Public Goods Funding as a Competitive Advantage - Berkeley 2024

[Music] hey everyone my name is Kevin auki I'm the founder of gitcoin and I'm going to be introducing some of the ideas behind gitcoin 2.0 in this talk and also talking about how public goods funding is not just something that we do because we're all truistic but because it's a competitive Advantage for your ecosystem meta stands for the most effective tactic available and in this talk I want to talk a little bit about how I think that uh public goods funding can be a competitive Advantage for blockchainbased ecosystem systems and uh basically what that does is it unlocks a whole bunch more Capital to go to public goods funding if the biggest capital allocators in the space are allocating Capital to public goods and if we can first do it for evm based ecosystems what would it mean if we reached to critical mass and honed the tools and then we can eventually go mainstream and do better public goods funding in the real world using these tools eventually so public goods funding the next meta is all about that view and I'm also going to sprinkle in some ideas about getcoin 2.0 which is the latest version of getcoin that we've just announced over the last couple months so I I'll I'll start with a highlevel frame in January of 2024 Justin Drake who is an ethereum core developer said on Bank list that layer 2s compete on tooling liquidity virtual machines tokenomics public goods security and Business Development okay so we're all competing to expand block space to the world World in these different layer ches arbitrum optimism ZK sync there's a long tale of public goods that are out there and they're competing with each other to attract Builders to them to attract users to them to attract tvl on all of these different layers gitcoin equals grants equals growth and we are building a capital allocation ecosystem which is going to allow people to fund what matters to their communities in the future and we're doing it not just because we are altruistic but because it is is a competitive Advantage for your ecosystems to be allocating capital and is going to help your ecosystem attract the best Builders the brightest mines so underneath the hood of Grants I view what gitcoin is doing is building a capital allocation machine at it as a means of making sure that the right Builders are the ones who are getting capital in the uh in the ecosystem so the most naive version of a capital allocation machine and by the way Capital allocation is just deciding who to give money to it's basically the process of deciding what to fund a naive version of capital allocation is just doing an airdrop uh is that the first thing that you could do and the most naive thing that you could do if you're trying to allocate Capital to people who are doing good work in your space is to do direct grants basically I am a centralized treasury administrator and you can apply to get money out of the treasury using uh a direct Grant system maybe an RFP system very simple way of of creating a drip of funds to people who are doing good stuff in the ecosystem has been through quadratic funding which basically is based off of this idea that instead of a central power broker giving out money to an ecosystem you actually have a pool of funds that is allocated according to the needs of Everyday People in your ecosystem it's called retroactive public goods funding it's based off of the idea that it's easier to decide what to fund in retrospect as opposed to in the future so it's easier to say what public goods have been good in the past as opposed to speculate on what public goods could be good in the future so gitcoin is now traversing this design space and I think that we're uniquely positioned to do it because we've done $60 Million worth of funding through four million unique transactions to about 4,000 creators over the past and so we are I think uniquely positioned to be building these Capital allocation machines uh for everyone in the future and explore this design space of what I call onchain Capital allocation the potential here this design space that I see is to do Democratic transparent accessible and Powerful Capital allocation and it's going to be evolutionary right gitcoin grants round one was horribly naive in the past but every time we run one of these experiments we have learnings and then we design another experiment and then we just iterate towards a higher local Maxima from there and I kind of think that that iteration th this is this is what that looks like so basically if you think about the search space of possible Capital allocation mechanisms that are available out there and the amount of value that they could create for these commun communities each experiment is just sort of like a naive attempt at realizing that value creation and then you iterate towards the possible future design space uh uh what's possible and by the way there's not just one local Maxima that you're looking for there's going to be multiple local Maxima of what's possible Within These communities direct grants climbs a local Maxima of how do we do very simple Capital allocation to these communities quadratic funding is finding the local Maxima of how do we do Democratic Capital allocation retroactive public goods funding how do we do retroactive contributions okay so the way that we're going to iterate this design space remember what I said about at the start Capital allocation systems have money in and data in and then allocate money in the in the on the other side of the equation so basically tokens into aloe which is our Capital allocation protocol registry of projects which is basically data in and then that goes into Alo and then it is routed through through a strategy which you can think of as a way of just opinionated way of allocating funds to a community and what's powerful about this being modular is that uh is that we can put multiple strategies into the same system and they can work with different tokens and Registries okay so quadratic funding and retroactive public goods funding can be put side by side with each other in this modular infrastructure and they can work to uh side by side in in the same ecosystem to fund what matters to these ecosystems systems and the sum result is that we're just going to make not only allocation smart contracts that allow you to allocate Capital to your ecosystems but we're also going to have no code tools like gitcoin Grant stack that allow you just pull it into your ecosystem run quadratic funding run retroactive public goods funding for your ecosystem and to do it without having to code at all right now getcoin supports direct grants quadratic funding and retroactive public goods funding and there is billions of dollars of capital that will be routed over these things in the next cycle or so but what kind of future stuff can we build in this pluralistic design space I've got a bunch of different things that we're going to be building into gitcoin 2.0 and when you choose to allocate Capital through gitcoin and gr stack then you're betting on an ecosystem that is going to continually be adding more tools to the toolbox so anyway in some I think that public goods isn't just for hippies anymore it's something that you do because it's a competitive Advantage for your ecosystem and we're going to Pioneer the tools in the liquidity going into these ecosystems this cycle and then a couple Cycles out they're going to spill out into the mainstream and help cities and countries allocate Capital to their citizenry in a way that elevates impactful Builders I think funding your public goods is a sustainable competitive advantage and that's what gitcoin 2.0 is designed to support in this cycle we support three different mechanisms for doing it right now but we'll soon have more and uh yeah that's that's my talk thank you [Music]