Thread by @owocki

Today I gave a presentation at the @ethereum core devs meeting in Berlin about Sustainably Funding ETH 1.x/2.0 & why it’s a pandoras box. 🎁

Thread Below 👇 Take cover, because its Knowledge Bombs all the way down!💣🐢💣🐢💣🐢 /1

I peeked inside Pandoras Box 🎁 when I submitted ERC 1789 ( github.com/ethereum/EIPs/… ). In this ERC, i made 3 arguments

1. Why ecosystem stewardship is important
2. Why ecosystem stewardship inflation funding is the right approach
3. How to design it.

/2

Why is it a pandoras box? 🎁

In a system without sybil-resistant identity, there is a “tradeoff between either failing to incentivize legitimate public goods or over-subsidizing plutocracy” @VitalikButerin
/3

Maybe it was correlation, maybe it was caustion, but after ERC 1789 the internet fought for a few weeks. A few groups tried to capture the conversation. Many respected core devs even started to suspect each other. 🍿

/4

Let me tell you why I opened up ERC 1789, and the road that led me there. 🛣

The goal of this preso is to give you an overview of the funding landscape for crypto dev. 💸

/5

The preso has 3 parts: 👇

1. Funding Private Goods
2. Funding Public Goods
3. Funding Public Goods w. blockchain

/6

I’m a member of the @ETHMagicians Business Models ring. 🎩 There is 15 page report on how to fund private goods on blockchain at bit.ly/web3businessmo… . Use it, embrace it, extend it!

/7

On to funding public goods. /8

One way to frame the problem here is as an extension of the categorical imperative. Everyone is rationally incented to fund their own private gain. But no one wants to be the sucker funding the commons; unless (nearly) everyone else is. 🖖

/9

One example, from a statist perspective, is roads & bridges. 🛣 Which are funded by taxes. /10

A lot of things are funded by taxes. But we don’t have a choice to fund them. 🌇 [Insert hot take about governance here]

/11

@nayafia is an author of the seminal work in this space; entiteld “Roads & Bridges; The unseen labour behind our digital infrastructure”. 🛣

RESPECT ✌️ Nadia

Read “Roads and Bridges” here => fordfoundation.org/about/library/…

/12

Nadia is also the author of “Lemonade Stand”, a practical guide to financial support for Open Source. 🍋

Check it out here => github.com/nayafia/lemona…

/13

Unfortunately, OSS is not funded very well today. The top categories of funding for OSS are “No Funding” and “Employer”.

:sad_trombone_sound: 🎷🎻

/14

I think that we can do better. I think we can/should shoot for funding for projects that

1. have an impact
2. compensate well
3. align with our values

and that the internet of money (blockchain) is a punctuated equillibrium that offers us *hope*. 🙌

/15

which brings me to… an exploration of the design space of “funding public goods with blockchain”. specifically ETH 1.x/2.0 🌅

/16

A famous example of this problem is when @preston_vanloon tweeted that Prysmatic Labs (an ETH 2.0 team) was working full time for other jobs, and it was hard to focus on ETH 2.0 because of funding. 📉

Then he received a YOLO grant from @vitalikbuterin 📈

/17

Why does this matter? 🤔

Well, if we could fund public goods in Ethereum, we could

1. Accelerate ETH 1.x/2.0
2. Reduce that chances of black swan event (cough, DAOHack, cough)
3. Create an incentive for great developers (cough, @austingriffith, cough) to join the space.

/18

Don’t care about any of the above. Care because if we do this it could increase the price of ETH; and therefore the security of the network. #pumpit 🤑

/19

Here’s the state of ETH 1.x funding. 👇

TLDR — It’s mostly geth, parity, and Panetheon; They are funded by the EF ICO, parity ICO, and Consensys. Respectively

/20

Here’s the state of ETH 2.0 funding (thanks @ethhub_io ). 👇

There are lots of teams building ETH 2.0; Most are funded to the tune of $10k-$500k by EF Grants, Gitcoin Grants, Consensys, a @VitalikButerin YOLO Grant, or the Parity ICO

