Griff Green is one of the co-founders of Giveth, which aims to build the future of charity using the Ethereum blockchain. It wants to become the gateway for non-profit organizations into web3, giving them the tools to grow their own communities via DAOs and crypto.
The primary source of revenue for any non-profit organization is donations, but relying on individuals giving voluntarily can limit their impact, Griff says. He argues a system that better aligns incentives can allow non-profits to have a much larger role in society, potentially even stepping in where local governments are failing. The big vision is for donors and volunteers to become akin to investors in an organization, and be rewarded for their participation too.
Griff also talks about his own fascinating journey into crypto, and how he went from keeping all his savings in physical gold to digital gold. He goes through the history of Giveth and how it was born directly out of the ashes of the famous DAO hack of 2016, and what the roadmap is for the organizations going forward.
The podcast was led by Camila Russo, and edited by Alp Gasimov and Daniel Flynn. Transcript was edited by Samuel Haig.
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👀 Only paid subscribers have access to the full interview transcript below.
Camila Russo: Welcome everyone, I’m so happy to have Griff Green here at The Defiant podcast. For those of you who don’t know, Griff Green is one of the co-founders of Giveth — which describes itself as a community-focused organization building the future of giving and using blockchain technology.
Griff is also a longtime member of the Ethereum and crypto communities. He has amazing stories about The DAO hack, and we will get into all of that. Welcome Griff, thank you so much for joining me!
Griff Green: Thanks for having me, it’s a pleasure to be here.
CR: To start, can you get everyone up to speed on what Giveth is and its latest developments? Then we’ll get into your own story.
GG: Giveth is a project that rose out of the ashes of The DAO in 2016, and has a long healthy relationship in the Ethereum space where we supported a lot of projects over the years. The goal has always been for Giveth to change the way that we coordinate around nonprofit and public services. There is this weird thing that you have to donate and you have to sacrifice to provide value to society and we want to change that.
We’ve tried various things over the years and actually spun out a project called The Commons Stack that goes full-on and tries to build economies around causes so that people can be rewarded instead of having to sacrifice to do good work.
Giveth is really focused on going the other direction of starting with nonprofits — meeting them where they are, making it easy for them to onboard into the web 3 space, then taking them on a journey [so] they can build their own DAO… and have their own economy that actually rewards the people who are doing good work on the ground and making the world a better place.
This is the dream of Giveth, but it starts where people are, which is donations and onboarding nonprofits to a donation platform that uses crypto. That’s the first step, and then we can take them down the path to eventually where they will be able to be rewarded for their good work. That’s the dream.
CR: Okay, we’ll get into that in more detail later in the conversation. But first um I would love to hear your story and how you got into crypto and how you got interested in this crazy space.
GG: Sure. I’m a crazy anarchist from back in the day. I actually was bankless [from] 2012 to 2014 and just wanted to exit the financial system. I heard about Bitcoin pretty early but didn’t buy any, I think the first time I heard about bitcoin was $5. But I didn’t buy any of course because you had to wire money to Japan and that sounded crazy. I ended up getting into Bitcoin by trading gold and silver because I actually kept all my money in gold and silver instead of in bank accounts. Then I bought $3,000 worth of Bitcoin in April of 2013 right after it crashed.
By late-2013 I was a massage therapist, I was doing Thai massages and my wrists were hurting. Then bitcoin went to $1,000 and I made $24,000, I was like ‘oh man I could live this for way over a year.’ So I stopped doing massage and focused all of my time on and became obsessed with crypto and ended up thinking ‘I’m going to go to Ecuador and be the Andreas Antonopoulos of Ecuador’ [because] they use the US dollar there. There is this tax that anytime they send money out of the country that they have to pay 5% so I was like ‘oh what? a great opportunity for crypto to circumvent the taxes.’ And of course, after doing some community building there for a few months I found out that Ecuador was going to make crypto illegal. I didn’t want to end up in a third-world prison so I left and stopped that.
While I was in Ecuador I also started the first graduate program of digital currencies that ever existed. In fact, I think I have the first formal degree in digital currencies that anyone got in a group of nine people. We got a master’s degree in digital currencies as a chemical engineer.
But then I wrote a white paper about building a sharing economy, as a DAO basically. At that time we’re using the BitShares terminology of a ‘Decentralized Autonomous Company.’ We wrote this paper and I was Googling ‘is there someone doing sharing economy crypto stuff?’ And Slock.it came up so I applied for a job.
They didn’t respond, I begged and pleaded I set out [to] work for free. [After] a few months of applying, send[ing] them emails over and over again, they eventually let me become their community manager, and then we built this really cool project called The DAO as a means to actually build the real core project which was the ‘Universal Sharing Network.’
