S4. Ep. 8 - Karma GAP w. Mahesh Murthy

Transcript

welcome to the green pill. network podcast if you're just joining us we're building a coordination a network Society of thousands of hackers dreamers and doers using crypto to bring positive sum digital systems to the world this podcast features the people who are doing it and we publish a season of episodes every couple months this season is lean mean Capital allocation machines how will the world's Capital allocation change will we have more scalable precise Capital allocation mechanisms will be able to remove intermediaries and create more Dem ratic systems of capital allocation how can web 3 maximize not just Financial returns but achieve impact equals profit ecosystem growth public goods funding in protopia can we build economic systems that

precisely allocate Capital at scale and what are the coolest experiments doing so these are the themes of green pill season 4 lean mean Capital allocation machines one special thing we are doing this season is allowing you to collect this episode and all episodes in this season go to G pods. medgreen pill to find all the episodes and to start collecting thank you to JT nickel. eth how. Simons sd. eth zerx lucas. eth sky. eth Shan W br. eth MMA onchain and james. eth for being our top collectors of green pill so far if you want to learn more visit our website at Green pill. Network where you can download the green pill book for free or join the Discord and become a member of your

local green pill. Network chapter my guest today is Mahesh Murthy the founder of karma karma is building Dal to measure contributions enhance governance and enhance the way that we do grantee accountability we're talking about Karma Gap today which stands for grantee accountability protocol basically is the way that grantees can showcase their work keep their Community updated and build reputation in web 3 so basically as we're chasing this meme of impact equals profit Gap allows grantees to post their updates and their Milestones of what they've been working on to their community which allows funders people working through the gitcoin ecosystem or optimism or any other ecosystem to have

a more informed decision about what they're funding and where their eth is going in getcoin Grants or optimism retr pgf or any other Capital allocation machine out there so uh just have a deep respect for Mahesh as a builder he's uh one of the fastest shippers I know karma is always adding new things to its application suite and is really innovating in the in the space of grantee accountability um gitcoin is actually building a a integration with karma in which since KAG Gap is a protocol Grant County protocol the updates that are being shipped through KAG Gap are actually available via getcoin Grant stack so we talk a little bit about what it means to be building

based off of protocols in web 3 and how web 3 is just kind of this ultimate Capital allocation machine not only is there millions of dollars available to people who are having impact but blockchain's also all ow for better tracking and coordination around that impact so was a fun episode with Mahesh and I think you're going to enjoy it hey Mahesh how's it going good how are you doing Kevin pretty good I am excited to talk about Karma tell us about karma karma is um it's a suite of tools for um Builders to uh build up reputation um build a reputation and showcase their reputation which has lot

of implications um our goal is to really help them um build reputation yeah I I'm wondering if you could take us deep on some of your products I know that gitcoin uses a couple of these but for those of us unfamiliar with Karma how can I use it karma has been around for we started two years ago I think the um the first product which we built which we still have is the governance product which is um um it's the delegate Dash boards so there are a lot of dows who have um who use the delegation model for governance and one of the challenges is um who are these delegates um how active are they in the Dow so um we wanted to solve that problem and um show the token

holders like these are all the delegates this is their reputation if you have tokens you can go delegate to them um so we uh we built a product called the delegate dashboard uh which gitcoin also still uses um where we go and pull all the delegates on chain index all their voting power index all their activity on Forum Discord um all their onchain and offchain voting history we agregate all of them and then quantify and then uh generate like a reputation score um which is used for a good number of use cases um one for token holders to delegate their um tokens uh it's been used recently for compensation and also

so it yeah I think those and also some Dows use it for like council elections and things so it has like a very nice yeah I know that getcoin has used that I think we called it our Steward report cards uh if I recall Karma power that and you could basically look at the different stewards who are out there stewards is just get coin's name for delegates and reshuffle your delegations based off of who was most active or was Voting in accordance with your values yeah so we have like tons of features like lot a lot of like uh I can talk talk about for like an hour but there's like tons of features around it uh you can slice and dice the data look at it in different ways and uh get a lot of insight and and then um so this season of green pillow is all about Capital

allocation and basically what are the ways in which different Dows are doing Capital allocation on chain um one of the so we just talked about the delegate tracker I know you're also working on something called Gap can you tell us a can you tell us about that yeah Gap uh stands for grantee accountability protocol it's an protocol and an application we built for uh two use cases um one is for grantees to build up their reputation um so granes receive funds and then they have to keep the uh they have to execute on those projects which they got funded for so this is a good way for them to keep the community updated by posting updates on what

