Blockchains Are Revolutionizing Public Goods Funding

Last month, I had the honor of being invited to speak at the New Voices stage during Consensus 2024 regarding public goods funding in crypto, a specialized area I’ve devoted significant time and energy to throughout my Web3 profession. Feeling knowledgeable and excited about the topic, I was looking forward to shedding light on it for a wider audience. However, as I attempted to put my thoughts into writing, I couldn’t shake off the feeling that it might remain abstract or unclear to some. (Can anyone relate?)

As a passionate crypto investor and tech lead at the Public Goods Network, I had the privilege of being invited to speak on the “New Voices” track at Consensus 2024.

I’ve begun crafting my speech, outlining the role money plays in fueling incentives and driving world-altering inventions. In the 1950s, government funding for research ignited advancements in science, medicine, and technology. More recently, the expansion of venture capital has propelled a surge in startups and innovative businesses. My thesis: cryptocurrencies are paving the way for a decentralized, mass-scale distribution of financing to underserved sectors. The hope is that this will lead to significant progress. Regrettably, discovering concrete, widely accepted examples of this phenomenon has proven elusive.

As a researcher exploring the potential of blockchain technology, I’ve come across numerous inspiring initiatives that are making a significant impact in various fields. For instance, GainForest is a project that tackles deforestation through a transparent and automated system, distributing funding directly to local conservationists upon proof of their efforts. Another project, VoiceDeck, empowers journalists by enabling retroactive community-driven funding decisions. I’ve actively participated in quadratic funding rounds on Gitcoin, which distributed millions of dollars in matching funds to numerous projects based on the number of unique donors. These experiences have fueled my excitement about the possibilities that blockchain technology holds for our world. However, it’s disheartening to realize that these applications represent only a small fraction of what this industry is focusing on.

Last year, I spearheaded the second half’s technological advancement and implementation of Public Goods Network, a Layer 2 blockchain designed to provide long-term financing for public goods via sequencer fees. As we strived to distinguish ourselves among numerous competing blockchains, our primary strategy involved financial incentives. To attract builders, fill up available blockspace, and foster growth within our ecosystem, the allocation of capital became a pivotal approach.

As a crypto investor, I’ve seen some programs make a significant impact in the community, like Optimism’s RetroPGF. With this mechanism, the most impactful projects are funded retroactively based on the collective wisdom and decision-making of the community. It’s an innovative funding solution that I’ve come across in my crypto journey, showcasing how blockchain technology is transforming the way we distribute resources effectively and transparently. RetroPGF marked the first large-scale implementation of a decentralized, tamper-proof funding mechanism in the mainstream crypto scene.

In my view, this experiment was extraordinarily successful. Each phase was conducted meticulously, akin to scientific trials, involving formulated hypotheses and controlled variables. This refined their ability to evaluate and reward impact with increasing accuracy. Subsequently, other blockchain ecosystems, including Filecoin and Celo, replicated these rounds for their respective communities during the early part of this year.

Although I found this development intriguing, I couldn’t help but ponder the reason behind blockchain ecosystems being the primary adopters of these funding mechanisms. Was the entire crypto niche focused solely on enhancing blockchain grant schemes?

My answer: yes and no.

From a researcher’s perspective, it is commonly held that public goods funding mechanisms are merely viewed as DAO tools or social initiatives. However, in today’s fast-paced market landscape, these mechanisms have evolved into valuable competitive advantages. Blockchain ecosystems are rapidly adopting and refining these groundbreaking tools and protocols at an unprecedented rate. As these open-source solutions continue to improve, they provide any ecosystem, not just blockchains, with the ability to fund their priorities effectively.

As a crypto investor, I’m excited to be part of the onchain ecosystem, which is made up of thousands of individuals from different corners of the world, all working together towards common objectives. This is a significant shift in the way economic and governance structures are designed. Historically, these systems have been imposed from the top-down. But with the advent of blockchain technology, we now have the power to build bottoms-up global networks that align with our values and beliefs. It’s an empowering feeling to be part of this decentralized revolution.

Our technology is on the verge of transforming the way capital moves and power is wielded in society. Although blockchain funding mechanisms are currently developing, they will eventually grow to encompass economies as large as nations. As the industry advances, it will encourage investments and direct resources towards underserved areas.

For individuals aiming to cultivate an ecosystem, I strongly recommend conducting experiments and openly sharing the results. By pooling our collective wisdom, the industry can more effectively achieve our common objectives at an accelerated pace.

As a crypto investor, I strongly advise you to delve deep into the governance and economic structures underlying various blockchains. It’s crucial to assess whether token distributions foster a healthy ecosystem or solely benefit a select few decision-makers. Moreover, familiarize yourself with the mechanisms that control these systems, keeping in mind that your investment choices influence their development.

As a crypto investor, I can tell you that the potential of blockchains to revolutionize economies and governance systems is no longer just an abstract concept for the future. It’s a reality taking shape right before our eyes. And what makes it even more exciting is the healthy competition among different blockchain platforms, which is fueling innovation and growth in this space.

Here’s a suggestion for paraphrasing that statement in a more conversational and clear manner: