Translating Web3 from 26th Century Saturn into 21st Century Earth: Public Goods Funding
The final article in Bloom’s 4-part series that breaks down the major concepts of web3 in a way that non-technical people can understand.
Public Goods Funding
This needs no translating.
This one doesn’t need translating. It is what is says, funding for public goods. Actually they do use a more technical sounding phrase — “retroactive public goods funding” — which means the money is given after the impact is demonstrated. While that term is a little heavy handed, the problem it addresses is that grant funding often requires laborious reporting — reporting that small, grassroots groups usually do not have the capacity or training or time to do, which means they never get funded. It’s very common for larger NGO’s to misuse funds and divert a significant percentage of it to top-heavy administrative structures, or to have the admin sophisistication to get a grant but not actually be effective at solving a problem. Retroactive funding — after the impact is done and demonstrated, allows projects to start to move into a gift-first approach, and establish more trust that they will be rewarded for contributing to public well being. One example of contributing to public well being would be a group of people planting a free forest for people who live in the area to freely access and eat from.
Public goods funding also is going to allow us to subsidize work that is otherwise economically inefficient to do or to at least get started. For example, there is a process called restorative justice where instead of putting someone in jail for a crime, the affected parties sit in a circle and a facilitator walks them through dialoguing about what happened and what everyone affected needs in order to feel safe again, and doing that together. It’s light years cheaper than prisons, and 95% more effective. Not enough people know about it and not enough people are trained in it. Many people who are interested in being trained in it don’t have money to be trained in it, and it’s not widely adopted enough yet for them to make a living doing it fast enough to cover the training expense or in a way that they can juggle between their full time job. There are *so many* skills like this across Bloom Network, that millions of people would do and it would save society billions of dollars and repair longstanding trauma in communities, but there is a financial gap to anyone being able to make and sustain that kind of livelihood leap. When retroactive public goods funding, we could set up funds to supplement the income of a restorative justice facilitator. Until the practice is more well-established and has its own self-sustaining finance models and is at a scale that can hold that.
There are so many more examples I could give here. Public goods funding will empower more people to take the leap to doing types of activities and entrepreneurial endeavors that care for their communities and create widespread public benefit. The incentives to capture and control value are less in this kind of funding structure. Openness, collaboration, and making widely accessible public value is what gets you compensated well.
Decentralized Organizations With a Transparent Bank Account
Otherwise known as, DAOs
Ok, so now I feel ok telling you about DAOs, which is one of the most abstract concepts that people find frustrating. A DAO is just a collective managing funds. With rules that they can program, without having to trust a privileged set of people to follow and not abuse.
DAO stands for decentralized, autonomous, organization. Decentralized because no one person has all the control knobs, no three people in an office can collude to get resources to do what they want and get paid way more than the people doing the day-to-day labor. (Unless everyone agrees to that or has set up rules that explicitly allow that. You can literally set up a DAO on “dictator mode”, like, it’s a setting.) Autonomous means each person or set of parties that have voting rights in the DAO, have autonomy to participate or not as they like. No central body has authority over everyone. And it means that decisions can autonomously be executed by code, i.e., the vote happened, it is binding, and the funds get sent immediately.
With a DAO, members vote on how the collective treasury is spent. You can set up any rules you could possibly imagine for that — who can vote, how much power or “weight” each person has and why, how often votes happen, how many people need to participate for a vote result to be valid. There are technical terms for all this, and it’s normal organizational governance stuff for the most part. Except it’s 100% open and transparent, and it’s cheaper to program more complex governance rules than if you make long formal legal agreements about them. That’s important because humanity needs collaboration structures to manage resources together quickly and efficiently, in order to address the climate crisis and more quickly transform our economic and governance infrastructure. We need to be able to form groups fast, make decisions fast, and allocate resources quickly and effectively. DAOs help with that, if they are done right, and if they exchange knowledge with on-the-ground direct action communities who have deep experience with power dynamics and conflict resolution.
Setting up a DAO can be incredibly simple — 7 people make a wallet address that requires 3 out of 7 members to sign any transaction before it can go through. They use email or an in-person meeting to make suggestions of what to fund and dialogue about. Or they can use different platforms and irrevocable contract rules to automate very large-scale, sophisticated governance structures. Either way, you get transparency, consent, and you can’t have something happen like what really happened with Occupy NYC, where one person who controlled the paypal donations account ran off with the money.
Here is an example of a good business use case for a DAO. You surely must have met a marketing person who hates their job. They’re a graphic designer who does the same thing day in and day out for random clients and is bored out of their mind. They’re a talented strategist who gets paid a tiny fraction of what the principles of the agency make. If talented marketing people circled up and made their own DAO that was a cooperative marketing agency, they would have more agency to choose which clients they each work on, and choose humane values over the high profit margins of doing marketing research for a sharky pharmaceutical company, but still get paid more than they would at their own hierarchical agency where they had no leadership authority. Freelancer collectives are a good, solid business model for a DAO.
There are a lot of decentralized organizations (DAOs) that do not work at all — people are like “yeah let’s make a DAO about x”, but they have no culture strategy, no business plan, it’s just people doing free labor and it’s chaos. That’s the most common thing that happens. Don’t do that and try to not join a chaotic DAO like that. Educational DAOs are also pretty good — I hear good things about Boys Club, an educational community for women and nonbinary people to learn about web3.
I’ll stop here in this initial translation document. I hope this helped demystify some of the tech and help you grab onto the “why’s” and the “real world” reasons its important. Stay connected with Bloom to begin to learn and participate as we get rolling.
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Author: Magenta Ceiba
Principal Systems Architect
bloomnetwork.earth
