HyperCerts for Regenerative Cryptoeconomics by Evan Miyazono | Devcon Bogotá

foreign [Music] thank you for coming to hear about hyperserts um those are actually quick question have how many people have heard of impact certificates generally in the audience okay um so this is going to be a proposal for a system that looks very very different from what we have now economically I I want to come to you as if we are people in a barter economy discussing what money could look like and if you imagine trying to explain the mechanics of a supermarket does someone from a barter economy you can imagine how weird and incomprehensible some of these things will be at first I hope that you'll bear with me and then eventually we'll get to something that uh seems very compelling it makes a lot of sense and feels like the kind of thing that you know where you could take this and start building on it extending it incorporating this into things that you're working on my name is Evan miyazono I uh lead Network Goods formerly PL research at protocol Labs protocol Labs you might have heard of for ipfs filecoin lip P2P one of our many other small projects I'm talking about none of those what I'm talking about is going to be a new project that's about uh we proposed this about uh I think nine or ten months ago and we've been uh sprinting on it I'd say for the last six months or so uh overall the structure for the talk is that I'm going to talk about the over overall structure is going to be what was possible yesterday what is now possible today and where we think that we should bring tomorrow starting off generally with the claim that we didn't really have much in the way of tracking of actions yesterday compared to what you might imagine yesterday people did things you might even say people just did the things instead of trying to do additional things in addition to doing stuff um I would I would generalize this to say that like specifically I'm thinking that you can make things you can talk about things you can Fork projects steal things modify them share them but there is a scene and unseen impact and all of you have are familiar with the kinds of things that I would say are seen if you if you're talking about things that are seen by the economy this is really obvious you have things that people can pay for or not um when we talk about things that are unseen the specific framing is uh these are externalities these are indirect costs or benefits um respectively negative and positive externalities that affect third parties based on things that are done somewhere else you can see very concrete examples of these um I have two things that you might do create a parking lot or create an apple orchard with both of these there are clear costs to making it there are clear benefits to making it and then there are also some things that you may or may not be able to capture or describe very clearly um parking lots and asphalt generally has been shown to raise the temperature of the city just because it absorbs more sunlight Than Dirt does similarly an apple orchard might reduce flash flood risks compared to parking lot but it might also create issues around uh the chemical treatments used to grow or protect the crop there's no way currently to track or reward or even like there's no handle that the market can get to grab onto to think about the positive externalities like the oxygen that is created by by this apple orchard and you'll frequently see tables like this talking about rival risks or excludable Goods when we talk about these externalities often they fall into the non-excludable category of public goods and Commons and you'll see a lot of discussion of these These are rigorous economic terms with formal definitions but I think that talking about them in terms of externalities is a really clean and simplified way of saying like there are things that are hard to track hard to reward hard to say like you did you did great here here's here's a prize and like prizes themselves all like the Nobel Prize for instance is like a way of tracking the externalities of the benefits of scientific research you'll see a lot of themes resonant with the public goods funding models the retropgf stuff um the get coin regen Finance type uh like all of these things sort of end up thinking about and talking about the same types of models the same types of goods that are really hard to incentivize support the creation of Etc I would also highlight that this is a very simplified model I really enjoyed this talk about uh how you might frame different types of goods in addition to rivalrous or non-rivalers you could have semi-rival riskings you can also have anti-rivalrous things and these uh this framing is useful to approximate but really I would encourage the focus on externalities people do it these impactful things and you can imagine that there is one action that results in a uh possibly uncountably infinite number of impacts externalities positive effects that result from this and there are ways of thinking about how you might want to try to track all of those effects you could try to track those I would claim that it is far simpler and far more effective to just talk about accounting for this initial piece of work and let this and potentially specify some of this but mostly just track the things that people are doing and if you have that then you can start building off of that to understand what the impacts of a specific action are and talk about whether those are good what are those impacts are good or bad and whether or not we want to support them incentivize them Etc uh today I'm pleased to announce that we have an ability to track actions in a novel way we're calling them hyper certs these are a specific interoperable data layer to account for actions that are