The coordination mechanism renaissance

Ethereum is leading the renaissance of coordination mechanisms for voluntary public goods funding. From Quadratic Funding to RetroPGF, multiple players have executed very successful experiments that leverage blockchain technology to form capital and allocate resources in more efficient ways, all fuelled by Ethereum’s philosophy and technology.

However, we are still missing an important and millenary mechanism to coordinate people to fund public goods. And it’s one that can be improved 100x by doing it the Ethereum way.

The (not so) new way of funding public goods

Funding public goods through lotteries has existed for multiple centuries - even millennia - all around the world. Legend has it that the Great Wall of China was funded through a lottery, and the Roman Emperor Augustus used them to repair the City of Rome.

Lotteries, though, can be rigged or be straight out scams. It’s important to know that lotteries have been monopolised by the state - allegedly to prevent these issues. However, even state run lotteries had cases of insiders rigging them in their favour. States monopolising lotteries also brought another problem to this interesting coordination mechanism: players cannot choose directly where the proceeds of the lottery will go to i.e. which public good they’re funding, and they’re many times non-transparently distributed.

There is a big opportunity for lotteries to be fixed with the Ethereum values of decentralisation, permissionlessness, verifiability, credible neutrality and mass coordination.

Imagine a lottery where players decide where the money they play with will go. Where players can verify what their chances of winning are in order to decide if it’s worth for them to play. One that communities can leverage for the benefit of the projects they want to support. A permissionless protocol that gives people the option to play in favor of those causes they want to support.

The opportunity of decentralised lotteries

In 2021, the U.S. Lottery alone had revenues of $ 31.2 Billion; and it’s mostly politicians, and not the donors/players, who decide where the money they raised will go.

Think about it… Historically, there hasn’t been a more effective tool to voluntarily raise money for public goods like the lottery, but the way they’re set-up right now make them either manipulable, corruptible or inefficient when allocating resources. We have a unique opportunity to blend lotteries with Ethereum values and make them a great source of fairly and transparently distributed funding for public goods.

This week we announced LottoPGF. We’re on a mission to unite degens and regens to take the power of the lottery back to the people’s hands. Our goal is for LottoPGF to become another tool in the coordination mechanism and public goods funding toolbox.

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