Welcome to Ethan to Ethan. To Ethan, to Ethan, to Ethan. We have a panel panel about the funding side of uh I would say crypto as it says here. And um so I'm just going to go ahead and uh introduce Constanza. So please give it a round of applause for the moderator.
Hi, thank you. Is it working? Yeah. Okay. Uh, hi.
Thank you so much. So, for the panel on public goods, we are going to have um Vivian from PSC. So, applause please. Nico Gallardo coming here. Julian mom daddy is [Applause] welcome and shy gorilla.
So round of applause here. So thank you so much. Let's start. Um do you want to start by introducing yourself first and what you do so that then we can take it off? Sure.
Does that work? Yeah, I think so. Okay. So, I'm Julian. Uh, I'm a researcher at the Ethereum Foundation working on some topics like ME that was discussed in the previous panel.
Uh, and now we're more I'm working on uh scaling. So, scaling the L1 and scaling blobs for the L2s. Uh, I guess it's related to public goods because we're building public goods. Um, and it's been very interesting to to work uh in an atmosphere where like new people come in. Uh, you build everything in the open.
Uh, and you can see your results, I guess, in the open. Thank you. Hey everyone, I'm a Cheeky Gorilla. You can call me Cheeky. I'm a core contributor to Protocol Guild.
Uh we're focused on uh rebalancing incentives um for working on Ethereum's core protocol to make sure that Ethereum can uh on board and retain its talented core protocol developers to keep on shipping the upgrades they've been shipping. Um in my spare time, I'm an absolute privacy freak. Uh so happy to nerd out with anyone about that. Uh, hi everyone. I'm uh Nico Gallardo from um Octant.
Um well, what we're doing at Octant is basically been funding public goods um well digital public goods for um two years and uh now we're shifting focus towards uh helping other ecosystems uh fund themselves as well uh while at the same time finding Ethereum alignment and funding Ethereum as well. Hello everyone. My name is Vivian Placencia and I'm a software engineer in the privacy and scaling explorations team at the the foundation and we also build public goods. So yeah, it's related to this panel. So thank you so much.
Um I guess the first question to start and set the tone the first question I have is what is a public good? Um, what's the definition of public good that you would like to have? Um, like Vitalik pointed out, it's not clear whether there is public good um, in crypto. Is a project with a token but without a business model a public good or only like projects that have that don't have a token. So, and what about an open source project that has a define business model?
So, what is public good and what is not public good? I guess I'm going to ask this question to all of you so that we can get the different definitions. I'll I'll I'll kick things off. Sure. Um I think if you ask Ethereum what is a public good, they will tell you everything is a public good.
Um which basically means that nothing is a public good anymore, which is a shame. That's not technically correct. There are a wide variety of definitions for what a public good is. I unfortunately in the pressure of the moment cannot remember a single one. Um but nevertheless something that is providing benefits to people all over the world at scale in a way that's not monetizing those users, right?
Um and I think there are a variety of public goods funding programs in Ethereum. Um which is truly an incredible thing and is truly one of the reasons why it's so fun to be in the Ethereum ecosystem. Um, but you can see that all of those different funding programs kind of target different different types of projects that they think are public goods. And so there really is a disconnect uh between what is it actually that we're trying to fund. And again, I don't think that's necessarily a terrible thing because trying to provide uh trying to build funding for worthwhile projects is always worthwhile.
Um, however, I do think we can sidestep a lot of the complexity that we have with trying to figure out what are public goods by just reframing it around maybe dependency funding because at the end of the day, what we really want to do is provide funding for projects that we depend on. And those are much much easier to identify. Those are much easier to quantify like what is the impact that they're having, what is the scale of the dependency and basically make sure that we uh we pass funding along to those accordingly. Thank you. Yeah, sure.
So, uh my view on what's a public good is starting with the economic definition of public goods are non-excludable and non-rivalous goods. So, the non-excludable part means that you can't randomly pick people that can't use these goods. Any permissionless system is that by definition basically non-rival means that if I use it, uh it doesn't degrade someone else's user experience. Uh this I think is a more interesting one in in crypto because if you use for example Ethereum um you're using some block space that someone else can't use at that point. So in that sense Ethereum the blockchain itself isn't necessarily a public good but a common good as in it's non-excludable but it's still rivalous.
Uh but that maybe um that that doesn't really cover the message because for example then Ethereum client code uh is a public good because like anyone can review the code, anyone can run the code uh and it doesn't degrade someone else's user experience. So I think it's very very nuanced what you actually call the public good. Uh and it's important to have discussion about that. Thank you. Yeah.
So I think public goods are these projects that benefits everyone and everyone can use and it can have a business model or not but I have seen it mainly in projects that don't have a business model. So, but it's mainly projects that benefits everyone and everyone can use and in the Ethereum ecosystem that are also decentralized and h they that have the values of of the ecosystem. Thank you, Nico. Yeah. Um well I think we see already like how wide the variety of definitions of public goods are and um I'd like to focus a little bit on the kind of like digital public goods and like what we call public goods in the um Ethereum space and I think I've seen a shift in the definition of uh from public goods to uh network goods or even ethereum goods you know that relate more specifically to to Ethereum because what's good for let's say Ethereum maybe doesn't necessarily mean that it's good for Solana let's say and does that exclude it from being a public good well I would argue not really as long as it's um like open source and available for anyone I think the open source part is like really key here because if anyone can just fork the code and and reuse it in in different places then as a digital public good I think that's like maybe like the most um important uh part of Thank you.
