Public Goods Donations Embrace a New Reform, Can True Sustainability Be Achieved?

Compiled by : fangting

💡 Key Takeaways

  1. Diverse Perspectives on Public Goods: The guests of this space provided diverse perspectives on public goods based on their unique experiences and initiatives. For instance, Constantin views blockchain as a significant public good, while Vivian believes understanding the role public goods play in the open-source community is crucial. QJ emphasized the principle of permissionless access to financial services, the freedom to express and share ideas, and the freedom to associate with like-minded individuals. Bruce, as a programmer, highlighted the importance of open-source projects and the growing importance of public goods with the development of Web3.
  2. Challenges and Approaches in Public Goods Funding: The panelists discussed the challenges they have encountered in public goods donations and how they have approached these issues. Constantin mentioned the misunderstanding of public goods and the mismatch between demand and supply as key challenges. Vivian emphasized the importance of developing an incubator ecosystem for all public goods builders and initiatives. QJ highlighted the need for efficient coordination and information circulation, and Bruce pointed out the difficulties in tracking grant approvals and receiving funds.
  3. Public Goods Network (PGN) as a Potential Solution: The panelists shared their views on the newly launched Public Goods Network (PGN) on the L2 layer. While all acknowledged its potential, they also highlighted concerns such as its focus only on on-chain applications or public goods, leaving out projects with off-chain activities, and the lack of clarity on its governance rules to distribute gas fees.
  4. Ongoing Initiatives in Public Goods: The panelists shared updates on their ongoing initiatives. GCC is planning to announce its official establishment soon, ECF is working on a decentralized knowledge base set for release in early August, “Funding the Commons” is building a diverse environment for collaboration, and LXDAO is involved in academic research on funding public goods and a project called “fair sharing” that aims to ensure fair distribution of rewards in remote working environments.

We know that all the guests participating in this space are deeply involved in the cause of public goods. Could you briefly introduce yourselves and the work you are doing?

Constantin: Hi everyone. My name is Constantin, a core contributor to GCC. GCC, short for Universal Digital Commons of the Global Chinese Community, is a community fund that mainly focuses on supporting public goods projects related to the global Chinese-speaking community.

Vivian: I’m Vivian, a contributor at da0, a civic tech community-based in Taiwan. We started a Web3 branch within our community last year. Today, I’m representing ‘Funding the Commons,’ an event I’m helping organize in Taipei this December. I met the team behind ‘Funding the Commons’ in New York last year and was truly inspired by their mission and work. We thought it would be great to bring this conversation to Taiwan, and that’s exactly what we did. We’re looking forward to fruitful and enlightening discussions about the public goods community in Asia later this year. Thank you.

Bruce: My name is Bruce, a co-initiator of LXDAO, an R&D community focused on supporting public goods and open-source projects. I’m a programmer with over a decade of development experience and have worked on a few open-source projects. This background has fostered my interest in public goods and open-source projects.

QJ: I’m QJ, from the Ethereum Community Fund, where I serve as the executive director. We were founded in 2018 by several projects with a shared vision of contributing to the broader infrastructure of the crypto space, the Ethereum community, and the general blockchain industry. We pool funds to grant projects that are essentially public goods, so that as much as possible, of the necessary part of the web3 infrastructure doesn’t involve charging users (and making it a horrible experience). To stimulate growth across the industry, it’s crucial that we build the necessary infrastructure that enables more people to enhance user experiences for end-users, not necessarily those who are technically inclined. This is the fundamental reason behind the Ethereum Community Fund’s inception. Since then, we’ve been actively involved in researching and designing larger-scale coordination mechanisms, ensuring not just public goods funding, but all necessary components of the industry are catered to. This includes the development of technology and outreach to end markets.

Could each of you share your perspective on the concept of public goods, drawing from your unique experiences and initiatives?

Constantin: From my perspective, blockchain itself is a significant public good. It’s a public ledger, accessible and usable by all, making it non-excludable. It doesn’t exclude anyone based on their region or race, and everyone can benefit from it, making it a non-rival public good. From GCC’s standpoint, we believe it’s crucial to spread awareness about the importance of contributing to the establishment or generation of public goods within the global Chinese community. Being actively involved in constructing or producing public goods is essential, which is why GCC focuses on fundraising, technical contributions, and other long-term services, aligning with our vision for public goods as a whole.

