Bankless - Does Decentralization Matter? | Kevin Owocki & Cooper Turley

Episode Date: March 17, 2022

What is most important in crypto? What wins out in the end? Today, we find out if user experience is more important than decentralization. As we progress through crypto's cambrian explosion, we often observe the tradeoff between immediate product viability and a 'no cutting corners' approach. Taking the side of UX & a product-first mentality is Cooper Turley, a champion of the creator economy. Kevin Owocki—himself a schelling point for public goods—is defending decentralization and the merits of a values-first approach. While exploring the roots of this tradeoff, we'll learn more about where we are as an ecosystem and where we are inevitably heading. ------ 📣 ZERION | Trade Across 7 Networks and 500+ protocols https://bankless.cc/Zerion  ------ 🚀 SUBSCRIBE TO NEWSLETTER: https://newsletter.banklesshq.com/ 🎙️ SUBSCRIBE TO PODCAST: http://podcast.banklesshq.com/ ------ BANKLESS SPONSOR TOOLS: 👀 POLYGON | LAYER 2 DEFI https://bankless.cc/Polygon  ❎ ACROSS | BRIDGE TO LAYER 2 https://bankless.cc/Across  🦊 METAMASK | THE CRYPTO WALLET https://bankless.cc/metamask  💳 LEDGER | THE CRYPTO LIFE CARD https://bankless.cc/Ledger  🧙‍♂️ ALCHEMIX | SELF REPAYING LOANS https://bankless.cc/Alchemix  🦄 UNISWAP | DECENTRALIZED FUNDING https://bankless.cc/UniGrants  ------ Timestamps: 0:00 Intro 5:45 Decentralization vs. Usability 10:15 Learnings with New Users 19:19 How Will Crypto Change the World? 25:10 Not Compromising on Values 32:25 Do Users Care About Values? 36:00 Where/When to Compromise 39:13 The Importance of DevTooling 41:00 Crypto's Trojan Horse 43:36 What Good UX Looks Like 48:55 Lowest Hanging UX-Fruit 50:39 How This All Comes to Fruition 53:11 2022 Crypto W Wishlist ------ Resources: Cooper on Twitter: https://twitter.com/Cooopahtroopa  Kevin on Twitter: https://twitter.com/owocki  Foundation: https://foundation.app/  Soundxyz: https://www.sound.xyz/  Mirror: https://twitter.com/viamirror  Snapshot: https://snapshot.org/#/  Gnosis Safe: https://gnosis-safe.io/  ----- Not financial or tax advice. This channel is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions. This video is not tax advice. Talk to your accountant. Do your own research. Disclosure. From time-to-time I may add links in this newsletter to products I use. I may receive commission if you make a purchase through one of these links. Additionally, the Bankless writers hold crypto assets. See our investment disclosures here: https://newsletter.banklesshq.com/p/bankless-disclosures 

Welcome Bankless Nation to this special episode that we are going to bring you here live on the bankless YouTube and later on the bankless podcast. Today, we are talking about the conversation of do users care about decentralization? How do we onboard 8 billion people into crypto while also preserving our crypto values? Is that even possible? Is that a thing? And so today I'm excited to bring Kevin O'Waki and Cooper Turley to people who, uh, that are on, differing ends of the spectrum where Cooper is really on the frontier of how crypto is getting adopted in new novel use cases. And then Kevin O'Waqi is a builder's builder, building out

these systems that can scale up crypto values to hopefully scale to the whole entire world. And I think these two individuals have very unique perspectives as to how to actually adopt, get the world onto crypto systems in ways that satisfy the needs of the users, but also while doing things the crypto way. And I want to have this conversation about what does it take to onboard the world and how much do we have to compromise along the way? And do we actually have to compromise? So we are going to unpack the question of do users care about decentralization here on this bankless live stream panel coming up next. We will bring that conversation right to you. But first, we got to let you know about Xerion. And I would be sharing my screen, but you might

notice that Ryan Sean Adams, the AI, has a bug in the system today. So the A. is down. So it is just me today on this bankless panel. And so, Zirion, of course, our partners at Zerion needed to let you know, but Zirion actually works across seven different chains and applications. And so whether you have your assets on the Ethereum L1, the Optimism L2, Arbitrum, ZKSink, whatever L2 you prefer, or what other L1 you prefer, Zerion can get you to those other chains. And so while there's many, many chains out there in the world, there's just one, Xerion. And Xeroon can help you bridge across every single chain directly. So you can get exposure to optimism while never, ever leaving Xerion.

And you actually only have to switch networks when you need to sign a transaction. So you're not constantly switching back and forth between networks to see where your assets are. Are they on Arbitrum? Are they on optimism? Zerion will give you a fantastic summary of where your assets are. It is the mission control for Web 3, your intuitive. defy portfolio manager. There is a link in the show notes, banklist.com.com slash zirion. For you to go check out and load up your wallet. So you can see your aggregate

Ethereum and just private key portfolio across all of crypto. I think that's actually going to be a very relevant part of the conversation today is how do we have many chains, how do we have many ecosystems and all of them be usable all at the same time? So guys, we are going to get right into the conversation of do users care about decentralization? How do we preserve crypto values when we onboard? 8 billion people into the world of Web 3. So right after some of these fantastic sponsors that make the show possible,

we will bring you Kevin Milwaukee in Cooper Turely. Here we go. So you've got some money, but how are you going to use it? You want to spend. Use me shopping now, bro. When you know you should be saving. You'll never buy a house at this rate.

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and helping to design the Fair Fair launch of Across. If you want to bridge your assets quickly and securely, go to across.tto to bridge your assets between ETH, optimism, arbitrum, or boba networks. Living a bankless life requires taking control over your own private keys. And that's why so many in the bankless nation already have their ledger hardware wallet. And brand new to the ledger lineup of hardware wallets is the Ledger NanoS Plus, a huge upgrade to the world's most popular hardware wallet. With more memory and a larger screen, the NanoSplus makes it easy to navigate and verify your transactions. And the paired Ledger Live desktop app gets you increased transparency as to what is about to happen with your NFT.