they're doing the kind of impact they're having their metrics they can put everything on chain and keep the communities updated on um how they utilizing the funds and how what their progress is that way they can build up their reputation as well and then for the communities it's this One-Stop shop like one one place they can go and look at all the projects their Community has and the DA has funded and see the status of all the uh projects where they are and for all the ones who have completed they can go review those projects uh and say like yeah this was a good thing we funded we should continue to fund things like these or we should say this was a good experiment it didn't really work

out next time we should make sure like we don't fund such projects like it just didn't turn out so you can get like a constant feedback um on how the funding has been like allocated and what's happened so it kind of solves both sides of the problem for Builders and for the communities so Gap stands for grantee accountability protocol protocol and it's basically a way to create visibility and accountability into what grants are doing yeah exactly got it yeah I'm at gap. karmah hq. XYZ if you're listening to the show and um you want to plug that into your browser you're welcome to it's also in the show notes if you want to check it out so basically this is a way to connect the impact that these grants are doing to

the amount of funds that they're receiving so I think it's an interesting way to create accountability for for grantees and grants are obviously a huge part of how Capital allocation is done on chain yeah so we um yeah we we started building this uh probably five months ago I would say and it's all built on um it's all on chain um and we chose um EAS uh ethereum attestation service to build this um it's because most of the work is done by the grantees and they are basically attesting that I did this like I created I I received this grant I created these Milestones they go and host updates on these Milestones so it felt like that was like

a um a good um a Lego block es to build on top of so that's what we using and uh yeah we have deployed this on we started with optimism so a lot of communities are on optimism now we are also multi-chain so we have it on arbitrum and we can easily spin up any2 we can deploy on so um at gap. karmah hq. XYZ and then I can I can click into all the different communities using Gap as you said arbitrum getcoin optimism public nouns and pocket are are using Gap but I'm uh I'm clicking on the gitcoin logo right here and I see a handful of projects that have posted

updates on their grants using Gap so um I what I think is interesting is like you're taking the basic data structure of a grant which exists on chain and then adding an opportunity for people to put updates in Milestones I see on on some of these grants so um can you tell me can you tell me about those updates in Milestones uh let's take for example gitcoin so gitcoin runs these these rounds like there was a gitcoin 19 round there's 20 round 20 coming up um when I go there and let's say I want to allocate some like I want to um fund some of these projects um one of the challenges is uh these projects have

been on bitcoin they're there in every round for the last two three rounds but like how do I know like what have they done uh what have they accomplished so they received some funding in the past uh uh past round so what have they done there's no clear way to see that today um so we're like so what they can do for example Bitcoin grantees is they can go and create their Grant on Gap uh they can post updates there or create Milestones saying if I receive these much funds in 20 I will hit these these Milestones or these is all the things I did in 19 and that is super useful for um uh funders to like go look at it and say like they have made some good progress like I can like let me go

increase my allocation to them this time or like okay I'm not too happy with their progress so let me just like reduce their funding or like as a funer you can like you get all these insights um based on what these granes have accomplished um another cool thing which we did was in the gitcoin grant stack uh if you go to any of the project page there's a new tab called the grant stab where we are actually pulling all this information and displaying it in the grand stack itself um because we built this as a protocol um like we have our front end but there's no reason for anyone to like um people can build their own front end or integrate this EAS so the protocol defines these clear

structures yeah I I think what's cool about these things being on chain is how since there are a protocol that can be available in many different applications and uh I think it's neat that you can not only view these milestones and updates at Karma's Gap site but also in in gcoins applications or any other application in the future which hopefully just lends to the ability for these milestones and updates to affect the choices of people funding the projects uh the more milestones and updates and the more credible the milestones and updates ideally the more funds people will send them in a qf round but I don't know we should do a data a data driven analysis of that to see if it's actually affecting the way

people decide what to fund yeah so um yeah I would I would love to like work with the gitcoin team and look at that data um and also I'm excited for um building um because these milestones and Milestone completions and verifications it's all on chain you could technically technically hook it up to um like the AL like create like an Alo strategy for like a milestone strategy and then like you could actually disperse funds based on Milestone completion too so um that's one of the powers of just having it all on the Chain one of the memes that's been popularized by optimism is this meme of impact equals profit where basically the op I think it it the

