Epicenter - Learn about Crypto, Blockchain, Ethereum, Bitcoin and Distributed Technologies - Quadratic Funding and How Gitcoin Raised $60M for Public Goods - Kevin Owocki

Episode Date: May 10, 2024

5 years, 20 Grants, 3715 projects crowd-funded and over $60M raised towards public goods funding, from 4.2M unique donations. Gitcoin’s headline numbers are indicative of the massive success their quadratic funding (QF) and public goods funding models (PGF) have seen over the years. With Gitcoin 2.0, crowd-funding is further decentralised, Allo Protocol being open-source and permissionless: any ecosystem treasury can create their own Gitcoin Grants program to help their community fund what matters to them.Topics covered in this episode:Kevin’s background and Gitcoin’s journey so farThe utility of Gitcoin PassportGitcoin Grants sybil protection dilemmaPublic goods & capital allocationQuadratic funding (QF) & retroactive public goods funding (RPGF)New allocation models introduced by Gitcoin 2.0$GTC token utility & decentralising Allo ProtocolThe current landscape of DAOsEpisode links:Kevin Owocki on TwitterGitcoin on TwitterGitcoin Governance ForumsSponsors:Gnosis: Gnosis builds decentralized infrastructure for the Ethereum ecosystem, since 2015. This year marks the launch of Gnosis Pay— the world's first Decentralized Payment Network. Get started today at - gnosis.ioChorus One: Chorus One is one of the largest node operators worldwide, supporting more than 100,000 delegators, across 45 networks. The recently launched OPUS allows staking up to 8,000 ETH in a single transaction. Enjoy the highest yields and institutional grade security at - chorus.oneThis episode is hosted by Friederike Ernst.

So basically what Gitcoin is trying to do is we're trying to build the ultimate capital allocation engine for these ecosystems and allow people to deploy these tokenized treasuries to allocate them to fund what matters in their communities. We're seeing a lot of adoption by L2s and LSTs and projects that want to use Gitcoin grants, the power of Gitcoin grants in their own communities. Gitcoin's flagship product over the years has been this thing called Quadratic Funding. And the reason why quadratic funding is powerful is also one of its vulnerabilities. As we increase the cost of forgery for attackers, we accidentally increase the cost for real users to verify their identity with Gitcoin password. This episode is brought to by Nosis. Nosis builds decentralized infrastructure for the Ethereum ecosystem. With a rich history dating back to 2015 and products like Safe, Cow Swap, or Nosis chain.

NOSIS combines needs-driven development with deep technical expertise. This year marks the launch of NOSIS pay, the world's first decentralized payment network. With the Gnosis card, you can spend self-custody crypto at any visa-accepting merchant around the world. If you're an individual looking to live more on-chain or a business looking to white-label the stack, visit nosispay.com. There are lots of ways you can join the NOSIS journey. Drop in the NOSIS Dow governance form, become a NOSIS validator with a single GNO token and low-cost hardware, or deploy your product on the EVM-compatible and highly decentralized NOSIS chain. Get started today at NOSIS.io.

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8,000 eth in a single transaction. You can even offer high-yield staking to your own customers using their API. Your assets always remain in your custody, so you can have complete peace of mind. Startsaking today at chorus.1. Welcome to Epicenter, the show which talks about the technologies, projects, and people driving decentralization and the blockchain revolution. I'm Frederica Anz, and today I'm speaking with Kevin O'Waki, who is the founder of Gidcoin, a grant distribution project originally on Ethereum and now on a whole lot of other chains as well. Kevin, you've been on Epicenter before. Welcome back.

I'm so glad to be back. Thanks for having me. Cool. It's been a while since you've been on, I think, like two or three years. So give us your and Gitcoin's backstory in a nutshell. Yeah, for sure. Well, you know, one of the cool things about having been in the space for the last seven years, and I think this is my third epicenter episode is that I actually the first epicenter episode I did was within a month of the launch

of Gitcoin grants, which has been the platform that has helped the Ethereum community fund $60 million worth of open source software and public goods for the Ethereum community. And that was January 2019 that we launched

