New Applications for Quadratic Funding

Transcript

cool all right let's do it um so what's up everyone my name is connor o'day i work at gitcoin i do a lot of our grant operations bd partnership stuff um you know kind of dow dow native all types of work uh but yeah gm i appreciate you guys showing up the the 9 30 a.m talk on the last day of the conference i knew it would be pretty rough uh but i appreciate you guys being here um so i'm going to be talking about quadratic funding and different applications for it um what git coin is currently doing and you know kind of the whole concept around public goods and how i think that's uh it's a term we should maybe move away from and i will tell you why uh but first so uh what what is quadratic funding um

quadratic funding is basically the mathematically optimal way to fund public goods um in a democratic community and it was initially proposed kind of wholly in the context of public goods if you see the paper by vitalik glenn and zoe it was called a flexible design for funding public goods and the quick version is basically a fork of quadratic voting uh but in an example if one grant gets a hundred dollars from one person another grant gets a hundred dollars from ten funders uh and trade or another grant gets ten dollars from ten funders it should be uh traditional matching both would get a hundred but with qf uh grant one gets twenty dollars and grant two gets a hundred eighty dollars and the benefit here is like the preferences of the many outweigh the preferences of the few

uh and wtf is a public good so this is kind of like the traditional uh you know two by two breakdown of types of goods a public good is non-rivalrous and non-excludable and so that is clean air infrastructure privacy and then you know things that are rivalrous aka you know if i use some of it there's not there's not the same amount for you it reduces the total amount or club goods where they could be excludable um and we really focus on public goods you know if you if you're familiar with bitcoin that's kind of our whole you know theme and we really hit that one home i'm wearing my my public goods are good hat now you can get that on the get coin store uh but when you think about it like um things that we think of as public goods like ethereum

and the internet and toll roads um you know ethereum for example like it's certainly rivalrous to some extent there's limited amount of block space it costs money to to use the internet probably as a public good but you think about you know the great firewall and different ways that people are actually excluding excluded from the internet um it's certainly debatable and then you know toll roads there's a certain amount of congestion that can happen when they get too busy so it might make sense to charge for them but then does that make it a business model because it's still kind of a public good so you know there's still ways that things can be conserved the public but have a business model or not necessarily be fully non-excludable and non-rivalrous

and you know with that in mind are we bitcoin the ethereum community only using qf to fund public goods probably not and if public kids are good are non-public goods not good and does that mean we're funding public bads and i bring this up uh i have some screenshots in here i have no idea who runs this account but i thought it was super funny there's an evil bitcoin twitter uh that is focused on funding public bads which is not you know not necessarily a bad thing but i thought that was a fun little quirk and so you know as of late i think there's been a lot more discussion happen over happening over the classification of public goods um and goods in general um and i'm not gonna

make an assertion to or an attempt to make an assertion of what the best model is to follow but i'm happy that there's discussion happening around this for example carl tweeted out recently this kind of revised version that has anti-rival risk goods in it which could be like network goods that actually gain value as more people use it or use the network symbiotic goods kind of a similar similar function but they're non-excludable and then this other one kind of flips the whole thing on its side but it kind of brings up that there are semi-rivalrous goods and semi-excludable goods that kind of fit you know between the the typical boxes of like the 2x2 and so you know as long as we accept

that there are many more types of public-ish goods and that qf is useful tool for all kinds of coordination i think we can kind of you know expand uh expand the thought process of of what's actually valuable to be funded and where qf can be used and so what i'm kind of getting into is it's a gradient right it's not just black and white um there's all types of different uh goods and uh the recent paper uh by glenn puja and vitalik which is you know two out of three of the initial quadratic funding paper authors and the focus was not on quadratic funding or public goods uh it was on soulbound tokens which i think you know stirred up a lot of debate but they make the case a few times that you know

there's a spectrum between being fully private and public and that people have different preferences and are not always just fully selfishly or fully selflessly motivated um and one quote that i found was interesting is networks with inter increasing returns are most efficient when treated nearly as a purely public nor purely private goods but rather as partial and plural shared goods and so you know even the original authors of this paper are kind of you know expanding the thought process around you know what is a public good you know what are these models good for funding uh so coming back to kind of what git coin is doing um one aspect of the quadratic funding rounds we're doing have been cause rounds um and these are

