Priorities for PGF Builders in 2025 - Bangkok 2024

[Music] uh cool excited to be here uh with everybody um so it's been awesome to see the growth of funding the commons over the years uh we started roughly around I think three years ago is 2021 or so um and in that time span we've seen uh truly incredible growth in the number of applications of different kinds of funding mechanisms to govern all kinds of different sorts of comments the set of people joining the community and Building Things now um is is super large we've seen just this steady growth and compounding year-over-year uh I think we're into the several thousand people in the funding the commons community that are actively building or working on um some concrete uh set of mechanisms and that's been been really really great um so what I want to do today is uh I tend to do this every year uh for the cling of the Comm Community is is talk a little bit about how the world is changing right now and look ahead while there's some time into how the next year is going to operate and give some set of priorities for how you can apply your energy and your your work to try to maximize results um with a look ahead into what's going to matter the years in the future meaning what I what I wanted to still here for you is a set of a small number of priorities and these will matter a lot in the long term in the say five fiveyear time scale and um normally uh if you've seen my talks in the past uh I usually have like a lot of different slies and whatnot um bad news my my own laptop broke two days ago so I don't have access to all my keynote files so I have a desolation of the points and earlier versions and so I'll do it do it more interactive and hop around between things if for the people who have seen me do that that's also really good but it doesn't mean that I have a perfect flow so we'll be hopping around a little bit um so let's go through um the set of priorities uh before I go into um into this let's set the stage a little bit um over the last few years we've seen um tremendous growth in the crypto Community I'll show you a graph later um both the level of capital uh that the community harnesses is now in the you know 2 point something trillion scale um and there are tens of thousands of people actively building and millions of people actively using crypto around the world uh for including for payments for uh holding currency and whatnot so the stage is set extremely well for better mechanisms to govern Comm at large um but we're missing good products that enable those people to use these new ways of operating on the flip side um there are major economic shifts that that are Brewing due to AI uh you've everyone here has seen it has heard it it feels like a tired conversation um but I just want to be hyper clear um and here actually I will um rely on some um slides from something else um uh yeah I'll skip this I was going to like just try to use some graphs to to make the point um is it needed yeah actually I'll do it because it's it's kind of like a useful thing you you've heard the conversation and it's getting tired around just how much AI is going to change everything um but I but I want to be super crisp and clear that the the world is currently not ready for the level of economic shifts that are going to happen due to the models that are being built right now and the next Generations uh coming in the next 2 4 6 um 15 years and so um the the scalability here is really good there's we have not found a Breaking Point in the in the scaling of the intelligence of the model which means that we're going to start injecting better and higher level intelligence into every factor of the economy at large today you're seeing massive scale call centers shut down and increase their their ux so people users of call centers are seeing record high numbers in terms of customer satisfaction at the same time as you're seeing massive layoffs in terms of all of these call centers being replaced with AI models that's just one example law firms are going to go through similar types of things as these models get better you'll see that happening in more and more and more sectors of the economy to complicate matters um we're starting to build a we're we're finally to the point where software is catching up to the hardware and finally able to do much more sophisticated robotics which means that by 2030 2035 we're going to be able to rely on fleets of robots to do large scale manual work the these two things together will dramatically shift the production scale of Earth will totally change how humans build things and scale things this is happening quickly and it'll it'll follow the typical adoption curve where nobody believes it then suddenly it starts happening and then everyone feels like this is obvious and that transition will be a you know 2 to 5 year uh time span so knowing that this is going to happen or that this is high likelihood of happening of of course the future's unpredictable by Nature a lot of things could occur some of these things may now come to pass for lots of reasons but it's a very high probability set of outcomes so that means that the world truly needs to change the structure of our economics we need some other way for humans to have control and Direction Over how the economy functions which makes our work in this community dramatically more important because the mechanisms that we're building are mechanisms to govern how we route resources how we allocate work how we allocate ourselves how we Orient our thought and so our mechanisms are ways of distilling opinion from many different participants into concrete and actionable things that some process should take and so our work if we do it right over the next two to 5 years can shape the future of the global economy and the crypto Community is the best testing ground for us to do that meaning the mechanisms that we build if we can get them working at the trillion scale you know 1 to 10 trillion scale that is large enough that we can truly test these things to work for operating City scale City scale things but small enough that