In today's rapidly evolving information age, the concept of collective intelligence has become increasingly important. It not only relates to how we, as a society, make decisions as a whole but also involves how we fairly and efficiently allocate resources. In this interview, we are fortunate to invite Griff Green—the founder of Giveth and Common Stack—who will share profound insights on how to leverage collective intelligence to improve resource allocation.
Podcast Date | November 22, 2022
Bounty for this episode | $420
Class Representative | Cube
Review | Cold Crow
Typesetting | Dolphin
Introduction#
In today's rapidly evolving information age, the concept of collective intelligence has become increasingly important. It not only relates to how we, as a society, make decisions as a whole but also involves how we fairly and efficiently allocate resources. In this interview, we are fortunate to invite Griff Green—the founder of Giveth and Common Stack—who will share profound insights on how to leverage collective intelligence to improve resource allocation.
🗣️ The Concept and Importance of Collective Intelligence#
Collective intelligence is a capability that emphasizes the ability of groups or communities to make wiser decisions and solve problems through collective actions such as collaboration and communication, rather than relying solely on individual capabilities.
Collective intelligence is particularly important in the context of resource allocation because it helps us better understand societal needs, optimize the flow of resources, and achieve more efficient and equitable resource distribution. This enhancement of intelligence is realized through various mechanisms that facilitate information sharing, enhance group decision-making processes, and reflect the common needs and preferences of community members.
In the Web3 era, the realization of collective intelligence has become even more crucial, as this era provides a higher density of information space and the ability to create decentralized collective intelligence. By leveraging blockchain and decentralized technologies, people can design and implement various new mechanisms, such as quadratic funding, conviction voting, and retroactive public goods funding, to promote the development of collective intelligence and improve traditional resource allocation methods.
🗣️ Limitations of Existing Resource Allocation Mechanisms#
Traditional taxation methods, such as tithing, involve donating a portion of wealth to churches or non-profit organizations to support public goods. This method is straightforward but lacks feedback mechanisms and enforcement. It may be more effective when supporting local and smaller projects.
Modern tax systems are considered the primary mechanism for funding public goods today, but they have also sparked discussions about their legitimacy. One viewpoint is that taxation is a form of compulsory donation, while another argues that it is necessary for achieving better social benefits. There are also doubts about the trustworthiness and effectiveness of tax distribution, thus creating a demand for decentralized and grassroots feedback mechanisms.
Voting mechanisms currently exist in various forms, such as majority rule voting and consensus voting. However, existing voting systems face significant issues, such as inadequate representation and manipulation by interest groups. Although voting is a traditional resource allocation mechanism, its efficiency and applicability are questioned, requiring better user experiences and more advanced technologies for improvement.
Market mechanisms are one of the best mechanisms for capital allocation in private goods, but they have limitations in funding public goods. Market mechanisms have advantages in incentivizing innovation and efficiency but fall short regarding external costs associated with public resources.
Existing resource systems have considerable limitations, but the advent of the internet age has brought new opportunities. Network technologies can create high-resolution public goods preference profiles and allocate funds more precisely to public goods. The arrival of the internet age provides opportunities for democratizing the economy and achieving more efficient public resource allocation.
🗣️ New Explorations in the Web3 Era#
Opinion Expression Mechanisms#
Quadratic voting is an alternative to the one-person-one-vote voting method, using voting rights to measure the preferences of the crowd and the intensity of those preferences. This ensures that the broad consensus of the crowd can influence issues, rather than just the voices of a few individuals swaying decisions.
Conviction voting is a new mechanism that mitigates the influence of oligarchs over time, using time instead of one-person-one-vote. In conviction voting, participants can stake their tokens to support proposals they favor, which compete against each other. Unlike other voting mechanisms, conviction voting does not occur within a fixed time frame but can increase support for proposals based on the number of tokens and time. This mechanism can also be adjusted in real-time, dynamically altering the flow of tokens based on the funding needs of proposals.
Ranked choice voting is a very cool mechanism. You can express your first choice, and if they do not win, who your second choice is. Then they recalculate the votes. If no candidate receives more than 50% of the votes in the first round, the candidate with the fewest votes will be removed, and your second choice will become your first choice. Additionally, by introducing quadratic voting, we distribute power more evenly among each voter.
Budget Box is essentially a pairwise comparison evaluation method. Individuals need to make choices, preferring one Gitcoin project over another, simply selecting one. It is actually a very simple user experience voting method. The Budget Box is a great way to provide qualitative assessments, which is very difficult in natural circumstances, and it distributes in an interesting way.
