To say that there’s a lot of speculation in the crypto ecosystem would be an understatement as speculation is the very life-blood of this entire industry. Though as I explained in my previous piece, speculation doesn’t have to be bad or negative/zero-sum - it can be used for positive sum purposes such as funding public goods.
Obviously there is an insane amount of speculation happening in the NFT space right now with billions of dollars of activity in the month of August alone. So, this got me thinking, what if we could harness this speculation to create positive-sum outcomes? Essentially, we could create something like an “ape tax” where speculators get what they want (something to speculate on), and the proceeds can be used for the greater good (such as lobbying efforts - as my tweet above illustrates - or funding open source projects on Gitcoin). I’ve already written about something similar back in August 2020 here where I described the concept of “Ethereum money games” and how they could harness DeFi speculation for the greater good. I think we can be even more creative with NFTs and in turn direct even more money to public goods.
I think that the advantages NFTs have here are multi-faceted and a little nuanced. For starters, NFTs appeal to a much wider retail audience than something like DeFi so the pool of potential “ape money” is already going to be much larger. Secondly, people are much more inclined to put money into something that’s for a good cause if they directly get something out of it - and what better than an NFT they can either speculate with or just set as their profile picture? And on that note, the social signalling from setting it as a profile picture is also a factor since people can essentially say “hey, I donated to this cause and here’s the on-chain proof”. You may scoff at this idea but I wouldn’t underestimate the power of social signalling - it’s embedded pretty deeply into our ape DNA after all!
Of course, NFTs and DeFi aren’t the only areas of speculation we can tap into for positive-sum game purposes. There is speculation that happens within gambling-related activities though products built around this haven’t really taken off just yet on Ethereum. In saying that, we have the building blocks in place such as prediction markets and some other state-channel based games, but I do think we need these things on a layer 2 or sidechain in order for them to be appealing. Once that happens, we can harness all of this “degenerate gambling” and direct a portion of proceeds to public goods. This would obviously be similar to how gambling is taxed by governments around the world and that tax money then used to fund real-life public goods.
I hope to see more projects like Lobby Lobsters take the approach of donating some or all of their proceeds to public goods or just general positive-sum games. Think about how much money we could raise for things like Ethereum core development if just 1% of the billions of dollars was donated (hint: that’s $10 million for every $1 billion). An ecosystem that tries its best to not fall into extreme tragedy of the commons situations is one that we should all strive to support.
Have a great day everyone,
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