Degens & Dragons: A Tale About Sustainable Public Goods Funding - Artem

uh good morning everybody um oh it's not on the screen oh it is okay sorry okay okay so I I can see it scaled on this screen down below um I will start anyway so uh can you raise a hand if you're listening for my presentation yesterday in the morning okay cool um who knows what octant project is okay we have a we have a handful of hands um who knows what who Deion are de yeah in general like what okay okay so um the last question I have for you who knows about the game Dungeons and Dragons okay so I think we uh we have a a room with enough context so digons and dragons are nothing like Dungeons and Dragons but um we have this story and the meme that we trying to um tell to the world so um Can the world exists without octant like you probably know a little bit about it but I'm going to be talking more uh later and just to let you know how this presentation is going to go I'm going to talk about Gans and Dragons then I'm going to talk a little bit about what Octan has been so far and then I'll talk about how we're going to go forward with this and so uh World definitely can exist without Octon people will use crypto public goods will be funded somehow uh but what if we create octant and what if we create a mechanism for sustainable public goods funding so uh the issues we're trying to address go much deeper than crypto it includes uh questions how do we create uh social impact how do we change the modern layer of society and how we fund what matters today most people seek maximization of their Capital that's how capitalism works so what what we're trying to do is pretty hard in the modern world because it goes against the grain it goes against how people think about things so let's get to it we call the dragons projects who accumulated substantial amount of capital in crypto the reason we call them the dragons is because dragons usually sit on pile of gold and they don't want to get out of that pile of gold they want to sit on this pile of Gold forever um and uh they usually shape Direction and potential of the crypto ecosystem um so just uh a little preview what I'm going to be talking about a bit later and for those who know what Octon is it's going to be obvious but we are golden Foundation who has substantial capital and we using this Capital to fund public goods and so we think that other projects like golden Foundation could do the same using the technology that we're working on uh to expand this metaphor I'd like to say there other dragons the mor day dragons they are big Tech corporations or hedge funds that accumulated also substantial amount of capital even in comparable with the the crypto that's the result of like systemic change that happened in the last 50 years we have hedge funds who control the game and a lot of people cannot actually even if you're smart enough it's very hard for you to um use uh Equity markets and stock markets to uh break out of poverty because the the system is riged and hedge funds control uh most of the stock markets and as a result of 21st century we have all this big Tech corporations that definitely create a lot of value for the world but at the same time they're very much profit motivated and the decisions usually made in in um uh with um with the the profit in mind not with the community in mind that's why web3 exists in the first place right so some of dragons are not corporations but wealthy individuals and they have significant influence over various Industries there are also uh crypto individuals who as their uh dragon counterparts could be uh pretty good and help sustain public goods or create more positive impact in the space now for a moment I'd like to talk about this term called Financial nihilism um that's related to what I just said about um most of the people see crypto and people in crypto um as like see crypto as a way to get rich quick and um the reason for this in like there's this article wrote by Travis King called Financial nihilism who who does doesn't know what who knows what what nihilism is okay everybody knows right so I guess you can you can sense what Financial nihilism means like the idea is you try to get as much money as possible in your hands but it's important to understand that this behavior is partially uh a result of like a response to systemic risks uh the modern economical situation put a lot of uh young individuals in a tough spot where savings uh for house or stting a family is very hard uh so this idea of financial nailism is related to the fact that aord Mobility for a lot of people in the world and also like Americans because this is the analysis based on the American Market but I think it's generally true for most of the world that it's very hard to buy a house and um Financial analism also goes in hand in hand with uh something like approach called populism uh and populism usually refers to people who are disregarded by the mor system and the idea of financial nalism is basically saying if like going to work and making money doesn't work for me I'm going to do something different so in terms of uh populism you're going to vote for like some not very good candidate in terms of financial system you're going to buy a mem coin expecting get like 10x or 20x return so those are some graphs for from uh they're not very good quality though uh from this article so this is like around 1960 I think and we see kind of like the the the uh the price of the houses and like in this range between I I can't really see this I think it's 70s ' 70s and 80s like a lot of Boomers uh and some of the Gen X generation body houses and then we see like the the crisis um in houses and then it goes a little bit down