[Applause]
hi everyone hi welcome to DEFCON 5 thank
you so much for coming through for this
workshop today my name is Paul cos I'm
going to introduce this amazing
gentleman in a second so the topic for
today's workshop is funding as a medium
and a message how we get capital and the
influence that it has on what we built
the reason I chose this topic was
because it came making a very personal
topic for me as well I saw other kind of
funding scenarios involving for system
over over time and I think it's pretty
important topic stacks the address we're
opening what are the different sources
of capital where does kind of come from
what are the incentives that come with
it and how do we decide where to get it
from 58 oh cool so I'll just quickly
konnichiwa konnichiwa our goals for
today are really to first to foster an
open conversation to explore the world
of funding and habitats where three
specifically in funding with three
infrastructure we want to look at
different sources of funding and in
Senate design we're going to go from
centralized model to very decentralized
models that button and then what we
really want to try and do is make this a
very good platform for you guys to share
your experiences discuss the problems
that you encounter to ask questions yes
so that's one of their core goals of the
workshop we really want to try and make
this as a drag
so please feel free to engage US
presidents interrupt it really should be
like a very kind of front facing what's
up cool our workshop challenge for today
are energies from demo compo
fortunately or unfortunately I've been
raising money I feel like most of my
adult career first at a tech startup
with the consensus I raise money for the
launch of the enterprise appearing
Alliance so in
the open source standards world and
recently at dharma temple where we
managed I think the largest actively
managed the very fun hundred fifty
million dollars opening permit and I
think that can speak to some of the
issues with institutional allocators
open source grants and venture
next up we have a meeting so money a
little money
I've been the recipient of grants on the
floor from Jeff to channels and stuff
and also summoner of Moloch Tao which
are open source a mystery everybody
working on a project called the common
stack which is a collaboration between
giveth and block science and we're
pushing forward open source token
engineering and robust design in
economic systems and the first component
we're building as an Augmented body
meter which is a funding mechanism with
continuous funding mechanism for open
source projects or for communities
around the cosmos
I want to give a brief introduction to
statement often we're going to try and
cover a host of topics in this Marcel I
always feel like to say I'd like to say
I'm not qualified to talk about any of
these topics but I've learned so much
over the time and what I'm really trying
to do is really just share share my
experiences give you a very brief
background about myself
I first got into doors point in May 2013
but being interested in kinetics and the
first community comments like the doors
point I think no crypto presentation was
ever
I studied economics in Switzerland Cape
Town's
really fell down the rabbit hole in late
2015
some people little mouths worked on an
identity put the group UNICEF went to
Denmark to met a lot of people at
consensus join consensus for the first
time worked on you point that left
consensus and under the income people
Pollock Germans were aiming to redesign
the way that essentially centralizes the
drug development provided to confront
we're launching our first back and the
fundraising topic for meeting and became
very prominent this year we got into
fundraising mode I had to kind of go
through a lot of these the challenges
like with fundraising as well as the
good sons
Sarika Teixeira or would you also
previously received a grant maker been
involved in a lot of fundraising
initiatives with Toby self yes
cool so funny maybe quick question into
the room who has received funding before
in any other form
yeah it's a lot of people which is great
so you can all kind of join individual
topics later on maybe and has a quiz
received VC funding well get it is so
the structure the worst of the expense
missing in about well what can it go
into each funding category so the money
categories of DC mm to target sales
maybe hands up with who's received
funding by doing a token sale so that's
interesting array that's about nest
equipment VC which is yeah I think
that's maybe states made we received a
grant before from any kind of Bradley
string 33 dinners Wow
I suppose that's more people that that
we had with with we're talking sales
less people that we see who is received
funding from the table before
nice
okay maybe that hunts like an open
question to the pro why do you guys feel
that funding off the deals I could have
a taboo topic to talk about McCauley
thank you
do you guys feel like it is a tough
topic okay so the funding is very overly
discussed in the eServices
where we all say yes to that persistent
part of it so our grant funding I think
for example of a two experiments really
discuss probably things like VC funding
less so it's kind of moving
it's almost moving in from the scale
from nonprofit perform profit which also
changes the scale in terms of its grants
there's almost me like that's a great
opportunity gives us that was really
hard to understand how any of these
companies got VC funding borders because
of level with the incentive the VC how
does the round structure work valuation
in Turkey
yeah but maybe that's what about this
that's really cool so why is funding a
core tool to build anything
well you've got to pay yourself you want
to grow your team and your product legal
expenses community building marketing
and awareness but what's really
important to realize is that the source
of funding is fundamentally define point
bill how you monetize it any one time to
do that so getting a grant to fund your
town it has very different implications
that getting of trying to get to a VC to
fund it up and it's really important to
understand what are the different
incentives for those different issue of
authority cool so this is kind of a
general framework that we're going to
follow going through each of these
topics
and as I said before feel free to drop
oh by the way if you wanted to come up
and sit down there's no spaces here in
front
thank you so much for joining us
she also the other champions I've
already introduced themselves do you
want to give me a quick intro yeah sure
so hi I'm Kevin o makki I'm one of the
cofounders of get coins our mission is
to grow and sustain open source software
a software platform that connects
funders to coders when access to funding
and vice versa and I guess our most
recent funding stuff we did an ecosystem
was kick point grants which just round
three raised just under 300 k 4 e 2.0
prolixity mrs. to and explained the
matching yes this is so rad
yes Oh Glenn while and metallic
published his post called constrain
capital liberal radicalism which is
basically you have a pool of matching
funds that will be distributed to
projects that get crowd fund
contributions and instead of a
one-to-one match where if Andrew gives a
hundred dollars to project it'll get
matched by a hundred dollars from the
matching fund that's distributed
according to the breadth of
contributions not just the depth
so if project a raises a hundred dollars
from one donor then it'll get matched
less than project B that got ten dollars
from ten different donors so both
projects raised a hundred dollars but
the second had much broader base of
support and so with quadratic matching
which is another word for constraint
capital or liberal radicalism you can
have some of the projects like nickel in
grants would you with a one dollar
contribution would get $200 worth of
matching just because they it's a broad
base of support so it's a according to
Glenn a while the mathematically optimal
way to fund public goods that the
ecosystem cares about I think that's why
I drew and I do up here
okay cool so as we move through these
different topics we'll look at what is
they funded what is they often is this a
for-profit model or nonprofit another
governance who makes the decision on
what gets funded no one doesn't the
incentives or benefits from the funding
and then what are the key issues that
that can come we have this question
already who is a planet before I'm
actually really glad that you joined so
I think one of the core questions that
we have in this ecosystem and that keeps
coming up again is like funding how do
we fund to open source infrastructure
and it's kind of the strategy of the
comments problem yeah like how do we
fund open source infrastructure there's
a lot of expectation that funding goes
into the base protocol layer once it's
deployed but we haven't we've develop I
think good models yet to to scale that
up and I think that's why we're seeing
so much investment and so much kind of
scaling away from the core layer to
monetize on other day is like monetizing
day a 1 and a 2 and so on and of course
thing that I want to get into this is
well kind of this is kind of what we're
trying to do you guys not see it it's
just the public works entertain in the
kind of current society we pay taxes in
order to like pay for the roads to be
done the kind of state was having pain
taxes to use these theorem to the finest
but that the miners don't kind of invest
back into that continuous development of
the rows of the base there so if we
don't kind of find good ways to invest
in public works will it be like
refundable capital into public works
then we end up like us like shitty fun
whole throats and this is a really big
problem I think not just a problem that
we have in I think the current open
watching space but it's a problem an
open source maintained man in general
Kevin maybe you have or lacking any of
you I I know it's really really
difficult to be maintained to be paid as
an open-source maintainer for any kind
of project yet so I mean I think that
our mission is to crowd sustainable
sources whatever went up here has an
interesting model that could be used to
solve the coordination problem of
funding
, sack full of dal Congrats I know we're
all experimenting with space and so I
think a diversification of funding
models it will make me miss system
stronger so it look to hear from the
others on the panel Jim we'll get into
that each of the models you're not just
like as a base open it okay so we don't
like this so we need better funding
models for the Commons which would be
want to make sure that we get to the end
we also don't want this so this is
tollgate in China and so like other ones
that we have free roads but if they're
not maintained well they're gonna end up
like this and on the other side this
kind of reminds me of some of the day or
one solutions that are being built up
it's like if we start monetizing
scalability too hard then essentially it
become click like using a theater will
be like pausing from toll gate to target
that's also something that we want to
avoid okay so over the next half hour
plus we're really gonna kind of take the
journey from different for-profit models
into nonprofit models and then finally
to their comments the first one that
we're going to start with is venture
capital one of the oldest funding models
in existence I think compared to the
other ones about
cool so let's talk about in Chicago I
think going back to Ellie I saw the most
amount intact up for people that had
previously received VC because my
phrasing you have again
okay does anyone want to speak about
their experience chants prints that
haven't DC maybe some additions they
encountered yeah the only language be
seen
so you haven't seen one lineman ever
watch that
so the only way I got to be seen to
invest
basically governance and ground roll and
weaker UN
