Episode 284

Giveth – Creating the New Economic Model of Giving

Griff Green

We’re joined by Griff Green, one of the founders at Giveth. The organization, which emerged out of the ashes of the DAO, aims to create a better model for charitable work. Operating as a Dapp, Giveth aims to bring new governance models in the nonprofit space. The goal is to create better incentives for donors and charity workers, in all types of social good projects.

Topics discussed in the episode

  • Griff’s background as a gold-hodling digital nomad
  • His time spent at Slock.it and his involvement in the aftermath of the DAO collapse
  • How traditional charity organizations work
  • The problems these organizations face and how funds get allocated
  • The Giveth backstory and why the team chose to start the project
  • Incentive alignment in the charity space
  • The use of bonding curves and continuous organizations to fund charity projects
  • The project’s roadmap and future

Sebastien Couture: We are today with Griff Green. Griff is one of the founders of an organization called Giveth. He’s also one of the founders of DAppNode which we will also talk about today. But primarily we’ll be talking about Giveth and reengineering altruism  with blockchain and Ethereum. Thanks for joining us.

Griff Green: Hey thanks for having me. This is cool man. We have a pretty international thing going on, I’m in South Africa, Sunny’s in China. I don’t even know where you are.

Sebastien: I’m in an undisclosed location. No I’m in France as I usually am. So yeah. Thanks for coming on. So why don’t you start by telling us about yourself and how you got involved in crypto.

Griff: Yeah I am a crazy crypto anarchist. I got involved because I didn’t even have a bank account for a while. I was actually using gold and silver to move money around, like physical bars and to store my value because I just hated the bank so much back in the day. I’ve actually grown to appreciate the value the banks bring in some ways much more than I used to seeing how hard it is to do banking. But yeah it was a pretty clear advantage to use Bitcoin instead of gold and silver right. So a long time ago I think I traded like 3 grand worth of gold and silver for some Bitcoin and then I kind of forgot, I didn’t really forget about it but I wasn’t watching it closely. And then November 2013 Bitcoin went to a thousand and just like I was blown away. I was a nomad traveling around, I was living very cheaply and I think I made twenty four thousand dollars and I was like telling myself I could live off this for two years. What is this stuff. And the more I learned I just became entranced like I couldn’t stop learning more and investigating about what  is this stuff you know. And I ended up getting a master’s degree in digital currency while travelling to Ecuador to try to bring Ecuador Bitcoin. Unfortunately Ecuador made Bitcoin illegal so I had to kind of leave the country because I didn’t feel like ending up in a third world prison and part of my master’s degree I was writing a white paper for a bike sharing economy. So that was called Bike Coin and it was very similar actually to the dao and what Slock.it was doing. And so I sent them a video that I made about how excited I am about decentralizing the sharing economy with DACs. At the time I was using the bit shares terminology. In fact I didn’t realize how awesome Ethereum was at all. I was really in more of the bit share space and I was following Mastercoin and XT and all these other Web 2.0 platforms is what we called them, Bitcoin 2.0 or whatever. And Ethereum was last on my list everyone told me it’s vaporware but I heard Slock.it was decentralized in the sharing economy so I just emailed them told them I would work for free and I want to just be a part of what they’re doing. And eventually I think they watched my video explaining my bike sharing economy and they let me in right after they hired Stefan Paul and then the whole DAO thing happened.

Sebastien: Yeah well we’ll get into that in a little bit. But I’m curious. Tell me a little bit more about what it’s like to be literally living and storing your value in gold and silver, were you like lugging around silver bars and stuff over distances and perhaps even international borders.

Griff: A little bit a little bit. I definitely would. I still carry silver around with me because I’m just kind of crazy you know. Just like junk  silver like old quarters and dimes. But most of the time it would end up with me storing gold and silver with a friend in Seattle and then he would find someone to sell it to or just buy it himself whenever I needed money and then send me money via wire. Eventually I ended up getting a bank account to make some of that easier. But yeah it’s not that hard. You know you just have to have friends. I’m very social a guy so I have lots of friends that always down to help me out.

Sunny Aggarwal: So you use your friends as banks essentially.

Griff: Yeah exactly. Decentralized banking. It’s a real thing. You don’t need crypto.

Sebastien: And then so from there. Tell us about your experience at Slockit. What was that like. I mean I hadn’t really realized you were working at Slock.it but yeah tell us what that.

Griff: Yeah man I had a great time Slock.it it was amazing. I really dove headfirst into all that crypto stuff. I learned to write a little bit of solidity and hanging out with Christoph and Simon and Steffen. It was really amazing. You know it was like a family. There was only five of us at Slock.it. So eventually we added a couple more people or one more guy very near to the DAO launch but  yeah it was you know, I helped build the community on the slack. And it felt like we were onto something so huge with the DAO that just everybody was so excited by it and I got to kind of be the leader of the community and shepherd everyone into learning how to use the DAO and I met Jordi Baylina by creating this DAO ninja like test so if you wanted to be a DAO ninja you had to like figure out what is approved. At the time Solidity was in 3.6 like ERC-20 standard wasn’t even really a thing. It was a thing but people weren’t following like Gollum. They just made their own token because back then the ERC-20 that was an idea so people didn’t even know what the approved function did. People didn’t know how to vote. And so I created lots of cool walkthroughs and to kind of educate the early Ethereum DAO people and I mean yeah I was it was the time of my life and I couldn’t believe the opportunity I got straight off the bat, that was my first crypto job. And probably almost kind of my last.

Sunny: And then you know I guess most of us are well aware of the end state of that  project and what ended up happening with that. How did you actually meet Jordi. You mentioned you started working with him on some Slock.it tutorials and stuff. Was he working at Slock.it as well?

