Markets for Public Goods

Transcript

[Music] foreign [Music] how's it all how are you guys doing today uh so I want to start before I get into my talk I want to make an announcement we are launching quadratic funding on giveth today right now yeah uh major props to get coin it wouldn't have been possible give us not doing any civil detection work major thank you get client and Trust the labs who are doing all of our civil work wouldn't be possible without you it also wouldn't be possible without the quadratic force uh this uh our founding members of the quadratic Force are Aragon gnosis public

nouns status Jordi vogtonian shapeshift these are the people who are funding the matching pool so that we can distribute it to real non-profits that are raising with crypto so uh check out giveth.io qf and uh play with it right now it's it just went live but now we can actually get to the talk because I'm not really going to talk about quadratic funding today I'm going to talk about markets for public goods and public goods is this weird term that we use in crypto a lot uh and it's a very academic term it means non-excludable and non-rival risks that honestly that's not very useful uh the the academic term for it is basically an ideal it's impossible ideas are the closest thing I think to a public good

but we have IP law right uh radio waves this is another public good but you need a radio to access it so it's really these things are excludable or clean air can be rival risks if you pollute it right so I think it's more useful to think of public goods as things that are free of charge to end users things that people can enjoy things that are good for the public maybe okay so the problem with public goods is that market participants businesses people who are trying to make a profit they externalize costs they pollute the river you know so they don't have to take care of their pollution ethically and they effectively exploit public goods they take all the free stuff they can so they can make as

much profit as possible their profit making machines so governments actually siphon funds from markets through taxation in the name of public goods in the in order to produce public goods for society so it's kind of interesting because we don't really think of it but taxation always comes from economic activity you think oh governments are fun and from taxes right taxes come from economic activity markets taxes come from markets and there's a lot of them 25 trillion dollars were collected by governments in 2020 and these are you know 2020 stats imagine I think there's been a bit of inflation so it's probably more right

and you can check my stat here there's a great Wikipedia link so they're collecting a lot of taxes to fund public goods and they do it all via economic activity so this is very surprising governments are getting funds from markets and they always have been so we in the crypto space have this unique opportunity I would say it's the biggest opportunity no one is talking about and that's what like half my talks have entitled but uh we have the opportunity to build something better than governments governments are spending 35 trillion dollars a year oh is that a typo no it's not a typo

it's not a typo I swear there's just like a weird discrepancy here this I say it's the biggest opportunity because this is a lot of money this is a lot of money being spent on public goods they're spending 35 trillion but they're only collecting 25 trillion dollars in taxes does anyone know where the other 10 trillion went how did how do they get the other 10 trillion the money printer someone said it that's right money printer go Burr it comes it comes from debt it comes from bonds it comes from blah blah blah complicated mechanism to print money okay the end-all be-all is they're printing funds through some mechanism to cover the Gap in taxation and spending

so governments are funding public goods in two ways they're funding public goods by issuing a currency and they're funding public goods through taxation this is where crypto can shine this is what we can do too we're building systems that issue currency and we can direct Revenue to public goods probably better than any taxation system ever could we can create public goods markets in fact I would say we already are creating public goods markets and public goods markets have been around for a long time right but the way the crypto is doing it is kicking in this issuance model you know most public goods markets have been using Revenue but in crypto we can use

uh issuance so think of Bitcoin or ethereum we're at ethereum conference let's use ethereum ethereum issues eth to people right and then creates demand for the eth so money printer go Burr eath goes out but the goal of ethereum needs to be to make sure that there is a demand for that token and if they get that supply and demand magic right they can produce the Global Financial infrastructure for the future of society which they seem to be on Pace to do and that is one hell of a public good uh this is this is I think of it as like public infrastructure like the water infrastructure or electrical infrastructure of a city right this is

Global borderless frictionless Financial rails for the whole society but they have to make sure that they're rewarding The Ether to people and assessing it correctly to people who are creating value and they have to make sure that people actually want that ether for something and so then we can have a healthy market for creating this public good and that market instead of being regulated by governments it's actually regulated by the users and unfortunately the most important user is probably a Speculator speculators are the main Regulators of these public goods markets in the crypto space For Better or For Worse but of course developers and users all have a say in how these systems are regulated

and instead of governments which are taxing economic systems and then regulating them from a very top-down standpoint in crypto we have a much more decentralized regulatory system and hopefully we can make it a lot better and do a better job at regulating ourselves but as I said public goods markets have been around for a long time radio is the most classically cited public good one of them and uh you know it's it's always been funded by advertising advertising is one of the surprising huge funders of public goods whether it's radio TV social media etherscan has ads right or even ECC you know I consider these conferences of public good and ECC is a

public good yes you need tickets to get into this building but look at all the people outside that are sharing ideas and exchanging exchanging value right the coolest thing about public goods markets is the Innovation right ECC has a cool system where the booths that are over on the other building they're only there for two days and then a new set of booths come in tonight so like this I've never seen that at a conference right you don't see this kind of innovation when governments are funding public goods because there's no competition you know a lot of Revenue models are just straight up selling cookies like the Girl Scouts are selling cookies they're providing value to society you know if you know maybe your favorite cookies are Chips Ahoy but you buy Girl Scout cookies anyway because they're