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Welcome Bankless Nation to this very special conversation about how do we expand, how do we project crypto values to 8 billion people. Here we have Kevin O'Walky, an early contributor to Gitcoin, now host of the Green Pill podcast, which you might recognize on the bankless RSS feed, which focuses on regenerative crypto economics and how we scale crypto values to the rest of the world. Also joined by Kevin O'Walky is Cooper Turley, an operator and investor in the creator economy, co-founded friends with benefits, advises audience, and a leading collector of music NFTs. And Cooper is also a crypto-socialite and has been experiencing the intersection of crypto and mob. modern pop culture, which is why both of these individuals are particularly suited to have this conversation where Kevin O'Waqi is deep into the bits, the ones and the zeros, and Cooper is deep into the pop culture, and we are trying to get these two worlds to come together

and make sure that we scale out crypto to the rest of the world while preserving crypto values. Guys, welcome to the conversation. I'm really excited to have you guys here. Thank you, man. Excited to be here. How do you do, fellow kids? Kevin, you are not that much older than us. Okay, guys, I want to start the conversation here. We got to, because we've got to define the actual conversation. Decentralization versus usability.

Are these things even opposites? And are these things, the friction points upon which this conversation lies on? Cooper, I want to start with you. Yeah, I don't think they're opposites, but I do think a lot of the times user experience is directly correlated to how decentralized something is. you know, and to really state my opinion on this matter, I think that the more decentralized the product is historically we've seen the harder it is to use. I don't think that's going to be the case forever,

but I think that's sort of the grounds for this conversation. Kevin, what's your opinion? Yeah, I'd agree with what Cooper said, yes, and I also think that decentralization is sometimes a really important part of the user experience. If you're in a country where you can't trust the state and they seize your assets, then that's a pretty big user journey hiccup.

Also, if you've got a system that's fragile and centralized and it goes down, that's a pretty big usability problem. That said, as someone who has been building products since 2017, at least from the start, some of the tools to make Web3 apps deeply usable to the standards of Web 2, we just weren't out there when I first started building. And it's been getting a lot better with the launch of tools like the graph and various other libraries that have been built out there open source. So I think the usability of apps, when you don't have those Black Swan events, is catching up to the Web 2 experience that we all kind of know and love. I think there was a nuance right there, Kevin, that I think we should definitely unpack. And that's really just about, do we actually need to change the definition of U.S.

and usability inside of Web 3? Because like you said, if centralization allows for assets to be seized, that's bad U.S. But that's not really what you would think about when you think the words U.S. I think we, when we think about usability and UX, that's, we kind of stick inside of this web to mind frame of just like, is this website easy to navigate? Do the buttons do things instantaneously? And do they do what I want them to do? So as part of your answer, kind of we need to actually change our definition of what usability is. Yeah, I mean, I think that usability can be all encompassing. If you'll allow me to just share my screen really briefly, I think a lot about this user experience hierarchy of needs, which starts with functionality.

in that the interface doesn't break and it's not slow. Does it have the right information on it? Are the aesthetics hot? And does it allow me to do my job to be done as kind of at the top of that pyramid of usability? And so I think that one way to untangle this might be to go up and down that stack in kind of reason about decentralization versus usability at different layers of that stack. Cooper, you've met a ton of people who have come into the crypto space in 2021 and 2020. And I think this recent cohort of crypto people is particularly interesting because they're not,

in my opinion, from what I've seen, they're not crypto people adopting crypto for crypto sake. They're people adopting crypto to get something done, which really changes their priority about what an application means to them and especially with usability. So what have you learned from helping this newer cohort of people come into this space? What do they care about? Can you put us into the shoes of a new user that came in 20? 2021 or 2022. Yeah, I would say it's really about ease of onboarding.

You know, how many steps do I have to take to start using something today? You know, in most cases, it's really around NFT collecting for the most part. So whether that's minting an NFT, collecting an NFT, joining a token-gated server. You know, these are some of the use cases that I see happening most commonly with new people to Web3. And right now that onboarding process has a lot of friction in it. You know, I think to Kevin's point, being able to recognize that the custodial nature of these wallets is extremely important is a new paradigm that we haven't had to consider before.

You know, when I sign into Instagram with my email and my password, I don't think about, you know, what are the assets that I'm holding under the hood of my Instagram account. And so a lot of these Web3 products do come with the new novelty to them. But I think the core thing that I'm focused on from a UX perspective is how much time does it take for me to say I want to use a Web3 app to actually being able to use it in a meaningful manner? And how do we make that window as small as possible? So when it comes to going from Web 2 to Web 3, there's got to be this inevitable U.X breaking. based on just the new paradigms that we exist in. Just like you said, when you log into Instagram, you don't actually have to be worried about the assets that you hold.

So maybe this conversation is like, there is actual no way to avoid this breaking of the U.S. just because we're going from paradigm A to paradigm B. When you're helping people onboard into the concept of, like, user sovereignty with their assets, like how easy is it to explain it to them, the powers of Web3 is kind of where this UX thing actually breaks down. I think a first crack at that. I think connecting with a wallet instead of signing with the

email has really clicked for a lot of people once they've actually been in the door. You know, when they go to two different apps and they're able to connect with that same wallet address, I think it makes sense to them. I think the difference there is that more broadly, I don't think a lot of people are well suited to handle key management. You know, I think for people like us who have been in the space for a long time, we understand the notion of non-custodal versus custodial. We understand that giving out your private key as a non-starter. So many of my friends have gotten scammed from just like negligence, you know, scammers are getting pretty good out there and key management is definitely a churkey situation. And so to your point, I think that it's really