A forgotten part of this thing was that we were going to build a sharing economy project where anyone could just put stuff in a [physical] locker and send Ethereum to [open] that locker. They could get something out of it, use it, and then bring it back and get their deposit back. We dream[t] of drones being able to open the lockers for you and the drone itself hav[ing] its own Ethereum account [and] that it’ll release the thing out of the locker to you if you pay the drone.
But in the end, we had a fatal flaw with The DAO, even though we will probably always be the most successful project on Ethereum in Ether terms because we raised $150M — which was at the time 14% of all Ether in existence. We had this fatal flaw where there was a bug and someone is able to hack us for about 4% of all Ether in existence, about $50M. Then we were able to coordinate the community to come together to hack the hacker and hard fork the network, and actually take the money out of the hackers’ hands and give it back to everyone.
CR: Thanks! So far your story is just so incredible. You started out as a chemical engineer, then decided to go bankless and put all your money in like precious metals. After that, you were traveling the world and you had your savings in gold and decided to put some of that in Bitcoin. Then going to Ecuador and then back to the United States, becoming a massage therapist then going full-on crypto. Then Slock.It and that leading you to the group coordinating to save The DAO fund. It’s an amazing Ethereum story!
So what happened next? Basically all of you listening probably know The DAO hack resulted in the split of Ethereum and Ethereum Classic. Did Slock.It just fizzle out after that?
GG: From the Ethereum perspective, yes, but Slock.It kept going. In fact, they’re still alive today.
Only six months ago did Cristoph Jentzsch actually retire and give Slock.It up. They built some really cool stuff but nothing really public for the Ethereum community. They have this “Incubed” system, but it was never something really prominent. You have to have a token to have any kind of awareness in the space it feels like.
Life after The DAO
CR: So what did you do after The DAO hack?
GG: During The DAO hack I met some really incredible developers, Jordi Baylina and a few others. We rescued The DAO funds on mainnet and then rescued them on Ethereum Classic — we were the white-hat group.
After that we could see the writing on the wall, DAOs started to get a name and we wanted to make sure that DAOs didn’t have a bad name. We feel like The DAO almost did have a negative impact on the movement of DAOs, so we started to say ‘Look DAOs have the potential to change the way we coordinate around some of the most important issues of our time. Let’s go straight at it. Let’s try to get nonprofits to be DAOs and show what you can do when you use an economy to actually solve problems as opposed to donations and taxes.
CR: Did Giveth emerge directly after The DAO? I thought it was more recent but was it 2016?
GG: 2016. So we made the Minime token in 2016 which came out of the lessons of The DAO and is still used by every Aragon DAO that exists. Status used it for their token and a lot of other major projects use it, even Compound took some of the ideas for it and all of the Compound-style DAOs are using the same strategy that Minime and Giveth came up with in 2016.
Then we actually built our first application where every time you donate you get a token. And then it was like what do you do with the token? We don’t know yet, but you do something, right? But then in 2017 ICOs went wild and tokens sort of had a bad name — we had brought in a bunch of nonprofit people to help us understand their perspective and honestly, they kind of took us in the wrong direction.
They’re like ‘no, we don’t want tokens, that’s too commercial and ICOs are bad.’ So we got rid of the tokens out of our offering, and we’ve been running a project called Giveth Trace since 2018.
We actually launched it… during the CryptoKitties times, but gas was so bad that it would have cost $100 to create a campaign. So we charged nonprofits $100 to create this thing and it was like ‘oh we got to be able to do it cheaper than that.’ And now now gas is even crazier, it’s ridiculous now.
So we ended up creating a scaling solution. We threw this conference called Scaling Now and we actually created one of the first bridges off of Ethereum to another chain. The POA Network
did it first, then we basically did it second but we bridged to Rinkeby.
We built a donation platform that you would donate [to] on mainnet, but then we bridge the tokens to Rinkeby and we do a bunch of stuff for the nonprofits on Rinkeby. Then when the nonprofit would want to claim its donation, it actually bridged from Rinkeby over to mainnet where all the actual Ethereum tokens were stored and got the tokens so we could do all sorts of fun smart contract transactions for free and then trace donations to where they were going and what they’re being used for. Then I only have to pay gas when people donate and when people withdraw, so it was a really cool project. But honestly, it didn’t get much traction. I found out that traceable donations sounded like something people want, but actually it’s not.
It’s not something that grabs people and brings them into it. So we simplified the product [to] more of a Gitcoin approach where you just donate straight to an address. [There are] no smart contracts on the donation side, and also launched it on xDai.
So now we have Giveth on mainnet and xDai and you can just donate straight to nonprofits, and very recently we launched a “GIVbacks” program — it’s kind of like tax-deductible donations except without borders, without taxes, without governments. So unlike Gitcoin, where when you donate on Gitcoin you’re controlling a matching fund where the project gets the money. On Giveth, when you donate you get the money. You get paid to donate and this is important for us because we actually want to create a donation platform governed by donors.
