RetroPGF 3: A Lavish 1.6 Billion Social Experiment
#578
GM,
Next Tuesday, I will be taking a leave, and the publication will resume on Wednesday. Additionally, the photos from the members' gathering have been uploaded to Google Albums. Feel free to browse and share.
Now, let's get to the main topic.
Today brings both good and bad news. The good news is that in January 2024, all members are expected to receive a reward through an OP token airdrop initiated by Blocktrend. This airdrop is unique because subscribers on media outlets are able to receive it. However, the bad news is that this OP token airdrop might be less than the previous one. Currently, Blocktrend has only obtained one vote among 146 badgeholders, ranking around 500 out of over 600 projects.
The voting period for badgeholders will conclude on December 7, 2023. Writing this article is like trying a last-ditch effort, hoping for some miracles. On one hand, it reports the current status of Blocktrend's application for RetroPGF. On the other hand, it serves as an example, illustrating the shortcomings of the current RetroPGF mechanism and suggesting possible improvements.
Let me briefly explain to new members why this airdrop is happening.
Bold Experiment
This year, Blocktrend is undertaking a bold experiment. We are actively participating in Web3 public goods funding mechanisms, such as Gitcoin Grants and RetroPGF, aiming to discover sustainable ways for media operation and explore future directions. However, both public goods funding mechanisms face two major challenges: where the money comes from and who should receive it.
Gitcoin Grants' funding comes from individual and corporate donations, and the decision on who should receive the funds is made collectively through "quadratic voting." Therefore, every three months, I invite everyone to verify their passport and participate in small donations to help Blocktrend obtain funds. This money has enabled us to pursue many new initiatives, such as organizing physical events and producing audio-visual content.
The RetroPGF mechanism is different. It rewards past impact rather than future plans. While Blocktrend uses future plans as a call to action in Gitcoin proposals, RetroPGF application explicitly states: "Do not fill in future visions; just be honest about past achievements." In other words, Gitcoin rewards the future, and RetroPGF rewards the past.
The funding scale of RetroPGF is also much larger than Gitcoin. The previous round, RetroPGF2, distributed OP tokens worth approximately 800 million TWD, which was already astonishing. This time, RetroPGF3 will distribute OP tokens valued at a staggering 1.6 billion TWD (30 million tokens) to reward Web3 public goods builders.
OP tokens are real assets. This is an unprecedented large-scale social experiment, but RetroPGF is not a reckless money giveaway. It is part of Optimism's development strategy, aiming to attract more users by rewarding public goods builders, ultimately making Optimism the preferred blockchain for users and builders.
Each round of RetroPGF is funded by the Optimism Foundation and is collectively decided by a group of badgeholders to determine which projects qualify for rewards. RetroPGF's simple ideal is to make the equation "Impact = Profit" for projects a reality.
Blocktrend has been participating since 2023, and in May of this year, it returned the 6,355 OP tokens it received as a reward to all premium members1. Blocktrend's success is not solely individual efforts but also due to the support of its members.
Simultaneously, the airdrop aims to solve the "free-rider problem." Free readers receive one article per week, but Blocktrend incentivizes paid members with airdrop rewards, encouraging people not to be free-riders. If Blocktrend's influence is internationally recognized one day, the airdrop rewards for members could potentially exceed the subscription fees paid, similar to an investment return.
At that point, free-riders may realize that paying is more cost-effective. In the future, if Blocktrend removes the paywall and makes all content public, readers would still be willing to "subscribe" to qualify for future airdrops. This is the bold experiment Blocktrend aims to undertake, creating a win-win-win situation for readers, Blocktrend, and Optimism!
However, it is challenging.
RetroPGF3
RetroPGF3 consists of three phases: proposal, voting, and rewards. It is currently in the final stages of the voting phase, with all OP rewards expected to be distributed in January 2024. Blocktrend will proportionally redistribute the received rewards to paid members. According to the documentation:
All types of contributions to the Optimism ecosystem are eligible for RetroPGF rewards. Whether you are a developer of Ethereum clients or an educator producing Optimism videos, as long as you can generate impact, you qualify! RetroPGF is open to all Optimism artists, creators, writers, builders, and communicators... RetroPGF3 selects 146 badgeholders, through various methods to decide how funds are allocated. Even teams that have received venture capital funding are eligible to apply. badgeholders will adhere to the principle of "impact = profit" in determining the final results.
Participating in RetroPGF3 has no barriers; anyone can submit an application. Just fill out the application form, and you have the chance to share a piece of the 1.6 billion fund pool. Everyone naturally submitted applications, ultimately attracting a total of 1,594 project applications. This surprised the RetroPGF team, as the previous round had only 195 proposals2, making this application volume eight times larger.
The RetroPGF team added a temporary screening mechanism, forming review teams of five members each. If three members of a team deem a project ineligible, the application is rejected. In the end, 1,066 applications were rejected, with a pass rate of only 33%. The rejected applicants were understandably unhappy and filed appeals. After some adjustments, 643 applications proceeded to the voting stage.
RetroPGF3 has a total of 146 badgeholders, and the number of badgeholders will increase over time. After each completion of RetroPGF, existing badgeholders can recommend new members to join. Projects that ranked in the top few in the last round of voting also qualify to recommend new members. The badgeholder is envisioned to expand outward from a small circle, ideally representing a diverse background, including different nationalities and professions, allowing the impact of various projects to be visible.