we can experiment a lot and move very quickly you can't experiment at the at the multi-trillion scale that easily or or like at the you know 10 20 trillion scale that easily governments are super risk averse so we can experiment we can run the the experimental lab process for the world figure out better economic flows figure out the solution and shape the outcome for the rest of the world so we can think about how the future might unfold think of a set of plausible scenarios find a preferable outcome do the work to figure out how to get there and Orient the rest of the world to upgrade smoothly into this lots of Technologies in the past have developed this way the internet that you benefit from today was shaped this way over Decades of people working hard looking ahead and building the infrastructure for us so I say that to describe why what we're doing is critical now I want to like distill out the things that I think are important in 2025 so we will see huge Capital increases so um just to put into perspective this is the current scale of um Capital that you know treasuries around in the ethereum ecosystem have and that's the crypto market cap so you know 2.6 trillion and growing so you should expect in 2025 um it is very likely unclear but it's very likely that the crypto industry will continue growing quite a bit and so these treasuries may keep their current value or you know only decrease a little bit or possibly 2 to 5x which means that in that time frame these resources can then be used much more scalably so if we can Orient and and by the way all of these groups especially the Dows have no good ways of allocating the resources everyone is struggling with how do you govern these large scale common resources and allocate them to people it's precisely what our community is for so if we build good mechanisms and scale them then we can get an upgrade between all of these which will then upgrade the entire crypto community and if we're allocating single trillions well and those scale it'll give us the confidence to be able to reach out to uh governments at large and shift how tens of trillions get out at so that's the that's the like Global priority of this community now practically for the next year where I think we need to be so I'm going to give a set of like three ideas for concrete ft FTC Builders individually and three ideas for the community at large so for individual Builders uh I think people really need to focus on solving mediumsized problems so not small problems that a small community has or big problems like you know um how to totally change the the flow of capital in like entire governments because those are too hard and too slow and so mediumsized problemss give you the aperture of something sizable enough where the thing can be scaled to have high impact but small enough that your experimentation can move very quickly and so I would point you towards these kinds of things and I underscored the word solve because I've seen when we started the funding the common Community there there was the the promise of this possibility but no ideas or very few ideas and so we needed to stimulate a group and bring together a lot of Minds to generate a lot of ideas and we've done that over the last two to three years we' we've generated an enormously valuable set of ideas we've also translated a number of those ideas into active projects that people are taking on there are many projects out there over the last two years two to three years that I've put into practice a bunch of those mechanisms and are starting to scale them into the tens of billion sorry tens of millions but overall my sense is that we have a glut of ideas meaning we have an over supply of ideas today okay and way less execution that's focused to actually solve problems and so I would Orient each and every one of you much more actively towards solving concrete and tractable Pro problems in the next two to three years for people and as when you do this try to distill those mechanisms into composable structures that could be copy pasted into other environments and scaled um also factor in that when you solve this problem by the nature of what we're building it tends to not a mon a straightforward monetizable product so the VC industry doesn't know how to deal with us and that means that the entire Capital funnel that the world relies on to do Innovation isn't easily accessible to us it is hard for our community to raise money from VC which means that we need to do two things one tune some of those products so they are VC compatible or two convince the treasuries to fund it at VC scale to be clear VC scale is tens of tens to hundreds of millions per year that's what it takes to build software we can benefit from Ai and decreasing the costs but up to a point so either build something that is VC compatible or build something where you managed to convince people to give you tens of millions of dollars so suggestion two is to work hard to put in place now to bacon into systems a routing of at least 10% hope many of many of you and I would agree that it should be a much higher number but at least 10% of crypto networ Supply to public goods funding structures I'll give you a mechanism for how to do this but if we can bake in this rule in now and make it a norm across the industry while things are still small especially where things are in an upswing in a in a bull market then as networks get much bigger this 10% is going to add up to an enormous amount of capital that will be able to transform tons of tons of things so work really hard now to bake this in as a norm industrywide across ecosystem i' this is one of my strongest recommendations to most Founders that I talk to when they build crypto networks today I'm actively working on multiple networks that I work on to to go in this direction but just strongly strongly strongly recommend route as much you know at least 10% if not more of the networks applied to public goods broadly defined you want that definition to be a focused aperture where the network should be funding with a priority towards things that are