Last year, Marc Andreessen famously (or infamously) wrote “It’s Time To Build”, in which he lamented the failure of our institutions to act decisively in the face of the pandemic, and more broadly to collectively imagine and build towards a better future. For many of us he argued, our complacency with the status quo traps us, and makes us reluctantly accept the world around us in place of meaningful action.
The beauty of the Ethereum ecosystem is that although we’re still a nascent community, rarely do we fall into such complacency. In web3, we continuously imagine new ways to coordinate, and build tools and social norms that allow us to play new kinds of positive-sum, multiplayer games. In fact, some may hope these tools disrupt even the web2 status quo Marc Andreessen could be seen to represent.
One way to think about the space in which we play all of these coordination games is as a digital nation. This isn’t a perfect analogy, and even some of the most diehard cypherpunks would be reluctant to say we’ll be without nation states any time soon, but the metaverse™ we’re building does share some interesting similarities: in shared culture, shared values, and now shared currency.
Historically, social contracts have played an important role in helping us form and maintain our shared cultures and values. In an ideal social contract, as early modern philosophers like Rousseau have described, everyone forfeits some rights so that they might also impose selected duties. To do this without sacrificing freedom though there has to be a proper process for choosing what rights and duties we care about in the first place. We have to continuously exercise our voice, achieve consensus, and in short play the game.
In the 20th century, governments principally shaped the games we played, in turn shaping the rights and duties that underpin our social contracts. For example, in most democracies today, citizens agree to pay taxes in their shared currencies to fund their shared infrastructure; to maintain public goods like roads, bridges, and electrical grids.
In the 21st century, especially in the web3, we’re still coming to terms with what our shared contracts with each other are. In some corners of our space, we find ourselves asking if we should have any duties to each other at all. Somehow though, despite the fact that there’s no physical government to appeal to, no local bank to borrow from, and no formal university to give us the knowledge we need, we manage to keep making progress. DAOs in particular have played an important role in this process, giving us structured ways to collect, invest, and build together.
But as Vitalik mentioned in his recent post on legitimacy, coming to terms with new social norms, and choosing the right ones to fund our public goods together, is not an easy problem. My hope is that with enough effort though, the rules and mechanisms we apply to DAOs can help us out of the dark forest into a kind of web3 citadel. Web3 is our city, it’s where we live, and we should take care of each other.
If you’re not already familiar, public goods are a special class of goods most popularly (though not originally) defined as simultaneously non-excludable and non-rivalrous. Non-excludable meaning it’s extremely difficult to stop someone from using the good, like roads and bridges, and non-rivalrous meaning that it’s abundant, and one person’s use of the good doesn’t substantially reduce the amount left for someone else (e.g. there’s more than enough air to go around). Perhaps more generally though, one might consider public goods as those that create positive externalities. Public goods are critical, even selfishly, because we all rely on them - having a new car doesn’t matter if there are no roads to drive it on.
It’s worth noting that determining what is “truly public” can be a difficult task, and it’s something every community has to decide. One distinction that’s often drawn is between public goods and club goods, those goods like golf courses or membership only gyms that are excludable but non-rivalrous. But to make things more confusing even some of the things we consider public goods can be excludable given enough time and effort. For example, if you’re not a particularly good driver you might have your license revoked. If you’re an American, you might not always be allowed into Canada to use the roads in the first place.
Digital public goods are fundamentally more accessible and hence even less excludable than traditional examples. A book in a library is only available locally to those with a library card, but the infrastructure to coordinate information online is accessible, increasingly, around the world. As a consequence of their reach these kinds of goods generally create more positive externalities -- as we use them they become more useful to others at the cost of maintainer time.
This seems like a great thing at first, and it is, but there’s one major problem: the more accessible and freely generative a good is, the less people want to pay for it or sustain it. A government only has interest in funding its own roads, companies like Facebook only have interest in funding their own infrastructure (even when it comes to the kinds of open source software they focus on e.g. React), and yes even libraries generally only take care of the books within their walls. As Nadia Eghbal has written about extensively, the goods that are most critical and most public are often the least funded.
The good news is that together we can help solve these problems using our own shared web3 infrastructure, the kind that allows us to play positive-sum, multiplayer games together in the first place. And to add to that, we already have some social norms that we’ve been evolving as a community.
One such social norm the Gitcoin community has tried to set is that we need the community to be more involved in funding Ethereum’s “most public” digital public goods. We’ve done this by setting up quarterly matching rounds using quadratic funding, a novel mechanism designed by Vitalik, Glen Weyl, and Zoe Hitzig in 2018. The way this mechanism works is simple, projects in Ethereum can list themselves as public goods in need of funding, and participants can democratically allocate funds from a community managed matching pool by donating some of their own money. By its design, quadratic funding incentivizes every member of the community to fund the infrastructure they want to see in direct proportion to how useful it will be to them, providing a possible solution to our digital tragedy of the commons.
To date, this mechanism has distributed over $50mm to projects at their earliest stages like EIP-1559, POAP, Prysmatic Labs, Uniswap, and WalletConnect. All of their success is ours too as members of the Ethereum community thanks to the positive externalities they’ve created.
But it's always worth questioning whether we're doing enough as web3 citizens. The questions that keep me up at night are how we can genuinely encourage long term building and more sustainable infrastructure. How we can focus less on price and the whims of Twitter personalities, and more on the money, culture, and community legos we want to see in our ecosystem. How we can focus less on speculation and more on participation.
Over the coming weeks, and months, Gitcoin will be taking larger steps towards answering these questions and helping us sustain public goods alongside the community. We want to see more experimentation, and to help others push the boundaries of what kind of public goods coordination is possible.
Among the experiments we hope to see, as Vitalik outlined, are public goods funding via NFTs:
Which NFTs people find attractive to buy, and which ones they do not, is a question of legitimacy: if everyone agrees that one NFT is interesting and another NFT is lame, then people will strongly prefer buying the first, because it would have both higher value for bragging rights and personal pride in holding it, and because it could be resold for more because everyone else is thinking in the same way. If the conception of legitimacy for NFTs can be pulled in a good direction, there is an opportunity to establish a solid channel of funding to artists, charities and others.
Here, we've already seen some interesting developments on from PleasrDAO who in addition to purchasing Snowden's first piece recently purchased a piece from the Tor Project to support their privacy efforts and we hope to see more public goods funding via NFTs within Gitcoin as well.
Since these examples could go on forever I’ll simply hope to meet you all soon and explore them further. For now, I’ll leave you with this:
Web3 technology enables an almost uncountable number of ways to play global, multiplayer positive-sum games together. It creates all kinds of new, infinite gardens for us to play in, but only if we sustain them. I hope all of those reading consider joining us in this task, and building alongside us.
It’s time to build for the public good.