The donors control the platform, they control the direction of the system. To do that, whenever someone donates they get a bunch of GIVE tokens back. They get GIVE tokens liquid right away, and then they also get a stream, almost like a Universal Basic Income for 5 years.
CR: Very cool. What’s the name of this latest iteration of Giveth?
GG: We just call it Giveth.io and that’s the website. It’s easier to remember because we want people to go to the website. And then the program where we give tokens back, it’s called GIVbacks.
CR: I want to get into this evolution of donations. But first, before we get too far away from your own story I would ask you this question that I’m trying to bring into all my episodes: what makes you defiant?
GG: Defiant? Well, I just don’t believe that we need governments to support us.
I don’t think that [government is] a problem, I think government can provide a lot of value. I have another perspective than what I had when I got into crypto, but I really just refuse to believe that we cannot solve coordination failures around shared resources better than governments. I refuse to believe it.
Nonprofits are one way, but they rely on donations and sacrifice in every direction. Governments are another way, they also kind of have bad incentive structures and a very top-down approach that ends up being inefficient and in many ways corrupt. I think that we can do it the same way the free market does it. But instead of using business models, we use economic models. No one believes me, basically, I seem like the crazy person, … but I just and I know we can do it.
CR: I also lean Libertarian so I’m sympathetic to your view, but what do you mean by ‘we don’t need government’? Basic government functions like defense and protection — do you think that should be coordinated by individuals as well?
GG: Public goods like national defense or public safety is usually how I like to frame it. This is a concept of where things are non-excludable and non-rivalrous.
So if I have safety in public, it doesn’t impede on anybody else’s privileges. And if there is safety for me, there is safety for everyone right? So that means that we can’t have a business model, there are no customers.
Don’t get me wrong, I actually think that governments, nonprofits, and the web3-focused economies are all great. Anyone who is providing a public good is fantastic, they’re creating an abundance for society. So I’m not saying we should overthrow governments, I’m saying that we should build systems that can do it better.
Defending a large perimeter of a country, that’s going to take a long time to outcompete a government. But maybe we could just start with building roads, or doing other things that are a lot easier to coordinate around a smaller locality and have smaller scope… So I don’t think that we go straight [to] ‘we don’t need governments, let’s take them away because we have this solution.’
It’s more like death by a thousand cuts. Let’s replace monopolistic government services with competing public goods focused [on] economies that actually can evolve to solve the problems that we want through market demand and market forces, but in ways that are competitive and bottom-up as opposed to top-down.
This is how it’s going to be, feedback takes four years for it to [make] any kind of change, and there are all sorts of political barriers and a lot of friction.
If we have this system with competing micro-economies it would be more like startups. Look how much coordination it took to get this cell phone and this laptop into my hand. How many people? How much research happened? It was a lot of work and a lot of coordination, but it happened effortlessly because every step of the way people who were providing value were rewarded. We had profit as a selling point and we don’t have that in the public good space. We don’t have a way to slowly reward people who are doing good work every step of the way. It’s just government saying ‘yes, let’s buy all these bombers… and let’s give a billion dollars to this company to provide this service.
Converting donors into investors
CR: So right now the way that public goods are serviced is basically through taxes right? Governments collect taxes from their people, they use those funds that they collect through taxes.
GG: It’s a different approach to distribute them in the way that the different groups within government see fit.
There is a budget for education, healthcare, defense, and so on and that’s how public goods are serviced, [the] right people kind of get together and delegate those functions to government. And there are also [the] private sector and donations. So public goods is a very broad term.
There are public services that governments provide. But anytime a government is failing to provide a public service, usually a nonprofit actually steps up right? Governments provide clean water, but when they don’t — like in Venezuela — there is an abundance of clean water charities. So when governments fail, you see a lot of nonprofits because they’re actually providing the same value effectively, satisfying collective wants and needs.
If you’re satisfying an individual want or need, you can create a business model because you have a ready-made customer. So we can live in individual luxury — I can get a cell phone, I can get this — but I’m in Costa Rica right now and the roads are crap, there are dirt roads everywhere. I could go buy a computer, but I can’t drive. The car that I have here is getting destroyed all the time, it’s like someone is shooting a BB gun at it constantly because of the roads you know. So it’s a collective want and need that’s unsatisfied.
In Ecuador… when a road has a problem… they’ll call a Minga, a bunch of people will have to take their Saturday to go fix the road because the government is not going to do it. This is the individual sacrifice to satisfy collective wants and needs, and I think that we could solve this through crypto-economics.
