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 financing platform, the founder has been exploring different ways to innovate the space.
Since its inception in 2019, the platform claims to have funded more than 3,000 different projects, donating more than $50 million to finance public goods with a cumulative market capitalization of $28.2 billion.
In an interview with Blockworks at Permissionless II, Owocki spoke about his vision for the future of blockchains and his plans to further grow the public goods sector.
Keep reading for more excerpts from Blockworks’ interview with Owocki.
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Block works: You have previously said that you believe in a “pro-topic” future. Can you tell me what that means and how this differs from a, let’s say, utopian future?
Owocki: The movement I’m trying to encourage is about regenerative crypto ecosystems that are pro-social, pro-environmental, and pro-topical. This means that it gets better with each iteration, while utopian is an ultimate destination of where the world could go, which is positive.
I think 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 repeated interactions between participants instead of non-repeated interactions, you can have little miscommunication and you can develop trust and pro-social behavior.
What I want to focus on for this conversation is repeated interactions, [and] the reason why is because it develops pro-social behavior. like you [screw] come visit me sometime. I’m not going to do business with you anymore, but if Ethereum is a dark forest and every address looks like every other address, then you’re not going to get these repeated interactions where we can confidently evolve for each other. You’re going to get people who [screw] you come along and they can hide among everyone else. So what we need to do is enable the ability to track individual actors in the system so that we can develop repeated interactions.
Read more: The Gitcoin co-founder wants to return from the sidelines
I took an Uber here today. I don’t want to know the man, where he lives, how old he is or his birthday, but I do want to know if he will 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 we are walking in Web3 is that we want to do privacy-protecting identity.
Block works: How do you think you can achieve a privacy-preserving identity in Web3?
Owocki: The problem I’m focusing on is Sybil’s 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 homes in the Hamptons, if we want Web3 to scale labor, we need to build more democratic Web3 ecosystems instead of plutocratic, one sign, one vote . ecosystems.
The way I explained that might make you think it’s binary, but in reality it’s a spectrum. The point is that once you have a primitive for one human voice, you can build things that are a spectrum between one token and one voice, 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.
Block works: What exactly is quadratic financing?
Owocki: So the way quadratic funding works at Gitcoin is that we have a million dollar matching pool every quarter, and that million dollar matching pool is allocated to the results of a crowdfunding campaign – we match contributions from the crowd. The thing is, we don’t match the base amount of capital put into it. First, we match the base number of contributors to that grant. So if you raise a $100 grant with 100 contributors, and a whale raises a $100 donation, the individual contributors get 95% of the matching pool.
Simply put, what quadratic financing 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 they fund. So basically it becomes something between one token, one voice, and one human, one voice.
Block works: How do you see all this happening in the Web3 ecosystem space? What do you think will happen in the future?
Owocki: So here is the conclusion: in nature there is natural selection, that is, the survival of the fittest species depending on which organisms survive or which group of organisms survives. In crypto we have market selection, which is essentially capital flow. You have these crazy summer and winter cycles where you’ve had 1000x growth, and you get all these scams and viruses eating themselves, and then you get the extinction events where only the strong survive.
Because it is an evolutionary ecosystem, it changes so much, and the most effective tactics available change evolutionarily over time. In the early days it was just forking Bitcoin and adding privacy, then it became Ethereum forks, then it became ICOs and alt-layer ones. Later the meta became PFP projects and DAOs, and now we’re at a point where ordinal numbers and Friend.Tech are the latest meta. What I find interesting is that as the ecosystem evolves, the meta is always changing.
Read more: The creator of Bitcoin Ordinals wants to clean up the BRC-20 standard
The nice thing about meta is that as soon as someone figures out what the new meta is, there are a bunch of copycat projects that just replicate it. The nice thing about evolution is that you get a punctuated equilibrium where someone discovers a new meta, and then everyone copies it until that meta is no longer the most effective tactic available and the ecosystem moves on to something else. What that does is create many benefits for people who will be the first to discover a new, punctuated equilibrium.
This is my big guess. It is that the next layer of ecosystems will be whatever the next cycle will be, and then another layer from that, we will finally reach a point where public goods financing and democratic DAOs will be their own evolutionary tree. . I want Gitcoin to become a cornerstone asset that every other project in the ecosystem depends on to enable Sybil resistance and enable the financing of public goods. So for now, it’s about building public financing and resistance infrastructure.