Optimism Funds Public Goods: Subscribe to Blocktrend for OP Airdrop Chance
#496
Recently, a friend from the community asked in the #AskMing channel on Discord whether there is a competitive relationship between different blockchains and Layer 2. I responded with a lengthy explanation there, so I won't repeat it here. But this led me to think of another common question - with so many Ethereum Layer 2 solutions emerging, how should users choose?
If you ask me, I would prioritize Optimism. Not only are the transaction fees lower and the ecosystem richer, but more importantly, Optimism is trying to establish a new mechanism to reinvest future earnings into the development of public goods through a digital democratic process. This is the biggest difference between Optimism and other Ethereum Layer 2 solutions.
In this article, I will explain the sources of Optimism's income, how they distribute future income through a digital democratic mechanism, and why Blocktrend subscribers may have the opportunity to receive additional OP token airdrops in the future.
Income
What is Optimism? I'll explain it simply with the following diagram.
If we compare it to storing a quilt, Optimism is like a vacuum compression machine. People used to stuff quilts directly into Ethereum, which was convenient and intuitive but also took up a lot of space. Optimism compresses the bulky quilt into a vacuum before putting it into Ethereum. This way, Ethereum can accommodate more quilts in a limited space.
In this analogy, the "quilt" refers to every transaction sent out by global users.
Since Optimism receives various transactions from people before putting them into Ethereum, it naturally has the power to determine the order of transactions. The order of transactions is very important. For example, if there are only 10,000 tickets for a A-Mei concert today, but 100,000 orders flood in online at the first moment, who determines the order makes a big difference.
Similar situations often occur on the blockchain. However, the unit of time on the chain is not calculated in seconds, but in blocks (block). Each block can accommodate hundreds to thousands of transactions. If there is an arbitrage opportunity on the blockchain now, only the first person can successfully arbitrage, so it is very important who determines the first place. Blocktrend has written about MEV (Miner Extractable Value), discussing how miners can gain potential benefits by sorting transactions.
In the future, these MEV benefits will gradually shift to Layer 2 solutions like Optimism and become Optimism's main stable source of income.
However, the development team of Optimism does not intend to put all these incomes into their own pockets, but will reinvest the money into the Optimism ecosystem to build public goods. But how to allocate funds has always been the most difficult problem, which is also the main reason why Optimism, in addition to developing a "vacuum compression machine", also established the Optimism Collective in hopes of realizing community co-governance.
OP Rewards for Subscribers
According to the introduction of Optimism:
Web3 is the gateway for people to another parallel world, a network space co-owned and co-governed by citizens, where we have the opportunity to rebuild the native collaboration methods of the digital age. The current network space inherits the economic rules of the physical world and is facing serious market failure problems. However, the network space is built on information... Public goods are crucial to the development of the network space.
The Optimism Collective is a new digital democratic mechanism to promote the development of a decentralized ecosystem. The collective is composed of communities, enterprises, and citizens through mutually beneficial contracts, adhering to the principle of influence = profit, that is, those who have a positive impact on the collective should be rewarded with profits. This principle will serve as the North Star of this world, creating a more productive economy.
Public goods can be enjoyed by everyone, but few people are willing to pay, such as maintaining the cleanliness of parks, reducing crime rates, or sponsoring quality media operations.
Everyone hopes for a clean park, a good social order, and quality news media, but individual sponsorship of public goods is usually unprofitable, and those who don't pay can still "hitch a ride". If everyone is waiting for others to pay, public goods will lack funds and cannot continue.
The citizen community g0v is a kind of public good, but what benefits does it have for individuals to sponsor g0v? I'm afraid there is none. But without g0v, we wouldn't have a "mask map" in the face of the epidemic, and we wouldn't have a "real or fake" LINE bot to verify in the face of fake information. If there are no public goods, people's quality of life will decline significantly, but this returns to the question of who pays.