important that we emphasize why connecting with the wallet is better than signing in with an email. But with that, I think, comes with a lot of underlying risks. And I think that's kind of the core area of UX, I would say that's really interesting to discuss here in this panel. Yeah. I would just add that, you know, when I think about this tradeoff between decentralization in UX. I think a lot about, you know, in Web 1, everyone had to learn what a back button in a URL bar and a reload button. I think there was a stop button that was on browsers back in the day. We all had to learn these new paradigms for how to traverse information, what a hyperlink was. And people kind of got over the hump, right? And so when I think about Web 3,

you kind of have to learn about private key management. You have to learn about backing up your private key, which is an important part of private key management. You have to learn about sending transactions, gas, layer two architecture, if you're going to be in the Ethereum space. And so one of my big questions is, are we going to try to shim the Web3 user experience into Web 1 and Web 2, which we already know people understand? Or are we going to teach people these new primitives around key management and gas? So like, are we headed towards a world in which a lot of these D-Apps are a blockchain mullet with Web 2 in the front and Web 3 in the back? Or are we going all in on beautiful Web3 locks for everyone?

And I think that you're going to see a stratification, depending on the use case, between those two things. Yeah, I think it's a mix of both. You know, my vision for what this works out as is that I think that most platforms will start custodial and they will front and cover the gas fees. So people do not have to do that themselves. But I do think it's always how it's going to function. And so if you are an advanced user, I believe that you can mature opt in to sort of a more

non-custodial approach there. But I think for the 8 billion people that David's referring to, my guess would be the mass majority of those people will never touch a private key in their lives. Yeah. You know, one interesting experiment out there is the burner wallet, which I think was one of the earliest L2 wallets that just kind of felt like an app that you could use. But it was so fast and so easy to send transactions on it without having to worry about the gas prices. I think that that's a great point that we can kind of like pull people along this custody route into having their own private keys and learning about those primitives. Cooper, when you've helped people onboard and watch their experiences as having to use crypto infrastructure, again, to achieve a goal, not necessarily just to do crypto stuff for the sake of doing crypto stuff, do people feel the power of holding private keys as in like, is that something that they feel empowered by or does that feel something that they are encumbered by? As in, does the responsibility of having your own private keys, is that a burden for them?

or do they actually think that that's cool and neat and they get some excited? This is only my personal experience, but I have never once onboarded someone to Metamask here in L.A. and then seeing them be like, fuck, yeah, I have a personal key. Like every single time, it's like, bro, what am I doing? Like, what are these words? Like, just get me through to the thing.

And then once they get them through the thing, they're like, okay, wait, I need EF2. And then it's like, yeah, okay, go on Coinbase. And then if they want to send from Coinbase to Metamask, you actually have to KIC, so then they're uploading their documents. It takes a couple minutes to process. And then they're withdrawing.

And that whole process has been very difficult for me to be like, yo, you need to be in this world. And then I'll sit with them. And then it takes us 30 minutes to an hour of me being with that person, you know, physically for them to get started. It's been tough, you know, to say the least. One of the things that I tease bitcoinsers the most when they say that Bitcoin's going to take over the world is that I kind of tell them that, well, you guys kind of have already found all the libertarians that care about Bitcoin. Like there's not many left of you to really scale out Bitcoin to the rest of the world. And what I'm hearing from you, Cooper, is that that might also be true with people that get excited about having private keys and having control over their own money and assets. Kevin, do you think the powers of being your own custodian, having control of your own money and assets?

Maybe we've actually onboarded most of those people and the rest of the world actually might not be interested in those powers. What do you think about that? I think a lot about drivers and barriers. So what's the job to be done that they're trying to accomplish when they're trying to accomplish when they, hit the private key roadblock or the KYC roadblock. And those are the barriers. And so what are the drivers? Are the drivers enough to overcome the barriers?

And the problem in 2017 was that you only had this like sort of libertarian footwork government kind of attitude that made you want to get over those barriers. But now we've got NFTs. We've got DFI. We've got quadratic funding. So it's about continuing lifting up the bear or the drivers to get people wanting to incur the pain of learning about these new primitives to get them through the door. But I don't know.

The developer, take what I say with a grain of salt because my audience at Gipcoin is mostly developers and people who already understand this stuff. So I think that I'm not really bearing the brunt of it in a way that someone like Cooper is. Yeah. And David, something I just thought about there is for all three of us on this podcast, we have a significant portion of our net worth in crypto. I think for the average person that's joining crypto every day now, they have less than $1,000.

you know, in many cases less than $100. And so when it comes to something like key management, I think the reason we're so passionate about it is because it's very meaningful us. You know, if we lose that portion of our lives, we're getting hit with a serious, serious dent. For a lot of these people that are joining Web3 today, they're treating it almost like a burner experience

in many ways, shapes, or form. You know, the most common experience I've seen is someone putting $1,000 of Ethan their metamast to go by the dumbest JPEGs I've ever seen in my life on OpenC, and that's all that they know. And so when you treat it with that mindset, And I think that's why there's a different relationship with private keys because they don't see it as, you know, the means of their financial freedom. They see it as speculative gambling for the short term.

What about the onboarding experience for other ecosystems? I've heard fantastic things about the Phantom wallet with Solana. Cooper, do you have any perspective as to how much of this is an Ethereum problem? It's not that much easier on Solana. I think it's incrementally better, but it doesn't drastically change the overhaul. I mean, you have a little bit better UI on Phantom. you're using a different token and it's a little bit easier to send and faster. But at the end of the day, I think the whole notion of setting up a private key and sending

tokens to that wallet to be able to use it in the first place, I think is the core blocker that we get stuck on, irregardless to what ecosystem we're talking about. I think the meta conversation here is really about, will crypto change the world or will the world change crypto? Obviously, like the internet changed the world because we first didn't have the internet and then we had and then we had the internet and that changed everything. But we already have the internet now in the world of crypto and like now crypto is still kind of optional at this point. And so to perhaps to get crypto to eight billion people, we actually have to change what crypto looks like in order for

that to change the world rather than just like, well, crypto is so clearly useful that the world is just going to have to change to adopt crypto. What are your guys this perspective on this, this friction? I think we should keep increasing the drivers. and keep decreasing the barriers to get into crypto. One of my beliefs is that for 99% of the world, their financial lives is not their investments. They probably don't have that much savings. And we're very privileged if we have savings in this space at all, a net worth.

