Epicenter - Learn about Crypto, Blockchain, Ethereum, Bitcoin and Distributed Technologies - Martin Köppelmann & Matan Field: How the dxDAO could become the world’s largest organization

Episode Date: January 24, 2019

The concept of DAOs has been captivating to many in the crypto space for years. When “The DAO” was created in 2016, in the few weeks of its existence and despite obvious flaws, it gather tremendous momentum and amassed 14% of the entire ether supply. Since then the technology has matured and Martin and Matan argue that the time for DAOs has finally arrived. We were joined by DAOstack Founder Matan Field and Gnosis Founder Martin Köppelmann. We talked about the decentralized exchange protocol DutchX. We also talked about how the two projects together created the dxDAO, which will manage the DutchX protocol, but could go onto its own path. A path that could even lead to being the DAO for all of DeFi. Topics covered in this episode: The unifying vision behind the various Gnosis projects Why Gnosis decided to build decentralized exchange protocol DutchX DutchX’s usage of batch auctions to provide good prices and liquidity for any market Incentivizing market makers with the Magnolia token Why the DutchX needs a DAO The role of Reputation in the dxDAO How Reputation will be distributed Why DAOs unlike companies could become more efficient as they grow How the dxDAO could become the biggest organization on earth in the next 10 years How one can get involved in the dxDAO Episode links: dxDAO Website Joint AMA: Martin Köppelmann & Matan Field - dxDAO DAOtalk.org Introducing the dxDAO A brief discussion of the protocol governing the dxDAO The DutchX as an Open Protocol Thank you to our sponsors for their support: Simplify your hiring process & access the best blockchain talent . Get a $1,000 credit on your first hire at toptal.com/epicenter. This episode is hosted by Brian Fabian Crain and Sunny Aggarwal. Show notes and listening options: epicenter.tv/271

This is Epicenter, Episode 271 with guests Martin Kupkelmann and Matan Field. This episode of Epicenter is brought you by TopTal. Experience a new way of hiring as TopTal delivers only the top 3% of applicants, including highly skilled blockchain engineers. If you're looking to scale your team with the very best talent, visit TopTal.com slash Epicenter. Hi, my name is Brian Fabin Crane. And I'm Sunny Agarwal.

So we're here today with Martin, who's the CEO and founder of Gnosis and Martin Field, the CEO and founder of Dahlstack. Both of them have been on the podcast before and today we're going to speak about this super exciting experiment that they're doing together, which is combining a decentralized exchange and a DAO. And yeah, it was a great conversation. We hope we enjoy it as well. So let's go to the interview.

So we're here with Martin Karpelman and Matan. field. So both of them are, you know, back on the podcast, have been here before. Martin actually twice. So your third time here and Martin was here three years ago. So quite a long time ago to speak about Gnosis. So we're going to speak about the very interesting project, which is the Dutch Exchange and the DX Dow. So yeah, thanks so much for joining us to you guys. Well, thanks for having us. Thanks. So maybe we can start with you, Martin. So we spoke about Gnosis before and, you know, of course, some people will also, some listeners will also be aware of Gnosis because you guys

were sponsoring the podcast last year. But tell us a little bit, you know, what is Gnosis and what's the evolution that Gnosis has gone through? Yeah. So the core of Gnosis is, is prediction market and prediction market platform. And we see prediction markets really as a new um asset class basically uh we recently like coined the term uh conditional tokens because it's it's really a lot of you can do with prediction markets you can give any event a likelihood or make make a market for the occurrence of any event but you can do much more you can do uh you can see how any event is influencing any other event um so so how is one event happening influencing the likely of another event happening, but it's also useful for stuff like how does one event

happening influence the price of any asset. And that's super interesting also for decision making, this future key discussion. How does this decision influence stock of a company or token or something like that? So we say that those are conditional tokens. And that's, yeah, we provide framework for those to really create a new asset class. That's a create part of NOSIS. Then we have a trade part of NOSIS. So we have all those new conditional tokens that needed to be traded somewhere. And that became more and more the focus of NOSIS to provide efficient trading mechanisms for this new asset class, but in general for tokens. If you build a trading mechanism,

you, why wouldn't you, I mean, you would allow to trade anything that's, from a technical perspective, it doesn't make that much of the difference what you trade there. So create trade and the third thing we, that's somewhat, we're 100% related to our initial vision is the hold part, create trade hold. A little bit like historically, we started

to build a multicig wallet because there was no and we wanted to do a token sale so we wrote to the motisic wallet that was able to hold tokens that became almost the industry standard almost every ICO is is using it and we realized well we should like continue that and support that and bring that that additional security of a multi-sick wallet to consumers So have a smart contract wallet where you as a consumer use a multi-stick wallet. And you have multiple keys right now in the first setting that's a NOSUSA save. You have, for example, one key on your phone, one key on your computer or wherever. And it's a convenient way to use it.

