PSE | Rethinking Public Goods - Vee | ETHDam 2024

[Music] we're going to have a morning packed with um some very interesting content that's going to end up with regulation and compliance so we've been speaking about Builders all weekend so far and now we're going to see kind of really what the uh what's going to happen moving forward and how can we actually do things in the right way and we're really going to hear from a lot of Industry leaders um but kick things off this is a topic that's very close to my heart in this regard because it really Powers a lot of the blockchain ecosystem in terms of public goods so I'd like to introduce v um who's going to be talking about that this morning thank you very much Jonathan hey everyone so I think first things first props to everyone for making it here on a Sunday morning that is very impressive exactly treat yourself to a double shot espresso so quick background intro about myself I uh my name is V I am with the privacy and scaling Explorations team what we do is work on open open source privacy and scaling tools we are a part of the ethereum foundation my specific role I focus on this project called quadratic funding which is around how can we better think of better ways to channel funds towards projects that are working on public goods I focus a lot on spreading awareness and adoption for quadratic funding to different communities and that would be the focus of my talk today which is around um rethinking the model for public goods fundings we would take a uh a look at what are public goods um we will look at how are they currently being funded um we will focus on the different models but we would focus specifically on quadratic funding uh we will also look at you know why should we even consider quadratic funding um why should everyone here be bothered about it at all and how can we be more involved in participating so getting right into it what are public goods has anyone here ever heard of the term public goods before okay so everyone's an expert we can just call it quits here like we can end the talk let's go for coffee right now but for the the few that didn't uh raise their hands uh quick intro into public goods uh public goods generally speaking have three main characteristics firstly they are non-excludable what that means is individ idual cannot be excluded from use so say for example if I don't like someone it doesn't matter I could not ex exclude them from enjoying or participating in using the public good the second characteristic it is that it is nonrival RIS meaning if I am using this good it doesn't reduce the quality or quantity available for someone else to use it and lastly multiple people can use this good at any point in time so this is the theoretical explanation um some examples real world examples of this are um in the real world your examples are street lights roads libraries these are all public goods and in the online World your ethereum ecosystem blockchain YouTube they all share characteristics of uh what it means to be a public good so looking at the how public goods are currently being funded um we take a look at the traditional model before we look at some ways in which public goods are right now being funded so traditionally speaking um we usually have governments that use funds gotten from tax revenue to fund public goods so for example the this deciding like okay how much of an annual budget they would like to put towards building Parks versus focusing on climate change versus focusing funds on say defense or military in this model the public is involved usually only once every 4 to 6 years that is when they vote for the political party that they would like to come into power and so in this case four to six years you get to make a Choice M I don't think so but this is how traditionally it has been done whereas right now if you look at uh the different types of models that are available uh mainly there are three different models the first one is quadratic funding which I'll will go into a bit more detail later but a few organizations that do this are firstly us privacy and scaling we also have Bitcoin that runs quadratic funding rounds the second type of model um of funding public goods or projects working on public goods is it also involves quadratic funding but it also attaches an incentive mechanism so an example of this is GI so what they do is um they run quadratic funding rounds and for anyone that decides to vote they would be given gift tokens as an incentive to participant and the last Model is something that's been really famous and been making headlines recently which is retroactive public goods round with optimism what they do is um they do not run a quadratic funding model uh they instead retroactively fund projects so what that means is say if a project has been working on a public good within the optimism ecosystem and can show the work that they have done in say the past 6 months or a few months then they apply to get funding and are eligible to receive funding so overall these new models of funding is a big thumbs up from me just because we aren't involved in the process only once every six years uh we get to decide we are a lot more involved as individuals and as a community so zooming into the first model of funding public goods uh we look at quadratic funding which is what me and my teammates here uh focus on in the psse team so really what on Earth is quadratic funding it sounds like a really um intimidating title to me but it can be explained in really simple terms and I'm going to try to do that today for us effectively what it is is you have a body it could be government it could be private philanthropists it could be anyone or organization that decides to set aside some amount of money this is called the matching pool amount just a pool of money and the point is the community then gets to vote to decide how this pool of money would be distributed amongst projects the key idea is we want to push power away from wheals and have a more democratic way of allocating money to projects working on public goods and some characteristics of quadratic funding are that you get a predetermined number of votes meaning unlike a traditional voting system for example if you look at elections you can only vote once for one party whereas if you look at quadratic funding say if there are 20 different project you could vote for say 10 to get funded you can distribute it amongst multiple projects it is an extremely decentralized um way of voting and ultimately you choose like how funds are distributed uh and which projects should