/21

Here’s a smathering of the options available to these teams. 👇

/22

Many of these teams are funded by billionaires & corporations; the only actors who have the massive capital needed (sometimes massive upside too) to fund. 🙈🙉🙊

RESPECT to @ethereumJoseph ; who funds my paycheck and the paycheck for the whole team at @gitcoin rn. 🙌

/23

The problem is that sometimes these actors are not so benevolent. 👿

If you see any of these billionaires walking down the street, ask them to pls fund ETH 2.0! 🤑

/24

One project to watch is @molochDAO, a minimum-viable DAO that’s raised $300k+ for Open Source. Kudos to @ameensol for his work here. 👹

/25

A month ago, @vitalikbuterin proposed a norm that we build donations into wallets. ✌️

This is an exciting idea; but it’s unknown how many would keep this fee on if it’s optional. This is also somewhat limited to wallets only, and there’s a time preference issue at play.

/26

It’s worth checking out @CodeFundio ; an ethical advertising platform that places ads on your repo documentation. It sure is nice to have a way to monetize your audience without selling them out! 💰

(Disclosure: Codefund is a @gitcoin project)

Also worth checking out is @oscoin; they just released their whitepaper. They have an algorithmic way to deploy capital to Open Source. Checkout their whitepaper at oscoin.io/oscoin.pdf ✌️

/28

Lastly, please allow me to shill @gitcoin grants; a crypto crowdfunding platfrom that’s raise $150k so far for ETH 1.x/ETH2.0. 😎

<shill>Round 2 CLR Matching is live until 4/19. Contrib @ gitcoin.co/grants </shill>

/29

And finally, here we are at Block Rewards Funding. Think this thread is long? I’ve spent 2 years thinking about this hard problem, and the reason why I keep coming back to BR funding is that none of the above have reached a scale that they’re accomplishing our goals. ☹️

/30

Again, the design constraints are:

- Funding public goods without subsidizing plutocracy. 🎩
- Valuable Developer Work is hard to define & measure (as opposed to Miner Work) ⛏

/31

Our vision is to enable a transparent, informed decision-making process about funding priorities. 🌅

Our mission is to
- educate
- understand
- prototype
- advocate

To build a predictable, sustainable, and impactful funding system for the community.

/33

- We do not intend to replace the EF.
- We do not intend to alter the way core devs operate.
- We do not intend to address deeper issues of governance.

Sorry, conspiracy-theory twitter! Go find your red meat 🍖 here => @proffaustus

/34
=======================

Our stated operating principles 👇
- Responsibility
- Openness
- Transparency
- Teamwork
- Respectfulness

/35

Timeline ⌚️
- ERC 1789 (my original proposal) is now closed.
- In May Istanbul EIPS are due.
- In the Fall, the Istanbul HF will happen.
- In the meantime, we’ll be doing research on DAOs/Legal Entities/Signalling Mechanisms

/36
=======================

We have submitted EIP 1890 ( github.com/ethereum/EIPs/… ), which ads code to distribute block rewards funding, but sets the inflation rate at 0%.

/37

The next EIP submitted will likely set the inflation rate to non-zero. 🎁

/38

1 way to contain the risk here is to add a decay to the BR funding, such that only $100k will be minted and distributed to devs. ✳️

Require another hard fork to renew the funding. This will force accountability on the DAO that distributes the funds (avoiding plutocracy)

/39

Before I wrap I want to zoom out and remind everyone how high the stakes are. We are in the middle of a historic battle for the right for an open internet. From the FSF, to Linux vs MSFT, to Bitcoin + Ethereum vs the legacy financial system, we are seeing history here. 👇

/40

My goals are to steward this conversation towards (1) funding public goods AND (2) avoiding a plutocracy. This is a solve-able design problem. 🥅

We MUST solve it. Because if Ethereum doesn’t win; then we’ll all be tipping our devs in #XRPtheStandard

/41

I invite you to join the converstation at t.me/joinchat/DwEd_…

slides @ docs.google.com/presentation/d…

🙊🙉🙈📈📉🐢👹🎩💰🥅

/fin

Finally, my parting thought: remember to breathe

https://twitter.com/mptherealmvp/status/1118839554293870593?s=21