James Waugh I Positive Incentives of RetroPGF I Fire Eyes I Pragma Sydney 2024

[Music] next up I want to bring on James from firece to talk about how you can take advantage of and just overall the the positive incentives that go into Retro pgf if you don't know what retr pgf is it is retroactive public goods funding which means there's a mechanism for you to be rewarded for doing or the work that you've already done in this space whether it's contributed to a community provided anywhere from help to buil on projects taken early bets on certain Technologies and then seen that get rewarded by getting more users in or just getting more people to know about what's happening so there's a lot of things to go into that and it's a really really big ecosystem now kind of leading and directly giving people billions of dollars and all of you can actually take advantage of that in terms of be part of this for the next waves be part of the next rounds and a whole economic sort of network around how this benefits everybody so James is going to talk about what that looks like and without further Ado please welcome James on [Applause] stage hello thank you very much ktic and I mean to Echo some of the thank yous that Anthony said like very very stoked to be here and very very stoked to have this kind of event in austral Asia I mean maybe one day it'll be in New Zealand and I'll be super stoked but until then I will take Sydney um as a as a medium St also like huge shout out to the rail gun guys I think like privacy is a really scary space right now and something I'm really passionate about outside of retro pgf and so thinking about how we can like you know encourage that ecosystem more and sort of bring those people up is really super important um so positive incentives for retr pgf so hands up if you know what retr pgf is okay like 40% hit rate hands up if you received anything from optimism or anyone else as a retroactive Grant okay SE that's like 10 maybe 15 people so really what R retroactive pgf is is thinking about a grants ecosystem and rather than doing it in a way which is like Hi here's something you should get money for you know pretty please come and do this it's about doing cool stuff and then being rewarded in the future for doing that right and so optimism have done that over the past couple of years with different progressively bigger and bigger rounds the most recent round was about over 100 Mill milon in op tokens that were distributed to people for doing cool stuff in the ecosystem oh no I need my slides or I don't know what I'm talking about um and so last year I wrote an article at the end of the year in November called retro pgf to infinity and beyond and I used the Neopets uh money tree so maybe some of you know what Neopets is but the money tree and Neopets was something that you would go to once a day and you would click a button and that would give you a random prize right and anyone could go to that tree and so thinking about that neop pits money tree and sort of how we can think think about that in the broader landscape I really wanted to see a lot of these other projects introduce their own retro pgf uh Grant systems and since that article in November there's been two really strong use cases and a few sort of less strong use cases one of them is from um the filecoin ecosystem and another one is from the pocket ecosystem and both of these have set their own retr pgf grants up and so thinking about the future as to how you know we as an ecosystem can be rewarded on an ongoing basis for participating in systems like this is super cool um so we know how to distribute grants a lot of them so the first gitcoin round was in 2019 um and that distributed $38,000 uh to the ecosystem which at the time was pretty impressive right now I went to blockchain grants.com and and at blockchain grants.com it told me that there was $8.26 billion of Grants deployed now I don't think that's entirely accurate I think it's probably a very very small fraction of that number but think you know even if it's like 10% right or 5% into that number that is a shitload of money that's been distributed you know on an ongoing basis I don't know where blockchain.com blockchain grants.

