Episode 10: Money programmed for good  Samantha Yap [00:03]: Hi! I’m Samantha Yap. Welcome to The Story of Money by YAP Cast where we talk about where money is heading. Join me and Kevin Owocki on this episode of The Story of Money by YAP Cast. Last episode introduced Kevin Owocki and his vision of money as something more than just a financial thing. We heard how his view of the world has been changed by cryptocurrency, that it’s possible to see the flow of funds between actors in a transaction or series of transactions as having the potential to be something more — where wealth is not the only endgame, where the transaction doesn’t just involve money, flowing in one linear direction. He said it could be more than that, where parties to a transaction can transfer more than money — the example he used was a right to governance, allowing parties to have some say over the network that they’re using. Let’s dig more into this; I was particularly interested in Kevin’s focus on the potential of this for charitable works, where no financial gain is sought. Kevin Owocki, is the CEO of supermodular a web3 venture studio that’s building the foundations of a regenerative financial world. He is also the author of Greenpilled – How Crypto can regenerate the world. He is best known as the founder of Gitcoin, which is at the forefront of sustainable work on open-source software. Kevin also hosts the Green Pill Podcast. Gitcoin, charity and open source Is there a place for charity and doing good in crypto? Kevin Owocki [01:40]: Yes, this will be my easiest answer. Yes. Samantha Yap [01:44]: And how? And I guess this is a segue into Gitcoin and what led you to start Gitcoin? Kevin Owocki [01:52]: Totally. Yes. I'm mostly known for founding Gitcoin which is now a DAO that I'm not CEO of - I've disaffiliated from leadership because decentralization and basically what Gitcoin is, it's a crowdfunding platform. Its mission is to grow and sustain open-source software. Open source is this really interesting market in that. It powers our digital infrastructure. It's the digital equivalent of our roads and bridges. It creates $400 billion dollars per year in economic value to society but because open source has the code open source - available for free - no one wants to pay for it. Basically, there's this coordination failure, public goods funding failure. Public goods just means things that are available for free and can't be excluded. There's this thing where you have something that simultaneously creates a lot of value but it's really hard to capture value if you're building it and so Gitcoin’s mission is to solve that problem for open-source software. Gitcoin has delivered $72 million dollars’ worth of funding to open-source software developers leveraging crypto as a more efficient and powerful way of funding that open source. So, I think the Gitcoin’s a living example of how crypto can be used for good and for pro social causes but there is an ecosystem of hundreds of what we call impact DAOs, projects whose bottom line are what impact can they create on the world. And I think that's going to be an up-and-coming category in the Web3 space in the future. The challenge of finding the right model Samantha Yap [03:13]: Pretty impressive that you've helped build an ecosystem that's raised and distributed $72 million to projects. Yes, that's quite impressive, like how - I guess without getting into the details because I think there's a lot on how the mechanisms work and encourage listeners to learn about how quadratic funding works but just how did you go about creating such a system in a short summary? Kevin Owocki [03:42]: Yes. I mean, I wish I had some sort of like divine inspiration where it's like, I had some fundamental insight and then I just built it and then they came but really, it's just been a lot of trying stuff and failing. Gitcoin was my 6th side project that I was trying to turn into a startup. The previous 5, all failed and then when I started Gitcoin, the mission has always been about open-source software. The Northstar at Gitcoin has always been open source but we iterated through 4 or 5 different mechanisms before we got to the current instantiation which is Gitcoin grants and quadratic funding and even then, once we achieve product market fit with Gitcoin grants, we're like, oh shit, it should be a DAO and not a company and so we had to dismantle the economic and governance and computation levers of Gitcoin and rebuild them from scratch around being a DAO. It's really just been a lot of trying stuff, failing, doubling down on the winners and then learning iteratively over time and having a community that supports you is the most fun thing in the world. When I first started Gitcoin it's just me alone in my basement and it was really lonely but finding other people who really care about this stuff has really just made my spirit come alive because there's nothing better than going to a Gitcoin hackathon and someone coming up to you and saying, hey, Gitcoin changed my life because it allowed me to work on this open-source project instead of go get some job that I hate. It's really the community that continues to push my gumption ahead with working on this. The role of money in public goods Samantha Yap [05:08]: Yes, that's amazing. That you've been also like, while learning, iterating, trying different things like do good along the way as well and on the achievements of Gitcoin and what it's been able to do for good; what role has money? What's your perception on the role money has played in hindering human charity or public goods? Like money as the - back to the concept of value that we've been talking about. Kevin Owocki [05:34]: Yes. I mean, I think that there's - we could do a whole episode just on that question probably. But I think that some of the trends that I see are basically money that's more focused on ‘now me’ as opposed to a Bentoist view of capital and so what would it look like for money to be programmed in such a way that it reflects not just instant gratification but what's good for me in the future? What's good for us? And then what's good for future us? Like a bento box of incentives instead of just now me, you've got now us, and you've got future me and future us. How can we build monetary systems that are good for groups of people instead of just individuals? And overtime, I maybe went a little bit too far into this at the start of our conversation but the 8 forms of capital, how can we have money that regenerates material capital and spiritual capital? How can we build money that is anti-fragile and monetary systems that don't collapse? And people are out their savings in this booming bear-bust cycle. The design space is very vast here. We can now program our values into our money and so it really just depends on what problems do we think there are in money and we can create higher dimensional value systems in the web3 space and that's the most exciting thing about this space is that there's lots of talented people working on solving all the problems that they see and I'm just one of the voices in the room. Samantha Yap [06:53]: I like the way you frame it as the way you can just design money. You're like designing or programming money to serve different purposes and functions and yes, like bringing it back to where you started, the conversation to the 8 forms of capital. I got the page here with me but you spoke about social, material, financial, living, intellectual, experiential, spiritual, cultural. I've actually been very interested in the spiritual one and the cultural one. The spiritual side of capital We don’t probably have time to break down one or two but yes, let's use as an example. So, the spiritual form of capital. Yes. How can crypto help with that? Or what does that look like? Kevin Owocki [07:36]: Basically, there's 8 forms of capital. There's financial capital but there's also cultural capital, spiritual capital, experiential capital, intellectual capital, this podcast might be a form of intellectual capital, living capital, material and social capital. How can we create more resource capacity on those vectors over time is kind of the design space that I've been playing in with regenerative crypto economics. I'll pause there to take a breath but I'm curious if you think that's the target and - because like, it's not really about what economic system I want. It's about articulating our shared goals together and building an economic system where a decentralized ecosystem of agents can come together. This is me planting a flagpole for what I want to see but it's really about the listener and what kind of world they want to see as much as it is me articulating my goals. Samantha Yap [08:23]: Right. Let's go back to the consumption types because for the listeners who don't have the book and don't see the charts but we'll pull it up when they have a chance to but there are 4 charts and you - It talks about extractive, sustainable, resilient and regenerative. That's what I see. This one. There's like 4 - there's 4 graphs, so the extractive graph if we explained, it's like an arrow pointing downwards but resources deplete over time. The Sustainable Graph is the one where the resource availability is not depleted over time but it's steady. Kevin Owocki [08:59]: Yes. I think it depends on what your goals are for the system but sustainable is definitely better than extractive if you're trying to build something that has longevity in it. Samantha Yap [09:08]: OK, and then the Resilient one is - it's a system that's able to recover from shock like COVID, and it's able to recover. That's OK. Right? It's like a straight-line chart with a little dip in the middle but it's like back to steady again. That's fine. Kevin Owocki [09:23]: Yes, I mean, I think that what you don't want is fragility. Basically, a system that hits a shock event and then the resource capacity goes down over time is what you don't want. You actually do want resiliency in your economic system. Samantha Yap [09:35]: Right. So then let's take it to the regenerative chart where it is a graph where the line is like, it's pointed upwards but it's still a bit volatile but it's always moving upwards. Let's unpack that. How can that happen? How can we create that? Kevin Owocki [09:54]: Right. I mean, I think that's the design space that we're kind of in and not to bunt on your question but I think that we're still trying to figure that out with crypto economics and I think that we've seen what doesn't work and the example of fragility that I'll use is Terra Luna, an entire $40 billion stable coin that brought a bunch of retail investors in because it was advertised as stable and went to zero overnight. That's fragility to me. So I think that when it comes to reverse engineering, the reverse of that I think that we want anti-fragility, we want things that can respond to shock events and not go to zero and maybe pause there but I think that there's other kinds of ways that we can think about designing economic systems that are regenerative. So, I mean I - page 51 of the GreenPilled book which you can get a greenpill.party lists out these eight forms of capital and I just have to give a shout out to Gregory Landau, this is his idea. I'm just helping amplify it here but according to the 8 forms of capital, the currency of spiritual capital is prayer, intention, faith, or Karma and basically, what that's building towards when you're trying to accumulate spiritual capital, what you're trying to create is spiritual attainment and this is a higher dimensional type of currency where depending on what your beliefs are, whether you're a Christian, Muslim, Hindu, Jewish, or any other type of spiritual attainment, that will look different to you depending