Optimism PBC Blog
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Optimism PBC Blog

Ether’s Phoenix

Humanity’s defining characteristic is its ability to organize and cooperate. We have devised a number of tools to do this — from language, religion, and legal structures, to rules on the highway — all are systems created to align our actions.

Despite these tools, many current attempts to coordinate large-scale action are failing. Planetary health is in rapid decline. Open source software is underfunded. Public and common goods don’t receive the support they need to survive long term.

Why is it that crucial things which stand to benefit all of us are being neglected and, more importantly, what can we do about it? In a moment where coordination is overshadowed by defection and common ground is hard to find, how do we choose the path which leads to a better future? Enter Ether’s Phoenix.

Impact = Profit

Imagine a world where every individual is awarded profit proportional to their positive impact. Distribute your software package for free, get paid proportionally. We can call this powerful equation the “fairness ratio,” where impact = profit.

But how do we calculate that “impact?” Positive contributions are notoriously hard to measure. Not only do many public goods suffer from being “out of sight, out of mind”, but they may take an extended length of time to manifest and measure. The free market is our most popular tool to assess impact, but for these reasons and others it fails to adequately compensate most public or common goods.

The passage of time may help to allay these problems. In general, it’s easier to agree on what was useful in the past than what will be useful in the future. So to assess the personal profit due to each actor, imagine if society paused every now and then to look back, survey its citizens, and pay out the profit each individual deserves. This is the “retroactive” part of retroactive public goods funding.

If we believe this is a good system, this process becomes recursive: the “impact” side of the fairness ratio will also reward the contributions that helped bring about this world in the first place. The work to build a system that supports public goods is a public good itself.

Summoning the Phoenix

This is Ether’s Phoenix: the angel who rewards you for summoning it, a kind of reverse Roko’s Basilisk. It is an algorithm that rewards the early cooperators who created conditions for public goods funding to prosper. It is a future where early investment in public goods is recognized. It is also a mindset: that optimism prevails, that better systems are possible, and that humankind will be rewarded for its cooperative revolution.

Granting 100% of centralized sequencer profits to Ethereum protocol development is Optimism’s current (but not final 😉) contribution to summoning the phoenix. It may not fix all the world’s problems, but it’s a step in the right direction, and who knows where that step could lead? A more harmonious future perhaps, if we dare imagine and build toward it.

If that sounds like something you’re interested in doing, check out our job board. We’re always looking for more people serious about doing something that matters (while having fun doing so).

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Blogs and musings on optimistic rollup and public goods.

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