Knowledge Transfer: Hardness, a feature of Gitcoin 🪨

This knowledge transfer post fell out of a convo with @nategosselin . Thanks for the invitation to share this knowledge Nate!


Post TLDR

  1. Hardness is defined as the capacity of a system to make something very likely to be true in the future.
  2. Humans cherish hardness because we cherish stability. Especially in core infrastructure.
  3. Blockchains are a new source of hardness, with new strengths and weaknesses.
  4. Using blockchains, web3-era institutions could be built to fund the public good, to fund our shared needs, and to coordinate at scale.
  5. For these use cases hardness is a key feature - The ability to fund our shared/public goods at time t0 is less valuable than the certainty that they can be funded at t0, t1, t2tn
  6. Ergo, if Gitcoin wants to be a reliable funder of shared needs, Gitcoin could consider it’s hardness to be a core feature.

0. Preamble

The ideas in this post are from (1) conversations with Vitalik Buterin, who was during the launch of Grants one of Gitcoin’s key early stakeholders, and from (2) Atoms, Institutions, Blockchains by Josh Stark.

If you’re working full time in web3, Atoms, Institutions, Blockchains is worth a read itself, but I will summarize the key points below for any readers seeking a TLDR.

1. Atoms, Institutions, Blockchains: Hardness

From: Atoms, Institutions, Blockchains

Human civilization depends in part on our ability to make the future more certain in specific ways.

Fixed, hard points across time that let us make the world more predictable.

We need these hard points because it is impossible to coordinate at scale without them. Money doesn’t work unless there is a degree of certainty it will still be valuable in the future. Trade is very risky if there isn’t confidence that parties will follow their commitments.

The bonds of social and family ties can only reach so far through space and time, and so we have found other means of creating certainty and stability in relationships stretching far across the social graph. Throughout history we have found ways to make the future more certain, creating constants that are stable enough to rely upon.

One source of hardness has been physical stuff - atoms - in the natural world around us. We found objects and systems that had some convenient properties which, we learned through experience, were quite hard to change. We picked up shells, rocks, and metals from our environment, possessed and defended them, and used them as a basis for commerce.

Over time we learned to create our own hardness, and not just borrow it from nature. We built institutions - groups of humans who work together, who behave in predictable ways over long periods of time. We learned to design these institutions to become very reliable - so that we could give an instruction to an institution, and be sure that those instructions would be followed - even years, decades, or centuries later.

Recently, we’ve invented a new way to create hardness: blockchains. Using an elegant combination of cryptography, networked software, and commoditized human incentives, we are able to create software and digital records that have a degree of permanence.

“Hardness” is defined as the capacity of a system to make something very likely to be true in the future. Hardness is most useful where it is customizable or programmable - where humans can choose something specific we want to be true in the future.

This is the problem that blockchains solve. They are a new source of hardness, with new strengths and weaknesses, which make them a suitable complement to address the limitations of Atoms and Institutions.

TLDR - Hardness is required to create certainty about future outcomes. Blockchains provide hardness to digital systems

2. Early Gitcoin Grants

In early Gitcoin Grants Rounds, before the DAO launched, the governance of the rounds was just a group chat between several ecosystem participants in which rough consensus decided the basic structure of the round.

At a certain point time (after a lot of struggle), we started to get more successful at raising more money. At the time, I believe Gitcoin was doing ~ $100k rounds, and we raised something like $300k (these numbers are approximations from memory). The question was, do we up the funding to $300k for the next round we run?

I recall Vitalik chiming in that the community could begin to trust that Gitcoin Grants rounds will just happen every quarter if we used the money to fund the next few rounds instead of using it all at once.

Vitalik was a key early stakeholder, as the founder of Ethereum and the author the QF paper, and so his input was valued - but it was not a decree. A vigorous debate followed about what was the best thing to do.

The rough consensus that formed in that early group chat was that the ability to fund Gitcoin Grants at time t0 is less valuable than the certainty that they can be funded at t0, t1, t2tn. The latter creates a behavioural change in the ecosystem where people have certainty they can work more on public goods than things they can monetize (at the time, ICOs).

3: Atoms, Institutions, Blockchains: Casts

Back to Atoms, Institutions, Blockchains:

The cast is the “thing that is hard”, and it always takes the form of a statement or claim about the future.

Casts are descriptions of some future state of the world. A cast is hard if that future state of the world is very likely to turn out to be true. These casts might be claims about something not changing (“the object in my security deposit box will still be there in 10 years”), or something changing at a certain rate (“The supply of Bitcoin will inflate predictably for the next 100 years”), or something that is conditional on other actions or events (“If we get divorced, we will divide our assets in the following way”).

In practice, we are usually interacting with bundles of interrelated casts, which woven together, create stability and predictability in our affairs. For instance, if you own gold but store it in a bank, there are many interlocking casts that matter to you: casts about gold’s supply in the future, the integrity of the institution holding your gold for you, the physical properties of the vault where it is stored, the strength of the legal agreement between you and that institution, the reliability of the legal system in the jurisdiction where you live, and many others.

4. Combining these concepts: Casting Hardness at Gitcoin

I didnt realize it at the time we had the early group chat, but we were actually creating a “cast” for Gitcoin’s hardness at that time.

We were specifying to the community the following cast: "We have $300k, and Gitcoin is funded and will remain operational at $100k/round for roundt, roundt+1,roundt+2.

This cast allowed the community to augment it’s behavior and trust more that it could work on public goods and still get paid.

5. Hardness :handshake: Gitcoin

One of the key points of my recent Knowledge Transfer post Knowledge Transfer: The Gitcoin Hyperstructure 🏢 is that Gitcoin Grants is moving from a platform to a protocol, from socialware (trust each other), to trustware (trust the code)

This graphic best illustrates this idea:

If this transition is created, then Gitcoin Grants is becoming a hyperstructure: a crypto protocol that can run for free and forever, without maintenance, interruption or intermediaries

Companies are not hard. Daos that run on socialware are not hard. Hyperstructures are hard. Trustware is hard.

And people need hardness in their institutions that fund their shared needs/public goods.

Casts of Gitcoin Grants 2.0

Here are the “casts” I think Gitcoin is expressing as Gitcoin Grants 2.0 launches.

  1. The code is free, forkable, and open source, so anyone can run their own implementation without an intermediary.
  2. The main Ethereum round / Grants Program will run as long as the following conditions are met:
    1. There is sufficient money in the matching pool
    2. There is sufficient sybil/collusion resistance.
    3. There is sufficient input into the Grants Rounds by/for the community.

There are likely other casts that are expressed in the way Grants 2.0 is designed. Which I welcome others to note below.

Summary

In Summary,

  1. Hardness is defined as the capacity of a system to make something very likely to be true in the future.
  2. Humans cherish hardness because we cherish stability. Especially in core infrastructure.
  3. Blockchains are a new source of hardness, with new strengths and weaknesses.
  4. Using blockchains, web3-era institutions could be built to fund the public good, to fund our shared needs, and to coordinate at scale.
  5. For these use cases hardness is a key feature - The ability to fund our shared/public goods at time t0 is less valuable than the certainty that they can be funded at t0, t1, t2tn
  6. Ergo, if Gitcoin wants to be a reliable funder of shared needs, Gitcoin could consider it’s hardness to be a core feature.

I hope that this knowledge transfer post was useful to you in understanding why hardness is important for public goods funding, where hardness comes from, and how to “cast” hardness into Gitcoin Grants.

Comments/questions/feedback welcome.

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