Gitcoin founder talks about nearly 30 mechanisms for coordinating crowd intelligence

When you can achieve better collective intelligence, you can achieve better collective resource allocation.

Speech: Gitcoin founder talks about nearly 30 mechanisms for coordinating crowd intelligence

Compiled by: Yu Xing

In the 65th episode of the GreenPill Podcast, Giveth’s Griff Green and Gitcoin founder Kevin Owocki discussed nearly 30 different mechanisms for coordinating collective intelligence, aiming to achieve better collective resource allocation. This article is extracted from their Conversation.

Coordination mechanism diagram originally posted by Kevin Owocki on Twitter via Octavian

When you can achieve better collective intelligence, you can achieve better collective resource allocation. That’s a great thing when you’re trying to fund public affairs and build a regenerative financial system. -Kevin Owocki

Let’s start with a few classic example mechanisms:

Tithing —

Tithing - This one is an ancient religious act that historically has been done by donating a portion of your income to churches, non-profits, etc. It is simple and easy to understand; the downside is that without feedback, people won’t know they are What the money does, there is no enforcement, no checks and balances, there needs to be a strong cultural driver to keep it working.

Taxes —

Taxes - Like “mandatory” tithing, you are required to give a portion of your money to the government. The downside of taxes is that: power corrupts, centralized institutions decide from the top down how funds are used; the only The feedback path is voting, and although this process is very slow, it must be acknowledged that this is currently the best form of obtaining funding for public goods.

Voting —

Voting - There are many forms of voting, it usually takes the form of majority rule, representative democracy is also a form of majority rule; the other way is consensus voting - which basically requires absolute unanimity for progress.

Taxation is a fund-raising mechanism, and voting is a fund-allocation mechanism. There are many powerful mechanisms to raise funds for public resources, but the allocation mechanism does not seem to be that effective. Voting will be corrupted by money. So what about the distribution mechanism of the “market”?

What if there was a market for trading “clean rivers”? This will allow different companies to compete in this new market. Collectives can use supply and demand to choose the public goods we want and reward value creators.

Markets —

Market - usually regarded as the best way to allocate resources, but not suitable for collective resource allocation - the market pursues maximization of interests, only provides services to those who can afford the purchase price, only applies to highly excludable goods, market failure situations The performance is obvious in the financing of public goods; but the market itself is a decentralized collective intelligence mechanism. Any goods that have consumer demand and are willing to pay will be produced, which also stimulates innovation.

「The coolest thing about markets is that it’s win-win. Nobody is losing. If you’re creating value, you win, which is amazing. The real problem is commons don’t have markets to push back.」 — Griff Green

The cool thing about the market is that it’s a win-win, no one loses, if you create value you win something, which is awesome. The real problem is that there is no market for public goods for feedback regulation.

Web-based Mechanisms

As we move from the industrial age to the information age, there is an opportunity to achieve more effective governance mechanisms and mechanisms that can provide market-like funding scales with the legitimacy and public interest brought by taxation and coordination to make the economy truly Democratize, whenever people create a high-definition image of a public good need, the collective intelligence will invest the money to make it happen.

The following are 27 mechanisms discussed by Griff and Owocki. Of course, they all have some limitations.

Quadratic Funding —

Quadratic financing - Created by Microsoft’s Glen Weyl and Ethereum founder Vitalik Buterin, this mechanism raises funds through a central fund pool and allocates funds based on the public’s support for the project rather than the amount of capital invested. . This is contrary to the 1:1 approach, which is plutocracy and reflects only the needs of capital. Quadratic financing is based on the number of contributors rather than the amount of funds, which reduces the influence of large investors and is more democratic.

Example: You started a fundraiser that raised $100 from 100 donors, and I started a fundraiser that only raised $100 from one donor, even though both fundraisers received $100. Donate, but you will receive 99% of the matching pool, which helps direct funds to the “poor and the many” and while you may only be donating a dollar, you are actually part of the public will for the distribution of public funds Guided the direction.

Problem: Possible Sybil attack and need to raise public pool of funds.

Conviction Voting —

Conviction voting - This is a method similar to quadratic financing, which also alleviates the influence of plutocracy, but takes time. The rules are: the proposal supported by staking tokens can be withdrawn or reallocated at any time; voting The weight of increases as the staking time of the token increases. Once the proposal reaches the threshold, the proposal is passed.

If you own more tokens, you have more say, but even if you only own a minority share, you can still advance a large proposal, it just takes longer. This applies to competing proposals within the same tier, and among all proposals, you can allocate your tokens to your preferred proposal in various ways. The concept comes from Michael Zargham and others, and is implemented by 1Hive. It works very well if there are a lot of competing proposals and a clear budget, allocating the amount the community wants in a given period of time.