optimal Capital allocation mechanism would be one that connects the impact that you're having to the profit that you're receiving so it feels like granty accountability protocol is basically meant to sort of achieve that Meme of the more impact you're having the more milestones and updates you can create the more people will fund you in a qf or retr pgf round I'm just connecting a few Dots here but you know feel free to push back on that or comment on that if I got it if I got it right or wrong yeah no um that that is literally the the goal um right now the protocol works really well for proactive grants um so you receive a grant then you go say like these are all the Milestones I'll like hit based on this funding I've received and you go

like post updates and if you do a good job hopefully like we get like a subsequent Grant um we are adding features to um let people kind of like show their impact and proof for like generally for their project which hopefully can be used when they apply for like retroactive Rands whether it on be on optimism or gitcoin has the um the Retro grants now um so they could essentially like show all of this work they have done um we are also adding like onchain like um attestations like community members can attest to it so all of those data points could potentially help yeah it's really quite

quite neat to see um I hope to see a positive feedback cycle uh evolve where the more attestations are being created and the more legitimate attestations are being created against the project the more funding it gets which creates incentive for that for those communities to attest um you know one of the things that I think has has been a problem with these impact measurement things is that if you don't have enough data then you can't actually spin that flywheel and um yeah create just just making sure that more people can can not only make attestations but have an incentive to uh crat a network effect around the protocol so hope to see that develop over the next couple seasons of Bitcoin grants and retr pgf uh in the future

yeah and one of our success metric is also that like it's one thing to build reputation but then like what do you do with it so um our metric is like so if you build reputation like you should like your projects should succeed like if you if it's a good project so which means success could be like follow on grants or like more like visibility like uh we want to help projects like um accomplish those so that is really that's when our protocol will be successful yeah well what didn't I ask about Gap that you want to tell me I want to talk about like the the longer like so what we're doing it's it's good like it's helps with the capital allocation but there's like we want it

to be like lot more impactful so some of the things which we are building like I could talk about like a couple of things I'm really excited about um so one is today the um one of the challenges is there are a lot of grand programs there are a lot of like platforms like very which are being used by program managers and fund allocators to allocate funds um there is the there is the problem of Discovery so the grant programs want high quality builders and high quality builders like don't want to spend too much time just writing applications or like applying for Grants so one of the things we like we're doing is like how do we kind of like do like matchmaking um so gitcoin runs so many

grants and like this like so many of those like coming up on bitcoin there's like other platforms where like there's rounds running so can we like put all of those in like one format in one way and put it all on chain and then like kind of build like this whole like high quality builders and then can we like match them um it's a hard it's not like trivial I would say but like I think there is there's a way to do it um or at least we want to take a stab at it um yeah yeah I think the new ux paradigms become possible when you have more and more grants on chain and you have more and more money flowing around you can start to do interesting emergent things with with the data there so it'll be

quite interesting to see what is possible uh and it feels like you guys are are are kind of trying to start spin spinning that flywheel um across many different ecosystems yeah so um and then how do we um like I personally have um applied for Grants like we work with number of DS um some of them are very well streamlined some of them are like very painful um so like how do we how do we make this easy on the builders and also it's like it's good for the um um for the Dows like if they attract high quality builders so that is like a personal paino as well so I'm like excited to um tackle that

problem yeah well um I was telling you before we were recording but this season of green pill is all about Capital allocation machines basically the hypothesis is that we'll be able to do more scalable precise Capital allocation without intermediaries than was possible before and we'll be able to do more democratic transparent and and just weird Capital allocation mechanisms in the future I'd love to give you an opportunity to react to that thesis and maybe say a little bit about how Karma and GAP and what's on your road map fits into that yeah so um um I think I was saying like one of our metric is um or the notstar is like how can we help um Builders like get more like like funds

um by like helping them build reputation and showcase that reputation um the thing we also do is like we work with um a lot of like platforms for example like with um gitcoin um what we are doing there is um when Builders apply on Grand stack for example if there is like tons of application it's so difficult for the round operators to like actually see how do you even like say like who should we short list what should we do so one of the things which will affect like the projects which are getting funding like maybe they like they're so overwhelmed they they ignore like some of the quality builders and maybe they don't um

so we're like working with with with gitcoin and like like seeing like how we can feed lot of our the data and the reputation data we have and help them like short list like um projects better um and then we are also looking at like how do you um reduce the gap between like when someone applies and then they receive funding right like there is no reason to like well there's Technologies there like if we can like automate all of these like and can you do like near instant allocation of funds um one example like um one uh I have seen is um nouns is trying with like with their rounds on foraster where people post as