And so I'm a big believer that if you want to have 99% of the world adopt Web3, then what you're going to need to do is hit them with a use case that is something that intersects with their financial lives. What does their financial lives intersect with? Jobs. We've got to build this internet of jobs where people who can earn crypto, earn their first crypto instead of buy their first crypto. Because 99% of the world, their financial lives is not their investments.

It's earning. And a lot of times it's pretty tight. It's paycheck to paycheck. And so I think that it's really important to build Web3 earning experiences if we want to onboard a lot of humanity. And I just think it's so cool that Santi Siri of UBI, there are people in Argentina, that are living off of UBI in Santi Siri. I think it's so great whenever I meet a developer at an

eth event and they tell me, oh, I got my first coins at, I get coin and like you guys got me through three months of the bear market last time. So I think earning is gonna be a huge blowaway use case then its time has not come yet at all. I absolutely love that. Yeah, and I can really echo that sentiment here in LA too

because one of those drivers that does get people to go through the hoops of downloading Metamask and putting ETH into their wallet is the ability to sell their creative work. Now, I think NFTs have been such a core driver to this chapter of Web3 because a lot of people are earning income through selling creative work on chain. And I think that ability for someone to have a new marketplace and a new medium to be able to transact with their peers has been, in my opinion, the single biggest driver of success in Web 3 over the course of the last year. And Cooper, you're a big builder in the world of the creator economy, which I think is what more or less you alluded to right there. Can you just talk about just the drive of adoption that comes from sustainable revenue generating parts of Web3?

Like, is this, do you think this is going to be responsible for like 5 to 10% of adoption or like 50% to 60% of adoption? Like how important does this aspect of actually being able to earn money natively in Web 3 drive adoption from your perspective? I think it's the fundamental building block. You know, when I look across the board of my friends who have retained Web 3, it's been those who have been able to consistently sell. their work on chain. You know, it's one thing to buy ether and have that in your wallet and see it's go up. It's another thing to go and buy an asset on OpenC and then flip it for a little bit of profit. But the people who are most involved with Web3 today are those who started out by selling an NFT or two, using that money to then buy another JPEG and then continue that cycle.

And I think once people realize that Web3 is the most opportune place for you as a creative to be exploring, you know, relative to any other marketplace that exists today, once you take a couple foot holds into that place, you know, it's not only the ability to mint and tokenize your work, it's sort of the community spirit around it. And so when I sell a work on foundation or when I sell a work on OpenC, there is people on Twitter that are like coming and giving me flowers every time. I think that's where we start to get into sort of the stickiness of this is actually more on sort of, you know, like how personal relationship do you have with this ecosystem and how much of a core role does it play in your life. But Cooper, in your answer, you talked about things like

OpenC, which, you know, I wouldn't even classify OpenC as fully Web 3. they have heard from members of the OpenC team as they kind of consider themselves Web 2.5, right? Like, you own your own assets. Your assets are coming from an explace external to OpenC, but OpenC can still censor your NFTs. They can still, like, you know, close off your account. And so these are some of the compromises

that we've had to make on our crypto values in order to have, like, an entire bull market in NFTs. Like, imagine whether or not, like, without OpenC, would we have even had an NFT ecosystem or an NFT bull market. So into my mind, that's an indication of just like, oh, we do need to compromise in order to have this ecosystem. We had like the looks rare platform, the more decentralized version of OpenC, which

isn't even fully decentralized, still actually hasn't gotten the adoption that OpenC has. So like where do you see the role of compromising in the world of trying to get these people onboarded into platforms that enable them to be self-sovereign builders? Yeah, I think it goes back to how easy it is. for the platform to use. You know, the reason that OpenC is winning right now is because it has a superior brand and it has a good product. An analogy I like to make here is when sushi swap for it to Uniswap, the reason that that project went differently is that Uniswap was driven by its code and its underlying protocol parameters. It was not necessarily driven by the product experience itself.

You know, OpenC isn't really innovating too crazily on a technical level from a protocol standard point. It's winning because it has a strong product. And you can go and you can search for these things and the UI stays up most of the time and you have trust that what you're buying is reliable. And I think it's a very different standard when we start to compare, you know, what is the difference from a uniswap versus sushi swap fork from an open C versus looks rare. The uniswap versus sushi swap is on a protocol level with the smart contracts. OpenC versus looks rare is for the most part on a product level. Kevin, how do you see this trajectory?

Like in the in the future, how do we build out systems that don't compromise on our values when it's so obviously easy to onboard more and more people if you just take short. Well, you're probably asking the wrong guy because I built Gitcoin Web 2.5 back in the day when we put my hand to the sky and say sorry that I did it that way, but the tools truly weren't there in 2017. So my experience is that Gitcoins built Web 2.5. When you go to Gitcoin.coin.co it's a server that we manage that's centralized. Spent a lot of time during the bear market just trying to survive.