Problem: Many proposals are needed to compete, otherwise proposals are easily passed. The good thing is: minority opinions can actually pass proposals.

Retroactive Public Goods Funding —

Retrospective Public Good Funding - Karl Floersch was the inspiration for this mechanism and they implemented it on Optimism. They create a committee of experts and allocate revenue from the Optimism network to that committee of experts, who allocate funds to things that provide value to the ecosystem.

The advantage is: more talents can develop current public goods based on expected future income, and funders do not need to worry about the difficulty of measuring funding results.

Network Goods —

Network goods - private goods are rivalry, an example is an iPhone: you have to afford it in order to have it; public goods are non-rivalrous, such as breathing air: everyone has access to it, regardless of financial status . Online goods become more valuable as more and more people consume them, just like open source software. The more attention NFT art receives, the higher its value will be. By issuing NFT art for public goods, the value of NFT art can be increased through the dissemination of public goods, and the purpose of funding can be achieved.

Effective Altruism —

Effective Altruism - Effective altruism follows a cost-benefit principle and aims to fund the most efficient groups that do the best work and get the most results per dollar.

Kevin: Effective altruism is based on the theory that we don’t actually give to make an impact, but to make ourselves feel better. As a kind of philosophical thinking, effective altruism is different in practice for everyone. If we classify public undertakings according to a utilitarian perspective, how do we judge which undertaking can produce the greatest benefits?

Suppose I donate 5 US dollars to buy 5 mosquito-proof tents, which can save 100 people from malaria in a certain area within 5 to 10 years; while the same amount of money can only save 2 people by funding other projects, and a similar mechanism is used to treat funded projects It’s fun to prioritize public goods and donate our money to the most effective public goods.

The limitation of effective altruism is that this model cannot identify projects that are not proven to be effective in the future, so it is suitable for large-scale operation, which will have an integration effect.

Griff: The problem with effective altruism is that analyzing impact data is difficult. The impact is qualitative in nature, but we are trying to quantify it. But some values cannot be quantified. For example, how much is a sunset worth? These are all money vectors. A more immediate ethical dilemma is the trolley problem: How to quantify the value of life?

Hypercerts —

Super Certificates - Owocki is working with Protocol Labs to develop this mechanism. The principle of super certificate is this: suppose I collect ten tons of carbon in the atmosphere and obtain a certificate, then this certificate may have value in the market, because another person may be able to emit ten more tons.

Super certificates can extend similar proof of impact factor contribution to any impact vector. I saved ten people, picked up ten tons of garbage, and helped ten old ladies cross the road. We can issue super certificates for any positive impact. , and then launches a marketplace of impact evaluators, attracting those who want to collect Hypercerts to demonstrate their virtue, Web3 provides tangible proof of virtue.

We are launching a three-party market where any DAO that makes a positive impact can issue super certificates, impact evaluators can stamp certifications, and people who care can buy them.

The overall value is that any DAO that creates positive impact can shift from worrying about how much impact it can capture to worrying about how much impact it can create, which fundamentally changes the incentives for impact DAOs to build business models that This means that more capital and talent can flow into the influential DAO.

At the same time, this also solves the problem of effective altruism mentioned above - if you can create a decentralized market regulated by collective intelligence, where people can issue, evaluate and buy super certificates, then you can have a vision of impact. A powerful decentralized data source to detect whether future impacts are occurring.

Why haven’t they worked in the past? The influence market existed before the emergence of NFT and is not new, but it is not often talked about in traditional systems. What is different now?

A globally transparent, programmable, non-tamperable ledger is the key, such as carbon emissions. Influence flows within the global system. Previously, people lacked a basis for consensus. At the same time, one thing I learned from carbon emissions is that buying pressure starts. will be the most difficult part. Carbon emissions can be regarded as a subset of the large-scale application of super certificates. 99% of the organization’s regulations on carbon emission shares come from government regulations, but in a decentralized market, how can we impose this? kind of buying pressure? Let Vitalik tweet? Or will the number of super certificates be a mandatory requirement for funding? I think the most likely way to achieve a major application change is to use the power of society and culture to make collecting super certificates a fashionable thing. This may be possible, but before that, we can still build a market, a Donate to the game.

Augmented Bonding Curve —

Enhanced Bond Curve - The Bond Curve is a smart contract that is a means of launching the market by minting corresponding tokens for reserve assets. Whenever an asset is added to it, it will mint tokens, otherwise it will burn tokens. , to release collateral; the transaction object of the token is a contract, so there is no need for a buyer when selling. The price of the token rises with each minting and falls with burning; cold start is solved by improving the liquidity base Price discovery issues at the time.