Gitcoin 1.0. And that was about the time that I appear on Epicenter the first time. over the last couple of years, we have been progressively decentralizing Gekcoin, and I am here today to talk about the Gipcoin 2.0 white paper, which outlines our vision for a decentralized Gipcoin. So hopefully taking the power of Gipcoin grants and that $60 million worth of Ethereum public goods that have been funded on the platform and putting in the power of any community

that is based on top of the EVM. So progressively decentralizing and progressively having more impact over time. Perfect. We'll talk about all of that in just a little bit. Gitcoin leadership has kind of changed somewhat over the years, so I know you were gone for at least a little bit. So what's your current involvement? So my current title is co-founder, and I am an acting CTO of GrantsLab,

which is the organization that is pushing forward the software development at the Gitcoin Dow. Gitcoin, as I said, in the intro has been progressively decentralizing over time. in 2021 when the Gitcoin Dow launched, we launched the GTC token and that was sort of like a transfer of power from at the time, Gitcoin was a corporation and I was the CEO of it. So all of the decisions sort of rolled up to me. And when it became a Dow, the decisions transferred over to the token holders who were ultimately responsible for the fate. And as part of the transfer of power, our legal team felt that it was necessary for me to disaffiliate from the token holders who were ultimately responsible for the fate. And as part of the transfer of power, our legal team felt that it was necessary for me to disaffiliate from the. project for at least a little while. And I think I was in total disaffiliated for 15 or 16 months. During that time, I was working on a project called Super Modular, which basically at the time we thought that we would kind of, the setup would be similar to how the Ethereum Foundation

builds the Ethereum protocol. And consensus, Joe Lubin's startup, builds things on top of it, things like Metamask or Nosis. That was kind of the setup between the Bitcoin, Dow. and Super Modular. Super modular was building software in the Gitcoin ecosystem, and Gitcoin was building the core protocols, which makes me, I guess, like one one thousandth of a Joe Lubin.

But we were just building stuff in the Gitcoin ecosystem for a couple years. And after that time, I ended up reaffiliating with the project as of, I think it was September of 2023. And I'm glad to be back in the fold and helping push the core protocol forward. We're seeing a lot of adoption by L2, and LSTEs and projects that want to use GICT coin grants, the power of GICCoin grants in their own communities. So it's quite an interesting time to be helping people fund what matters in their communities

because lots of people with tokenized treasuries that are trying to build active communities around them. I have to admit that last time I tried participating in a funding round. And I've participated in many, many, many funding rounds because you've had like 20 or something, right? I must admit I gave up. I didn't make it. I did not actually make any contributions at all. I think it was like in the late summer or fall last year. And I failed at authenticating enough ways to kind of get a Gitcoin passport or something,

something that wasn't necessary to kind of contribute earlier. Tell us about the Gitcoin passport and why you felt it needed to be introduced. And I know this wasn't just me. So basically, I know lots of other people kind of seem to have this. same problem on Twitter at least. Sure. Yeah, well, certainly value your honest feedback and the road to progressive decentralization has not been without setbacks, and sometimes there have been many happy to talk about any and all of them. So basically, Gitcoin's flagship product over the years has been this thing called quadratic funding. And the reason why quadratic funding is powerful

is also one of its vulnerabilities. And quadratic funding is a mechanism invented by Glenn Weil from Microsoft Vitalik Boudron, the founder of Ethereum and Zoe Hitsig. And basically the way it works is that Frederike, if you have a grant that raises $100 from 100 contributors, and I have a grant that raises $100 from one contributor, you're going to get 99% of the matching pool because we're trying to fund what matters to a broad swath of the Ethereum community. So that's really powerful because it means that lots of people will come out of the woodwork to contribute to these grants, because even giving a dollar can get matched with tens or hundreds of dollars from the matching pool, depending on how big the matching pool is and how many other contributors there are to the grant.

Okay, so that's really powerful. We're pushing power to the edges of the Ethereum community by funding with quadratic funding. But that power is also a drawback. Okay. So the vulnerability in this, and since your listeners are in the Ethereum community, I'm assuming they're adversarial thinkers. If I have $100 to my grant with only one contributor and you have $100 to your grant with 100 contributors and you're getting 99% of the matching pool, I have a rational incentive to make up 100 different identities in order to contribute to my grant and get more of the matching pool. So that's what's called a Sibble attack.

It's a sock puppet attack. And that's why we've introduced Gikcoin passport into the system to allow people to verify their identity and increase the cost. cost of forgery in so that your identity cannot be falsified. Now, the problem that we ran into and keep in mind, this is all like live beta software. We're kind of trying to figure it out as we go along is that as we increase the cost of for attackers, we accidentally increase the cost for real users to verify their identity with get coin passport. And not only do we have to, we have to walk this line where we make the system not civil, like we have to make the system civil resistant, but we have to make it privacy preserving and we have to lower the friction for end users.

