Re 1. I think the key aspect of impact certificates which is ‘un-mentioned’ here is their continued tradability. At any stage, funders will seek to invest into projects with greater value in the future. This will cause development according to the market values.
For example, someone can buy insect welfare farm prototyping certificates in 2022, because they think that in 2025, they will sell for 10x the value. If in early 2023, people are willing to pay twice that in 2022, in mid-2023 the price is 3x what it was in 2022. Continued investments into the org enable it to reduce the cost, make better use of, and gain more insights into the product. Thus, the org prospers.
So, founders (and any shareholders) should be getting rich off impact certificates, because richness denotes impact.
I suggest that full impact of the project is sold: if people compete in how much impact they have, then they can either advance projects traditionally (direct work or funding) and entitle what the consensus among the project organizers and funders is or buy certificates. If only funding impact is sold, then organizers cannot participate in funding ownership unless they buy shares, which creates an unnecessarily divided atmosphere.
If funding needs are variable (which should apply to the majority of cause areas or scalable projects), then 100% impact should be clearly defined and shares traded while it should be possible to purchase shares in bulk.
If beneficiaries are increasingly more costly to reach, then the price of additional shares increases. This motivates funders to buy early. If some intervention, such as malaria vaccine research, reduces the unit cost of the remainder of the problem, then the vaccine investors should be able to buy bulk of shares, for example until the cost of vaccinating very difficult to reach beneficiaries equates that of moderately difficult to reach beneficiaries currently given bednets (at the current impact share rate).
Some speculators may wait until cost-effectiveness increases, e. g. due to research, if they hypothesize that even the last person vaccinated enjoys malaria prevention at a lower cost than any other one receiving a bednet (current practice) would. This optimizes resource allocation between cost-effectiveness increasing and direct benefit actions.
To spare any Oracular Funders from having to fund projects while enabling purchases of any scope, no pot should exist. Anyone can sell and anyone can buy. For example, suppose that you express interest in 20 projects and get 500 notes of people starting working or thinking of them requesting more to keep going. You fund 5 which you like and think that can get funding elsewhere later which increases the value of your shares while someone else funds other 5 which later get back to you with more promising results asking you for more to increase their impact. This (also a form of ideal state) can be kickstarted by several funders expressing interest in the projects of which certificates they’d like to purchase. Sometimes, people post projects they’d like to see on the EA Forum. So, maybe a tag: ‘Certificates Purchase Interest’ can be a good start.
I think that there has to be an option of using fiat. For example, crypto taxation in the US is a new thing to many people and could discourage participants. Some people, on the other hand, enjoy crypto, or even try to see which of the few products which accept crypto they buy. So, there should be an option to pay with fiat or crypto, both with equally low (no) fees (e. g. no 3% credit card fee).
I am for direct purchases rather than action. Considering the speed at which impact funding progresses, I am not worried that rents would be captured by the fastest, who would immediately be able to resell higher. And even if they were (for example if they bought in a window of opportunity when price plummeted and solved the problem), good for them. Auctioning, which is unfamiliar to many, could prevent people from acting fast and taking the advantage of opportunities to solve great shares of problems.
Funding floors by large funders may influence the market sentiments. For example, if a funder states that they will buy a relatively unfamiliar solution for $5m, then other investors can start buying around $5m*percent. If they set the floor of a second project at $5m when currently funders invest $10m*percent, then market funding can more away from the second project.
By economic theory, this should reduce the price of the second project. In practice, this can happen. For example, if an NGO cuts relatively cost-ineffective aspects. However, for maximally cost-effective projects, the price cannot decrease so less impact in that area will happen.
A volatile funding floor can misallocate but also improve the allocation of investments. Using your example of the medicine factory, if a funder first announces that they value the disease eradication at $1m but after $400k is invested, they change the value to $500k, then if they invested the $400k, no disease is cured because factory is build but no medicines produced. If others invested the $400k, then 80% of the disease is cured by the additional $500k. Another investor can purchase the remaining $100k for a price which is not unreasonably high.