The Enhanced Bond Curve (ABC) adds fees during the minting and burning process, so when an asset is sent to ABC to mint a token, a portion of the funds goes into a pool managed by token holders and the remainder is used for minting Token.

If someone destroys a token by sending it to ABC, a portion of the funds released will go into the collective. This is a continuous flow of funds based on the market. As long as there is buying and selling, there will be fluctuations in asset prices.

ABC also added a “Hatch” to its initialization to collect funds before the bond issuance curve, with part of the funds used to mint tokens at the same price for all participants and another part of the funds used collectively.

Dominant Assurance Contracts —

Lead Guarantee Contract - A guarantee contract is a funding commitment with the premise that “I want to fund this project, but only if others do too.” If the fundraising does not reach the threshold within x weeks, All funds will be refunded. Kickstarter is famous for this model.

Lead guaranteed contracts go one step further and are a kind of bet: if the contract reaches its goals, the primary funder gets their money back plus some profits, but if the project doesn’t get funded, then his money is divided among all the secondary investors. Holder, so this is a game of making money, donation and vision. Both egoism and altruism have enough incentives to participate, in an interesting enough way to promote public financing of public goods. This model originated from Asia. Alex Trabarrok’s development of the concept.

Donation Mining —

Donation Mining-Giveth.io is a community-driven organization that aims to fund non-profit organizations and social causes. GIVbacks is its last donor reward mechanism. Every two weeks, GIVbacks will award GIV governance tokens to verified impact As donors to GIV projects, donors can also establish their influence in the organization when funding the development of public goods, and expect to increase the value of GIV through network effects to obtain returns; in addition to GIback, you can also participate in GIVpower through Stake GIV tokens to increase the exposure of a project to be funded and obtain mining rewards.

Pairwise (formerly Budget Box) —

Pairwise Comparison (formerly Budget Box) - This tool comes from the Colony ecosystem (2018). Pairwise evaluation is when two options appear on the screen and you choose the one you prefer; at the end, you get a list ranked based on your preference. Your rankings can be merged with other people’s rankings, and you can end up with an ordered list, a preference, or a weighted list for allocating your budget.

Collaborative filtering: It pairs you with other users with similar preferences. With large-scale data sets and collective choice preferences, once you have a sufficient amount of user profile data, you can use collaborative filtering to evaluate other options they might like without having to make all kinds of complicated choices.

Furthermore, voting should essentially be a signal aggregation. How great would it be to have a personal server, run your own personal AI bot, train it to vote for you by sending all your online content and even personal private messages, and you just have to watch the availability once in a while.

Futurarchy —

Future Politics – Created by Robin Hanson, Future Politics is a bet on the mechanics of how the future will have an impact in some way, you state that a certain proposal will have an impact and if it does, you You will receive a reward, otherwise your bet will be lost. This is like including the impact of a proposal on the economy or other items you are voting on in your vote choices. It introduces voters to prediction markets so that the market can filter which policies will create indicators of national well-being. This uses the market The power, but the danger is that once an indicator becomes a target, it ceases to be a good indicator.

Stigmergy —

Incentive coordination - This is an indirect coordination mechanism, or a characteristic common to all coordination mechanisms, rather than the mechanism itself. Stimulating collaboration is a trace of historical action that narrows the scope of consensus and ultimately achieves coordination goals. The principle is that the traces left by individual actions in the environment stimulate the same or different agents to perform subsequent actions. This is how ants coordinate their actions, leaving stimulating traces that guide other ants to achieve their goals.

If you can build a network of trust and tell other people that these are the people who are trustworthy, they have a lot of credibility, and the more good things they do, the more credibility they have; like when people are on Gitcoin Sharing their behavior after donating is a pheromone behavior that motivates others to donate; this mechanism has a self-reinforcing property.

Praise —

Appreciation - A bottom-up, peer-to-peer collaborative reward/reputation system, Appreciation maintains a reward fund by giving appreciation to community members. Appreciations are automatically calculated and recorded, and every two weeks, a team of quantifiers rate the value of each appreciation. Praise recipients are rewarded with tokens based on these quantified results, linking each token allocation to each compliment. Praise is motivated by gratitude, high emotions, positivity, and more, while this rich data can be used to incentivize contributions, inform the community about who is doing what, and more. People vote with each other and tell everyone who they think is valuable and who is adding value, which creates a similar trust network model. Now we can stake tokens on the trust network, which is even cooler.

In Regen web3 we are connecting financial capital to other types of capital such as social and cultural capital, while also making finance serve social and cultural capital. Reference Gregory Landua and his theory of the 8 forms of capital.

