Crypto is still going to change the world

1)The Set Up: Us vs Them

Right now, two trends that have the potential to reshape the world: AI and crypto. AI is a top-down phenomenon because of the capital requirements to make progress, hence the small number of players building frontier models. Crypto is a bottom-up phenomenon because of its decentralized ethos and emphasis on sovereignty hence the number of small organizations building.

Crypto is fundamentally for the people, by the people, it is the American ethos Anthropomorphized. The core principles are constitutional: The individual is the weakest minority and therefore their life, liberty, and pursuit of freedom must be protected against their greatest enemy; the majority. This ethos naturally extended into money after the large government bailouts of the late 2000s which was only possible because of the abandonment of market-based money as a check of government power.

I want to rebuild the world in our image.

Within crypto, there are several interesting innovations including DAOs, zero-knowledge proofs, and DEPIN, but public goods should be at the top of your list.

2) How we build the world in our image

What Optimism, the layer 2 chain on Ethereum (and others), is trying to do can fundamentally reshape how people coordinate.

1) Using "stock compensation" to fund crypto public good contributors

Time Scale: Now

Using retroactive token grants to encourage people to build things that would not have been previously built because of a lack of profit potential is the first step in this multiple-decade plan to create the world in crypto's image.

2) Using excess transaction fees (Profit) to fund positive sum effects within the broader crypto space

Time Scale: Future (Years)

Then, once the Optimism Ecosystem has begun generating enough fees and revenue to be profitable, the grant council can now shift its focus to the broader crypto ecosystem. To fund other projects outside its direct ecosystem. Creating positive sum effects that will speed up the endgame of Web 3.0 and Crypto: sovereignty, privacy, and trust for all.

3) Using excess transaction fees (Profit) to build positive sum effects in the real world

Time Scale: Endgame (Decades)

Lastly, using excess fees to build in the "real world." In the same way, the Optimism Grant Council helped kickstart its ecosystem, it could do the same for developing economies.

IE. Funding charities that administered a thousand vaccines in Sub-Saharan Africa

3) A Brave New World, If You Can Keep It

“A republic, if you can keep it” is a famous quote attributed to Benjamin Franklin, who supposedly said it in 1787 after the Constitutional Convention in Philadelphia when asked if the new constitution would establish a monarchy or a republic. Franklin's comment suggests that democratic republics depend on the people's support and involvement.

This public good funding mechanism is similar. Retroactive funding is harder to corrupt than government and venture capital funding because it is funding based on results as opposed to funding based on promises(VC) and rhetoric(Politics).

I am in love with this mission because it takes the traditional funding mechanisms of governments (taxes) and businesses (venture capital) and makes them better.

A common complaint about taxes is that the taxes themselves are mandatory, but the discretion around spending is not. So governments can say they will tax citizens to fund public health and then use that funding on foreign wars. Furthermore, because the funding of governments is not restricted, they have no incentive to economize their money. Retroactive public good funds flip this model on its head by encouraging people to build what they want to see more of in the world and then funding based on impact. IMPACT = PROFIT!

Retroactive public goods have the potential to reshape how capital finds its way to the best ideas. Currently, VCs spend most of their time looking for the next 100x return. These companies are usually technology-based in software or manufacturing. This focus on long-term big ideas has left an open void for short-term "small" ideas that have a disproportionate impact-to-capital-needing ratio.

To make this idea more concrete, you can think of all the spending going towards creating AGI and genetically engineered medicine. These ambitions are great things, but they will take decades and tens of billions of dollars to fund. This focus on "Moonshot" projects is always present because the payout for success is trillions of dollars in wealth. But this pursuit of humanity's great visions has left "smaller" opportunities like effective altruism behind because of their lack of profit potential. But in a future world where the impact is profit, the short-term (public goods) and long-term (step change technologies) get pursued more equally.

And that is how crypto is going to build the world in its image.