I am for purchases, pitches, or demand by anyone at anytime, while I think that giving ranges of both costs and price values with possible record of adherence to the ranges from both sides can increase efficiency. It may be that some prices do not converge at market value, but at ‘niche’ market value informed by the market participants costs and benefits knowledge (e. g. due to impact complementarity to different fields).
From institutions, academia can be the most readily interested in impact funding, while it can retain the intellectual depth which could be decreased by commercial marketing. Considering the price and minimum wage differential among industrialized and industrializing nations, even a relatively average funder could hire a qualified FTE team for 10% of their salary.
My stance is that founders should be able to sell any percentage at any price. If they seek to pay themselves a reasonable salary and produce results which have been agreed upon, they should be able to retain the ‘action’ impact while the funders the funding impact (this would be a traditional funding case).
I am not sure about the legal issues but just like anyone can buy crypto in many jurisdictions, then people should be able to buy impact certificates? People invest into crypto but it is considered an asset thus does not follow investment law? I have not at all researched this.
Currently, anyone can purchase any good or service, even if its impact is negative. So, impact markets would not make this worse. Law should prevent criminal activity. It is likely that impact certificates would not fund (legal) projects which have clearly negative impact, such as a cage factory farm. The impact certificate would be, for example, to reduce such farming.
The main worry can be that a funder invests into risk-mitigation in a way that alerts malevolent actors of an opportunity, which increases the risk. Biosecurity and AI safety are the areas in EA that come to mind. This is worse for direct funding, where there is no feedback of other funders who would signal disinterest by divestment.
The impact market trying to influence funders should be optimal. In addition, the Future Fund and currently OpenPhil actively ask people for insights about projects. Both have structures which enable gaining value from the insights while preventing manipulation.
The emotions should be positive. If one is spending 40 hours working on a project application with 6% chance of acceptance, they know it. If someone invests $1,000 into a research project if they think that it will be bought for $100,000 later with 3% chance, they made a decision. I agree that people should have the time and money, otherwise it would not be fun. There are other fun impact opportunities paid more certainly.
Re 1. I think the key aspect of impact certificates which is ‘un-mentioned’ here is their continued tradability. At any stage, funders will seek to invest into projects with greater value in the future. This will cause development according to the market values.
For example, someone can buy insect welfare farm prototyping certificates in 2022, because they think that in 2025, they will sell for 10x the value. If in early 2023, people are willing to pay twice that in 2022, in mid-2023 the price is 3x what it was in 2022. Continued investments into the org enable it to reduce the cost, make better use of, and gain more insights into the product. Thus, the org prospers.
So, founders (and any shareholders) should be getting rich off impact certificates, because richness denotes impact.
I suggest that full impact of the project is sold: if people compete in how much impact they have, then they can either advance projects traditionally (direct work or funding) and entitle what the consensus among the project organizers and funders is or buy certificates. If only funding impact is sold, then organizers cannot participate in funding ownership unless they buy shares, which creates an unnecessarily divided atmosphere.
If funding needs are variable (which should apply to the majority of cause areas or scalable projects), then 100% impact should be clearly defined and shares traded while it should be possible to purchase shares in bulk.
If beneficiaries are increasingly more costly to reach, then the price of additional shares increases. This motivates funders to buy early. If some intervention, such as malaria vaccine research, reduces the unit cost of the remainder of the problem, then the vaccine investors should be able to buy bulk of shares, for example until the cost of vaccinating very difficult to reach beneficiaries equates that of moderately difficult to reach beneficiaries currently given bednets (at the current impact share rate).
Some speculators may wait until cost-effectiveness increases, e. g. due to research, if they hypothesize that even the last person vaccinated enjoys malaria prevention at a lower cost than any other one receiving a bednet (current practice) would. This optimizes resource allocation between cost-effectiveness increasing and direct benefit actions.