on what you are. But just to give you one tangible example, I know of a project called Interbeing Protocol which is basically working on a social meditation protocol. That is a way of decentralizing power away from head monks in Asanga which is like a Buddhist monastery and basically, having meditation being a decentralized protocol means that you no longer need the master, you no longer have the power structure of Asanga anymore. You've got a decentralized protocol which produces spiritual attainment instead of having to study with a master and have that power asymmetry between them. You definitely asked me a really hard question there with what is spiritual capital and web3? But I think that's an early glimmer of what it could look like. Programmed money = a double-edged sword Samantha Yap [12:02]: No. I mean, you address that pretty articulately. But I guess, maybe back to how crypto can enable that. Are you saying it's like building protocols or building a token that can help people transfer like that capital? Or that value? Kevin Owocki [12:19]: Well, I mean, I think that yes, we went to a very advanced example there and also not all of this stuff is good, right? Being able to program your values into your money is a double-edged sword because if your values are financial scams and pump and dump schemes, you can do that with crypto but if you want to build something that regenerates people's spirits or regenerates the earth, then you can also do that with crypto and I always try to be honest about the space in where it is crypto, how crypto can regenerate the world. I make no case that it's actually happening right now but I hope to write the book in 2025, how crypto is regenerating the world and it's all about stimulating the minds of people who build economic systems to build a lot of this stuff. I just want to make sure that we note the good and the bad that comes along with being able to program our values into our money. Samantha Yap [13:05]: It's interesting because also with people who manage money, I know, say, Christians. I'm a Christian myself so you-- They tithe right, the 10%. I'm wondering is like - yes, I mean, programming the value like if you're getting value, whether it's - and I'm trying to think how we can apply that to the world like different faiths also have their relationship with money and like whether we can program that whether that's good because usually, in traditional world it's - if you get people who get to the stage where they need someone managing the money, they go to an asset manager and they go, alright, they're also being very strategic with where they put their money and their funds whether for investments but also who they give to. Regenerative finance defined I mean, if you also think about philanthropists and people who give, they also want to have some strategy for where they align and value certain things and then put money in in different directions of yes, no, I think opening a can of worms but yes, it's interesting to see it right down into different capitals, and as you said, it's like designing this space. So yes, I mean, taking it to regenerative finance. In a nutshell, could you explain what regenerative finance is now that we're there? Kevin Owocki [14:16]: Yes. I mean, I think that we just want to build financial systems, that get better over time have more resource capacity over and hopefully, you know, the real end goal of this is to create more human thriving, to create more stability for people where they can climb the Maslow's hierarchy of needs, they can house themselves, they can clothe themselves, they can get food and shelter, and then eventually as they climb up to a community of love and belonging and self-actualization is what regenerative economics can do for the individual people which by the way, money should not be an end in itself. It should be a means to enabling attainment of what you want out of your life and so to me, that's what regenerative crypto economics is. It's just building crypto that serves people and does it better over time. Samantha Yap [15:01]: I think you're one of the talks that you did this year. You've done many but I think I was listening to you at in Paris at EthCC this year and you just talked the way you explained it was how like money organizes the world right now. How money can organise the world, through code The economics of the world and money. So then with crypto, how do you see money organizing the world right now? And then the potential you're talking about earlier with regenerative finance? Kevin Owocki [15:23]: There's this concept called a hyper object which is basically something that has a ton of impact on our life but you can't see or smell it or grasp it, right? You don't have any sensory perception of it and hyper objects are really hard to talk about because they're so abstract but they're also important to talk about because they have an effect on our lives and I think of monetary systems as exactly that. They're like hidden beneath all years and years of study and for that reason, I think that it's really hard to answer your question but if I wanted to take a swing at it, I think that one of the things that really excites me about web3 economics is that the idea that money and scarcity can now be designed by anyone who has a computer science degree which is 10s of millions of people across the world and this is like coming from a world in which you had to be an insider, a Federal Reserve banker, in order to design a monetary system. We decentralized access to building economies to the edges and by the way, hopefully, in 10 years, you'll have drag-and-drop coding systems where you don't even have to have a computer science degree to build these things. And there's a bunch more people who can explore the design space and can do it for their own community needs as opposed to the needs of someone who