So that's a little bit about why passport exists and the problem that we are trying to solve. And the thing I'll say is that the passport team has heard everyone's feedback loud and clear. And they are working on a no friction way of verifying civil resistance. I can get into that if it's interesting to your listeners. but GG20, Gcoin Grants 20 is coming up in April, and I would encourage everyone who gave up during Gitcoin 19 or Gitcoin 18 to give it another try because we've been putting a lot of work into making the friction way less for people, and I'll be curious to hear if it paid off. The nice thing about Gitcoin Grants is that we run 20 rounds, and it's an iteration every

single round. We take the feedback from our community and the feedback from Battalick and other game theorists and try to fold it into the next iteration of Gitcoin grants. So it's a deeply iterative evolutionary experiment, and we value your feedback because it helps us make it suck less next time. Tell us what you've changed to make it less painful. Yeah, so there's two things. They're both really data science-heavy,

so we've been investing in some PhD-level data scientists to, number one, there's a stamp called the ETH stamp, which basically goes out, and uses a lot of complicated data analysis and machine learning to look at all the on-chain signals behind your address and to figure out if you're a civil attacker or not. So like something that that algorithm would find is that if there's 100 accounts that are all funded by the same account, that's probably a civil attacker. That's probably someone who's just gassing up a bunch of different accounts so that they can civil attack get coin grants. So for the end user, that is a just one-click

connect and sign your message in order to get above the matching threshold on Gitcoin grants to get that stamp. And, you know, before, well, you tell me what your experience was in GG19 or GG20, but before you would have to go through and click a bunch of stamps in order to get up to the threshold. And now it should just be a couple of clicks using that machine learning algorithm. And then the second thing that I just want to talk about really quickly is this new algorithm that it was invented by Joel Miller, who is a data scientist on the Gitcoin team, called cluster mapping. And basically, what cluster mapping does is it's a way of clustering contributors who contribute to the same grants together and treating them as though they're the same

identity. And so basically, if someone's Sybil attacking a Gitcoin grant and they make up 100 new accounts, and all those 100 accounts only contribute to the same Gitcoin grant, for the purposes of the QF algorithm, they are just one identity. And basically, if I was a civil attacker trying to attack Gitcoin grants, then I would have to contribute to a bunch of other grants in order to make my identities unique and uncluster them from each other. And basically, what this does is it takes the energy of the attackers, the funding of the attackers, and make sure that they're funding a bunch of public goods on Gitcoin in order to attack the system. So it kind of takes like karate kid style takes your opponent's momentum and uses, uses it against,

uses it against them in a way. So yeah, in some cluster mapping and the ETH stamp are the two ways that we're really reducing friction using cutting edge data science behind the scenes in order to prevent Sibyl and collusion attacks on QF, but also keeping the user friction low. I totally understand the approach. Is there a way to kind of escalate this if I feel misclassified. So say, for instance, I told my 50 friends that they should definitely give to, say, Rodkey. And they do, but they only give to Rodki. So basically, there's like 50 people who only give to Rodki because I told them, there's a fantastic project, please give to it. Can I then kind of escalate the fact that kind of they were kind of, so to say, disqualified from

the matching pool? Yeah. So, I mean, the first method of feedback is contacting the Gitcoin support. So in the bottom right of your browser window, you can chat with someone on the Gitcoin support team and just say, hey, I don't agree with this, or hey, here's my feedback. Your UX sucks in this browser combination, Web3 login combination.

That's the first layer. The second layer is that you can go to go togov.gitcoin.co.co. And you can escalate it to the Dow governance structures. So, you know, this is all transparent political economy happening out in the open. And if you're not happy with the way things that are working, then that's another way to escalate things. And then, you know, the third way is just complaining on Twitter. I know that Gipcoin has had some missteps in the last year and a half. And I'm partially responsible for that as the founder. And we listen to all that feedback. And Gipcoin is, like I said,

iterative and evolutionary. And your complaining helps make Gitcoin grants 21 better. So please tell us through any of those channels when you don't like that. what you're seeing. Perfect. So maybe let's back up a little bit. Why is capital allocation a difficult problem that kind of needs this level of infrastructure to tackle? I think that what we're seeing in 2024 is really quite interesting. We've got thousands of Dow's or tokenized communities that have tens or hundreds of millions, sometimes billions of dollars of capital in their treasury. And they all want to build ecosystems around their software stack. And so

you know, Justin Drake was just on a bankless episode in which he was talking to David about how like the L2 meta, how L2s are competing with each other. And he said that L2s are going to compete for liquidity and on infrastructure and on sequencers and and on tooling and on public goods. And you know, like the one change I would say to to what Justin said is that is that public goods are the way that you get all of those other things in your ecosystem.

