This is how Web3 incentivizes Good.

Thanks to crypto/blockchain/Web3, there’s now an established path to do something good for all society and be rewarded for that.

Today we are talking about public goods in Web3 and decentralized funding mechanisms.

First of all, what are public goods?

Public goods are services or commodities that benefit all members of a community and that are non-rivalrous and non-excludable. Non-rivalrous means that the use of the good by one person does not reduce the supply available to others. Non-excludable means that individuals cannot be excluded from using the good, even if they do not pay for it.

Examples of public goods in Web3 include open-source software, infrastructure, and tooling, and resources that make Web3 more accessible for all.

We already benefit from public goods, but we often don’t think about them this way. Bitcoin and Ethereum are two great examples. The use of these blockchains does not prevent others from using them, and they are open to everyone; if you have a computer or a smartphone with access to the Internet you can use them.

Funding the future of good in a decentralized way.

Retroactive Public Goods Funding (RPGF) in Web3 is a decentralized funding mechanism that helps decide what projects to fund after they have already demonstrated value.

This approach drastically addresses the challenge of predicting the future impact of any specific project. Instead, this is a system that rewards initiatives based on their proven usefulness and contribution to the community.

One popular way to implement a RPGF system is to collect funds from sources such as transaction fees on a protocol and allocate them to public goods projects that have shown tangible value.

The potential and effects of this are massive. We now have the power to align greater transparency, and community participation, and focus on rewarding proven impact over any speculative potential.

As an example, a few weeks ago we saw how the Optimism Foundation caused a sensation on social media because multiple creators, developers, and educators received generous grants for their constant contribution to Web3.

These projects and individuals received the grants without conditions, without a roadmap, and without plans to deliver anything in the future. However, if we look closer, we will see that these are renowned projects within the Web3 ecosystem that have been benefiting everyone for quite some time.

Without a doubt, Web3 has demonstrated how it can offer a unique opportunity for people and projects to do good today and reap the rewards tomorrow.