Markets for Public Goods

Transcript

this is going to be a talk about markets for public goods with Griff green give him a round of applause thank uh thank you so much let's see if we can get these slides up uh because actually before I start my talk uh Ashley over there has some really cool swag some give us swag some patches so if you want to just not sit there but you want to get some like turn some like upgrade some swag right there she'll hook you up uh and give you some patches and if you really want to earn some Swag like the best swag is the swag that you earned right so we have these impact quests you can go to the gith booth learn what they are but basically the concept is let's leave

Barcelona better than we found it and win some cool swag so uh you could check out the gith booth and you can like you know pick up garbage or do some or donate on gith to Barcelona projects and also get like the green pill book or even a hardware wallet okay but that's the end of the commercials uh let's talk about the talk market for public goods the markets for public goods I hope that at the end of this that you guys share my belief that actually public goods are almost always funded by markets I know sounds crazy right but let's first start how many people have seen me talk about this slide before good then I'm going to skip it

the long story short is that public goods are great there's a technical definition non-excludable non-rival risks that's not really what I'm talking about that's the technical academic definition uh and it's kind of public goods I like to think of them is like the stuff that you imagine governments and nonprofits are doing right the value that they're creating but it goes even beyond that because actually corporations are often also providing free of charge to end user value right right telegram Discord did you pay for that no most people didn't pay for that it was free I would Define that in at least for the value of my talk and the

value of building cool with crypto I would call that public goods the main provider of public goods however is government because they got some huge Revenue $25 trillion wor dollars worth of Revenue was collected by governments in 2020 and that was a few years ago there's been a little bit of inflation so I'm sure the numberers is a lot higher than that right they are the major providers of public goods and they do they get most of their funding from taxes and but when you look at these taxes where does this money really come from you know what where does income tax come from or corporate tax capital gains these come from markets right governments are

effectively skimming off the top of markets to fund public goods and there's a reason for it Market participants are incentivized to externalize costs this is a market failure right so people who are engaging in markets they want to make profit so they take all the free stuff they can to make profit that's their job that you could say if you're cynical that they're exploiting public goods so governments are effectively siphoning funds off of markets through taxation in the name of public goods so that they can protect public goods right and this is this is a win-win right this is the cool thing about markets in

general they're win-wins this the governments and States they provide like a a safe space for markets to operate they provide Public Safety roads all these things but this is so very surprising when I tell people this idea the people don't we don't think about governments as making money off of of markets we we we stop from that next like layer right now they get money from taxes it's true but they've taxes have always been coming off of markets and it's this weird I don't like the dynamic it feels like it's like okay so as a as a you know someone who has a business it's kind of I'm incentivized

to exploit and extract as much as I can from all the public goods that are available and then as a government I'm I'm incentivized to extract as much as I can from Market markets right it's this it feels adversarial it's like extraction economics is is what I'm making up a term because it's fun right uh it feels like extraction economics and I think that in with crypto we have the opportunity to build something better a a new a different system where it's not extract extract but actually it's it's like let's instead of extracting from markets because markets are markets we're not I'm not trying to change the incentives of of the of the market you know they

they want to make a profit and there's market failures but could we create abundance economics on the other side could we effectively integrate taxes into economic systems that are built around the value creation of public goods if we create a system where actually you are rewarded when you are coordinating around the production of public goods and and then like the corporation instead of being taxed they're actually oh well this is a way that we can you know put some extra numbers on the spreadsheet that that's that's not extraction economics that's them just

playing their game they're like well no I can make make more money by not polluting right this is the dream this is the high level dream of what we can do if we can build something better than than governance governments if we can build abundance economics and public goods markets are what will create abundance economics and I think it's understated how valuable this system could be what an opportunity it could be many of my talks are titled the biggest opportunity that no one's talking about because look at this governments are spending $35 trillion at least in 2020 and I'm sure they're spending a lot more than that

