What is Gitcoin?
Gitcoin is a solution to a problem.
Problem: Resources are not allocated as well as they could be. The right amount of money is not put in the right peoples hands to best minimize human suffering and promote human flourishing.
Context: Complex problems require sense-and-respond solutions which enable sustainable experimentation. Optimal solutions will likely be probabilistic rather than deterministic and the framing should be an infinite game scenario.The internet of value is a fundamentally new substrate for resource coordination which opens up a large experimentation surface for how communities fund their shared needs.
Solution: Allow people to store value in a non-inflationary asset which incentivizes intelligent building and experimentation in how communities best fund their shared needs.
Justification: If there is a limited amount of resources (time/attention/value/natural resources) how can we best use them to promote human flourishing? Because we do not know the answer, we might accelerate the rate at which governments compete for citizens via new resource allocation methods. Most governments will have greater impact by funding shared needs rather than individual needs.
Gitcoin = GTC = The asset people can store value in to catalyze better resource allocation in the world.
Gitcoin’s solution to the money problem
Money is simply an information network which incentivizes productive allocation of resources. It consists of stores of value (SoV), units of account (UoA), and mediums of exchange (MoE). The more cynical might also consider it to be a System of Control (SoC).
The system as a whole needs both liquid SoV & MoE which function relatively to the outcomes and ecosystem they drive. They are the incentives which drive collaboration to find solutions to our shared needs.
Gitcoin has a great opportunity because of the following fundamental problems in other stores of value:
- Fiat currencies are caught in a prisoner’s dilemma which inflates supply which drives them to zero value in a competition to inflate at a slower rate than the others.
- Fiat currencies will inflate to cover capitalist lending outpacing production. On the peaceful end of the fiat spectrum users believe in a system like the US dollar because it is the best of the bad solutions. Unfortunately, this requires extraction from other economies/currencies. In many of these other countries, the populace “believes” in the currency because of the threat of force.
- Bitcoin made revolutionary improvements on almost every one of the fundamental characteristics of money. Durability, portability, divisibility, uniformity, limited supply, and acceptability. Gitcoin has all of these characteristics except acceptability, but in a world where conversions can be made in seconds on a decentralized exchange, this is no longer highly relevant.
- Bitcoin is not backed by violence as it uses math to settle conflict, but it does drive inequality in the short term. Unlike fiat it does not inflate. However, people are incentivized to store the value and not to spend. As one person’s spending is another’s income, it pushes for those who have today to hoard it. It also incentivizes
- Gold performs worse than bitcoin in almost every function.
- Art, Fine Wines, Collections, NFTs, etc. These are all unique subjectively valued stores of value which do not work as a unit of account. However, the subjective difference in value comes from a market mechanism. The problem is with billions of people only a few are close enough to the mechanism and the expertise to have equal information on non-fungible items.
Stores of value have a problem in that they incentivize something. Fiat incentivizes inequality through violence. Bitcoin incentivizes inequality through math.
Our values are not properly expressed in a store of value which incentizes something we do not believe in. Now that we can create unlimited scarcity, why would people incentivize things which do not align with their values.
Gitcoin incentivizes a solution to problems. As long as there are problems, people will store their funds in GTC. The total addressable market is larger than any other store of value.
GTC has a non-inflationary design, but the best part is that by helping communities to build and fund their shared needs it gains an unbeatable advantage.
- Has the best information on which systems work well to inform it on how to best distribute resources within its community of builders.
- Has the deepest rolodex of builders familiar with the solution space.
A store of value raises in price when:
- There are more people willing to buy it for a higher price
- There are less units on the market
Gitcoin’s addressable market of literally every person on earth, and maybe some AIs in the future, makes it undeniably the best bet for the first. People will always have problems to be solved collectively.
As for the latter, what better community to find impactful ways to give GTC utility which increases the legitimacy, credibility, and sustainability of Gitcoin in a positive feedback loop between the price of GTC and the impact it creates.