and that was have to show that there is
yeah or you may get funding
Here I am any good your mom
that doesn't really cut it
that's a field imager
thanks to their and
one other
is like the environment was very
it's so easy to raise like 27
and when we tried to raise like a
serious I can completely different eight
so I think alive
you see that from the ground sizes why
me ground sizes were like doesn't have
now there are not to my very major
others I think that speaks to exactly
what your penis is said it's like so
much decreased a lot of twists I'm going
to say something similar but
their deal
so environments before me but else that
I've been teased
okay coming from the VC side work
Adebisi
although I think that
you know I think that also some
really great in a lot of ways
issue is that
maybe there's no way different than vici
obsessed right so a venture capital
works for a lot of models but a lot of
the business
and projects that we're building right
now in crypto aren't served but in
traditional venture capital return
structures and as the process and just
in federal like Jesus is overseeing this
disassociation with how Bichir capital
can be applied to prove to projects and
that's on the other question like how
private capital is being funneled to
early tech invasion in other words
really really interesting comic I think
something that will be very interesting
to see play out there's a lot of thing a
lot of it a lot of companies that be
planning at the moment that they don't
have a business together and we've been
interesting to see at some point if if
kind of like healthy pressure starts
rising on investments that were made
that have large user bases that people
are now using that have created the
slogan infrastructure but that not need
to start monetizing that open
infrastructure which might kill those
user bases they'll be interesting to see
really interesting inevitable together
these patterns successful in the past
and they apply that moving forward
bathroom
yeah general students
we detect ups I've just heard a lot of
stories where there's been the author of
investor that had some power to do
something wrong
yeah basically try to maintain
yeah I've just had times I'm in the old
story of the one who invested the
mississipp for everyone and then there's
a lot of pain and torture in getting rid
of that
that's awesome
I think another generalization is what
we're seeing right now with with
entities that try to become ubiquitous
like we work in Newberg that wanted to
grow as quickly as possible that didn't
necessarily consider the balance sheets
and we're seeing that kind of unwind
right now and that was driven primarily
by investor pressure and and uh kind of
balancing actually building a
sustainable business with if I put a
dollar in we get five dollars out and
and recognizing that that we actually do
mean baljeets in the end
before everyone was kind of born new to
the topic I want to give a very quick
overview so this is general for college
funding model B C's invests to make
money like and and that's a big
confusion that's understood we can
happen if you're like building this cool
open source projects on the walked in
and see centralized like does it make
money know if it doesn't then like
that's a hard pitch
unless you can convince someone that
you're going to grow to enormous user
base and somehow be able to monitor the
news against them that was some learning
from you coming out of their open source
watching space it's like people that
make money and if you don't make the
money together it's generally in
exchange for company equity we've seen a
lot of South bottles evolve over time
there's also an increasing there's an
increasing trend back to equity and then
they go maybe into South once again but
the other generally generally how it
works if you don't have a company if
you're tiny ways we see and you don't
have a company yet and decentralized t
aim of go-getters and you making it work
it's gonna be hard to raisers in taking
before staff are we familiar with Y
Combinator state standard agreement
feature ok so like that's even more
nuance the
get spoken part versus the actual I
agree that created yeah but it's a great
comment so just as a quick recap company
a company normally has equity equity
shares that to be issue the easiest ways
to raise early stage financing either
through a safe which is a simple
agreement for future equity or through
something called a convertible note
convertible known as a death instrument
that can be converted into equity at a
later
liquidation stage so you could say for
example you're now you guys are just
starting out you have an early stage
team you've created your company and now
if you seduce for example you're raising
two hundred thousand in financing buy a
convertible note so that's essentially a
debt that comes out to about chain and
then depth you would then say to the VC
cool let me look into a civilian in here
once we put those milestones and when
she wears that million that depth Thank
You burns is a little bit about
generally it's based on consecutive
funding rounds based on progress and
it's kind of like leveling up which
makes a lot of sense imagine it's a
video game you're moving from level to
level the bosses become harder it
becomes like more and more and generally
you go from a friends-and-family round
to a proceed round to a seed round and
then series a/b c/d
this very few companies in the chorus
made it into like this range like a
quite basement here
most companies encompass most companies
that we've seen the seed stage a lot of
companies are in series 8 in series
debut nobody want serious kind of
customer interaction so like your
business is starting to work starting to
generate revenue in general it's only
reading exchanges in my opinion that
have made an intellect
it's like further for the office line
and read it I feel okay maybe maybe to
give you guys a range as well so maybe
friends and family routes tend to be
like you're really just raising
early-stage money to get going maybe up
to like 50,000 or 100,000 it really
depends on your obviously on your
different system it is a horrible idea
yes sir procedures in general anything
that you refer to the first kind of
institutional money so this could be a
very early stage button and a couple of
angels it could also be a couple of
angels this range would be anywhere from
like a hundred through up to like up to
a million there's even like one of the
half million dollar receive grants now
but this is intensity the range then see
now starts when he starts out with of
like 750 to a million and then goes up
top to pit so there's seed rounds up to
fortified light a lot of this is very
flexible the numbers from the past two
or three years have just been going up
up up so companies raise more money
under various state which is part of
like I think we're seeing end to end
this really big just excess in capital
which is also starting to flip not as a
have we said earlier with like IPOs been
going to awesome
so really you want to start making money
within three to five years minimum this
few businesses like that I mean there's
very long term big project companies but
that doesn't apply it to like to cook
our general it's very centralized
decision-making so one thing that you
have to remember is selling equity means
you're selling stake in your company
which means others people have a say
over the government's and how you money
probably
so there's many examples kind of horror
stories enough like if a VC doesn't like
the way that you lead your company or
your team they might just replace you
you know at work the board will try to
push you out doesn't have we have really
seen that yet mentioning in crypto but
it is something to consider just from a
governance system then this is a really
looking for 10x business models so if
you can't demonstrate how this is going
to have like 10x in terms of an
investment if they invest the billion
they want to exit with ten million which
means resolve your business at that
point needs to be it's a really grow to
match those numbers valuations and
terpenes so valuation is basically once
you go to VC or give it to an angel once
you select early you're going to try and
want to get to evaluation which means
you need to now put a price on your
company which not means you need to
evaluate and how much money could this
company make in some place and then the
idea you want to get to a term seen a
term sheet is kind of the offer from the
me see how much they're willing to
invest any one terms
go and then there is best thing which
this supplement is often forgotten
crypto we'll get to that a little bit
later but it's essentially how your own
shares of the company or your employees
chairs invest over time so this is
really just to cover the basis I know
you want to make this like open kind of
discussion around to discuss worst of
all the VCS and funding he centralized
open infrastructure but also the polar
pcs in like funding projects in the
space of general Abby just had a great
comment earlier that I think for a lot
of open source business models VC
funding doesn't actually work off and
yeah maybe to kick it off I want to hand
it over to you guys in terms of
experiences in terms of
that's that's one thing we've come up in
the common stack looking for funding to
build the common stack I'm looking at
VCS and the first question of
supplements or profit model we're
building open source components for
communities to use basically like a you
know an SDK for dows we don't have a
profit bot we don't want a profit model
and that makes the VC Road very
difficult route to walk for an open
source project like the contact projects
that seem to have had some success
raising theses our projects that they
might have an open source construction
but they you know are going to bend
figure out to come to mind that
recently one in
project one is the swamp
Sabrina swap Hispanic annuity office
medical it's not happening it's like one
of the coolest exchanges on aetherium
these bonding curves and it's a
automated parking maker that's where
it's me nothing to you it doesn't matter
it just means that you can always trade
against it
I'll always trade back with you you can
put money there it doesn't actually take
anything use it
but the team is building services around
them and there isn't on the premise that
those services would be valuable
insta-death on the other hand it allows
you to better manage your CDP's so who
here knows what make your downs and die
thankful almost all day so you can take
a loan and
interest but maybe there's compound
which is another platform where you can
take a loan and that gives you a better
interest rate and the process of moving
your debt over one of those platforms
the other is actually quite annoying and
like crunch an error and so they provide
a valuable service and then take a fee
for doing that because something like
point five percent for being able to
migrate your your loan over and that's
been an investable business model
nice
so to answer this question I really
think there has been a role and VC's in
funding decentralized open
infrastructure and I think that the
notion of decentralized open
infrastructure being funded by a small
beekeeper really juxtaposes the notion
of what we're trying to do or what that
infrastructure is trying to do and I
think that was kind of the on moment
with I would say the imperium token sale
the is that it wasn't a bunch of people
on Sand Hill Road that would hate papers
with us and I think that was kind of the
aha moment of the token sale although a
little silly token sales in general but
but I mean this the future of Finance is
we're witnessing it where you can where
you don't need the visas for everyone to
come seduce you
how do you guys feel though so you see I
think we've got to we got to target
sales just as well I think we've largely
seen to excel disappear and now there
seems to be a big gap as well in terms