receive funding so for my lot of the Rings fans um you definitely with quadratic funding do have a lot of power it all of the power lies in our indiv individual and communities Collective hands and of course I cannot come to a privacy related conference and not talk about privacy so what about privacy like if you look at um how some other organizations currently run funding rounds say for example optimism or gitcoin um the one challenge is that people can see how you voted like they you they can find out like okay yes you voted and how you allocated your votes towards which projects the difference in the way we run rounds is we include this um privacy layer it's called Macy um my teammate talked about this actually yesterday what it is the tldr is that once you add Macy to voting rounds uh votes effectively cannot be faked you cannot censor anyone you cannot double count you can't tamper with votes votes are completely encrypt uh they tallied offchain um and verified onchain again the tldr is with quadratic funding rounds including Macy uh we have private secure voting which ultimately just reduces the risk of uh bribery and collusion for anyone um any Dev here any Builder here who's interested in learning more about mey scan the QR code and and you'll be taken to our website where you can deep dive into the documentation and you can also connect with our team to talk more about Macy implementation so the Privacy aspect is covered quickly looking at uh quadratic funding so it involves a math formula um whenever I look at this that is my actual reaction um all the time I try to explain this to anyone I barely make it so I think it would be a lot more effective for us to walk through um an a real world example of how the funds can be distributed so we assume that we have $10,000 in a matching pool amount uh to distribute to projects that are working on public goods and the idea is that all of us get to vote on which project we would like to see funded and I know how seriously we take our work here and as a result I feel it's only fair that we walk through this example with JFS of I so assume let's assume that uh three projects are participating in a qf round that has $10,000 so we assume that the first project has um two people that vote for it to receive money these two people put in $500 each again all of the amount that we're talking about is hypothetical we assume that the second project is slightly more popular because people think it's um more valid and useful in their community and we see that it then receives five people voting for that project to receive funding and lastly this last project is the famous kid uh it gets 20 people voting on it um in order to receive funding because again people might think that that is the most relevant project in their community so the final distribution of the $10,000 pool would go through this math formula again recognize that all three projects received the same amount of money the only difference is the number of people that ended up voting on the project so how the $10,000 gets distributed is if you look at it the first project which only had which had the least number of Voters ends up receiving only $740 out of 10,000 the second project receives a bit more close to 2K out of the 10K and the very last project ends up receiving the most amount of money which is about 7.5k so what does that example even mean like why quadratic funding if you notice the last project ends up receiving the most amount of funding so a few key takeaways is that it doesn't matter if you have whales backing one project the upside of quadratic funding is that the more people or members of a community think that project is relevant and important the more they would vote for it and as a result that project would receive more funding uh it acts as a form of signal to people in power to communities to project owners in terms of what the community thinks is is important it it then also is most importantly powered by the community um if you unfortunately if you look at a lot of uh elections in different countries uh I think there's a lot of people that feel jaded because they feel that um they do not have the power to influence and that their W doesn't make a difference whereas if you look at quadratic funding um every single vote counts and your vote is so impactful that uh it ends up fostering more accountability and Community involvement and last but not least is that every cent counts uh the entire idea is it doesn't matter how much one person puts in towards a Project funding it matters more how many people end up signaling and voting for a project so okay great this concept is great but what's in it for us like why should any of us even consider participating I guess the key reasons because all of us here have used a public good at any point in time in our life uh one time or the other we would have all walked down the roads enjoyed street lights um enjoyed Parks even walking to e Dam if you enjoy the greenery that is you enjoying in a public good we would all also so in one way or another be contributing to the ethereum ecosystem and which is also a type of public good and so if we have all participated in this uh the key reason you should focus on participating in qf is because when you participate and you vote for your favorite project that is building a public good that would Channel funds towards this project which would help the project get funding and ensure they can continue doing the good work that they doing so the key reason is all of this power is in all of our individual and Collective hands to ensure that projects continue to receive funding and as a quick recap for those that weren't here last year uh we did run a qf round last year as well which was really cool um it involves projects that came out of the hackathon that that was $115,000 distributed to 23 different projects and so key question how do you participate in qf well um if you scan this QR code it would take you to a an application form so this year we are also running a qf round with $155,000 to be distributed again to hackathon projects the voting period starts from tomorrow and runs all the way to next Wednesday inclusive uh the entire idea is you look through hackathon projects and you can allocate and vote for multiple projects that you would like to see receive funding voting is a one-time process this QR code would take you to a Google application form uh the entire reason for this application form is firstly uh the eth dam organizers crypto Canal um they would be collecting your eth addresses whichever one