I’ll try to directly answer some of the questions raised.
I’m generally interested in this project. If such a system existed, I’d probably issue certificates for research artifacts (papers, blog posts, software, datasets, etc.) and would advocate for the usage of impact certificates more broadly.
If I were able to reliably buy arbitrary fractions of certificates on an open market, I’d probably do so somewhat often (every several weeks) in order to send signals of value. My personal expenditures would be very small (a few hundreds of dollars per year probably unless something significantly changes), but I’d also try to influence others to get involved similarly.
As for concerns, I’m very uncertain about my position on the diverging concerns raised and argued by RyanCarey and gwern in this thread. As a creator, I can imagine wanting access to the entirety (or at least the majority) of the value of certificates attached to my work. As an observer of a market, I’d like for it to generally be open for speculation and revaluation, etc. Perhaps I’d be in favor of a system that splits the difference somehow, perhaps via smart contracts that enforce a split of resale royalties (most going to the creator, some going to the prior owner)?
Relatedly, I’d love to see a workable / understandable / intuitive system for revaluation of a certificate as various parties end up owning various parts of it, bought at differing prices (if such a thing is possible). I can imagine myself wanting to send a signal that a cert should be valued more highly by buying a small fraction of it for higher than the going rate. I may also just be unfamiliar with pricing schemes for fractional ownership and prices like this.
I’m generally interested in this project. If such a system existed, I’d probably issue certificates for research artifacts (papers, blog posts, software, datasets, etc.) and would advocate for the usage of impact certificates more broadly.
Well, it does. :-) If you haven’t created tokens yet, is it because of the two concerns you listed? I.e. (1) that the creator is not privileged over later buyers of the shares and (2) that the auction mechanism of the exchange always gives you the best price even when you’d like to pay a higher price to signal your support?
The first is something I haven’t thought about enough because I considered that the demand side, especially from profit oriented investors, would be the bottleneck. But especially when I want to attract the attention of well-funded, time-constrained, popular charities, it may be necessary to be able to offer more benefits to the suppliers too. Is there some equivalent in the regular market? Maybe a company offering shares that do pay a dividend and shares that don’t, and issuing the first to founders, early employees, particularly value-aligned partners, etc.?
Otherwise, one mechanism that comes to mind that also has the advantage of being continuous and adjustable is to cap the fully diluted supply at a very high level and put only a small fraction of the tokens up for sale. Most of the value will then be in the hands of the creator but the high fully diluted market cap will make the token relatively unattractive for buyers. The creator can then burn more and more of the tokens in their wallet until an optimum is reached where they still have a lot but the token has also become attractive for buyers. Would that work for you? Or would you prefer for such a thing to be automated, like a bonding curve smart contract except that it burns tokens instead of buying them? Then you wouldn’t have to worry about the particular shape of the curve or about what potential buyers who are still waiting will expect you to do next.
(One could also argue that the creator is necessarily privileged over later buyers by being first to own the tokens, beating all future buyers to it, and having access to most information about the project.)
The diverging concerns you’re referring to are the idea of creating a market as prediction market vs. a normal market for trading tokenized impact? My focus is clearly on the second. I’ve very freshly starting to think about whether there’s some angle of tying in prediction markets, but so far I have no idea how that could be done. Ozzie’s approach here seems very promising to me, but to realize that I’d first need so much buy-in from lots of smart people – sophisticated evaluators like Open Phil and others – that it doesn’t seem to me like it has enough traction at this stage.
I’m also wary of tying in too many (more than one) unusual concepts at the same. “Like the stock market but for impact” already ties in the novel aspect of impact. If that were then also based on Harberger taxes, except prepaid, and stochastically resolved prediction markets, it might get too complicated for users and surely too complicated for me to get all the incentives right…
The second is difficult because being able to buy at something other than the best price runs counter to the basic workings of the (Serum) exchange. Would you be happy to buy for a fixed amount of USDC and offer the surplus of tokens you’ve bought (because of the, in your eyes, discounted price) for sale at the price you deem to be fair?
I imagine other issues are maybe:
That it is still hard to market the tokens? Maybe the EA Forum can pin a post where all top-level comments are token offerings.
The legal questions?
The lack of automated market making? Raydium might be able to help here.
The $100+ for creating a market?
The lack of a mechanism to generate passive income through holding tokens? Raydium can perhaps again help with that.
The way I see Raydium is that they’re still offering their services to a small set of carefully selected projects, so that it’ll probably be hard to convince them to set something up for a token representing one blog post and easier to convince them to set something up for a token representing an established charity. But I’ve been in touch with them only very briefly so far.
Interesting, thanks for the reply! Let me unpack what I’m thinking of when I say “if such a system existed”. Here are some things I’m imagining in such a scenario:
Ideally, there is a market already (not just the potential for one, as that link indicates), or there is a clear plan and a number of EAs that I know the names of who have said that they will participate. I’m willing to be an early adopter, but I’m not in a position where I can vet the fundamentals of the project. For example, I’d like to see people who were involved in the prior attempts to do Certificates of Impact endorsing a plan. Similarly, I’d like to see analysis from a different and identifiable person who is an expert with crypto. I’m just conversant in crypto, and I find most of the writing here to be very somewhat inaccessible due to its length and complexity.