now they spent 35 trillion in 2020 right and no it's not a typo right the previous one was their revenue is 25 trillion right so wait wait wait there's a there's a problem it's not a typo they spent 35 trillion but they only collected 25 trillion in 2020 where where' the rest come from anybody got an idea Deb debt that's right money printer go BR that they they actually just print it right and there's complex mechanisms for printing they're like no they didn't just print it they borrowed it well you

know they issued bonds they did all sorts of complex things but in the end they printed it okay when you issue a bond and you give it to somebody that paper is just paper sure they gave you real money for it but the paper you printed a bond is not real money it's a promise and what I would say is that we're already copying taxation models and government models with crypto so go out on a limb here with me Public Utilities like let's say that you want to create a water system for a small town right you want a water treatment plant you want a big a dig a big well you know you you want all the

infrastructure you're going to issue bonds you're going to take out loans you're going to effectively print money uh in very some complex way to build and maintain that infrastructure well blockchains are doing the same thing right Bitcoin is just saying hey here's some Bitcoin uh to the people who are maintaining the infrastructure you know uh or ethereum did a did it effectively in Ico they said hey investors give us Bitcoin so that we can uh so that we can like build all this stuff and we'll give you ether when we launch so blockchains issue a currency just like Public Utilities issue a currency to bootstrap the Network and then uh the big difference with Public Utilities is it's

usually centralized it's generally a you know top- down approach where there's some local government that's like we're doing this and we're controlling every aspect of it so they control the infrastructure they can either use it themselves to provide income for themselves like you know through the usage rights like what collecting a water bill or they can license that infrastructure to corporations to do all the all the work uh with blockchains it's more decentralized so it's like well all these people kind of created value in one way or another so they get the currency right and those people need to sell the currency so that they can like capture some profit you know pay for themselves pay for their work so uh

the de so it's becomes more of a supply and demand game where uh people you have to have a demand source and in in blockchains usually it's the transaction fees right the idea is hey it's not the water bill it's like you got to pay transaction fees in Bitcoin or in ether and then that creates demand for the currency that investors can trust uh so so you can see the parallels right but the big difference is that in public utilities governments regulate the market and collect taxes if they license the use to a corporation they can say don't make the price of water more than you know a dollar a liter that's just like you can't charge it more than that they can regulate the market whereas in blockchains it's more of a decentralized

like the people who are participating kind of self-regulate so the devs and the speculators are regulating the market and trying to profit in more of a decentralized way but the outcome is the same in the end Society gets something some really valuable public infrastructure uh in in the case of Public Utilities it's something more in meat space like water infrastructure electrical electric an electrical grid but with blockchains it's traditionally a financial infrastructure Financial infrastructure that is anyone can use anyone can tap into uh but there's other models too right so there's I maybe I'm going out on a limb here but if you try to like

come with me and be like think of things like taxes right like how does government make a profit and how does how how do how do organizations that are providing public goods make a profit uh the most common model by far is an income tax model the Girl Scouts their goal is not to sell cookies you know at least that's not their state of objective they're it's a side hustle you know they're like hey who wants our cookies you know and and I consider this an income tax model because the CEO is making over 200k a year okay it's not like this is all like charity and great you know that people are making money off of the Girl Scouts they work for the Girl Scouts they make some money there's lots of volunteers of course but the outcome is a public good they're empowering young women with new skills

to like Adventure in the world so so their side hustle is selling cookies but and they they but they use that money they self tax to provide a public good and it's the same with social media and ether scan and lots of l2s like mantle where they they have a side hustle advertising or in the case of mantle they actually have their own exchange bybit and bybit is self- taxing to fund public goods in the gaming industry in the blockchain gaming industry or to support college kids and learning about crypto so there's also another very popular kind of income tax model is uh the premium model and everyone's heard

of the premium model right uh Twitter and and telegram Discord uh they give you services for free it's so great right this is like spreads the network effects but if you want to be a power user you want to get that blue check box just give Elon eight bucks you know uh and and then you get other benefits and uh you know there's like the8 Twitter but then there's you know projects like the UN which are providing one hell of a service to society okay giving governments a space where they can converse oh my God okay this is important because Wars are like they're like a thing so uh but the fees like China pays 400 something million dollars