So, yes, go ahead. There was a part of your question that we we haven't touched on that I wanted to touch on uh was basically a hill that I will die on about um if you are a so-called public goods project uh are you allowed to have a token? Um and perhaps more importantly, are you allowed to raise VC funding? Um and I think this is a really really interesting questions. Um there is no right or wrong answer but I will give you my perspective of this.
Um, and my perspective of this is predicated on my vision for optimism's retroactive public goods funding program. How many people here are familiar with uh, optimism RPGF? Okay, a good amount of hands. U, basically optimism is a layer 2 and they are dedicating a portion of the transaction fees generated on that layer 2 towards funding public goods. Um, and the way that this works is they have these so-called badge holders who are basically trying to figure out, okay, in the last couple quarters, what are the projects that basically created the most good or the had the highest impact uh for the optimisms or Ethereum ecosystem broadly.
Um, and basically channel that those transaction fees, channel that uh that funding towards those projects. And um when this was initially conceived by of course Vitalic Buterine um when he this this idea of ret retroactive funding um there was this notion that basically if something like optimism can achieve sufficient scale right so they have enough transaction fees so that projects can truly depend on this funding over the long term then you might see this beautiful situation where you can have public goods projects who are valued based based on the amount of RPGF, the amount of retrofunding that they are going to receive on a quarterly basis from this program and that would kickstart this flywheel effect where you can basically have VCs who are looking to invest into projects based on how much good they can create and that's mindblowing that idea. We are still very far from that being a reality. But like the potential is there. But of course for that potential to actually become a reality.
Uh two things are required. Number one, these projects they need to be able to have tokens or do ICOs because otherwise what are they going to give to to VCs and number two obviously they need to be able to accept VC funding. And I mean in some ways you can think of VC funding as like a bank loan that needs to be repaid anyways. Um, and so from my perspective, yes, public goods projects, uh, they can absolutely have a token. They can absolutely raise VC funding, but of course, you have to have a token that's used in the right way and you have to have VCs that won't corrupt the project.
So, you know, nothing's black and white. You have to consider the ramifications of what you're doing, but generally speaking, I do not think that those two things should disclude uh disclude a project from being considered a public goods project. Interesting. Thank you. So we have one yes for public goods can have a token.
So now at this point I want to know the other opinions. Can public goods have a token and what's the role of VC in public goods? So I'd say for me it's about the outcome basically. So do you actually produce a public good and whether you have VC funding is about the process. I mean there could be a million reasons why a VC would want to fund something that's a public good that they don't directly get some benefit from.
And you can see this happening a lot. For example, Paradigm builds like a lot of tooling and it makes a lot of sense for them to build this tooling, right? I mean, that's how their their portfolio companies, they can create other products, they can onboard more um developers that that work either in paradigm or for their portfolio companies. Uh but like the specific tooling that they make is essentially a public good. Uh so the exact reason why a VC funds something I think is not so important.
uh how a public good funds itself beforehand is also not not like the defining characteristic of whether something is a public good. The it's just like the the outcome is the thing that matters and and the process is um malible at some points I guess. So is that a yes? It's yes. Okay.
Um yeah, I would also agree with that. I think Ethereum is maybe like the prime example of like a public good that has a token and has raised money from investors um that is making like a lot of impact. I think a lot of people confuse the word public goods with nonprofit which is you know causing a lot of confusion all around. Um but I don't think it's necessarily the case. like you can be a public good and offer a lot of uh the value to people um while at the same time having a a revenue model that makes it sustainable.
In fact, I think a lot of public goods would benefit from thinking a little bit outside of the okay what I can provide for free, what can I offer with extra value to uh make myself sustainable. So yeah, that's interesting. So you're even taking it one step further and say yes it can have a token yes it can be a business. That's very interesting. Yeah I agree.
I think yes because if they find a way to fund themselves I I think that's better as long as it's still public everyone can use it. And I think yes because if they find a way to to fund themselves, I think it's is it's fine too. Yeah. Both. So if I may, so what you just both said about like they should find like revenue models like in principle, I agree.
Like if you're starting a business, you should be able to make sure that you can uh you know pay to put food on the table and support yourself and your family. Um that's absolutely rational. Um it is also a a tough nut for the ecosystem to crack. Like we have not cracked public goods funding yet. Um there are many different projects that are that are trying to crack it.
Um like Octant, Lotto PGF, Protocol Guild, we have Paddle Battle, uh Gitcoin, Optimism, like everyone's trying their own unique flavor. Um and yet still despite all that initi all those initiatives um projects would still be very rational to to not depend on that and try to find their own revenue sources. Um and I am hopeful that one day um that won't be the case anymore. Um very ambitious plan um but uh you know I think we've seen that the Ethereum ecosystem is dedicated to solving this problem. Um because what we really want is for these talented entrepreneurs to truly dedicate themselves to just providing uh the most good in the
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