Web3 is like a parallel world, also facing the problem of no one willing to sponsor public goods. Optimism stands up and says, we will pay. However, their solution is not to directly open applications and allocate funds, nor to sponsor public goods worldwide. Instead, they adopt RetroPGF to recognize the effectiveness of the Optimism ecosystem retrospectively and attract more funds to invest in the development of public goods. According to the introduction of Optimism:
The Optimism Collective believes that building public goods should be profitable. The "Citizen House" will provide funds for public goods through the RetroPGF model, as it is easier to recognize the impact of public goods retrospectively than to predict it in advance. Each round of RetroPGF will be conducted independently. The final result will be a set of scores, and these scores will determine how much funding each project can receive.
Blocktrend has introduced the concept of RetroPGF, which simply turns the originally unprofitable public goods into a "business" that can be invested in for profit.
The operation of RetroPGF is to open proposals first, and then a group of "commissioners" measure the impact, and finally allocate funds to influential projects. The following is the process diagram of the second round of RetroPGF to be opened in January 2023, divided into proposal, registration, and voting stages. This time Optimism allocated 10 million OP tokens as funds, voted by 90 commissioners, and decided which projects could get how much money according to the proportion of votes.
At first glance, the operation method is a bit like a government subsidy. After all, the government has long played the role of sponsoring public goods, such as sponsoring art and cultural activities. However, what the commissioners of Optimism look at is not exquisite achievement reports, but the measurement of real impact. The public goods that have the greatest impact on Optimism at the moment can get the favor of more commissioners and get more sponsorship funds.
Taking Blocktrend itself as an example, if I am lucky enough to get some OP tokens from RetroPGF, I can airdrop them evenly to each member of Blocktrend. If the amount of OP tokens is more than the subscription fee that everyone paid at the beginning, it is considered that everyone has "invested" and profited. In the future, it may attract more people to rush to subscribe to Blocktrend, and even become an alternative investment option. This solves the problem that no one was willing to sponsor public goods.
Even if Blocktrend ultimately fails to get the OP token allocation, everyone can still get articles and podcast content from Blocktrend, which is not a loss, but a sponsorship for the development of public goods. This is the "impact = profit" concept that Optimism wants to realize with RetroPGF, and then attract more funds into public goods "investment".
But seeing this, I believe everyone will immediately think of various problems.
Collective Wisdom
The most critical question is, who are the "commissioners"? After all, whoever controls the commission controls the distribution of RetroPGF funds and is suspected of self-enrichment.
In order to design this digital democratic mechanism, Optimism can be said to have taken great pains. They divided the "commissioners" into two houses, the Token House and the Citizen House, each with different powers.
The commissioners of the Token House are all holders of OP tokens, managing technical upgrades, inflation rates, and fiscal allocations. In the Token House, the more money, the more votes, which is very similar to the token governance model that everyone is familiar with. But deciding who can get RetroPGF allocation is the responsibility of the Citizen House.
The Token House recognizes coins, one coin one vote. The Citizen House recognizes people, one person one vote. But the problem is, Optimism doesn't issue ID cards like the government, so how can it confirm that different wallet addresses are not the same person on the internet? It's hard, but they've tried their best.
Optimism has designed a mechanism to obtain voting rights. They selected 14 "social sages" in the coin circle to serve as seed citizens. The Token House can also vote to select 10 representatives to qualify for the Citizen House. There are currently 6 ways for people to obtain voting rights in the Citizen House, but it still cannot guarantee that one person will not play multiple roles.
In addition, even if each representative of the Citizen House is an independent individual in the physical world, language barriers, cultural differences, and personal preferences will affect which public goods can get Optimism's sponsorship.
Even though I have decided to apply for RetroPGF in the name of Blocktrend in January 2023, it is likely that because there are fewer commissioners familiar with Chinese, the final voting results will inevitably favor English content. If you can't get enough votes, Blocktrend will have a hard time getting OP tokens from RetroPGF to give back to members.
In other words, to realize "impact = profit", the premise is that the composition of the commissioners must be diverse enough. Optimism turns the originally unprofitable public goods into profitable investments through RetroPGF, thereby attracting more funds to support the operation of public goods. However, how to fairly distribute limited resources is the next problem that Optimism is exploring.
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