CR: Okay, so when the government fails, there are nonprofits that step up. In the same way that the government is funded through taxes, nonprofits are funded through donations but in both cases they require people to just give away their money because they value public goods. In the case of taxes, that’s forced on you, but in the case of nonprofits, that’s voluntary.
GG: A big difference between donations and taxes is that donations still contain market information, when you donate you’re creating a signal. It’s feedback that says ‘I want this.’ But when you’re taxed, not only is the money taken from you, you also lose the feedback. And if what say you have is a vote every four years or something like that, it’s just inefficient.
CR: You don’t have a say on how that money gets used.
GG: It’s not whether it’s right or wrong, it’s just missing an opportunity to give that information, and then aggregate those signals across every individual so that you could say ‘this is what we need because we have this information from everybody.’
CR: So the next step is crypto? How does crypto fit into this framework? How does it make things different?
GG: So crypto is an economic system. Bitcoin is being printed every 10 minutes… and they can use that money to incentivize miners to validate and order transactions on the blockchain and create a single source of truth. Bitcoin, Ethereum, and all these blockchains are actually public goods. Anyone in the world can create an Ethereum address or a Bitcoin address and participate in international finance, pass value to each other, and receive value from anyone in the world.
GG: It is a non-rivalrous risk if I create an address. It doesn’t impede on anyone else’s ability to create an address and it’s non-excludable. No one can stop me from making a cryptographic hash and getting an address. So Bitcoin, Ethereum, these crypto-economies are public goods. Or at least they serve public goods and some of them serve more public goods than others.
Like Primecoin. It’s an old cryptocurrency. To mine a block in Primecoin you have to find a prime number, and Primecoin has found 35 million prime numbers or something ridiculous like that. Before we knew very few prime numbers, less than less than 4000000 for sure. I can’t remember what the number was but Primecoin is finding new prime numbers every day by printing money. This is actually a public good.
It’s not nearly as important as taking care of [the] less fortunate in society, but it is creating a public good through issuance, through an economic system that… is effectively an economic game where you get points making the world a better place.
This is what I’m excited about. I think we can create games where collectives actually get to decide who gets points, so that we can have individual signal processing to actually give feedback on the public good.
That’s being created and individuals get those points. Instead of a video game where the points are non-transferable and don’t have any value, we can use DeFi and we can use other liquidity management systems like bonding curves to an actual liquid token that can be used for satisfying their individual wants and needs. So you can get a job through a DAO [which is] a purpose-driven economy that actually gives points if you take care of homeless people.
Take care of the homeless, earn some HOMELESS tokens. Then you can sell those tokens for Ether and then go pay your rent. [We] are actually creating systems that can do that and create these economic games. We can use the same techniques as business models do, which have evolved competition.
There can be a homeless shelter economy, and [an economy in which] the homed feed the homeless, [and] maybe a larger help the homeless economy. And they can all be competing with each other in the same way restaurants would compete with each other.
Then individuals get to decide ‘well I think the most important thing is that the homeless are fed.’ ‘No, I think the most important thing is that they have a house.’ They need all of it, and… instead of donating to these economies [people] can allocate their capital [in the] same way they allocate their capital to Amazon or Google when they buy stock to invest. So now we could actually turn donors into investors and turn volunteers into shareholders that actually earn revenue and points.
CR: This is a really cool innovation in public goods design. Instead of relying on people to voluntarily give part of their money to different organizations that they like, you are rewarding those contributors — both donors and volunteers — with shares of those organizations?
GG: Yeah, I mean that’s the end goal. The end goal is that we take a nonprofit to the point where they can have their own DAO. For now, we just reward donors, so Giveth’s starting point is if you donate to a project, you get a bunch of GIVE tokens… streamed to you over time. It’s the first time in the history of donations that there is an upside, you could actually make money by donating and I think it’s a huge leap forward.
But then it’s going to take a lot of time and research on how to build these. It’s really easy to make Primecoin because it’s [something] you can prove, there are tricks that you can use to prove that you made a prime number. But how do you prove that you’re helping the homeless,
and how do you turn that into a thing? It’s actually more of a culture kind of issue. It’s a community-building issue [rather] than a technical issue, so I lose a lot of people in crypto, honestly because I think the cultural build of communities is where we really need to move towards.
How do you build a community? How do you create cultural norms… and also design the rewards mechanisms so that people are happy to live within this thing and it doesn’t become some sort of dystopian economic prison where you’re trapped in some game that you don’t want to play?
There are a lot of ways this can work or not work. Even look at Bitcoin — it created an economic game and they set up the rules so that the higher the bitcoin price goes the more electricity people are willing to purchase to mine Bitcoins. It’s not the best token engineering… and they did a great job. I’m not saying that it’s really that much of an issue but it could have been designed a little bit better so that it doesn’t burn so much electricity when the price goes up.
