you know we love in Ethereum talking about money Legos and money Legos are like these components that you can combine together with each other and you can build complicated mechanisms out of that, right? So like any ERC-20 is a money Lego, exchange is a money Lego, collateralized loan platform is a Lego, an Oracle is a Lego, right? And you can build things out of other Legos and to me like there's also a thing of like governance Legos, right? And I mean you know quadratic funding is one of those

examples, sortition I consider to be a Lego and and to me info finance is also one of these Legos, right? And so it's like this extra pretty powerful ingredient that we can use and we can combine together with all of these other mechanisms and really expands the space of things that we can do. I love that. I know that there's a few Chucky around planned in GG 23. So Gitcoin's going multi-mechanism and we'll be including retro funding in future Chucky in GG 23. Then also check out Vitalik's post about info finance if you want to learn about that Lego. I got a couple other Legos that I want to ask you about in this lightning round and then we'll wrap up. The first is protocol guild. People are forking protocol guild and creating guilds for epic things. What do you think of that?

I mean, I think one reason why it's uh good is because uh some of the concerns that I have personally about Protocol Guild, which is like the mechanism, just feels like this sort of thing that it could just collapse into this sort of back-scratching elite that ends up supporting each other and uh sort of intentionally not letting other people in, right? But, obviously, this is a critique that I would have where I would absolutely love it if I ended up being so completely wrong and that Trent ended up being completely right that I'm uh that I'm wrong about this, right? Uh but that if we want to find figure out if I'm right or wrong on this, like you don't want to just that focus on one specific example because, well, there

could be reasons why Protocol Guild is uniquely good for if you're in a L1 development, but then you need but that make it less good for other thing, right? My case uh like if I had to make a case for why Protocol Guild is like very naturally L1 specific is basically that the way Protocol Guild tries to get around this uh problem of like being vulnerable to being a back-scratching uh club, there are very natural specific rules for what an Ethereum client is, right? You know, there's a test suite, there's like it's a programmatic thing, you can go and run it, and uh it's like a thing that is very mathematical, that's like very formalizable, and you can generally

define it, right? There's still like a bit of work around the uh edges, and then it's like, "Oh, if you fork a thing in unique five changes, are you a separate client?" But, like relatively speaking, it's uh it's definitely on the formalizable side, right? But then, the question is if you try to expand it to things other than um L1, um so then Trent would say, "Well, Protocol Guild already supports research, right?" But then, with research, like research is still a relatively small group, right? But basically, if you try to expand it out into other domains, uh then like are you actually able to um create maintain these like stable sets of rules that are able to actually force a guild to continue to be inclusive and to accept

new members, right? If I wants to learn whether or not you know this concern is right or wrong or somewhere in the middle, then having lots of different examples and lots of different domains I think is like exactly the way to find out, right? And so I'm like yes, and now I'm looking forward to seeing an equivalent of protocol guild in like five other domains and then seeing those things actually run for significant durations of time. And I think you know the design space absolutely deserves to be explored. And then also just like intrinsically it's good to be able to reward you know whatever groups of people. I do think that you know this kind of back scratcher collaboratives like exactly

the thing that my magnifying glasses on when I get evaluate the stuff, right? And because you know the Ethereum ecosystem definitely does get critiqued from being or being back scratchery in that sense. Right? Like one example of this though is that if you saw some of the you know Twitter drama around uh StarkNet and the Scroll airdrops and like how they did a good job of supporting public goods developers. But then it's like okay, you know, are you is this basically just OG is the Korean favor with other OGs? Um so if we can figure out a rules based a way of creating rules based mechanisms that's like general purpose enough that they can make protocol guilds succeed in

like a large number of settings and like I would consider that an amazing success, right? And then I mean obviously quadratic funding like we've seen around for some of everything. And then it would be really cool to see retro funding like experiments that continue to happen across that a lot of different domains as well. So, you know, yeah, their diverse experimentation is exactly what we need. Great. I got one or two more magic mechanism questions and then we can wrap up. The next mechanism I'd love to just run by you is things that are called auto PGF, auto public goods funding. So, things like glow dollar, which is basically a stable coin. The more that it's adopted, the more it funds public goods. So, you take the yield that you

would normally get on like tether holding dollars and then you fund that into public goods. Auto PGF is this new category of automatic public goods funding gadget. What do you think of that? Yeah, I yeah, support it. I mean, obviously like there's a limit to this kind of stuff, right? Because eventually it's going to be competing against the opportunity to just like take that revenue and keep it for yourself, right? But it's definitely like yeah, but but I mean, tether doesn't pay like interest to its holders right now, right? But I mean, I know like you can obviously stick it into Ave and you can do other things. But and like it's definitely psychologically easier to never see gains at all than it

is to like click a button to make your balance number go down. So, I could see it being an advantage, but you know, it's like so I think it's like it's definitely a great thing though. It's also a great thing with a ceiling, which I think is totally fine. All right, last mechanism that I want to ask you about and then we'll get into my wrap up questions is I'm not sure if you followed AI 16Z, but it's basically this open source library for AI agents and someone launched a token on their behalf and I think it's last I checked it had a market cap of like 300 billion. And now they've got a treasury of like 10 million dollars. And so, I'm wondering what you think about open source projects funding themselves by tokenizing and having these sort of giant treasuries where they can now be

