Sorry if I missed it in the article, but who are the parties you would like to get on board to put up the refund bonuses?
It would the producer of the public good (e.g. for my project I put up the collateral).
Can you bootstrap them by using DACs to fundraise for bigger and bigger refund bonuses?
Possibly? I’m not sure why you’d do that?
Are you aware of any issues with securities law, since people can make monetary profits off refund bonuses?
I disagree that a Refund Bonus is a security. It’s a refund. To me it’s when you buy something, but it comes broken, so the store gives you a voucher to make up for your troubles.
I imagine (no idea really) that the law of the country of the person who starts a fundraiser will be what
matters legally.
I’m in South Africa but from what I can tell, if you work with US dollars and do something illegal the FBI will come after you, so I wouldn’t be confident that only South African law applies.
Can you maybe just pick out a charity fundraising platform that has funding thresholds and refunds (and is used by consequentialists), and refund bonuses to everyone who contributed to failed fundraisers?
This is actually a cool idea. I don’t know how I’d manage to get people’s details for giving refund without co-operating with the fundraising platform, and my impression is that most platforms are hesitant to do things like this. If you know of a platform that would be keen on trying this, please tell me!
Put differently, I would love a non-speciesist world and a world where funding in AI safety is allocated efficiently. I’m currently working only on the second problem, so one could argue that I’m freeriding on others’ solutions to the first.
I don’t quite understand this point. You could work on AI Safety and donate to animal charities if you don’t want to free-ride.
Btw., I think it would be useful to mention what the article is about in the title. I would not have read it (even though I’m very interested in the topic) if Dony hadn’t told me that it’s about DACs!
You’re right. I didn’t want the title to just be “Dominant Assurance Contracts” because I assumed that most people have never heard of them and tried to come up with something more interesting, but maybe enough people on lesswrong have heard of them so I should probably be more straight forward.
I disagree that a Refund Bonus is a security. It’s a refund. To me it’s when you buy something, but it comes broken, so the store gives you a voucher to make up for your troubles.
Then perhaps we should call it ‘Refund Compensation’ instead. I’d much rather if refund compensation didn’t fall under securities laws and everyone could offer it hassle-free.
I really like that. It draws attention to the fact that the “bonus” is compensation for time and effort spent on trying to buy a product that was never delivered.
It would the producer of the public good (e.g. for my project I put up the collateral).
Oh, got it! Thanks!
Possibly? I’m not sure why you’d do that?
I thought you’d be fundraising to offer refund compensation to others to make their fundraisers more likely to succeed. But if the project developer themself put up the compensation, it’s probably also an important signal or selection effect in the game theoretic setup.
I disagree that a Refund Bonus is a security.
Yeah, courts decide that in the end. Howey Test: money: yes; common enterprise: yes; expectation of profit: sometimes; effort of others: I don’t know, not really? The size of the payout is not security-like, but I don’t know if that matters. All very unclear.
Profit: I imagine people will collect statistics on how close to funded campaigns can still be a day before they close so that they still fail in (say) 90% of the cases. Then they blindly invest $x into all campaigns that are still $x away from that threshold on their last day.
I imagine the courts may find that if someone goes to such efforts to exploit the system, they were probably not tricked into doing so. Plus there is the question of what effort of others we could possibly be referring to.
But even if the courts in the end decide that you’re right and it’s not a security, the legal battle with the SEC alone will be very expensive… They keep expanding their own heuristic for what they think is a security (not up to them to decide). They’ve even started to ignore the “expectation of profit” entirely (with stablecoins).
But perhaps you can find a way to keep the people who run the fundraisers in the clear and keep your company in South Africa (where I know the laws even less though). If the fundraisers are on a mainstream blockchain, the transactions are public, so you (outside of the US) could manage the refund compensation on behalf of the project developers and then pay refunds according to the public records on the blockchain. That way, no one could prove that a particular project developer is a member in your system… except maybe if they make “honeypot” contributions I suppose. Perhaps you can have a separate fund from which you reward contributors to projects you like regardless of whether they’re members. If a honeypot contributor gets a refund, they won’t know whether it’s because the project developer is a member of your org or because you selected their project without them knowing about it.
This is actually a cool idea. I don’t know how I’d manage to get people’s details for giving refund without co-operating with the fundraising platform, and my impression is that most platforms are hesitant to do things like this. If you know of a platform that would be keen on trying this, please tell me!
Yes… You could talk with Giveth about it. They’re using blockchains, so perhaps you can build on top of them without them having to do anything. But what I’ve done in the past is that people sign up with my platform, get a code, and put the code in their pubic comment that they can attach to a contribution on the third-party platform. Then if they want to claim any rights attached to the contribution from me, I check that the code is the right one, and if it is, believe them that they’re either the person who made the contribution or that the person who made the contribution wanted to gift it to them.