of because now a lot of people are going
back to the VCS for example projects
like the comments that I think you guys
would totally go to the option of like
raising from everyone as a VC but the
market isn't there anyone that it
couldn't be isn't there yeah
and who tweeted this just a couple weeks
ago and they said the internet turned
everyone into micro bloggers and the
blockchain will turn everyone into micro
investors and we see with the common
stack a future of kind of communities
subscription models or the investment
models where you are paying a
subscription fee and you receive you
know a token and asset which gives you
governance in that community and also
provides capital to that community to
continue doing good work so kind of
merging these for-profit and nonprofit
actually going back to the point you
made earlier about public works the way
we get things down as a human society as
we pool any hospital and then allocated
towards what's best now we do that
through taxes that isn't necessarily
efficient we do that through the stock
market global calendar tools to provide
the Trinity for for profits to do work
and grow the value of what we gave them
but we don't have this for the non
profit open source infrastructure that
doesn't have a revenue model so I think
that's we're really on the cusp of
figuring that out and that's what we're
really excited about the common stack is
basically creating that capital pool for
a non-profit open source infrastructure
to survive and thrive
yeah I hope the questions yeah even if
you say that the internet took a
blockchain which other potential
creating making people micro investors
right we most people are conditioned
okay that I'm going to invest my money
okay I want this to make a return so
they are thinking like the beauty they
are thinking invader how can an open
source generate returns for me so how do
you monetize forever so appreciate your
views
it's like VCS literally ten hundred
thousand extra turns absolutely they're
doing look like angar Singh they're like
pushing me to go through there explode
capacity yeah you know get their money
out stop wasting time to move on to the
next project right but like if you're
trying to build a community you might
not want to go that way right you might
want to focus on like 2x returns or like
something you know something that might
get you back over
our timeline right all right but it's
also potentially less risky right right
and so there's different ways
you know thinking like a VC is sort of a
box where it's like you could think like
a capitalist but not necessarily a PC
okay
any other burning questions about visa
funny
I would just say one thing about
corporate structures in the space I
think bring consensus and I think with
respect to venture capital since this is
no surprise or secret that they have
tried or trying to raise capital and
when having these conversations there
were lots of businesses where the value
essentially improved to the protocols of
the theory things like education of
things like the funding research but
that didn't fit into the box of if I put
a dollar in I get five dollars out so so
I think one one other piece that I would
say is that when we are talking about
your capital if there is in many cases
kind of like product markets there
modeling if I put one dollar and how do
I do this by the $10 cell and there is
not too much and what I've experienced
room for creativity and and I think that
it
one has to have you know a serious
conversation on it it's if my business
is going to improve to a token word to
be enterprise value
maybe personal experience from Electra
myself look I found I found the
experience of interacting with VCS at
least the ones that would general that's
not like super deep crypto small TV very
small fun so the more general big PC is
I always found them to very
disillusioning experienced like these
can be very smart but they can also just
be extremely like close-minded and you
come in there and you like you how to
speak minute that you're not cool this
is what we're trying to do this is all
the cool things and you get boiled down
to like this very narrow set of
questions or like very kind of a very
narrow view on the world that also
doesn't fit I think with a lot of these
new business models that we are kind of
BC's are also like put the bulky pcs in
historically late to the party and like
tend to be on the wrong side of the
spectrum there's really very few VCS
that actually applies in their
respective fields but at the same time
being a VC like a partner analyst I
don't know why B for some reason it's
such a prestigious job title to help so
there's also this vanity detail video
that comes with the culture of like
being a VC being funded by a VC into
activity C that's yeah I found it a
little bit all always disillusioning to
to be to be interacting with oh I guess
it's a really high experience like a few
guys have I get to the point is also
feed on experience of a pinch to someone
to like give them money and kind of go
through those
continues pitches for Franco kids yeah
his extra be interesting to see if I
compare like early slide Tex that I mean
to like to like going through the
experience and then like data statistics
you'll see how you keep boiling it down
to play just core questions like
okay
but in any experience relating getting
support from venture capital but from
maybe corporations like offered to them
impact instead of 10x
experience that he knows ain't them
polska saying hey you know you're gonna
have this impact and you're gonna have
to give that to the people at the big
operation platform where you will have
benefit from that it's not necessarily
economic so so the like most fortune
500s now have corporate entry and you're
seeing a lot of it in the financial
sector where with things like that Frank
most banks are just kind of keeping the
lights on with their budgets and they
have to look fire with that in to your
point it has to solve a specific problem
or that's entity and really think they
are very so if if you are you know
building the next best thing wailing
gasps maybe ExxonMobil will help but it
has to be very specific to the
industries that there's hope
and it also ties in basic sanity to that
company but you might not mean that you
essentially become that company's butter
well through them and it might mean like
if you get funded by Exxon for example
that Chevron or anyone says before
justice which it'll be well a stager
yeah okay okay yes I'm surprised by the
person that's being drawn between
traditional VC and token cells as
they're being defined on his panel which
are seemed seemed to be just ICM utility
companies but there's no
the tokenize securities and how that is
actually a more or let's say digitized
form cowboy racing words I see us with
community building since they don't
actually offer people equity to most
companies what does the panel
my securities and their comparison to
sort of traditional is it great question
I don't think we define good I don't
think we even started talking about
offense buddy but I think that right now
the capital markets don't necessarily
have the appetite for them we're seeing
them as basically in my opinion
glorified you sheets where it was maybe
five ten million dollars raised what
would I do agree if you're a finance I
would just like to see corporations or
investors be able to pull them easily on
their balance sheets and I think things
like custody or fertile stood up right
now
with securities that are getting took
knives darling
[Music]
so
for that
I'm gonna get you what I think is
important to differentiate you can have
tokens and then even have tokens
representing equity which benefits just
as well into the venture capital great
colleges lasting change your
philanthropy or a venue for
we'll have people willing to put money
behind something from a venture capital
perspective maybe this capital recycling
as opposed to getting something back we
also have these donor advised funds and
you're kind of like a tease
these guys all they want babies to
recycle their capital and that's a huge
subset of the kind of
money that goes to these open source
also like UNICEF they have a venture
capital type fund which is you know
focus on out open source and they're
good one problem that they want to hold
that the ID
took a great great fanatic on it or
maybe I think to context classify it's
very easy to pass b2c but I think these
BC can have a ton of value to your
startup just have to know that you're
kind of that you fit into like that box
so that you don't move too far a lot of
bucks and then it's gonna add a ton of
value like in terms of like I've seen
like very young inexperienced he'd get
VC funding and whether PC really tries
to help you out do an executive coaching
make sure you got stay on the track
really revamp marketing think about you
going to market so V sees also I think
especially to the theorem space and
different service that could come that
have not done an enormous amount of
rationalization in the space I think
that specifically content in T but we
need that professionalisation because we
come build everything of its source of
all X's and Y's we want to service real
customers like real people that need
professional product and these do an
enormous amount to like push was there
as an ecosystem as well and then I think
without VC funding the same space in
terms of growth would have struggled
enormously over the past one of the
fears just as like any other form of
financing essentially fell into the
trough into the winter they were seen
cool next up tokens
who has I saw less heads up there from
DC who has received
funding from a token octagon do you guys
wanna does anyone want to share an
experience what was it like breakthrough
that maybe at one point did you launch
what is it like engaging with that
community of investors is it public
is it still private
let's share a little bit together we we
read he goes through the bc first and
then we realize here which is it's a
very mixed it was in February 18 which
is very good yeah so therefore the other
running a startup Buda Buda project and
so the matter is the BCE or for knives
here if you need the real money good
money this money for you know but ever
startup giving these guys here I say
definitely cost a lot of energies to be
the leading to worry about to debase se
C's do too after you I worry about to
what
but this inversely defer the repetition
of the project and I think the even
worse these later donors
not necessarily understand more of any
visions for your project they just
because of the pain people just want to
make big money but the way the market is
going down we and we myself spent a lot
of time trying to get a comparability
threat to communicate with reason so
these I have to say these are too much
some really really good cars yeah any
anyone just did to dismiss me
obviously - so like I was like self-help
group before like honestly I have a
friend who did they do the tour itself
and like you've got like death threats
like for multiple different accounts and
when the whole market is crashing and
you're getting desperate from like your
best unis and that's an enormous amount
of like and then you don't even know if
like yes he's gonna come after you like
you said that's an enormous amount of
psychological pressure which i think is
a lot that that that's not at that stage
yeah yeah I thought that remains handed
but I decided I guess for some insights
those who I'm from golden so we did one
the early token sales back in 2016 and
honestly but then I thought that this is
a very natural path - that type of
project exactly because there is like a
very deep conflict between funding and
infrastructure part of the source part
of the stock and venture panic like that
to me it is obvious and I and I believe
this is still like that of course you
can do a venture funding ability things
like that on the on the higher level
like I can perfectly imagine like a
consumer-oriented
project building on top of local chains
of infrastructure project that has taken
venture funding but not for the lower
levels projects but then a perfectly the
D holyday idea of token sales of that
type of funding products got derailed
2017 when we have like a dating app
tokenized products doing SEO send them
other things like that which like to me
it was especially like painful to look
at that because I felt like I do this
and now a part of that well really you
know in we really did the sailing in
November 2016 that looked like like
really a way of collecting they get
their very very special type of funding
for very special type of projects like
not thing and an easy tool for everyone
to get money for whatever and and at the
same time I believe that that's really
appealing at what happened in 2017 like
discredited the whole idea because
exactly because of that we have a
problem you mentioned of the funding for
Acurio mikkel system other other parts
of the decentralized in the system that
and then that DC finally cannot solve I
believe that even today we can see maybe
not exactly in the current urine
community but in a burglar locked a
space that but I have a feeling I have
like I mean I heard a done that maybe
someone from this comment on that
statement but if I think like we started
now the the race they bring worry that
they think it it kind of like a
blockchain maximally but but driven by
the by the Vista funding said that that
the now the approach is that that you
know the real document will be for for a
VC funded project that who feels they're
like the clothes
that everyone who's using that the kind
of technologies that we worked in love
so yeah dude just summarize III believe
that you know pokken is a great way to
do finance take a very special type of
product also I don't think this is like
really discoverable for the meeting
today but I think that we have like a
problem with E we didn't token economies
in general so we need they like have
much more exciting ways tokens can be
used I think that that like they did the
whole idea of protocols is not
really working it may be apart from like
a very special low level cases like in
Korea for example but not forty forty
many projects how you are in this time
so so and I think that that really like
things like like like for example like
you discussed in radical targets of
there are a lot of ideas that the
funding in reputation in governance that
can be used built around tokens and I
think it's we were only the start that
way so that's for sure needs to be taken
care of to come out move on with with
with tokens and of course a cool idea
that compared Campari Dow approach the
with the IC o---- approach that you have
some control over the poly Malik's panic
and terminated funding to the teams they
ceased
anything and so on that's also important
and I don't really know about VC how
that can be recurrent and that you mean
so yeah III think you are talking to
luck sir I know I just wanted to thank
you so much I think that shows really
great comment savory previous speaker I
want to add to that so specifically
those early token sales I think fully
follow the ethos of what we were trying
to do and then later on we got dating
apps and all kinds of stuff I still
think if that if we would have if the
Dow that original of the Dow would have
survived I think it would have put a
stop to a lot of that madness that was
going on because the DA would have been
this could have been this collective
efficient capital allocation mechanism
into good projects forcing them to
action if you diligence how they spend
their furthest all of that rather than
everyone just slapping like a smart
contract on to me and let me exit sent
funds to this address we decided to do
the token say laughter now lastly the
you know that we were preparing with
proposal for me down I think I just
think in terms of the madness that we
saw I think if that I haven't been
having the Dom itself was complete
madness like right there but like if it
had worked then I think it would have
been a great filter correct price so you
not even you have a lot to write I had a
beginning so gross was actually one of
the original lets a collaborator so they
are yeah I was one of the five employees
of sloppy so
yeah they definitely change that
everyone kind of had an excuse to not
put some accountability on chain play
well the doubt with fact so put the
money my multi say Oh fancy and yeah
this kind of do what was in your best
interest
there's an interesting evolution that I
think is happening there's a group out
of consensus called Tobin which which
takes the concept of a two-and-twenty
carrier let's just say the fees that
would accrue to a venture fund and and
basically parses it by the person who
sources the deal could receive 10% of 10
to 20 the people that do the testicle
due diligence the business due diligence
the legal due diligence could receive a
part of that two-and-twenty and if you
source the deal and no one wants to fund
it you could actually lose your stake so
there are these kind of next generation
in theoretical models that are kind of
creating the hybrid with venture and
tokenization which I think there are
kind of the evolution of what could
happen and with that you have kind of
this broader sense of your diligence
where you could see in the future state
anybody could do that technical
abilities and and you can have
reputation and if you're great at this
you get a score and they
become someone that sought-after to do
technically diligence so you can really
kind of decentralize the concept of
venture funding I try to get a sense of
the room who bought tokens
who are tokens in 2017
and who who in 2017 or 18 thought that
like tokenization was the future and
then we were like totally owning the
messiest
right it was still thinks that right so
it was also pretty case-specific
right people launched a lot of different
kinds of targets many of the tokens made
absolutely no sense from an economic
standpoint you said your goal right yeah
so your token was a two-sided
marketplace that was used to transact
makes no sense
thank you
and some people launched token cells
that were like super exploited and tried
to get as much money as possible maybe
this guy who's trying to come her I see
her buyers I launched worse than a
dating token I run a porn company it's
called spanking right so I watched I see
Joe and I raised six and a half million
dollars the global public auction for
spanked tokens and the premise behind
spank tokens is that you can stake them
in the spank bank
which is our algorithmic central bank
that means booty tokens
and so it actually powers the circular
economy that makes sense right now the
execution you know falling market
whatever you're like it's been hard for
us to get traction and but like as you
know as we continue to grow the company
the turkey holders like will benefit
from the growth of our economy right
like that there is value capture present
in the protocol right and further the
way that we've launched the the sole the
target specifically was was not
intending to capture as much of the
possible value on the table
I actually launched the most fair I CEO
ever and I could say that it's true so
the way we designed it was it was a
single round blind auction and so you
would submit the series of bits so we
actually sort of used state channels for
this outlet state channel guide census
so you and you would deposit a bunch of
your either on to the contract and
afterwards you would place bids which we
have the price and the quantity and so
it'd be the amount of spank that you
wanted and the price of rolling paper
many of those up to the total deposit in
place and not approximated your demand
curve right and so then what we did is
we we got all of those bids together and
we we had our own supply curve which was
the amount of tokens that we were
willing to sell at each price we figured
out where those matched we picked a
strike price and then we gave everybody
the same price and so we resold 30% of
the tokens and raised six and a half
million dollars and the benefit of doing
it that way is it you know even it like
in the best case the tokens up 30x from
the sale and in the worst case it's down
about 4x right and so it's like you know
you give some token sales that were so
exploitive
that they're down 99% from the point of
the sale and so you know what when
you're talking about these don't try to
lump everything into a category even if
it is a dating app or
and just just add on that based on
Twitter about two months ago about how
all tickets are not equal and we really
need a decentralized rating agency to
raid the triple-a checkpoints from the
horseshit coins and and so the problem
with that is when you create a ratings
agency well how do you prevent capture
of that ratings agency to you know you
give them a bribe and they rate your
your clean
higher and so so I think it would be
interesting to see a trusted community
source then that can separate the the
worst chickens from the best ones and
you know I think it means the way being
framed it as being down for X it's way
different than being down then you know
percent and I agree with that the UM
someone I was talking someone to do for
Lynn who is saying Oh multi-floral die
with maker is gonna be that so basically
right now the collateral in maker that
that makes die into a simple gland is he
and that single collateral died and in
the future we're gonna have logger or I
forget what what tokens are gonna be
launched in multi collateral die but you
can basically look as as more tokens or
States to create diet and makers
economics at the different attributes of
of those markets and then you can use
that to approximate a rating for each of
those tokens based off volume and the
flow of the tokens in multi bundles I so
I guess the to some of my point two
points decentralized rating agency will
be important it will and making sure
that it's not capturable will be
important and maybe multi collateral
died couldn't do that
it already started it's not facility
centralized but he was two weeks ago
when they said Hall is creating a
reading to define if something's the
utility or security and I think that's a
step in the right direction
that was ridiculous now that he's not
very much
from a high level interesting you know
just supposing it's our previous
discussion of PCs and happened a fine
sois not necessary
model-driven yeah I think it's
interesting
20 over 11 Toki prices like you
a token model I think that really goes
against what we're saying we're token
like I need is good or you know
really in fact people who are funny
are they just looking for a return that
went to bring expectant mothers and so I
think it's very important to think about
why you're raising money
that's expected a Western think you are
and you can't sell
please
I think from that level
chest
I think a great comment as well how just
we talk to kind of question how does he
theorem you can we fit into that model
like days Democrats up
yeah uh-huh I don't personally I don't
think they at lunch ever come to
sass model
he's an avid ship
so that
I probably doesn't than you're always
like the dollars Tish like if your
protocol depends on the stable value
without it you could never operate and
I'm not saying sometime you're saying
okay
okay for the same time move on
we kind of went through a lot of this
but yeah okay so this is what we saw by
the white paper I think you saw a ton of
this which also discredited the whole
block chain space unfortunately but I
think about a man who President had made
the 360 circle come come to realize like
it's brother space be very disillusioned
but they've come to realize okay there
is actual value to be delivered quotes
to show it to anything and yeah and the
half cycle and we saw a lot of this as
well what is your business I think what
is the non capture for the token I think
95 percent of tokens that are one for
American Catholic feminity don't have
like there's no working model does be
gone like there's a limited supply and
it's listed summer okay we went through
a lot of this I'm not gonna I'm not
gonna go into that again and maybe some
of the important things to differentiate
with token models I think there's both
for-profit and nonprofit in separate
models something that Andrew mentioned
hey I think we need to strongly
differentiating token models or token
sales of token as business models
between an application here token
I think that's fair one thing to go back
to the etherion crowd sale that I think
triggered me was that there was no
vesting the metallic is still grunting
away and nine-tenths of the other people
they've got what 15 million ether or off
to raise another token or we run at a
competing protocol level etc you know
making that type of behavioral economic
incentives makes a lot of sense I think
block stream is an example with a
Bitcoin where they they invest
time-release bitcoins and obviously
that's a little bit of a different it's
a for-profit entity but kind of baking
in typical concepts like best things in
a corporation I think and I think if
there's a huge tragedy of the commons
issue you know think about all the
people that were County 2.0 vs. gap or
work or Jeff Wilkie who I think added
value to you know you won't point out
but 300,000 ether of it hanging so I
think thinking about those types of
tragedy the Commons
shoes is very important I think there I
think there was a lot of like miss
raised funds right talking cells at the
application layer which fundamentally be
should have been maybe like ideally like
maybe we catch the positive businesses
bootstrap or VC funded if they happen if
they have tried again pcs money probably
a lot of that space a lot of the coins
that we see the support existed it
vertically and I think it's great to
think just some general mozzie things in
in general we do it open sale to
exchange for Network statement assets so
that goes into was raised with the
security over here it's often impossible
that bumps on financing it's also comes
with a lot of issues so we'll use twenty
million dollars how are you going to
they cut you dispersed that over time in
like with that there hasn't been like
the same experience as you have we DC
which is that kind of leveling up aspect
kind of a more decentralized decision
making that pundits like or what he said
like everyone's Avicii there's various
business operating models we've run
through that I think the key problems
that a lot of companies are faces like
the legal incentives other funders and
then there the token models cool maybe
as a last question before we close the
talker topic to come back again what
what do you guys feel is the role of
tokens and funding he says urban
infrastructure
building
I got especially healthy Achebe's as
well like get warning confusion she
listened and then after one good she
Pierce's mantra more rapidly instead of
using too huge first then absolutely
yeah
and I mean if you if you can build the
utility without raising a token that you
probably should integrate a token into
the model later on unless it souls like
a fundamental or Katniss it's also
fundamental problem
I guess I'll chime in and say that
several months ago I offered any IP that
twice out using inflation funding the
etherium made that and but the current
controversy is prog pal I guess five
months ago the controversy was blocked
or worth something and you know the
whole problem is is basically with if
you create inflation funding at that
layer one of a protocol then then how do
you prevent capture of that inflation
funding I I by people who
just want to be with oligarchs in the
network fins bass booth proof-of-work
you can improve that minors are at a
guide to the network because there's
consensus algorithm that says that
minors riding bikes the network but with
software development the value
proposition is inherently abstracts and
you know the software developers are
sometimes not great communicators and I
don't even know if the projects that I
worked on for the last month that we
don't intend on is going to have any
value to the community this diet
propositions are subjective and so
there's the room for capture of funding
of open source infrastructure buta
inflation funding the toxins that sums
up really nicely in his blog post on
Volusion which is on this website there
is a inescapable trade-off between
failure to fund legitimate public goods
and enabling a plutocracy and I think
that that's why the block award funding
be varying from a net that that yep he
is dead and and maybe we'll see it on a
on a side network or maybe it's a
testament that has value or some other
platform but we're not going to see it
on the theory at a time soon enough
name a showmance quiz for inflation
funding but in what context in the
context that you just described so I
mean like the picture of the horse that
you had like being drawn out
progressively is sort of relevant here
I'm my VIP was broken up into three
sections the first is that software
development is is valuable the second
was that current methods of funding open
source infrastructure are not working
and the third is we should explore
blockwork funding it was designed to be
a gradient of contour of a fully baked
inocent controversy where I don't think
I think in this room people would how
many people agree that software
development is valuable to etherium
all right how many people think that
current mechanisms are not working how
many people think that we should use
inflation funding to deploy capital to
you to put out clients information there
you go so that's the gradient right
there variation like probably
if it's out sure that's wicked - it's
just like that I know that's being done
are they completely Mitchell Michelina
protocol this is like a really fun
conversation having the abstract and
Kevin process it just later
bulldozing ahead and putting it into
practice and so people like it's can of
worms don't open it we're like let's
just take a look so like we look to
found the works
you made a telegram group there's a
couple hundred people in it with like a
lot of people came in and like started
being all I think the Chordettes should
be responsible for distributing funding
because we know best right and then like
Aragon comes it's like well we should
put the money in an arrogant down
because you know and then I'm like well
I should be in charge you know I'm right
the point is is like by the virtue that
nobody else wants to you know to give me
the legitimacy
even if I think I think it's the same
exact way I'm thinking about other
people trying to spend the money and so
it's a deadlock right and it's devolve
into this sort of like political
power struggle and then that's when I
Ridge but that whole thing and I was
like I'm outta here I see the words it
was that I think this is this is what
people want you about right it's that
the whole thing could was legitimacy
because people could leave that it has
been captured by some special interests
and that potentially is more damaging to
the project and the value that the
funding
I'll say that the architecture Motel is
quite elegant where the amount of
influence that you have is only relative
to the amount of tokens that you've was
it like staked or I guess you're called
we tribute and walked out and so
basically no one will ever have more
influence than the value they brought to
the table in the first place whereas
with block rewards funding it the
funding is being created on a thin air
by inflation and therefore you don't
have that sort of mechanism yeah I want
to copy out this too but we started the
conversation with the goal of like you
know kind of a little noble goal it's
like long-term how are we going to
sustain this forever right like in five
years how are we going to fund apps like
yes
you know runs out of money whatever like
we still wanted what you're doing this
right so the fat part I'm still in favor
of like I believe that we should I'm
optimistic that we'll you know come up
with something and maybe be able to do
it but I think that the bar is really
high so our legitimacy
to drive that conversation great and
we're like the proposals are like let's
just put it in and out really yes
whatever happened last time Lee and and
like we as a community haven't even
participated and downs because we're not
used to this like we haven't learned
from your experience of managing funds
it's where we haven't made mistakes
right so my take on this was like let's
run a bunch of controlled experiments
and so I summoned Moloch down and you
can talk more about that later but like
it's it's still possible for this to be
involved in the direction where some now
like structure doesn't play it out other
people want it to like use the money to
pay for quartets immediately and the
situation there is like youth was like
$100 yeah front plate was like you know
and people were definitely concerned but
then like a few throws immediacy of the
the need was sort of faded away right
and it means that like we shouldn't take
an insane risk we should we should try
to work up to it right that's that's my
thought so um I think it's still an
important thing to consider very slowly
maybe if we overly can right honey
figure it out speaking of experiments
here we are experimenting with different
funding levels right we'll work our way
to explain matching is I love it like I
think this is the perfect segue into
next topic we talk for just going to be
talked about investing maybe one last
thing that we haven't talked about that
like and but after actually we should
mention it like VC token launches and
just something like to quickly mention
here it's a very common problem of like
private capital versus public capital
valuations and we now see this with
companies like Google we work going
public I think with there's many recent
examples in crypto where VC extremely
decent by the point Trust goes public
and then loses the majority of its
valuation to the public market so maybe
as Abbas caveat here
but this tune there's too many things to
bring up just what is C cash and the
other isn't green yeah see catch you who
here knows what C terminus everybody I
think here notice that is he has 20
percent inflation funding so they put
that into the beginning they said
working for 3 years we're gonna give
developer fun 20 percent of the protocol
rewards to pay for development right
that works when you do it bidding
doesn't quite work when you try to add
it later as we're seeing and he sounded
like a source of contract like okay it's
can you opt into the in the beginning of
the movie a minute but once later if you
try to change the contact later on then
you got for me
right and the other thing is this friend
and Brin raised so much money and it
like touted by all the me seasons like
fair money creature knows what greatness
like happy and they had no inflation
funding for Deb's they had no depth well
they're like everybody makes money off
this past mine and what happened was
like the most predictable tragedy the
comments effort which is like one all
the people who are operating first of
all of our pcs were greedy and and - you
have no money set for death certificate
the devs were like broke and trying to
like you know plead with the PCs to pay
them to continue doing work and barely
any of the PCs wanted to do it and I
don't really know how that went I
stopped following it
which fundamentally doesn't make sense
but that's the classic tragedy of the
Commons probably a bunch of PCs that
invested into the miners but no one's
going to continue funding the actual
protocol Alvin right it doesn't make any
cognitive sense but if I gets this yeah
it's like from the single act from a
single actors perspective you're like
well then somebody else about that
why should be from them I think that's