To spare any Oracular Funders from having to fund projects while enabling purchases of any scope, no pot should exist. Anyone can sell and anyone can buy. For example, suppose that you express interest in 20 projects and get 500 notes of people starting working or thinking of them requesting more to keep going. You fund 5 which you like and think that can get funding elsewhere later which increases the value of your shares while someone else funds other 5 which later get back to you with more promising results asking you for more to increase their impact. This (also a form of ideal state) can be kickstarted by several funders expressing interest in the projects of which certificates they’d like to purchase. Sometimes, people post projects they’d like to see on the EA Forum. So, maybe a tag: ‘Certificates Purchase Interest’ can be a good start.
I think that there has to be an option of using fiat. For example, crypto taxation in the US is a new thing to many people and could discourage participants. Some people, on the other hand, enjoy crypto, or even try to see which of the few products which accept crypto they buy. So, there should be an option to pay with fiat or crypto, both with equally low (no) fees (e. g. no 3% credit card fee).
I am for direct purchases rather than action. Considering the speed at which impact funding progresses, I am not worried that rents would be captured by the fastest, who would immediately be able to resell higher. And even if they were (for example if they bought in a window of opportunity when price plummeted and solved the problem), good for them. Auctioning, which is unfamiliar to many, could prevent people from acting fast and taking the advantage of opportunities to solve great shares of problems.
Funding floors by large funders may influence the market sentiments. For example, if a funder states that they will buy a relatively unfamiliar solution for $5m, then other investors can start buying around $5m*percent. If they set the floor of a second project at $5m when currently funders invest $10m*percent, then market funding can more away from the second project.
By economic theory, this should reduce the price of the second project. In practice, this can happen. For example, if an NGO cuts relatively cost-ineffective aspects. However, for maximally cost-effective projects, the price cannot decrease so less impact in that area will happen.
A volatile funding floor can misallocate but also improve the allocation of investments. Using your example of the medicine factory, if a funder first announces that they value the disease eradication at $1m but after $400k is invested, they change the value to $500k, then if they invested the $400k, no disease is cured because factory is build but no medicines produced. If others invested the $400k, then 80% of the disease is cured by the additional $500k. Another investor can purchase the remaining $100k for a price which is not unreasonably high.
I am for purchases, pitches, or demand by anyone at anytime, while I think that giving ranges of both costs and price values with possible record of adherence to the ranges from both sides can increase efficiency. It may be that some prices do not converge at market value, but at ‘niche’ market value informed by the market participants costs and benefits knowledge (e. g. due to impact complementarity to different fields).
From institutions, academia can be the most readily interested in impact funding, while it can retain the intellectual depth which could be decreased by commercial marketing. Considering the price and minimum wage differential among industrialized and industrializing nations, even a relatively average funder could hire a qualified FTE team for 10% of their salary.
My stance is that founders should be able to sell any percentage at any price. If they seek to pay themselves a reasonable salary and produce results which have been agreed upon, they should be able to retain the ‘action’ impact while the funders the funding impact (this would be a traditional funding case).
I am not sure about the legal issues but just like anyone can buy crypto in many jurisdictions, then people should be able to buy impact certificates? People invest into crypto but it is considered an asset thus does not follow investment law? I have not at all researched this.
Currently, anyone can purchase any good or service, even if its impact is negative. So, impact markets would not make this worse. Law should prevent criminal activity. It is likely that impact certificates would not fund (legal) projects which have clearly negative impact, such as a cage factory farm. The impact certificate would be, for example, to reduce such farming.
The main worry can be that a funder invests into risk-mitigation in a way that alerts malevolent actors of an opportunity, which increases the risk. Biosecurity and AI safety are the areas in EA that come to mind. This is worse for direct funding, where there is no feedback of other funders who would signal disinterest by divestment.
The impact market trying to influence funders should be optimal. In addition, the Future Fund and currently OpenPhil actively ask people for insights about projects. Both have structures which enable gaining value from the insights while preventing manipulation.
The emotions should be positive. If one is spending 40 hours working on a project application with 6% chance of acceptance, they know it. If someone invests $1,000 into a research project if they think that it will be bought for $100,000 later with 3% chance, they made a decision. I agree that people should have the time and money, otherwise it would not be fun. There are other fun impact opportunities paid more certainly.