Abusing Public Goods? Considering How Web3 Public Goods Should Be Sustainably Operated from the Perspective of the Optimism Grant Program

The "Retroactive Public Goods Funding" (RetroPGF) initiative initiated by Optimism has entered its third iteration. However, blockchain detective ZachXBT argues that many of the projects currently receiving votes are not in need of funding, suggesting that opportunities should be given to smaller projects instead. This has sparked a discussion within the community on the issue of Web3 resource allocation.

RetroPGF Introduction

The Dilemma of Free Riding on Web3 Public Goods

Public goods typically refer to non-excludable infrastructure such as parks, highways, etc. Web3 heavily relies on public goods, to the extent that Web3 is largely built upon them. This includes all on-chain services and tools like EtherScan, L2Beat, Solidity, which are provided to users for free.

Due to human nature, public goods face the issue of free riding, making it challenging to profit from or sustain them through business operations. Traditionally, these are typically supported by the government.

However, in the world of Web3 where even the government is absent, how to promote the development of public goods and allocate resources has always been a major industry concern.

Optimism Launches RetroPGF Experiment

Although the Ethereum Foundation strives to play a role in advancing Web3 public goods, industry development solely relies on it is insufficient. Since last year, Optimism has been supporting public goods projects in need of funding through "Retroactive Public Goods Funding (RetroPGF)."

What sets RetroPGF apart from conventional funding programs is that the evaluation committee tracks the impact a project has already generated and rewards them post-assessment.

The program has supported many projects, including Revoke Cash, Across Protocol, Agora, Gitcoin, Zapper, and is now in its third iteration, with the prize scale, number of judges, and professionalism gradually maturing.

The third edition of RetroPGF started voting on 11/6 and ends on 12/7.

The Challenge of Allocating Public Good Funds

However, even with relevant projects and resources, there is still a second challenge in public good funding - how to allocate them?

ZachXBT Suggests Reserving Opportunities for Resource-Scarce Projects

Blockchain sleuth ZachXBT tweeted yesterday, pointing out that many projects leading in votes have already received venture capital investments, such as Synthetix, or even non-open-source projects. He believes these projects, unlike new ones, are not lacking in funds and should give the opportunity to relatively resource-scarce teams.

ZachXBT listed projects that are relatively well-funded and still applying for RetroPGF or currently in the top 100 in votes:

• Alchemy: Raised $540 million
• Synthetix: Raised $66 million
• Zora: Raised $50 million
• Tenderly: Raised $40 million
• ImmunFi: Raised $24 million
• OpenZeppelin: Raised $23 million
• Rabbithole: Raised $21.6 million
• Rainbow: Raised $18 million
• Gelato: Raised $11 million and issued tokens
• Mirror: Raised $10 million
• Socket: Raised $5.5 million
• Snapshot: Raised $4 million
• Hop: Raised $2 million

ZachXBT hopes voters in RPGF will ponder what truly constitutes a public good and aims to leave opportunities for genuinely needy public good projects, mentioning OtterScan, BlockScout, Revoke Cash, Defillama, and Rotki as better recipients of support.

Returning to the Nature of Projects

ZachXBT's tweet sparked community discussions, yet not everyone agrees with his ideas.

Some community members argue that the sole criterion for evaluating projects should not be whether they lack funds, but rather a return to the essence of considering whether the project genuinely provides meaningful public goods to the industry and should receive due rewards for achievements.

There are many discussions surrounding the evaluation itself, such as how to compare effectiveness across different fields and whether the association with the Optimism ecosystem influences project selection, all of which require clarification.

No Clear Answers

These questions may not have clear answers in the short term, and the issue of public goods is closely related to users. There is much room for discussion on how to support, allocate, and evaluate these seemingly taken-for-granted resources. While using these tools and resources, perhaps one can pause to consider how to sustainably operate them.