Retro Profit Organizations - Berkeley 2024

[Music] all right so I'm going to be giving something of a like slightly researchy talk it's going to have two mechanisms but I think it's only fair if we're going to unite these two mechanisms uh about around like grant funding and retr funding that I give you a sort of a thematic tie so we're calling it retrofuturism which is this idea that you're trying to remember what you used to think think about the future you know it's like what was our imagined future once back in the day and so the idea is that that concept of remembering what you used to think about something is something very very powerful in grant funding particularly the sort of interesting way we like to do it in in the web three space uh and so the two mechanisms I'm going to talk to you about uh are going to are going to both kind of use this theme and I'll come back and and try to remind you uh why and exactly how it does it's big optimism has done some really cool experiments right like there's there's a lot of money being given out um right we have a lot of other projects in the space uh doing it what Jonas from optimism I think one of the reasons it's especially interesting uh right now is that in the last sort of bull market 2021 2022 there was this kind of like grants funding uh nightmare where you saw a bunch of people saying hey I'll give you grant money if you do this and then you'd have have these roving bands of mercenary units like fulfilling at best the minimum requirements for a grant to build something and just doing it for a bunch of different systems at the same time projects tended to find that was not a very successful way to build an ecosystem so alternatives for for just ecosystem funding is one reason you might care about this and and the approach you know in that context would sort of say well build something useful and then we'll fund you after the fact right um but I'm going to argue two challenges it faces are you you have a lack of supporting institutions which it's a big interesting new idea you're obviously going to not have a full infrastructure of supporting institutions right off the bat and secondly it's probably going to suffer from Mission creep or what I'm going to call futurism creep because remember we got to keep to the theme here um and that's just the idea that it's a new enough idea that you're it's going to be hard not to slip into sort of old ideas and thus it may not even get a fair Shake why would you actually want to do rpgfan we're done we're done sort of uh stage clearing here and I think the way I've outlined this idea of retro public goods is that it's something that's surprising useful I think that's actually inic original paper about it right it's something where you don't think it's going to be useful and then when you hear about it or once you see it built it come it turns out to be useful a retrop public good is something that looks like the orange curve before it's built right where you you have that that Mass on the low utility part where everybody's just kind of like yeah I don't get it um but then after it's created it looks maybe more like the blue curve right where people are like oh no I can actually see the point right so that shift from uh the way a curve you know the utility uh would look to people before it's built versus after it's built is one way of kind of codifying what we mean by a retr public good dynamically we're going back and we're saying what did you all used to think about this idea before it was built and we're using that in comparing it with your opinion of what you thought what you now think it is now that it is built right and the difference between those two is our metric so that's the retrofuturism piece we're remembering what you used to think about the future the journey then summarizing everything would be you apply for a grant round up front uh EG like a getcoin round and then you you get that sort of like early assessment of how useful people think what your building is going to be and maybe you're pleasantly surprised maybe it turns out the world gets it and then you can just go through the normal process right but let's say they don't get it you think you you're going to build something that's more useful than people expected you sign yourself up as a retrofit organization making this commitment um and then when you show up to the round people see that commitment and they pay extra special attention because you're not you know you're not just a Chrysler Building right and then you apply for this bonus retr public goods funding um so what are the challenges um first is it vure investable I mean I think the answer is probably no right now but in theory the answer is of course yes right like in theory if you're creating this much value there's a world in which you could capture that much value and if you can redistribute that value back to shareholders then yes it's investable but I think that's one of those things that's probably would really have to be proven out before people are willing to make a sort of like unicorn style traditional VC investment um and you'd probably want to see uh rpgfinal uh retr profit organizations is a world in which we're seeing really really spiky distributions where some organizations who created a lot of value are getting a lot of it back and maybe we see that maybe we don't um so how gam is it uh that would be another one if you think through that earlier mechanism I talked about where we're sort of like linking game you know arbitrum and gitcoin if the funding amounts are a lot different you might imagine people sort of shading down but then if you think that through it's like you know maybe prevents them from existing in the first place it's just a little complicated and i' I've clearly just done a partial equilibrium not a general equilibrium model here so uh so you know uh probably work to be done there and then my favorite piece can you slash retr public harms as a theorist I love this the idea that you say you're going to you're going to build something and you build something bad or you or you don't do what's expected is there something that you can be put on the line because it's essentially just the flip side of the whole thing we're interested in right we're gonna if we're going to reward you for retr public goods can we penalize you for retr public harms or retr public bads I think that's really cool and interesting in practice the idea of like slashing somebody's business doesn't sound super nice so I'm I'm not sure about putting it into practice but couldn't help mention it just to sum up this is the retrofuturism theme right both the mechanisms we've talked about have been ways of leveraging the the earlier opinions of relevant people and what they thought about the future to sort of better understand what sort of goods we're funding right in the first case it was What did the what did what did the users the potential users or Community think about the use beforehand and how did that compare to what they thought after and the second one is what did the uh what did the people starting the business think about their ability to capture profit and so both of those are being used across these two mechanisms and then hopefully it could be interesting to sort of Link this cool uh upfront Grant INF infrastructure we have in web 3 to the sort of like expost rpgfan in in web 3 and that could be an uh I'm pretty hopeful about that as an interesting Way Forward so I appreciate you uh helping or you're you listening and taking any questions