to be a member of the UN to have access to influence right so they they're the UN is providing a public Public Service a huge public service and members are actually paying for it they found a nice economic system public nouns and the token engineering comments they're public nouns is providing like general public goods you know and anyone who has a noun can propose what public goods to fund whereas the T Tec is really focused on how do we advance token engineering right and they're both membership Commons if you have Tec tokens you have a public noun then you have special rights but in the end the public good is for all and I want to dive into the TC because it's a really complicated and

juicy taxation system uh that I think I would like to see a lot more organizations do something like this where effectively if you want to issue Tec tokens you have to send a stable coin into a bonding curve I'm not going to explain it you have to send a stable coin into a smart contract right and when you send that stable coin to the smart contract it creates Tec tokens it's a magical thing uh but part of the collateral that that part of the money that you sent in goes into collateralizing the T tokens and the other part goes to funding public goods in the TC's case specifically to advancing token engineering to funding the you know tooling that token

Engineers use CAD CAD or python libraries or or uh the te Academy which is an incredible educational opportunity for anyone so uh there you could kind of think of this as like a custom duty it's like you want to bring your value into this closed economy well you got to pay the taxes man right uh and uh and then the same is when you want to exit it's kind of a Tobin tax so if if uh if you want to exit the TC want some money back for TC tokens you can burn the tokens through the smart contract it will release collateral for you and a portion of the collateral that's released actually goes to funding public

goods and keeping the the cycle going now I called those things taxes but I'm wrong those are not taxes they they're called tributes in the system and I think it's really important that we recognize that this is not a tax government taxes are not optional you have no choice okay they will come at you they will steal your house they will take whatever you got to if you if you don't play by their rules you are in their land right and and governments actually use that money uh they that they collect to create regulatory monopolies around the public goods that they care about so they'll take that money and they'll decide what they want to do do they want to provide defense do they want to control the

water the electrical grid what what do they want to control the roads you know honestly some countries don't pave the roads okay guys like people pave the roads so the cool thing with the Tec and other systems like this is that we're creating the similar economic models but they're not taxes they fund public goods but enable competition if the Tec is doing a bad job at advancing token engineering but they're collecting a good Market someone else can come along token economics sty who's like an ally of the TC they could be like ah dude TC you guys have lost your way we're creating the same model ourselves we're advancing token engineering over here you can't do that with

taxes there's no optionality here taxes create are fund monopolies this is something better much better uh okay so I have a few more uh systems that I want to go through but I got to go kind of fast because I'm running out of time uh merit-based funding is super cool you know from award ceremonies social impact bonds that are funded by governments uh but the one that of course that's the most juicy is retr pgf this is the one you guys need to know about because in September no November somewhere in there probably more like November optimism is giving away 30 million op tokens to anyone who provides value to the optimism Network

this is like $40 million and there's no exact like oh you know you have to do this or you have to do that it's they have some metrics but you can innovate around what you want to do so right now they're bootstrapping this system with issuance of the op token and then they distribute the op tokens to builders and then the idea is well those Builders have created value so they are creating more demand for the op block space and then that should generate sequencer uh Revenue so like how you kind of like me like how you order the transactions there's a lot of money that can be made from that and then that value would get captured and continue this cycle now the coolest

thing about this system is that it allows for Innovation it allows for billers not to have to coordinate so much with the central planner like if you want to govern government grant holy cow has anyone applied for a government grant like shoot me okay it's so much paperwork they want you to do exactly this follow these rules not give money to sanctioned entities and stuff like that right so like uh very difficult if you want to actually make Global impact uh so but this is like yeah you know you can just coordinate you don't you Loosely coordinate with optimism and innovate on a new way that you don't need to get validated you just need to find investors to that will support you in your effort to build towards optimism

and then those investors and the builders will get rewarded by retr pgf so you can see they're creating like a free market for public goods in optimism and by the way 30 million op okay in November like what are you building put it on optimism and then get some of this money that's insane amount of money uh especially in a bare Market if you want to know more about this uh gith is running a booth we're playing in that game okay we didn't we didn't really ask permission from optimism to put that Booth out there that's a community that's like a giveth project and we're hoping that we get rewarded from optimism right but that Booth that's not funded by optimism that's