you know not necessarily web three native you know we're trying to do things in the real world um and i think it's interesting because a lot of them you know are public goods but also aren't and so you know climate solutions you know grants that are trying to prevent and create solutions for climate change probably is a global public good but if you actually look at the breakdown of grants that were in that round um it's very focused on you know north america europe and there's a whole another side of the world that is is kind of left out there and i think we need to do a better job of you know activating projects in in all different continents and countries um but also thinking about you know the there's positive externalities to a lot of these projects that do you know have an impact globally but a lot of them are

very focused in certain certain geographies longevity is a funny one i think there's there's a whole movement about you know life extension and you know people just don't want to die and so the longevity research i think is a public good however it's probably more of a public good for the wealthy you know i imagine like most people won't be able to afford the life extension research stuff in our lifetime but so you know maybe it could be wealth dependent the advocacy rounds we're doing are focused on you know policy and lobbying but pretty much mainly in the u.s so maybe not a public good for everyone or maybe there are you know externalities to the u.s policy that influences things globally um ukraine is an interesting one you know i think supporting uh ukrainians in

the time of war was certainly a public good but there's obviously different opinions on the different sides and you know ending war is good for everyone uh but it's it you know it could be argued that it's more of a geographically focused public good and then diversity and inclusion you know i think is absolutely a public kid but again uh i think we have to look at the breakdown of like where these grants are coming from because we do have kind of a bias for you know the north america europe uh areas um and one one uh grant that i thought was super funny that that we had way too much debate about was pizza dao on the get coin platform um they're a dao that

provides pizza you know in at conferences at events i ate their pizza in denver um and so the whole debate was whether pizza is a public good and some people felt really strongly that it isn't you know not everyone is benefiting from the pizza but it ultimately was decided that it would stay on the platform and also ecc this is kind of on the nose but ecc has a grant ecc's a non-profit all of the funds that were raised in the grant you know went to running this event at cost but you know is it a public good like a lot of people can't afford to travel here you know maybe the funds are going towards food and drinks and um you know it's a debate but i like bring these up not to say that we shouldn't fund them but rather

we need to like reconsider the the classifications of types of rounds and how we group them together so we accept quadratic funding can more efficiently allocate capital uh community preferences in you know many areas not just strictly public goods uh then you know what's bitcoin been up to because our whole tagline is fun public goods and public goods are good um so taking a step back we've now run 14 uh quarterly quadratic funding rounds um if you're not familiar these last about two weeks we do them typically in the last month of each quarter and they've pretty much been growing round over rounds for the last three years so the first year the matching pool was our first quarter was 25k and i think 38k was

the total amount after community donations and then the last few rounds uh dr 12 1314 all had about a three million dollar matching pool um and anywhere from like two to three million uh community contributions um so you know in total i think it's like 40 or 50 million dollars that has been you know distributed to open source and public goods and semi-public goods via the get coin platform and we ran some experiments along the way so the first few rounds it was just one main pool everything was kind of grouped together we then you know after i think rounds like four or five started to break it down into categories so we had like daps infrastructure um you know we did some experiments with geographies so we had like an east asian round uh we tried a few things you know kind of what we're

calling cause rounds now during covid we had like a public health round um and and you know some other experiments like that and then at one point we actually moved back to having one main pool so everything was grouped together again and then that's kind of taken us to where we are now where we have one main overall pool but we've been breaking things out into specific ecosystem rounds and cause rounds and these are different um than the categories because they're not mutually exclusive uh previously a grant you know would have to be in dapps or have to be in infrastructure and now we kind of have this breakdown where you know a grant depending on you know the theme and how it fits can be in you know multiple rounds so looking at uh gr14 like i said i got 3.3 million dollars

total in matching i mean one million dollar main round covered everything on the platform a million dollars for the cause rounds climate advocacy and diversity and then we had i think 14 ecosystem rounds and so you know some of these are kind of a single funder uh like polygon or cello or e s like very focused on projects building on their protocol or their dow um and then you know some of them were more themed rounds they were crowdfunded so we had an ether round uh we had a gaming round we had a zk tech round and those ones are usually you know crowd funded from a few different organizations it's not like one one dow or one protocol funding you know their own grants in their own ecosystem so it's kind of been an interesting