There will always be a better way
Imagine that every shared need we have is a “problem”. The solutions to those problems are “outcomes”. Some problems are very local such as shelter for one family. Some problems are broad like national defense. Each of these problems has a different set of stakeholders and people with the expertise, time, and resources to solve them.
To find the optimal “funding” stack we would need to collaborate effectively with all stakeholders. We may need to incentivize some experts to participate and pay some contributors for their time.
First, we must recognize that democracy requires consent of the governed. The internet of value provides an opportunity to unbundle much of the governance we are used to. It no longer makes sense to primarily share resources at the family, local, state, nation-state levels. Especially if we were to consider consent to only be with “hell yes” or else it is a no.
We no longer need to express our conviction on individual topics through a congress person who also represents 800,000 other people.
We no longer need to find the candidate that least egregiously violates our principles because we are tied to geography in an archaic limitation of expressing our preferences with high-resolution.
If you believe that resources are not allocated as well as they could be AND you believe there are better solutions possible, then Gitcoin is for you.
Everyone who feels that this issue is solvable falls into one of two categories:
- People who don’t know how to help solve it
- People who might know how to solve it (Because it is unsolved, let’s say there isn’t currently a class of people who know how to solve it.)
For the first group, they have an easy answer for how to help. They can take the capital they have and store a portion in GTC. They can easily buy GTC off the market and hold it as long as Gitcoin is catalyzing the impact they would like to see. These are capital contributors.
Capital contributors appreciate that Gitcoin will catalyze their funds into impact and hopefully the world will catch on. This will hopefully increase the value of their investment in a public infrastructure which allows the rails and mechanisms which distribute capital to compete rather than the capital itself.
For the second group, people can Git coins with Gitcoin by contributing time, attention, and expertise to the shared needs of the Gitcoin Community. These are labor contributors.
Labor contributors work on solving problems in exchange for capital. As they gain more expertise in solving their particular part of the puzzle, they also are enabled to participate more in the governance decisions of the Gitcoin community.
Both of these groups believe there is a better way for communities to build and fund their shared needs and that Gitcoin is possibly the best way to make an impact.
Gitcoin’s path to sustainability
A 100 year purpose is the direction, but how do we set boundaries for how we focus our decentralized collaboration in the next year?
Our essential intents are these boundaries.
The CrossStream DAO Operations council (CSDO) includes the workstream leads from all of the “structured” workstreams. (There is still conversation to be had around which groups GitcoinDAO chooses to fund will be included as workstreams, though the conversation should be had soon to minimize mis-communication.)
CSDO ratified these 5 essential intents plus I’m including the one suggested by Kevin afterwards.
Grants Protocol (+ Growth)
- Build a widely adopted, modular Grants protocol that creates a flourishing ecosystem of funding mechanisms.
Passport Protocol (+ Growth)
- Build a widely adopted, modular Pluralism Passport protocol that creates a flourishing ecosystem of network effects around Decentralized Society with Soulbound tokens, VCs, DIDs and ratings algorithms (starting with Sybil Resistance).
Financial Sustainability
- Have a comprehensive, diversified strategy for financial stability of the DAO in order to effectively achieve our mission.
DAO Organization
- Create and promote clear and engaging rituals, communication channels, and messaging that build shared context among GitcoinDAO’s contributors, stewards, and supporters.
Grants Program
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Enable a successful grants protocol launch by dogfooding it internally & supporting ecosystems in adopting it.
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Continue to support the Ethereum ecosystem & public goods in web3 and beyond through Gitcoin-led rounds.
To me, none of these are very good as essential intent because they are not clear and achievable. They are too high-level. Here are my suggestions for how we can use these intents to clearly move Gitcoin toward sustainability.
I would slightly change the buckets
Bucket 1 - Launch and grow the components of a successful Grants 2 flagship protocol
A successful grants 2.0 protocol is each of the components having been launched with well documented SDKs and clear growth metrics. The components include the fixed and modular components.