and we talked about rewriting it to be decentralized. And Idwislah is like always number seven on the list. And now that we've raised the round from paradigm and kind of like fully committed to becoming a Dow, we're in the middle of, we just announced grants 2.0, which is going to be a protocol-based approach to get coin grants. And it's going to take all the tech debt and debt that we have from the old product and flush it out the window. And the hope is that grants 2.0 is a credibly neutral foundation for, Gitcoin grants in the future. So I think that we're kind of like right in the middle of that

transition. And, you know, what we did in 2017 got us off the ground. It made us into somewhat of a household name in the Ethereum space. But it's not the future of credibly neutral public goods funding. And that's a very bitter pill to swallow to have to totally reset on your product and go in another direction. But luckily, we've got the right community momentum and capital to make it happen now. And so we're just really investing in reinventing, turning the company into a Dow, or I guess like Gitcoin grants into a Dow. And so we're right in the middle of that transition. So I guess I'm the wrong person to answer your question is the short answer to that. Bitcoin right now is very Web 2.5, but we are trending towards becoming Web 3, which I think is

kind of like an interesting counter example to OpenC, which is just kind of on this IPO route. Gitcoin is on the route to becoming a Dow. And there's like a counterfactual version of the world in which the teams could have chosen to go in a different direction. But I think we made the right choice by deciding that Gitcoin grants was going to become a Dow. Yeah, it's definitely the harder path, but I think definitely the more admirable one. And when I think of what makes a product Web3, quote unquote, I think about whether you're connecting a wallet or signing in with an email. And so if you're probably David, I would agree that something like OpenC is, you know, Web 2.5 in many senses. but to the average user, the fact that you're coming in and signing in by you're connecting your wallet,

I think that's the level of depth to which they consider that conversation about whether or not this is a product. For me, it's the forkability. Can I go to this code base and fork it and set up my own instance of it? If my right to exit, if I don't like the system as it exists, and you don't have that with OpenC, you kind of have it with Gickcoin, but you have to deal with our clunky code base. I think Austin Griffith is the king of forkability. I've always working with him, and he's always like, you know, fork this template that I made,

or fork this app that I made. And that's kind of what we aspire to right now at Gitcoin with Grants 2.0. I think you see the difference in framing there too, because as we start to consider 8 billion people in Web 3, the amount of people that even understand what a fork is or how to even do that in the first place, in my opinion is going to be like super marginal. And that's not to say that it's not important. But I think that's where like the lane start to differ, right? It's like, what is the depth to which people can actually choose to do something with

these systems if they want to? Back to my other point, I don't think most people will ever be able to do so or even know like what that looks like. Yeah. I mean, I think that it's true that those people don't understand forkability, but they all get the sense that they're trapped in Facebook, Facebook's walled garden. So I think there's an intermediary audience in between the 8 billion people and the protocols, and that's the developers that are building on top of them and the early adopters.

Like, are they able to fork the protocol and create a better customer experience for the rest of the world based off of that forked protocol is like the intermediary kind of wedge between those two audiences, I think. Kevin, can you talk about the right to exit or the ability to exit and how that fits into the definition of like Web 3 values? Just for listeners that are new to this concept, can you kind of unpack that for them? Yeah, totally. So basically, forcability and the right to exit is basically like I could leave, imagine a world in which you could leave Facebook and you could not only download your data, but you could take your social graph with you to another Facebook clone that had different. values that wasn't run by Zuckerberg that was run by like anti-Zuckerberg or something like that.

And so there's this transportability of your information from network to network that is involved in your right to exit that doesn't exist in Web 2. And one of the dreams, the big dreams of Web 3 is that I could take my social graph and my relationships with me from site to site without having to get trapped in anyone's walled garden. So that right to exit is that. but it's also anyone being able to fork a code base of a protocol and launch their own version of it, which can be a friendly fork, which means that the team that initially launched the protocol converge those changes back upstream if they're a really good idea, or it could be an unfriendly fork,

like a sushi swap where it's like, we're just going to compete with you. And I think that really the value that we're kind of like chipping away at here is the consent of the governed. In political philosophy, there's this idea that the consent of the governed is the only legitimate basis of governance. as opposed to like the divine right of kings in like the 16th century. And the only consent of the governed we have with these Facebook, with these giant tech monopolies is that tick, I read the terms of service. And no one fucking read that terms of service.

It's 35 pages long. You can't negotiate the terms of services, totally asymmetric power between the consumer and the people who've put the platform out there. And so the idea of not only giving users governance of the platform formally with governance tokens, but also allowing forcability, creates that consent of the governed feedback loop, which hopefully will lead to better products and better consumer experiences, because users can exit if you're, I don't know if I can curse on this. If you're fudging it up, they can exit.

And I think that it all goes back to consent of the govern for me. And forkability and right to exit are all just parts of evening out that power asymmetry and restoring the consent of the governed and therefore the legitimacy of these products. And just to just to reiterate and unpack that a little bit further, the idea is that if your code base is open source, if the code is free for all developers to iterate on as they see it, the idea, the hopeful idea, the optimistic idea is that the developers of this open source ecosystem will trend towards crypto values over time. And what crypto values are, at least in my perspective, what Web3 values are is kind of what you said, the consent of the govern, as in our Web3. protocols reflect the values of the users that compose them. Very much unlike Facebook, right? Like the values of the users are not freely expressed into the design of the systems.

But in Web3 systems, the idea that we can fork these things into newer and newer systems ensures over time that there's some sort of alignment behind the values of the people and the systems that enable these people. Now, Cooper, my question to you is that, who, of these new users cares about this concept? Like how how crypto values woke are the people that come into the crypto in 2021 and 2022? And do you see them like trending towards crypto values or do they not care? This was exactly I was going to take it. So I'm glad you asked that question. I think that being able to have governance is extremely powerful. But to your point, I think the vast majority of people

will never use it in the first place. You know, the extent to which governance conversations happen in the terms of crater economy is what color should the t-shirt be? Where should we host the meetup? You know, like things that are like, you don't need tokens really for that. But I think that people are just like, they hit a ceiling in terms of like what governance can actually do for them. And so I think there is a degree of education that's like, you know, governance is valuable. Like it's not only the color of the t-shirt or like the logo that we use, but it's like a fundamental change to the underlying protocol or product. I don't think many people are aware of the fact that they can have that level of influence on a project. I think it's only because we've seen the power