but basically the main idea is that the young people cannot really afford buying houses at the same price as it was before and that graph um also represent the share of total Real Estate Value uh depending on like different Generations so you can see like you you can see a very specific Trend in how uh the value is distributed between different Generations so it's not a surprise that a lot of people turn to crypto expecting high high returns um so now what it has to do with dents that's supposed to be a gift I don't know why it's not playing out maybe it's loading but what you're supposed to see there's like a guy with two axes and he's like screaming and jump in from like a uh a big rock oh yeah there it is so I guess like what I'm trying to show this meme is that like what I explained just now right uh dragons hold a majority of the funds but the value originally comes from the community as a signal like we value this thing we value this project um and digons they embodied the spirit of innovation and risk-taking that defines the crypto world and so the willingness to embrace the uncertainty in Risk um is kind of what in a way makes this space vibrant and like what I asked in the beginning who knows who digons are I'd like to make like very very clear difference between digons and scammers right so this is not the same thing there may be people who are new to the space uh scammers are Bad actors that we don't want in the system but gun are different they are usually like people who are buying and investing and participating in different chain activities and generally creating this like vibrant uh space in community and we can like say that some chaos to lead into new trends and Paradigm shifts balic V wrote two articles a couple of months ago one is called uh dun communism and another one is about meme coins and so his idea is very much align what we are talking about so we want to fund public goods but we are kind of a niche and D have this remarkable coordination potential so we're trying to combine those two thing bringing bringing the capital from the dragons and tabing into the potential of the uh uh dig VI vibrant communities and basically merging them together so yeah as I said digion are Risk Takers basically Deion represent the communities right because uh dragons with their capital if they're without the community they're basically nothing they want people to use their products they want people to be a part of the ecosystem they want build on top of their ecos systems and dragons are entities with significant Capital so what we trying to do is to create Capital efficient mechanisms and games to engage with digs while creating uh while simultaneously funding socially impact impactful veterans and public goods and and for that we want to use collective intelligence to Signal impactful projects uh through mechanism like quadratic funding and similars who uh knows what quadratic funding is um so for those who don't know quadratic funding is a mechanism that is usually used to fund public goods and the idea of this mechanism is essentially like um you're putting a price on a public good but and you voted in a way for it but every next vote is more expensive this this than than the previous one and this is achieved through a basic square root function right if you ever saw a square root function so the first uh vote is cheap the next uh vote is more expensive and further uh on and on and so what it allows to do is to from one point of view uh actually given something so put in a price so people will have to be willing to to um take part of their money or capital and actually fund what matters to them but from the other point of view uh it doesn't give a lot of power to dragons so it doesn't allow you to buy uh to to have the same amount of votes as um like basically it doesn't allow to have more significant amount of uh voting power um so to kind of finish this story um I'd like to uh quote this phrase I don't know where it's coming from but I saw it in Spider-Man uh and I really like it so with great power comes great responsibility um it's in a little bit um utopian because kind of we we know how the world works right now and usually who sit in the pile of gold they usually don't want to give it away or even uh put it to work so it funds uh impactful Ventures but we're optimists we're techn optimists we are thinking that is possible and I guess Goen Foundation is one example of those so we think that uh the capital must be either redistributed or at least put to work uh so the returns of this big am big amounts of capital can be used to find uh more uh important and more uh impactful products so that was the uh the first part uh of my presentation now I'm going to talk a little bit more about what Octon is and how was created so Goen Foundation is the first dragon um originated from a successful token swap in 2016 um so we hold 100,000 e and what we're doing with this Capital we put in to the proof of stake uh mechanism in ethereum and creating uh renewable funding Stream So going back to like everything that I said before there are projects that are funding public goods now these days in web 3 and outside but the main problem with this projects is this funding is not sustainable so if you want to work on something that you really care about but you don't have a revenue stream it's really hard to rely on something like gitcoin that's why we believe we need to create more sustainable uh mechanisms and the idea is capital-based funding is more sustainable long term compared to donation based funding and also the mechanism how people raise funding is also very hard because they have to ask for donation all the time instead of having like