works on Wall Street and also, we're building this repository, this library of open-source money Legos, where we can all try things and we can copy what works from each other. We're traversing the design space much faster in web3 than could be done in the old world and that means that there's going to be bigger successes and unfortunately, it seems so far there's been bigger failures and I think it's incumbent upon us to try to push the ecosystem of capital and talent into more regenerative things that are not going to collapse and cause people to lose their money and I also think that Web3 is inevitable and it's because three people can walk into a hackathon and build something in a weekend that it would take in a bank $20 million and 100 people to do 10 years ago and it's because of these open source money Legos and the amount of talent that is in the space. I think that we're speed running the history of capital and finance right now in web3 and I think web3 is inevitable and we just have to guide it towards a more regenerative future. I don't know if I totally grasp the hyper objects there but that's at least my swing answering your question. Samantha Yap [17:41]: Very well-articulated answer here as well. I mean, I recently had Jacob Goldstein who was the host of Planet Money on this show and the way he puts it is that money is fiction, you can't see it. You also can't really touch it either. Even though we have got paper money but these days no one touches or hold holds notes anymore. Yes, that's another good way to look at it. the future has room for everyone But you were saying that a computer - you're a computer scientist. You could design this world and you can design protocols through open-source software but what about for the average person like me? I mean, I've got soft skills. I'm a communicator, I'm a PR person and then there's other people who have non-technical skills. What about for them? And most of the listeners of this show? Kevin Owocki [18:23]: Yes, well, I mean, I think that there's plenty of room for anyone who's intellectually curious and persistent to enter this space and I believe that there is a movement that is happening here that has a space for people who can do copywriting, for people who can communicate, for people who can do marketing, for people who can do design, for people who just like to learn. And I'm coming to you today as this software engineer who's written a book on this stuff but the way I got to where I am is by just learning something new every day and really trying and leaning into understanding the future and so it's important to be inclusive of as many people as possible in this space and a diverse set of intelligences and geographic background and race and gender and all other vectors of diversity because if we're going to build open-source financial systems, they need to represent humanity as a whole. I definitely think it helps to have a computer science degree because we're building things with computers and that's just the medium we're dealing with but I definitely think there's a place at the table for anyone who's willing to show up and learn persistently day every day. The gradual emergence of ‘regen web3' Samantha Yap [19:32]: And looking ahead, where would you like the ReFi industry or regenerative finance world to be in the next 5 years? Kevin Owocki [19:40]: I mean, I think that right now, it's seen as this like, Oh, this is this cute little sideshow in web3, like the regen movement. But I will say that there's a lot of talent and capital in regen web3 and that is really heartening to me because that wasn't true a year and a half ago and I would like regen web3 to be a category up there with NFTs and with DeFi as a vanguard movement that is happening within web3 and I want that because I think that web3 is the biggest lever that we have for creating human thriving for humanity because we can now program our values into our money. Just the power of that is it's a genie coming out of the lamp kind of moment and I would like to see more capital and talent rotate into the regen web3 so that's what I'm here for and that's what I hope to see. Samantha Yap [20:33]: I like that - program our values into our money. Very exciting and you are a great mind and thinker in this space, Kevin. Really excited to see what you can do with supermodular. Thank you so much for your insights on YAP Cast. Kevin Owocki [20:48]: Yes, thanks for hearing me out and Sam, great to be working with you. Samantha Yap [20:52]: That was Kevin Owocki, who is the CEO of supermodular. To me the key takeaway is this: in this series of podcasts, we’ve seen how money means something different to different people, but it’s nearly always come down to money and finance being about the same thing: a sometimes-necessary evil that greases the wheels of commerce, of survival, of growth, of wealth. But Kevin has asked a different question: he’s asked whether money be programmed to do something different? Whether it can be programmed to make society more resilient, whether it can be programmed to reflect values other than the financial wealth of individuals, companies, governments? There are dangers, of course; we are still early. Web3 has hardly proven itself to be resilient to internal shocks, greed and mismanagement, so why should we expect it to be resilient to external shocks? And of course, not all of us share the same values; for some the value of getting rich whatever the cost to others is a glorious, admirable one. To others, there are more spiritual purpose that dictates their relationship to money. But perhaps amid the rubble of the DeFi upheaval, there are the seeds of a stronger, more noble kind of finance, that focuses on regeneration. I really like to think so. Thanks for tuning in to another episode of YAP Cast. I’m Samantha Yap. For new episodes follow The Story of Money by YAP Cast.