of on-chain governance and sort of the social and financial dynamics that come with that, that we understand, you know, the depth to which this is so important. Guys, I have a bunch of more questions that I want to get to, such as what aspects of Web3 Ux actually out-of-the-box trumps Web 2 U.X as well as, is this really just like a scalability issue? Like imagine if we had instant fee, instant and free transactions, how much of our U.S. problems are solved. And then also, I want to ask you guys about your favorite U.X experience in the the world of Web 3, do you have a particular app that comes to mind about like that really just

like embodies good user experience in this new world? These are the questions that are coming up next right after we get back from some of these fantastic sponsors that make the show possible. If you're going bankless, you need Metamask. This is your tool to unlock the world of Defi without giving up custody over your private keys. Metamask is both a secure in-browser wallet and also a secure bridge for your hardware wallet. You can now trade tokens on any decks or aggregator. Metamask swap gathers real-time pricing information across all the defy exchanges, allowing you to select your best price while getting all the Metamask benefits of self-custody, lower gas costs, and increased transaction

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No human counterparties or centralized intermediaries, just autonomous code on Ethereum. Input the token you want to sell and receive the token you want to buy. The Uniswap Grants Program is accepting applications for grants. Do you have something of value that you think you want to contribute to the Uniswap ecosystem? No matter how big or small your idea is, you can apply it for a unique grant at uniswapgrant.org and help steer Uniswap in the direction that you think it should go. Thank you, Uniswap, for sponsoring bankless. All right, guys, we are back to our conversation about how we preserve crypto values, which I personally hold dear, and how do we make 8 billion people also hold those things dear. And so I wonder, Kevin, you've been a builder in the space, and you mentioned kind of having to compromise.

with Web 3 values in getting your application out the door. And I'm wondering how you kind of navigated those choices. What things would you absolutely never, ever compromise on? And what things are easier and more okay to compromise on that you might see other upstarts, new companies, new platforms compromising on in order to get their viable business out the door? Yeah. I mean, I'm really proud that in 2017 that everyone was doing ICOs and we just didn't have any of that noise, we just built a community that people loved. And that sounds like an obvious choice in hindsight,

but at the time, it was a real countertrend bet to not do an ICO. I do think that back in 2017, when we started, just the tools weren't there yet. The graph wasn't there yet. Schaffald-Eath wasn't there yet. There just wasn't the tools. And so maybe what happened with GIC-Coins launch isn't super relevant to what builders out there are doing today. I think that there's definitely a different set of tradeoffs today where you can have a pretty close to Web 2 U.S. with a Web 3 wallet. And I think that that's really cool. Things that I would not compromise on is I don't ever want to have custody on users' funds.

I don't want the liability. I don't want to be accused of having access to those funds. And so we just always designed it so that we never had custody of users' funds. And I think that a clear tradeoff that we had to make was back in Gekcoin Grants round 12. We, because the Gekcoin platform was centralized and there is a sanctioned, again, certain sanctioned nations, we did have to shut down a grant that was connected to one of those sanctioned nations. And I know that that caused a big controversy among the Web3 community that's connected to that nation and to that community. And that was a tradeoff that we were coerced to make

because of the regulatory regime in the United States. But it's a clear tradeoff that we had to make because we're centralized and I'm, I feel for everyone that it affected, I truly do that, that, you know, they can't participate in quadratic funding and public goods funding because of that. So those are the tradeoffs that come to mind to me, but I will note that in 2020, there's really great tools to get your tool off the ground, decentralized, and you shouldn't have to make the same tradeoffs that I made in 2017. Yeah, I actually wanted to pull on that because that was a question that came from, from one of my friends when organizing this agenda. is the importance of dev tooling to help solve UX issues.

And so I think from what I've gathered, there's actually like two layers of building. First, you've got to build the apps to make the apps usable. But that job is done a lot easier if there's a lot of dev tooling, which also needs to be built. Kevin, can you talk about an unpack just the importance of dev tooling when it comes to making usable apps? Yeah.

I mean, you know, imagine you were trying to launch this podcast with only sticks and stones. It's hard to focus on your audience and providing value to them when you don't even yourself have the right tools in order to ship to them. And some of my favorite dev tools are scaffoldeeth, which allows you to get a end-to-end D app from smart contract to front-end interface up within a minute. I think the graph is really great for querying relational data. I'm really excited about what ceramic is going to do for Web3 profile data. And so we're kind of starting to see these tools develop. Oh, and one of the things that really, like, I'm so sure that crypto is going to be tradfai. And it's because every new money Lego that is built in this ecosystem enables us to do something new.

And then the permutations of all the different money Legos of what you could build grows exponentially. There are hackers that can walk into Eith Denver weekend hackathon this weekend and build something in a weekend that it would take a bank $100 million and a thousand people to do 10 years ago because there's so many money Legos that are just out there open source and there's such less corrupt in the open source financial system. So the amount of what's possible to build grows exponentially with every new money Lego that's put out there. And that's why I'm so sure that Web3 is going to win eventually.

The progress is exponential. So the question of this episode is do users care about decentralization and like extrapolating it's like we have crypto values that we believe that we embody and how do we export these values to 8 billion people? And a lot of this is coming off the backs of like the Alt Layer 1 summer, Solana, Avalanche, a lot of these decentralization compromised ecosystems gained a ton of adoption. But in my mind, they compromise on some of the values that make crypto-tick. Decentralization being the big one.

But we also have Layer 2s coming out that in my mind help preserve decentralization at scale. And Kevin, what you were talking about with just these money Legos offering optionality to devs, A question back to you again, Kevin, is, is this just like a short-term problem? Is this just the problem that we would expect the first 15 years of crypto to have? And over the long term, it's just we just build our way out of it? Sorry, I don't think I understood the question. Is the problem of not being able to project crypto values to 8 billion people, just something that we would only consider in the first 15 years of crypto?

