Ethereum’s Regens Tend to Ethereum’s Public Goods

Although the term goes all the way back to pre-modern times, the first rigorous framework for defining public goods was created in the 1950s, first by economist Paul Samuelson and then later Richard Musgrave, who formulated the definitions of “non-rivalry” and “non-excludability” that we so often use today. Goods like clean air, parks, roads or national defense are often used as canonical examples of these types of goods – if one person has access to it, everyone does, and one person’s use can never deplete another’s.

This article is part of CoinDesk’s “BUIDL Week.” Dr. Paul Dylan-Ennis is an assistant professor in the College of Business, University College Dublin. Scott Moore is a co-founder at Gitcoin, an internet-native community focused on building and funding digital public goods.

These definitions were created at a very particular time in a nascently global post-World War II environment. Nationalism was still a prominent feature of contemporary life, and how we understood the notion of “the public” beyond the foundational borders of states wasn’t always clear to a society whose well-being and very survival depended on them. In a post-internet age, the conversation around global public goods and what we mean by the term has grown significantly. It’s become clear that there are much broader degrees of excludability and rivalry when we think about these goods: A road might only be accessible if you’re allowed into a particular city and a gate might be locked around a park during night-time hours.

The internet, although far more omnipresent, is still not fully accessible around the world even as projects like Starlink continue to roll out.

We still pay for all kinds of not-so-public goods because we recognize that aspirationally we care about the openness of the goods in question, but practically we’re focused on the positive externalities they generate. We pay for local subway systems that might overflow from demand and where riders pay a fee, because it helps the city thrive.

By paying, riders form communities and organizations that build economic activity, property holders thrive as value accrues around stations and, in turn, the taxes levied return value back to the city. Despite their restrictions, goods like the subway system add to our collective well-being.

Ethereum, like a subway system, produces meaningful positive externalities, even if it sometimes gets clogged with transactions. Volumes have been written about the way the so-called world computer could increase human agency and coordination, with some even comparing what’s been and remains to be built to a city. Others have noted that programmable money enables us to move value the same way the early internet enabled us to transfer information.

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In one sense then, Ethereum is a public good: It’s built for its own kind of digital city, often by its citizens, with the aim of improving everyone’s well-being. Practically, though, like most things we define this way, and especially with no state in sight, Ethereum functions like a commons, and all common goods need to be carefully maintained.

Governing the Ethereum commons

In 2009, Elinor Ostrom was given a Nobel Prize for her work on governing the commons. She showed that by designing local, self-organized systems we could solve what American ecologist Garrett Hardin called the “tragedy of the commons:” the inevitable depletion of our most basic necessities (e.g. fisheries) without any state or company to oversee their maintenance.

In Ethereum, our maintenance means taking part in writing meaningful open-source software, participating in decentralized governance and preventing the dilution of the foundational cultural principles of the ecosystem that have been battle-tested over multiple cycles.

Managing a commons like Ethereum is a complicated process. Unlike in traditional centralized models of organization, Ethereum’s management is distributed across a number of stakeholders, who have to reach rough consensus over a protocol hosting billions of dollars in value.

Ethereum’s blockocracy, those users most focused on upkeep – various client team developers, researchers, validators, and large-scale foundations like the Ethereum Foundation – help ensure this is the case. But builders on Ethereum – those developing decentralized autonomous organizations (DAO), decentralized finance (DeFi) protocols or non-fungible tokens (NFT) – share this responsibility, too.

Where we fall short is in our failure to recognize the self-organizing ecosystem we live in and take on our respective responsibilities, as in the case of the recent Goerli testnet bridge. We cross over thin lines and sometimes add one more cow to the field than we are supposed to, accelerating its decline.

Ethereum is trapped between two sides: On one side it is seen as home to an astonishing ecosystem of innovative smart contracts designed to produce and sustain global public infrastructure (the regens) and on the other it is known as the home of innovative permissionless DeFi and NFT innovation that sometimes leads to rug pulls (the degens). Degens can play a vital role in our ecosystem, but we need to define how these groups work together. These sides don’t need to be in conflict, but they do need to coordinate.

Perhaps a better framing to align both sides comes down to the difference between what John Doerr called missionaries and mercenaries. Deep down many of those who self-identify as degens do care about the ethos of Ethereum, rather than saying the right Shibboleths like FTX founder Sam Bankman-Fried.

Missionaries are, as we say, “in it for the tech.” But left to their own devices, mercenaries would seek to make Ethereum as a place where we can engineer our own disasters more openly and transparently.

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Radical permissionless is sacrosanct in crypto cultures. It is non-negotiable, like decentralization or censorship resistance. Since nobody can be denied access to a blockchain at a technical level, it always comes down to the question of culture and expectations. Let’s do our best to set those expectations.

By believing in Ethereum as a public good, and developing a strong and robust culture around why these kinds of public infrastructure matter, we can prevent mercenaries and fortify our ecosystem for the next cycle. We can create our own future, between regen and degen, by learning to see the Ethereum ecosystem as a shared commons that needs to be tended to, not overgrazed.

UPDATE (FEB. 28, 2023 – 14:30 UTC): Adds a reference to the Goerli testnet bridge.