Who Pays for Public Goods?
Date
Oct 20, 2021
🔗 Initiative
🔗 Working Documents
Workstream
Recording: https://youtu.be/upt3a0GDyqU
Web3 is in a remarkable phase where anyone can mint money out of thin air with tokens and get backing from community to support their project. But two questions might give us pause.
1) How sustainable are these treasuries 5-10 years from now without investment strategies to earn a return?
2) In what ways are their expenses with tokens serving to seed a broader web3 public and to what degree are DAOs looking towards building insularly in ways that may forfeit or foreclose the commons entirely?
At the heart of these questions is a simpler one: who funds public goods? how? why? And what do they get in return? The broader questions we'll be looking to approach: what mechanisms can we create that will incentivize DAOs to support each other as composable states? And what mechanisms can we create that incentivize people to give to the commons?
Highly recommend reading Alisha and Andy's pieces on this subject, along with Mazucatto's discussion of the ways taxpayers have funded Silicon Valley without getting a return. How can we devise sustainable states that do?
Intro
being a taxpayer is being an investor, but an investor that never gets returns. how do you build a sustainable economy that funds public goods but should taxpayers and funders get something too. this idea of a private economy seems almost opposed to public goods
Pan: Wealthy people will move in the direction of certain things. funding these pushes toward progress. How philantrophy feeds into financialisation. and that's like how people who don't have money can use money of those that do by creating some kind of incentive structure?
David: Status hacking, how do you appeal to these rich people to give incentives.
Sarah Drinkwater: status hacking. used to work in big philanthropy and left for good reasons. a lot of things philanthropy likes to fund are institutions that already exist. things they can put their name on. true public good are a little intangible. network of libraries etc. not infra but more of the plural aspect of it.
- Basically - do you need philanthropists in order to fund large projects?
Looking at failures of traditional charity would be helpful for us too
can we hack status in a way where we're giving minor incentives (names at sides of buildings) in a way that makes a difference but also is this a bad way to look at it?
Money might not be the way > structure is important too
Lani: smart contracts > opportunity to make it real to provide support to things we really care about. might start like this but can be something else
Scott: how we are spending it is just as important. is there a way we can get this going? the notion of better defining the goal that these DAOs play, something we want to explore
Pan: how do we fund something that's good for everyone. people with a lot of tokens have misaligned incentives on defining what's best for everyone
Sel: Incentive design, mechanism design for gamification, so people want to contribute. acting inspite of anything coming back to you. how to encourage altruism behaviour in such a system?
- how public is a public good?
- libraries: not just for knowledge but a space where people can access Internet (physical public library is already decentralized in the US) —> how to bring the good of physical public library to web3 library?
global infra already exists, should use it
a thought: DAOs to pay members to be a part of the book club.
David: 3 ways to tell people that there are returns to investment
- financial capital: e.g. klimaDAO wants to be a carbon sink. tokenise carbon and make people buy more and price goes up and people want to buy because price goes up(?)
- social capital: social capital — tie status of PFP to your identity
- positive externalities: great return for everyone so it's great return for me as well
*projects should aim for all 3
Kyle: psychology research on extrinsic, identified, intrinsic, projected motivation.
almost everyone starts with extrinsic. but its not sustainable.
don't need a community or get paid to get pressured into it.
could identify which ones we're appealing to and start to move folks into intrinsic.
leaderboard for grants
bounties platform is extrinsic to get people in
David: Missionary to mercenary funnel or opposite. mercenary looks promising: look at Axie who onboarded numerous people using this mechanism.
Andy: Vitalik's monkey sitting on car guardrails, its the boundaries where things happen. can we create spaces simultaneously artistic and economic. linguistic primitives and you can play with them. not about denying saying it should only be intrinsic or extrinsic. but
Give away 50% of your money to an ecosystem funding things you'll probably get much more than what you gave away. Educate people into thinking that public giving is an investment.
pan: the incentive structure of donation (donating to museum) —> you pay lesser taxes (tax break = extrinsic motivation). the people who are in the center doing the work vs the people at the fringes bringing in the energy. you don't have to on-ramp these extrinsically motivated people into the system.
alisha: redefining extrinsic motivation — does it always have to be financial? + intrinsic motivation — does it always have to be social? What can Gitcoin learn from Axie?
graven: web3 can have diversity, don't have to be a monoculture. prefer to separate moneymaking from donation. don't have to be everything to everyone.
alisha: destination driven incentives in real life
cryptowanderer: you're not what you think you are, you're a lot more. then you recognise that intrinsic is a massively inclusive kind of category. in making and contributing to kernel, you get a lot more out of it. nothing is truly extrinsic and the entire experience that unfolds through is intrinsic in some sense. diamond sutra - can a bodhisattva give a gift? no cannot if they still have the concept of a being you cannot give a gift. its only whne i lose that sense of separate self where the stream of generosity can flow through uninhibited.
Learn to earn > planting a seed, value accrues so much more to everyone else than to what you've given. DAOs might pay members to do book clubs. insights it generates, draw people in etc. it can be one of those things where you have that external motivation too.
Value accrues to everyone else more than 'them
How these organisations could be structured to take care of its community.create flexible prototypes from these smaller organisations that try
Pan: idea of creating the grain of sand that makes the pearl and it can be the most important thing and it becomes this mechanism that creates so much more outside of the interaction but you still concentrate on the seed. lets you iterate, things less relevant can become less useful. work small and work densely
john - people speculating on those carbon credits don't really care about those carbon credits. experiment but be intentional about end result.
ben west - boom and bust cycle in environmental non profit world. public goods is more of the process. not easy to measure the outcomes.
graven: dollars and cents are the only linguistic primitive you can to measure. turing-complete that we can use now. crypto-poetics. you're never in control of the outcome. real humility, seeing all other human beings the same as you. because we all share the same nourishment the layer of dead stuff that feeds us all
What are the major/ successful alternative revenue streams you have observed?
Like maybe for a learning org, education can be non-gated, serving the public good, but integrating live biz projects, or using the collective force/ actions of learners to create newer sub-initiatives, etc can pull in funds from varied sources
Or dropping nfts is huge trend right now for all daos, (but they put extra energy into it as well)
everything is intrinsic, connecting with our local environment and finding out the needs. I agree with it so so much and in resonance with our project too
"You do not need to change the world, it's the eyes you see"
Some references:
