Funding the Commons - Paris 2023: Unveiling key player harnessing web3 for public goods transformation

The "Funding the Commons" conference in Paris this weekend brought together visionaries from various fields to explore new models of funding public goods, notably through web3 technologies. The event provided insights into pioneering approaches, revolutionizing funding practices and uncovering the transformative power of web3 innovations for public goods.

One crucial takeaway we should all remember is that democratizing is not solely about open access; it encompasses open access, shared ownership, and participatory governance.

1. Resourcing network goods from Protocol Labs: Key learnings

Protocol Labs is an open-source research, development, and deployment laboratory, aiming to "advance technology for the benefit of humanity". Their projects, including IPFS and Filecoin, focus on improving the storage and distribution of data over the Internet, promoting resilience, fairness, resistance to censorship, and empowering individuals.

Resourcing network goods

• Network good is defined as a public good on the scale of a specific network of interacting individuals and organizations
• Pain points faced : hard to increase the scale at which resources we distribute, lack of efficiency in allocating resources and few systems created to reintroduce value created to build more goods .
• Protocol Lab's model to resource network goods : a) Funding source - what entity(s) invest in impact, how is it renewable (legal and financial structure); b) Distribution methods : mechanisms to pass information & match funding with projects (mechanisms i.e. bonds, information gathering methods i.e valuations, metrics; c) Impact : heuristics of network/ public good providing a feedback loop projects which are able to generate desired impact by deploying funding.
• Key learnings from Protocol Lab's in their journey of resourcing network goods: a) Mechanism selection is a design choice around quantitative/ qualitative based on complexity of space and scale?; b) if you are building funding mechanisms, your user is the funder, not the funding recipient ( more positive sum for the ecosystem) ; c) Why decentralise? Because open protocols do to network effects what antitrust doess to horizontal integration

2. How ReFi can change the world by leading to greater financial inclusio?: Celo, the carbon-negative, mobile-first, EVM-compatible blockchain ecosystem to build a regenerative blockchain ecosystem

Problem statement: Prioritizing Long-Term Sustainability over Short-Term Profits

Traditional financial systems have long prioritized short-term profits over long-term sustainability. The challenge lies in harnessing the unique talents of people, the strength of communities, and the health and biodiversity of global ecosystems to propose economic solutions that benefit everyone.

Refi: Bringing Sustainable Solutions through Web3 Tools

Refi leverages Web3 tools to bring sustainable solutions to the forefront. By employing universal basic income (UBI), nature-backed currencies, and creating new money without new debt, among other real-world use cases, Refi aims to redefine money's impact on the world, fostering greater financial inclusion and prosperity for all. Its aim are the following:

• Environmental Sustainability: The creation of digital environmental assets, the promotion of circular economy practices, and the facilitation of data sharing and collaboration among stakeholders.
• Social Justice and Inclusion: by focusing on identity solutions, financial inclusion, governance mechanisms, impact funding, and empowering marginalized communities.
• Economic Resilience: Refi prioritizes economic resilience by leveraging decentralized systems that are programmable, transparent, and secure. These characteristics enable efficient and reliable financial infrastructure that can withstand shocks and adapt to changing circumstances.

Celo: Building for Radical Regeneration

Celo defines itself as "a platform built for radical regeneration", harnessing Web3 building blocks to provide sustainability solutions in a programmable, transparent, and secure environment. With a focus on a mobile-first infrastructure, Celo develops applications that promote planet-positive action and financial inclusion.

• Proof of Impact: Celo's initiatives have demonstrated tangible impact. This includes reaching 550,000 recipients through universal basic income, supporting 4 million micro-workers, issuing 4.1 million microloans, offsetting over 4000 tons of carbon emissions, and recovering almost 2 million kilograms of plastic.
• Ongoing initiatives : Celo is actively working on various initiatives, such as mutual credit systems to stimulate local economies through complementary currencies in partnership with Grassroot Economics. They also support community-based forest stewardship by enabling local communities to earn from forest data collection and environmental conservation efforts.

3. Creating a sustainable funding and allocation mechanism for the regenerative funding for public goods : the case study of Octant's epoch zero developed by the Golem foundation

Octant is a plateform "for experiments in decentralised governance that reward participation". Concretely they - at this stage- explore sustainable models for community funded public goods. Their mission is to create incentives systems for people to fund public good .

• Who is this for? Initially it is intended for the community of GLM token holders, but all are welcome. Although GLM tokens are required for locking.
• How do we participate and what mechanisms are in place for incentives? Time-lock a minimum of 100 GLM for at least one epoch (initially 90 days) - in simple terms, it means setting aside 100 GLM tokens for a locked period, initially 90 days, where they cannotbe accessed or transferred. After the lock period ends, you regain control over the tokens.Your earned ETH rewards can then be either withdrawn or allocated to projects of your choice that have been whitelisted for the following epoch. Donated rewards are multiplied by matched funding.

4. Building bridges between the legacy and decentralized ecosystems to fund public goods: the case of Open Collective

Open Collective acts as a bridge between legacy systems and DAOs. It provides an open finances platform for communities, serving as a legal and financial toolbox for grassroots groups.