sustainable Revenue stream com into them uh on a continuous basis so our goals were basically create uh uh a sustainable stream of funding uh align with the community uh and what they want to fund and avoid centralization risks right because there are a lot of philanthropies and funds that actually do this but usually they choose what exactly to fund um so that's our mission uh if you were on my presentation yesterday morning you probably saw this so we are trying to create this spgf movement sustainable public goods funding and um our mission is not only to fund public goods but also Empower individuals so we're trying to find a balance how do we both uh create mechanism to find what matters but also reward people for participating in the system a little bit about like how octant Works in general uh for those who don't know so we are running recurring public goods funding rounds called EPO uh right now we're running them every 3 months um and we reward users for participation so distribution of this rewards happens between M and fund which goes to public goods um where's this uh yes uh recipient project donation uh funds matched and uh user rewards so user rewards can just withdraw um the value that is assigned to them but they can also choose to donate part of these rewards to public goods so effectively octant users are the ones who deciding how the matching fund is distributed a matching fund is substantial so if you donate a small amount of uh funds you can actually get a big leverage they could be like 10x 20x um and yeah so we taking it here it goes in here and that's basically the high level uh how it works and in order for you to participate in the system you need to lock glm token uh in the application which acts as a as a g mechanism uh to reward the community and against the Bad actors so yeah um that's basically what I just explained participants claim user Rewards or give away to public goods projects uh donated user rewards are matched with the matching fund given the leverage and the projects that we fund are Community Driven so there is a there is a vote that decides who will be funded and then there is a vote who and how much uh funding those project will get eventually um H Lev picture of what we achieved so far so we generated more than 3,000 eth in the last year so we ran our first funding round July I think July last year yeah um so we ran four funding rounds for ebooks were and the eth that we accumulated was used to uh fund them so combined user rewards that went to uh the community and the matching fund uh almost 200 e uh I don't know where but it says received by public goods projects it's uh more than 1 1,100 e and user received uh a little bit over 600 E for one year so uh the if we translated into dollars so it's almost $3 million received by public goods project during the year and also we run something called Community rounds where we uh basically partner with some community in the space we uh allocate some amount of uh rewards from the total yield and then they mobilize the community and fund what matters to them so we run a couple of successful rounds with a couple of dows like shifi right now we are running around with purple Dow uh if you know about the project and you're on farcaster check it out because they're very active over there and um you can see some of the examples of uh the project we funded uh right now it's over 50 projects I think in general uh but you probably know some of them uh there is a gitcoin hypers shirs a tour browser l2b some of the web3 libraries like web3js uh so the main focus has been so far on web 3 and some of the Privacy oriented products um are there any I'd like to pause for a second and ask if there are any questions like about this part yeah are the difference between the total Yi so if you received 3,000 eth uh and the user rewards and the matching fund received 1,755 where is that difference in like 1300 eth go to so um there like there's a part that goes to the Community Fund that is used to run this community rounds another part is 25% is operational costs that allows us to cover the St in operations and the development team and during this period of time we were um there's like an algorithm that is more complex um so in the four rounds we're changing the algorithm every time our original idea was to um give part of rewards to users uh give the Ming fund and then everything else we were going to put into the stake and more to create more sustainable funding streams so on the second ook like substantial part R over there in the third ook we actually made in and the fourth EP we made this much fund and user rewards much bigger so basically everything that is over there went to the community rounds operational cost and Extras taking okay I think I think I'll continue and then uh we'll have like a couple minutes for the questions in the end so going back to the digs and Dragons uh we are want to empower dragons and create mechanism for active provision of capital towards public goods funding and create more sustainable funding streams so right now octant V1 is just one instance that runs an our St in operations and we have only our community who has the power to vote and only like a certain amount of project what we want to do is want to expand this model we want to replicate and mobilize more digons uh with different existing protocols in social games and Empower more Crypton native to participate in public goods fundings so this is like a very high level overview of how this looks like so we have couple of actors in the system we have the de dragons I was talking about uh we have this well uh actually not precise uh division between regions and digion but the idea of regions of people who already like care or know about public goods and digion are these guys with access who don't know about public goods yet but they might be like might get interested in this and uh I don't know if any of you know Kevin auke and his work but in one of his books he wrote this Deion to region Journey so you like come to the space you try to make money but actually over the time you join a dow you start caring about the the the space and start contributing so in a way that's kind of like a mechanism to turn Deion to Regions so uh on on this side of the diagram we have dragons that deposit big Capital that goes to the yield generating strategies like staking the rewards coming back and they share rewards with the people who are already in the system right who uh for example uh log glm token in a way it works right now and they have power to vote and fund syst fund public goods projects on the other hand we have dents who are not a part of this and they can also deposit capital and they also use different yield generating strategy but the idea they also put some percentage of yield to sustainable public goods funding and so there could be defi protocols or whatever you can think about but also they get certain reward for this contribution so it's like a game where you both give and get something back and whatever is accumulated in sustainable public goods funding eventually goes to projects that create some impact and um those project create impact we measure it and which is very very hard problem probably one of the hardest problems in a public good space funding um and which that creates like flourishing ecosystems that that's our idea about the NEX duration of octant um this is a little more detailed diagram um by the way question who knows what uh impact bonds are or social impact bonds nobody one no okay okay I think I'm I'm going to explain it in a minute so comparing like to the previous diagram so these are the dragons that deposit like substantial amount of capital on different Capital sources these are digion that deposit like smaller amount of capital the difference here is like dragons for example uh claim this operational costs because they need to sustain the operations that they run and digs they claim like big amount of this yield but certain percent is goes to the protocol the Octon protocol and so there's like a withdrawal layer it's more of a technical part that needs to pump like uh like the body pumps blood uh into the mechanism and so over here we have like mechanism that will divide it between different volts between different something we call Transformers for example some dragons might decide to convert uh yield from one token to another token um and we have this like incentives layer that actually allows people to uh participate in the system so and over there we have this mechanism where regions or actually some of the Deion who already uh become a part of the uh of some Dragon ecosystem they can deposit token and they can be rewarded for participating in this so it's important to say that the idea of this dragon is dragons have to have some substantial amount of capital right but usually they also have a token and the token is not always used and there are a lot of examples of the governance tokens in the space they don't have any utility and so in a way we're trying to create the utility and put their Capital to work so like a two sides equation they want to mobilize their Community they want to uh uh bring more uh fund into the uh uh ecosystem there's say this screen is saying my time is up so uh the idea is that is all okay to fund public goods and eventually uh both teion and dragons and regions they can receive some something called social impact bonds I'm just going to say what what this that thing means uh so this is a financial instrument that usually used to fund socially impactful Ventures by private Capital but then if this uh project is successful usually philanthropist to governance pay governments pay back to this project so it's not necessarily successful it's not necessarily an investment but it's usually uh a way to fund uh some public goods in on the government level okay so I'm just going to skip this one it's more like a a conclusions about future of public goods funding and um thank you I don't know if I have any time for question while yeah thank you okay how do you measure the success of uh sorry so how do you measure the success of this whole funding and goods and what's uh let's say some characteristic there we would say is uh net positive for the ecosystem so right now we're uh working with number of projects that uh allow us to like get the feedback so it's not really numerical right now so we get in either like um um communication feedback about what kind of impact they create what they actually do and uh we are asking people to provide a feedback on on the platform that we're working with another thing is that we are working with the projects that for example created impact metrics for optimism to try to replicate the same model model at the a little small smaller scale but I think like like you ask one of the fundamental questions because impact measurement uh is very hard and you cannot compare all the projects using the same metrics so it's like the ongoing discussion and we are always open to uh new proposals to improve that part we have one more question anybody one more burning question no DJ questions okay thank you okay thank you ardam I think there's did you have a question what's the what take out big it it it really depends on the different uh yield mechanisms and yield strategies so it could be different it's it's kind of a part of the game yeah okay thank you so much