interesting breakdown and i think we could further delineate like the the different types of rounds are running but what's interesting is you know a grant could be in the climate round could be and polygon and main at the same time if it's a fit and it fits the eligibility and then kind of pull matching from all of those all of those pools and any donation of that grant you know counts for the the matching amount from all of them so it's not like you need to donate to a grant in the context of one single round uh and what we've also been trying out are some local rounds which i think are like a whole another area that haven't really been explored um funny enough actually during the early coven days we did this downtown stimulus project which was a bunch of small businesses in downtown boulder kind of

signed up to do this you know more of a web tui uh qf round um and it was you know i think you could use credit cards it wasn't on the main bitcoin platform but that ended up raising a good i want to say the pool was like 25k or even 50k and i think there was yeah about 16 000 donated um you know no crypto involved at all and then actually in the last grants round we did an oakland local round uh for different charities and like youth focused uh restorative justice projects in oakland california and so i think there were seven grants in that it kind of flew under the radar it was kind of an experiment but you know it was super interesting because maybe it's not as relevant to the whole global audience but if we can

activate people in specific communities i think there's a lot more potential to to experiment with local rounds both uh you know certain cities it could be towns could be smaller or you know countries states like larger larger geographies and that was like not that was an open that was kind of like a exclusive hand selected round and i think we'll see more of those happening as well uh so what's next um so since git coin has launched the dow um we're essentially working to decentralize uh the grants platform and basically build a quadratic funding protocol that anybody can uh you know deploy to different chains build their own front end and most importantly you know kind of customize and run their own

self-serve rounds uh because right now with you know the way git coin is doing their quarterly rounds um everything is kind of grouped together and so if someone wants to do their own round they have to kind of do it on our cadence since the platform is pretty centralized as it stands uh you know we need to help manage and run everything but the goal of the protocol is that you know anyone can kind of plug in and use this at any time and it doesn't have to be qf you know it could be a different type of mechanism or grants program and the key thing there is decentralized identity that's a really hard problem to solve uh but i think if you heard uh kevin owaki's talk he talked about the bitcoin passport that we're working on and i think we're getting to the point

where we could reasonably uh have a decentralized identity system that we trust but if we're not there then you know doing a truly decentralized qf uh platform is pretty much impossible because civil attacks are the biggest threat that break down the whole mechanism uh further we're gonna be categorizing the rounds a bit more as we grow and do you know all these different local and cause rounds i think having one main overall pool is not as feasible and so that will probably break down into something that's still very open but maybe more targeted towards ethereum or web3 and like i kind of started off with i think we need to reconsider you know what public goods encompasses and you know what it doesn't and you know kind of set the eligibility

of these rounds around that and group them together based on the types of goods they are and then you know like i said local rounds cooperative rounds private rounds uh retroactive public goods funding um something we're doing with optimism we'll have an experiment uh with them soon on you know funding projects retroactively and that i think actually is going to be a permissioned round where um it's not open to anyone to donate like they have with their dow uh different different mechanisms for for their community members to get involved uh but so there'll be experiments that we're doing with optimism um and then we're just trying to scale both horizontally and vertically and by you know vertically i just mean bigger bigger pools bigger rounds more grants but horizontally um you know trying experiments in new ways different types

of goods different communities uh different industries and then thinking about you know independent versus codependent rounds and so whether they overlap or whether they kind of run as a fully exclusive thing will be something we need to consider because right now they're all grouped together but that's probably not feasible long term um and yeah okay i know i'm a bit over time this is the last slide uh but you know and then at that point you know i think it's really important that we need some type of neutral protocol that's self-serve to try these experiments but we could think about using qf for you know how a private university used its endowment or i haven't tried this one out this one's kind of there but how a group of friends decide what restaurant to go to um let me know if you try that i'm not sure if it's gonna work but um

you know country clubs uh corporations prioritizing budget allocations homeowners associations doing whatever they do political parties um you know countries funding uh global initiatives and government spending too you know like federally i think people want more social social services and less war you know better vibes or local you know government spending like you know if you want to park in your neighborhood people would donate to that you could allocate some portion of funds so i think we've sort of just scratched the surface for you know what we're doing with quadratic funding in public goods and i think once there's a protocol that is basically permissionless there'll be there'll be a lot more opportunity to experiment

and yeah so that's my talk thank you guys for coming out i know it's super early but yeah i'll be hanging around if you have any questions or want to chat thanks