2min chapter

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154 - Why Public Goods are Good with Vitalik Buterin

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CHAPTER

Exploring Concave and Convex Decisions, Assurance Contracts, and the Aloe Protocol

This chapter explores the concepts of concave and convex decisions and their relevance to democratic decision making. It discusses assurance contracts and their potential integration with quadratic funding, as well as the Aloe Protocol's goal of combining different capital allocation mechanisms.

00:00
Speaker 2
Well, I think that's a good overview of concave versus convex decisions. If you search Vitellic.ca and you search for concave versus convex, you'll see a visual graph of that and it really helped me me grok the decision or sorry, grok the concepts. Have you heard of Vitellic? There's some mechanisms that help turn democratic decision making into more binary decision making. I don't know if you've ever heard of assurance contracts?
Speaker 1
I have, yeah. Those are great. Yeah.
Speaker 2
Assurance contracts are basically a mechanism where you can say I'm going to run a fundraise and if it gets up to XML, then it'll be fully funded, aka we can go to the moon. But if it doesn't, then everyone gets their money back and it's sort of a way of migrating between a concave and convex decision. So I'd be curious to see those kind of gadgets be used more in
Speaker 1
the public goods funding space. Oh, yeah, it's interesting. I mean, I remember when Alex Dabraak, who they came up with dominant assurance contracts, which are a span on assurance contracts where basically there's like some entrepreneur who agrees to give people even more than 100% of their money back if the project fails. He made a post on marginal over who should not believe responding to quadratic funding basically saying like, hey, actually, quadratic funding could be combined with assurance contracts or dominant assurance contracts. And that might be even better. Yeah.
Speaker 2
One of the projects that's going on in Bitcoin right now is taking us beyond quadratic funding. The new protocol is called Aloe Protocol, which is short for capital allocation protocol. And the plan is to build in quadratic funding. Of course, we've already got, but quadratic voting, bad holder based voting, conviction voting, dominant assurance contracts. And so I'm really excited about having a Swiss Army knife of all of the different capital allocation mechanisms out there and starting to maybe test them together. But it also gets really cool when you start to combine them with each other. I think you said that someone suggested we combine QF in assurance contracts. So maybe that'll be something that we run around with in the future.
Speaker 1
Yeah, absolutely.

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