Why municipal public goods?
Public roads, pipelines, playgrounds, parks, and other types of municipal infrastructures are the proverbial public goods. These are the most recognisable examples and the most common types of public goods any person uses.
Deciding which of them to prioritise within the communal budget has remained largely inefficient since ancient times, often marred by corruption.
Different public goods provide different (number of) people different value. If there is a public good that provides high value to a small, but influential, group of people, it will more often than not get prioritised in the common budget. This is why there are poor and wealthy neighbourhoods or underdeveloped parts of the city.
How can it be fixed?
There have been various types of attempts, to increase transparency and improve decision making when it comes to public goods funding, under a umbrella term Participatory budgeting.
In recent years, there’s been a surge in research and insights into funding public goods. This has been primarily driven by the need to finance public internet infrastructure. Innovative mechanisms have emerged, particularly within the web3 industry. New tools and systems have undergone testing, backed by real funds and actual projects.
One of mechanisms emerged is Quadratic funding. It has the ability to absorb all the different configurations of public and individual wills, and produce an outcome that is mathematically fair. Learn more about how Quadratic funding works and how it compares to other voting methods.
For a few years already Gitcoin has been successfully distributing funding to Ethereum public goods using QF. Having successfully introduced QF in funding internet public goods, we are naturally looking for other public goods which we could fund this way. Municipal public goods are emerging as the logical next step.
These are the reasons why we are excited about this opportunity:
- QF would serve as a great improvement over the existing mechanisms used in cities.
- tools on Ethereum (such as Allo protocol) are further ahead in development than any web2 tools.
- Ethereum community has a lot of collective experience and knowledge running QF rounds and solving issues within.
- blockchain offers better transparency and control over the funds, ensuring proper implementation
- EVM offers modularity and expansion of the core apps, allowing anyone to improve the user experience and offer new features or services
All of these points make it easier for us to convince the city administration that it’s worth it piloting QF on web3 stack. Additionally, if we are able to get additional funding from web3 treasuries for this pilot, and for matching rounds themselves, effectively increasing the city budget, we can easier make the city choose web3.
On the other side, this initiative is enticing to the web3 industry as it has a potential to become an avenue to onboard millions of potential users. If we are able to onboard citizens to Ethereum, implement tools based on OSS, and successfully run QF rounds, it’s hard to imagine the city ever going back on the technology. It will be easier to run subsequent rounds on the existing infrastructure, but also anyone else (companies, institutions, etc. ) will be able to pick up and create their own mini rounds within the city using the same set of tools. It will also be easy for anyone to expand the toolset, and compound the effect.
If we pull this off well, we could see a significant new avenue of not only onboarding new users but also applications of web3 in the real world.
Project background
This is a proposal by Tomislav Mamić, co-founder of BlockSplit conference. Project is developed in-person during the FTC Berlin Builder Residency in September 2023 and subsequently in October in Split.