CR: This is kind of off-topic but just like curious you think Proof-of-Stake solves that?
GG: Yeah, I think proof-of-anything can solve that. I also think you could design a Proof-of-Work that doesn’t scale linearly with the price. Maybe as the price goes up, the difficulty goes up at a different rate and it doesn’t make it so hard to mine Bitcoins. You could design it a little bit different, but unfortunately, a… challenge with decentralized culture is that it’s really hard to change if you don’t have a leader. With Bitcoin, I think they took the approach of ‘hey, who’s going to decide this is right? How about we just not change anything ever because Satoshi doesn’t exist?’ And that means that we can’t change this in bitcoin, we can’t change the difficulty algorithm to make it less energy-intensive.
CR: So the goal here is to design a decentralized network where the outcomes are just more positive to the wants of everyone involved?
GG: Exactly. I would say instead of it being like ‘this is the one economy that solves all of our problems, building systems that are reproducible, that can be repeatedly built for different causes — even small causes…
You could even have two groups that are trying to build roads in this town competing to provide that value, and then maybe one succeeds more than the other this, one still stays in this town, but this one actually grows into the state and the people who invested in this early have upside because this economy is growing… And if the value that’s being created is received well by a community, then it spreads to a larger community.
Then you can actually make money by providing value that normally would only be provided by governments and nonprofits.
CR: Ok, so going back to Giveth specifically, it started out from the ashes of The DAO to make a new DAO that enabled donations. Initially, it did have a token that went back to donors, but then when you started working together with nonprofits and because it was the post-ICO era, you took the tokens away. Then that didn’t work, and you reintroduced tokens?
GG: So we made the Minime token in 2016, but we launched the GIVE token on Christmas just a month ago and it’s just our token. We haven’t introduced tokens for every project yet.
Giveth has splintered off into many groups. I Really like this idea of scaling horizontally instead of just ‘everything is Giveth’.. We spin-off The Commons Stack, we spin-off DAppNode, we spin-off BrightID. We spin-off these other groups that have their own org and their own micro-economies…
Giveth [has] a really nice roadmap where after a while, while we’re doing GIVbacks and going… we have The Commons Stack doing applied research. So the Common stack launched our first micro-economy around a public good — that’s very strategic.
The public good we want to create is Token Engineering. We want to advance Token Engineering and it’s the first micro-economy out of The Commons Stack to launch… It’s already funded a few token engineering academ[ies] and tooling. It raised about a million dollars for public goods in the space at launch and hopefully it’ll grow.
With the Token Engineering Commons, it has this augmented bonding curve which was published on the Giveth medium, and then we spun out the Commons Stack to take it to fruition. Anytime someone mints tokens through the bonding curve, then a portion of the funds actually go to public goods. And anytime someone burns a token to sell the token, then it actually sends some of the funds to public goods. So it’s this like supply discovery mechanism that is funding public goods whenever it’s interacted with, so it allows market volatility to fund charitable forces which is great because it’s a win-win.
It’s not really a donation. It’s the only way to create the token. You only have one option, by minting this token through the bond curve you are funding public goods. And then we build reward systems using the [Token Engineering Commons] and Commons Stack as a playground to understand how we build cultural, purpose-driven economies that can actually provide public goods.
This is building a framework for building microeconomies — Token Engineering Commons is our first micro-economy, and now The Commons Stack will try to build more using the same framework. We were very embedded in the Token Engineering Commons because we’re also a token engineering community group. Now we’ve learned a lot of lessons and we’ll continue being part of the Token Engineering Commons because we care about the token engineering world.
We are going to start spinning up other commons as well. But they’re not going to be focused on token engineering. They’ll be focused on crypto Universal Basic Income or other web3-focused things because it’s still a complicated system.
CR: So that’s the research arm of Giveth that will go and investigate how to better design all the complicated things that are making crypto work?
GG: I would say BlockScience does the research… then The Commons Stack does applied research. So we apply the research and try it out and learn the practical issues with idealistic assumptions, then actually figure out how we do this in a legal way. And Giveth is watching all of this and making it palatable for nonprofits.
Keeping nonprofits in crypto
CR: What do you mean by making a pilot palatable to nonprofits? What exactly does it do?
GG: Education… Think about the audience of the Token Engineering Commons, a bunch of people that I don’t have to show how to use Metamask. I don’t have to explain how bonding curves work. [By contrast], the groups that just want to end global warming or you know take care of puppies, they’re like ‘Meta-what? I don’t think so.’
With Giveth… you can log in with Google and start raising funds using a Torus wallet, [for] which you use a Google login. Then when they raise some money, we tell them ‘hey, Google can just steal your money, maybe you should get Metamask?’ Then they have an incentive to learn, so we’re trying to build this stepping-stone path for them to hop from one step to another.