one of the reasons why I think in the
buggy movies you saw the creation of
these community funds like a lot of big
of the of the bigger projects
simultaneously also raise their own easy
fund to support their community which
now obviously operated under much best
kind of narrow-minded okay but before we
get too deep into the little things I
want to talk about maths scientists
actually the last few comments are a
great segue from from tokens not to
graphs as the funding option after -
after tokens we're going to go into
dowels and then kind of - well how's
everybody doing with like should we take
a really break or should we just keep it
going I figure you take a break my
disperse - fun cool that's our bug
that's who's received a grant
what so maybe someone in the vacuum
business permit was your experience
Oh
- that's apart but to a liner go inside
the bunker
quite as opposed
you're always delivering and quite so
like you guys around a little bit more I
think Austin's right
that going forward there should be clear
mechanisms for the same mouthful
difference and also accountability for
using those will also help with that
process because often people are saying
they want to see the value on what they
are paying for I thought maybe just
doesn't and I think almost like I've
seen some grant funding processes to be
like more stringent than the much
smaller amounts but much more stringent
see in chapter that the situating
process in terms of the pasta I guess
it's a very different accountability
layer as well because there is no
investment being made so it has to be a
general person it does anyone else when
I add something
they experience yes grants are like
bandits you know they give you like okay
I have a problem I don't have any
economic model I wanted through this
value but the value isn't valued by like
the market so like give me some money
I'll do it for a while until the grant
funding runs out and then
it's a sad thing that's why I love get
point grants they're not like grants
it's like a continuous funny you even
you can start making plans when you rely
on both Frank's at the beginning it's
like you have to use that money to
figure out how you're going to get your
next money you know it's almost like
it's kind of wasted just on playing a
grant circuit if you can actually have a
residual income coming in and you can
count on that you can hire a developer
and you know where they're getting paid
every month
you know I'd sell of course that one's
out but that helps a lot this is the
opportunity cost of the nonprofit space
in general is grants are time-consuming
process you have to conform to each
different grant making body and fill out
their application you know dude the
whole thing that is time spent applying
for money that governments and
for-profits have supplied to them in
spades in capital markets and were in
the tax pools so this is where the the
nonprofit is really like as a huge
opportunity cost in and continually
trying to find these grants and
donations rather than
changing the world yeah I think as a
business being dependent on like grant
funding on a continuous level must be
like must be extremely stressful I mean
like BBC's mother distressful actually
probably any type of funding if you're
not running a sustainable businesses and
safety stress this economy could you're
gonna feel like a week recap again it's
clearly mother who mean grant said
nobody in exchange for services for like
a community so build something to the
read specific service that serves the
common good
nobody it's payment on that they read
what I've seen it's like it's like very
milestone based payments not on full
delivery but it's like to the one thing
you gotta do the other thing in general
fund infrastructure community
initiatives it's generally very small
amounts compared to VC and tokens and I
think maybe that's where the whole model
again of like how can we brothers open
source infrastructure false show it
pumping so much money into the one
direction for for-profit policy not like
nearly enough
into the other direction how I have a
lot of value who's to the protocol later
here in centralized decision-making and
centralized governance in many cases
what it feels like even if it's a cream
iam I've heard it can take a really long
time to like to hear from the ground
because I we go to crap once ourselves
and to this date still haven't received
to second favorite of the crowd and just
be mad yeah when is it coming when is to
come in and just be like oh yeah it'll
come up in the next batch and this is
like a very would not grant funding
coming company foundation in these
namespace we still have government and
if we were relying on that as business I
mean the grandmas recruits like not to
go and then the first payment came about
after and we still do the rest
it's like we're super dependent on it
for like party emails angry and I'm a
objected
big migrants is pushing to decentralize
decision-making about grants to an
algorithm on the CL art stuff so it's
not all of them are decentralized if our
artisan tries
I'd also say the vault au has a
decentralized decision making process so
people are pushing pushing
that's sweet
as I kind of not reading a grant-funded
follow but I wanted to add it to give it
a new chance to talk a little bit about
consensus as I thought I think it census
did so much in DTM spaces early on and
really invested a lot at the protocol
data it's definitely like grant funding
lot of fun although they have a grant
funding Jeff do you wanna talk a little
bit about that and Senate but basically
compared to traditional venture where
the dollar rating of five dollars out
here's our product here sir here's our
contraption consensus had lots of
different
tentacles independent and in some of
them the value would accrue to the ether
token things like consensus diligent
incisional things like education and
things like was marketing for awareness
and and those we necessarily lose
something that would be venture festival
so just defining that but but I think
that consensus did not shirking
economies
I think I think grant served an
important part of the penny ecosystem
because like if you have a vested
interest
like yeah spend money
we I received a grant from the f was 420
we're playing is that better
connects team we work with them
to play and that's like you know source
infrastructure for the hold space some
of that work it was like research
oriented because
first wants to do it and it's hard to
you know take that kind of risk if you
are
whereas like you know that they're still
making a venture funded business out of
that but like we're able to build a
better product for aetherium because of
the grants that we receive
also receive leading the end rupees
grant so this was you know I was like
broke it working
let me crash his house for mobile he
wasn't trying to raise money
you know people are really helpful you
know you're also trying to help that
succeed
something that I've noticed with threats
as well like personalities still that
are a lot at building every good
relationship with a grant funding
Authority it may seem like you're
applying to the for example to the ETF
and like it's a very technical thing
that happens you must be funded and
someone else gets funded before you and
it is still very relationship that's
that's an expense that I've been
listening because the space is small
yeah I was super super cool let's talk
about that
it's getting to King so we can make you
through this whole like for-profit older
models into like none and to the models
into the profits and now activate you
don't have the models exactly - we'll
get into like the last section of the
watchtower just just discussing new
hybrid models so slapping about bonding
here want a job see what happens but
here let's talk about ours were more
generally initially I want to open it up
to the audience again audience works out
for me
you guys are the base nice what about
the time have you received planning from
down and I
say that I'm a bad actor I am part of
the molecule and I think that's our have
a core part of our town and I haven't
voted yet and I think that with respect
to these let's say common utilities
governance is is not necessarily
prioritized or incentivized and and you
know I'm a proxy vote I just had to
trust a mean kind of sort of himself and
and I think that that's an issue with
like a public utility like a doubt like
governance and funky-looking I mean you
just create Monica I know today's bang
grenades I found personally in
the doubt and then our limitations like
I said before either
she's like yeah but then I reach but
that work it's a
okay
can you talking about like the project
loading they're talking about all this
stuff yeah so all who hears her tomalak
doubt all right
it's and I got a grant from the app as a
little frustrated about how inefficient
that process was so I decided to launch
a competing grants organization or you
know walk curry
so wait while looked at works is you can
put money in and you buy shares you have
to be voted in by the existing members
and you get voting power proportional to
the amount of money that you put in and
the only way that the doubting spent
money is to make new shares and so if
you want a grant from the Dow you will
say I want you know X shares and the
ground will mint those shares and that
proportionally dilutes all of the
existing members so that the money comes
from everybody
you if the Dow has for example you know
a thousand ether you want any of their
grant it will if it has like a thousand
shares but when the temperatures and
then those temperatures you can Rachel
it so two other mechanisms there's a
there's a seven-day of voting period and
a seven-day grace period so during the
voting period everybody can vote and
that vote is final
and before the money is actually spent
everybody who didn't vote yes has the
opportunity to withdraw all of their
funds and they were basically everybody
else to pay for it and it's and it makes
it so that if you disagree strongly
enough with the way that the doubt is
going to spend your money you can take
your money and leave alright so the
thing is you know it's not really a bad
actor and it's just like implicitly
trusting the people who are voting to
make decent decisions and if he's ever
made aware of the people who are
actually going to spend the money not
making decisions that he thinks are
reasonable he can pull he has a week to
pull out his money but before that money
gets spent and that's pretty powerful
because it means he always has
sovereignty over his month
unlike some days were like if you want
to take
you actually have to submit a proposal
and get everybody else to vote to let
you pull out your money and so if that
doubt gets captured
you can potentially never again I think
that was safe so so far that that's like
the mechanism of moloch but we launched
it in February we raised right now it
has about a million dollars has there's
about 20 of us that were crazy enough to
put in 100 ether at the beginning we're
just like you know no idea where this
should we go but like it seems like a
good idea that striveth and then
eventually we proved that we could
coordinate and font grants per we funded
these two reports we funded b2
development we funded we funded a mixer
recently what funded a bunch of core
infrastructure audits or the payment
channels that connects this building and
you know sort of the highest moment of
this was like when metallic and Joe and
consensus in the up each decided to put
in 2000 also and really give us a lot
more firepower to be able to not only
like engage
well the community to you know
potentially execute grants that we
wanted to see see done but also just
amplifies the amount of value that we
have to spend and so far that's been
going really well I think one of the key
things that's really cool about it is
just how efficient the whole process is