I don’t quite understand this point. You could work on AI Safety and donate to animal charities if you don’t want to free-ride.
Well, let’s say I barely have the money to pay for my own cost of living or that I consider a number of AI safety orgs to also be the even-more-cost-effective uses of my money.
But what I’ve done in the past is that people sign up with my platform, get a code, and put the code in their pubic comment that they can attach to a contribution on the third-party platform. Then if they want to claim any rights attached to the contribution from me, I check that the code is the right one, and if it is, believe them that they’re either the person who made the contribution or that the person who made the contribution wanted to gift it to them.
Oh cool, that’s a good idea. Then you can piggy back off existing crowdfunding platforms instead of making your own one.
people sign up with my platform,
Do you have a link? It sounds cool. I want to check it out.
Well, let’s say I barely have the money to pay for my own cost of living or that I consider a number of AI safety orgs to also be the even-more-cost-effective uses of my money.
I think I see your point. I agree that DACs don’t solve this type of free-riding.
Thanks for you comment, it’s very helpful.
It would the producer of the public good (e.g. for my project I put up the collateral).
Possibly? I’m not sure why you’d do that?
I disagree that a Refund Bonus is a security. It’s a refund. To me it’s when you buy something, but it comes broken, so the store gives you a voucher to make up for your troubles.
I’m in South Africa but from what I can tell, if you work with US dollars and do something illegal the FBI will come after you, so I wouldn’t be confident that only South African law applies.
This is actually a cool idea. I don’t know how I’d manage to get people’s details for giving refund without co-operating with the fundraising platform, and my impression is that most platforms are hesitant to do things like this. If you know of a platform that would be keen on trying this, please tell me!
I don’t quite understand this point. You could work on AI Safety and donate to animal charities if you don’t want to free-ride.
You’re right. I didn’t want the title to just be “Dominant Assurance Contracts” because I assumed that most people have never heard of them and tried to come up with something more interesting, but maybe enough people on lesswrong have heard of them so I should probably be more straight forward.
Then perhaps we should call it ‘Refund Compensation’ instead. I’d much rather if refund compensation didn’t fall under securities laws and everyone could offer it hassle-free.
I really like that. It draws attention to the fact that the “bonus” is compensation for time and effort spent on trying to buy a product that was never delivered.
Oh, got it! Thanks!
I thought you’d be fundraising to offer refund compensation to others to make their fundraisers more likely to succeed. But if the project developer themself put up the compensation, it’s probably also an important signal or selection effect in the game theoretic setup.
Yeah, courts decide that in the end. Howey Test: money: yes; common enterprise: yes; expectation of profit: sometimes; effort of others: I don’t know, not really? The size of the payout is not security-like, but I don’t know if that matters. All very unclear.
Profit: I imagine people will collect statistics on how close to funded campaigns can still be a day before they close so that they still fail in (say) 90% of the cases. Then they blindly invest $x into all campaigns that are still $x away from that threshold on their last day.
I imagine the courts may find that if someone goes to such efforts to exploit the system, they were probably not tricked into doing so. Plus there is the question of what effort of others we could possibly be referring to.
But even if the courts in the end decide that you’re right and it’s not a security, the legal battle with the SEC alone will be very expensive… They keep expanding their own heuristic for what they think is a security (not up to them to decide). They’ve even started to ignore the “expectation of profit” entirely (with stablecoins).
But perhaps you can find a way to keep the people who run the fundraisers in the clear and keep your company in South Africa (where I know the laws even less though). If the fundraisers are on a mainstream blockchain, the transactions are public, so you (outside of the US) could manage the refund compensation on behalf of the project developers and then pay refunds according to the public records on the blockchain. That way, no one could prove that a particular project developer is a member in your system… except maybe if they make “honeypot” contributions I suppose. Perhaps you can have a separate fund from which you reward contributors to projects you like regardless of whether they’re members. If a honeypot contributor gets a refund, they won’t know whether it’s because the project developer is a member of your org or because you selected their project without them knowing about it.
Yes… You could talk with Giveth about it. They’re using blockchains, so perhaps you can build on top of them without them having to do anything. But what I’ve done in the past is that people sign up with my platform, get a code, and put the code in their pubic comment that they can attach to a contribution on the third-party platform. Then if they want to claim any rights attached to the contribution from me, I check that the code is the right one, and if it is, believe them that they’re either the person who made the contribution or that the person who made the contribution wanted to gift it to them.
Well, let’s say I barely have the money to pay for my own cost of living or that I consider a number of AI safety orgs to also be the even-more-cost-effective uses of my money.
Oh cool, that’s a good idea. Then you can piggy back off existing crowdfunding platforms instead of making your own one.
Do you have a link? It sounds cool. I want to check it out.
I think I see your point. I agree that DACs don’t solve this type of free-riding.