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I disagree-voted to indicate that I did not donate my mana because of this post (I use Manifold sometimes but I have only a trivial amount of mana)

You probably want to donate any Manifold currency this week

by Henri Thunberg 🔸

Apr 23 20242 min read 23

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Effective givingForecastingOpportunities to take actionManifold Markets

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In a recent announcement, Manifold Markets say they will change the exchange rate for your play-money (called "Mana") from 1:100 to 1:1000. Importantly, one of the ways to use this Mana is to do charity donations.

TLDR: The CTA here is to log in to your Manifold account and donate currency you have on your account before May 1st. It is a smooth process, and would take you <30 seconds if you know what charity you want to support.

Donate your Mana

There are multiple charities available for donations, that EAs tend to donate to, such as:

GiveWell
Rethink Priorities
EA Funds Animal Welfare Fund
EA Funds Long-Term Future Fund
The Humane League
Against Malaria Foundation
Shrimp Welfare Project
... and many more.

It is not 100% clear to what extent the donation is indeed counterfactual^[1], but I believe there is reason to believe you can have positive influence through choosing which charities end up getting this money.

If you I) have an account with Mana on it, II) regularly do charity donations with your own money, then donating your balance now seems to dominate other options.

If you actually want to have some currency on Manifold to make bets with, you can buy it back next week for a cheaper rate than your current donation. I am somewhat unsure of this: it's possible that the value of one charity getting the money over another is not enough to outstrip the degree of counterfactuality discount described in the first footnote. The reason I am still writing this post, is that I think many people have currency laying around that they never plan to use – but might be a few $10s or $100s of charity donations, and 10x more valuable than it will be next week.

Worth noting (thanks @CalebW for highlighting in comment) is that if you are locked in to positions that are hard to exit, you can get in touch with admins to help resolve your situation more satisfactorily without having to sell at crazy rates.

I apologize in advance for the possibility of:

Claims about Manifold's future that they change their mind about.
Mistaken use of terminology from my side.
Mistaken speculations about donation counterfactuality.
... other mistakes.

^{^}

My understanding: Since the money donated to charity is from a Future Fund grant (?), it can only be used that way rather than to support other business activities. So it might be likely that the allocated funds would eventually go to some charity regardless, and your influence is which one.

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Austin1y17

Thanks for posting this, Henri! I'm happy to answer any questions you might have regarding the changes here, the donation program, the future of Manifold or anything else like that.

Very briefly:

The move to 1000:1 is prompted by the fact that we have currently roughly $1.2m of mana issued against $1.5m cash in bank. As we move to sweepstakes, we want to make sure we can fully back this and still have a healthy runway. (fwiw, I think currency rate change is a terrible solution to this and think there's a small chance, 15%?, that we can avoid this)
Our donation program has originally funded by a Future Fund grant with $500k, so donations were coming out of that pot. However, I think of mana donations as counterfactual (I took my $100k salary in mana!), with the idea that Manifold itself would back donation flows once the initial 500k has been spent down.
I myself have recently left Manifold to focus on Manifund, which we are expanding into an independent grantmaker; but am still close with the Manifold team

Nathan Young1y12

The move to 1000:1 is prompted by the fact that we have currently roughly $1.2m of mana issued against $1.5m cash in bank. As we move to sweepstakes, we want to make sure we can fully back this and still have a healthy runway. (fwiw, I think currency rate change is a terrible solution to this and think there's a small chance, 15%?, that we can avoid this)

This seems like a bad situation to have gotten into. Did this happen because manifold didn't plan well or was it Future fund related? If my mana is gonna take a haircut the difference seems pretty important.
Personally I like manifold a lot and if they said "hey we screwed up (or were screwed) and so don't have assets how can we figure this out" I would be pretty amenable to that. I know it's easy to see this as a run on the bank, but the only way to do so is to donate the money, so you have an unusually charitable group to negotiate with. I really liked the way they didn't trash Mr King in the Whales vs Minnows thing. Forgiveness is real and they have a reasonable amount of my good will to play with in situations where people screw up.
But with very short notice saying "we're doing this" feels like I am being defected against and leaves me a lot more likely to donate everything (I have $320 on manifold). Feels like this kind of behaviour should be punished.
Also why the need for a 10x devaluation. wouldn't this also work if they devalued by like 30%? Not sure why 1/10 was the right number.