expected to have positive impact you can think of it as roughly analogous to equity interest in a non-profit Enterprise naturally if you think about like a startup that is expected to have profit the value of the equity is proportional to the uh present discounted future cash flows of that Enterprise that you might expect with some uncertainty tact on and if you expect to have impact that is not profitable maybe you're going to cure a disease or develop a mechanism to incentivize the Earth being carbon negative or net carbon neutral then you could imagine that because there's no Revenue there might not be a value to these uh to the equity-like analog of those systems and instead we have a an expectation that we could design and Implement a paradigm shift that is a tool this tool actually coupled with really a philosophical change about how we think about and how we reward things that we think are useful or valuable and if we have both of these together then we can potentially create a shift where you're not just uh you're not just paying for things that you can personally own and take home with you you're paying for things that you can enjoy in the same way that we all enjoy either rule of law Clean Air National Defense uh or things like software infrastructure a like fairly cheap deeply subsidized access to block space on some on your particular blockchain when I say that this is specific there are six data fields that we think are sufficient to specify what actions were taken with whatever resolution you might be interested in really and specifically the contributors would be a like robustly identified ideally but we should be able to deal with identity that is not cryptographically verified in these hyperserts the scope of work would be being able to say like oh it was work on this project or this other project or this aspect of this project community outreach software development Road mapping the time of work would be when the work was done in contrast to the time of impact where you could potentially uh talk about how this particular work had impact that was at this time like last year versus the impact that it will have in five years and think about those as separable objects in addition to the scope of work where maybe your apple orchard both uh reduces flood risks and uh and provides carbon sequestration and oxygen and the rights would be this generalized field in which you could incorporate bragging rights along into embed and transfer bragging rights IP rights Etc with the uh with the hypersert object itself and these aren't at this point wholly abstract oh actually I'll get to that moment one thing that's very important um when you're talking about these this data structure in this data layer is the ability to do robust accounting you could imagine that the way that you would generate these might not be splitting them in the ways that where the pieces are most recognizable and as valuable for their output so you could imagine generating these as the work you do on a project quarterly but the thing that you really want to support as an or something the thing someone really might want to support would be specifically like one one feature that was built and that's the feature that makes this product particularly useful for them or you could imagine uh one particular type of Outreach that led to a huge growth in users that uh and a whole new use case that made this project particularly valuable to a user or a community or a company um I say Accounting in that this is roughly analogous to uh Double Entry bookkeeping which I would claim is another fairly revolutionary structure like coordination mechanism among humans at scale uh this is not some hypothetical thing we actually have a pilot app that is live on the girly test net the back end is an ERC 3525 which extend extends 721 and so these are these do exist as nfts um we've partnered with uh Kevin owaki and others at gitcoin to make uh fairly nice uh rendering svgs for these so that when you look at them you can see not just some set of text Fields but this is very generalizable and my claim is that tomorrow people actually uh yeah you so you can go on uh to pilot.hypersearch.xyz and create mint these play with them and I will be sharing the roadmap later on on what this looks like and uh what our plans are for a broader launch and the claim is that tomorrow people will use these to coordinate in new ways this is my hope I think that this would be if possible if adopted a significantly brighter future in which anything from creating novel knowledge to open data to uh scientific breakthroughs to Community Support to a carbon sequestration could be things that you can suddenly support efforts from in the same way that like I can't as an American citizen support a particular NASA mission because there isn't a like physical affordance for me to do that in the same way that I can support food banks and homeless shelters and hypersuits should generalize that to be able to support any kind of action that people are taking it is worth noting that when we talk about hyper certs and impact certificates people typically think that all these actions have to have happened in the past and I want to hopefully disabuse you of that notion and explain that there is a incredibly impactful way that you can influence future decisions with retroactive funding and that is what we're targeting for our first use cases for hyperserts specifically you could imagine that uh oh I do not have a I do not have a laser pointer I do not think um so this is a diagram that shows progression of time you can imagine that typically when these actions take place that you want to see uh the impact before the public is willing to provide to provide money to this for having been successful and it would be