# What is Retroactive Public Goods Funding? (RetroPGF)

By [Tim Robinson](https://paragraph.com/@timjrobinson-2) · 2023-01-07

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One of the most exciting ideas to come out of "tokenize all the things" is retroactive public goods funding (RetroPGF). It's one of the first good non-skeuomorphic ideas I've seen in the Web3 space.

RetroPGF Is a way to encourage people to invest in charities as much as they do in startups / public companies. How? By ensuring that future donations to those charities reward early investors in them.

[Optimism](https://www.optimism.io/) kicked off this idea with their grants rounds - [round two started this week](https://optimism.mirror.xyz/wqk1Yeyn2OhV9paDzbRXvQ0m0JYDu2npbSkMClwk1rY). They are giving away 10M OP tokens to open source projects that are improving the Optimism or Ethereum ecosystems.

There are two big differences between this and a normal charity donation:

*   Instead of giving to projects who _say_ they will do good, they only give to projects which have already done good.
    
*   These projects have DAO's with their own token. When they receive OP tokens their own token increases in value. This happens because of speculation they'll swap the OP token to their own, or because the projects token gives governance power and now the project has more funds to be governed.
    

So now everyone knows the best open source projects will get some funding, and this funding will increase the projects token value, what do they do? They speculate!

Why not front-run Optimism by looking for open source projects doing good work, and buy their token? That project gets some funding now, and if they receive a donation you make money! It's win-win.

This creates what we call a Regen Cycle, where more funding goes to projects that are helping make the ecosystem (or world!) a better place, instead of only startups looking to make a profit.

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*Originally published on [Tim Robinson](https://paragraph.com/@timjrobinson-2/what-is-retroactive-public-goods-funding-retropgf)*