Because we just haven't built out the own solutions for it. Yeah, there's a couple of questions tangled up in that. And I know you don't want me to ask a question back to you. But I mean, I guess like the question is, why do we want to propagate crypto values back to the world? Is that we think the world would be better if it had more crypto values, self-sovereignty, and it? I think the answer is yes.

Yeah. Yeah, in broad strokes, yes. But I do think that like to actually answer your question, the utility is the Trojan horse for the values. And I think that every time you use quadratic funding on Gipcoin, you start to see that, oh, public goods are actually fundable. Like there's actually momentum here. It's not just this like dead space that no one's working on. Every time an artist makes more in a week off of an NFT than they did it off of a year of Spotify scales, you start to see, oh my gosh, a better world is possible for funding the arts. And I think that the utility is really the Trojan horse for

the values. And you're right in the first 10 years of crypto, the only utility is like the libertarian for the government like type stuff, which like all due respect to libertarians. I believe sovereignty is very, is very important. And as we have more and more utility coming out of the ecosystem, I do think that there's there's going to be more opportunities to Trojan horse, more sovereignty and more of those values into the world from there. Cooper, I want to ask this next question to you is what about Web3 actually has good UX? I think the obvious answer that comes to mind as well,

you get to own your own assets, which has tradeoffs. This can also be a bad UX. But is there any, while you've observed your own operations in the world of Web 3 and also the people that you've helped onboard, what is universally like given the thumbs up by people in crypto? Is there anything come to mind? I would say universal login, you know, one login to every app that you ever use makes a lot of sense to people. I think a digital backpack is cool. The fact that I can like own tangible financial assets that

all live in one place, you know, even if they're across a variety of different industries is really exciting to people. And then more broadly, I think we'll get to this point, but token gated access, you know, as a primitive, basically the assets that I own allowing me to enter different physical and digital spaces. I think those are some of the core primitives that people have been really excited about. Kevin, same question to you. What has, what has, what, tailwinds does Web3 have when it comes to UX? In source. I mean, I think that just the exponential money Legos that are available to implement all

of those things is so important. And it's why you've seen more innovation in Web3 in the last two years than you've seen in banks for the last 30. What is the bank done? Like invented the ATM in the last 30 years and maybe found a way to milk people for more profits. So, yeah, also very excited about universal logins. I'm excited about non-skeumorphic use cases of crypto.

things like coordinate, things like quadratic funding, and just things that weren't possible in the old paradigm, because I think that that's where the breakthrough, the breakthroughs are going to come from. I actually add one more on here too. People love the idea of secondary markets and on-chain royalties. I feel like that's what I talk to creators, they get really excited about. The fact that they don't have to go like manually collect from anyone and that it just happens automatically.

It's like kind of a nuanced one, but people actually really resonate with that. Totally. Is there any Web3 application, Web3 website or company or project or whatever that, when you look at that, you go to whatever, wherever it is, whatever website, and you log into it and you're like, wow, this just feels so awesome. This UX is fantastic. I feel really empowered as a user. Anything in the world of Web3 that really stands out as they did it right?

Cooper, I'll start with you. I think two I'd call out here are Foundation and SoundXYZ. You know, Foundation's been the one when I showed new people here in L.A. about like a crypto product like, oh, this just looks and feels like something that I would use normally. It just happens to be built on Web3. And then from the music and Ftie side of things, you know, the audio player on sound with that audience tab, there's just some social choices that were made there that were really good. And I guess it's a third one to round it out.

Mirror, I think is fantastic from like a publishing standpoint. It's a Web3 product, but they do a lot to really like extrapolate how Web3 it is to where if you want to make an NFT on Mirror, you just click a button, you say I want 10 copies, upload this JPEG here and then press a button to mint it. And it's more of a widget-like experience than it is like you having to do anything on a contract level. Kevin, same question. Yeah, great question.

I want to yes and Cooper's answers. Those are all really great. I do think that one tool that I'm continuously impressed with is snapshot, which is where a lot of Dow governance votes happen. Just the repeatable off-chain governance stuff that they've built, I just think is like The amount of the ecosystem that depends on snapshot for its Dow's, I think, is immense. And we should give them a lot of credit for the work that they've done in making that a reality. I also think NOSIS safe.

NOSIS safe has just become a pure part of my day to day in week over week, managing funds in a NOSIS safe, being able to connect it with Wallet Connect and all of these different D apps. I think that it's maybe not the most aesthetically beautiful interface in the world. these two apps that I'm talking about, but they're so purely functional in getting the job to be done of managing assets or voting and decentralization that I'm just compelled by how seamlessly they work and how much of like a core money Lego they've become for the space. So I think snapshot and NOSIS safe for me. I definitely co-sign snapshot. I think the interesting thing to call out about NOSIS safe is, you know, on the protocol level, NOSISA is fantastic. It's like a fundamental building block. I've noticed that there's actually a new chapter of products being built on top of NOSASA safe just to make it easier to use. There's a couple of companies called Coup, Castle, you know, MetaLink's one that

comes to mind here. There are a couple of companies that are basically like all routed on the back of NOSA safe at the core and then just making it operationally easier on top. Utopia falls into this category. Parcel falls into this category. I think it's interesting to recognize that something that's such a core building block like NOSIS safe. I mean, I totally agree with you, Kevin.

I'm in NOSA safe every single day. but there's things that we need to do to make it easier. Like right now, if I want to collect an NFT with a friend through a NOSISA safe wallet, I can't connect to most of these sites. Like the wallet connect integration is very tricky. You can't sign messages in NOSA safe right now, which means I can't even get started on a lot of these NFT protocols. And so I think there's definitely improvements that we can make on this sort of UX question

to make something as powerful as a multi-sig, more tangible for the average user. Totally. What would you say is the lowest hanging fruit UX problem that you wish the industry could solve? Like, what is the thing that everyone is running up against that just frustrates them? Does anything come to mind? Kevin, goodbye. I mean, my audience at get coin is like Web3 developers who are by definition already further down this rabbit hole.