really nice to be able to take that money from the future pull it back into the present and use it to fund this action whenever you see this as an economist or in finance you can see that this bottom line This role is played by an investor typically there's some benefit that is expected to be taken because there's some likely some possible possibility of failure and so you expect that risk to be offset by profits but generally you could imagine that there could be impact investors who are investing in activities generally and I think that we should try to and we are targeting the creation of a particular Bounty slash prize programs with uh non-profits who fund science or environmental programs to set up programs where they will fund or they will pledge to award the team that succeeds most in pursuing some goal and they will reward not just that team but also anyone who contributed to that team and do so in a proportion that the teams and contributors and collaborators agree is fair at the time of collaboration so you can start to see the analog to equity interest in these projects um the only like there is no profitability of these it it would just be a chance at potentially sharing in the reputation and funding from a prize but you can start uh benefiting from all of the de-risking that you get from retrospective funding there's like the the grant maker who's funding retrospectively knows exactly what the outcome was and so they know exactly what they're get that they're getting what they're paying for um but they also get the causal impact of prospective funding where they can actually de-risk this for more people they can make it easier for people to take on these in large Endeavors because suddenly they've pledged not just support they're not just fund retrospectively teams that succeed but also anyone who provides them with workspace or resources or collaborations or introductions and so it should really facilitate the ability for these contributors to a priority go out and do these useful things so uh overall you don't I will admit you do not need hyper certs for this you could do this with napkin agreements in the same way that like many cap tables are set up initially with like a signed napkin of like okay the founders it's 60 40 or 50 50 or whatever and that's good enough that is possible here the reason hyper certs get interesting is because I I foresee and predict and hope to help create an ecosystem where it's not just one-off programs sometimes you'll see these programs Cascade where maybe the contribution to a small scoped retrospective funding program ends up being integral to a much larger effort and you can imagine this very easily for some particular carbon capture technology that becomes integral to a larger program around capturing at gigaton Carbon scale uh globally and so I think that these things will Cascade in time and you'll see these embedded in each other and when you start doing that having a robust and very formal and consistent way of accounting for and listing all of the pieces of impact becomes very useful because you want to be able to either trade or exchange or share or attribute within each program in a way that is visible to and measurable in the larger program I expect that these will also have a property where you'll have multiple funding programs simultaneously running where the same activity could apply and when that work is being done you'll need to do splitting and merging of these contributions to say which parts exactly were being rewarded by which grant program even though it may look like a monolithic activity from one company or one team or one Dao I also will claim that this should generalize so far I've talked about how a grant program looks like you have teams or activities being funded with grants in some kind of historical pay and prey as a grant maker you kind of just have to send the money and hope for the best and this could be done by some simple format and I'm proposing that we use hyperserts for this of course uh actually I should mention that the breakdown of these into categories I think are useful layers of abstraction because for many of these you can actually separate or you can replace the component with other things that you might want to use depending on what you're trying to achieve what level of consensus you might have I think it's very important that we also be able to fund things retrospectively so not just teams and activities but also outcomes outputs and the impact that those outcomes have and when you have this it starts to become interesting to look at how instead of grants for retrospective funding you could have bounties and retrospective evaluation for these uh sorry grants for prospective funding you could have bounties and retrospective funding for uh the retrospective outcomes or outputs and there is no real bound to the type of decision mechanisms you could use for this and so to name two completely different things that definitely don't cover the space but just give you some inspiration of how you could start thinking about using these you could imagine having a retrospective funding program on a subsequent Bitcoin grants round where we use quadratic voting to price the hyper certs for useful breakthroughs in cryptography for instance and in addition you could have you could imagine bringing on or bring salience to those projects for prospective funders and impact investor types to subsidize future work that could be incredibly impactful but perhaps cryptography researchers can't spend time on because Grant makers are focused on what Google and Facebook and Amazon think are interesting research projects within those countries um alternatively you could imagine actually just using hyperserts for internal performance tracking uh I'm