So if you can solve the problem of capital allocation, you can invite the builders into your ecosystem to build tooling, to build infrastructure, to build liquidity. And so basically what Gipcoins trying to do is we're trying to build the ultimate capital allocation engine for these ecosystems and allow people to deploy these tokenized treasuries to allocate them to fund what matters in their communities. So basically the problem of capital allocation is how do we fund what matters in these communities? How do we run quadratic funding rounds that help incentivize the outer ring of builders in your community? How do we run retroactive public goods funding rounds in order to incentivize communities in order to add value to them? So I think that

like the immediate answer in the crypto space is like the most effective tactic available if you're competing as an L2 or an LST or an LRT or a DFI project, is to build a community of hackers that are in the orbit of your ecosystem. And so, you know, that's the near-term goal for Gitcoin Grants is to help these communities fund what matters to them in the near future. Now, I think in 10 or 20 years, we're going to take the tools that we have pioneered in the crypto space. We and others have pioneered in the crypto space.

And we're going to take them mainstream. And in 10 or 20 years, I would love to live in a world in which local towns and cities and states are running retroactive public goods funding rounds and quadratic funding rounds using tools that were pioneered in the crypto space. I think we can do better capital allocation using blockchains than was possible in the old world. We now can do scalable and precise capital allocation without intermediaries. We can do more democratic capital allocation than was possible before. And to me, that's the true purpose of crypto is removing intermediaries and helping people get funding for doing good in their

communities. So yeah, near-term answer, we're going to help arm people who are building EVM-based communities. But long-term, it's about helping the world fund its public goods and helping the world allocate capital a democratic way. Cool. You talked about quadratic funding earlier, where kind of the impact your vote has depends on the square root of how much you're giving. You also mentioned retroactive public goods funding right now. Can you briefly explain what that is? Yeah, sure. So, but just to zoom out a little bit, um, one way that we describe Gitcoin 1.0 is like a screwdriver. It only did quadratic funding. Gitcoin 2.0 is like a multi-tool. It's going to do quadratic funding. It actually does quadratic funding. It does retroactive public

goods funding. It does direct grants. It does all these different flavors of, of funding. So, um... Talk us through all of the flavors that you support now. Sir, yeah, yeah. Well, you asked about retroactive. public goods funding, so I'll start with that. Gitcoin has, I've been working with the optimism community in order to build a tool called easy retro PGF.XYZ. And that's basically the same voting interface that optimism uses for retroactive public goods funding in their community.

Retroactive public goods funding, as your listeners may know, is based off of the idea that it's easier to fund things that have had an impact in the past than it is to speculate about which things will have impact in the future because you have all the data available about what's actually done good in these communities. So basically, using retroactive public goods funding, you set up a system of badge holders who are community members who are highly regarded in the community, have good judgment, and have about three to five hours per quarter in order to allocate capital to what has done good in the past. And so optimism has been pioneering the retroactive public goods funding space within the Ethereum ecosystem,

and we've partnered with them to make their flavor of capital allocation available to any other DAO in the EVM space that wants to do retroactive public goods funding. So we've got our first pilot of easy retro PGF.XYZ available coming up in the in the next month. That'll be in April. And we're working with, I think I can say this on here, but file coin pocket cello in order to earn retro pgf rounds in their community so yeah just just i just i just want your listeners to like i just want to like drill in on this point get coin 1.0 is just qf get coin 2.0 is is many different flavors of uh of capital allocation and qf and retro pgf are two two of the ones that we're most excited about right now happy to go into the others or to take

questions about retro pgf yeah one question about retro pgf before we kind of go into the others and so you said that you have to define a set of people who are allowed to kind of make allocations or kind of vote on kind of what should receive funding. Why do you have to do that for our PDF and not for not for quadratic funding? Yeah, so we're kind of like almost mixing two things. The prospect of retroactive versus prospective funding is is just like sort of like a spectrum of, are you funding things that were only good in the past? Are you funding things that are good in the past and in the future? So that's like, that's like one spectrum. And then

another spectrum is the allow list, who gets to vote. And in quadratic funding, there's this almost, it's actually pretty radical to think anyone in the community can vote with their dollars or, or their eth that they bring, whereas retroactive public goods funding is a little bit less democratic and it's a more, a little bit more technocratic. So basically, you assign a badge holder, or someone in your community that's well regarded and well informed that gets to vote. And I kind of think of this as a spectrum of like on the on the left hand side, if it's just the core team and the founders that get to decide who allocates capital, well, that's completely technocratic and sort of like insular and no one gets to decide.

