Open-source evangelists recently unveiled a testnet for the OP Stack, aiming to fund public goods. The Public Goods Network developed by the same team that created Gitcoin is expected to redirect most net sequencer fees into public goods instead of paying token holders or developers. The act of not excluding non-payers from its consumption is what constitutes a “public good” in economic terms. Developed using the OP Stack, the Public Goods Network forms part of the proposed “Superchain” including Optimism and Base networks.
The Public Goods Network is geared to be an Optimistic layer-2 rollup of Ethereum. Such networks often use a centralized, profit-driven sequencer to batch transactions and periodically submit them to Ethereum. Most profits, as promised by Gitcoin, are to be reinvested into public goods projects. According to them, this strategy will prevent venture capital firms and others motivated by “rent seeking” from overtaking the value provided by layer-2s.
The funding of these projects draws from sequencer fees but does not directly benefit Gitcoin. Instead, the allocation falls to an impending “alliance” based on a “newly defined governance model”. The network’s long-term goal is to allow the funding of projects directly from sequencer fees, thus removing the middleman, using the EIP-6969 standard.
Contrastingly, skeptics might argue that the power of controlling where fees go is, in essence, no different from being a centralized authority. It will be familiar territory for those who worry about potential misuse of funds, lack of transparency, and biases towards particular types of projects.
Another potential issue is the reliance on a proposed new governance model, yet to be fully defined and understood. The concept sounds promising, but its practical implementation, checks, and balances remain unknown. Thus, crypto purists might view this as a sign of potential centralization, albeit in a more veiled form.
Evidently, the Public Goods Network is an innovative approach to funding projects through a blockchain system. However, it comes with its share of potential pitfalls and concerns about concentration of power and control over funds. As with any new technology, the keys to success will be clarity, fairness, and delivering on the promises made.
Source: Cointelegraph
