Building with the bear - Three reasons to be bullish about web3 social impact – Part 1
The last couple of months have been tough for those building in web3. Not only have the markets dropped substantially, but more importantly, trust has been lost due to a host of bad actors, fraudulent activity, and scams. This has left many feeling discouraged and wondering if the future they were trying to build with web3 is still achievable.
The good news is that the markets don’t have to be correlated with the progress being made in the web3 social impact space. In fact, one could argue that they aren’t directly correlated, and that there has been a decoupling of web3 impact projects from the market, so to speak. From the changemakers interviewed on the Crypto Altruism podcast, and the research conducted of web3 impact projects, it’s clear that builders aren’t slowing down, and that incredible progress continues to be made despite the market conditions.
This may seem counterintuitive, but the fact of the matter is, web3 builders, especially those looking to use this technology to change the world for the better, recognize that bear markets are for builders, and that current market conditions shouldn’t dictate the incredible social impact potential of web3
In fact, there are many reasons to be as bullish as ever about web3 social impact. So, in this article, which is part one in a series, we share three reasons why the future of web3 social impact is bright, and why the bull case is still intact. This is part one in a series exploring the most compelling social impact use cases of web3.
1. Decentralized Science
Over the past couple of months, the Decentralized Science, or DeSci, movement has gained incredible momentum. Whereas this spring was known as the “ReFi Spring”, I would argue that the summer should be referred to as the DeSci summer. But, before we go any further, what exactly is DeSci?
In short, “the decentralized science (DeSci) movement aims to harness new technologies such as blockchain and ‘Web3’ to address some important research pain points, silos and bottlenecks.” Whereas scientific research has long been viewed as overly bureaucratic and disjointed, the DeSci movement aims to improve this by using blockchain to offer greater transparency and to take on the “profit hungry intermediaries” such as scientific journals, that have dominated the traditional research space. The use cases of DeSci are substantive, and scientific research and development is ripe for disruption, presenting an incredible opportunity for this movement to thrive.
We’ve had the pleasure of interviewing leaders working in the DeSci space and have been consistently amazed with the ambitious work they are doing. We’re seeing accomplished scientists, engineers, and innovators, all coming together to reimagine a better, fairer world of science. If you’re interested in hearing from some of these leaders, check out our DeSci Podcast Starter Pack, where we highlight interviews with four DeSci leaders.
A great example of a DeSci project that has experienced incredible growth recently is VitaDAO, a web3 movement dedicated to “collectively funding, and advancing longevity research in an open and democratic manner.” To date, VitaDAO has provided over $3 million USD in funding to over 200 research projects, and recently launched the Longevity Prize, a $300k+ granting program with support from prominent web3 leaders such as Vitalik Buterin and Justin Sun, as well as contributions from over 6800 Gitcoin donors.
It is still early days for the DeSci movement, but it is clear that the momentum is unstoppable, and no market conditions can slow it down.
2. Quadratic Funding
You have probably seen the term “Quadratic Funding” floated around a lot lately in web3 circles. It is a term that, by its very nature, sounds intimidating, and might bring up memories of High School Algebra, and the beloved Quadratic Education.
But beyond the name, Quadratic Funding is a revolutionary technology that is positively disrupting how communities raise funds for causes, making the process fairer and more democratic. So, what exactly is Quadratic Funding?
Gitcoin claims that “Quadratic Funding is the mathematically optimal way to fund public goods in a democratic community.” Sounds confusing? Well, it’s actually not that complicated, and you certainly don’t need a PhD in math to understand it. This short video by Gitcoin is a great starting point:
In a nutshell, there are three parties in a Quadratic Funding campaign: the everyday citizen, the large donor, and the grantee, which is an individual or cause soliciting funding for their project. The grantee puts forward an idea for something they would like to receive funding for, let’s say, a new DeFi protocol aimed at providing banking services to those in rural and remote communities, and their project gets added in to the pool with all the other proposals.
The everyday citizen can then view all the grant proposals, and decide which ones they want to support by making a small contribution. The beauty of it, is that even the smallest of contributions, let’s say $1, can have a massive impact, and this is where the large donors come in to play.