The above is currently my main set of cruxes, but here are a few expanded thoughts on things I’d like to see:
What is the precise plan (not just a discussion of tradeoffs and technical possibilities).
Example: A blog post (or several) detailing exactly how the Certificates of Impact system works, how each type of individual can interact with it in all the expected ways, and what its constraints are. After reading such documentation, someone with close to zero crypto knowledge should be able to participate.
Nice to have: A community-vetted website or portal hosted on a reliable domain that simplifies the interactions in the market so all unneeded and removed complexity and terminology is hidden.
Public scrutiny of the system by identifiable crypto people in the community. At my level of knowledge, the only way that I can feasibly be relatively certain that the system would likely be sane is that I’ve seen it publicly scrutinized by people who are extremely skilled in this sort of thing.
I realize that what I’m asking for is costly. From my perspective, these requirements seem to be pretty fundamental for us actually kickstarting a vibrant impact cert market.
On the flip side, I think there’s a lot of potential for such a system, so I’d see this work as quite plausibly very high impact and thus hopefully a mini-cause around which folks can coordinate. Personally, I can try to rally support once a system exists (see above), but I’m not currently in a position to rally community leaders nor get crypto experts to scrutinize the plan.
Public endorsements from trusted experts in relevant domains, such as crypto, econ, impact certificates, EA-style prioritization. Yes, that’d be great! I’m closest to knowledgeable on the last one, and I’m very concerned about Ofer’s concern above. So I want to come up with a promising solution to that before I move forward at all.
A series of blog posts detailing how different actors can use the system. Yes, very good. I’d also explain the reasoning behind various design decisions in these posts. Something that irks me about a lot of crypto projects is that they have a very specific fine-tuned byzantine architecture that they explain in detail but never mention why they made all these design decisions.
A software that abstracts away all the unnecessary complexity. That is probably something that I’ll need to build gradually as I see signs of adoption. It’d be too easy to waste a year on building a software that no one uses. (I’ve worked for a startup that did that.) So I hope I can do it in a way where the complexity doesn’t itself impede the adoption too much…
On the flip side, I think there’s a lot of potential for such a system, so I’d see this work as quite plausibly very high impact and thus hopefully a mini-cause around which folks can coordinate. Personally, I can try to rally support once a system exists (see above), but I’m not currently in a position to rally community leaders nor get crypto experts to scrutinize the plan.
I’ll try to directly answer some of the questions raised.
I’m generally interested in this project. If such a system existed, I’d probably issue certificates for research artifacts (papers, blog posts, software, datasets, etc.) and would advocate for the usage of impact certificates more broadly.
If I were able to reliably buy arbitrary fractions of certificates on an open market, I’d probably do so somewhat often (every several weeks) in order to send signals of value. My personal expenditures would be very small (a few hundreds of dollars per year probably unless something significantly changes), but I’d also try to influence others to get involved similarly.
As for concerns, I’m very uncertain about my position on the diverging concerns raised and argued by RyanCarey and gwern in this thread. As a creator, I can imagine wanting access to the entirety (or at least the majority) of the value of certificates attached to my work. As an observer of a market, I’d like for it to generally be open for speculation and revaluation, etc. Perhaps I’d be in favor of a system that splits the difference somehow, perhaps via smart contracts that enforce a split of resale royalties (most going to the creator, some going to the prior owner)?
Relatedly, I’d love to see a workable / understandable / intuitive system for revaluation of a certificate as various parties end up owning various parts of it, bought at differing prices (if such a thing is possible). I can imagine myself wanting to send a signal that a cert should be valued more highly by buying a small fraction of it for higher than the going rate. I may also just be unfamiliar with pricing schemes for fractional ownership and prices like this.
Very interesting!
Well, it does. :-) If you haven’t created tokens yet, is it because of the two concerns you listed? I.e. (1) that the creator is not privileged over later buyers of the shares and (2) that the auction mechanism of the exchange always gives you the best price even when you’d like to pay a higher price to signal your support?
The first is something I haven’t thought about enough because I considered that the demand side, especially from profit oriented investors, would be the bottleneck. But especially when I want to attract the attention of well-funded, time-constrained, popular charities, it may be necessary to be able to offer more benefits to the suppliers too. Is there some equivalent in the regular market? Maybe a company offering shares that do pay a dividend and shares that don’t, and issuing the first to founders, early employees, particularly value-aligned partners, etc.?