And badge holders are just a way for communities to slowly dole out that responsibility to their most trusted community members. and what I think we're going to see with retroactive public goods funding is communities that have had direct grants programs and maybe there's a grants administrator who's become a power broker in their community start to be able to dole out and progressively decentralize that that responsibility but also that power to their community until you start to reach out and have what optimism has which is hundreds of badge holders who are making decisions and then I think the ultimate destination looks a little bit of. bit more like QF, where maybe you'll have thousands of badge holders that are making decisions about funding what matters. It's about progressively decentralizing that power. So when we talk about the difference between QF and retro PGF, I think people get a little bit tripped up because we're actually traversing two different spectrums of the design space. The first is retroactive versus proactive. And the second is how technocratic versus democratic is the vote. And, you know,

capital allocation is a design space. There's going to be many dots, along this design space, those just happen to be two that the community is exploring right now. Yeah, super interesting. And what are the other capital allocation schemes that you have integrated into Gitcoin 2.0? So I would be very clear about what exists right now and then what exists in the future. Because I think a lot of like one of the radical things we did with the Gitcoin 2.0 white paper is like, we didn't write the get coin 2.0 white paper and then say, hey, we're going to build it over the next five years. This stuff is live already.

So we've got direct grants, which is just plain, simple, vanilla grants. You can go out and a grant administrator can run an on-chain grant program. We've got quadratic funding, which is what GIC coins historically known for. We've got retroactive public goods funding. That's already live. And then we've got conviction voting pilot that we were working on with one hive. So basically, conviction voting is sort of like an interesting way of doing capital allocation in which you stake government.

tokens and they can remove money from the treasury the more governance tokens have been staked and the longer they've been staked. And then we've got a capital allocation mechanism called streaming quadratic funding, which is a partnership between geo-web and superfluid and get coin, in which basically instead of funding public goods quadratically for two weeks per quarter, you can have an always on stream of revenue that is being continuously allocated to different grants in your ecosystem. So those are the five that exist right now, direct grants, quadratic funding, conviction voting, retro PGF and streaming QF. We've got a roadmap of around a dozen other mechanisms that we want to build into the get cooling toolbox into the future. And like I said, this is all in service of helping communities fund what matters.

as we see a future in which communities are going to be funding their ecosystem and a plurality of different mechanisms. And we think these mechanisms are all complementary with each other. I think that the meta, the most effective tactic for someone launching an EVM-based community in the next cycle is going to be not just having a regular grants program, but also doing QF and retro PGF and conviction voting all together. And yeah, so the vision is basically to, to have an ecosystem of capital allocation that funds your community in complementary ways to just your existing direct grants program. Can you give examples of where you think each of these schemes will be particularly effective?

Because if they're all about the same, you wouldn't need so many, right? Yeah, sure. I'm happy to. The word scheme makes me feel a little bit dirty because a lot of these things are deeply rooted in game theory. But yeah, just to answer your question, Quadratic funding is really good at Democratic capital allocation and invites people in the outer edges of your community to fund what matters to them. Retroactive public goods funding is really good at progressively decentralizing the responsibility from a centralized grant administrator to a group of trusted community members and then eventually many more of your community members to fund what matters to them. Conviction

voting is really good at creating bottoms up momentum in your community to help people fund the public goods that matter to them. And, you know, if a normal governance proposal or process takes, I don't know, hours to write the grant proposal, and then it takes all of the token holders to vote on it, and in some, it spends 100 hours of token holder attention, conviction voting is really nice because you you you you're not doing um million dollar grants with with hundreds of dollars hundreds of hours of attention you're doing uh like a 500 dollar slush fund for a party that someone in your community wants to host and they only have to stake thousands of their of their governance tokens in order to pull it out so it's like a very bottoms up way of doing capital allocation so i think these

are all these things are all good at like it's the analogy of of of a multi-tool I think really works. Like for the same reason that scissors and a Phillips head screwdriver and pliers solve different problems around the house. Each of these capital allocation tools solve different ways of doing capital allocation in your community that are all complementary to each other. So I think of it as like a multi-tool or like a toolbox of different tools that complement each other.

Cool. You were just talking about staking the token that's relevant for that community. You guys also have your own token that you briefly elude. to earlier, what is that used for? Yep. So GTC is the GIC coin token and GTC stands for GIC coin or I like to say that it's all, it stands for govern the community. It's a governance token and basically it's a fork of uni which itself is a fork of compound. Using GTC, any token holders can delegate their governance power to a member of the community that's more active than them. There is a, the Gitcoin token dropped in 2021 and there was around 14,000 holders

at that time who were delegating to about 100, 150 key decision makers in the community. And, yeah, GTC is basically a governance token that allows you to govern the GICC smart contracts on chain. And the GICT coin smart contracts are basically the Treasury. And then there's also Allo Protocol, which is our capital allocation protocol that, you know, there's a fee switch within the protocol that is governed by the GTC holders. And then there's the treasuries that are governed by the GTC holders. And there's active discussions on gov.gitcoin.coen.co about how to evolve this into the future. But yeah, the short answer to your question is just governing both Allo Protocol and the Treasury.