The large donors contribute funds to a matching pool, which are used to match the funds donated by the individual donors, or the “crowd”. Quadratic Funding elevates the crowd’s favorite projects, by contributing more matching funds to the grants that receive the highest number of contributions, not the highest value of contributions.
For example, let’s say there are 10 donors who donate $1 each to project A, and 2 donors who donate $6 each to project B. Although project B received a higher value of contributions than project A, project B would actually receive far more matching funding, as they were supported by 10 individuals, instead of 2. Quadratic Funding makes use of a special formula to determine exactly how funding is matched, ensuring total transparency and fairness in the process.
This amplifies the impact of smaller donors, making sure that they have a voice in how community funds are distributed, while ensuring the projects with the most widespread support get the funding that they deserve.
Quadratic Funding has been thriving lately, as more community members get involved in Gitcoin Grants, allowing their voices to be heard by supporting projects and causes important to them. Looking for evidence of this? Look no further than the success of Gitcoin’s most recent granting round, where $4.4M in funding was distributed to 1,495 grants, with contributions from nearly 40,000 individual donors.
With the next Gitcoin grants round coming up in January, it will be exciting to see this momentum continue, and for more community members to get involved and rally behind this revolutionary new crowdfunding tool.
3. Crypto Philanthropy
It has undoubtedly been a dark year for humanity. With the Russian invasion of Ukraine, a progressing environmental crisis, and the stripping away of reproductive rights in the United States, among many other painful challenges, many are losing hope for the future.
Throughout all these crises, we have seen the power of web3 philanthropy shine. One example of this can be seen in the web3 community’s response to Russia’s War in Ukraine. In the day’s following Russia’s invasion of Ukraine, the web3 community rallied in support of Ukraine, launching several fundraising initiatives to support humanitarian organizations working on the ground in Ukraine, including Ukraine DAO, as well as special funds from Endaoment and The Giving Block. Also, for the first time ever, we saw a government appeal directly to the international community for donations, with the Ukrainian Government posting their wallet address to accept direct donations.
As a result, humanitarian organizations in Ukraine as well as the Ukrainian Government, have received well over $100 Million dollars in cryptocurrency donations since the beginning of the war.
Another example can be seen in the web3 community’s response to the stripping away of reproductive rights by the US Supreme Court. As a result, we saw many web3 leaders and organizations come together, rally behind reproductive rights, and commit to raising funds in support of non-profit organizations advancing reproductive rights in the US and around the world.
One example is Endaoment’s Protect Reproductive Rights Fund, which, to date, has received over $240,000 in donations in support of the Centre for Reproductive Rights, Fund Texas Choice, SisterSong Women of Color Reproductive Justice Collection, NARAL, Fòs Feminista, Planned Parenthood, and URGE: Unite for Reproductive & Gender Equity.
UnicornDAO, a collector’s DAO for women in the NFT space Co-Founded by members of the famous Russian protest group Pussy Riot, also partnered with Endaoment to raise funds. UnicornDAO created a wallet, LegalAbortion.eth, to encourage and facilitate crypto donations to organizations supporting reproductive rights via Endaoment.
We have also seen a number of NFT projects emerge that aim to raise awareness and funding for organizations supporting reproductive rights. One great example is CowgirlDAO, which launched the “10k FUCK YOU collection” with Proceeds from sales of the NFTs being donated to charities via Endaoment, under the advisement of CowgirlDAO.
Despite the current market conditions, many charitable organizations are doubling down on their cryptocurrency fundraising efforts. With Giving Season just around the corner, it will be exciting to see the web3 community come together, once again, in support of causes all over the world.
Conclusion
Bear markets are for builders. This statement has been thrown around a lot lately, and there is certainly truth to it, as is evidenced by the many disruptive web3 impact projects that continue to make progress in spite of the market conditions. The web3 social impact movement is an unstoppable force, and no market conditions can get in its way. If anything, the current conditions can help galvanize web3 impact builders, with a focus on shifting the narrative away from the bad actors and scams that have dominated the headlines, and onto the amazing potential of web3 to change the world for the better. To those leading the way in this movement, kudos to you, and keep on building!
In the next post in this series, we will focus on three more reasons to be bullish about web3 impact: Regenerative Finance (ReFi), Crypto Universal Basic Income, and Decentralized Autonomous Organizations (DAOs).
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