Understanding the vital role public goods play in the open-source community is crucial for the entire community. In the open-source community, people often work without compensation, a fundamental issue. Having blockchain mechanisms designed to tackle this issue is vital for the community’s development.

QJ: How we perceive blockchain and crypto technologies is crucial. The underlying principle is that people should have permissionless access to financial services, the freedom to express and share ideas, and freely associate with like-minded individuals. These social mechanisms are severely lacking, not just offline, but also within the blockchain promises online. This scarcity makes them a significant part of the public goods that the Ethereum Community Fund (ECF) focuses on. Many services or goods that should be accessible to all are in high demand but in short supply. Any efforts to provide universal education services would be considered public goods by us.

Bruce: As a programmer, I’m familiar with open-source projects, which are public goods. The importance of public goods is growing with the development of Web3, a culture that supports open source. There are a lot of projects that rely on open-source projects, but some open-source project developers working full-time may only earn around $100 per month. So, the question remains: how can we ensure the sustainability of these projects? It’s a tough challenge. However, when I learned about Web3 products, I saw some opportunities, such as DAOs, tokenomics design, and other mechanisms, or creating tools to address this issue.

As we all have encountered challenges in public goods donations, how did you approach this issue? Can you share the solutions you have explored and discuss them together?

Constantin: As the Global Chinese Community (GCC) has not fully launched, I can’t give the answer from its perspective. However, as a founder of an open-source project that received a donation from Gitcoin, I can share my personal experience.

The most urgent problem for public goods donations is the misunderstanding of public goods and consequently the mismatch between demand and supply. Many people believe that public goods should be free of charge, from start to finish. However, many good public goods or open-source projects require initial funding. Unfortunately, people often question the validity of these projects and are hesitant to donate even the smallest amounts, preventing these projects from starting or scaling.

Much like the initial stage of Bitcoin, where Satoshi designed a reward system to incentivize miners or verifiers to secure the network, many projects need some form of initial funding. It’s a common misconception that a project must be entirely free to be considered worthy of donation. While this is an important factor, it’s not the only one and sometimes shouldn’t even apply in the context of public goods.

During the Gitcoin procedure, the platform only performs general quality control checks on the projects. The decision to donate to a project is left to the individual, and there aren’t overly strict entry rules to determine what constitutes a public good. This approach could help solve the widespread problem concerning support and donations for public goods.

Vivian: As for DAO, we work closely with Protocol Labs, who organize Funding and Comments. We’ve also adopted Hypercerts, a new protocol for funding and rewarding positive impacts on the blockchain and open-source community.

We created the Hypercerts Studio, which designs tokens that document your positive impact. These tokens, akin to NFTs, are transferable, making them vessels for positive impact and a new method of distributing resources.

The different projects within DAO that require resources can apply as a project within the Hypercerts Studio. They can reward people with Hypercerts for making a positive impact on their projects, and these accomplishments can later be funded retroactively.

At the end of the process, there’s a demo day where the community votes on contributions. The rewards are then distributed based on this agreement. This system will be showcased in December during the Funding and Comments period.

However, it’s crucial to remember that the core of these projects is people. Proper communication about resource usage is vital, as money-related issues often arise within a community. Hypercerts can help allocate resources more accurately, depending on the impact created, bringing significant value to the ecosystem.

QJ: In our work with the Ethereum Community Fund, one of the earliest grant programs, we observed that acquiring funding isn’t too challenging in a robust economy. However, sustainability becomes more problematic, particularly during stagnant market phases. Projects that are worthy of continuation often struggle to secure funds as potential donors are preoccupied with their own endeavors.

The key concern here is the sustainability of funding sources. It’s something many projects of today, as noted by previous speakers, are attempting to ensure. They aim to guarantee that public goods and services can always be sustained.

Another issue we encountered is coordination. As our community grows, it diversifies into numerous subcommittees, each with unique interests, priorities, and visions, which can sometimes diverge markedly. Despite public goods being generally seen as beneficial to the entire community, not all projects align with everyone’s quarterly plans. This discrepancy often leads to drawn-out discussions that culminate in actions that could have been initiated without such extensive deliberation.