Griff: No no. We were probably going to hire him honestly but he built something amazing like the day before the DAO launched, he actually made a pull request to the DAO repo and wanted to integrate liquid democracy into the DAO from the get go. And he had coded it all up and it was it was a piece of art. But you know the DAO got launched so it wasn’t gonna come in and we weren’t going to delay it. So then he actually started working on how to do it without it being native to the DAO code itself. And so he built a system for doing that and literally the day that the DAO was being hacked I was writing a blog post about how we could integrate liquid democracy into the DAO using  his amazing work because he had actually delegated votes for me already at that point. This is like three weeks in so there was a really interesting character one of the best devs outside of the crew that we already knew. So. But then when the DAO got hacked he also knew the code better than almost anyone and so I I brought him into the Robin Hood group which was trying to rescue the funds that was left over that the DAO hacker didn’t steal. And there were a bunch of us in there. And after the first person wrote the code that ended up stealing a lot of the funds he wrote the second DAO hack contract then ended up also stealing the funds. And so. And then after that you know when it came back to okay now we have all the money. Now what. You know stealing funds in Ethereum is really easy. Giving it back to people is so hard. It’s ridiculous. Everyone has an idea what you should do and blah blah blah. And so most people bailed on the Robin Hood group. And so we formed the White Hat Group. And Jordi and I are think are the only public members at that time. And then after the hard fork we ended up helping another person who actually sent half a million dollars to the DAO. And there was another DAO hack that had to happen to get that money out. And then I mean there’s so many DAO hack stories. So I hope we can blow through that and keep going to talk about Giveth and these things. But after that there was this ETC thing right. Because ETC all of a sudden two weeks later and it’s like oh my god we’re holding 10 percent of all ETC in existence. Right, White Hat Group is. So we flee to Switzerland and this is the first time I meet Jordi, we find a lawyer in Switzerland to help us out. And we met at the airport. The White Hat crew have all fled to Switzerland for legal support and it’s like oh hi Jordi. So that’s how I met Jordi. After that the White Hat Group gave all the ETC back to everyone. And I think we actually still have eight million dollars sitting in that contract. That was like. Come on people just take the money please don’t just sit there. Everyone’s always like Oh the White Hat Group, everyone is to steal the money. It’s like we  we only make it like possible to do these things so that we can encourage people to come and get the money before we do something wild with it. But obviously that’s just going to sit in the contract forever.

Sunny: You know the White Hat Group was one of the things that came out of the DAO. You know I know another one was this MiniMe token which was you know I remember I heard about it because it seemed to be one of the first contracts in general that actually implemented some sort of like on chain upgrade ability which was you know that was a cool concept and like remember when I was working at ConsenSys two years people were talking about this whole MiniMe token and it’s a really cool idea. And then the third thing that came out of the ashes of the DAO was you know you’ve wanted to start experimenting with governance and this going back to this you know I think you took back the old DAC acronym from Bitshare days but you know you reframed it so can you tell us a little bit about that. So what was the goal here with the experiment with governance and this whole DAC concept.

Griff: Yeah. So just go back to MiniMe. We created the MiniMe contract out with the lessons of the DAO. We wanted upgrade ability. We wanted the ability to actually vote without locking tokens and there are a lot of other cool features that the MiniMe contract made possible and we just were like hey if you want a governance token this is it. Right. Because otherwise all those lessons just get lost. And so MiniMe token was the first Giveth project. That was a gift to the world just for DAO governance in general. And we were generously funded when Ether  was like ten dollars to continue on that route. But there wasn’t a whole lot to do at first but we knew that we wanted to start a project around building a platform for decentralized governance experiments so that instead of trying to risk the fates of some project completely on an experimental DAO you could instead start a charity and use that DAO to decide where to send funds to which projects that support the charity’s costs. So that was kind of the idea like hey this is a a play box. While you’re experimenting with decentralized governance you can also make the world a better place at the same time. Win win right. Also  when the DAO hack happened and everything was finalized the White Hat group was like Hey DAO is going to have a bad name you know this is a scary place. So the White Hat Group started Giveth. So we can make sure that DAO could end up with a good name that they do make the world a better place. Not just you know making people money. And also that we can experiment with decentralized governance because we’re not going to get it right for years and years and you know everything that we’re doing here is research. Everything in general in the blockchain space even right now, they’re research projects and anyone who has any other ideas I would love to have a debate but whatever we’re doing now is probably not going to be useful ten years from now and we should plan for that. So. That’s why Giveth kind of started it was like hey let’s do our research in a way that helps the world. And so we ended up building one version using MiniMe and a couple of other contracts but then we we realized that that was a little bit that didn’t really give us the results that we wanted. So we made a second version where we kind of integrated a liquid funding called liquid pledging, so pledging your donations. And it’s kind of like liquid democracy meets fund management. It’s a really cool smart contract system and governance system that doesn’t require consensus amongst the group but yet it allows for group funding from individuals so they can just kind of decide you know  I want my money to go here I want my money to go there. I’ll delegate authority over my funds to this guy and then he can decide but oh actually I don’t like his decision I can veto, take the funds back send it somewhere else. Allowing for those kinds of movements which I think is just really cool features that I want to see in the charitable space that didn’t exist at the time.

Sebastien: So moving now to charity organizations. Can you describe in your in your view what’s the landscape of traditional charity organizations and how they work. And talk about some of the issues that you see there with regards to governance and fund allocation and some of the problems that these organizations face.

Griff: Yeah I mean it’s almost taboo to talk bad about charities. I feel it’s always a weird spot because you have all these people that are you know sacrificing, taking a lower salary so that they can actually contribute and make the world a better place. But then at the same time I would argue that they’re working in a broken system that. It’s unfortunate. But the incentive alignment that happens in the charity space is just, it’s broken. People who are trying to make the world a better place have to fight against that system. And so it’s a little taboo to talk about but I just want to make sure that everyone understands that the people that are in the charity world are doing amazing work. But the system is totally misaligned. So there is a few main points. Number one, the people who contribute value to this system are poorly rewarded. In fact sometimes they’re not rewarded at all, especially donors. In the normal world when you invest in a startup you’re putting in money and then you reap huge rewards for the value that’s created. But in the charity world you put in money and you get nothing. And that’s a huge fail. That’s a huge fail. Also just in general you know they’re not really creating communities. The charitable system as it is today, the best bet is the start basically the same corporate business entity that a startup would use. But then you know these corporate charities, the goal is to grow grow grow find a way to create income streams and revenue streams and get as big as possible, which is great except when when you’re actually trying to make the world a better place you’re trying to solve a problem, you’re not trying to just grow and do the normal business strategies.

Sebastien: What do you mean by corporate entity. I’m not sure I understand what you mean by that since.

Griff: Well you have this classic corporate structure where you have a CEO and shareholders and it’s the same structure as a corporation.

Sebastien: But wait we don’t have shareholders in a charity most charities are some form of non-profit NGO. Right.

Griff: Yeah. They have a board of advisors and it’s usually run by their largest donors. So while it may not be the same exact scenario it’s or at least by words and it’s definitely not the same alignment structure, it is the same situation where you have a bunch of people who put in a bunch of money and try to tell you what you should do. Whereas I don’t think that’s really the people with the money are probably the best people to be making decisions on how that charity should be run. It should be coming bottom up. The people on the ground are the ones with the best ideas. They are in it every day.

Sebastien: Okay I understand. Yeah I mean I think there’s some truth to that in the sense that of course money will cause influence in charities so if you have a bunch of people who donate a lot of money to a part of the board of directors of that charity and they’re making decisions that maybe aren’t all aligned with the realities on the ground, then in that case the money might not be allocated in the most efficient way possible. I think having people on the ground and their experience is beneficial to a charity and to sort of conduct a work of that charity. But what do you think about the absence or non absence of experts  within charity work that they can say OK this is the best way to allocate funds based on research like for example economists when it comes to allocating funds to reduce poverty. Is that something that we see a lot in charity world or is it missing?

Griff: I think in general it’s missing because if you’re an expert and you have a lot of value to contribute you’re going to get a lot more value working in the for profit world. And that’s just the  status quo. The experts that come in they usually work pro bono and maybe they’re putting in 10 hours a week out of the kindness of their heart. But you know they can’t put their full focus in because they have a real job that pays them a lot of money. And in the end this is the biggest problem. This is a systemic issue is that the value being created in the altruistic space isn’t accounted for. The economic models that we use today don’t actually say hey there’s value in helping the less fortunate in society and there’s value in protecting a river or any other shared resource that the society happens to obviously derive value from. It’s just not in the accounting books. So the people that are experts in how that river should, so let’s take a spring right. The experts on the spring they’re the bottling factory that’s creating water for water bottles for just like plastic water bottles that you can find all over the world. If Coca-Cola has a spring that they want to make sure they can extract as much water from in a sustainable way then they’re going to hire experts, they’re going to be able to pay those experts to focus on making sure that spring is going to be able to provide this service for as long as possible. Whereas the community spring, that is just out there for everyone to come and check out and drink from. It’s going to get degraded over time. No one’s going to put time into making sure that we’re taking out the right amount of water and that it doesn’t get vandalized or destroyed by something nearby that might be polluting the groundwater. These things aren’t taking care of because although that community spring is providing the same value that the spring that Coca-Cola is using, the community’s spring doesn’t have economic value in our economic models.

Sunny: So really the problem is it comes down to how do we incentivize taking care of the comments right. Where like if you allow this spring to be privately owned by a corporation they have the incentive to care for it. But then when there is a community owned stuff like the lake or whatever that’s  where the problem lies.

Griff: Yeah. Exactly. All because then when the private entity comes in they control this spring. They own the spring and the community no longer has access to it. So that’s not really great either. But, what we want to do is actually create an economy around that spring. Right. Because the bottling factory Coca-Cola who owns a spring they’ve effectively created an economy. And I would even argue it’s an altruistic economy. I mean they are providing access to clean water all over the world. Bottled water isn’t is a magical thing, in the 18th century like that would blow people’s mind, that you could just have access for a dollar, clean water almost anywhere in the world. This is a feat of modern economy. And Coca-Cola is doing God’s work OK. It’s amazing to say that and you wouldn’t normally think that but if you actually look at it from like a really high level, clean water everywhere in the world is is magical. But they did because the current economic models satisfy individual wants and needs very well. But they don’t take care of shared resources at all or qualitative measurements right. Standard of living for the less fortunate and in general and so now we need to create an economy around community owned property.

Sunny: So doesn’t that make it seem then more that we should be trying to provide more private ownership. And find stewards of a lot of these public goods so we should allow corporations to own the community lake and why is that not the solution. What are some examples of some common goods that we can’t just give over to the stewardship or custodianship of these corporations.

Griff: I mean it is a fine solution. I don’t think it’s the best solution. I don’t think private ownership of everything is the best solution, in general, private ownership leads to a lot of centralization of wealth and a lot of other issues such as a lack of access to to the community. And I think the spring example is a perfect case. Here we are on a crypto podcast. I mean we have the opportunity with this technology to create new types of economies that actually provide public goods and I don’t think a lot of people really think of blockchains from this perspective but that’s what’s been happening ever since Bitcoin was created. Bitcoin itself is a public good. Anyone has access to international banking just by creating a random number, you can create a random number on a device you have access to international banking. This is a huge good for society. And there’s other blockchains that have done crazy things too that are more obvious as a public good, Primecoin, Purecoin, Namecoin. And I could talk about those if you guys want but I feel like using this technology and creating economies non-stop like unstoppable economic machines that provide value for these shared resources is a way better way to go than selling the shared resources off to some private company that’s just going to extract as much profit as they can.

Sebastien: So tell us about Giveth and why you chose to start this project with  your team.

Griff: Basically charity is a low hanging fruit. By far it has the worst incentive alignment out of any system I know of that has any kind of real use case in this world. There is donors donate funds and they lose but their contributions raise the standard of living for everyone else in society. This is a really sad state and I believe blockchain technology has this opportunity, has a special use case of realigning incentives. When the DAO collapsed and it was pretty wild, the White Hat group really had to look at where do we want to practice DAO. We wanted to keep the DAO mission alive and charity just seemed like the best opportunity. Number one it’s really low risk. I don’t think the SEC is going to come after anybody who creates a token to help the homeless. I don’t think that’s going to be their number one target. And then also it’s just an opportunity, it’s an opportunity to actually give DAO a better name. If you’re using DAO’s to do good work in society people will believe that decentralized governance might actually have some other impact besides just making investors rich. You know that’s not exciting to me and  it’s not exciting to the White Hat Group in general. So the other unknown benefit of really working in the charity space and trying to bring DAO’s to charity is it’s an amazing filter. The Giveth community is just full of kind hearted people that want to make the world a better place and aren’t aren’t motivated by money. And that filter was like an added bonus that we didn’t see coming. So it’s been a wild ride and it’s been a lot of fun and I think we chose the right direction and now that we have actually the Giveth dap in the feature complete state we can start doing these economic experiments and start funding DAO’s for charity in unique ways that aligns incentives that people never thought was possible.

Sunny: Okay very cool. And so you know I remember I kind of like really first learned about Giveth probably two years ago now I was on a train with you and Jordi back in Switzerland. We just came from a talk with Amir Taaki and so you were explaining to me and back then really the focus that you guys if I remember correctly was really around the transparency of nonprofits. And so you know at that time you were really focused on the claim or thesis was that like one of the main issues people have with nonprofits is that they don’t have a proper view into how their funds are being where their funds are being spent. And the idea was that somehow a block chain would contribute to the transparency and that would maybe increase the donations that are coming in. But it seems that you know maybe I’m mistaken about this but that seems to be a little bit less of the focus that you’ve been focused on lately. And so what kind of maybe led to that shift there?

Griff: Yes transparency is definitely number one for us. I mean it’s traceable donations I think are a huge benefit to society. But one of the realizations we had is that you don’t actually need a blockchain to do it. We have this amazing DAP. And it uses a blockchain to move money and it gives people authority over their funds in ways that may not be possible with the normal database like in a decentralized way but with a little bit of centralization it would be okay. Any charity could provide traceable donations to their donors. Any charity could connect donors to the people who are actually using the funds but they don’t. And I mean these large corporate charities they have so much money they could do probably a much better job than we can just as a very small charity living off donations so the question is why don’t these charities actually want traceable donations. And because the incentives are misaligned. So yes they Giveth DAP is about traceable donations, transparency accountability. But we basically could be replaced by an open database and that gives power to people over their donations. And then as simple escrow system I mean it’s very rare to see escrow is used in the charity space and it makes so much sense to me and anyone I’ve ever talked to. You want to build an orphanage, you need a million dollars to make it happen. You don’t need a million dollars right away. You know maybe you get one hundred thousand dollars to get started and there’s 900K sitting there once you hit milestones. The Giveth DAP makes that pretty simple and easy. And it’s the default approach. You know there’s reviewers that say whether or not you’ve completed the milestone and then you go to the next but you don’t need a blockchain for any of this. Well you do need a blockchain for is realigning incentives so that everyone who is participating is actually winning including the underlying cause. And that’s what giveth really brings to the table to giveth  DAP actually allows people who want to raise funds to actually dip their toes in a risk free way into the blockchain space so that people who are experimenting with new types of economies that actually can provide an underlying good, they can interface with the real world. And that’s where the Giveth DAP’s direction kind of went, it’s more about allowing people who are trying to do good work to actually participate in the blockchain space without even having to understand how all this stuff works.

Sebastien: So let’s maybe give an example of how the Giveth DAP can be used to fund a charity. So let’s take the example of this. This Trash Heroes that you alluded to in one of your talks at EthCC in Paris.  The Trash Heroes is this organization in Thailand. They’ve got volunteers and they go out to you pick up the garbage on the beaches and stuff like that. Right. Grab all the water bottles and clean up the beach. So if Trash Heroes were to emerge today as it Giveth DAP, let’s take the example, walk us through the inception of that charity on the Giveth DAP and maybe like all the way to like trash is eradicated and we no longer need that DAP anymore. Can you walk us through that scenario.

Griff: Yeah I’d love to. So if you go to Thailand right now or actually all over Southeast Asia there is this altruistic organization called Trash Hero. It’s a real organization. They started in Thailand just picking up trash on one beach. And they grew and grew as a community movement but it’s completely altruistic. Now they can stay altruistic, they can go on if they want to participate in the boxing space and receive donations in Ether or dai, they can actually or anyone who can convert whatever crypto token they want into dai, they can actually put up requests for funding just like they would on Indiegogo or Kickstarter or any of those they could just go to Giveth DAP, say hey I want some money for this right. And normal people could just send them donations the old fashioned way. So it’s a very risk averse way. You don’t have to experiment. It’s not like applying for money from a DAO directly. You’re just saying hey I’m I’m open for donations from anything in the crypto space.

Sebastien: Like any other charity would you know ask for money these days. Like pledge and you’re helping us and you feel good about your pledge and it helps us.

Griff: Yeah exactly. And and so this is the gateway to go into something a little more experimental. What’s really nice about this instead of applying for what most like foundations and things require is that you apply to their grant program. And this is a very much more open, anyone can fund and coordinate over funding the cleaning of a beach that they care about. So now if we want to kick it up to another notch DAOs can actually participate. If you have a DAO with a purpose it’s like hey I want to clean up the beaches of Thailand. The DAO can’t donate to you know your legal entity. They can only donate to a smart contract. Or without intermediaries at least. So now a DAO with a purpose of cleaning up beaches can fund this project directly. Now the question is how do we get funds to this DAO. And this is where we start experimenting with the crazy blockchain world. You guys had Simon on a few weeks ago and he explained token bonding curves and curation markets and he did a great job and I don’t want to like really dive deep into the technical explanations, if you guys want to learn more about how continuously funded organizations are progressing as a research idea in the blockchain space, I really recommend looking at any of Simon’s work and also Jeff Emmett wrote an amazing blog post that is really geared towards an introductory level explanation of continuously funded organizations called ‘Rewriting the story of human collaboration’. it’s a great blog post really entry level that just shows how token bonding curves can work. But here this is where we have a DAO that actually receives funding from an economy. You can almost think of it as like a programmatic tax where anyone who is participating in this economic system, there is a way for money to be funneled to that DAO that’s doing the good work. And what’s really crazy is if you align the incentives properly it’s scalable upon demand. And if you don’t mind I wouldn’t mind taking kind of a detour to what was happening in the blockchain space in 2013/2014. Back in the day when people were making blockchains instead of just tokens it was all about aligning incentives. It was all about hey what common good are we going to provide to society with this blockchain. And I know that sounds crazy right. And that’s not really how most people were thinking about it. But from a high level this is what it looks like right. Namecoin was the first fork of Bitcoin, the common good it provided was uncensorable world domain registration. And this is magical. You know just like Bitcoin international banking for all. And now anyone can register a dot bit domain anywhere in the world whenever they want and no one can stop them. Now what’s really interesting is that this has been going on for almost like seven or eight years. And no one even cares. Noone registers dot bit domains, if Namecoin was a startup, if Namecoin was a charity, oh it would have failed a long time ago. OK. No one uses it but because it’s an economy and economic machine that’s just allowing anyone in the world to register dot bit domains it continues because it’s scalable, it scales based on demand. Another example is Primecoin. Another one no one cares about. No one really is like trying to find a list of prime numbers. But guess what Primecoin made it anyway. They did all of this without university grants without any support from an investor or an angel investor or maybe the angels were basically devs that wanted to play with this technology. But now we have a list of 30 plus million prime numbers right. And prime numbers are being discovered every day. And this is wild. No one even cares. And the people who are actually finding the prime numbers they don’t care. Right. The people that are speculating on Primecoin, they don’t care about prime numbers but yet a common good is being provided and everyone providing that common good is acting in their own best interests. With for profit motives. And Curecoin is the one that really exemplifies this. Because in 2002 way before blockchain Stanford researchers created this folding@home project. There’s another one that’s more popular called SETI@home – The search for extraterrestrial intelligence. But basically you can run this program on the background of your computer and altruistically fold proteins for cancer research. This is folding@home. And so this has been going on since 2002. And in 2014 someone decided to create a cryptocurrency around it. So for 12 years this was done altruistically. People are folding proteins for cancer research, Alzheimer’s research, out of the kindness of their heart. But then Curecoin comes in and they create an economy around that idea. Where to mine Curecoin, you have to run their software which happens to be running folding@home. And FoldingCoin also does this exact same thing. And there’s also Gridcoin. That also does this for other at home projects. But people who are mining Monero or mining other GPU mining software, they’ll look at Curecoin and when the price goes up or the mining power drops they’ll start folding and unfolding proteins for profit. And yet this is an altruistic cost. They created an economy where when speculators come in and buy Curecoin this actually makes people who are mining Curecoin want to put more computing power towards it. So you have this scalable balanced economy around an altruistic underpinning. And this is what Giveth is trying to do with the new technology to bring it out of the digital realm and into the physical realm.

Sunny: Right. So essentially you know it seems what’s nice about folding@home and Primecoin is that we can kind of turn this search for prime numbers and this folding problem into a sort of proof of work like a useful proof of work. You know it doesn’t solve all of the properties you need for the best proof of work. We can have a whole other conversation about that but you know it’s something that we can describe using just pure digital stuff right. But then how do we prove this picking up of trash on this Thai beach in a digital way that’s kind of where Giveth  DAP comes in.

Griff: Exactly. Giveth DAP is the proof of work from the physical realm to the digital realm. To the blockchain space. So with our transparent traceable donations that gives a lot of accountability to what’s happening in the real world that’s missing in the current charity space. This can provide the proof of work for actual contributions to a community led project whether it’s taking care of a spring or even taking care of orphans or anything else in the physical realm. Now I think it’s a stretch to start making people doing altruistic work like social impact work to start off with this kind of crazy blockchain proof of work stuff. I think it will probably end up starting off more with like open source projects and maybe evens things in the crypto world that  where the people who are doing the good work. And even though it’s not valued by the economic models we have today they can understand the system a little bit better but eventually once the system gets fine tuned we can move it into the real altruistic proof of work that everyone in Goveth is really excited about.

Sunny: So is the idea that this DAO in the you know this trash commons DAO it basically acts as an oracle service to say oh look this guy has been doing a really good job at like you know he’s been going out to the beaches every weekend, and so they’ll like mint coins for him is that kind of what the goal here is.

Griff: Yeah it’s a little more complex than that but effectively yes. It’s just like Dash, Dash has this proposal framework where people say hey I want to take care of the dash system I have this idea I want to make YouTube videos I want to do this I want to do that, and I can apply for funding and then the the DGBB in the dash ecosystem the master nodes will vote and they will fund those projects. Now what we want to do is much more complicated and it takes the lessons of all the decentralized governance that the Giveth crew and the general token engineering and governance experts have been observing and taking all the really you know the research that’s on the forefront of this space and combining it together in a well-balanced well engineered system that can actually provide continuous funding for an underlying common good. So. I just want to say this does exist in society right now. It’s called governments. Governments are continuously funded organizations but they’re centralized and they use force to achieve their funding. And so the goal here is to create continuously funded organizations that are voluntary, that anyone can participate in but will still provide the same needs and services that a government often is needed to provide.

Sebastien: So that leads us into the next topics. You mentioned Simon who’s been on the podcast a couple weeks ago and again I’m going to reference your excellent talk at EthCC which will be in the show notes to take us to the next topic which is bonding curves and this idea of continuous organizations. So maybe taking again from this idea of Trash Heroes and that example, explain how continuous organizations are useful for building successful charities.

Griff: Yeah. Perfect. So let’s just do a quick recap right. So someone comes in with an idea to clean a beach. They make a proposal on the Giveth DAO. There is a DAO that has money that is then funding that proposal and they give it DAO. Now when they actually fund that proposal this DAO is part of an economy, an economy that’s based on a token. So it’s actually a two token system. There is the reserve currency which I expect to be using xDai. But we’ll see, when it’s built we’ll see what’s out there, and then xDai is just like dai, it’s one dollar per token. So this DAO will send xDai, a stable coin to the Giveth DAP and the Giveth DAP is smart enough that when it pays out the milestone it actually will send the xDai to a token bonding curve and mint tokens from the bonding curve and give that to the recipient of the who’s cleaning the beach. Right. And what’s really nice here is that when a lot of people are asking for money they need that money to be a stable value. They’re not trying to be speculators. So we need to give the people who are doing good work a stable value. And when we’re converting it using a token bonding curve and giving them tokens they get that value, if it’s for a thousand dollars they’ll get a thousand dollars worth of value right there but in tokens. And if they need to convert that to a stable currency they just push another button, it goes back to the bonding curve and they get exactly the amount of money that they would expect. The benefit here though is that they want to keep those tokens. They are now part of the governance of that DAO and we want the people that are doing the good work to be part of that governance. And so now let’s get into where that token bonding curve comes in and how it creates that continuous funding for this DAO. A bonding curve is basically a smart contract that mints and burns tokens based off of how much money it has in it. Often people talk about the supply of the token as the actual deterministic thing that says how much the token price is but also reserves the amount of money in that smart contract can be used as well. And so I like to talk about it based off of how much money is in the smart contract. And when there’s very little money in that smart contract the tokens are cheap. And when there’s a lot of money in that smart contract the tokens are more expensive. And if you do this you can actually create a tax that funds this DAO by saying let’s say that a token is worth one dollar, so someone sends one hundred dollars into the token bonding curve and they get one hundred tokens. Then if someone else sends a hundred tokens in, they should get one hundred dollars back. But we can actually align incentives in such a way where when people exit the economy, when people decide to sell their tokens, they have to pay a tax. So if they they are burning their tokens in the token bonding curve, a hundred tokens, then they actually only get ninety five dai, and five dai, five dollars worth of value, will go into the DAO that then uses those funds to do good work in whatever underlying cause you’re working with. So this economy, it has aligned incentives because whenever anyone is taking a profit they’re also donating to charity. Effectively.

Sunny: If I can maybe put this into some context, this sounds very similar to me, correct  me if I’m wrong here, but this reminds me quite a bit of a game called Fomo3D that gained quite a bit of notoriety in the Ethereum community a couple months ago now. And so how that game worked was it was this like really interesting continuous pyramid scheme really. And what would happen is that you would go ahead and buy shares or they called them keys. Keys in this game and when you buy keys half of the money you pay with Eth and half of the Eth that you pay with or whatever the distribution was half goes to the previous shareholders. And then the other half goes into this price pool that became used to pay, you know they had this whole game with a countdown timer and stuff and you know the fun little thing, I suggest people go read about it it’s really interesting. And so you know it kind of created this pyramid scheme where what you wanted to do was buy these shares and kind of get other people to also start playing the game because then they’ll buy shares and when they buy shares you get more money and then there’s the whole game that’s going on on the other side which is also bringing in more users. And so this seems very similar except the difference here is that the half that’s going towards this prize pool is instead going to fund this public goods commons. And that’s really like the base what’s providing incentive. So this entire system is that like you know because this commons is being funded that’s what’s  the main base of this entire pyramid scheme engine.

Griff: Yeah. So it’s really interesting when Ponzi schemes came into the space, I kind of had this revelation or like this weird mind bending issue is that the general economy, the economic system that we live in, uses the same idea. If you speculate on stocks, our your goal is to buy a buy a stock when it’s low and hope that other people come in and raise the value of the stock. So if I buy Amazon when it’s low I hope that people will come in after me and then they’ll raise the price and I can sell a stock in the company. Now the reason that’s not a Ponzi scheme is because there is an actual Amazon company and they are providing goods and services for people and they are using investor funding to actually make that a reality.

Sunny: But also the other thing here is that once a company does an IPO and those shares of the company are out into the wild after that IPO event the company no longer benefits from people speculating on their stock anymore. But here what’s happening with the bonding curve scheme, because some of the money is going back to the Treasury of the non-profit fund, there’s no one IPO moment where like the nonprofit is selling all of its shares right now, instead it’s just a continuous thing where as speculation continues to happen the non-profit continues to get more funds for development.

Griff: Exactly. What’s really amazing with the ability to take crypto currencies and use them to align incentives properly is you can kind of do some jujitsu you know like all the things that you think are supposed to make the system worse, speculators move in volatility. You can take those and actually make them into a good thing. So like the more volatile tokens price is, the more taxes end up being paid. The more donations end up going into this DAO because if there’s a 5 percent difference between buying and selling. And so if you actually have the secondary market on finance they’ll be arbitrage bots that are looking at the volatility on the market and if they can make even just a few dollars they will pay thousands of dollars worth of fees to the charity to the charitable DAO, just to make a few bucks and to stabilize the price of the token. And people working in their own best interests trying to make a profit, actually fuels the good work that the economy is doing.

Sunny: Another benefit that I that I see coming out of this is back to what we’re talking about the altruistic donations and how there is no incentive for it. You know I kind of disagree. There is a bit of an incentive for altruistic donations where there’s the social rep you get right. And if you make a large donation you can get a building named after you or something or you’ll have your plaque on somewhere. But that really only incentivizes really large donations. But it kind of leaves the small guy out of the picture a little bit right. Like I don’t have a million dollars to go donate but you know maybe once a month I set aside a hundred dollars to donate to an organization. But you know I don’t earn any social rep from donating a hundred dollars. And so this seems to basically open up the donation space for more than just the big guy. Would you say that’s also true.

Griff: Absolutely. What’s really cool about this system and the way we’re doing our governance model is it actually does incentivize small donations. So like the governance model that we use is called conviction voting. And the amount of voting power each project needs to pass is dependent on how much money it’s asking for. So let’s say you have a thousand dollar request to clean a beach in Thailand. If the voting power behind the Trash Hero commons is enough for nine hundred dollars of donation that’s effectively being pledged to this milestone on Giveth that can still receive one hundred dollars of donation to cap it off from an individual, so you effectively have this big whale of a donor that says hey if someone donates one hundred dollars to this milestone, nine hundred dollars will come instantly. And then this allows people who don’t want to play in the blockchain space to see oh hey I can get nine X matching by throwing one hundred dollars in here. And then when they do it boom they instantly get to see that money come in. And the other thing is that all the stuff that happens for donations all the social rep is still there. There’s a lot of people working really hard on NFTs so you can give social badges. I was just at a hackathon where Birdchain, a bunch of Berlin hackers, actually won a hackathon by creating social badges that represent people doing good work and on Giveth we had a project that was doing Christmas cards for Venezuela. So that anytime someone bought a Christmas card and NFT and sent it somebody, all of the money that was raised would go to a transparent donation towards Venezuela on the Giveth DAP. And so we can we can recreate all this stuff. You can still put your name on a house or have a list of the top contributors to even the commons but then at the same time we’re aligning economic incentives.