com got their information I assume that's like they're Distributing grants you know based on like a shitcoin that dropped 99% is like if you measured at the all-time high we gave out $18 billion um but there's a lot of different grants programs around the ecosystem right so starting in the bottom right there we have the cardano ecosystem now I'm not a huge fan of cardano but I was recently in um Kenya for a project called magma a collective called magma which which is kind of like a network State Collective pushing a lot of really cool stuff um across the whole continent and what a lot of the founders in um across Africa told me is that cardano is the biggest grants deployer there right and for a lot of these ecosystems they don't really care if it comes from layer one or this layer one or that layer one at the end of the day deploying $80 million that they can use is awesome um another example up there is the Tron influencer grants program right and so this is if you support the Tron ecosystem which I do not uh then you can you can show up as an influencer and receive tokens for being a cool influencer right so clearly there was a large spectrum of Grants going from like gitcoin which is ideally you know really about a ecosystem and developing out cool developer tools like Unis swap right Unis swap came from one of those initial early grants rounds and so right now there's the getcoin grants round 20 going on um and you know even if it's not 18 billion dollars that we have you know one thing that crypto has been really good at is giving out money right in lots of different forms and some of those forms of Grants and so WTF is retr pgf it's like a grants program with but with a time travel stuff inside of it you know we're really what it is is as opposed to giving out a standard Grant which is if you come to my platform and you build XYZ instead it's like contribute to some cool stuff and you'll get rewarded for doing that but that really has a cold start problem right it had like has a chicken and EG problem because it sort of requires a level of privilege in order to even start contributing to those e E Systems right because if you're not being paid then how could you you know start doing work before you're getting paid because you need to be paid but luckily that's already started happening right optimism deployed $100 million you know a few month at the end of last year um filecoin and pocket are deploying you know tens of millions of dollars more and it's pretty awesome to see like that you know cold start problem has really been solved by a few of these projects leaning into that and so now um there's over a thousand projects that have been funded from either optimism pocket or filecoin and these projects are across the entire world across the entire ecosystem some of some of them in this room um and so thinking about you know that cold start problem has now been solved right so you can now start contributing to these ecosystems and start getting rewarded on a really quick basis um which is putting the Retro in in public goods funding um now this is like an interesting mechanic right so like the lighthouse there um is Lighthouse is a really good there's other examples but a lighthouse is a really good example of a public good right because you don't want to crash into the rocks and so they sit up lious and now every ship that passes by is like oh that's a very useful Lighthouse um now optimism is a public good in some ways but it's also a private good right that's there's a Laura Shin tweet there uh where a16z bought $90 million of optimism tokens right that's quite a lot and at the same time optimism gave away $150 Million worth of optimism tokens so if you're a16z you're sitting there going okay so I'm buying a token that you just gave away some multiple of right it's a pretty confusing pitch but the reason that a16z and a lot of other investors are buying these tokens is because of the network effects that these types of rounds are making right retr pgf goes a long way in creating the incentive model internally to be like I want to contribute something value to the world and hopefully if it's actually valuable that will be recognized and I'll be rewarded you know massively and so the bottom right you have Ivan on Tech maybe some of you remember this from a few years ago and he was like respect the pump and you know I'm not sure that I would quite align myself that much with Ivan but the idea that actually like crypto moves in mysterious ways right and narratives and mechanism design and all of these different things and how many people you can get in a room that are smart you know that is what really moves crypto and meaningful directions and so thinking about how we can align different projects towards you know meaningful goals and towards like public goods well also maintaining a token price right because you can't just start with 100 tokens give them all away and expect that to have a meaningful market cap right you've got to give them way in strategic ways and in meaningful ways to actually push forward the ecosystem and so something um I'm from fire Eyes by the way so the bottom right is a little fire eyes emoji um and we're really passionate about sort of like pushing forward ethereum in a meaningful direction through designing cool governance and cool air drops so a lot of the biggest airdrops um ens optimism um super rare gitcoin a bunch more will sort of help build out what those mechanisms actually look like for Distributing tokens and eardrops are very fun and I feel very passionate about eardrops um but so is retr pgf right and if you sort of you don't need to squint too hard to actually like these are the same mechanism right the people that got the Unis swap eardrop weren't really expecting they were going to get a Unis swap airdrop right the people that got the ens eardrop weren't expecting that they were going to get the ens eardrop and then suddenly you show up and you go wow I got $122,000 or whatever it was you know $5,000 in my account this is sick right I I really care about this ecosystem now and similarly with retr pgf although like you do have to often you have to actually apply to be participant right so you have to like fill out a form and say hey here's what I did you know I want some tokens for doing that but you know just basically through an application form just like for tokens you've got to press claim right you do some minimum amount of work and then you've received a shitload of tokens for doing that right and a shitload of incentive doing that and so what that points to is it like what we want to build is an ecosystem where you can be rewarded in lots of different ways right if you are adding value in a meaningful way to the ecosystem you can very quickly receive a heap of value for doing that and it doesn't matter if it's like you've pressed a button on a protocol or you've created some fantastic art so um optimism had the onchain Summer where basically people that like had made different types of art or um music and stuff like that were massively incentivized for doing so and so you can make sort of cultural artifacts you can build like core code you know core developer resources or you can just interface with a protocol or it doesn't matter right if you are adding value in any of this realm then we want to incentivize you massively and you can very easily see a future where you know like there was one of these projects that had ever done retroactive um pgfs now there's three right I would suggest that you know over the course of this year there will be many many more projects that lean into this and now as something as someone that's done something useful for the ecosystem you can be rewarded from like 10 different protocols right and each one's giving you 5,500 $100 but you're being one recognized for that right so you can go out and say hey I receive retop pgf funding you know you should support me more and two you receive a sort of sustainable value for the work that you're doing and so it's very exciting to see sort of more of these projects leaning into that um who knows what will be incentivized right this is my excellent Yoda meme never farming I am always farming I be and I think that like you know in the essence of Yoda you know with his hood up being a wizard sort of walking around trying to do you know most value additive things to the ecosystem you know you know that you are always farming and you are always contributing value sorry you will always be farming by contributing value right and that's something that I think is like a massive unlock for crypto and certainly when you think at like traditional organizations there is no traditional organization that does this right Airbnb tried to give away Equity to their superhosts and they were told nope you may not do that it's illegal right now we are operating in a very different landscape and we can give away tokens to whoever we damn well please right despite The Regulators maybe being pissed off about that but what that means is we can actually start to incentivize in a very different way and create a collective in a really different way right so the idea that like I'm an electrician and I can walk into a coffee shop and I can fix the light bulb and then the guy goes oh yeah you can have coffees for the next few weeks right now maybe there's some like you've got to make sure he's an accredited electrician and there's some like you know technical questions there but that concept applying to a really broad audience makes for a much better human coordination experiment right we sort of have created like a PVP environment over the past like hundred years of creating these like traditional corporate structures with corporate law that are bound by regulation that says You must maximize shareholder value and actually that's not maximizing human value right it's maximizing shareholder value and that shareholder value is held by very small you know hopefully not too malicious mostly malicious group of people and so think about how we can experiment with that and just give that value away in a much more collectivism and you know human Centric way I think the first step is retrop pgf and you can certainly see that spreading you know once 100 projects have deployed hundred billion doar I think a lot of the world will change their tune and say maybe I should just do this because it's good for the world right and then maybe someone recognizes that I added value to the world and they want to incentivize that massively and so you know these are four of the projects that have started experimenting in this um in this Zone at the moment um but I would say that there's like infinite positive incentives that we can give away here right the total crypto industry has a valuation of like a trillion dollars right trillion dollar I'd say actually most of that probably you know it's maybe like a couple hundred million couple hundred billion dollars of value that's held in the crypto market cap compared to the what was it earlier like $8 trillion held by Black Rock alone there is a significant amount of capital in the world or value in the world and thinking about how we can start to sort of like you know Kickstart this machine with these incentives and actually through token market caps through basically like funneling money out of Silicon Valley and into the hands of like you know contributors to these protocols that are building the future is a really meaningful step and I think it's going to continue in a in a very quick way into this year when I wrote that piece in November at the very bottom of it I said I want cool protocols to adopt retr pgf first because I'm kind of worried that the cardos and the Tron you not not to too purposely roast them but to like you know Lamer Protocols are going to adopt this retrop pgf narrative and they're sort of going to steal it from optimism right and they're going to go we're doing the B binance retro pgf round and you know here's a100 million to anyone that's contributed to binance ecosystem and that's still good but they still get to sort of harvest that narrative right and so