The end goal is they have the same thing that Token Engineering Commons has, but they’ll have it through a different system where a lot of it is rewriting some of the system’s assumptions. In the for-profit space, win-win is everything. [In] the nonprofit space, you’re like ‘the world wins and we lose and donors lose,’ and that foundational framework is something that’s going to take time to rewrite in the nonprofit culture.
For each nonprofit that comes through our platform, we try to create these systems where… you’re looking for win-wins and we also want to make sure that they can actually start rewarding their people for doing good work.
These systems aren’t built in most nonprofits. It’s like we just figure out who will do it for non-financial rewards, which is great and there is nothing wrong with that. Let me just say I’m a big fan of nonprofits
But to integrate the systemic change we need to advance as a society and not just f***ing burn ourselves into the ground… It’s hard, it’s a different system.
CR: I agree. I think you’re right that nonprofits and public goods become more sustainable if people who are donating and contributing and volunteering are rewarded for it. It makes a lot of sense.
So Giveth onboards nonprofits into this system, and you do it through ways that are familiar to them and like Google and log-ins. Then do they get a regular bank account? How do they access their funds?
GG: We’re integrating with groups like The Giving Block. Every Giving Block project is on our platform. There is another group called Change and they’re there, they… do processing for crypto into nonprofit bank accounts and we have this last mile solution solved for many, especially 501(c)(three) [organizations] in the United States… But for other nonprofits, it’s a lot harder so that doesn’t help us honestly.
We want them to get stuck in crypto. We’re not just trying to extract value out of the crypto community, we’re trying to bring nonprofits into the crypto community. So giving them a last-mile solution doesn’t help us achieve that goal so much.
What’s cool about Giveth is the solution… if you have international donors. You can’t give them a tax deduction because they’re paying taxes somewhere else other than your jurisdiction. What if you’re just a really cool guy in Venezuela making water filters and you take pictures of how you’re providing this value to society and you post it… on Twitter.
You show ‘look I’m doing this work I’m fixing people’s water filters for free and I’m providing a valuable service to my community.’ Well, wouldn’t it be great if anyone could donate crypto and get the same rewards that they get from donating to a nonprofit in their own jurisdiction through a tax deduction? That’s what we’re creating.
We’re creating a system basically replacing the 501(c)(3) service that the US government provides with a web3 solution. We’re replacing a government service with an economy.
The government service is a tax deduction so that subsidy would now come through this bonding curve — that means tokens.
So there are two things going on. There is the Giveth platform economy… and then there is the individual microeconomies we want to create for projects. So micro-economies need bonding curves for liquidity… and Giveth is a relatively large economy and so we don’t need a bonding curve to start — we can do it through liquidity mining. So there is awesome liquidity mining rewards out there for Giveth tokenholders to provide liquidity.
But if you’re a small nonprofit with a market cap of under $500,000 the liquidity mining isn’t going to cut it. You have small liquidity so you need a bonding curve to solve your liquidity issues.
With just the small time that I have, maybe I could run through how we’ll build the micro-economies on Giveth? So first, projects come in, they log in with Google, and Giveth looks just like Kickstarter or Indiegogo, GoFundMe, or any other thing that they’ve used. They create a project and then they raise some money. We’re only going to help projects that succeed on the platform moving forward, this is a curation process.
So when they start to succeed [and] they start to raise money, we try to give them educational resources. Say ‘hey did you know Google can steal your money? Get Metamask. Ok, you got Metamask, you’re still raising funds. Awesome. Did you know [that] every time [your donors] donate, they’re getting GIVE tokens?’
We want to create a curation system where GIVE tokenholders can stake their GIVE tokens and earn rewards for locking it, but they also earn governance power for locking it and they can use their power. They can use the voting rights to choose their favorite projects on the platform and then curate the projects that are good on the platform. The ones that have a lot of GIVE stakers behind them will end up getting featured on the platform, the donors to those projects will get more GIVE tokens back.
And we’re going to create a matching system where the voting power matching is determined based [on] that. So in [addition] to quadratic matching, which we also want to incorporate eventually when Gitcoin figures it out for us…, we’re also trying to use GIVE token-governance over curating projects on the platform. And what’s really cool with that is now all of their donors get GIVE tokens
So they can go to their donors and they can give the donors an opportunity, they can say ‘hey, let’s find a win-win — you stake your give tokens, you earn a yield.’
It’s super cool. The donors get educated about DeFi, but nonprofits get educated about DeFi and they can start offering win-wins to their donors. Now the projects that get a lot of GIVE tokens stake behind them.