It's easy to see this as capital controls etc etc, but the only place the money can go is to charities and if things collapse manifold may die and I don't want that. In both cases, I am differently motivated than if manifold is a faceless bank.

Best of luck on Manifund, though it's a shame you've left manifold cos I liked manifold and value is fragile. Hope you're well!

Austin1y7

(Briefly: we got into this via a loose monetary policy involving lots of printing mana for bonuses and subsidies, in order to encourage engagement. But there's historical precedent for this - eg Paypal famously gave away $10 to every user to get their network effects started)

I think our monetary situation is actually fine. It's tempting to look at things from a cash balance perspective because it's simple, but that's pretty naive. This post from CommonCog has informed my thinking of these kinds of things:

"People with limited understanding of business think that business is all about making profits. But those who actually run businesses know that running a business is all about managing cash flows."

Manifold users don't actually cash out that much, so we shouldn't actually need that much cash on hand. Another point Zvi raised is that very few online sportsbooks maintain enough cash on hand to fully pay out all users -- it just doesn't make business sense to do this, you grow more slowly if you commit to holding extra cash.

The equity value of Manifold dominates the cash considerations (we last raised at $40m valuation), so from our business perspective we can eventually back assets just by raising more. The point of this pivot is to drive enough interest & mana purchases to get us to a Series A, after all.
Shrug, as above, I don't think we've really historically screwed up; I'm in the weird position of simultaneously trying to talk my cofounders out of this 1000:1 thing and trying to publicly explain our actions at the same time...
Yeah, I agree the short notice is very bad. I think the rationale is that the Google Form for loans below will basically be given to anyone who reasonably applies, so our users shouldn't be that badly affected.
Yeah, I was already pretty unhappy when I first heard the proposal to be 200:1; 1000:1 seemed much worse. Idk, again, I think it's a bad idea.

Jason1y5

I tend to agree with your co-founders on this one.

Manifold users don't actually cash out that much, so we shouldn't actually need that much cash on hand.

I am not sure that the behavior of past Manifold users in a play-money economy where the only cash-out was to charity is a reliable guide to how future users will react to in a ~real-money environment.

Another point Zvi raised is that very few online sportsbooks maintain enough cash on hand to fully pay out all users -- it just doesn't make business sense to do this, you grow more slowly if you commit to holding extra cash.

When we're talking about play money potentially redeemable for charitable donations, that is one thing, especially where the vast majority was ~freely obtained (as opposed to being purchased with cash. If people can't donate play money they were largely given for free, that doesn't keep me up at night too much. It's something different where the quasi-cash was largely purchased with real cash (or obtained in wagers of quasi-cash that was largely purchased with real cash). In the latter case, I think you have to be prepared for the risk of a bank run.

The equity value of Manifold dominates the cash considerations (we last raised at $40m valuation), so from our business perspective we can eventually back assets just by raising more.

Maybe, but conditioned on there being a run on the bank, Manifold equity would not provide a solid backstop for customer claims. If you are in a bankrun situation, there is a pretty decent possibility that Manifold equity is either illiquid or ~worthless. You might be hard-pressed to find buyers either because of the underlying facts that led to the bankrun or due to skepticism about the value of a business whose customers are in a panicked rush for the door.

Moreover, the base rate of young startup failure is pretty high, so there could be a number of scenarios in which a run makes sense. If I thought Manifold might be going under soon, and my quasi-cash was backed only to a limited extent, I think I'd rather exchange my quasi-cash for real cash ASAP.

Perhaps you could get an irrevocable line of credit for the next ~2 years backed by a certain amount of equity? If you can, then that could back the quasi-cash liabilities. If you can't, is evidence that you can't get a sophisticated lender to accept the equity as collateral also evidence that Manifold users shouldn't accept it as backing?

I guess another way of saying this is that I think Manifold should treat quasi-cash holders as ~depositors, and thus should be unwilling to expose them to more than a tiny risk of loss due to anything other than bad trades on Manifold.