Sebastien: That brings up an interesting point I think which is at a higher level of abstraction how should we allocate funds more generally to commons. So you know should we be moving more towards a model where people just give money into an organization and then through governance it figures out well maybe money should be allocated to Trash Heroes or right now money should be allocated to this community in a remote place where people are very needy and one thing that came up recently was this fire in Paris at the Notre Dame cathedral and then a lot of people started giving money to the organization that takes donations for monuments in France and a lot of billionaires sort of giving money and then at the same time you had other people saying oh well you know this money could be used for something much better, all these hundreds of millions of euros  that were donated it could be used to feed the needy. So if we had governance systems, now I’m not saying that we shouldn’t you know fix Notre Dame, it’s a nearly thousand year old monument and cultural heritage but it kind of begs the question of okay maybe charitable organizations themselves should be subject to governance so that amongst those charitable donations and all these causes we should be putting money towards things that actually matter and having experts in there also economists etc that are weighing in on those decisions and on that governance model I think would be something like bringing a lot more value generally to the space.

Griff: This is exactly what excites me the most about the commons. Is this ability to coordinate effectively amongst various charitable organizations. When you have a free market people can decide hey like is there going to be a big need for this iPhone, you know is there going to be big need for bottled water. You know what about people creating fax machines. If you have a company creating fax machines you’re going to be asking for investment and no one’s going to give you money because there isn’t a big value for it. Right. But then all of a sudden one of the problems in the economy is when you do create something that has a short term value you get an undo response in the market. Right. And this happens a lot in the charity space like you’re saying with Notre Dame, but if you put this in a token bonding curve in a robust ecosystem where people who start donating all over the world to help Notre Dame they’re going to end up raising the price of the token. So they’re going to get fewer tokens than they would if they continued to donate to let’s say ending homelessness in Paris. Right. Ending homelessness in Paris relative to Notre Dame is actually going to probably be a better buy as a speculator. So now you have speculators that can come in and mediate this overabundance of of resources that might go to Notre Dame. Of course Notre Dame should get a lot more resources than it would have before. In fact if you were somebody who is supporting Notre Dame before this fire you would make insane profits and it’s too bad there weren’t more people supporting Notre Dame before this fire because maybe the fire would have been prevented if it had a larger base of support but then when it does have this huge fire lots of people start coming in, the people that were supporting Notre Dame before all of this they end up making a profit and they can sell their profits and start supporting ending homelessness in Paris, which is all of a sudden being forgotten about because of this big fire. And so now we can have like a robust altruistic economy where speculators game profits by saying oh yeah, this is a project that really needs the money.

Sunny: Yeah it seems that this essentially turns into a TCR of bonding curve. So it turns into like which one of these bonding curves you want to put your money into and whatnot. One of the other questions that I have though here is when you bring  financial incentives into this system, whatif that sometimes could cause some sort of more perverse behaviors. So for example let’s say there’s the Trash Hero Commons DAC. And then there is another DAC that’s like you know garbage heroes car windows. You know it’s working on the exact same problem. And now they both have extreme economic incentives to go out and essentially shill their DAC instead of the other DAC. And we see this happening in the crypto space right. Like most of the products that we’re building are public open source goods but because they have so many financial incentives tied to them you suddenly get the slightest change between competitors or two different versions of a project. Slightest change and then you add economic incentives into there and then you get this insane tribalism where people are just instead of focusing on developing the culture out there, shilling their token instead of the other. And so how do we make sure that these DACs that were meant to fund these public goods don’t just devolve into such tribalism like that.

Griff: Well this is this is the magic. I actually think that crypto tribalism is really interesting as an interesting result of the system because yes on the speculating side you’re gonna have these investors that want to show their token and blah blah blah but think about the value on the other side of things. The coordination aspect. If you look at Bitcoin lightning network for example, it’s a whole bunch of Bitcoin Maximus that are creating competing organizations that actually are incentivised because of Bitcoin maximalism to actually coordinate effectively on bringing lightning network forward as a whole. Right. Because they all have Bitcoin so they all effectively have this one alignment of incentives. Now what if we could create save the rainforest maximalism, so that all the nonprofits that are working towards saving the rainforest now can coordinate effectively and be open about what their projects are and can work with each other to standardize how they’re going to coordinate effectively because they all have this token that aligns them to act together. Now of course you have this other tribalism like you mentioned right where there is Ethereum and then there’s Bitcoin and then it’s like oh which one’s better which one is worse. But I feel like that’s just static on Twitter. It’s not nearly as as powerful as the coordination that actually brings everyone together to push those two projects forward which ends up pushing crypto currencies forward as the result.

Sunny: But what happens if there’s not one rainforest save the rainforest coin but there’s two competing save the rainforest coins. And now the DAC holders of each of these save the rainforest coins, they’re much more interested in going out and like shilling their DAC rather than actually going and working on saving the rainforest.

Griff: Yeah. We need multiple save the rainforest tokens. We need multiple save the rainforest commons because they keep each other at bay. They keep each other working competitively in a positive way just like we have multiple crypto tokens right. If there was just Bitcoin maybe we would be a little bit lazier. Bitcoin wouldn’t be hot to trot to get lightning network out so fast because Ethereum’s  chomping at the bit you know at taking this market. So now Ethereum and Bitcoin are effectively competing against each other but the real competitors the banks, it’s not actually Bitcoin or Ethereum. Now maybe you go to crypto Twitter and you see all this all the people like yelling that Bitcoin is better or Ethereum is better, iOS man it’s the future world currency. No. But guess what. The real issue isn’t which coin is better. The real issue is that they’re all better than the banks and this competition is super healthy at advancing the real issue which is bringing international banking to everyone and decentralization as a whole.