We’ve identified these challenges and believe that we need to make the grant process more open. People should be able to freely discover the projects they need. While the mechanisms, protocols, and networks our community has developed are effective, we also need to guide people toward understanding what public goods are needed. Moreover, we need to ensure that projects working on these public goods are accountable and legitimate.

In response to these issues, we’ve identified three steps from our years of research. We’re striving to establish a knowledge base that represents the truth. This isn’t just an accumulation of information and data but a processed, verified, and updated framework. This knowledge base, owned by everyone yet no one in particular, needs to stay accurate and relevant. We’re inviting builders, thinkers, and mechanism designers to join us in this endeavor, making it a public good.

This knowledge base would provide a foundation for funding mechanisms and protocols. It would allow the community to validate information, not based on a single team or small DAO, but through the collective wisdom of the entire community. It would enable us to learn from our collective failures, avoid repeating mistakes, and accelerate collaboration.

We’ve seen numerous initiatives focused on sustainable funding and impact evaluation. We aim to support these efforts and serve the public, especially those less privileged and less noticed. We’re fortunate to discuss these niche concepts in a stable environment, but many out there could benefit from the opportunities we’re creating, yet lack the means to access them.

We need this layer of trust and education, which is a cornerstone of our work. It will allow more people to benefit from what we’ve built, what is being built, and what needs to be built to serve them. This is a vital process that can direct users to meaningful experiences.

Bruce: We’re currently engaged in R&D and academic research to determine which public goods are eligible for funding or support. We are analyzing donation information from platforms such as Gitcoin and other similar foundations. I think that’s quite an exciting endeavor.

Addressing the question at hand, I must confess that I don’t have a comprehensive solution at the moment. As a developer, I spend a significant amount of time applying for grants. Each application requires a substantial amount of information, such as what your product looks like, its features, and what you aim to achieve. Not every product yields satisfactory results.

For some products, it can be challenging to track grant approvals. Even when they are approved, it can take up to half a year to receive the actual funds. Such delays can be quite frustrating and can hinder product development. I’m afraid I don’t have a clear solution for this issue right now.

As PGN is a newly launched public goods network on the L2 layer, what kind of benefits can it bring to the public goods projects that everyone is working on? How can we achieve collective construction and development at the public goods layer?

Constantin: To be honest, I don’t have a lot of detailed knowledge about PGN. However, I believe it’s an excellent initiative to attempt to find solutions for the problems we just discussed. It seems to be a constructive approach to support builders and discourage scammers. It’s aimed at directly supporting those public goods projects that are in need. Let’s wait and see. Hopefully, PGN can achieve success and provide substantial help to all the public goods project builders in the space.

Vivian: Our goal at Funding the Commons is to develop an incubator ecosystem for all public goods builders and initiatives. Having more projects and solutions working on facilitating the process of working on public goods is simply amazing. It’s not a zero-sum game. In essence, it’s adding clarity to the entire public funding discussion, which I find incredible.

QJ: While I may not necessarily possess more information than everyone else in this space, ECF’s long-standing relationship with Gitcoin has afforded me some takes. Gitcoin, one of the first grantees of ECF, has consistently tried to find innovative ways to fund public goods over the years. It’s been fascinating to observe the other projects and attempts that have emerged during this time.

As research goals for ECF, we’ve sought grants from multiple ecosystems since the beginning of this year. This process has given us an understanding of the difficulties involved. It’s clear that you need to repeatedly apply and engage in public marketing for each ecosystem or platform to garner more support and secure the much-needed grants.

Consider the scenario where a new, enthusiastic individual wants to join the space and create something beneficial for their community. This endeavor requires substantial time and money. The Public Goods Network (PGN) is working to solve this problem, aiming to make it unnecessary for people to apply everywhere. If these funding platforms could align their efforts to support the same projects more efficiently, it would be ideal in the regard of efficiency.

At ECF, we faced similar challenges when we started. We needed to know who was not yet funded so we could help those without existing support, instead of those who had already received funding from multiple grant programs. This information requires efficient coordination.

We need a system that efficiently circulates information about who is funding what. PGN is taking on this challenge, aiming to align and unite funding programs. In turn, ECF can support these programs with information and research efforts.