However, the current voting situation reveals a significant gap between the ideal and reality. The following chart is a RetroPGF3 voting tracker created by netizens. It lists the current vote counts for each project, along with whether the project has received external funding.
Among them, Protocol Guild currently holds the top position with 25 votes from badgeholders. The next top 10 in order are Revoke.cash, L2BEAT, ethers.js, Otterscan, Solidity, Wagmi, DefiLlama, EAS, and Hardhat. They are all outstanding performers in their respective fields. Is there any specific question or concern?
RetroPGF voting principle is "impact = profit." Badgeholders must assess the current impact of a project and then determine how many votes to cast based on the project's current profits. Ideally, the project with the highest RetroPGF votes is not the most impactful but rather one with significant influence and minimal income, a trap easily fallen into by intuition-based voting.
RetroPGF is similar to the "Most Improved Award" in school, aiming not to embellish the top performer but to encourage other students to strive for improvement. It's rare for someone to win the Most Improved Award consecutively, but how did these projects fare in the last round? They ranked 1st, 2nd, 6th, 14th, 16th, 42nd, 46th, 51st, and 72nd, with one project absent. Protocol Guild retained its top position, and L2BEAT remained in the top three.
Some might argue that the gap between their impact and income is too substantial. Even the previous 800 million TWD "Most Improved Award" wasn't enough to bridge the gap, so there's no harm in winning it twice in a row! Let's make a bet—after this 1.6 billion TWD "Most Improved Award," will these projects still be at the top in RetroPGF4?
The rigid ranking reflects the lack of diversity in the badgeholder. With limited time, it's challenging to assess the impact and income disparities of other projects.
A more significant controversy arises from projects that have received venture capital funding. While not violating RetroPGF rules, the responsibility falls back on the badgeholders. Adhering to the voting principle of "impact = profit," badgeholders must consider whether these projects still need funding.
At this point, I can't help but sympathize with the 146 voluntary badgeholders. They need to juggle a mathematical formula in their minds: "impact — income — venture capital = gap." And always remember, the larger the gap, the more votes. It's quite a mind-twisting thing!
Detective ZachXBT this week highlighted projects that received substantial investments and even have tens of millions in reserve funds. He hopes the badgeholders will vote cautiously and not forget the principles. For example, Alchemy disclosed having received 550 million USD in venture capital but still garnered 11 votes. It raises questions about the reasons behind the badgeholders' votes for Alchemy and whether Alchemy intends to repay the venture capital. In my review of projects, I also noticed that several well-established DeFi projects that presumably don't lack funds received favorable votes from badgeholders.
Returning to Blocktrend, if we end up with only one vote, it could either mean our influence is minimal, or our profits are already substantial, and there's nothing to "compensate" for. However, it might also indicate that the entire mechanism, from badgeholder composition, information disclosure to system design, has room for improvement.
Methods for Improvement
Although Blocktrend's performance is not at the top of the list this time, I believe it's just a transitional period. Blocktrend writes in Chinese, serving a Chinese audience, while RetroPGF badgeholders are primarily English native speakers. The expansion speed of the badgeholder has yet to cover the Chinese community, and Blocktrend's influence might be underestimated.
But instead of passively waiting for RetroPGF10, I think there are more proactive ways to improve. RetroPGF has designed various mechanisms to ensure fair resource allocation. Otherwise, distributing the total funds of 1.6 billion among 643 projects, each taking home 2.5 million, would be the end.
The problems RetroPGF encounters is having too many projects, and badgeholders' attention is too scarce. After all, badgeholders are experts of the Web3 world, so finding time to explore new projects is indeed limited.
The best mechanism design should allow badgeholders to make decisions without being overly cautious but rather based on their habits, yielding ideal results. Examples include Quadratic Voting3 and Quadratic Funding4.
If the top few selected are fixed, the mechanism should encourage badgeholders to explore projects that they consider less known. If the same badgeholders votes for the same project every round, their voting weight would be lower than those who study new projects seriously and make different decisions each time. And if a project consistently receives favor from different badgeholders, it might indicate that the project has substantial impact from various perspectives.
Furthermore, I believe badgeholders also want to make different decisions, but unfortunately, there is too little objective data available, and they end up relying on impression scores. It depends on whether the community is willing to assist RetroPGF in creating a more comprehensive voting dashboard and whether on-chain data is sufficiently complete. If, in the future, RetroPGF applications can speak with on-chain data (for example, proving event participation numbers using the quantity of POAPs5 distributed), rather than projects self-reporting, it would be more objective and efficient.
On-chain resumes require time to accumulate, and users must deliberately cultivate them. Before on-chain data is comprehensive, the most crucial aspect is the visibility of the project. For instance, in RetroPGF2, not many people knew what Ethereum Attestation Service6 was doing, and the project received a low number of votes. However, in RetroPGF3, the development team directly included this service in the application process, leading to a significant increase in votes.
I also want to invite everyone to brainstorm on how to make Blocktrend visible to the badgeholder. Even though Blocktrend has translated its content into English, these materials won't present themselves to the badgeholders. This is where I need everyone's collective help to assist Blocktrend in this bold experiment, hoping that one day it will succeed. Let the free-riders discover that paying is more cost-effective, creating a win-win-win situation for readers, Blocktrend, and Optimism!
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