good for it meaning you need to build and fund the goods that are good for that Network but it should be so broadly defined that as those networks succeed the aperture widens and then you you have the spillover effect to fund more and more and more and more things dependencies further and further and further away dependencies so very concretely for the Falon Network for the ethereum network this would mean initially funding our own implementation teams and as we succeed then funding our dependency software the dependency science the dependency communities and then wider and wider and wider use cases to the point where if we scale to networks that are worth tens to hundreds of of trillions which is very possible in a 20 to 50 year time scale then those things can actually fund at the level of nation states that's one of the things that I find most exciting about this industry these networks can scale to be Capital allocators at the scale of nation states the the world um total budget of R&D is it's on the order of two 2 to 400 billion a year the US is about you know 90 billion a year that's total so crypto Network do that the third thing that I would strongly recommend individuals to do is that right now ai systems are pretty dumb still which means that they don't work really well for all the things but you can start leveraging AI systems to make your own work faster and more efficient you can drop costs all over the place but more importantly you can start expecting that as those models get smarter you they'll be able to do more things so start reconfiguring your structure start reconfiguring your organizations and your systems and protocols to be able to plug in models that are smarter as they emerge they don't have to be smart enough right now they just have to be like good enough where you can design a structure where you can assume that as things get smarter you can swap swap things in place so now some thoughts for the broad um Community the I think the number one thing that that um the community needs to do is to increase experimentation through the solving mediumsized problems piece so it's not just like increasing experimentation in the you know more hackathons and so on though I think we need to do that it's getting the experimentation all the way into um solving medium-sized problems so a lot of us need to be focused on how do we support a lot of people in doing that work in taking ideas that we have already come up with over the last two to three years and putting them into practice and solving problems and getting to the point where um they're they're having large scale impact the second thing we need to do is we need to help find cash flows to connect to these Builders if it's not one piece of that is helping get them funded initially but much more important than that is help them find a cash flow that is going to grow with their success so that they can fund all of the development in an ongoing basis so that means better business model development setting good Norms around the community that pgf mechanisms need to earn a fraction of the money they allocate so that you can build the mechanism in a better way um suggest other more creative more interesting more ctive ways of generating fees structures think about the sequencer fees that now are powering all of optimism and therefore all of retr pgf and therefore a lot of pgf communities we can probably come up with similar kinds of innovative business models like this and so find good cash flows and hook them into pgf um streams and crucially pgf streams that end up producing some fee tax that goes to the buildout of the pgf mechanisms themselves um a lot of this community because this community is so kind and generous tends to undervalue its own contribution and under appreciate how expensive it is to build things and therefore lots of Builders don't you know go in in the route of like building nonprofits instead of startups or not paying themselves very much and so on which what ends up that ends up doing is it creates an environment where it does not give you the ability to get Capital at the tens of millions of dollar scale which means that you cannot hire large enough teams to actually build your thing and therefore you end up not being as successful so it is totally fine to take a a a portion of the cash flow and value that you're generating to feed back into the buildout of the thing itself and and so we as a community need to normalize this and make it much more easy uh for a lot of Builders to do this and the third thing that I think we can do and this doesn't need that many of us we need to set up a good Builder funnel a number of us have done this over the last few years for many networks of going from early media to learning about how to develop this to experimentation with hackathons to to um building a thing to scaling it to finding a business model and growing and currently we don't have one for the fun funding the commment and for the pgf community and I think we need to build one um yeah so yeah um sorry I'm like more serious in the talk than I meant to be mostly because like I started it kind of heavy and like the stuff really freaking terrifying about the future and so it kind of like colors my perspective a bit but uh to end on a good note um um maybe the last thing I'll mention is last year last couple of years I've been pushing a lot this notion of funding networks and finally a lot of this thinking has percolated through a lot of people and a number of us have been you know ideating around this and I think now we're starting to see this emerge a lot more so again think of your mechanisms of composable units and think about how to weave them together into into larger and larger networks so you can use your structure as a single unit router that can then do something simple that can then be composed huge plug here for the Alo protocol um and for all the stuff that um gcoin and and Kevin auke and others are building because that's like the right direction for this kind of thing um plug for the retr pgf communities that are starting to do Downstream