interested like my entire team working on this is interested in using this to attribute and share and track and list like oh thank you for helping me with this project I'm going to give you five percent of the impact certificate that I have I'm minting on this work that I've been doing internally that doesn't even need to be sold just having a useful metric to track what is what people are doing and look back on this in a way that is consistent I think will be profoundly useful and there are many things you can imagine in between of uh High net worth individuals wanting to fund programs of uh non-prof endowed non-profits trying to use this for increasing the impact that they have in their Investments or you being becoming prospective funders in these and I think that this becomes incredibly impactful if we can convince at some point um that or if we can convince nation-state scale funders Sovereign currency issuers that they can fund these because I think that there are certain aspects of modern monetary theory that imply robustly that this could be scalable to fund all sorts of public goods at a scale that we haven't actually seen yet and cannot curling sustain in our current economic Paradigm so that's getting a little bit abstract as far as timeline the plan is to do run a security audit and launch this possibly this quarter ideally within the beginning of q1 on mainnet and have people start to actually use this we're going to be deploying hackathons recruiting program managers and Grant programs funders for both prospective and retrospective funding for impact certificates we definitely plan to integrate with Git coin and the get coin passport because of our current collaboration and their enthusiasm and we don't yet have full merge and split capabilities yet or the ability to have attestations I didn't get into at all the fact that you need external evaluators to decide how much they think how valuable they think the impact for an outcome actually is that needs to be a deeply subjective thing and in the same way that like I can look at strawberries in the supermarket and say do I want to pay that for it or not is do I think this is worthwhile you could imagine having a robust market clearing price even the absence of robust inter-subjective agreement on the value of some of these things because if someone's willing to pay for it that economically will set the price of that positive externality or that the work that results in that positive externality um we do have a road map that has us uh supporting the allocation of 50 million dollars in Impact certificate in in hypersearch specifically by Q3 of next year I would say we are roughly on track for that and I would love to encourage you to like keep on us to make sure that this is happening this is not a business model this is a pure public good we are not taking fees we have no plans to take this and extract money from it we think that this is just going to enable a revolutionary coordination model for humans in terms of the people actually doing this uh my team or my sub team the network funding team and we're also working with Ray Guild and uh Kevin owaki and Octavian at Super modular and obviously I have to thank protocol labs and Juan for their support and um would definitely encourage you to take pictures of this I think we'll link this talk and the slides on hypersearch.xyz once uh the video is up and in addition um I also wanted to plug funding the commons it's a conference we're running uh fairly frequently I think the target is to do roughly 20 next year two large events many pop-ups a large number of community events this is actually the shirt from the one that we did on Monday at shelling point and other than that if you are interested in helping implement this either tooling front end back end helping audit the smart contract we're putting together a decentralized organ a permission decentralized organization to try and make sure that when this is ready for Humanity that it is in the most useful form um I am at 50 seconds left so I'm happy to take one question at these at these uh I reminded like a stock ranking at companies where to show like your performance you have to show individual contributions like okay I did this I did that have you talked about people on these sector about this like discussions informal whatever I I don't think that we've our our plans currently have been that you can Define these at whatever resolution you want so if you want to Define it for your team and you never want to break it down into individual individuals you don't have to the idea of being able to merge and split these is purely because in the same way that it's easier to create a liquid market for art if you're not selling an entire collection all at once it might be that people want to support individual contributions to a project and it like it's unfortunate that we you have to decide based on uh roughly it's unfortunate that those who have money to buy these get to decide whatever they want to support but it's also the reality and by creating this the hope is that we can make it easier for more people to support more things and we will have to lean into making it easier and uh encouraging people to support things that they see are valuable I'm curious about your decision not to have a viable business model around this and whether that's kind of short-sighted for long-term impact um and I don't know I see this a lot in crypto where there's these sort of very short um projects that don't have really like long-term sustainable you know structures I suppose so I just I'd love to hear why why you've chosen to do that I have so much thinking about this and I'm really glad you asked um I will not get into all of it I would be happy to take additional questions in the hallway