Filecoin Sustainable Blockchain Summit - LATAM - October 2022, 31 Oct 2022

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From YouTube: How Impact Certificates Will Change Web3 Incentive for Impact - Holke Brammer - Montaña (Main Stage)

Description

Those who emit carbon should pay a price for that carbon - especially high emitters. Carbon pricing policy is one of the most powerful tools for reducing emissions, and Carbon Credits facilitate that?

What if we expanded carbon credits into all different vectors of Impact? Instead of just paying to reduce carbon, Impact Certificates could help increase open source funding, journalism funding, or help fund the removal of people from poverty. In this talk, I will outline the progress that the Gitcoin/Protocol Labs/Raid Guid teams have made in creating a market for Impact Certificates.

- Sustainable Blockchain Summit LATAM 2022 - https://sbs.tech/

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Xyz is reward impact, and um this is just how the target's structured but there's a huge opportunity in public goods. We spent a lot of money, States and philanthropists and Foundations spend a lot of money on public goods and 11 trillion.

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That's basically just like what is spent on public goods in the US, and it's not only about like how we can like increase the number of um like what we spend on public goods, but it's also how we can actually allocate this money most efficiently, and that is something that we can I think improve with the technology that we have and with the concepts that are developing actually in a in a lot of different areas. Right now, including like retrospective funding. That I will talk about today.

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So a problem with a lot of like the impact space is the grand funding is oftentimes really cumbersome. It is wasting a lot of resources in Grant applications and stuff like that. So we definitely need to improve the allocation of time of impact entrepreneurs and also the question is like who are the entrepreneurs? Do we really get the best talent into working on the most impactful uh things? Also, that is something where we can really improve how the system currently works.

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um What is one part of the solution that we are offering here? It is hypersearch which is basically carbon credits on any other impact. Vector carbon credits is not a perfect system and I think all of us know that here, but they have a couple of interesting things that they do. For example, they allow us to go out and build a venture.

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If it's successful, we are rewarded for the impact that it creates, so the more impact it creates, the more carbon credits we produce, the more we actually get rewarded for that, and that is something that we would like also to see in other sectors, such as education, biodiversity um or even like journalism, so think of like a biodiversity hypersearch, um where it basically just says like how much did you actually improve the biodiversity in a certain area, and we can also think about open source funding or journalism, as I mentioned before.

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So all of those things can work in a similar fashion as carbon credits, and we all know that sustainability is more than just reducing the carbon and kind of saving the climate. But it's also about biodiversity and other things. So a hyperset basically looks like this. It is important that we are seeing here two parts, because it's a hyper search and also part of the evaluation, so the evolution is something that we want to keep separate from the actual hypersuit, because the hyperscertain itself, basically just sets, says who did what?

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When and what is it really impacting in what time frame? And then it also adds what are the rights of the person, the organization that owns the um the high pressure? What can they do with it and separate from that is the evaluation, including the self-eviation, where I claim how much this this project, that is described by the hypersearch, really um like what what the impact of that was, and this can be quantitative, qualitative.

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It's basically supposed to be an open evaluation system where evaluators can come up with the right methodology to assess the impact, because there's not like one solution that fits all kind of impacts that we want to um like account here with hypersuits.

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What we have built so far is a pilot of this so and you can try it out on hypersense.xyz.

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um You can produce a hyperset right now on the girly test net and we have implemented the eip3525 here, which is one of the first implementations to my knowledge of this, and what it allows is really to share the the impact that is created, and that is important, because a lot of projects when you want to be impactful is about collaboration with other people, and it's not only like one project that really did all of the um the impact alone.

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So suppose um uh two people work on the project and one does more than the other. Then they can share it and, like one um owns like 70 of this hyper cert and the other 30- and this is like natively then um on uh on chain on the protocol level that you can uh have uh share this or you can um also have like three parts to this hypersuit.

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um What this really enables is a certain Dynamic, and this is just like one possible Dynamic among others, um but, as I said before, like today, we often have just like funders that give a grant to a contributor. They produce a public good and some impact and be basically just like hope that that is really impactful. So we basically we're for Grant. We pay and pray that it then is impactful.

