City3 & Gitcoin pilot better community governance with quadratic funding in Oakland

TL;DR: City3 is running Gitcoin’s first local cause round. 7 Oakland non-profits will receive quadratically matched donor contributions. Support them here.

Over the next 50 years, cities across the world have a unique opportunity to create more prosperous, just, and regenerative communities beyond our current extractive systems of financial, social, and government organization. 

New coordination technology will play a critical role in shaping this. However, while on-chain, tokenized governance challenges us to rethink resource allocation at scale, we need to see more use cases outside of the current crypto context.

We’re excited to announce that city3 is partnering with Gitcoin to pilot the first citywide local cause round for Grants Round 14.

Applying crypto powered governance to existing city dynamics allows us to pilot a transition to a more just governance structure for real world communities. Quadratic funding to support local non-profits is our first foray into community governance, and we’re starting with Oakland.

Quadratic Funding meets cities

Quadratic funding (QF) is a powerful mechanism for resolving collective action problems – namely the monopoly that financial capital holds over decision making power. By weighting matching allocations by the number of donors rather than the amount donated, we’re testing new models for direct democracy to take hold in our communities. 

This is an important improvement to existing participatory budgeting models as QF enables a more nuanced expression of public preference over simple winner-take-all majorities. It pushes power to the margins and brings more democracy into public good funding decisions.

This local cause round marks a first of its kind and, we hope, the first of many. Alongside carving new models to fund civil society, we hope to answer these questions:

  • Is supporting an organization that you care about an effective incentive to onboard to web3?
  • What can quadratic funding tell us about the way people value civic organizations?
  • Will small dollar contributors still feel like their voice matters?

We’re certainly not the first to try this. The Colorado Democratic Party has experimented with quadratic voting, as has the government of Taiwan. In Boulder, Colorado, quadratic funding was used to distribute $30K+ to businesses most affected by the pandemic. 

We, are however, the first to apply real-life QF with a fully crypto-native experience — and we expect there to be lots of learning and opportunities for improvement. The reality is that there are still major technical barriers to using crypto for this kind of experiment, including lack of internet connectivity, poor usability and legacies of exclusion. We believe that QF can create more democratically optimal outcomes, but only if we find ways to foster democratically optimal inputs.

Our approach

Our approach has been rooted in building with community, particularly those who were left behind from the last web2 wave.

Drawing from our deep ties in the community, we began organizing in Oakland in Q3 2021. In Q2 2022, we hosted several crypto onboarding sessions with the aim of reaching those who otherwise would not be exposed to this technology. 139 people received pre-funded non-custodial crypto wallets for the first time, 84% were traditionally underrepresented, and signed our OAK Founding statement. 

Q2 2022 onboarding workshop with the Oakland community
Q2 2022 onboarding workshop with the Oakland community

We then hosted in-person kickoff sessions with local non-profits to help explain QF in a more intimate environment. Most people were surprised to hear that crypto could be used in this way, and even more so that they could reach Oakland residents through these new funding avenues. The 7 non-profits participating in this round have had a profound impact on their communities:

  • The Hidden Genius Project mentors more than 1,000 young Black men each year to overcome existing barriers and accelerate their careers in tech.
  • The East Oakland Collective offers homeless services and solutions, economic empowerment and community action for Black residents.
  • Community Kitchens is a free meal program for Oakland’s most vulnerable community members. Every day they bring together over 50 local restaurants and 10 community groups to distribute meals to  the unhoused, at-risk youth, and shut-in or low-income seniors.
  • Homies Empowerment provides spaces where gang-impacted youth can heal and thrive. They run a community school for youth who have been pushed out of traditional schools as well as a community care center and several food access programs.
  • The Bay Area Mural Program brings local artists together with community stakeholders to turn bare, blighted or graffitied walls into artistic landmarks that address communal issues.
  • Agency Oakland works to create, facilitate and sustain spaces for artists and creatives in Oakland. They offer subsidized rates and production support for local arts and culture organizations and individuals who want to use their 10,000 square-foot activation space.
  • Adamika Village provides direct outreach to individuals and families impacted by community violence. They do this through healing circles, funerals, rights of passage ceremonies, missing people search and rescues, and hood patrol. 

See each non-profit’s full profile here.

The Oakland Fund for Public Innovation came on as a matching round partner given their willingness to engage private partners to innovate, test and scale ideas that enhance Oakland.

We also partnered with Endaoment to reduce the friction for non-profits withdrawing crypto donations. Endaoment is a public charity that allows US nonprofit organizations to accept legally compliant, tax-advantaged crypto donations as cash in their bank.

Who we are

At city3, we’re building the tools to make web3 work for our cities. Some of our biggest coordination challenges exist at this level – our cities and too many of the people within them suffer from environmental injustice, economic exclusion, and social stratification. 

We believe the next 50 years will be critical for physical communities to determine a new political and economic path, one rooted in collective stewardship, economic resilience, and human empowerment.

For this to happen, we need better technology that serves our cities. We’re here to build it.

  1. Participate in the Gitcoin round and support Oakland’s local organizations
  2. Follow city3 on Twitter to stay up to date with our work
  3. Follow OAK on Twitter to stay tuned with city3’s first localized project
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