right from the time that you submit a
proposal you will have your answer in a
week and you will get your money in a
week after that right if it passes and
so you know that there's some do
diligence you know going back and forth
negotiating process before you submit it
but like that will think the fastest we
ever ran this was like I do we need you
to test runner so that the client teams
can run tests against their bills
make sure that like if something changes
you know they know it broke something
and the next day it guys like I'll do it
earlier we interview him the next day
after that you're like variable seems
good and so we used to the proposal
$20,000 now under he beat so we worked
with him to form the proposal because it
was our idea and then it was you know
and and so on it's not the CTO of white
lucky he came on to help execute it was
like a one you know one month project
great the key thing is like a one month
contract work it's like not even worth
doing it's not even worth thinking about
for like going to the yet for money
because the amount of time and effort
you have to spend just to get the
proposal through is like more tough you
know value than the whole grant right
and so being able to have like fast
efficient grants as I think a nice slate
complimentary aspected City F grants and
I think that the model has sort of taken
off also because we're seeing the same
code
or getting doubt which is like a super
PAC to fund and your yang beams and like
meta cartel which is like a bunch of
application-layer developers coming up
on application-layer infrastructure and
like Church of doubters and our
collective
they're different story but I think that
it also presents a model for the yet to
incredibly decentralize their funding so
they get criticisms because they you
know they're like how do you guys make
your decisions or how do you decide the
fritz but their money all this stuff and
it's like well if they could put more of
their money into denounce for like
specific areas of the ecosystem then
they would be engaging the other
ecosystem stakeholders and being able to
collaborate on making these decisions
and do it in a transparent way it's all
the stuff is on chain funding that's the
mullet primer I think it's a nice much
for that again I think it's one of the
biggest contributions in the space like
that I've seen it like for the pasta I
think the amount of bring the coolest
one of the things that I love most about
Moloch is the way that their actual
contract starts look at it it says like
please steal this code which is like one
of the guiding principles of open source
but like since weeks since Mallen came
out we've seen so many iterations of
that and so quickly like the space is
literally exploding with ideas and
that's something that is really
important at this point that we iterate
and that we test cookie I think he
wouldn't be gone before calling itself
is trying to cheat the code itself has
taken on its own life form and things
like meta cartel is anyone from Erica
Tyler yeah the anyone that can explain
this a hotel yeah yeah okay she took
that
second cell basically predicted by
Monica think you tried together grab her
molecule right join as a member
right I tried to get him in the rest of
the to that first look like now so they
you don't reject it you've got a seems
like right I'm gonna have a hood
and so these are the next on a
background so it's really more in the
application there dux and so meta car
travel is basically he was saying primer
has more but to fund the application
later and but as a different story that
model because Monica since its funding
to is seed grants giving but may take a
cell makes more sense to maybe switch to
the for-profit and so it is going to is
like an ongoing discussion is probably
like finalized because the first wave of
grants so Francis a quick front in
basically package like event occurring
an MTS for taking Monica thing and
basically they're like starting to
incorporate and so maybe we're gonna do
another tau structure to kind of get
maybe system and investors or other
support so anyways like recording
business follows is different from
Moloch which is to like a charity and we
might switch to for-profit there so he
elicited cyclic for the application
layer
Super Bowl and like now great segue into
the next topic as well but like we're
seeing like a lot of expectation and
people actually moving for nonprofit
balls again into for-profit models which
is being quality good so I think I think
what we'll see over the next six months
in here as well is like the
reinvigoration of models like what the
dow were originally trying to do and I
can't wait for like a VC to actually
whether we'll be seen come along with it
but actually
let's allocate capital into the sub now
that will then invest into like these
these set of projects which is going to
be really yeah exactly actually also
playing twister is cohort-based
funding so kind of like going towards
like a mini white linen or kind of thing
about coming next year possibly I think
there's been some really really great
experiments so far with doubts but I
think we're still in the very early
stages of this experimentation as you
pointed out I think centralization of
decentralization is still a spectrum you
know you can have without being more
decentralized but also here than me and
say if there's something you know that
might you know he'll make a couple calls
and like that's not gonna pass where is
Tommy
zatia in the ending how they're set up
so there are certain aspects of Dallas
where governance is one question of how
do we make decisions so that you know
they're they're representative of the
group how do we address on chain voting
issues with people who are not voting
and is that really a representative
decision or these stakeholders actually
checked out and not really paying
attention to these voting systems also
long-term sustainability and scalability
all ecumenical tell these are great
examples but they're still deflating
continuously deflating the state of
everyone involved so if you carry this
up to its logical conclusion once maulik
has spent all this money the next person
to come in puts in 100 E and they
suddenly have a very small proportion of
governance over their money and
meanwhile everyone who is in moment
before who spent all of all its old
money now has an equal say over the new
money coming in so if you take this to
the long term it still has a question of
sustainability and scalability of
which is I think the problem that we're
here to discuss is they're all valid
criticisms but I think one thing to
remember with all of these decentralized
models is that humans and human nature
naturally tend to flock or look for
leadership and intend to look for
leaders even in the sense that systems
and so you can see what you want but
like I mean kind of an eerie electronic
table let's say that there's a lot of
things that's wanted that didn't happen
and also just to be clear right and like
there's a couple things where like I had
to bring all my shares to bear right
like there's a lot of people who didn't
want hang down to get funding for
bowling and I really wanted gang now
it's very metabolic so I voted with
every single one of my 601 shares to
make sure you get one sumner share at a
hundred personally to make sure that an
egg now went through and some people
were like it's so upset about that but
they almost rage quit and took their
money and went home but then you know
they decided not to and that's
interesting because they have that
option right and so you can say maybe I
anticipated that it would piss people
off just enough that they wouldn't leave
but that's you know ended up and I think
actually most of the members are in
retrospect happy with that decision
because the people who try and have
people who like Peter Pan who now runs
mana cartel who was doing the
coordination for Yangon and that just it
was the young us to use the same code
there they're actually what we were
funding was the mobile app about mobile
UI for our small town could eventually
use also right and he's also planning
building Dow house which now can like
you can spit up your own ball of talent
and see all the dashboard of all the
motels I think that's maybe one aspect
of dowels that in this large chain space
where there's a large ethos of code is
law we often forget that there's a
cultural aspect to these as well and
having mean as the steward of Moloch and
I mean each now kind of has this leader
or group of people that that the
community looks to to steward these
towels in the right direction and that's
not necessarily a bad thing
that's a decentralization is the
spectrum and we are at one point on that
spectrum and hopefully we can move
further towards that decentralization of
there are certain puzzle pieces we need
before we can continue moving down down
that speculative so also a little more
things
I'm actually taking a step back from my
sort of active participation in public
doubt in terms of just like a lot of the
coordination work due diligence some of
that and we're excited to see how it's
going to move all of us other members
step up and fill the void that we were
that I was doing to the court so I'm
gonna
maybe
there's a lot of people who
building websites and like popular teams
during middleware a platform is going to
work
cool I'm gonna move to the I think we've
discussed this again one of them to the
last topic I think it's really exciting
and guys thanks a lot for bearing with
us it's been entertaining through those
pretty long parts up and cool the last
thing to really talk about our new
hybrid models that are emerging
personally something that I think is
really really interesting and I just
want to ask it to the audience is anyone
will expand a little bit well is anyone
already familiar with models like the
con stack or the Eragon fundraising out
or something like continuous
organizations
that's up okay I've got a half of the
room cool
maybe tone that the person meant to
those people raised their hand would
might you explain it to the rest of us
simpletons yes of me when these two
bottles really come with these two one
was really combined higher now combining
governance and our structures with
fundraising and and target cells but the
main I think a key difference between
these two is that these are now they're
looking at continues financing
mechanisms and a lot of them are looking
through financing mechanisms through
bonding curves which are instead of just
issuing a lump sum of tokens you really
issue them continuously over time
according to supply and demand in the
market in exchange for funding there's
taxation mechanisms that we can filled
into the curves yet so for me the hybrid
models kind of our continuous by raising
models for dollars which is ours the
first Olympics financing that we put
here doesn't know where to talk about
occur is
but you know what populate okay I'm
assuming I'm assuming most people know
but I'll just just expand 500ms market
maker what do me with autonomous market
maker so normally if you the previous
store manage that we seen someone makes
the smart contract and issues all the
total at once in this case the targets
are continuously issues through kind of
marketing and what the speeds also it's
not just a token issues but it's also an
exchange and liquidity provider and this
is the most the stereotypical design
that you see a lot of the time we'll
just pictured the representative is
actually a terrible way to represent
body groups but it's what the use T is
positive so this is the supply to
monitor for my big night we have the
price at one side and then the supplies
bottom and then you have a curve that
governs the issuance it's essentially a
function mathematical functions can be
exponential or conducive point that gets
encoded into this markup and so has more
focus in issue the price increases
according to that curve if people can
also prepare took it's by just sending
