Retroactive Public Goods Funding

Transcript

foreign [Music] [Music] hello Welcome Friends of ethereum Friends of ethers Phoenix I'm Jonas I'm leading the Retro pgf effort at the optimism Foundation two years ago we shared this concept of retroactive public goods funding today I want to talk to you about what we've

done in these last two years a bit of intuition about how retroactive public goods funding works and how you can help to summon ethers Phoenix cool so two years ago at ECC the optimism team together with vitalik published this concept of retroactive public goods funding um show of hands who has read this article hey that is wonderful who who here has heard of retroactive public goods funding what a high context crowd wonderful okay who he thinks public goods are good I

mean we get everyone okay some don't some don't believe yet maybe you believe soon great so two years into it a lot has happened um just reiterating on this core core problem statement I think there are a lot of great talks about why public goods are important I think they're more inspirational speakers that can really pill you on why public goods are good but if you already believe this um we believe public goods are good but we're missing sustainable ways to fund them and we're missing effective resource allocation tools and this is the optimistic approach to

this we tried to solve both things sustainable funding for public goods and an effective resource allocation to fund and incentivize the creation of public goods we have this beautiful flywheel here where we have nice useful op block space this is um op mainnet block space this is block space of other op chains Zora Bass the public goods Network many more to come they generate revenue from sequencing the transactions and part of this revenue is reinvested in financing public goods via retroactive public goods funding

and we believe public goods are really at the core of this network and this ecosystem at the core of what makes this valuable so we believe having a good public goods ecosystem provides a lot of value to users and Builders and this value results in more demand for op block space which results in more Revenue which results in more funding for public goods and this is kind of this core flywheel that we're working on so the big question is how do we make this retropgf thing happen how do we use it as an effective tool to get people to build for the public goods and the solution is retroactive quadratic Impact Church conviction

non-plutocratic collusion resistant AI Alliance ZK public goods funding hey a r q i c n c r a z-pgf just kidding um it's sometimes working in these systems for a few years we get like super nerd sniped and Hyper obsessed with their own systems and we invent our own vocabulary and then we go home for Christmas and we talk to our mom and we were like Mom retroactive impact third conviction not plutocratic Etc public goods funding is going to change the world and nobody has an idea what you're talking about um so a really simple breakdown of what we're doing here with retro funding is we're creating a mechanism to

incentivize the production of goods and services that a community wants so commonly as you all know about retro PDF we think about this nice aspect that if we look into the past and we reward kind of uh the the impact that we measured so we we reward what we all agree was useful in the past that is much more effective and efficient than if we try to predict what's useful in the future so this is kind of the first nice property of this mechanism but what we're really trying to do with retroactive funding is we try to incentivize behaviors we're trying to incentivize people to build public goods and services that we as a community want so in the absence of more classical free

market forces providing these goods and services we kind of are creating our own market around creating these services and this is at the core of what we're doing and this is not a new idea so often we come around here we outline these really novel Concepts um and and we we um we really pretend like we're Reinventing the wheel here but this is quite a well-established uh well-established concept that we're leveraging and what we're really trying to do is like take this concept into like a new dimension to become the core economic mechanism that we build ecosystems on so somebody even like shared an article

with me from like 1908 with they had the first mention of retroactive funding so it's actually super old and and like um nothing that we're Reinventing I think some examples to build some intuitions of like what are retroactive funding mechanisms you're interacting with daily is like think of every prize competition that is repeated as a retroactive funding mechanism every hackathon Bounty every hackathon price um every regular prize competition is essentially seeing what was useful and giving you a reward based on how useful it was if you think of something like Spotify something that most of you are interacting with daily this is a retro funding mechanism I don't think

anybody's claiming this is working super well fund your artists um but what it's doing right it's it's measuring how many people have played this song and it's rewarding the song owners the IP owners based on how often the song was played right so we're really not like Reinventing uh or like inventing A New Concept we're applying an existing concept of rewarding behavior that we want to see to um to drive the creation of goods and services that we want and this is a continuous experiment so I think in socio-economic mechanisms theory is always very sexy and beautiful and then execution can be super messy

so somebody had like a nice meme on their slide which was like thinking about douse and it was like really really beautiful rainbow and the other was like being in a down it was really sad um so this is the problem here we always have these beautiful Concepts about like these these socioeconomic systems and then we actually bring them to the world people interact with them this behavior is like hard to predict so to actually make this mechanism work to make it drive public goods production we need to stay really close to the ground and iterate on the design of these rounds really fastly and this is what we're doing so so this is the part of what did we do in the last two years we shipped two rounds of retroactive

public goods funding [Applause] the first round we did in October of 2021 and this was 58 projects we wanted to fund ethereum and optimism public goods we had 21 voters who decided on the distribution of this funding these voters are early optimism citizens so we're powered by a bicameral governance system where optimism citizens are supposed to represent core users of the platform I'm not going to go into this the spicameral governance system is really interesting just teen is talking about this on Friday I would definitely recommend jumping into this it's like a