Otherwise, one mechanism that comes to mind that also has the advantage of being continuous and adjustable is to cap the fully diluted supply at a very high level and put only a small fraction of the tokens up for sale. Most of the value will then be in the hands of the creator but the high fully diluted market cap will make the token relatively unattractive for buyers. The creator can then burn more and more of the tokens in their wallet until an optimum is reached where they still have a lot but the token has also become attractive for buyers. Would that work for you? Or would you prefer for such a thing to be automated, like a bonding curve smart contract except that it burns tokens instead of buying them? Then you wouldn’t have to worry about the particular shape of the curve or about what potential buyers who are still waiting will expect you to do next.
(One could also argue that the creator is necessarily privileged over later buyers by being first to own the tokens, beating all future buyers to it, and having access to most information about the project.)
The diverging concerns you’re referring to are the idea of creating a market as prediction market vs. a normal market for trading tokenized impact? My focus is clearly on the second. I’ve very freshly starting to think about whether there’s some angle of tying in prediction markets, but so far I have no idea how that could be done. Ozzie’s approach here seems very promising to me, but to realize that I’d first need so much buy-in from lots of smart people – sophisticated evaluators like Open Phil and others – that it doesn’t seem to me like it has enough traction at this stage.
I’m also wary of tying in too many (more than one) unusual concepts at the same. “Like the stock market but for impact” already ties in the novel aspect of impact. If that were then also based on Harberger taxes, except prepaid, and stochastically resolved prediction markets, it might get too complicated for users and surely too complicated for me to get all the incentives right…
The second is difficult because being able to buy at something other than the best price runs counter to the basic workings of the (Serum) exchange. Would you be happy to buy for a fixed amount of USDC and offer the surplus of tokens you’ve bought (because of the, in your eyes, discounted price) for sale at the price you deem to be fair?
I imagine other issues are maybe:
That it is still hard to market the tokens? Maybe the EA Forum can pin a post where all top-level comments are token offerings.
The legal questions?
The lack of automated market making? Raydium might be able to help here.
The $100+ for creating a market?
The lack of a mechanism to generate passive income through holding tokens? Raydium can perhaps again help with that.
The way I see Raydium is that they’re still offering their services to a small set of carefully selected projects, so that it’ll probably be hard to convince them to set something up for a token representing one blog post and easier to convince them to set something up for a token representing an established charity. But I’ve been in touch with them only very briefly so far.
Thanks again for your input! :-D
Interesting, thanks for the reply! Let me unpack what I’m thinking of when I say “if such a system existed”. Here are some things I’m imagining in such a scenario:
Ideally, there is a market already (not just the potential for one, as that link indicates), or there is a clear plan and a number of EAs that I know the names of who have said that they will participate. I’m willing to be an early adopter, but I’m not in a position where I can vet the fundamentals of the project. For example, I’d like to see people who were involved in the prior attempts to do Certificates of Impact endorsing a plan. Similarly, I’d like to see analysis from a different and identifiable person who is an expert with crypto. I’m just conversant in crypto, and I find most of the writing here to be very somewhat inaccessible due to its length and complexity.
The above is currently my main set of cruxes, but here are a few expanded thoughts on things I’d like to see:
What is the precise plan (not just a discussion of tradeoffs and technical possibilities).
Example: A blog post (or several) detailing exactly how the Certificates of Impact system works, how each type of individual can interact with it in all the expected ways, and what its constraints are. After reading such documentation, someone with close to zero crypto knowledge should be able to participate.
Nice to have: A community-vetted website or portal hosted on a reliable domain that simplifies the interactions in the market so all unneeded and removed complexity and terminology is hidden.
Public scrutiny of the system by identifiable crypto people in the community. At my level of knowledge, the only way that I can feasibly be relatively certain that the system would likely be sane is that I’ve seen it publicly scrutinized by people who are extremely skilled in this sort of thing.
I realize that what I’m asking for is costly. From my perspective, these requirements seem to be pretty fundamental for us actually kickstarting a vibrant impact cert market.
On the flip side, I think there’s a lot of potential for such a system, so I’d see this work as quite plausibly very high impact and thus hopefully a mini-cause around which folks can coordinate. Personally, I can try to rally support once a system exists (see above), but I’m not currently in a position to rally community leaders nor get crypto experts to scrutinize the plan.
Awesome, thank you!
Public endorsements from trusted experts in relevant domains, such as crypto, econ, impact certificates, EA-style prioritization. Yes, that’d be great! I’m closest to knowledgeable on the last one, and I’m very concerned about Ofer’s concern above. So I want to come up with a promising solution to that before I move forward at all.
A series of blog posts detailing how different actors can use the system. Yes, very good. I’d also explain the reasoning behind various design decisions in these posts. Something that irks me about a lot of crypto projects is that they have a very specific fine-tuned byzantine architecture that they explain in detail but never mention why they made all these design decisions.
A software that abstracts away all the unnecessary complexity. That is probably something that I’ll need to build gradually as I see signs of adoption. It’d be too easy to waste a year on building a software that no one uses. (I’ve worked for a startup that did that.) So I hope I can do it in a way where the complexity doesn’t itself impede the adoption too much…
Thank you! 😊