Retroactive Public Goods Funding

Description

Optimism Collective:

"Retroactive Public Goods Funding is the economic engine of the Optimism Collective. It rewards the impact contributors have on the Collective, in order to realize Optimism’s guiding principle of “impact = profit”: the idea that positive impact to the Collective should result in a reward to the individual. With 850M OP dedicated to Retro Funding, it’s one of the most ambitious initiatives to date aimed at re-envisioning how to better align incentives to impact."

(https://optimism.mirror.xyz/zWlA9LROAzRee5BFqbquYHawmruKzLmXbONp_hcCwE4)

Characteristics

The Optimism Collective:

Impact = Profit

"Optimism is built on impact=profit — the principle that positive impact to the Collective should be rewarded with profit to the individual." [1]

Metrics-driven, human in the loop

"This approach leverages data’s systematic reach with human intuition’s nuanced adjustments. Metrics establish a quantitative foundation, ensuring that projects are assessed objectively and fairly, while human input adds layers of qualitative nuance, including quality, innovation, and momentum. An iterative feedback loop lets us adjust metrics based on the insights of humans with domain-specific knowledge."

(https://optimism.mirror.xyz/zWlA9LROAzRee5BFqbquYHawmruKzLmXbONp_hcCwE4)

Status

Optimism Collective:

"In 2024, Retro Funding rewarded over 400 builders with 20m OP across 3 retro rounds. While we have made promising progress on measuring impact, the program still fails to reliably support important contributions to Optimism. Furthermore, we lack sufficient evidence that rewards have caused significant ecosystem growth.

Key builders have repeatedly highlighted that Retro Funding is not reliable enough to drive their contributions to Optimism, as they have no way of knowing how impact is measured, and when upcoming rounds will take place."

(https://optimism.mirror.xyz/zWlA9LROAzRee5BFqbquYHawmruKzLmXbONp_hcCwE4)

Discussion

By Vitalik Buterin:

"The core principle behind the concept of retroactive public goods funding is simple: it’s easier to agree on what was useful than what will be useful. The former is still often a source of disagreement, but it’s a type of disagreement where you could still get reasonably good top-level judgements by using some existing voting mechanism (eg. quadratic voting or even regular voting). The latter is much more challenging. For the profit-making sector, the best that we can do is to build out an ecosystem where people can create startups and invest in them, and get rewarded if they end up correct. So rather than reinventing the wheel entirely, we will create a public-goods-oriented version of the exact same mechanism.

A DAO, which we can call “the Results Oracle”, funds public good projects. Long term, the results oracle can be funded by protocol fee."

(https://medium.com/ethereum-optimism/retroactive-public-goods-funding-33c9b7d00f0c)