Okay. Then let's maybe dive into Allo Protocol. because kind of like the Gitcoin 2.0 vision is kind of like a three-tiered stack with the LLO protocol at the bottom or top, however way you look at it. So talk us through that. Where I'll start is that we built Kittcoin 1.0 totally wrong. And I just want to like raise my hand in front of your your audience and say, I built it centralized and monolithic and I have seen the light and modular and decentralized

is the way to go. So, so, Gitcoin 1.0 was a centralized monolith. It was hosted on a AWS server in Oregon that I set up. And Gitcoin 2.0 is hosted on Ethereum and on IPFS. So, hooray, our public goods funding mechanisms are decentralized now. We're eating our decentralized vegetables. So basically, this is a, Allo Protocol is a modular suite of smart contracts that allows people to basically, it's easily forkable so anyone can fork Gitcoin grants and build their own capital allocation mechanism into it. But if you don't care about coding, you can just basically use this tool called Gitcoin Grants Stack, which is the web application that allows anyone to run a Gitcoin grants in their community. So basically, what we're allowing everyone to do is run a QF round, permissionlessly, without any help from us. So Gitcoin 1.0 was all about fishing for you. Gitcoin 2.0 is teaching you to fish. We've now got a community of 50 to 100 round operators that are trained to run

Gitcoin grants rounds in your community. And that's what we call the program layer. It's the social layer. People who understand how to run QF rounds in various EVM-based communities. And they are building these programs on top of Gitcoin grants stack, which is the application that anyone can use to run a QF round and a retro PGF round. And then that's all built on Allo Protocol, which is sort of the development layer underneath of it. So yeah, I think this architecture is quite elegant because it allows us to go deep on each of the capital allocation tools and build the best tool for that design space.

But it allows us to go broad and build many different types of capital allocation tools into the community. So that's a little bit about the architecture of Gekcoin 2.0. can I add modules to that? So basically if I feel like a particular distribution mechanism is definitely missing, can I build that and have it integrated into that stack? Yep. So if you don't have coding skills, you can go to Gitcoin.com slash grant stack, click on the GitHub, open up a new issue, and make a suggestion for a capital allocation strategy.

If you are a software developer, what you can do is you can fork Allo and Grant Stack, and you can augment the capital allocation strategies and then PR it back into grant stack. So what I think is really one of the most powerful things about open source is the ability to accept contributions from all over the place. And my goal for Gitcoin 2.0 is I want to do for capital allocation what Open Zeppelin has done for E or C20 tokens. And what I mean by that is this. When I was a software developer who was just entering the space and wanted to mess around with something at a hackathon for a weekend. I would just pull ERC20 solidity contracts out of Open Zeppelin's

repository and I knew they were well documented and they were audited and I could just take that money Lego ERC20 token and pull it into my app. And that way I could build what my app actually needed to do instead of reinventing the wheel of ERC20 for every app that I'm building. We want to do that for capital allocation. I imagine a future

in which anyone in a hackathon at an Heath Global Hackathon in the future can pull the power of Gitcoin grants into their application for that weekend, and they can instantly have a quadratic funding strategy or retroactive public goods funding strategy that they know is documented and audited. And I think that what this is, we want to build the money Legos for capital allocation on the EVM-based stack. And what that's going to do is propel the community forward in distributing the capital that exists in all of these different tokenized trade. treasuries across the space. And so, yeah, setting the shelling point for for capital allocation

contracts and making those those contracts available to any hacker in the space who wants to build QF or retro PGF or conviction voting or whatever it is into their application in the future. So that's the final North Star. We're not quite there yet. Still working on making the docs good, still making the contracts really understandable. But yeah, we believe in a future in which, Anyone can take the power of Gitcoin grants and put it into their application. And that's enabled by this new modular architecture that we presented in Gitcoin 2.0. You said that the fee switch for the Allo Protocol is triggered by the Gitcoin token. Tell us about the fees that you may introduce.

Yeah, I'd say that right now we're really just focused on providing as much value as possible. Allo Protocol is being used in dozens of places right now. think that there could be hundreds, thousands of DALs that are using Allo Protocol and could benefit from these capital allocation tools right now. And right now we are accepting payment and feedback because we just want to make sure that these tools are adopted in helping as many people as possible. There are no active plans to turn on the fee switch. I think it's really up to governance whether that's going to happen or not. And I think keep an eye on gov.gitcoin.co.co, but my constraints for actually activating the fee switch would be that it has to be done in a way that is positive some with the communities that it serves.