Demurrage —

Demurrage - it’s a bit like inflation - increasing the total amount of tokens reduces unit value, the opposite, but with the same purpose (currency depreciates over time). In demurrage, if you have 1 currency unit and hold it, over time, eventually you will only have 0.99 currency units left, and the other 0.01 currency units will be put into a common pool, this mechanism Designed to incentivize the velocity of currency, it primarily referenced the characteristics of perishable assets, such as rice or flour, which would rot over time, so the church would issue a seal stating that the rice was rotting, meaning that its Value decreases over time, demurrage originally comes from shipping, meaning “to stay” (Old French), and refers to the time lost required for goods to be unloaded from a ship. This is “liquidation damages.” While there are some relatively successful examples of demurrage currencies, which all lead to similar results, the user experience seems to be better in the latter case, where demurrage is a bit like a forced tax.

Proposal Inverter —

Proposal Inverter - Proposal Inverter was generated during the study of DAO and DAO coordination. Usually the proposer faces one DAO with one proposal. Now the proposal inverter acts as a middleware to make one proposal face multiple DAOs at the same time. If a proposal may solve the problem of multiple DAOs, they can jointly fund it, and then the funds will be collected and distributed according to agreed milestones.

Prop House —

Prop Library - Nouns DAO created this funding mechanism where the community raises funds in their community library. During these fund raising processes, builders can think that each round of fundraising has a certain amount of funds that can be raised by a certain number of Proposals win, and community token holders then vote on the best proposal to receive a certain amount of funding.

Quadratic Voting —

Quadratic Voting - Quadratic funding is a branch of quadratic voting that measures not only the preferences of a population but the strength of those preferences, and is an alternative to the one-person-one-vote system. You are awarded a certain number of voting points and can vote on any number of questions, and you can add a weight to each proposal that is the square root of the voting points you staked behind that question. Based on the number of voting points someone places on a particular issue, it is possible to see not only a voter’s preferences, but also the strength of their preferences for that issue. This avoids the consequences of plutocracy, where loud decibels influence judgments about what voters like, but rather broad consensus among the crowd swayes the issue. It also encourages voting on multiple proposals, rather than investing all your voting points on one proposal.

JokeRace —

Created by JokeDAO, this mechanism is a bottom-up on-chain governance method. You can tell a joke in the JokeDAO channel. If you tell it funny enough, you can get a grant, which can be used for anything. , including planning community roadmaps, generating ideas, supporting reward tasks, etc. There are different forms of voting for funny recognition, including 1 token: 1 vote, voting that decays over time, and secondary voting. The most fun thing is that they hold a distributed decentralized joke competition every week

Digression

$25 Trillion Opportunity —

$25 Trillion Opportunity – The public goods world is serious business! If we could improve the world better than governments can, we could determine the money that is currently wasted by governments on providing value to society for no gain. More than $25 trillion a year is spent on public goods. If we can create a more efficient system and capture a fraction of the value that is created, entrepreneurs can enter the space and innovate. We might even be able to transform private goods into public goods: food, water, shelter, and other basic needs—bringing them into the realm of public goods.

「We can invent higher resolution mechanisms for democracy. Regen web3 is a blue ocean of opportunity.」 — Griff Green

We can create higher-resolution mechanisms for democracy. Regen web3 is a blue ocean full of opportunities.

Holographic Consensus —

Holographic Consensus - OG DAO technology proposed by DAOStack, Holographic Consensus is a hybrid of future politics and regular DAO voting. Anyone can make a proposal (very easy), token holders can “stake” (vote) on the proposal, and when they do, they “enhance” the proposal so that it gets more attention and even speeds up voting process. If the proposal passes, those who staked will win tokens (Griff calls it “money”), while those who vote against it will lose their stakes.

The attention economy is taken into consideration here. Not everyone has time to pay attention to all proposals and votes, but when someone you know votes for a certain proposal, it is equivalent to him making some kind of identification for you, and you may follow it. , this works well when there are many proposals and too many things to focus on.

Holographic consensus helps maintain scalability and be resilient at the same time, both of which are difficult to achieve at the same time. In this way, those who place bets play the role of market prediction.

Skeuomorphism —

Skeuomorphism - is a classification of mechanisms, not the mechanism itself. Skeuomorphism divides coordination mechanisms into skeuomorphism and non-skeuomorphism. One example is the way Google and Yahoo choose to retrieve information. Yahoo is skeuomorphic in that they use a traditional library card catalog system model where you search for content that interests you by parent topic and subtopic, just like you would find books along categories in a physical library. Google is non-modular, providing information retrieval results by creating a simple search box in a way the Internet has never seen before.

