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March 24, 2023

How Crypto Can Regenerate the World

This is a transcription of the talk that Kevin Owocki gave at ETH Denver on March 3rd, 2023: How Crypto Can Regenerate The World

This is a transcription of the talk that Kevin Owocki gave at ETH Denver on March 3rd, 2023: How Crypto Can Regenerate The World

The title of my talk today is “How Crypto Can Regenerate the World.” I am Kevin Owocki, formerly of Gitcoin. I don’t know if you’ve heard, but I’ve disaffiliated from Gitcoin, and now I’m building a regen venture studio called Super Modular that builds regenerative DAPPs sometimes on top of Gitcoin Grants Stack and Allo Protocol, and sometimes on top of Hypercerts and other primitives in the space.

So, how can crypto regenerate the world? Please do not put on a panel entitled “How Crypto Is Regenerating the World”; I cringe so much to hear that people think that is happening now. Ponzi schemes, pump and dump, centralized exchanges, rugging you, we’re not regenerating the world yet. This is a roadmap to regenerating that world.

“Kevin, what’s the regenerative project?” I’m so glad you asked. The regenerative projects go down over time, resource capacity and regenerative projects number go up over time. And there’s also an element of what happens when these projects hit fragility. You are too fragile if you’re overleveraged in the decentralized casino. How do we build an antifragile public goods funding infrastructure that strengthens over time when it hits a shock event?

It’s important to say that I’m not just talking about money here. I’m talking about spiritual, intellectual, cultural, and material capital. Those are the types of resources that we want to see regenerating over time.

How do we solve coordination failures, nation-state infrastructure, industrial-age infrastructure, and national public goods? How do we solve global coordination failures like climate change, biodiversity, AI alignment, this surveillance tech economy, and open-source funding? I’ve been working with this philosopher and thinker named Daniel Smarketing Berger, who calls these things the meta crisis; the sum of all the coordination failures is the meta crisis.The first attractor of human behavior is coordination failure. We are uncoordinated, so we have AI alignment issues, climate change, and biodiversity collapse. And so the natural response to that is, let’s regulate it. Let’s bring it under the realm of the state. Let’s control it.

Once you allow someone to regulate over top of you, how do you know they won’t steal your land or plunder your resources? Our target is to build a third attractor where we are both coordinated, but we don’t need to give a bunch of governance control to people who could abuse it.

That’s what crypto can do for the world. And that is why Web3 is well-positioned to regenerate the world. Alright, so how do we do it?

A little building block for this talk, I’ve been starting to think about these things called holons. Something that is simultaneously a whole in and of itself part of a larger whole. So as a human, I have one holon in that I am a bunch of cells and organs that make up Kevin Owocki. And then, we as a group are the holon of this presentation about how crypto could regenerate the world. And then there’s ETHDenver, and then there’s Denver, and then there’s Colorado, and then there’s the United States, and then there’s the world. Those aren’t all the holons but just a stack of where we are now. That’s what’s called a holarchy - a connection between holons. A holon is both a part and a whole. You can do this from cells and organs up to the biosphere. It’s all holons everywhere around us. One of the cool things about holons and holarchies is that it breaks the duality of individualism versus collectivism because, at a different level, we are all a collective but also individual. So let’s break that duality.

How do we coordinate? Little basic coordination preamble here - Prisoner’s Dilemma, a game theoretical idea that if you have two prisoners who have been accused of a crime and they’re separated from each other and given a plea bargain where if they rat on the other, they get a better outcome. But if they coordinate, they’ll get a reduced sentence and if these people don’t coordinate, they’ll defect on each other. They’ll all get a worse sentence. And if they do coordinate, they’ll cooperate. They could pass messages back and forth and get a better outcome if they coordinated. Now that sounds like a silly example. But you know, when you think about things like climate change, when we’re all flying out to Denver, and we’re all expending a little bit of carbon to get here, then I think it’s pretty clear that we don’t have the proper coordination infrastructure for the world. So you can take Prisoner’s Dilemma and attach it to many different areas of a holon where individuals are not coordinating, even though their outcome would be better if they did.

Web3 is a better coordination power tool. Our legacy institutions for supporting public goods often need to be more reputable, efficient, and centralized, with high administrative overheads.
Some CEOs of NGOs and nonprofits make $30 million per year, and they’re just extracting from the markets they serve. What if we could build transparent, incorruptible, programmable, and permissionless coordination systems worldwide, and we can solve some of these coordination mechanisms? So let’s bring this in and assimilate this information with the holonic architecture I have set for this talk. If you look at this holon, how does this individual interact with the whole? They’re going to fund public goods, which is a coordination failure. Funding public goods is a coordination game. If we can break into each holon, what are the mechanisms through which they are raising money to fund public goods? And what distribution mechanisms allow the people providing value to get rewards for doing that legitimately?

To sum up, these are the digital holons that you belong to. If the open-source software you work with is not well-funded, it’s a coordination failure. The DAOs you participate in are also experiencing governance problems, which is another coordination failure. One thing that makes the Ethereum ecosystem unique is its open-source code and mechanisms for funding public goods, which enables cross-pollination between different holons. The ecosystem’s digital public goods funding infrastructure includes tools for ecosystem growth, such as Gitcoin Grants, Allo Protocol, retroactive public goods funding, and geographic-based public goods funding. By capturing some of the inefficiently allocated capital through other holons, we could raise a lot of money for public goods funding.

Scaling coordination is crucial, but how do we do it right? One idea is to focus on morality and plurality. Gene Roddenberry’s quote on the brotherhood of man and woman is the ideal basis for learning to delight in our essential differences and recognize our similarities. We must build a pluralistic public goods funding infrastructure that promotes cooperation across social distances and avoids tribal echo chambers. A fully workable and modular open-source code about localism will allow individuals to rely on their local government and state, only turning to the federal government when necessary. The Web 2.0 companies failed by extracting our attention and capital through their attention economy and surveillance capitalism and Web3 companies are creating a more efficient and transparent public goods infrastructure.

As we rotate capital, attention, and talent into the next market cycle, each bull market brings a Cambrian explosion of talent and new projects, while each bear market is an extinction event. However, the projects that survive each cycle are the keystone species that provide support to all other things. So, how can we build regenerative keystone species that rotate capital and talent into web three? We need to focus on growth and scale into web three. To achieve this, we need to establish a holonic infrastructure for funding and coordinating public goods. Currently, this infrastructure exists in a small region in the middle of the ecosystem, but as people realize that coordination is the new meta, we will eventually reach a state where we coordinate around our holonic public goods.

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