Aug 23, 2022 - Economy

Public goods devotee pushes green pill in crypto

Photo illustration of Kevin Owocki, the founder of Gitcoin, and abstract shapes.

Photo illustration: Victoria Ellis/Axios. Photo: Courtesy of Gitcoin

Kevin Owocki is the founder of Gitcoin, an Ethereum-based funding marketplace, and author of "GreenPilled: How Crypto Can Regenerate The World."

Why it matters: What gets funded on Gitcoin, with its democratized model for project funding, is effectively a snapshot of the priorities within the crypto software developer community. And its solarpunkian founder is optimistic about a crowdsourced future.

Context: Gitcoin has delivered $65 million in funding to the industry via bounties, grants, tips and other products since its start, generating roughly $6 million quarterly to fund various projects for the past six quarters, according to Owocki.

  • Its matching pool has drawn participation from big investors including Coinbase, a16z, Polygon, Starkware and Aave Grants, and helped the likes of decentralized exchanges Uniswap and 1inch get started. (It's also endorsed by Vitalik Buterin.)

What he's saying: "The [original] idea was to create a place for open-source software developers to 'git coin' — pun intended — for their work," Owocki tells Axios. Now, the core offering on the website is grants funding.

The big picture: Owocki is a proponent for "taking the green pill" — a pushback on the "degen" culture of meme tokens and gambling — while advocating for the use of crypto to create an economic system that increases in resource capacity over time.

  • To Owocki the internet is a public good, the metaphorical tree that anyone can benefit from.

Of note: Ethereum's move to a proof-of-stake consensus mechanism vs a proof-of-work one is important to Owocki, for one, because it makes that blockchain more sustainable.

Between the lines: Gitcoin Grants soups up crowdfunding with quadratic funding, using math to auto allocate capital in matching pools based on the number of contributors. Put simply, Gitcoin puts a premium on the interests of the many rather than, say, a well-heeled few.

  • Here's how it works: Two projects are looking to nab a $100,000 matching pool. They raise the same amount, $500, with one raising from five individuals and the other from just one. The former project's match would be $8,333 compared to the latter's, $1,667, because it got more votes.

Flashback: Gitcoin's success is, in part, owed to Owocki's sensibility, which he describes as: "flexible on the details and dogmatic on the mission."

  • "We were working off the broad thesis that there’s going to be trillions of capital in the open-source financial system and some of that would make its way back to developers," he said. "What we didn’t know was the mechanism through which that capital would reach software developers."
  • Indeed Gitcoin started with bounties and landed on grants, but it's also dabbled in other offerings like ads and NFTs, Owocki said.

What's happening: "Bounties and grants reflect current state of the market from a tech perspective. There’s a lot of ethereum 2.0 clients getting funded on Gitcoin Grants," Owocki said.

What's next: A Crypto Advocacy round on regulation focused on building support for organizations "at the forefront of good crypto policy and in defense of the open web."

  • "The advocacy round will be the biggest one that we’ve seen in the history of Gitcoin Grants," Owocki says.

Context: Advocacy has become more important lately as regulators clamp down on the industry. For example, the U.S. Treasury’s Office of Foreign Assets Control, or OFAC's, sanctioning Tornado Cash pushed the issue of privacy to the fore.

  • "The real question for me is [if] you have a regulator in one jurisdiction that is going to ban addresses on the global network, does the network then change the infrastructure," Owocki said, "Or does it route around that sanction or if you believe it’s censorship, censor it."
  • Coin Center, a Washington D.C.-based research and advocacy firm, is going to challenge this action in court on the basis that you can’t regulate speech.

Dates to watch: Gitcoin Grants' 15th funding round is set for Sept. 7 -Sept. 22. The Merge will take place in the thick of it.

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