Resource Allocation Mechanisms#
Quadratic funding is a mechanism for distributing funds through collective wisdom, allocating funds from a central matching pool to projects with higher democratic support. The quadratic funding mechanism attempts to mitigate the influence of capitalism on fund distribution by converting small amounts of funding into larger grant amounts to incentivize donations while also establishing a collective signal of preference for public goods funding. However, the quadratic funding mechanism has some issues, such as malicious attacks and matching pool fundraising.
Retroactive public goods funding effectively creates a mechanism where past contributions to public goods are recognized and rewarded in the present or future. This incentivizes individuals and projects to contribute to the public good, knowing their efforts will be acknowledged and compensated later. It aligns incentives and encourages investment in projects that benefit the broader community.
Non-fungible tokens (NFTs) have become an important funding source for digital public goods. NFTs make artworks accessible while introducing digital scarcity, thus creating value and funding for creators. NFT-related initiatives can also be further integrated with existing mechanisms, such as quadratic funding, to expand the coverage and impact of funding for digital public goods.
Augmented bonding curves are smart contracts that can issue and destroy tokens based on demand and hold the funds raised from token issuance. This mechanism addresses liquidity and price discovery issues in low liquidity markets and can be used to launch small markets. Augmented bonding curves enhance the fees generated from issuing and destroying tokens, converting them into a continuous funding flow, with part of the funding flowing into a common pool. This market mechanism can promote funding support for public goods and influence the behavior of market participants.
Proposal inverter is a mechanism that reverses proposals based on their expected impact. Through this mechanism, you can propose a proposal that many different DAOs or individuals can fund together, and then the funds are released to the proposing party. This can create a proposal market. Additionally, this mechanism has milestone features. Funders may agree to these milestones and provide funding. Once $10,000 is reached, the first $2,000 will be allocated to the project. If they reach this milestone, they will receive the next $5,000. Then, if they complete the entire project, they will receive the remaining $3,000. Compared to Prop House, the proposal inverter allows funding across DAOs or individuals.
Demurrage is an interesting concept, akin to the opposite of inflation, where the value of currency decreases over time, with a portion entering a public funding pool.
Futurarchy utilizes prediction markets to determine which policies have the greatest impact on national welfare. It is like betting on the correct outcomes, using market dynamics to filter policy options. However, it is necessary to consider the limitations of using specific metrics as targets, as they may not fully capture complex factors such as happiness or welfare.
Incentive Mechanisms#
Dominance assurance contracts allow funders to become dominant funders by organizing project fundraising through placing more funds, thus increasing the likelihood of the project achieving its goals. If the project successfully meets its goals, the dominant funder will profit; if the project fails to meet its goals, the dominant funder will lose their invested funds. This mechanism combines gambling and incentives, providing an interesting new way for project funding.
Donation mining is an incentive mechanism that applies the concept of cryptocurrency mining to charitable donations, encouraging users to earn token rewards by donating to public goods or charitable causes. This model not only promotes funding for social welfare and public interest but also allows donors to participate in platform governance by holding tokens, sharing network effects, thereby enhancing community cohesion and driving positive social change.
Praise serves as a reward and reputation system. Praise is a bottom-up, peer-to-peer collaborative mechanism that builds a culture of gratitude and community by quantifying people's acknowledgment of others' contributions. Through praise, individuals can express their appreciation for others in the digital space, and this acknowledgment can be quantified and converted into rewards.
Staking refers to a shift towards proof of stake, where the mechanism requires staking a certain amount of tokens and then running a validator. As long as the validator follows the consensus rules of the protocol, it will receive a slight portion of inflation in supply. This is a way to create economic incentives in crypto, as money is at risk and can be reduced or increased by the protocol at any time. This method can match capital with a specific set of outcomes.
New Possibilities#
Hyperservs is a very exciting project that will utilize blockchain technology to create a distributed impact assessment and proof system. The goal of this system is to encourage and measure the positive impact behaviors of individuals, organizations, or projects on society through the issuance of hyper certificates. It attempts to provide enhanced services or systems offered by blockchain and decentralized technologies. These services may be decentralized, offering additional functionalities or better user experiences, aimed at serving the public good.