empowering young women with new skills and our appreciation for nature this is a public good uh B corpse is like the general purpose business model if you're a business and you have like something you really care about you start a benefit Corporation in the states and you can uh like financially make a promise to your investors that you're going to spend send some percentage of money to public goods and now we have the L2 Cambrian explosion and like mantle is a is a is a l-2 network a roll-up on ethereum that is funded by an exchange buy bit sends money to what was bit down is now mantle and now they're launching their own L2 Network you can kind of think of this as a b Corp uh PGN like the public goods Network that just launched and optimism

are also funding themselves through sequencer fees gas fees Mev right and optimism is doing something really cool that I want to highlight optimism is actually bootstrapping a very interesting Market with OP issuance it says sequencer fees but really this is like the final ideal system right now they're starting with optimism tokens op tokens those OB tokens 30 million op tokens this is around 45 million dollars at today's prices are going to be rewarded to builders who are innovating and building awesome things for users in the optimism system uh on the optimism Network in November 45 million dollars

worth of tokens man build in optimism right and but the reason they can do that is this virtuous cycle those Builders are going to reward are going to bring in users who will use the block space pay gas create opportunities for Mev Bots that will create revenue and actually issuance won't be funding this forever we'll be able to use those revenues to fund retroactive public goods funding but the thing I'm really excited about is when more of a free market of ideas starts propping up under the retropgf where Builders who need a regular paycheck you're a builder in South America you can't just like take off six six months to build something cool that

you think will add value to optimism right you go find an investor who'll give you like 15K so you can spend that time and you say I'll split it with you 50 50. right and then the investors and the builders start getting rewarded and now you have investors investing in building public goods see where I'm going here we're starting to build a free market for building public goods and all the benefits of coordination that we unlock with free market economics another very common Revenue model is memberships like who here has the blue check mark on Twitter right ah come on uh you guys are lying I know you guys have that check mark uh you you send eight bucks to Elon for

that check mark it's cool right uh well this is the freemium model you know everyone gets to add to it Twitter is a public good you get to share a lot of ideas there the UN is a public good okay who knows how many wars they've stopped before they ever happened China pays 400 and something million dollars to be a member of the UN okay membership fees are fun in public goods uh I like public nouns I'm a member of the public nouns Dao uh community and like not only do you get like a cool uh a cool noun you know and you know you're funding public goods and then you get this nft I paid like actually 0.8 eth for this for this guy here and then you know I start to feel like this public

down you know it becomes part of my identity anyway uh another another way of funding public goods that's really interesting is the te Commons uh token engineering Commons is one of my favorite systems because it's a little bit more complicated but at the same time pretty simple they have this thing called a bonding curve IT issues Tec tokens so if you want to buy TC tokens you can go buy them on honey swap or Cal swap or any any swap on gnosis chain but uh you can also just go directly to the the bonding curve and buy them by minting so you can mint TC tokens by sending money to the bonding curve but it doesn't put all the money into minting the token

it takes some of the money and sends it to a dial that's to the dial so that it can actually fund public goods Advanced token engineering uh and then it uses the rest of the money to Mint TC tokens and when you have those TC tokens and you want to sell them you can sell them on secondary markets or you can go to the primary market sell them there and then again another tribute will be taken this is very similar to custom duty so you buy something in another country and you want to bring it to this country you have to pay some duties right you're effective we're effectively creating a a very similar taxation model but it's not taxes these are tributes that are funding public goods this through this system token engineering Commons has

raised over three hundred thousand dollars to advance token engineering and for a small market cap token its price is actually kept pace with ethereum since its launch in 2021. I mean this is insane right an advanced token engineering you know it helps but uh but the the real thing that I want to highlight are these are tributes these are not taxes we can replace mandatory taxes where um a gov a government that has a monopoly over every public goods vertical takes the taxes from you and forces you to give them the taxes and instead we can replace them with voluntary tributes if someone doesn't like what token engineering Commons is doing to advance token engineering they can start

tokenomics Dao and be like listen we fund Ponzi scheme like useful data science so this is all we care about ethics are stupid get out of here right because it's com it's a competitive market governments taxes are not optional they use these taxes to create regulatory monopolies around any public good that they care about they get to decide where the electrical infrastructure goes they get to decide where the trains go right we're creating similar economic models that are using the same mechanisms as governments economic activity funding public goods issuance funding public goods but they enable competition they're optional if we're not taxes they're

tributes if you're building in this space please consider reaching out to me I would love to support you I recently started a like a Dev shop of sorts this is a way to get through the bear Market honestly for all my projects we contract out to support other teams that have better funding than many of my public goods funding projects let's be honest uh and so we will we have Dev support design support and we've been so successful with this uh that we're actually hiring so we're looking for a good CTO if you know anyone so please consider supporting us supporting uh talking to me if you're trying to build in this space and a bonus request since

I have a few seconds I feel like lotteries are underappreciated lotteries are like at least in the States this is a huge way of funding public education and I feel like they've really hit the nail on the head of djans in the in the crypto space right where where are the lotteries to fund public goods you know just just a little hackathon project for the ECC hackathon later okay East Paris like I want to see some lotteries funding public goods anyway uh thank you so much for listening to me rant and uh I hope you enjoyed it [Applause] foreign