Public goods funding isn’t all about mechanism design. Culture might play just as big of a role in the final outcomes. So, let’s explore the culture we want to create on the Geo Web.
Retroactive public goods funding is such a powerful idea because it taps into the existing risk tolerance and long time horizons of the venture capital ecosystem (by creating a feasible path to “Exit” for investors in public goods).
Innovation follows a power law distribution. So in VC, it’s accepted that most investments will fail with zero return, some will break even/produce modest returns, and a tiny minority will produce outsized results to return the portfolio many times over. You should expect failure in the portfolio to produce optimal results!
That is not the standard by which governments (the traditional public goods and social program funders) are held too. Failures are almost always held up as examples of government waste and bureaucracy (yes, there is plenty of that) rather than evaluated within the context of the costs of doing business in the quest for maximum positive impact.
I believe that many DAO treasury management and grant programs are falling into this same trap. Loss aversion is a real bias, so this is somewhat inevitable as the group of stakeholders/decision makers grows.
The Geo Web should embrace retroactive public goods funding mechanisms for all the reasons Vitalik and the Optimism team layout in their post (1st link of this post), but I also aspire for the Geo Web culture to not be overcome with inertia in its prospective funding initiatives too.
The Geo Web itself is a crazy ambitious long shot, so hopefully, those roots can persist as a positive bias toward action and holistic appreciation of risk-taking. It will require conscious, continuous culture building, but I’m here for it.