• What do they do? They streamline the process of fiscal sponsorship by offering a fundraising, legal status, and money management platform. Each collective has a dedicated page to collect funds from backers and sponsors. Open Collective keeps track of budgets independently and provides an interface for the fiscal sponsor to approve expenses and ensure they stay within the set limit.

5. Ethereum Climate Platform: the power of blockchain in climate action?

ETC Background and the Role of ECP in Blockchain Technology for Climate Action:

ETC (Ethereum Climate Debt) is an issue being addressed by a consortium of over 20 companies and NGOs. Led by ConsenSys and Allinfra, this collective aims to accelerate funding for projects globally that contribute to significant greenhouse gas mitigation. The consortium collaboratively builds a platform to address Ethereum's carbon footprint since its launch in 2015, with the goal of scaling climate finance and offsetting emissions.

Blockchain's Impact on Climate Action:

• It enhances transparency and credibility in carbon markets, directing more capital towards emission reduction projects.
• Real-time monitoring of emissions reduction efforts is facilitated through digital tools like remote sensors and AI.
• Empowers individuals by providing access to decentralized decision-making processes, reshaping power dynamics in climate-related initiatives.

The Role of ECP in Climate Action

ECP (Environmental Conservation Project) utilizes blockchain to fund science-driven climate projects and offset historical emissions associated with Ethereum. By leveraging blockchain, ECP ensures efficient financing and monitoring of funded projects, with real-time tracking of performance. ECP also supports innovative solutions such as nature-based carbon solutions, green hydrogen, and carbon removal technologies, contributing to the advancement of sustainable practices.

6. Hypercerts: How to build modern impact funding system

Vision of Hypercerts: Hypercerts, an open, shared, and decentralized database, enables interoperability of various funding mechanisms. They reward projects based on observable impact through retrospective funding. This approach incentivizes creators to undertake public goods projects with uncertain but potentially high impact. It also facilitates feedback loops for learning from successes and failures while attracting more talent to the public goods sector through improved performance-based compensation.

What is a Hyperset?

• Hypercets are semi-fungible tokens designed to account for impactful work, with fractionalized ownership and transferability under specific conditions.
• Each hypercert represents a unique impact claim, specifying the scope of work and its corresponding impact, time frames, contributors, and the rights associated with owning a hypercert.
• The traceability and transferability of hypercerts facilitate retrospective funding (Creators can sell parts of their hypercerts to prospective funders to receive the necessary funding for their project). After evaluating the project’s impact retrospective funders can buy the hypercerts from the contributors and prospective funders if they retained a fraction of their hypercerts.

Builduing the basis of decision making and funding mechanisms

• Their aim is to make coordinating funding easier, building the basis for quadratic voting, bargaining solutions, DAO-style votes, milestone bounties, and simple unconditional grants.

7. How DAOs can create real impact with Real-World Assets( RWA) : A panel discussion between Centrifuge, Giveth and MakerDAO

DAOs (Decentralized Autonomous Organizations) have the potential to generate meaningful impact by leveraging real-world assets (RWAs). This panel discussion explored the importance of strong treasury management, the benefits of RWAs, key success criteria, and notable examples of RWA tokenization.

Understanding Real-World Asset (RWA) Tokenization:

• RWA tokenization involves representing physical assets, such as real estate, art, commodities, or intellectual property, as digital tokens on a blockchain.
• Programmable Tokens: RWA tokens are programmable and can be traded or utilized in various DeFi applications, increasing accessibility, divisibility, and liquidity.
• Unlocking Value: Tokenizing traditionally illiquid assets allows asset owners to unlock value, provides investors exposure to new markets, and drives a transformative shift in the financial landscape.

Key Success Criteria for RWA Tokenization:

a) Treasury Management

• Critical Importance: Effective treasury management is vital for the success of DeFi organizations utilizing RWAs.
• Predictable Returns: RWAs can generate predictable and sustainable returns, making treasury management essential in maximizing value and minimizing risk.

b) Compliance:

• Regulatory Compliance: Adhering to legal and regulatory frameworks is crucial to ensure compliant RWA tokenization.
• Building Trust: Compliance measures help establish trust and credibility within the industry and with stakeholders.

c) Defining Legal Entity:

• Clear Legal Framework: Establishing a defined legal entity is crucial to provide clarity and accountability for RWA tokenization projects.
• Legal Protections: A well-defined legal entity helps safeguard the rights and interests of participants involved.

d) Operational Side and Governance:

• Decision-Making Mechanism: Constructing effective decision-making processes and governance mechanisms is key to DAOs' operational success.
• Community Involvement: Leveraging community votes and input for operational decisions can enhance decentralization and inclusivity.

Examples and Use Cases of RWA Tokenization:

• Project Guardian: The Monetary Authority of Singapore (MAS) initiated Project Guardian, a pilot program aiming to tokenize bonds and deposits for utilization in various DeFi strategies.
• Tokenized Green Bond Project Genesis 2.0: Notable institutions like BIS, Goldman Sachs, and HKMA are testing a tokenized green bond project, demonstrating the potential of RWA tokenization in sustainable finance