And I think that we're still exactly figuring out the path to financial sustainability for Gitcoin and how to balance the tradeoffs with what that would mean for turning that on. So I guess that's a long way of saying it's up to governance. I don't know. Keep an eye on gogub.gitcoin.colders. What's the sentiment about Gitcoin token holders? Because I mean in principle, it's like if you look at the market cap, it's kind of like probably on the order of $100 million or something. So to kind of have that kind of float, people probably believe that it'll be able to capture some of the value that it provides to other communities, right? I mean, I think that the sentiment that I see expressed on Gov.gitcoin.cold, which is where, at least in theory, people are,

are supposed to be expressing their sentiment about Gitcoin is you guys need to get product adoption. So basically Gitcoin Dow launched in 2021 and we're now in 2024. It took two years to rewrite the centralized monolithic stack to be decentralized and modular. And I think that in a space where attention is fickle and we're going to chase meme coins on the order of hours not days, I think a lot of people have forgotten about Gitcoin. And, you know, that's fine. We didn't execute. And, you know, there was a pretty hard reset between 1.0 and 2.0.

So, you know, I think the focus right now is on building tools that are actually useful to people and getting those adoption. And, you know, what a – I think, like, being a leader, again, in capital allocation, I think, like, in a lot of ways, get coin 1.0, pioneered, quadratic funding with the help of, you know, obviously we didn't write the paper, Glenn, Battalick, and Zoe wrote the paper, but we're pioneering the actual practice of using it. And, you know, the game has changed. It's not just quadratic funding anymore. It's retroactive public goods funding. There's a bunch of different capital allocation tools and, and the reset from centralized and monolithic to decentralized and modular has necessitated a different approach in a new era of leadership. So, you know, I think the honest answer to your question is that

Gik coin needs to lead again and it needs to pioneer the space during a new era in which the game has changed and and the sentiment that I hear that I really want to respond to is making Gipcoin a market leader again and and that's that's what you'll see me pushing for at gov.gitcoin.coin.co.co.

That's absolutely fair. So you recently deployed to a whole bunch of chains. How did you determine where to deploy to? I mean, obviously, it's clear that if your main net was not the place to fee anymore in light of the fees. But yeah, how did you decide where to, you know, place your bets? Yeah, well, anyone can take Allo Protocol and deploy it wherever they want. So that's the nice thing about being forcable and permissionless is that you don't have to rely on Kevin O'Waki anymore.

You know, Gitcoin's going to deploy to any L-Tor. that's legitimate and wants to fund what matters to its community. So right now we're seeing the most traction on optimism and arbitrum. Allo has also deployed to Sellow into ZK Sync into base. And wherever the communities, wherever there's money that is going to be funding public goods and funding what matters to these communities, I think that we'll make sure that there is an Allo deployment to those chains.

So I think we're all waiting to see where L2s are going to shake out. But it's pretty cheap to deploy the aloe contracts to a new chain in terms of time and gas costs. So we're going to go to as many L2s as there are communities that have treasuries that want to deploy them. Yeah, it makes total sense. You heavily rely on kind of like the future being Dow heavy for Gidcoin, right? Because kind of like allocating treasuries kind of like in a decentralized manner. this is very much a DAO mandate. How do you see the recent evolution of DAOs?

Are you happy with where we are right now with DAOs? Or do you think we need to push for getting to another place? I think DAOs are a fascinating design space. I think DAOs are basically crypto and multiplayer mode. What do we do when communities have to govern something together, have to push forward a movement together? And I was like, when said the word organization in decentralized autonomous organization, I think these are networks in a way. And that's just a totally different way of thinking. And it's going to take time for them to evolve. The corporate form evolved for 300, 400 years, something like that from the East India Corporation to what we now know is the Delaware C Corp or, you know, I'm not sure what the equivalent is in Europe. But I think it's going to take decades of evolution for, us to figure out the final form of DOWs, and I think that we can't rush it.

