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How crypto can do good for the world


Hhe human society of the 21st century faces many global challenges and systemic risks. These challenges include climate change, misinformation, a precarious digital infrastructure and a lack of economic prosperity. And while solutions to some of these problems are available, they remain unresolved because too few people, groups, or nation states have come together to solve them in a coordinated fashion.

Kevin Owocki is the founder of Gitcoin.co, an Ethereum-based network for growing open-source software. This article is an overview of the speak she will give on the stage of big ideas at Consensus 2022 in Austin, Texas this week. Sign up for Consensus 2022 here.

Our inherited institutions are not equipped to handle these problems, largely because individuals focus on their own interests and nations focus on their own citizens, leading them down paths that help them but hurt the global system. These types of problems are known as “coordination failures”.

But we are not trapped forever in this death spiral. With the dawn of Web 3, there is an opportunity to build a better world for our generation and beyond. We can leverage the properties of Web 3 to design regenerative crypto-economic systems: resilient and sustainable systems, and align conflicting priorities towards the common good.

know your enemy

Chinese General Sun Tzu wrote that if you “know your enemy and know yourself, you need not fear the outcome of a hundred battles”.

Humanity does not face persistent problems on a global scale because we lack solutions, data or ideas. Instead, systemic risks persist because humanity has failed to address them in a coordinated way. Groups often act at cross purposes, even making each other enemies, when the real enemy is the conflict itself.

But conflict will not solve climate change. To address the coordination failure on the environment and other issues, we need a truly global coordination mechanism. Fortunately, we may have found one: decentralized blockchain networks allow us to create new incentives and mechanisms that are borderless and direct.

One way to strengthen coordination is to realign the economic incentives that support a system. In doing so, we create a systematic economic incentive to work to support this system. Five years ago, I saw an opportunity to create better incentives to help fix a specific area suffering from a coordination failure: open source software.

Much of the open source software that underpins our digital infrastructure has been designed and maintained by software engineers who are paid little or nothing for their work. This asymmetry between value creation and value capture is why I founded Gitcoin in 2017. We wanted to provide a system for those who create open source software to raise funds to fund their efforts. We help individuals and communities start, fund, and scale open source projects. Today, Gitcoin is a community of 312,000 developers, and we’ve committed $62.1 million in funding to open source projects.

Therefore, the regenerative crypto-economy

We believe Gitcoin can be a model for similar funding programs and eventually for what we call the “regenerative crypto economy”. Regenerative crypto-economic systems satisfy human needs, are net positive, and improve the balance between needs and investment. For example, Gitcoin helps create FOSS (free and open source software) resources that generate productivity and wealth – some of those freed resources flowing back into additional Gitcoin funding. Part of this has to do with mechanism design and economic incentives, but the potential of these systems to serve as a rallying point for fundraising and organizing is equally important.

DAO for maximum positive impact

ImpactDAOs, defined as any DAO (a decentralized autonomous organization) that creates net positive benefits for the ecosystems around it, are the evolutionary and atomic building blocks of the regenerative crypto-economic movement.

Here are some examples of ImpactDAO and the magnitude of the positive externalities they create:

Regenerative crypto-economy is being implemented by many ImpactDAOs today, and I dive into their work and impact in my new book on ImpactDAO with co-author Ale Borda.

With ImpactDAOs and the properties of Web 3, we can design a regenerative Internet of value to enable diverse global citizenship to flourish and resolve the many coordination failures that threaten humanity and the earth. We can increase and secure funding for the creation and maintenance of digital public goods such as free software. We can program our values ​​into our money and make public goods financially viable.

We can even eclipse the most prolific and degenerative use cases of blockchain networks and trigger a positive feedback loop for their regenerative use cases. More importantly, we can ensure that the future of the internet and the metaverse does not belong to any billionaire or tech giant.

Of course, it’s a double-edged sword, as value systems can vary wildly, and this tool will empower anyone who decides to use it. But by coordinating the incentives of many participants and providing a channel for greater alliances of strength and intelligence, system designers can create economies that truly do the world good.

Crypto for good

With cryptocurrency making headlines these days, some wonder if it’s really good for the world. While headlines love big winners, crypto’s biggest upside over time won’t be for billionaire investors. Its real promise lies in the creation of new structures that induce new behaviors.

The regenerative cryptoeconomy is already helping us build a sustainable financing system for digital native public goods. In the coming decades, we expect to see economies, democracies, and civic groups around the world upgraded with similar coordination mechanisms, enabling greater human flourishing.

It is up to us, the citizens of Web 3, to coordinate to create a more regenerative world. If you would like to learn more about the movement and how your skills and abilities can help you, please pick up a copy of the Greenpill book at store.gitcoin.co. Use promo code CONSENSUS_2022 to get 50% off. You can also listen to the conversations happening on the GreenPill Podcast via Apple, Spotify, or wherever you podcast.

We must go beyond our inherited political and economic systems if we hope to benefit humanity as a whole. The regenerative crypto-economy is happening. It is there, it is important, but it is also incomplete. To grow, he needs you.

Also in the “Big Ideas” series

Evidence Without Trust: Web 3 Helps Document War Crimes in Ukraine by Jonathan Dotan

In an age of misinformation, blockchain technology can renew our faith in probative truth, especially during the current conflict in Ukraine, says Jonathan Dotan, founding director of The Starling Lab.

How Web 3 is changing philanthropy by Rhys Lindmark

Rhys Lindmark, “Big Ideas” speaker at CoinDesk’s Consensus Festival, discusses how the crypto generation could rewrite the rules for charitable giving.

Let’s use new forms of money to engage with our communities by Matthew Prewitt

More local money could reduce the incentive to “leave” communities in need of resources, says Matt Prewitt, president of the RadicalxChange Foundation.

Forecasts, Prediction Markets, and the Age of Better Information by Clay Graubard and Andrew Eaddy

Quantified forecasting is a valuable yet underutilized tool, and forecasting markets are emerging as an indispensable tool for its adoption.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


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