Sunny: That makes sense. And so one other question I had is, I used to live in this house in Berkeley that was like part of the applied rationality community and you know very closely tied to this global movement called effective altruism which is this global movement that’s really about how do we you know apply utilitarianism and like you know optimize for altruism in the world. And it’s really interesting movement and they have like hundreds if not thousands of people who are working on this full time how to optimize charities for like maximizing good in the world. And so have you ever run any of these ideas by any of them and get any of their thoughts on this stuff.

Griff: Honestly all of this stuff is so early days. It’s more of a technical issue than a realistic one. Whatever we produce starting now is probably not going to work. I’m just going to be real with you. The goal here is to produce a system modeling after the successes of Primecoin and Curecoin and these crypto economies that have provided underlying goods before and just see if we can do that in the real world and our real goal is to build this in a way that we can iterate and really effectively. So one of the big issues in the cryptocurrency space right now is the lack of legitimacy and for good reason from the rest of the engineering world. When you look at what happens in cryptocurrency when someone creates a new token they write a white paper and then they build a prototype on Rincon B and then they launch. And that’s just not how things work in the engineering space. If you’re gonna do robust engineering you need to create a design. Simulate that design like actually say what that design does in math. And then run it into a computer system and see if the design is actually going to work and provide the output that you expect and you run thousands of simulations and then say oh yeah okay this is gonna work and then you build the prototype and then the prototype oh you had to change some things to make it work, so then you go back to the simulations you changed what you had to change and make sure that it still is producing what you needed and then you build the real thing. This is called design validation and we don’t do it. I used to build power plants, I’m a chemical engineer, we can strike ground on anything until everything went into a simulation. And now there’s this amazing organization called Block Science that Giveth is teaming up with to do the design for this complex system. And we’re gonna have complete simulations on how this works. And then we’re gonna build a prototype then we’re gonna go back so we’re gonna do that whole process and do actual robust token engineering and then build this system.  And then once the systems up and we can actually explain it to people about how it works and we can show them hey this is an example of it working for some high tech cryptocurrency focused projects, then we can be like hey we’d like to use this system for some effective altruism thing and that’s when I want to get their feedback in. But for now this is a highly technical project. And just to avoid scope it’s just best to keep it simple, launch something that has been thoroughly tested and also simulated so that we can quickly iterate. And so I’m not really looking for charitable input at this point because it’s a research project. You know it’s like if I was trying to cure cancer with some kind of experimental medication I wouldn’t go to cancer patients and ask what they think about the method of should we you inject it etc, first I have to do all the research and actually get something built and then I can actually explain what we have to someone normal and show them what it does and hopefully they can actually use it for making the world a better place.

Sebastien: So as a final question tell us where Giveth is going what’s the roadmap and also how can people find you and get involved in this project.

Griff: Yeah well honestly this is probably one of the first times I’ve really gone into depth about how this project works. Thank you guys for randomly asking me on Epicenter to talk about this. Our road map is a little loose right now. So far all of the work that has been done has been completely out of the kindness of everyone’s heart and we have about 50 or so people in this small community called the common stack. Our goal is to build a reference implementation for this project. And no one’s been paid a dime to do any work. So first we need to actually start probably raising money or doing something along those lines and we do have a general roadmap for doing designs and this sort of thing.

Sunny: Why not issue a bonding curve for Giveth itself.

Griff: Well this is the issue right. There are no bonding curves that are really live besides Fomo3D. So we need to do this. It would be really experimental and it takes a lot of R&D to issue a bonding curve around these things. But that is effectively what we want to do. So we want to raise some funds and create a white list of people that donate to our projects and then those people will be the experts that hatch a bonding curve. This is something I didn’t really talk about but this system of the comments the people who initiate a bonding curve it’s really best if they’re experts in the topic of that bonding curve because they’re going to end up with the most governance tokens because of the way of bonding curves work. If you buy an early you get a lot more tokens than if you buy in later. And so those experts, they’re going to be the ones making the decisions. And if they make bad decisions then the whole economy will fail because effectively the way the commons is structured, the speculators are speculating on how good the decision makers are going to do so that they can raise funds from external donors that normally are just donating and not getting anything in return. Here if they donate to the economy they’re effectively investing and they receive a token in in return. Right. So what we’re looking to do is actually raise funds only from token engineers and governance experts in the crypto space. And then we’ll end up with a white list that says Hey this is a list of people who are experts in the common stack, in this crazy structure that we’re building. And they would end up being on the white list for every other project that’s created off of this reference implementation because they’re experts in the system itself. And then someone would want to add people who are experts in what that system is doing on top of that. So that’s kind of our structure, it is kind of like creating a bonding curve for raising this system. But we’re not interested in creating a token ourselves. You know all of the static that comes around with the legal issues, Giveth isn’t even a legal entity. It makes things really difficult. We’ve been a blockchain based entity for almost three years now and I don’t want to change that. So we’re gonna work on this this whole system. We will probably raise money starting really soon. We just ended up having, I’m in South Africa and I was talking with Simon a lot about this project. He is on board and he’s excited to help us. And I want to get more social credit and like social validation and external validation from people before we get money. And say this design, this system, this idea, has legs and then we’ll start collecting funds and then we’ll do real robust designs. Hopefully by the end of the summer we’ll have actual designs that are simulated in this CAD software. And then after that we can actually start asking people to build it, like a really professional builders. I hope to build on Argonne so the whole system can be easily replicated and changed. And then after that we will have a reference implementation that anyone can just take and launch whatever comments they desire.

Sebastien: Thanks again for coming on the show Griff, it was a pleasure speaking with you. And thanks for telling us all about Giveth and the wonderful work you guys are doing.

Griff: Yeah. Thank you guys for letting me on. Thanks for letting me rant. I could talk about this for days and days. Thanks guys.

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