However, as donors, we’re often faced with the challenge of limited information about a project. While applicants are typically sincere in their intentions, we also need to verify their claims. The only sources of information are often their social media and websites, which may not provide a comprehensive or accurate understanding.

PGN is working to streamline the funding process, but there’s still a lot to figure out, such as governance and the funding system at this stage to my understanding. Despite these challenges, it’s a great start to initiate those conversations. Even if we find it’s still challenging, as ECF has experienced, it’s still a worthwhile attempt. Even if only a few projects align on the PGN network, the impact could be significant. I believe that more efforts to make the process more efficient will only result in synergies. We’ll have to wait and see and join in the attempt to make it happen.

Bruce: I regard PGN as an exciting experiment, although I’m not sure about its success. Technically, it’s just a fork from the OP stack, so it’s essentially another OP. However, its focus on public goods makes it a valuable sharing point. It facilitates connections between public goods projects and teams within the community.

That said, it’s not a complete solution. It only caters to on-chain applications or public goods, leaving out projects that are not fully on-chain or those that have off-chain activities.

Public goods need time to grow and become popular. Early-stage public goods may struggle to get support with this model, as they might not have a lot of users or generate significant gas fees. PGN has mentioned some governance rules to distribute gas fees, but the details are unclear.

In conclusion, while PGN is a promising initiative, its effectiveness remains to be seen. It might turn out to be better than the current mechanism, but only time will tell. Thank you.

When can we expect the official release of ECF’s new platform that is currently under internal testing?

QJ: Yes, we’re incredibly excited about this new platform. For the past three years, we’ve been working on creating a decentralized knowledge base. As other inspired grant programs and funding mechanisms have become more prevalent, we decided it was time to shift our focus to coordination. We hope to officially launch the platform in early August and open it up to the entire community. We strongly encourage everyone to follow our Twitter handle, @EthereumECF, for updates. To make this a truly useful knowledge base, we need representation from communities that we can’t reach personally. We want to help projects establish legitimacy in ways that extend beyond just token price. This platform aims to provide a trusted space where projects can showcase their work without any single party dictating what is true. This is a crucial first step to building trust and creating more efficient social mechanisms. We’ll be giving early access to interested individuals via our Discord channel, where we’ll also announce when we’ll be opening up to more users for trials. The real challenge is not in the design of the mechanism but in its operation with wider participation. We need people’s help to test it and protect the community from scams. All your experiences, including investments in projects that may or may not have succedded, will be valuable to the larger community. We’re excited and anxious about this journey and need everyone’s help to navigate this new world.

How does “Funding the Commons” ensure effective collaboration and communication among builders, researchers, and funders from various backgrounds and industries?

Vivian: “Funding the Commons” aims to build a diverse environment where people can coordinate and communicate. It’s more than just a conference; it includes workshops and other interactive formats. The initiative has grown to include hackathons and residency programs. The goal is to facilitate collaboration rather than simply listening to presentations. For instance, the first “Funding the Commons” event in Taipei was a collaboration with local communities. Building on the foundation of these communities, we aim to create an even more diverse and engaging environment.

What are the next steps for GCC, which is still in the early stages?

Constantin: GCC is planning to announce its official establishment soon. However, finalizing rules and procedures may take some time. Similar to ECF, GCC aims to aid projects directly but perhaps with a different approach. We’ll utilize a committee of experts to provide ideas and strategies. This approach will allow for support from various perspectives, making for a more comprehensive solution. While building digital commons, it’s crucial to avoid certain pitfalls, such as imposing unnecessary barriers or fees. We want to be direct and accessible while maintaining our standards.

Can LXDAO share some recent projects and experiences?

Bruce: Certainly, we’ve been involved in various initiatives. Recently, we launched an academic research project focused on funding public goods. We’re analyzing Gitcoin data to understand how funds are distributed. We also have a project called “FairSharing” that aims to ensure fair distribution of rewards in remote working environments, particularly in DAOs. This is crucial for long-term collaboration and sustainability. Even if there’s sufficient funding, a project can’t succeed without contributors. We have other projects underway, but due to time constraints, I’ll share more details later. Please check our website and Twitter for updates.