super interesting governance topic but yeah these citizens vote on the distribution of funding and we learned a lot I'm not going to go into into all the things we learned just one key takeaway is this idea of impact equals profit often in public goods discussions if you're in the in the green peeled green-pilled field um we we get into this Rabbit Hole of defining public goods by this classical economic definition and then we're like is this a public good is this not a public good and you get into like an endless discussion of like does it fit that definition and we found that this conversation was actually not that

useful to what we want to achieve what we're actually trying to do is we're trying to ensure that all the impact generated by contributors to optimism is fairly compensated with profit to these individuals and this gives us like a nice a nice North Star to aim for which is even if you ship something and you're able to extract some value earn some earn some rewards from it for instance let's say the bankless podcast has ads but we might see that Bangles podcast provides much more value than they're able to generate from these ads and if that's the case we want to use retro funding to align this impact and profit

ratio this is a big thing that we learned from round one of Rancho PDF um vitalik wrote a whole long blog post about it if you if you wanna if you want to rabbit hole and get nerd sniped round two is what we closed in March of this year we had 10 million op tokens 195 projects 71 voters and what we try to do is reward contributions that supported the development and Adoption of the op stack and one big takeaway and this was this was uh done in March it was quite manual we tried to really stay on our feet and execute on this round rather than trying

to build the perfect system and one thing that we found is that we need to be way better at collecting data on impact of profit so all these contributions to optimism be it in education be it tooling be it infrastructure we want to understand way better what impact has this contribution provided what impact has this tool provided and how much profit have these contributors been able to earn from these contributions already and based on these learnings we're shipping round three of retro pgf this is happening this fall 30 million op tokens took contributions that support the development and Adoption of optimism it's coming you can build for it before we get into it this is how messy it

looks if you try to visualize 195 projects and the payouts um just putting this up I think you can't even read it um uh just to give you an intuition of what are some of the projects in these categories it's everyone from protocol Guild Geth solidity never mind the beacon chain Explorer we have open Zeppelin and tooling we have the common stack uh we have so lady we have type chain we have such a diverse set of projects that were funded and we're actually seeing how Woodward how this effect is kicking in how it's changing Behavior this is what we want to see happen

um good some quotes here a good one from Andre from crypto zombies is dear team doesn't have a stable source of income and retropcgf allows them to retain their talent and focus on building more courses uh I I personally am a big crypto zombies fan this is how I got into into solidity and I think this is exactly what we want to see we want to see teams being able to focus on providing more impact instead of worrying about how they can get more funding round three Is Happening Here We Go Again these are the four categories

of things you can do to receive retro funding in round three this is the part of how you can summon ethers Phoenix so we have four categories of things of the contributions to optimism that will be rewarded this is everything from the op stack the infrastructure underpinning optimism to the developer ecosystem everything that supports developers and building these beautiful on-chain decentralized applications so everything from documentation apis services like oracles is eligible to receive retro funding even things that support the adoption of end users so think of all the wallets you interact with onboarding tools

education even some of the applications you interact with are eligible to receive Vector funding so if you're building something if you have a great idea in mind of what you can build likelihood is it fits in that framework and if you're building it and it relates to optimism you can apply to receive retro funding for the impact your product or service has if you don't have an idea of what you're what you're working on you can go to the ecosystem contributions board um it's a repo under the optimism GitHub we have around like 80 ideas of things that we think might be impactful to build

measure your impact if you're building something try to understand like how can you understand how useful this is how much impact is it generating how many users do you have how many people use your education tool go to your hackathon leverage your Oracle and their project try to measure your impact because if you don't somebody else will do it for you this is probably not what you want cool I think I'm running out of time so to summon ethers Phoenix you want to build public goods you want to help us improve retroactive public goods funding then ethers Phoenix will ensure that all Impact and profit is equalized um built for a perfect good optimism is not a roll-up optimism is an update to

capitalism thank you [Applause] let's take one now two questions hey Jonas thanks for the overview um I was wondering if you could talk a little bit about um optimizing the process for applicants and the voting process for this upcoming round sure um I think we learned a lot on this from last round uh specifically I think that's around the biggest pain points for project was like they were not aware that this is happening so we're working on spreading more awareness and the other part was we we didn't support them well in writing good

applications that help voters this also hurt voters so we asked them really lose questions and we got really loose answers and this wasn't really helpful for voters to understand the past impact of projects um so what we're doing this time around is for this project sign up help projects to provide way more information way more data sources on what they're doing so voters are able to wait more accurately assess the kind of impact the project has generated yes the voting process so um in the last round we had 69 people that submitted votes we aggregated all of them via simple average so they distributed their voting power on a

number of projects I think the median voter distributed voted on 45 projects um and yes we did it we it was it was Griff for instance here in the audience was a voter um it was quite a painful voting experience it was like going over 195 projects listed uh in a long form so what we're doing this time around is we're actually shipping a nice user interface for you to submit your votes thank you Jonas thank you [Applause] [Music]

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