Bessie Liu

Kevin Owocki, the founder of Gitcoin, has a bold vision for blockchains.



After recently revealing his intentions to return to Gitcoin, an open-source software funding platform, the founder has been looking into different ways to innovate the space.



Since its genesis in 2019, the platform claims it has funded over 3,000 different projects, donating over $50 million to fund public goods with a cumulative grantee market cap of $28.2 billion.&nbsp;



In an interview with Blockworks at Permissionless II, Owocki spoke about his vision for the future of blockchains and his plans to continue growing the public goods sector.&nbsp;



Keep reading for more excerpts from Blockworks’ interview with Owocki.



__________________________________________________________________________



Blockworks: You have previously mentioned that you believe in a “pro-topian”’ future. Could you tell me what that means and how it differs from a, let&#8217;s say, utopian future?



Owocki: The movement that I am trying to stimulate is about regenerative crypto ecosystems that are pro-social, pro-environmental and pro-topian. This means that it gets better with every iteration, whereas utopian is some ultimate destiny of where the world could go that is positive.



I think in order to do that, you can look at it from a game theory perspective. If you can have positive sum games instead of negative sum games, if you can have repeat interactions between participants instead of no-repeat interactions, you can have low miscommunication and you can evolve trust and pro-social behavior.&nbsp;



The one that I want to focus on for this conversation is repeat interactions, [and] the reason why is because it evolves pro-social behavior. If you [screw] me over once I’m not going to do business with you again, but if <a href="https://blockworks.co/tag/ethereum">Ethereum</a> is a dark forest and every address looks like every other address, then you’re not going to get these repeat interactions where we can evolve with trust for each other. You’re going to get people who [screw] you over and they’re going to be able to hide amongst everyone else. So, what we need to do is enable the ability to track individual actors in the system so that we can evolve repeat interactions.&nbsp;



Read more: <a href="https://blockworks.co/news/gitcoin-kevin-owoki-returns">Gitcoin’s co-founder wants to return from the sidelines</a>



I took an Uber here today. I don’t want to know the guy, where he lives, how old he is, or his birthday, but I do want to know if he’s going to get me there safely and reasonably quickly. So, I think a lot about how our financial lives are intertwined with our identity. The whole line that we&#8217;re walking in Web3 is that we want to do privacy-preserving identity.



Blockworks: How do you think you can achieve privacy-preserving identity in Web3?&nbsp;



Owocki: The problem I’m focused on is Sybil resistance, which is one human, one vote DAOs as opposed to one token, one vote DAOs. If we want Web3 to scale to the people whose financial lives are not their investments or their houses in the Hamptons, if we want Web3 to scale the labor, we have to build more democratic Web3 ecosystems as opposed to plutocratic, one token, one vote ecosystems.&nbsp;



The way I explained that, you could be led into thinking that it’s binary, but it’s actually a spectrum. The thing is that once you have a primitive for one human one vote, you can build things that are a spectrum between one token, one vote and that’s what Gitcoin is. It’s quadratic funding and quadratic voting, which is between one human, one vote and one token, one vote.&nbsp;



Blockworks: What exactly is quadratic funding?



Owocki: So the way quadratic funding works at <a href="http://impact.gitcoin.co">Gitcoin</a>, is every quarter we have a million dollar matching pool, and that million dollar matching pool is allocated to the results of a crowdfunding campaign — we’re matching contributions from the crowd. The thing is, we’re not matching off the base amount of capital that is put in. Primarily, we’re matching on the base number of contributors to that grant. So basically, if you raise a $100 grant with 100 contributors, and a whale raises a $100 grant, the individual contributors will get 95% of the matching pool.



To put simply, what quadratic funding does is it weighs the votes of the people who have a lot of capital less than the projects that have a lot of small contributions that are funding them. So basically, it becomes something that is in between one token, one vote, and one human, one vote.



Blockworks: How do you see all of this playing out in the Web3 ecosystem space? What do you envision will happen in the future?



Owocki: So here’s the take: In nature there’s natural selection, which is the survival of the fittest species according to which organisms survive or which group of organisms survive. In crypto, we have market selection, which is basically capital flow. You’ve got these crazy summer, winter cycles in which you have had 1,000x growth, and you get all these scams and viruses that are self consuming, and then you get the extinction events where only the strong survive.&nbsp;



Because it’s an evolutionary ecosystem, it&#8217;s changing so much, and the most effective tactic available evolutionarily changes over time. In the early days, it was just forking <a href="https://blockworks.co/tag/bitcoin">Bitcoin</a>, and adding privacy, then it became Ethereum forks, then it became ICOs and alt layer-ones. Later the meta became PFP projects and <a href="https://blockworks.co/tag/daos">DAOs</a>, and now we’re at a point where ordinals, and <a href="https://blockworks.co/tag/friend-tech">Friend.Tech</a> are the latest meta. What I think is interesting is that as the ecosystem evolves, the meta is always changing.



Read more: <a href="https://blockworks.co/news/bitcoin-ordinals-brc-20-standard">Bitcoin Ordinals creator wants to clean up BRC-20 standard</a>



The cool thing about meta is once someone figures out what the new meta is, there’s a bunch of copycat projects that just replicate it. The cool thing about evolution is that you get this punctuated equilibrium where someone discovers a new meta, then everyone copies it until that meta is no longer the most effective tactic available and the ecosystem moves onto something else. What that does is create a lot of advantages for people who are going to be the first to discover some new punctuated equilibrium.



This is my big bet. It’s that the next layer of ecosystems is going to be whatever the next cycle is, and then another layer out from that, we’re going to finally get to a point where funding public goods and democratic DAOs are going to be their own evolutionary tree. I want Gitcoin to be a keystone species that every other project in the ecosystem depends on in order to enable Sybil resistance, and in order to enable public goods funding. So for now, it&#8217;s about building public funding and resistance infrastructure.



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Kevin Owocki on building a ‘pro-topian’ future for blockchains

Gitcoin co-founder Kevin Owocki has revealed his intention to return to the DAO dedicated to building digital public goods infrastructure.



This time, however, Owocki <a href="https://gov.gitcoin.co/t/i-intend-to-return-to-gitcoin/16452">says</a> he does not plan to take center stage but rather work with the community and find out where he can add value.



In an interview with Blockworks, Owocki said he believes he can contribute to the ecosystem by spreading awareness and information.



“I’m really trying to add value from the edges and be a network catalyst to help synthesize information across different stakeholders,” Owocki told Blockworks. “I’m not returning as some sort of benevolent dictator.”



With Gitcoin’s governance process decentralized, Owocki plans to submit proposals over the next couple of months and gauge community interest.



“I always say there are three different types of feedback: There’s do feedback — which is ‘I want you to do this’; there’s try feedback — which is ‘I want you to try this’; then there’s considered feedback,” Owocki said. “I’ve been very mindful that at this stage, I’m really just giving considered feedback.”



<h2 class="wp-block-heading">Envisioning next steps</h2>



One area that Owocki is interested in working on is helping Gitcoin go to market through grants.



“If Gitcoin grants 1.0 was like a screwdriver — it is just quadratic funding, then Gitcoin grants 2.0 would be a Swiss army knife — it’s got quadratic funding, quadratic voting and the team is building milestone-based payments and conviction voting and dominance insurance contracts,” he said.



Owocki sees himself playing a role in finding products suitable for market participants and also building trust among the different parts of the ecosystem.



Eventually, Owocki notes that he intends to deliver his own version of an “<a href="https://blockworks.co/news/makerdao-endgame-update">Endgame Plan</a>” — similar to that of MakerDAO co-founder Rune Christensen.



“I may do something like that, but instead of it being top-down, it’s going to be more of a bottoms-up synthesis of different participants. It’s not going to be my vision, it’s going to be the things that are genuinely coming from the participants in the network,” Owocki said.



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Gitcoin’s co-founder wants to return from the sidelines

Darren Kleine

The founder of Gitcoin and author of the book, “Stuff Crypto OGs Know” says, when he first got into Web3, it was “red steak, bitcoin maxi, libertarian maxi.”



“Now, it&#8217;s just fun that there&#8217;s people that are into pro-social Web3 stuff,” Kevin Owocki says. “I can be with my more hippie friends and play some hacky sack and throw an ultimate frisbee at a crypto conference.”



The space has indeed diversified quite a bit over recent years, but one thing that hasn’t changed all that much is its apparent obsession with money. All blockchain applications seem to focus on financialized elements in some way. Will this ever change?



Speaking on the On the Other Side podcast (<a href="https://open.spotify.com/episode/6YTl5XcCmrAAtcVwa98KHj?si=rXnoqp5fQ8S00PkT74xpGA">Spotify</a>/<a href="https://podcasts.apple.com/us/podcast/84-navigating-values-trade-offs-w-kevin-owocki/id1570685120?i=1000624663942">Apple</a>), Owocki cites an <a href="http://www.appleseedpermaculture.com/8-forms-of-capital/">article</a> entitled 8 Forms of Capital co-written by Gregory Landua and Ethan Roland. His mental model, Owocki observes, “is that there&#8217;s not just financial capital.”&nbsp;



Capital, the article argues, exists in different aspects of experience including cultural, living, spiritual, social and intellectual, among others. “What Web3 allows us to do is to build bridges between financial capital and social capital, financial capital and spiritual capital or material capital,” Owocki says.&nbsp;



He mentions the recently launched Friend.tech Web3 social app to illustrate the concept. “When you join the app, it mints a bond. It creates a smart contract that is a bonding curve on the <a href="https://blockworks.co/news/coinbase-base-success-rea">Base [layer-2]</a> and basically, people can buy shares of you in order to get into your [direct messages].” 



“It&#8217;s basically financializing access to you. That&#8217;s a bridge between financial capital and social capital.”



Read more: <a href="https://blockworks.co/news/on-chain-gaming-community">Making friends online is easier with blockchain</a>&nbsp;



<a href="https://grants.gitcoin.co/">Grants.gitcoin</a> is providing grants to fund projects fighting climate change, he adds —&nbsp; a bridge between finance and living capital.&nbsp;



“There&#8217;s also an education round,” he says, “and there&#8217;s going to be a <a href="https://medium.com/@ronrivers/spiritdao-accepted-into-gitcoin-grants-beta-round-50e52a68fd52">Spirit DAO</a> — and there’s the Green Pill Network,” — a network that focuses on “turning degens into regens,” according to the <a href="https://greenpill.network/">website</a>. “In my mind, those are ‘spiritual capital’ that you&#8217;re funding with Web3,” he says.



Owocki defines the notion of “regeneration,” explaining that it’s not only about increasing resource capacity in a financial vector, “but also social capital and environmental capital and spiritual capital,” he says. “Let&#8217;s regenerate ourselves along with regenerating our planet and our communities.”



Delving further into the meaning of regeneration, Owocki explains, “resource capacity goes up over time as opposed to degeneration,” he says, “which is a system that goes down over time.”



<iframe loading="lazy" frameborder="0" height="200" scrolling="no" src="https://playlist.megaphone.fm/?e=BWG2358875049" width="100%"></iframe>







While the examples Owocki mentions are all “financialized applications,” he says what’s interesting about them is that they are equally accessible to users, regardless of their personal wealth.&nbsp;



“They&#8217;re accessible to everyday humans that don&#8217;t have giant bags, not just to the whales,” he says. Owocki explains that he wants to build a financial system where users can provide fair value and in turn receive fair financial value in the form of tokens.



“There&#8217;s a giant difference between things that are just speculative, like degen casino games,” he says, “and things where we&#8217;re actually genuinely exchanging social capital or intellectual capital, and I&#8217;m giving you financial capital for that.”



Owocki expects the crypto space to remain primarily financial in nature. But to onboard “<a href="https://blockworks.co/news/web3-ansem-attracting-new-people">the rest of humanity</a>” into Web3, he says it will become less speculative over time, developing “regenerative bridges” to different types of capital.



“At least, that&#8217;s the ‘regen’ Web3 ecosystem that I want to build.”



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Are crypto apps destined to always be focused on money?

Macauley Peterson

<div id="highlights-block_62e2aeb8ac4e2" class="highlights">
 <ul>
 <li>Most DAOs today use a one-token-one-vote model</li>
 <li>Decentralized identification has wide-ranging use-cases from DeFi to NFTs and the future of work</li>
 </ul>
 
</div>



A new tool from Gitcoin, an organization dedicated to raising money for public goods, aims to help other organizations raise money and make decisions more democratically. 



Groups such as <a href="https://rabbithole.gg/" target="_blank" rel="noreferrer noopener">Rabbithole</a> and <a href="https://poap.xyz/" target="_blank" rel="noreferrer noopener">POAP</a> are potential beneficiaries, but also large DAOs.



If you think of a DAO (decentralized autonomous organization) as an exercise in collective decision-making — enabling large numbers of individual stakeholders to align their interests through voting — one problem stands out: Most DAO governance systems use a token-voting model, where each token represents a vote.



But according to Kevin Owocki, founder of Gitcoin, “one-token-one-vote systems are inherently more plutocratic” than democratic.



The major holders, whales and venture capitalist firms can — and often do — dominate the rest of the community.&nbsp;



A natural alternative — for each person to count for one vote — is notoriously hard to pull off in an environment where stakeholders are typically pseudonymous and globally distributed — in other words, most DAOs. That’s where Gitcoin Passport comes in. It’s the first phase of a multi-quarter rollout of what Owocki calls Gitcoin Grants 2.0.



Gitcoin pioneered the use of a recent invention in the fundraising space known as quadratic funding. Alongside quadratic voting, the concept <a href="https://glenweyl.com/tag/quadratic-voting-funding/" target="_blank" rel="noreferrer noopener">was introduced</a> by researchers at the Institute for Advanced Study, a research arm of Princeton University, in 2015.



Quadratic funding allows a pool of matching funds to be automatically directed by the collective voting preferences of a large number of small contributors.



<blockquote class="wp-block-quote is-layout-flow wp-block-quote-is-layout-flow">“That’s powerful because it pushes power to the edges — you’re funding what the everyday democratic people in the ecosystem want to fund,” Owocki told Blockworks.</blockquote>



<a href="https://wtfisqf.com/?grant=10,10,10,10,10&amp;grant=50&amp;match=1000" target="_blank" rel="noreferrer noopener">For instance</a>, say two projects are vying for donations with a matching pool of $1,000, one of which raises $50 from one person, while the other raises $10 from five folks. Both raised the same amount of money, but the one with five times the number of supporters will receive five times the matching pool’s funds on top ($833.33 versus $166.66).



Gitcoin has applied this fundraising model to its own quarterly grant rounds — now numbering 14 and distributing millions of dollars from thousands of donors.



But to be effective, the project must ensure that large contributions from a single person or entity can’t be split up into many smaller chunks, giving the false impression of widespread support. Preventing the system from being gamed in this way is known as <a href="https://en.wikipedia.org/wiki/Sybil_attack" target="_blank" rel="noreferrer noopener">Sybil resistance</a>.



Passport will help Gitcoin keep its grants flowing fairly, but DAOs can also use it to improve governance.



“Sybil resistance is one of the key things to take us from one-token-one-vote to one-human-one-vote,” Owocki said.



<blockquote class="wp-block-quote is-layout-flow wp-block-quote-is-layout-flow">“A DAO would instantly be more democratic if it had quadratic voting instead of one-to-one token voting. That’s where I’m interested in seeing DAOs evolve.”</blockquote>



Gitcoin isn&#8217;t the only project trying to solve decentralized identification (DID), but it does have a leg-up on the so-called “cold start” problem, Owocki said.



“What everyone else is missing is usage.” Today there are few if any dApps using DID, thus few users care about having an effective DID system, and decentralized apps have no incentive to prioritize it.



This problem is not unique to DID, Jonathan Howle, co-founder of <a href="https://www.disco.xyz/" target="_blank" rel="noreferrer noopener">Disco</a>, told Blockworks via email.&nbsp;



“No merchants accept crypto, so nobody wants crypto, etc. The first step in the process, regardless, is to build the tools necessary for adoption to occur,” Howle said.



But the long-term potential is there, he said.



“Decentralized ID has the ability to unlock coordination and bridge the trust gaps that exist right now in Web3: Undercollateralized loans in DeFi, verifiable authorship and [intellectual property] rights management in NFTs, and the future of resumes, transcripts, job applications, peer references,” or what he terms “the future of work,” all stand to benefit.&nbsp;



“Nobody really knows what could drive mass adoption but I think there is a good chance it could be that,” Howle said.



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Start your day with top crypto insights from David Canellis and Katherine Ross. <a href="https://blockworks.co/newsletter/empire">Subscribe to the Empire newsletter</a>.



Explore the growing intersection between crypto, macroeconomics, policy and finance with Ben Strack, Casey Wagner and Felix Jauvin. <a href="https://blockworks.co/newsletter/onthemargin">Subscribe to the Forward Guidance newsletter</a>.



Get alpha directly in your inbox with the <a href="https://blockworks.co/newsletter/research">0xResearch newsletter</a> — market highlights, charts, degen trade ideas, governance updates, and more.



The Lightspeed newsletter is all things Solana, in your inbox, every day. <a href="https://blockworks.co/newsletter/lightspeed">Subscribe to daily Solana news</a> from Jack Kubinec and Jeff Albus.

Gitcoin Passport To Make Fundraising, Governance More Fair

Casey Wagner

<div id="highlights-block_615daa6f78d68" class="highlights">
 <ul>
 <li>With the help of a DeFi Education Fund grant, candidates’ stance on crypto will be publically available </li>
 <li>Donors will be able to direct funds toward any candidate or lawmaker, but the goal is to support DeFi allies</li>
 </ul>
 
</div>



This digital assets-focused political action committee (PAC) is helping blockchain enthusiasts put their money where their mouth is, and influence Washington politics with their dollars.  



<a href="https://www.hodlpac.org/" target="_blank" rel="noreferrer noopener">HODLpac</a> founder Tyler Whirty, who previously served as a staffer at DC-based libertarian think tank Cato Institute, is working on an application that would operate similarly to a decentralized autonomous organization (DAO). PAC rules and regulations make complete decentralization difficult, but there will be an emphasis on group decision-making. 



“The idea is that it would be a DAO, to the extent that it’s able to be,” said Whirty. “We have to maintain a traditional bank account, so it’s a bit centralized, but we&#8217;re definitely going to be a community-governed PAC.”&nbsp;



In 2020, the PAC operated on a token-based system. Users who donated or subscribed to the newsletter were granted tokens that could be used to vote on where the money went through a voting application.&nbsp;



“It worked well, to an extent, it proved what a community-governed PAC could be, but it was kind of before DAO tooling is where it is now.”



The tokens ran on Rinkeby (an Ethereum <a href="https://ethereum.org/en/developers/docs/networks/" target="_blank" rel="noreferrer noopener">testnet</a>), Whirty said, to avoid gas fees. It was a good opportunity to test different concepts, he explained. The PAC ended up donating a total of $7,500 to ten candidates in 2020. 



“Not anywhere near the $85 million that finance, as an industry, has donated,” Whirty said. “But, it&#8217;s a good dry run, and we got all the compliance stuff in place, so it was definitely not a lost cause.”&nbsp;



Things are expected to work differently in 2022. The team plans to build the “Gitcoin of political giving,” Whirty said, referring to the open-source platform for funding projects on Ethereum.



Individuals will be able to use HODLpac’s donation app, which has not yet launched, to give to any candidate that they want. As with the first iteration, the PAC quill use quadratic funding, Whirty said. “I think there are some benefits to that,” he said. “One being that smaller dollar donors will have their donations matched and amplified.”&nbsp;



Under quadratic funding, projects will be prioritized based on the number of donors, not just the size of donations because donations are matched by a shared pool — so the total amount given to a candidate is the square root of each contribution to it, summed and then squared. The strategy encourages donations of any size and is designed to ensure democratic allocation of funds.&nbsp;



“So people will be able to use the quadratic funding application and give to the candidates they want. They can also obviously give to the PAC itself — to the matching pool,” Whirty said. Both activities earn governance tokens.&nbsp;



<h3 class="wp-block-heading">Governing the influence of government in Washington</h3>



Governance token holders will be given some sort of power, although the details are not yet worked out, Whirty said. 



App users and donors will be able to direct funds toward any candidate or lawmaker, but the idea behind the PAC is certainly blockchain-focused.&nbsp;



“The idea is that everyone will be able to donate to anybody, but obviously, we want to support strategic people and that&#8217;s where the challenge of decentralized governance comes in,” Whirty said.&nbsp;&nbsp;



To help combat this issue, Whirty said, the app will display something called a HODL Score, which will serve as a measurement for evaluating a candidate’s stance on blockchain-related policy.&nbsp;



<blockquote class="wp-block-quote is-layout-flow wp-block-quote-is-layout-flow">“It&#8217;s this idea that we should have a tracker of where every legislator and candidate stands on crypto and everything that they&#8217;re doing,” he said. “Measuring and ranking is an interesting challenge.”</blockquote>



The HODL Score was something the team attempted to implement in 2020, but they did not have the funding to make it work, Whirty said. Now they do.&nbsp;



“We got a DeFi Education Fund grant to quantify these numbers,” he said. “It is a public resource to crypto overall but like it’s also essential to the functioning HODLpac, because we will be able to see how a candidate or congressman is when it comes to crypto-related issues.”&nbsp;



The DeFi Education Fund works to inform lawmakers and advocate for pro-DeFi policies. The HODL Score, Whirty said, will hopefully take into consideration all crypto-related statements and votes made by different candidates and lawmakers, including Tweets and public statements.&nbsp;



In the eyes of many crypto proponents, <a href="https://cms.blockworks.co/?s=regulation" target="_blank" rel="noreferrer noopener">regulation</a> is fundamentally at odds with the founding principles of cryptocurrencies, Whirty acknowledged. 



“That&#8217;s something I&#8217;ve thought about a lot and I think the tide is turning,” he said. “People are realizing that this is not an existential threat, the technology itself isn&#8217;t going to be destroyed, but life can be made a lot harder in crypto adoption, people are realizing that it&#8217;s time to engage.”