but uh the top the top level take is that my team within protocol Labs is actually intended to fund unprofitable impactful work and the only reason that works is because we can roughly draw a boundary around an ecosystem in the same way that a nation can draw a boundary around an economy tax things within the economy tax certain things within the economy and then fund infrastructure I am the fund infrastructure side of that equation we have other value capture mechanisms that exist within protocol labs and so this is roughly deeply subsidized by and supported by filecoin um if other people would like to support the creation of this that would be obviously welcome and we have plans that using hyperserts can make certain subsets of networks or economies so much more productive that strategic investments in those ecosystems can provide the revenue and the business model that we might need so we have no value capture in within hyperserts but if we invest in things that use hyperserts because that is their competitive advantage that becomes a business model and that's just one of a few different ways you could think about trying to make that sustainable I'm curious um also about the duplication of credit for one in One impact moment so for example if you have a million vaccines that are created and the funder the vaccines gets a hyper cert for funding them the transporter gets you know a credit for that the injector gets credit for that like how do you ensure that you're not giving away five million vaccines worth of credit for one million vaccines worth of execution the hypersearch itself should include specif like specifically what it was that they did and then if you wanted to you could merge the whole thing together um in proportions that the initial issuers thought was fair merge it into one thing and reward the whole thing monolithically there's also an important factor where you need to be able to scope or you need to be able to have anyone to say I think this is the impact or the value of this particular hypersert and if it turns out that like there was it was only valid because the transporter rushed it through and like made it in time then people might like people should be able to subjectively evaluate that and say I'm putting this subjective subjectively quantifying the value of this as higher for these reasons and then the people who are funding these might decide that is or is not aligned with their value metric hey thanks for talk uh I'm Marco I'm with ssvidel and uh I'm wondering uh have you thought about how if it this would be a good tool for dolls like d5s or dowels in crypto General to implement and um how easy would it be to to implement something like this or what could be the the benefits I really do hope implement this I think that they are like Dows are going to be closest to understanding the and extrapolating the potential for this framework I do think that there's a challenge around the fact that this does not this is not a source of funding and if that was reach for hyperserts as a way of raising money no no I mean like the dolls that have money but allocating yes we want to like help to grow the ecosystem right we need yeah a lot of structure built for the Dow that that could be that is chemical being built by by Grant you'll be able to identify perfect analogs for this but I'm really excited about one application where for uh a file coin conference or an ipfs conference we could say 50 off your ticket if you have a hyper cert that that shows you've supported either one of our like either ipfs or one of its technological dependencies and then for a 50 discount we sell all of our hyper search for 55 so either you're donating five dollars to us or we are subsidizing you onboarding and funding the projects that we depend on and then you can demonstrate that support by bringing a hyper certain saying look I decided to support this particular by JavaScript library that live P2P depends on that ipfs clearly depends on and as a result um I've like protocol ads can create a network effect and start subsidizing the creation of public goods in this way and I would hope that Dows and other conferences could start doing this and you could see this start to spread and really increase the amount of public goods that are funded hi Evan I've been involved in quite a lot of long-running and some short-running non-profit projects where further down the line it's very hard for everybody to remember and Achieve consensus on who made what contribution and is there any any sort of Deadlock resolution or conflict resolution in the job of in in the system for you know when you're trying to get around to quantifying the subjective as you said yeah I think that it needs to or does that just stay in the human sphere I think it lays in the human sphere um quantifying this objective since 2021. um I I think that it needs to be like taking only what is incredibly important to have in the data model itself having that on chain and having everything else be something that some evaluator has attached to one of these impact certificates and saying like this is why um like this is why this is the person who actually contributed this thing or like this contribution was the most important and then at some point because these exist in a market hypothetically then the market would decide which of those sub components are valuable you could also and should also have robust systems where eventually Sovereign currency issuing countries are deciding that they are using their governance structures or even uh Network States could be issuing their own currencies and doing this where they're supporting the creation of infrastructure as they see fit and then you can see more robust governance systems other than just markets showing up for that