What are Public Goods and why should we care?
Our world is populated with public goods, whether natural resources or man-made items. As a society, we control, distribute, and sustain these goods. These artifacts bring us together in conversation, discussion, and shared concern. Be it art, code or media, we as a society get to enjoy and benefit from the makers of such products.
What is the significance of public goods? Public goods have a positive impact on society, e.g. crucial role in helping those living in poverty meet their most basic needs. If all else is equal, public libraries, for example, can help educate the population in general. Those who enjoy privilege and power benefit from public goods in the same way that the poor do. Just imagine, if the sky is on fire, what good is your expensive condominium or car? The advancement of a society is frequently dependent on the availability and affordability of publicly funded goods.
In economics, a "public good" is something that is both non-excludable and non-rivalrous, meaning that no one can be denied access to it and that no one's use degrades another's. The electric grid is an example of a human-created public benefit, while clean air is an example of a naturally occurring public good. What are the public goods of today's knowledge-based industrial society? This is how open source code, which supports millions of businesses and independent developers, is frequently viewed. The cypherpunks saw privacy as a public value in and of itself.
Despite the fact that entire industries have been built on open source software, core contributors are still under-funded. Funding for open source software is about to get a lot easier, thanks to the infrastructure provided by companies like Gitcoin and Radicle. This shift in funding is already taking place, as more private and public money is being invested in open source development in crypto and other areas of technology.
Mechanisms for fair Public Goods funding
Let's have a look at the many methods (in web3) that these resources are frequently supported.
Direct grant programmes are a typical method. A grants programme frequently enlists the help of a committee (preferably, one that is credible and impartial) to assess applications for financing to support a project or idea that someone has. Those ideas that don't quite make the cut are frequently requested to return once they've gained more traction or addressed specific problems (much like VC funding). This type of funding is an excellent way for most projects/ecosystems to get started with seed funds for community development.
Quadratic Funding (QF) schemes have arisen for those communities large enough to enable more democratically equitable funding maintaining token-based voting. QF claimed to be the solution to the "free rider problem." This reinforces QF's incentive structure as a fundamentally democratic institution. QF is usually done in a "round" over a period of time. During a QF round, members of the community donate to projects they believe should be financed and supported; a matching partner matches the community's contributions, but not 1:1. Rather than the pure financial amount raised by each grantee, the match is more suited to the sentiment of the community. It is more important to have a large number of contributors than it is to have a large amount of money.
The practical implementation issue of identity and bribery/collusion is perhaps the most difficult to consider with this concept of quadratic funding. QF in any form, necessitates a model of identity in which individuals cannot easily obtain as many identities as they want: if they could, they could simply keep acquiring new identities and paying $1 to influence some decision as many times as they want, and the mechanism would collapse into linear vote-buying. It is important to note that the identity system does not need to be airtight (in the sense of preventing multiple-identity acquisition), and there are good civil-liberties reasons why identity systems should not try to be airtight. It simply needs to be robust enough that manipulation is not worth the cost.
Collusion is also difficult. If we can't stop people from selling their votes, the mechanisms will revert to one-dollar-one-vote. We don't just need anonymous and private votes (while keeping the final result provable and public); we need votes that are so private that even the person who cast the vote can't prove what they voted for to anyone else. This is challenging. In the offline world, secret ballots work well for this, but they are a nineteenth-century technology, far too inefficient for the sheer amount of quadratic voting and funding that we want to see in the twenty-first century.
The role of Humanode
In crypto, some teams choose to stay pseudonymous, for example the developers at Sushiswap. In the ethos of decentralization and being permissionless, it's good to support all builders in the space including anon devs. There will always be an issue with proving human existence so that a funding mechanism doesn’t get Sybil attacked.
The debate is still ongoing on the best way to mitigate risks and strengthen Sybil resistance. Discovering the various attack vector patterns allows us to create simple yet rigorous tools for detecting these patterns in a live and potentially high-stakes funding environment with millions of dollars on the line.
Humanode can provide a proof-of-human-existence layer, using its auditable pseudonymous biometric identification technology, for grant committees to enable distribution of funds in a fair manner. One method is integration of smart contracts to query the Humnanode network and trace whether a developer has proved his or her existence at some point in time using our liveness detection technology or develop a reputation system for developers who register using their biometric identification key. Another way would be enabling a one person one vote system for the grants that is tied to the biometrics of the voter without requiring the voters or their votes to be identified.