Thanks for putting the Exotic Tofu Project on my screen! I also like all the others.
We (me and my cofounder) run yet another “impact certificates” project. We started out with straightforward impact certificates, but the legal hurdles for us and for the certificate issuers turned out too high and possibly (for us) insurmountable, at least in the US.
We instead turned to the system that works for carbon credits. These are not so much traded on the level of the certificate or impact claim but instead there are validators that confirm that the impact has happened according to certain standards and then pay out the impact credits (or carbon credits) associated with that standard.
That system seems more promising to us as it has all the advantages of impact certificate markets but also the advantage that one party (e.g., us) can do the legal battle in the US once for this impact credit (and can even rely on the precedent of carbon credits), and thereby pave the ground for all the other market participants that come after and don’t have to worry about the legalities anymore. There are already a number non-EA organizations that are working toward a similar vision.
Even outside such restrictive jurisdictions as the US, this system has the advantage that it allows for deeper liquidity on the impact credit markets (compared to the auctions for individual impact certificates). But the US is an important market for EA and AI safety, so we couldn’t just ignore it even if it hadn’t been for this added benefit.
We’ve started bootstrapping this system with GiveWiki in January of last year. But over the course of the year we’ve found it very hard to find anyone who wanted to use the system as a donor/grantmaker. Most of the grantmakers we were in touch with had lost their funding in Nov. 2022; others wanted to wait until the system is mature; and many smaller donors had no trouble finding great funding gaps without our help.
We will keep the platform running, but we’ll probably have wait for the next phase of funding overhang when there are more grantmakers and they actually have trouble finding their funding gaps.
What a market does, idealizing egregiously, is that people with special knowledge or insight invest into things early: Thus less informed people (some of whom have more capital) can watch the valuations, and invest into projects with high and increasing valuations or some other valuation-based marker of quality. A process of price discovery.
AngelList, for example, facilitates that. They have a no-action letter from the SEC (and the startups on AngelList have at least a registration D I imagine), so they didn’t have to register as a broker-dealer to be allowed to match startups to investors. I think they have some funds that are led by seasoned investors, and then the newbie investors can follow the seasoned ones by investing into their funds. Or some mechanism of that sort.
We’re probably not getting a no-action letter, and we don’t have the money yet to start the legal process to get our impact credits registered with the CFTC. So instead we recognized that in the above example investors are treating valuations basically like scores. So we’re just using scores for now. (Some rich people say money is just for keeping score. We’re not rich, so we use scores directly.)
The big advantage of actual scores (rather than using monetary valuations like scores) is that it’s legally easy. The disadvantage is that we can’t pitch GiveWiki to profit-oriented investors.
So unlike AngelList, we’re not giving profit-oriented investors the ability to follow more knowledgeable profit-oriented investors, but we’re allowing donors/grantmakers to follow more knowledgeable donors/grantmakers. (One day, with the blessing of the CFTC, we can hopefully lift that limitation.)
We usually frame this as a process of three phases:
Implement the equivalent of price discovery with a score. (The current state of GiveWiki.)
Pay out a play money currency according to the score.
Turn the play money currency into a real impact credit that can be sold for dollars (with the blessing of the CFTC).
Thanks for putting the Exotic Tofu Project on my screen! I also like all the others.
We (me and my cofounder) run yet another “impact certificates” project. We started out with straightforward impact certificates, but the legal hurdles for us and for the certificate issuers turned out too high and possibly (for us) insurmountable, at least in the US.
We instead turned to the system that works for carbon credits. These are not so much traded on the level of the certificate or impact claim but instead there are validators that confirm that the impact has happened according to certain standards and then pay out the impact credits (or carbon credits) associated with that standard.
That system seems more promising to us as it has all the advantages of impact certificate markets but also the advantage that one party (e.g., us) can do the legal battle in the US once for this impact credit (and can even rely on the precedent of carbon credits), and thereby pave the ground for all the other market participants that come after and don’t have to worry about the legalities anymore. There are already a number non-EA organizations that are working toward a similar vision.
Even outside such restrictive jurisdictions as the US, this system has the advantage that it allows for deeper liquidity on the impact credit markets (compared to the auctions for individual impact certificates). But the US is an important market for EA and AI safety, so we couldn’t just ignore it even if it hadn’t been for this added benefit.
We’ve started bootstrapping this system with GiveWiki in January of last year. But over the course of the year we’ve found it very hard to find anyone who wanted to use the system as a donor/grantmaker. Most of the grantmakers we were in touch with had lost their funding in Nov. 2022; others wanted to wait until the system is mature; and many smaller donors had no trouble finding great funding gaps without our help.
We will keep the platform running, but we’ll probably have wait for the next phase of funding overhang when there are more grantmakers and they actually have trouble finding their funding gaps.
(H/t to Dony for linking this thread to me!)
GiveWiki just looks a list of charities to me; what’s the additional thing you are doing?
Frankie made a nice explainer video for that!
What a market does, idealizing egregiously, is that people with special knowledge or insight invest into things early: Thus less informed people (some of whom have more capital) can watch the valuations, and invest into projects with high and increasing valuations or some other valuation-based marker of quality. A process of price discovery.
AngelList, for example, facilitates that. They have a no-action letter from the SEC (and the startups on AngelList have at least a registration D I imagine), so they didn’t have to register as a broker-dealer to be allowed to match startups to investors. I think they have some funds that are led by seasoned investors, and then the newbie investors can follow the seasoned ones by investing into their funds. Or some mechanism of that sort.
We’re probably not getting a no-action letter, and we don’t have the money yet to start the legal process to get our impact credits registered with the CFTC. So instead we recognized that in the above example investors are treating valuations basically like scores. So we’re just using scores for now. (Some rich people say money is just for keeping score. We’re not rich, so we use scores directly.)
The big advantage of actual scores (rather than using monetary valuations like scores) is that it’s legally easy. The disadvantage is that we can’t pitch GiveWiki to profit-oriented investors.
So unlike AngelList, we’re not giving profit-oriented investors the ability to follow more knowledgeable profit-oriented investors, but we’re allowing donors/grantmakers to follow more knowledgeable donors/grantmakers. (One day, with the blessing of the CFTC, we can hopefully lift that limitation.)
We usually frame this as a process of three phases:
Implement the equivalent of price discovery with a score. (The current state of GiveWiki.)
Pay out a play money currency according to the score.
Turn the play money currency into a real impact credit that can be sold for dollars (with the blessing of the CFTC).