Hello friends! May the 4th be with you. I don't know about you, but we're feeling good: since we last saw each other we had a solid Speaker Series event to round out April, Wendy's debuted a pretty fire breakfast menu across Canada, and there were barely any Justin Timberlake "It's gonna be May" posts on Instagram this year.. this month has been off to a great start. We hope to keep the good times rolling with a new theme for our Deep Dive section this month: Non-profit, social impact and philanthropy.

Quip of the Week

The Latest

Worth a read: The Ownership Economy

Variant Fund published "The Ownership Economy 2022"- a look at how crypto is enabling ownership by turning users into owners. It's an incredible overview about web3's potential beyond the hype. At the outset, it may seem like a report written for startups and VCs and not for the general public, but its premise has broad applicability and relevance. To summarize: all the (web2) platforms you and I use on a daily basis (eg Instagram, Facebook, Tiktok, Uber, Doordash, Airbnb etc) benefit from our usage, yet we receive none of the upside. Web3's promise of an ownership economy flips that model on its head, allocating more value capture to users and early supporters rather than founders and investors.

From token-gated communities to media paywalls, calendar scheduling and stand up comedy?

Beyond the potential for ownership and upside with tokens, there are also a lot of experiments around leveraging tokens for access, primarily around social experiences: from Coachella to Friends With Benefits (the social club, not the movie or the relationship status..!) We are now starting to see other interesting use cases: media paywalls, calendar scheduling and even voting on jokes (for legal reasons this is not a joke.)

These use cases are still in their infancy but fascinating none the less. This Coindesk article argues that NFT subscriptions are a better alternative to the annoying paywall that comes up every time you're trying to read a NYT article-- effectively you'd be owning a "key" to the content that ports across applications, and would be much cheaper for publications to implement. As for calendars, this Calendly alternative is creating an option to only meet people with the same tokens as you; a way to potentially expose your availability only to people within circles you frequent. We'll be honest, while we're not sold on all the use cases just yet, we find it intriguing as the usage and utility of tokens continue to evolve.

Can't afford real estate in Canada? Probably can't afford it in the Metaverse either

We've talked about Yuga Labs and the Bored Ape Yacht Club before, but this was a big weekend for them as they had a Metaverse land sale. Not unlike the Canadian housing market, the price of real estate was insanely out of reach, with $360M+ of virtual land sold during their drop. Even more shockingly, the sales used about ~$150M worth of ETH of transaction (gas) fees, slowing down other Ethereum-related services in the process. To put it into context, as Fintech Business Weekly writer Jason Mikula put it, "Imagine if on Black Friday Visa/Mastercard increased transaction prices by ~31,000% (and charged you even if your transaction failed.)" In other words, yikes. To their credit, Yuga Labs plans to refund those affected by the high gas fees and shared their plans to migrate their currency ApeCoin to their own blockchain. It's a tall order and this Metaverse sale is not exactly a vote of confidence. Despite that, it's definitely proof people want what they're selling. Either way, we're here for the ride.

Deep dive: Gitcoin - Using markets to create impact

It's hard to kick off a month about non-profit, social impact and philanthropy without talking about Gitcoin. Their mission is to build a community focused on developing digital public goods, creating financial freedom and defining the future of the open web. And while we've seen a few examples of DAOs aiming to raise money for social causes, the way Gitcoin approaches it is interesting and novel and demonstrates a model that could potentially have usage outside of public goods.

First things first - what is a public good? Public goods irl include bridges, roads and clean air; things governments are typically responsible for because 1) these things are too important not to exist and 2) private businesses are unlikely to provide them due to the "free-rider" problem (a type of market failure when those that benefit from the public good do not pay for them, or under pay for them.)

Ok so what?

In the digital world, public goods often take the form of open source projects; projects that struggle with funding, often rely on altruism from volunteers and can be slow to develop as a result. Gitcoin believes that public goods are good and should be fundamentally built and funded differently. They are attempting to change the way digital public goods are approached, all while avoiding the market failures typically seen, and resisting relying on central governing bodies. How they are doing this is by using a novel funding formula called quadratic voting, the "mathematically optimal way to fund public goods in a democratic community." Quadratic voting scales allocation of funds in a democratically efficient way, matching every single donor's contribution with a larger pool based on # of contributors rather than amount funded. Basically projects with more donors get more matching funds, rather than projects with more powerful (but few) donors.

Unlike current systems that rely too heavily on the preferences of the wealthy (one dollar one vote) or are susceptible to when large percentages of the population are apathetic or ignorant (one person one vote), quadratic voting aims to place control in the hands of the community to dictate importance. So far, the approach has worked with Gitcoin raising $58M in funding across ~2500 open source projects. It is, as many things in web3 is, an experiment, but a promising one at that, that could have widespread implication beyond public goods, across non profit, social impact and philanthropy.

Want to dive in more?

Something to read

• Reimagining public goods funding in web3

• WTF is QF

• Crypto can fix public goods

Something to do

• Join our Discord

• Have a world-changing idea? Apply for a Gitcoin grant

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Till next time,