We’re gonna say ‘hey, how but we build a reputation system for your community? Let’s start rewarding people with a reputation token. So your volunteers start getting a reputation token, the donors, the volunteers get a reputation token, and the paid employees get a reputation token. And you start distributing out [tokens to] who is actually providing labor and expertise. Once they have this reward system in place with non-transferable non-monetary tokens, if they raise enough GIVE tokens locked behind them, we can actually initialize a bonding curve with the GIVE tokens..
So now we can create a micro-economy that’s backed by GIVE token collateral. And what’s really cool with bonding curves is they’re under collateralized, so with $100,000 worth of GIVE tokens, we could actually make a project token.
But say it’s grassroots economics, [a] really cool project in Kenya that actually works with bonding curves with people on the ground — one of my favorite projects in crypto. Let’s say that they have their GIVE tokens locked in what we call a bonding curve that is in Giveth their curve creates grass econ tokens.
So with $100,000 worth of GIVE tokens that can collateralize $400,000 worth of grass econ tokens. The stakers, the people who lock their GIVE tokens in this bonding curve, [if] they locked $100,000 they can get $200,000 back — they all win. They made money on paper, bonding curves work just like an IPO.
The ‘dark magic’ of market cap
CR: Wait, how did they get that money back?
GG: If you have Amazon for instance, [which] raised $50M in their IPO selling 10% of their stock, then with that $50M they actually created $500M. Jeff Bezos is now one of the richest men in the world because he got half of that in his back pocket for nothing. You didn’t sell it and he didn’t do anything — they raised $50M by selling their shares and then they created half a billion dollars.
I mean curves use something similar but it’s actually all transparent. There is $100,000 here and it’s collateralizing $400,000 worth of tokens, so that means a reserve ratio of 25%.
So [if] someone sells $100, the market cap will go down $400. If someone buys $100, the market cap will go up to $400. So you have this on-paper “market cap illusion.” Market caps are really manipulative to people’s minds. I think it’s some financial dark magic that I have to even create this word — there is no word for the fact that a market cap means nothing.
This financial dark magic that I call the market cap illusion still aligns incentives, it still gets people thinking. It shows that while you’re investing, there is a risk [of] losing money, but you put in $100,000 you get $200,000 worth of value on paper, and the people who are part of their reputation system.
Let’s say they get $100,000 airdropped to them like tokens, and then the project gets $100,000 that it can collectively govern with their DAO. Now, all of those tokens are locked. No one can sell any tokens right away.
Let’s say for six months no one can sell any, and then maybe for three years they’re slowly unlocked. But now there is a bonding curve… people can invest in this nonprofit, but if they believe in grassroots economics now they can use GIVE tokens to buy tokens in this charity and receive upside if they succeed at their mission.
And what’s really cool is that [when] people donate… to grassroots economics, 100% of the donation still goes to grassroots economics. Maybe they start building a liquidity pool on the side,… or maybe they just continue to use it to do their good work. But when people donate they get GIVbacks on our platform.
Those GIVE tokens don’t just go to the person that donated. They actually go into the bonding curve, and anytime you buy the bond tokens in a bonding curve the price goes up, so now the GIVbacks go into the bonding curve [and] raise the price of the token for everyone. And the donor actually gets project tokens now. The donor is an investor in that project — if the project’s token economy grows, they succeed along with everyone else because all the volunteers, all the people contributing labor and expertise and capital are being rewarded through this token economy.
And that’s what it takes. We have to reward the people who are contributing expertise, labor, and capital. We have to reward all of them and create a win-win system so that these nonprofits can actually advance without relying on sacrifice. They can advance and compete with government services, which is a hard thing to compete with.
CR: Wow, I think it’s such an innovative system. Where are you in that process? These micro-economies with their own bonding curves on tokens, they’re not live yet, right? Are you in the process of just curating these projects and having people stake GIVE tokens on the ones they like?
GG: There is a lot of applied research. So the first funding curve is live, it’s not through Giveth, it’s the Token Engineering Commons. Token engineering is doing the applied research and we launched the first bonding curve. But it’s not a curve with GIVE tokens backing it. It’s actually using xDai and DAI, so it’s just backed by the decentralized US dollar that MakerDAO creates.
So we have that system going and it’s super cool and we’re learning a lot. We’re also building a whole reward system that’s backed by gratitude, so you can dish praise to people. We collect all the praise… and then every two weeks it gets quantified by the community… to track GitHub contributions and discourse. That qualitative contribution is something that nonprofits have a lot of trouble rewarding, so we built this whole reward system research program that’s in partnership with The Commons Stack, Token Engineering Commons, Giveth, and another group called General Magic. And there are a lot of people involved in Ocean, Near, there is a whole reward system research group that’s going on with the Token Engineering Commons academy — lots of work is being done on the research side.