just as tweet they cast and each of those cast itself is an application and everyone just likes within their community and that counts as a w um they're basically like speedr running this whole Capital allocation it's an interesting model I think it has like of like well there are pros and cons to it but it is an interesting model yeah like how do we reduce the number of intermediaries and this one um and make it make the process like seamless and faster and the place where Gap I hope can play a role is just bringing in that reputation angle which is which is what like one of the big things you everyone looks at

before funding like what is this team what have they done in the past so if we could solve that problem it will make it easy to yeah I mean I feel like it's it's really promising to a have so much money available to be put into these onchain Capital allocation mechanism that's one thing that gives me a lot of Hope is that there's lots of dows that want to build their ecosystem and so you're gonna have money going into these things but then I also think that blockchains give just a better medium for moving the funds not just the money but because this is all being done on protocol There's an opportunity for someone like Karma to come together and to to come to the table and to do data analysis and to stitch together the protocols and to

find ways to add value and and it's really going to be I I feel like we can't predict what's going to what's going to come out on the other side of it but just there's a critical mass of momentum in builders that makes me feel like this is going to be really special and potentially momentous into the next cycle yeah um I I I fully agree it's just the beauty of these protocols is like every is a Lego block so like how do you like piece them together and like try try new things um yeah pretty excited for that yeah well if you're maximally successful in five or 10 years what do you think the world looks like success like pushing it to the limits would mean um there is this huge ecosystem of Builders who near

instantly receive funding for things they want to build and which will and our platform could like help them discover high quality like projects they can build on and like fairly quickly receive like funding and then they can show their impact and then that Loop goes like uh there's a this feedback loop and successful projects like continue to thrive and grow and like not successful projects like just die off quickly so that that can try and from the ecosystem point of view they get um exposed to the high quality builders which they can tap into so I it is like this huge Marketplace of like Builders

and like funds coming together yeah and I I mean I guess my my thesis for this is that this cycle is going to be all about evm based ecosystems all these Dows that have tens of millions hundreds of billions of dollars worth of money in their treasury allocating to builders but I guess one thing I'll be curious about over the 10year time frame is whether this goes mainstream at all if someone's doing impactful work in neighborhood say it's planting a tree or some other thing that is impactful but not on chain is not within sort of the niche of Technology if if we're able to go mainstream um do you have any any sort of comments on that I'm optimistic that it will go it will expand beyond the the

niche we all operate in which is like the the crypto protocols and that ecosystem because um I mean you probably already know the grants ecosystem is in General it's like it's massive like it's like few hundred billions or I I don't know how much funds are allocated like through Grant programs outside of crypto as well um if we solve some of those problems like which and I've talked to a few people in The Wider grants ecosystem and lot of the challenges are the same like they don't know how to measure impact they don't know how to find like quality like people to like allocate Capital to so those problems exist even

there so if we could like solve here and I see a a logical next step is to kind of expand and kind of bring them in or like we expand out so I am bullish that it's going to happen and I think one of the problems with measuring impact is that it's just such a multi Vector thing you know uh we've talked about it with Carl and Jonas from the optimism ecosystem how they're going to measure impact on the podcast before and it some things are very quantifiable how much block space did you consume but other things are less quantifiable you educated people what's the way that that spirals out outwards and how do you quantify that impact and there's things that are in between like writing open source code some of the open source code that I've written has been really

impactful and it's been the foundation of of gitcoin success but some of it it doesn't get merged and then you know it's just hard to hard to measure measure the impact even if it does get merged so I'll be curious to see in what ways Karma Gap helps us sort of chip away at those those problems and and create more accountability for for grantees and and hopefully we realize this meme of impact equals profit with the plurality of tools that are being put out there yeah so um I mean I I've spent like way too much time thinking about impact measurement it's everyone knows it's such a hard problem um so when there is a hard hard problem I'm like how do we like kind of break it out into small chunks right uh and solve like the smallest problem we have and

then kind of like go go from there and one of the approaches like I think and we're at least trying is um forget calling it like impact to begin with like it's it's just like it's just too much to think about like impact can we like start with simple like outcomes um so at least in like the the Dows and the grants which we are like we deal with the granty said they'll do this and it'll have it will result in this let's just first at least try to measure that like one is like did they say what they did they will do and did it say what it'll do did it do that or another way is like short-term impact like longterm impact it's so hard um because you need