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um What we want to replace this with this with is that we create first an impact claim that is the high pressure and when we do that, then funders. If you need some initial capital in order to produce your high Pursuit, also produce the public good. Then you can reward the funder because he actually contributed to creating this public good with parts of your hyper search that you mint for for your project.

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So then, you produce a public good and the impact basically as before, but importantly, the incentives that you you have here are really changed and they are changed because afterwards we have an evaluation part where the impact is observed by evaluators. They create an impact, evaluation and Signal now to fund us again, and these funders are not prospective funders now they are retrospective funders about the impact that has been observed. So we basically in include now a loop that is information Rich about the impact that has been produced and the contributors they get more rewards.

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The more impact has been produced so there's besides the first kind of brand making funding flow. Another funding flow after the fact that changes the incentives for contributors in the system, um the hyperset can also be exchanged between like prospective funders and retrospective funders and evaluators, can also work as kind of Scouts before the impact has been produced, that they anticipate the impact and can signal um to the funders. Also um before this slower information, Rich feedback loop.

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um Why do we think this is a better system than today? And we are not saying that, like everything should be a retrospective funding, there's also still space for like grant funding and other things, but the interesting properties of retrospective funding is that we, oh that one second I have to go back here. I think the button got stuck right. So that's! Okay! If you see the first two already so the first one is.

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We create high risk high potential public goods because you have an upside the more impact you create the more you benefit from it, and that also means that you can actually take on some of the risks. So you get the upside, but you also can have the risk or the initial funder that funds you takes on the risk to produce a high potential public good.

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That also means that we attract more talent to the space, because the more you actually get rewarded for for your talent, the more attractive it is actually to work in this space um right. uh The third one is that, with grants, oftentimes you're um kind of limited in what you actually can do, um how you can make the right decisions to produce the most impact, and it's difficult to sometimes like pivot, to a more effective solution with retrospective funding, where the impact is evaluated.

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Afterwards, you have more freedom to actually change the course of action that you do in your project.

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um As long as you actually produce impact, you can also produce hypersets and sell them. So that means that you can create recurring income streams as long as you actually produce impact from the perspective of the retrospective funder, it's actually nicer because you, it is much easier to allocate effectively your resources. So, for example, a lot of public goods are not linear in like the work that is created, but it is kind of a step function.

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A non-linear public good because, like half a bridge is not half as good as a completed bridge and the retrospective funder wouldn't pay for half a bridge um and then, as I said earlier, there is kind of a a feedback loop that we actually now observe, which hypersuits really get funded retrospectively. We have um more truthful signals from the evaluators to towards the funders, and that ideally happens all in the public, so that other contributors can learn from that and adopt the best and the most effective ways of producing impact.

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um And with this, if we use hypersuits for and we can use hypersets for Grants and for retrospective funding um and it's um another advantage that different funders can actually work together, because then they can share funding a high pressure, and that is also another opportunity to work together on this.

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So this is how we really think of like hypersearch as a new primitive for funding mechanisms.

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I focus now a lot of on the retrospective evaluation, but a hypersearch can be also awarded to a prospective funder just for a grant which allows this to then be kind of a public Ledger of all the the stuff that we believe to be impactful, and we can then better observe which of those things that we paid here for and which methodology we use, which decision mechanisms did we use to evaluate that and learn about the best ways of funding public goods.

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So, what's next, um so after we have now the like the pilot, we want to establish this further. We will build out the protocol further, but then we want us also to invite everybody else to a build application.

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On top of this um to use hyper search in in other projects, um we want to bring you to the first use cases to really show how retrospective funding can work and it can improve um uh providing public goods, um and that is also an invitation to improve how we allocate a huge chunk of money, and this is actually like bigger than just the 11 trillion here, but we all will benefit from this if, if um we are able to allocate efficiently and produce the impact that we actually need in order to solve the challenges that lie ahead of us and the ones that we actually see like uh in our everyday lives right and also there is a telegram group.

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If you want to chat about it, um there's also the link on hypersets.xiz. um That's the best way to get in in contact with us. Ask us question there um and everybody else who has like a similar question can can see it as well already um and go on hyperset XYZ to uh test it out and give us feedback as well about the pilot and your thoughts and comments and potential use cases. Thank you.