Right now with Giveth, we just have GIVbacks and we’re building the specification for the curation system… We have a deadline of getting that out when our farming rewards end, which is about five months from now — in June or July… That’s our deadline to get curation out so that we can move into that system. It’s also our deadline to get more liquidity held by our own protocol.
We’re going to move to implement the reward system into communities that are succeeding through a project, and then we’ll implement curves — is the end goal. And along that way we’re going to implement matching programs and causes, and we have a lot of other cool things that can gamify the nonprofit space and improve it with web3 tooling in ways that philanthropy has never seen before. This is why we say we’re building the future of giving, and the future of giving is actually regenerative… We need to build positive-sum games right now, philanthropy giving is a negative-sum game. Everyone is giving and they end up losing, we need to make it so that the people who are giving are actually receiving more than they gave, and that’s effectively investing. Sometimes you lose, sometimes you win, but in the end, there is a positive sum-game that’s possible there.
Right now, you donate to a nonprofit, you always lose and this is why Giveth can’t fail because we’re competing with donations — we can’t lose because everyone’s already losing, the bar is on the floor.
So if we create economies where people are still losing money, it’s better than donations.
CR: Amazing! What’s the timeline? You said the curation implementation should be out in five months, but when do you predict the entire project will be live?
GG: I wish I could say. There is too much research that still needs to be done, and a lot of it honestly is kind of waiting on the universe — I put some of these things on the universe’s to-do list.
Making crypto easy for your mom to use? I’m not going to solve that problem. There is amazing teams like MyCrypto, Metamask, Rainbow Wallet. There is so much innovation in the wallet space that needs to happen to get to the point where people who work in nonprofits who are allergic to technology can actually use this like they use Facebook. All these people are on Facebook, if we can make crypto as easy to use as Facebook, then I can launch curves and scale it.
CR: I honestly hope it’s sooner than that because I don’t know when that’s gonna happen.
GG: I mean we can launch curves, we just won’t be able to scale it. I think for open source projects and people who are a little more tech-savvy, it’ll be fine, but the people who want to help the homeless in the streets of Denver, they’re tough. I say that because I’m working with this guy who’s really awesome who does that work in Denver. He’s savvy but trying to get the people he works with to adopt this kind of tech and to solve their problems. We have a long road ahead.
CR: To wrap up and for people who want to start doing maybe an Mdp version of this, do you think the current DAO structure can support something like this? I feel like the kind of tooling that DAOs are using now may be conducive to doing a small-scale experiment in this way. I feel like there is a lot of rewarding mechanisms going on right now with DAO contributors. Do you think that can be a bridge towards the full-fledged solution?
GG: That’s exactly what we’re trying to do with The Commons Stack… It’s gonna take a long time before our audience, which is nonprofits on the ground today doing good work,… to use this tooling. [However,] young people that have a lot more technical savvy.
Honestly, I really believe in nonprofits’ ability to solve major problems because they know the problem — they have the wisdom of how [to] help the homeless in Denver. You talk to the people that are helping the homeless and have been for 20 years — those are the people that know the solution but they don’t know web3 yet.
So we can start up some nonprofit DAOs that will do cool things, but they’re going to solve the problems. We need to get to the people that are on the ground that know the right solutions, and I think we can do lots of experiments. The Commons Stack is going to do awesome experiments, I’m so excited for a crypto Universal Basic Income (UBI) commons.
We could build a micro-economy around supporting crypto UBI projects. For instance, they will all be cool with using bonding curves and we can build lots of projects like that. Then we can also start to scale out into smaller groups of tech-savvy people that want to even just take care of a river outside the town. They could build a micro-economy… and maybe have some experience with the water. I don’t know the science of studying the waters and the rivers, they could apply that technology there and maybe even start up a successful commons.
But for it to scale, for it to actually start competing with government services and for it to actually start competing with non nonprofits even, I think it’s going to take time.
CR: Okay, so we’ll have to be patient, but experiment in the meantime.
GG: Exactly, and if you want to experiment, The Commons Stack is going to launch. Check out the Token Engineering Commons, if you like what you see, The Commons Stack hopes to launch three to five more Commons over the next year-and-a-half — starting one at a time so we can scale our team a little bit and our resources.
So yeah, we’re looking to start more, and… definitely if you know any nonprofits that you would like to donate to and get GIVE tokens in return, bring them to Giveth. You could just send them crypto, or you could send them crypto and get GIVE tokens back. Bring them to Giveth, help us throw nonprofits into our onboarding circle, and then we can start getting them to be web3 knowledgeable slowly over time.
CR: Awesome! Well, Griff, this has been amazing, thanks so much for taking the time. It really is amazingly innovative and revolutionizing giving and donations and public goods. I’ll be looking forward to seeing how this evolves. Thanks again, it’s been a real pleasure!
GG: Thanks so much, it was really fun!