funded by retr pgf hopefully so okay there's lots of taxes you know and and but I want to also get people to think there's one thing that I don't see enough of in crypto and it's lotteries you know how much money is made made by lotteries I feel like I just feel like this is missing you know like the original like Bitcoin idea was kind of like a lottery like Satoshi thought it'd be like one computer one minor you know and that like everyone with a computer could kind of enter the Bitcoin Lottery and get some Bitcoin you know he didn't see mining pools and you know you know like as6 and stuff he didn't see that coming uh so even the

original crypto Vision involved in my opinion a lottery but I why aren't there more lotteries for funding public goods in the crypto space like it seems like such a dgen play Let's Do It guys anyway uh I digress okay so uh donation models are way more simple and I would say that uh the donation models are pretty advanced in crypto way more advanced than the other taxation models because those taxation models they're kind of complex and I don't even know if you guys understand what I'm talking about because it's pretty abstract but donation models are way easier and there is an economic side of donations at least in the states and dozens of other countries it's called tax deductions

right so you as a donor you can get a tax deduction you can reduce your your income tax uh and by whatever you donate right uh of course there's it's a complicated system most people don't even get what they get from a tax deduction but I don't want to explain it so uh give backs is like tax in tax deductions without governments or or taxes right so we've tokenized tax deductions with gith and anytime you donate to a project on giveth a verified project that we make sure is like super legit providing public goods you get give tokens right so that's super cool uh and and then there's qf and qf is by

far the most Innovative thing that's come out of the crypto donation space and you don't even need crypto to do it give backs you kind of need crypto to issue a currency you know uh but quadratic funding this could be done with PayPal and in fact they have uh gitcoin has created simple grants. XYZ and I think it's super cool they have like really interesting ways to around like stripe censorship and stuff so anyway definitely check that out but uh with gith we're trying to combine all three of these things givebacks quadratic funding and referrals so referrals are something we just launched and I think it's amazing because because we've tokenized this like tax deduction model you can actually when when a when

a donor donates any of these crypto whether it's on optimism polygon cell or XI or mainnet when they donate we issue them give tokens right well now if you go to your favorite project you can get a little link that's a referral link and you can get part of the donor's givebacks so now when someone when you are like hey check out this awesome project like even if you're a project right you can say hey check out my awesome project well then someone donates 100% of the donation goes to the nonprofit and then the refer which if if it's the project they get give tokens right and the donors get give tokens so you can see this is like this is nice

viral system well then we can supercharge that system with the quadratic Force right we can bring in quadratic funding on top of that so we have donation. eth which is our matching pool that we're just starting to fund and the quadratic force is what really amplifies the this quadratic power right they're the funders of the matching pool so they're saying hey I just want to fund public goods and not think about it right here's some money to the matching pool let the people decide right and what's really cool is when you have this matching pool up there it like just gets everyone excited about it because now $1 donation can turn into $100 of funding and then you kick on referrals and it

just stuff gets wild and this is what I'm trying to say when you bring crypto into funding public goods you can do like public goods Legos you can everything's interoperable you can build crazy things I want to see us innovate more and so uh thank you so much for coming like we have a I I recently launched not many people know about this but I have this consulting firm basically trying to survive the bare Market guys uh it's called General magic and we do we provide services for impact Dows like Dows that are trying to build Innovative systems and we're actually hiring we're actually hiring in a bare Market because we've been very successful so uh we're looking for CTO we're looking for designers devs anybody

please come apply Heather is right here she is like leading the hiring charge and working over time because we have so many positions to hire from uh so if you're a CTO especially we we need your help uh yeah and and or for instance you know I didn't make these slides General Magic made these slides they're beautiful right thank you rre where is rodri there he is you want Roder to make your slides yeah let's give rri a round of applause I'm like can you make give backs and referrals and all this stuff he's like yeah yeah yeah you know you want Roger to make your slides call General magic it's beautiful right so okay thank you all for uh enjoying my my time's been up for a [Applause] while