retrop pgf program funding like op retrop pgf funding lipop and so on um and so keep building that Network structure and I think we can be in a pretty good place so anyway I'll end with showing the slide again solve mediumsized problems Route more than 10% of the crypto networks apply to pgf reconfigure for and leverage AI in all things and then increase experimentation find cash flows and let's set up a good Builder funnel so cool hope to see you next year [Applause] thanks sure yeah I can take uh questions maybe one plug um while people are thinking of questions is the pop-up sities movement and Network Stace movement is a great place to experiment with a lot of fun uh mechanisms so consider coming out to some of the popup cities and just trying out new things there so it's a great way to build things um cool I think I saw yeah so so you a problem right let's say like mil so for talk about like solving problems let's say we have like certain Milestones right how what's the mechanism for like verifying that certain Milestones are actually achieved in the solving of a problem um I mean that's very problem dependent and what I would say is usually you're solving a problem for someone or or a group and they are the Arbiters of whether or not you've solved that problem and so that becomes a structure where you have to define the measures and the objectives in a concrete way usually the best I mean the reason the world is primarily a capitalist structure now is that usually the way you do that is that people are either willing or not to pay you and that's usually a really good measure right like if they're going to pay you for doing this job it's going to work if not you have your answer it's not working uh what do you see the main challenges in creating this Builder funnel at Large Scale um especially in crypto community so you mean like the Builder funnel type thing yeah so we need to bring the capital and we need to find a way to funnel that into pgf so what do you think are like main challenges that we need to overcome for this to exist um so Builder funnel is not necessarily um think about a structure like this where it's not a single program think of a pro like many programs that that create a ladder that over time you know people participate you know learn about things and then they may experiment with hackathons or other things and then you create a structure to help support them to get into like actually refining a product and eventually get accelerators or whatever this pathway is startup oriented so acceleration investment makes sense for that pgf needs an equivalent I think it would be great to have like the equivalent of a VC fund that invests in pgf but in order to make that work we do need to have an actual cash flow return coming from the pgf mechanisms back into those funds so creating a structure that actually does that um I think could be could be un unlock cool all right any other questions one more last one Conor why does it need to be on the 10 to uh billion 10 million to1 billion scale um as a problem and what's it about that as a sweet spot if it's if you are solving a problem at a smaller scale usually it's it's hard to find that same exact problem in a bunch of other places and it's just not going to have that much impact in the long in in the medium term and if it's bigger than that scale like I see a lot of people in the funding the common Community which like are very strongly oriented toward solving Mass scale um boil the ocean level problems I am a professional ocean boiler and I love that but the way you do that is by staggering your approach and boiling smaller amounts of water first and so if you try to go and try to con you know if you say okay we need to change the entire world then you're like oh I have to go convince governments and you know the UN and so on and look where that is right like we're the US is probably about to pull out of the uh Kyo protocol again and uh that doesn't really work today and so the the in on the flip side the things that have worked in the last 20 30 years are are techn capital style massive scalable structures and I think today if we solve this kind of scal of problem we can show that it works for the crypto community and then scale it out to the world and and for a lot of projects in here who are working on what are really public goods um kinds of problems how do you size the problem because obviously like a billion dollars is easy to answer when it's a revenue stream it's a little bit harder to say this is a billion dollar problem when you're yeah I I would I would concretely frame it as there is a revenue stream involved so there's a there's an amount of capital that you're going to allocate and there's a percentage that you're able to extract from that Capital flow as a fee for providing higher quality decision- making and that percentage is your your size a problem right so if you create a mechanism that a community that's allocating A1 billion or you know10 billion worth of funding and you're able to extract like a 3% fee or like a 1% fee out of that for providing dramatically better decisions um that gives you you know pretty sizable Revenue stream um that you can use now maybe that's too large maybe that's not going to happen maybe these communities I think like the F EF reports said 100ish million a year so you know you you might be able to get like 500k to a million or something like that if you truly demonstrate that this this is dramatically better than some other approach it you have to give people a cost reduction right like you can't sell this kind of mechanism unless you are actually giving a cost reduction and it becomes really easy to sell that you just say hey you're currently spending X how about you spend less than that and produce better decisions but you have you have to give me some amount because I have to pay people in order to build the damn thing so I I just the the whole you have to pay people to build a thing is a is a meme that like we need to learn more um cool all right let's end here thank you all right thank you so much I [Music]