So I don't know. I feel like this is a better question for you, Kup. Yeah, I would say Fiat onramping would probably be mine. You know, I think that it's easy to buy crypto. It's not easy to buy it in non-custodial fashion. And I think all the solutions that are out there do not let you easily get ETH into your wallet in one click. And I think that's the single biggest hurdle. I think people are fine with private key stuff.

It's annoying, but it's not like tricky. It's just like when it comes to actually funding the wallet itself that I think people get blocked a lot of the time. Yeah, I can imagine that problem actually getting worse as we go into a layer two ecosystem because we need ETH to go to a wallet on a particular chain. And all these exchanges need to enable all these chains. and there's the idea about the layer two revolution is that there's going to be many, many, many chains. So how do we get these Fiat on ramps to be able to deposit gas money

across any sort of arbitrary number of chains? I think it's going to be a tough hurdle to overcome. But when it does, then it means every single chain is actually available to enable users left and right. And the off-rams. I think it's the same for off-ramps too. Right now if I sell an NFT on foundation, the ability for me to actually put that into my bank account

is a pretty difficult experience. And I think making that flow easier where I can top up a wallet and then easily cash out if I want to. I think that's actually more of an important question than, you know, private key management. Kevin, I think this is going to be one of our last questions. And I'm going to throw this one to you is, again, going back to the concept of putting crypto values into eight billion people's brains, how do we preserve decentralization, how do we preserve user sovereignty? But how do we actually do that?

as in do we want users to be consciously thinking, like, oh, is this app decentralized? Am I in control of my own assets? Or do we want to actually take that cognitive load off of the user and just have that be the water that they swim in? Is that even possible? Or is it actually our responsibility to just preach about these new values of the Web 3 age

and trying to convince as many people to get on board with that? Yeah, I think preaching might have a net negative effect. So I think we really need to use the utility of these DAPs to Trojan horse in these values and just show them that hope for sovereignty and for public goods and for decentralization, anti-fragility is all possible. And I think that we've got to deliver DAPs that solve problems for people in the year 2022 that exists today. And that those values are utility, are Trojan-Horsed in from the utility.

And that takes me to how do we make it? easy as possible for developers to create the next wave of innovation. How do we give them business models? How do we give them the money Legos? How do we identify the use cases? And how do we build a talent pipeline? No one has enough developers or designers right now, a talent pipeline of people who want to work on this space.

And so that's kind of what I'm focused on right now. It's empower the people who are going to create the utility, and then the utility will Trojan Horse and the value, I think. So is it really all about developers, as in if we can just give the developers the tools to ensure that what they build is aligned with Web3 values, that well, then they can build platforms that scale those values out to the users? If you're asking the founder of Gitcoin, if it's all about developers, I'm going to say, hell yeah, I think so.

I would take that a step further and say, I think it's about making the tools easy enough to use for someone who has never coded a day in their life to actually spin up a Web3 product or service. This is something as simple as saying, if you hold an NFT, you can enter this venue. I think right now if I want to do that, I need to have a dev team with it. I think the testament to whether or not Web3 would be adopted is how easy we can recreate almost a Shopify like experience or a WordPress or a substack experience where I don't need to be technical in any capacity to benefit from the foundation that Web3 has built.

Hey, guys. Final question. And thank you guys so much for spending some of your time here on the bankless live stream. We really appreciate your guys' perspectives here. So final question is, what W do you really hope crypto, the industry of crypto has in 2022? Cooper, I'll start with you. I mean, I'm obviously extremely biased here, but I think music is the vertical I'm most focused on. And this is one that I think is going to have a breakout moment.

And I think the reason for that is not because I hold a shit ton of music NFTs, but I think that there is a very real wave about artists saying, I don't want to be in a label anymore. And I think Web3 is a clear alternative to that. So I'm very excited to explore what that path looks like. Kevin, what W do you hope the crypto industry achieves in 2022? I'm really big on regenerative crypto, crypto that's good for the world. And I think that that is both a means in itself, a means and an end. And I do think that there's a lot of skepticism about crypto out there, which I think is righteous.

And I do think that if we want to create a better world with crypto, and we want to show the world that we're creating a better world. with crypto, we actually have to create that world. And so I'm really focused on this thing called Impact DOWs, which are DOWs that have positive externalities for the space and for the world at large. And that impact can be financial like Gekcoin grants, funding public goods. It can be on identity and income like UBI and proof of humanity or it can be on the vector of paying down climate change, like climate Dow. So I'm really focused on impact DOWs. I don't know that 2022 will be the year for them. But I do think that at a time in which governments are trying to figure out how they're going to regulate crypto, if we can put our best foot forward

by showing how crypto can be better for the world, build Web 3-era institutions that fund public goods and regenerate the world, then I think that that's a really good step forward for the space. Nice. Can I add one more in there, David? I just thought of. I think it's really relevant to this medium, but tokenized media, you know, being able to collect versions of podcasts, blog posts, you know, whatever it might be. I think that there's going to be a really big wave around tokenized media. I'm excited for that to have a little bit of a limelight. I can confirm.

So, guys, thank you so much for coming on this live stream. I really appreciate this conversation. This is something that I think the entire industry needs to, need to have conversation the entire industry needs to have and needs to be aware of. And hopefully it can start to solve some of these patches in our apps to make sure that they stay aligned with the values that we created when Satoshi mined the first Bitcoin block. So Cooper, Kevin, thank you for coming on this live stream.

Appreciate it. Thank you, Matt. It was fantastic. Guys, of course, none of this was financial advice. I don't even think we talked about specific crypto assets or anything of that nature. But even if we did, it wouldn't have been financial advice. So thank you for bearing with us. I don't know the closer as well as Ryan does.

But we are headed west. We're on the frontier. It's not for everyone. But thank you for joining us on the bankless journey. Cheers. Thank you.