I'm really pleased that filecoin and pocket and a few others are now leaning into that because we want the best projects to do these retro uh pgf experiments first right and to start sort of um pushing it out in a meaningful way and so I would encourage anyone whether you're you know part of a community whether you're part of a token whether you're the founder of a project to actually sort of think about how you can use retroactive incentives um uh the development behind a new defi protocol called DEA um thank you very much for the um the topics of that you've uh you've just presented it it's absolutely fascinating um the one question I had on retroactive grants was how do we think about aligning ourselves best with the ecosystem what's that one kpi that we can absolutely nail and feel that we're genuinely adding value and therefore worthy of receiving a grant great question and so optimism have' done a lot of research into this topic of sort of like impact evaluation criteria right so what is impact to optimism optimism initially called it retro pgf and they got a lot of for calling it retro public goods funding right because is it public goods because it sort of seems like it's optimism Goods you know pretty pretty transparently and so thinking about how you can evaluate these these impact measurements is is very interesting um lorder who was one of the people that helped craft that impact evaluation criteria for the last round of um optimism retro pgf we had a conversation in istan last year and she was like oh I hope you're using the impact evaluation criteria as a badge holder to evaluate how you're giving out grants and I didn't know that she created the system and I went I'm just like making it up and I just go through and just give away money to these people because I think they were cool and because they added value now she was sort of not very into that answer but you know there's different badge holders so for the optimism experiment of giving out 100 Mil last year there's 150 different people that have been elected or um passed the Baton by other people that are sort of able to make those decisions around you know what is impact and I think you want that to be purposely decentralized right and so it's not really an answer you know my answer is that you sort of want the right people in the room that can actually evaluate impact in a way they see impact forming and that might be very different for very people and certain different people and certainly if you just have the VCS sit down and go who's been the most impactful and one of them says well the price went up on this day so this person's been the most impactful you know okay well that's clearly not how we should um evaluate impact but things like you know how many humans attended events you know how many humans signed up for hackathon you know were there cool was there cool art and culture created and sort of absorbed by a population you know did you build something meaningful how many people Ed that how many people have um you know looked at or copied the GitHub there are there are hundreds of different ways that we can measure this impact and try to sort of each project coming up their own criteria and their own metrics around how they want to retre ly reward you know will end in some chaos and will certainly end in some projects Distributing money to dumb places you know but that's sort of just like lots of shitcoins that have done the exact same thing you know it's okay we're still in an experimentation stage and we sort of can have that impact be measured in different ways by different project so I don't have an exact answer but hopefully we can sort of build that out together and have many different interesting parties contribute to how that um value is perceived and and rated we probably have one more one any other yes one more dying question thanks for this it's been um really interesting uh I wanted to get your opinion on how a project like this or like a concept like this um would work for real world projects and not just crypto projects I recently read about um a team that got together of with their own expenses and went to remediate a marine site where there had been a commercial fishing installation and the company had gone bankrupt and just left all their equipment there so um how do you see something like this applying Beyond just um blockchain ptical love it and I think especially for sort of like um public goods like impact evaluation you know trying to imagine um A&Z right or like a bank in Australia being like oh you've been a really great customer and you've added you you did a bug report you know here's some money that's going to be quite challenging I think but you know thinking about a project that's like cleaning up the ocean for example you know like what's that stat about when you give away to charity like some huge portion of Charity earnings are just sort of like deleted through bureaucracy right like this seems like a really nice solution where I as a contributor to that charity say hey here's a million dollars but I don't want that to be used for CEO salaries you know that need to be paid a bunch of money to distribute money you know instead here's a million dollars and take a photo of every piece of plastic you pick up right and maybe you've got to be like accredited to get on not accredited investor but you've got to be like verified to get on the platform you know but once you're verified and you're on that platform if you can take a photo of trash that you've cleaned up or you can take you know you can prove that you've cleaned the ocean in some way then being able to distribute value directly in that way especially around sort of the social impact space I think this like that maybe it's still 5 years away right but but that really clearly seems to be the next step is that you sort of distribute money to actions based on you know what amount of impact you've made and so I think certainly the Social Development space is a is an awesome place to start with this um anyway now his time's up thank you guys so much