to constantly keep looking at these projects and data for a long time to even like kind of say like did it have a longterm that and we don't have enough data points but I'm like just do like outcome to start with uh that'll like answers lot of the questions and then like the immediate impact it had which is much much easier like the immediate impact in the last six months did it have anything which you said it did um because one of the challenges with long-term impact is I worked on a project a it totally failed but the project B was really built on the foundations of project a so how do you like is Project a the most impactful or Project B like how do you do it right um

and I also feel like people don't probably have the patience or like everyone says like they want to allocate to for like impactful projects but I think when they say that it's really they're talking about short-term impact because long-term impact takes years uh you would have already made the funding decision by then you would have already moved on crypto space moves so fast especially we just talking crypto so I'm like outcome and short-term impact is if we just start there I think we'll get quite far so uh ramble thoughts that's that's one and then um subjective and objective like there's like the numbers you can like pull um but then the classic good heart law comes

into play um so how do you like how do you solve that problem so you should have uh like some of the subjective things like what does Kevin think of this product like okay that has like higher weightage than some Anon XYZ who has no reputation like saying something about it right so it's a combination of those two could also help um so we are we are tackling the some of the subjective things through Gap as well like who like start with the trusted seed of group of users like what do they think of this projects and then let let whoever is making the decision like kind

of easily tweak and look at the um look at the quantify be able to quantify you mentioned good Hearts law which I think is that's the one where it's a if a if a me becomes a Target it ceases to become a good measure I think that's quite interesting in the context of impact attestations and accountability Pro uh protocols because Milestone updates start to drive the majority of of funds then those measure becomes a Target and then the system evolves towards towards towards a different direction and I'm almost picturing picturing like an infinite evolutionary game where like every quarter if there's a getcoin grants round people post their their measures those measures become Target

because there's a funding round and then it has to evolve forward in the future I don't know if you have any other comments on good heart's law I just thought it was an interesting thing to to pick out from what you said yeah I mean I have seen that happening um there are like really there are like people like who like regularly post updates and like I'm like okay like it's um it's like how valuable is that update which is why like now we are like doing the catchup like the updates need to be verified like who can verify it and like or like anyone can verify it but like whose verification has more weightage so we are even like going down the path of like can we have this independent group of impact evaluators um like like can we

build like a Marketplace of like these impact evaluators who can come in and say like I'm completely independent person I just looked at this like can you Crown crowdfund it right so that's that's one way we're like trying to tackle tackle that um you have to see how scalable it is or like how to scale it but um but I have seen that in play yes it will definitely happen yeah for sure I think you just have to build algorithms that are antifragile to good Hearts law and you know in a world in which blockchains are immutable like the naive take would be that's impossible but you just have to design your protocols to be adaptable and anti- fragile and evolutionary yeah and one other point is uh one good thing is because we are putting all these on

chain uh people like the build ERS also need to be like careful like if they are gaming the system or like if they're like taking advantage of it everyone can see it like if it can be proved it just hits their reputation so it's it's not like you gamed it and it's some sitting in someone's database and it just like lost at some point like it's literally all of these things are on chain if for example on Gap if you're like spamming by just posting tons of updates like you just lose credibility like uh as a as a build so M so it's something something to like watch out for so that also helps I think just putting it all on chain outs yeah well uh we're getting towards the bottom

half of the episode uh actually the last few minutes of the episode and I'm wondering if there's anything that I didn't ask that you want to say I would say if you are a a granty uh Gap is like the is the best place for you to like come share your share your work share your progress and uh um we will uh soon like start helping you um get discover grants and um get more funding yep and uh yeah curious to see how people play with Karma Gap during gg20 which I think we're recording in the middle of March right now this will probably come out in April sometime but gg20 is coming up in April so curious to see how Gap affects who funds what during gg20 yeah yeah

we're excited and we are also doing a lot of Integrations with the uh Grand stack so looking forward to that nice well Mahesh thanks for coming on the podcast yeah thanks for having me Kevin thanks for listening to the green pill. network podcast you just heard from Mahesh Murthy I'm excited about them because I think Karma Gap is a way to introduce more accountability into grant systems and that is going to help us reach impact equals profit this podcast features the people who are building a coordination a network Society of thousands of hackers dreamers and doers focused on using crypto to bring positive sum digital systems to the world people like mahash people like the Karma Gap users and Community if you value our work you can collect this episode at pods. medgreen pill and while you're at it please remember to

subscribe rate and review I will see you next time [Music] peace