I really like, I really like Molluk DOWs. I really like compound DOWs. I think that there's a, the NOSIS safe is just an incredibly simple but powerful tool for helping communities work together. I'm excited about new primitives like Hats Protocol. And, you know, I think we can't force the evolution. I think we have to go through the painful parts, but also the beautiful parts of of Dow's happening. And, you know, what Gitcoins is trying to solve is like a very small portion of the Dow stack, which is capital allocation. And you're right, it does sort of depend on people having tokens that they want to deploy to, from their tokenized treasuries to the outer orbits of their communities. But, you know, Gitcoin's kind of a bet on

the EVM eating the world and tokenization eating the world. And on top of that, I know that people are going to want to fund what matters in their communities. And we just want to build the best stack for doing that. But maybe I could tease actually a little bit. I'm actually writing a book right now called How to Dow, which will be published with Penguin Random House as a publisher in September, October of this year. So really excited to explain the design space of Dow's to hopefully a more mainstream audience coming in the fall. And I think it's a really fascinating and exciting design space. I had no idea about the book, but I'm going to push on this now. So what do you think is the single thing that should be changed for Dow that would

have the most impact right now? It's a hard question to answer because asking about Dow's is like asking about, it's an extremely wide aperture. Asking about Dows is like asking about organizations. Are we talking about a family? Are we talking about a non-profit? Are we talking about a for-profit corporation? Are you talking about an NGO? Like, it's just like too wide of an aperture to even give a useful answer.

So I'm sorry not to answer your question. But I think there's a bunch of little things that need to be better. Yeah. Okay. I specify. So in my view, the one thing that would do a lot, if it were to be solved, is kind of like the attention bandwidth problem, right?

Kind of right now, when you actually look at the snapshots of DAOs, often it is votes on things that shouldn't be voted on. There's like basically quorums are not met left and right because people kind of disengage. Do you have an idea how to deal with the bandwidth problem for different decisions kind of on different scales for DAWS?

Yeah, I mean, my response to that would be, hey, what if there was a capital allocation tool that respected the voters' attention instead of assuming that they're spending tens of hours every day on the governance forums? So I think that like quadratic funding in a way sort of is that. With quadratic funding, you're taking

a look at all of the grants in a community that are doing stuff within that community and loading up your cart once per quarter it takes 10 or 15 minutes it feels more like an e-commerce experience you check out and then you're done once a quarter and so there's not a bunch of like governance proposals to really spend a lot of time debating back and forth on and you know by the way I'm sorry there was so much friction in your gg19 experience I hope that gg20 is is more is better for you but you know my response to that is We need a capital allocation Swiss Army knife, and we need to have more tools that respect the users' attention, the voters' attention when they're allocating capital in these DAs.

Yeah, and Kevin, I kind of, I want to make clear that kind of, I've given through Gitcoin through most of the rounds. I'm a huge fan. I think it's super, it's, I just wanted kind of, I was frustrated because I think it's a really important tool and I want to see it just to work. Yeah. Yeah, well, I am back at GICCoin.

I was disaffiliated for about a year and a half, and I think that GICCoin was in the messy middle between 1.0 and 2.0. But if you have complaints about GG20, please tweet at me. I'm at O'Waqi on Twitter, and I read all the feedback, and we take it seriously, sometimes even if you don't see it, and know that we were working hard to make the user experience better. We have made missteps. it is a hard design space, but

each Gitcoin is deeply protopian. And by that, I mean, it gets better every quarter. Sometimes it's two steps forward and one step, or two steps back and one step forward, you know, especially between Gitcoin 1.0 and 2.0. But we are still here. We are still grinding and we're going to make each get coin grants round better than the last one.

Fantastic. So tell our audience how to get involved with Gitcoin governance if they want to do so, how to contribute, how to, I know there's an approval process for projects to kind of be whitelisted and so on, you rely heavily on volunteers for that. So if people kind of, if this resonates with people, where do they had? Yep, so you can go to getcoin.com, which is where you can find all the other good stuff. If you check out impact.gitcoin.cold, that is the ticker for the amount of impact that Gitcoin has had. From the beginning of Gitcoin's entrance in the

space. I've always been very focused on let's actually show the numbers, the tangible impact that get coin is having. And I wanted to stand out from all the projects that we're promising the world, but not actually delivering much. And impact.com.coin.co is where you can go to see our latest impact numbers. As of, as of 2024, March 2024, we've done $60 million worth of funding to public goods in the Ethereum ecosystem. You can go to getcoin.cold.cold slash discord if you want to join or Discord and get involved.gov.gitcoin.co is the governance forum for for Gitcoin. And you can also find us on Twitter at Twitter.com slash Gipcoin. Yeah, those are the links that I would expect that people could go and check out. And April 2024 is when Gitcoin grants 20 is happening. So set a reminder. Remember to check out in your Gipcoin cart.

and send me a tweet after you do it and let me know if it sucked, then tell me it sucked. If you thought it was great, then tell me it was great. I'm Twitter.com slash awaki. Frederick Gay, thank you so much for having me

on the Epicenter podcast. I really enjoyed the conversation. Thank you for coming on, Kevin. I'm looking forward to round 20. Thank you for joining us on this week's episode. We release new episodes every week. You can find and subscribe to the show on iTunes, Spotify, YouTube, SoundCloud,

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