that you're comfortable with giving but the purpose of that is so that they can addir drop uh gas tokens to cover your gas fees when you are voting so that's the only reason they would be collecting it um they would also be collecting your email address so that they can email you instructions on um how to participate and how to vote so scan this and you can vote it's a onetime process so definitely would encourage all of us here to vote and last but not least if you would like to connect with myself or my team uh this is our Discord link uh if you join us you can talk to anyone from the psse or you could specifically join this channel so that if you have any questions about how to implement or any questions on quadratic funding the Privacy layer we are here to help thank you so much folks appreciate all of your time [Applause] thank you thank you so much for that um so if we can switch to the um slido who uh most people should know what to do at this point so if you have any questions please go to the slido and um ask away um I think one question I have for you while people do that if you have any questions is um what do you think is going to happen in what's the future of public good funding Jonathan why are you asking me the most difficult question sorry sorry it's Sunday morning um that's a great question I just looking at the current brands in the public good funding space for example if we look at say optimism gitcoin um they are doing really really great work though the question of how transparent would you want your vs to be is coming up at this like currently for example with optimism announcing bigger and bigger rounds um it comes to a point where the vote or if you influence batch holders that are voting that would end up benefiting some projects more than the other so I do think that if they figure out how to add a lay of privacy so that people cannot show how they voted would ideally be the way because if someone's announcing a $100 million round then if I am a project the temptation to have more people vote for me to channel funds to me is there so to remove that Temptation I would say adding Del lay of privacy and do you think that but um when you add privacy it's always uh the question of uh it's not publicly auditable very easily where then especially in in crypto there's a lot of um yeah let's say lots of people colluding together to vote for a particular thing so how do you think about how that intersects with privacy in that regard and how can we find the right balance um sorry what was your first part uh how uh people can maybe collude or uh like the symbol resistance and stuff like this right all of that if it's not publicly auditable where everyone can see how everyone voted then maybe yeah are you asking like how could we ensure Cil resistance but also prevent collusion yeah I guess in in I don't [Laughter] know that's a that's a good question I mean to be completely transparent and honest I would say that this is something that is currently being worked on but there isn't a perfect solution that exists so for example like um with quadratic funding rounds you have some organizations like clear fund that add mechanisms so that you can you know to for the Civil resistance but that by adding those layers that increases the difficulty of someone new to web 3 trying to understand so it's like we're trying to find that right balance but there's no perfect solution yes it's just tinkering about still that's right I think that's where I'm a fan of gitcoin passport in that regard does anyone here have a gitcoin passport one two three four okay four everyone else you know where to go um so we kind of covered the first one unless you have anything you want else you want to say about that uh yeah so civil resistance uh some context for that is basically what it means is we it is a mechanism just to prove that you are an actual person who's voting not a bot and so there are different ways to go about proving civil resistance for example last year if you look at if you remember that Cod um um of the picture of the East sign that was our form of Cil resistance where your private key for the Macy round was printed on the back of the card in a QR code so different event organizers have Cil resistance in different manners sometimes it could be your nft event ticket airr drop to your wallet um so that's how it's done uh in order to run qf rounds and prove like that you are an actual human being and when it comes to things like proof of personhood like World coins the big one has anyone had their has anyone done their orb I personally haven't one person right at the back in the dark amazing um but integrating things like that CU there's a lot of solutions to maybe Proof full personhood so how do you also approach thinking of that exactly like right now so for example for this year's round if you see uh we are looking at Gathering event attendees uh eth wallets to air drop gas tokens so it's still very much like we are trying to play with different methods because there isn't a perfect solution that's thicking that is applicable for different communities yet so still tinkering around with that cool um the second question here can the funds in retro pgf I think that's how I say it be distributed using qf as well how is it currently being allocated so RPG rounds right now now are not distributed via quadratic funding they use another mechanism and it the term escapes me right now um I don't think we have enough time to cover all of it but for the person who asked that question I will be by the side here to walk you through how that how the distribution but in summary no it's not via that formula cool uh and if you want to jump through these last two questions might as well yeah absolutely so the it's a gitcoin passport not a BTC passport gitc i n um the I gitcoin passport is basically what I talked about in Cil resistance where uh it is just to prove that you are a human being there would be certain verifications for example connecting your ex account connecting uh your GitHub account voting in around in order to prove that you're a real person uh how can you get it just uh search getcoin passport and the first link you get you can start to apply for it and oh I think I just got rid of it did I wait hang on thank you sorry uh some one they ask give a brief overview privacy scaling and expirations I think you should chat with the afterwards and can give you the maybe maybe all the slides they they apologize for arriving late um okay well well thank you very much for coming today thank thank you very much [Music]