Fixed components include the grants registry, the identity registry, and the round manager (pool registry). The round manager is where communities can choose their own “funding stack” of modular components.
Standards, protocols, modular design, and composability all benefit evolutionary systems because it limits the design space so new builders can experiment where the most impact is available. A funding stack includes the user and grant moderation (regulation), the funding mechanism, and the discoverability of grants on the Gitcoin UI (only because it will be the only one at launch). These spaces are what will create the most innovative solutions.
Here are my essential intents for this objective.
- Launch the grants registry, user registry, and pool registry (3 binary goals)
- If these are completed it means we hit our base goal of shipping a flagship product (Could clear up the wording to indicate actual usage, but I don’t think semantics are the issue here)
- Identify and set growth targets for each to use during season 15 (ie. 10k Passport non-sybil passport holders, 5000 grants on registry, $50 million in pooled funds)
- Clear growth goals to be assigned to workstreams for accountability
- Identify and set growth targets for 1 click funding stack permutations available (ie. 12 funding stack permutations)
- The value proposition is that GTC will catalyze an increase in the accessible experimentation surface for any community to fund their shared needs. Growing this experimentation surface can be measured by permutations available on the Gitcoin UI for easy use by any community.
Bucket 2 - Improve the sustainability of Gitcoin
The sustainability of Gitcoin requires capital contributors to continue seeing the velocity of GTC lower and innovative solutions shipped. This means the communication from contributors to stewards who control funding decisions is delivered in an effective way and that the contributors efforts are substantial.
To do this Gitcoin must create a portfolio diversification thesis, a value capture thesis, and the roadmaps and tools to implement them. Diversification is simple actions and tools which can be handles by a delegated authority with oversight. Roadmaps and implementation are simply design and engineering.
Value capture is unexplained at this point. Here I will attempt to connect this to my long intro.
GTCs sole utility should be investing in workstreams, structured and unstructured, via Gitcoin governance. Gitcoin should use quadratic weighted staking to reward people for governance participation. The key is that the staked GTC would not only be eligible for voting to direct funding in GitcoinDAO, but it would also be used to participate in the governance of the components of the grants 2.0 protocol.
Each component of the funding stack could launch its own token for economic rights without governance (or with some portion) of the participation in governance.
For example, Gitcoin Passport would fuse with the sybil detection DAO concept and launch a token economy to incentivize the acceleration of network effects in its adoption. It could reward stamp providers used by reader apps based on how many uses the reader gets or by funds passed through it’s resistance algorithm. It could reward sybil hunters and data scientists in a model contest.
The grants and pool registries could do the same in their own way. Then Gitcoin could invest in the first solutions available for the composable components such as a decentralized grant review protocol or a revenue generating business consulting communities on using the protocol.
If this sounds familiar, it is the roadmap of ethereum ecosystem expansion. Gitcoin currently has a huge information asymmetry we can collectively take advantage of to bring sustainability.
We are building a city and have first dibs on ownership of the public utilities (decentralized grants eligibility reviews) and private businesses (UI generation and round consultation as a service). The best part is the monopolies are ethical because they are openly accessible through Gitcoin. Maybe we monopolize most solutions and SALSA tax their value into future rounds…
That said, here are my other essential intents:
- Have > 2 years of runway in stablecoins & runway time is INCREASING
- An R(n) growth rate over 1 means sustainability
- Investments in Gitcoin built or used businesses & protocols > Gitcoin investments in non-gitcoin built or used businesses & protocols
- Means we invest at least $100k in our own dogfooded solutions (ie workstreams become value capture factories)
- Improve steward satisfaction score from x to y
- Implication of needed communication & process fixes around this role
- Improve contributor satisfaction score from a to b
- Implication of needed improvements self scored by those in the role
In conclusion
My intention here is to share my personal perspective and influence others’ thinking. I don’t intend to prescribe what is correct or incorrect, but rather to share the perspective I hold.
I am HIGHLY aligned with the essential intents already proposed and would vote to ratify them to the DAO today.