Pat Myron 🔸1y5

Manifold users don't actually cash out that much, so we shouldn't actually need that much cash on hand

This omits why Manifold users didn't cash out much: return rates were unsustainably high. Ponzi schemes manage cash flow at the expense of profit

Jason1y3

Yes, although this was much more OK with play money than it would be with quasi-cash. Especially since Manifold's heavy use of the play-money printing press wasn't a secret.

Nathan Young1y2

Not the only reason though. The only way to cash out was donations and some people didn't want to.

Toby Tremlett🔹1y15

Thanks for sharing this on the Forum!
If you (the reader) have donated your mana because of this post, I'd love it if you put a react on this comment.

MichaelDickens1y10

I disagree-voted to indicate that I did not donate my mana because of this post (I use Manifold sometimes but I have only a trivial amount of mana)

Jason1y11

Relatedly, I would note that past comments on the Forum about trading on Manifold as a potentially effective way to steer money to charity may no longer be valid (or may be less valid) after May 1 than they were prior to the announcement being made. The reason is that Manifold's "pivot" requires a much more controlled supply of its play money (mana), making Manifold at least close to a zero-sum game for traders. In contrast, a past comment may have been written when the mana printing presses were in high gear, at which time the expected value (in mana) of trading on Manifold was meaningfully positive due to subsidies, free mana, etc.

CalebW1y9

From the discord: "Manifold can provide medium-term loans to users with larger invested balances to donate to charity now provided they agree to not exit their markets in a disorderly fashion or engage in any other financial shenanigans (interpreted very broadly). Feel free to DM for more details on your particular case."

I DM'd yesterday; today I received a mana loan for my invested amount, for immediate donation, due for repayment Jan 2, 2025, with a requirement to not sell out of large positions before May.

There's now a Google form: https://forms.gle/XjegTMHf7oZVdLZF7

Angelina Li1y4

Thanks, I found this a helpful nudge, and wouldn't have known about this otherwise :)

Kerkko Pelttari1y5

Same, I only had ~800 mana free but wouldn't have realized to donate it otherwise, and it only took a minute.

OllieBase1y1

Maybe let the forum know here (Toby's comment above) :)

Jason1y2

Also, there's a statement in a publicly-accessible stand up meeting summary (speaker unknown) that "I also tentatively think Manifund wants to end the charity program after this"

https://manifoldmarkets.notion.site/Standup-de82dcce7411478fa52048c229a2eda2

(screenshot on file in my email)

Austin1y8

Speaker there was me - I think there's like a ~70% chance we decide to end the charity program after this round of payments, tentatively as of May 15 or or end of May.

The primary reason is that the real money cash outs should supersede it, and running the charity program is operationally kind of annoying. The charity program is neither a core focus for Manifold or Manifund, so we might not want to keep it up. Will make a broader announcement if this ends up being the case.

Jason1y3

Agree that real money cash outs would largely supersede this, but that's conditional on them actually happening and sticking around. It doesn't sound to me like real money is likely to roll out next month, though.

Austin1y2

Yeah - though in practice the charity payouts are transferred once a quarter anyways, so a month or two delay in rolling out payouts wouldn't change the results much.

In any case, definitely think now is a great time as any to do your charity allocations, given our general uncertainty on how all of this will look!

(I'm pretty bullish on sweepstakes payouts actually happening, I think like 80% chance this year. If they don't, then probably something like the charity program would make sense again)

simoj1y1

If incremental funding to Manifold isn't 10x more effective than effective charities, somebody should fund 10x cheaper rebuys for anyone who is planning to keep their mana through the devaluation, so their current balance can go to charity at 100:1.

Henri Thunberg 🔸1y3

Welcome to the forum simoj!

I think this might not be a great idea, due to uncertainties in what would happen with the allocated charity budget if it doesn't get donated right now. It's quite possible that the counterfactual is low, so we should probably not invest more into the ecosystem at this point — in particular when things are so up in the air about the future of the platform.

Damin Curtis🔹1y1

Nice, just donated my $31.23 worth of Mana to GiveWell! Wouldn't have known to do that otherwise, and took about 30 seconds. Thanks for the post :)

OllieBase1y1

Maybe let the forum team know here (Toby's comment above) :)

Davis_Kingsley1y1

Thanks for the tip! Just donated my mana to GiveDirectly.