「The earliest ideas for blockchain ledger technology are going to be just to port over existing methods and ideas. The best, most interesting mechanisms are going to be non-skeuomorphic.」 — Kevin Owocki

The earliest ideas for blockchain ledger technology will simply be to transplant existing methods and concepts. The best, most interesting mechanics will be non-skeuomorphic.

Sortition —

Lottery - Rarely used in real life, with the exception of jury duty, a lottery involves selecting a few people from a subset of likely voters and letting them make their own decisions. Kind of like delegation, but randomly selected from a larger group of “ordinary people”. Why is it not common in blockchain? No conclusion yet!

Aqueduct —

Canals - Channels in irrigation systems used to channel water from one system to another. If we were to have a diversified public goods funding system, what would it look like to build bridges between different public goods funding mechanisms? ? Send a channel from your DAO to another DAO, connecting modules for public goods funding. A water channel that can connect to any other mechanism in the ecosystem. Just like Radicle Drips - you can program a percentage of your revenue here and there based on your governance. This is a recurring token flow. Set it and forget it.

Owocki’s example is Gitcoin Grant 2’s new 「aqueduct」: a project will allocate a percentage of its DAO-governed funds to stream to the Gitcoin Grant’s Matching Pool, which will run a quadratic funding round based on the project’s vesting schedule.

Owocki’s example is Gitcoin Grant 2’s new “water channel”: a project will allocate a portion of its DAO-managed funds to flow to Gitcoin Grant’s matching pool, which will conduct quadratic funding according to the project’s vesting plan.

High level primitive here is simply “money (token) streaming”. The high-level primitive here is simply “money (token) flow”.

Ranked Choice Voting—

Ranked Choice Voting - Instead of selecting one representative to vote for, an ordered list can be submitted (first choice, second choice, etc.). In reality, votes are counted in a way that gives seemingly minority candidates a chance and allows voters to express their true preferences rather than strategically voting for the “lesser of two evils” ” candidate. Eliminates the problem of third parties sabotaging ballots. Useful for first-run voting with 4-8 candidates.

Staking/Slashing —

Staking/Slashing - Staking on Ethereum means depositing 32 ETH, thereby activating the validator software and following the protocol consensus rules, in exchange for receiving a small amount of issuance interest. If you provide false information to the protocol, or basically do anything that could cause the consensus to fork, your stake may be slashed, meaning you will lose your deposit. If you are offline for a day or two in a row, you may also get a small cut due to inactivity. This system creates a cryptoeconomic incentive because funds are at risk and can be staked, slashed, or increased at any time through the protocol. This is a way to tie capital to protocol behavior.

Disadvantages: It requires capital and is somewhat plutocracy.

Proof-of-Work —

Proof of Work - Proof of Work, the predecessor to Proof of Stake, still works in Bitcoin (unfortunately with a lot of carbon emissions) and is actually used in many projects to build upon the energy-intensive Bitcoin network. Allocate resources externally. This resource is issuance (“printing money”). Griff cited several examples, such as CureCoin and FoldingCoin, which reward issuance (tokens) with proof of useful work (folding proteins) to find cures for cancer, Alzheimer’s, and other diseases. Those who fold more proteins will get more release.

Decentralized Identity —

Decentralized Identity – We don’t want oligarchic digital identities, privacy crushing, or identity leaks; we want sovereign digital identities (assuming it’s protected). An important opportunity is that we can build systems that do not treat participants as interchangeable. We can build mechanisms that have a one-person-one-vote approach, which is inherently more democratic, or a one-coin-one-vote approach, or something in between (like quadratic voting).

To build a more regenerative cryptoeconomic internet, we need to be able to engage in positive-sum games and repeated interactions with each other - you do something to help me, you get a certificate and vice versa, which will allow us to build Trust based on certifiable behavior, which is very interesting. By accumulating positive-sum reputations, we start a virtuous cycle that increases the complexity of the space in which all the coordination mechanisms we mentioned in this episode can be designed to accommodate the vast number of subtle positive behavioral markers. Over time, the system will begin to generate gravity, creating an economic gravity well that attracts more people to participate. The cycle repeats until we have a crypto-economic regenerative internet.

Web3 Social —

Decentralized social media applications are great because of their features of sovereignty, privacy, and the fact that we can take social graphs from one website to another. Network effects need to be built, and that takes time. Once we shift our attention from Web2 social, have our own social graph and can fork the interface, and reflect the commonality of our own circle of influence on the social graph, this will make you one of the multi-center collective coordination mechanisms Center, this is also one of the future of group coordination mechanisms.