the back to the content and then the
price decreases again
so essentially people are always
training on this girl does it mean
though that the actual trading looks
like that the training can look very
much like a normal chart so remember
that this is the supply and it's kind of
time so it's a really interesting new
mechanism because it provides the
quiddity instantaneously and it provides
really great feedback loops to whatever
that combinations mechanism represents
so a lot of these let's say hybrid
funding models or hybrid organizations
I'm looking at the terminal representing
membership but they're obviously
membership but also first off what
equates to
that are generated by that containers
organization and we have champion from
the Cossack as well as Griff and I think
the comics egg is one of the most
exciting projects that I've seen in the
space come about that is really pursuing
these hybrid tub models and specifically
interesting in the context of funding
open source infrastructure so I think
we've touched on these topics multiple
times throughout the day and I think
that we really need to need to close the
loop from raising funds allocating those
funds making decisions as a group and
then measuring impact without those
though that full loop we have a really
hard time basically governing how we're
going to raise and allocate those funds
so we look at Moloch now we see this as
an amazing community of people who have
come together basically contributed
their funds into a pool and then make
decisions based on the amount
contributed on how those should be spent
the issues with it long term the fund
slowly deflate so you have more people
joining contributing funds but there's
less funds to be spent over time because
those funds are continually being spent
when you introduce something like
bonding curve and
the basic auditing curve that Paul
described here and a lot of people have
criticisms of it and that it could be
considered a Ponzi scheme basically
people put money in when someone else
puts money in that first person can sell
and make a profit so this is an issue
but if we give that token multiple forms
of value so with the in the common stack
we're working on a token bottom curve
model we're calling the Augmented
bonding curve and that token is not
worth just a claim on the collateral
pool in law like if your age great you
take your portion or what's left of it
out but we also give it another value in
the governance of how those tokens are
spent so when you go when more people
buy in the price of the token goes up
some people may want to sell and this is
where the race to the exit the Ponzi
scheme of a traditional bonding curve
comes in but with the Augmented bonding
curve as the price as people sell them
if you're the last person on holding
tokens in holic you're holding the bag
basically and the Augmented bonding
curve you are holding all the governance
power of that community so we have a
special mechanism called the exit
tribute when people exit the curve you
pay a small tribute to the community
which is kind of like we talked about
before the opt-in agreement you know if
you are going to do in this community
you understand that when you sell this
token you're going to pay 5% or 10% to
the community this goes a communal
funding pool and then if you help hold
on all those tokens you basically have
covered
/ that funding so this also encourages
the opposite pressure more people to buy
so you have this interplay of people
wanting to sell to fake returns
people wanting to buy for governments
over that collateral pool and that that
creates a natural volatility on the
curve and that creates continuous
funding for the project through the exit
Tribune
so this is just one type of mechanism
the bonding curves are a very new
concept with solutions based is very
open and I think we've designed the
Augmented money curve for a non profit
model you could have all sorts of
different mechanisms included there you
can include quadratic voting or CLR
matching you could and this is kind of
the approach of the common stack as
we're coming at this from modular
component approach so you can have all
sorts of different mechanisms that you
could build into those bonding curves to
suit that to each nice use case on top
of that we are working on some novel
governance processes that we see a lot
of problems with Unchained governance
mostly apathy or you know people being
busy or people not you know following up
how many dollars are you a part of you
know are you checking in with each of
them do you know in each of those votes
is going on the user interface is always
great in these early experiments so
we're working on a governance process
called conviction voting which is less
of a voting system but more of a
preference broadcast you're always
signaling what you want to see done
in the ecosystem and that conviction
grows over time so this also gives
long-standing minorities more weight
over a last minute whale that comes in
and says no this is how the vote should
go which we also see in Unchained
governance if there's a certain vote
maybe a mola maybe there's someone with
a lot of tokens who doesn't want to see
that go through and last minute they
come in and just squash it I mean yeah
there are protections against it but we
just want to see sort of this this
balance of a long-standing minority
having some weight against a late whale
coming in and saying this is how much
should go now that that's a bad thing in
the small ecosystem that we're working
with today we do want these safeguards
these people who know what's best for
these communities but when we're looking
at long-term scaling this into larger
ecosystems we want to make sure that
there's proper community representation
and governance so yeah so that's
basically basically the long in the
short of the common snack there are
we're basically looking to build a
library of components that can be used
to build dowels for all sorts of
different use cases there is no one
answer to how do we cover the economies
you know an economy around e 2.0 may be
very different from an economy around
trash cleanup may be very different from
community economies so we have all sorts
of different components that you can
basically combine and create your own
endow suited for your ecosystem and one
other really important part of the
common stack
the simulation so if every president has
anyone heard Cat Cat here show of hands
quickly so this is a simulation tool
that is just going from block grants it
was just open-source through the common
stack month ago and the cool thing about
the common sack components is all of
these will be rigorously designed from
mathematical first principles so you can
just take them off the shelf combine
them plug them into the simulator and
see how your token network will respond
to stress test before you start coding
and we can go away from this whole idea
of I have an idea I'm gonna read white
paper and I now launch this economy and
then we'll see what happens which could
have disastrous consequences when we're
talking about a billion dollar public
infrastructure which is really what
we're building there you're it's our go
yeah it's old thing is like it's really
fun watching you play up the explore
apartment mics
because you know we're you know I didn't
do this we didn't start Moloch to like
save the world right we just wanted to
fund it to stuff like that continued to
fund it so we kind of you know practice
meme driven development
so we with Paula
we have beamed the evaluated pool again
and you know people want to join them
and we've all been able to learn from
this experience and and we're all sort
of inspired by them and everybody who's
in the Dow will take that with any other
doubt that they join and have that
knowledge and bring it to other other
projects as well so it's it's fun you
know to have this kinds of there's like
there always needs to be something to
this first like just to try something
you're not doing it for all the use
cases and then other people
use that as like a research project in
order to learn from that and hope
something that might be able to be taken
to the broader market and market so
people might not have even anticipated
that that may be smart so
katkat doesn't attempt to simulate human
behavior
I've seen in the hits the Explorer
exploit
I'm just wondering how some sort of how
does that work
based on theory
just greedy algorithms
sure so cat cat stands for complex
adaptive dynamics computer-aided design
so economies are complex systems when
you embed humans and actually it's a
cybernetic governance system and also
second-order cybernetic governance
system where we are part of the system
that we're trying to govern so it makes
it a really tricky problem yeah the only
and I mean we definitely get a lot of
skepticism when we say we're simulating
economic behavior because humans are
predictable that is not a rational
economic actor that we can predict
behavior but when we put human behavior
on a blockchain you only have a certain
number of love actions so in for example
to myself very basic network in other
networks there might be governance there
might be voting there might be different
things but still you have a very
well-defined set of actions and because
on a blockchain economic Kovach or the
code is what you have to follow in our
in our real economies we have gray
markets we have black markets we have
cash transactions this can be captured
but when you put it all on a blockchain
you kind of get this economic big data
and you can define agents that pursue a
profit extractive behavior for example
and when you run Monte Carlo analyses
and parameters sweeps you can get a
pretty good at least envelope of
behavior you can see where your system
fails systemically before you start
coding so it's not necessarily
predictive saying someone is going to do
this it's saying this is the list of
allowed behaviors and if we throw in
10,000 agents with 10,000 different
objectives and run Monte Carlo analyses
sweets really use the big data crunching
algorithms and say this is where the
system can fail it's not saying we're
going to capture everything I mean when
when we started simulating bridges you
know someone forgot to include her body
residents and until Tacoma Narrows and
now we've built that into our lives so
this is turning crypto economic design
into an engineering discipline basically
that we can continue improving that
model the more we learn thank you so
much I think maybe the last moment for
me I think we're kind of been well
Whitney another workshop we did kind of
a full and then almost like a 360 around
them going from traditional for-profit
models into the token icos
craze that we saw then to grant funding
facility infrastructure always guiding
with us questions like how can we fund
in the comments what model is right for
which business case I think if we are to
every see kind of like a revival of like
very large-scale open source funding
like we did with the early i ciose it
will probably be through models and as
Landgraf is describing which are
incredibly new thoughtful ways of
reading using simulation design to build
these economies and using kind of I
think these moniker type models are much
closer and incentive design as to what
you might see in like in like pinch of
venture capital funding runs really like
leveling up going from stage to stage to
stage so I think we're making like the
best of tools together at this stage I'm
really really excited to see keep and
given I have all these initiatives
continue
specifically as they are we kind of
pushing the space boarded up and then I
want to give a huge thank you to all of
you for sitting in this two-hour
workshop and for bringing all these
amazing massive thank you to add you
Jeff and a mean for all of their
insights thank you guys so much
[Applause]
you
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