The Web3 Movement’s Quest to Build a ‘Can’t Be Evil’ Internet

Owocki was something of a rock star at the conference. He is credited with coining the term BUIDL in 2017. Admirers approached him nonstop to talk, show their support, or ask for a copy of his book, GreenPilled: How crypto can regenerate the world, that was the talk of the conference and quickly sold out of the 400 copies he had ordered. Owocki is about as far from a casino person as you will find in the crypto world. In one of several presentations he gave, Owocki told the crowd that since research shows that money stops being happy after about $100,000 in annual income, Web3’s founders should maximize their happiness by giving their excess money to public authorities. goods that everyone can enjoy. “There’s cypherpunk, it’s all about privacy, decentralization: hardcore libertarian shit,” he told me. “I’m more of a leftist. I’m more solarpunk, that is, how do we solve our contemporary problems around sustainability and equitable economic systems? It’s a different set of values.”

The internet, he explained, made it possible to move information between computers. This revolutionized communication. Blockchains have made it possible to move units of value between computers. Owocki believes this could be harnessed to revolutionize the way people interact through something he calls “regenerative crypto-economy.” Crypto economy, he writes green pilled“is the use of blockchain-based incentives to design new types of systems, applications or networks.” regenerative crypto economics means doing this in a way that makes the world a better place for everyone. The goal is to break free from the zero-sum, rich-get-richer patterns of capitalism. Owocki believes the right cryptoeconomic structure can help solve collective action problems such as climate change, misinformation and an underfunded digital infrastructure.

The main tool to achieve this is a decentralized autonomous organization† In theory, a DAO (yes, pronounced the same as the ancient Chinese word for the way of the universe) uses cryptocurrency to drive collective action. Usually members join by purchasing a certain amount of a custom token issued by the DAO. This entitles them to an ownership interest in the DAO itself. Member owners vote on what the DAO does, which is usually what it spends money on, as a blockchain-based entity can do little but move money from one address to another.

The young concept already has an eventful history. The first DAO, simply called “The DAO”, collapsed in 2016 after someone exploited a code loophole to transfer what was then worth about $50 million in Ethereum currency. Likewise, colorful failures have followed. DAOs were nonetheless all the rage on ETHdenver, where attendees were aware of their world-changing potential. Kimbal Musk, Elon’s photogenic brother, spoke about his Big Green DAO, a food-related charity. Giving money away through a DAO, he insisted, eliminated all the painful bureaucracy of philanthropic nonprofits. “It’s much better,” he said, although he also admitted that “there are many ways to fail, and this one could fail spectacularly.”

What is it about a DAO that – unlike, say, a Kickstarter page – is liberating humanity from the collective action problems that threaten to destroy the species? According to Owocki, it’s the ability to write code in ways that tinker with incentive structures. (In that sense, the first DAO was arguably Bitcoin itself.) “Our weapon of choice is new mechanism designs, based on sound game theory, deployed on decentralized blockchain networks as transparent open source code,” he writes in GreenPilled. Indeed, the book has very little to say about technology per se, and much more about various game theory concepts. These range from the kinds of things you’d learn in a lower econ class – “public goods are non-excludable and non-rival” – to things that wouldn’t look out of place in a sci-fi novel: “community inclusion currencies” , ‘DAO fractal protocols’, ‘retroactive financing of public goods’.

One of the most powerful incentive design techniques, according to Owocki, is something called quadratic voting. Owocki stood on the edge of the Shill Zone and turned to show me the back of his purple baseball jacket, marked “Quadratic Lands.” The Quadratic Lands, Owocki explained, are a mythical place where the laws of economics have been redesigned to produce public goods. “It’s just a meme,” he said. “I don’t want to tell you it already exists.” (Everyone at ETHdenver was right to be concerned about my ability to separate metaphorical statements from literal ones.)

In a quadratic voting system, you get a budget to divide among different options. Let’s say it’s dollars, although it could be any unit. The more dollars you allocate to a particular choice, the more your vote counts for it. But there’s one important caveat: Every marginal dollar you pledge to the same pick is worth less than the last. (Technically, the “cost” of your vote rises quadratically rather than linearly.) This makes it harder for the wealthiest people in a group to dominate the vote. GitCoin uses an adjustment, quadratic funding, to allocate money to Web3 projects. The number of people contributing to a particular project counts more than the amount they contribute. This rewards ideas supported by the most people rather than the wealthiest: regenerative cryptonomy in action.

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