Holographic consensus is an innovative governance mechanism that simplifies decision-making processes by simulating the consensus of community members. In this system, community members can vote or bet on proposals to predict whether they will be accepted. This predictive voting not only enhances the visibility of proposals worth attention but also accelerates the entire deliberation process. If a proposal is approved, supporters will be rewarded; conversely, if a proposal is not approved, opponents retain their bets. Holographic consensus adapts to the popularity of proposals by dynamically adjusting thresholds, encouraging members to actively participate in governance while maintaining high participation rates and improving decision-making efficiency and responsiveness.
"Joke race" is a grassroots on-chain governance mechanism used for communities to set entries and vote on their favorite entries. You can use it for various activities, such as planning community roadmaps, community recognition, bounty generation, creativity, and giveaways. They achieve this in the most fun and engaging way, hosting a distributed, decentralized joke competition every week.
Aqueduct is a method of establishing bridges between different mechanisms in the blockchain world, analogous to ancient irrigation systems that transport water from one place to another. This mechanism can be used to build a diversified, scalable civilization-level system for public goods funding. By establishing various aqueducts, different projects can share resources, funds, and support with each other. This mechanism is similar to periodic payments and subscription models in traditional finance but offers more flexibility and transparency in the blockchain world.
"Radical Drips" refers to an innovative resource allocation or funding flow mechanism with revolutionary characteristics. This concept is closely related to DeFi, involving continuous and automated distribution of funds, similar to the process of water droplets gradually seeping into the soil. "Radical" emphasizes the innovative and fundamentally transformative nature of this approach, while "Drips" suggests the continuity and stability of fund distribution. This mechanism aims to support public goods or community projects more efficiently and equitably, driving reasonable fund flow through the participation and decision-making of community members.
New Ideas#
Network goods are goods that become more valuable as the number of users increases. Unlike private goods, network goods have a non-competitive nature, meaning the more people use them, the greater their value. Open-source software is an example, where more users and feedback contributions make open-source projects more valuable to all users. NFTs also possess the characteristics of network goods, disrupting traditional scarcity models and allowing everyone to enjoy the works, thereby increasing their value.
Effective altruism is the idea of investing funds into projects that have a real impact on society, rather than just to feel better about oneself. Therefore, effective altruism aims to measure and evaluate the actual impact of different projects through methods such as data analysis and only donate funds to those with the highest benefits. Additionally, some criticize the "earn and donate" philosophy of effective altruism, arguing that this approach may be used to mask personal behavior or damage reputation.
Sortition is the direct transfer of mechanisms from the traditional world to blockchain platforms. Sortition refers to randomly selecting a small portion of potential voters or decision-makers to make decisions. Both mechanisms have the potential to work in specific situations, but they also have limitations. Sortition may not be suitable for innovative decision-making areas, while sortition may face opposition from power groups as it undermines their control.
Sybil resistance refers to a system's ability to resist the risk of individual entities manipulating or improperly influencing system decisions by creating multiple false identities. This defense mechanism is particularly important in decentralized networks and blockchain technology, ensuring the security of the network and the fairness of the decision-making process. Achieving Sybil resistance typically involves identity verification, economic incentives, community governance, and technical measures such as cryptography and reputation systems, ensuring that only legitimate individuals can influence the decisions of the network or community. In short, Sybil resistance is a key strategy for maintaining the integrity and resistance to manipulation of decentralized systems.
🗣️ Future Outlook for Collective Resource Allocation#
The Web3 era has explored many new mechanisms and ideas that can optimize resource allocation and promote innovation and efficiency in public affairs management. Through decentralized identity verification and mechanisms for realizing public interest funding and mutual assistance in social networks, people's behavior patterns in social networks can be transformed. Blockchain technology has the potential to drive innovation and mechanism design, and efforts should be made to build a more regenerative Web 3 ecosystem.
Additionally, Griff Green has proposed some interesting viewpoints, such as transforming private resources into social resources and moving basic needs from the private sector to the public sector. Through these mechanisms, more efficient and equitable governance and resource allocation can be achieved, thereby promoting social progress and development. Griff expressed hope to see the development of these mechanisms in the coming years and suggested an annual mechanism summary to introduce which mechanisms excite us.
[1] Griff Green：
x.com/thegrifft
[2] Collective Resource Allocation：
mechanisms for collective resource allocation 1. markets - driven by supply/demand 2. quadratic funding - driven by QF formula 3. retro public goods funding - driven by experts 4. effective altruism - driven by impact data 5. voting - driven by majority rule whatd i miss?
[3] Giveth：
https://giveth.io/project/gitcoin-grants-matching-pool
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Designing New Collective Decision-Making Mechanisms｜Greenpill
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