funded because there's a token associated with them and massively being successful. What do you think about that as a a venue for open source funding and and public goods funding? Yeah, I mean I think I mean things being able to be funded is definitely great. I mean the the question that I would always look for is like does that mechanism like differentially better support things that are valuable versus things that are not valuable but that are able to get attention, right? The the criticism of quadratic funding, right? Which is basically that like it's it's like while you're still in the mode of going from having nothing to having the thing, it's obviously pure good because hey, people are getting more money to do valuable things. But then

like once you're in equilibrium, then that like on the margin like you're at you're playing this attention game and the attention game good or you know, is it harmful? So I think you know, right now still waiting on the sidelines for a lot of that stuff. I think you know, experience will figure things out. If you're a builder of all the things that we've talked about today, what's the highest leverage thing to work on? How do you find the highest leverage thing to help in the in the most high high leverage way? I think it's I mean it definitely depends on what your position is, right? Because if you're a builder just getting into the ecosystem, then I think the first thing is to not try to like maximize your leverage immediately. The first thing is to like get really uh find your way around the ecosystem and

just understand all of the different parts of it. And so it's like basically uh you know, do the things that excite you while again if having a filter for like while doing this, am I actually learning, right? And that's always the first step. And then the second step is like when you get to the points of actually building things that could potentially be super high leverage. I mean yeah, there's definitely a lot of different ideas for the taking, right?

And you know, those ideas are in posts that ends writings that various people write. Those ideas are things that people just keep talking about. I mean, generally, yeah, I know, Ethereum you know, researchers and developers are pretty friendly and you can ask them for ideas. There's individual teams you can go and ask like this what is a thing that could be useful to you. I think probably the bigger challenge is not just choosing the right thing to build, but also like actually having enough distribution, right? Because we are pretty big ecosystem and that there's definitely this phenomenon where there's like 20 teams working on a thing

at the same time. It's like when I wrote my post saying this is my dream wish list for what you call a wallet, there's like 20 teams that replied with, "Hey, we're doing this like piece of it already, right?" And there's definitely like a really tragic aspect to this, right? Which is that you know, we're seeing there's all this work that's being done, but then like it's just not getting through the information network to the rest of the ecosystem. And so, I think you know, having a strategy for that is important, right? And it might seem wasteful to be you know, thinking 20% of your time about distribution, but on the other hand, that's like having a a great thing with a distribution you

know, it's two actual lower than it otherwise could be even more wasteful. So, I think also something that good to be on the ball about. But if anyone out there is listening and wants to aggregate all of this info that Vitalik referenced and provide just a digested list of highest leverage things people can work on, I would support you doing that and please DM me. Let's get into our final question, Vitalik. Is there anything that I didn't ask that you want to say? That you want to foreground about public goods funding in 2025? Yeah, I mean, I think I was just wanted to reiterate eight points that I made which is that up until now I think public goods and the associated cluster of values has been a very like a large share of I guess

what you might call the idealistic mind share of ethereum but it's only gotten a relatively a small share of the actual execution power and I think in 2025 it's time to like actually get serious about increasing execution power right? I think you know this is also one of the really valuable things that ethereum can do to the world is like actually show ways to fund valuable things across an ecosystem that go beyond each person having constantly worry about figuring out their own business model right? And I think one of the signs that it's an idea whose time has come is that we're also

starting to see like I would say very according to my values very lacking but still like present versions of this in non-crypto ecosystems right? So we're seeing Twitter monetization YouTube monetization for example like it's becoming a more popular topic and one of the reasons why I consider it lacking right is because it's like totally not transparent and like some people are getting $500 some people are getting $20,000 then like you you have no idea why and there's clearly a growing understanding right? That there are things that ecosystems need to fund and the ethereum world needs to

have a good answer for this. I think I mean you know the time is now that we actually have the growing amount of expertise growing amount of tools growing amount of existing experience to uh with that it's time to really yeah get serious about the public uh good that funding uh side of Ethereum and help it grow. Amazing. Hear, hear. Thanks so much. Thank you too, Ken. We just heard from the Vitalik Buterin about why Web3 public goods matter and what he would like to see builders focus on in 2025 with respect to Web3 public goods. Very excited about this episode.

I think that Vitalik has informed a lot of my vision for Gitcoin and the Web3 public goods funding space and I think that that's true for many people in the ecosystem. This is part one of a two-part series with Vitalik. We will be releasing the next episode with Vitalik in the coming days. In the meantime, thank you for listening to the Greenpill.network podcast. This podcast features the people who are building a coordination and network society of thousands of hackers, dreamers, and doers focused on using crypto to bring positive digital systems to the world like Vitalik Buterin, like the gaggle of builders that also believe in public goods funding in Web3. If you value our work, you can collect this episode. Go to podcast.media/greenpill to find all episodes and to start collecting today. And while you're doing that, you may as well make an offering

to our algorithmic overlords. Please tell the AIs that you like the Greenpill.network podcast and they will up-recommend it to other people in the world. If you subscribe, rate, and review, that helps other people find the body of work that we are creating in the Greenpill network and in the Regen Web3 space and in the Web3 public goods funding space. Alrighty, well, this has been a doozy of an episode. I'm looking forward to digesting it with the ecosystem over the next couple weeks. And thank you again to Vitalik for spending the time with us. This was really great and I will see you on part two coming in the next day or two.