So let's in short what NOSIS is currently doing. Create, trade, and hold. Very cool. That actually makes a lot of sense. It helps me, like, that it puts all, like, your, no, your major projects that you guys have been working on in, like, context. So what are some of, like, the updates since, like, the last time you were on? So the last time you guys are on was three years ago, summer 2016. A lot of stuff has changed since then.

In fact, the last time that you were on, we were actually talking a lot about the Dow. And so it's kind of interesting that now we're here, we're going to be talking today about the DX Dow. But so one of the things, like, you know, since then, you guys have spun out of consensus. You guys have done your own token sale, which in my eyes was like, you know, I think it was in April last 2017. And in my eyes, I see like the NOSIS ICO as like the ICO that kind of kicked off ICAW craze. And so how was that whole experience for you guys? Yeah, well, it's quite right. It's the right.

Yeah, I think you mentioned, where the token sale was obviously a, well, changed a lot before. the token say we were like a company of or we were still part of consensus until today we are a company of 50 50 people working on those three big big topics we yeah I guess we were lucky was a token say was a timing um uh either appreciating selling a bit uh it's a right moment so we kind of have are in a good position, have a decent runway of many years. I think it went very well and we are in a good position, but still, still, so much work. There's so much infrastructure is still missing.

That's just the case. So, yeah, I mean, the decision to build stuff like exchanges or exchange technology, and yet another wallet was not something we did lightly, or I mean, we obviously looked at the hundred other dexes that are currently being built and the hundred other wallets that are being built. And we still like decided it does not cover our needs. And we do think we bring additional significant contributions

with stuff we do. Cool. And so Matan, how about you? You know, you guys were on much more recently only about eight months ago. How has the evolution of Dowstack proceeded since last May? Yeah, so likewise, I mean, we had a pretty successful or very successful token sale back in May, May 2018. And then, of course, that changed a lot. We grew the company.

Now we're a company roughly of 25 people. So that's, well, of course, that's kind of like established. the company and growing the project. And then we made a lot of efforts on, I mean, we already had a working product before the token sale. We insisted to launch a token sale with a working product. But I think the last eight months,

we had an incredible advance in pushing the product from, I would say, a prototype into a real production ready. Like a real product, a real product that is on a blockchain but looks like a real product and works like a real product and has a significant value position. position, kind of like make it way more professional.

So these eight months were a huge amount of effort to bring like the most advanced technology on top of the blockchain. And yeah, it's pretty exciting. And now we're just launching that. And DXDA will be one of the first, what maybe with few other DAUs that we would launch with. Basically, we would launch the basic platform.

I mean, we already launched it, I don't know, six months ago on the main net with an alpha version. version, which again was kind of like a prototype. But now in Q1, towards the end of Q1, we will be launching the whole system from the bottom end of the blockchain contracts all the way to the interface. And there are a few layers in between. So the whole system will be launching public data

and the DXDAW will be one of the first, probably the first big DAO on top of the platform. Cool. And yeah, we're going to come back to that in detail in a little bit. But before we dive into the DXDA. stuff let's talk about the Dutch exchange so Martin why did you guys decide to build decentralized exchange and what's different about the Dutch exchange yeah first

because we needed the place to trade predictions as simple as that so so the prediction market obviously is a place where where it already includes the word market so I guess the next question could be why wouldn't we use one of the existing market mechanisms and that is that is because we believe there is a need for fully decentralized market mechanism and most of the decentralized exchanges right now are I would call them non-custodial centralized exchanges so that means yeah they are non-custodial you remain in control of the funds, but critical parts of the exchange,

like the matchmaking, keeping the order book, maybe even deciding which tokens can be traded or not, are in central centralized control. And I definitely see a need kind of also for those non-custodial centralized exchanges, but I definitely also see a need for like more protocol layer or like infrastructure layer thing that's just slightly above Ethereum, just some decentralized protocol that allows you to efficiently exchange any token into any other token. And my claim is, there are few that are, there are like some that are fully decentralized.

So Uniswap is, for example, one. And there is, well, you can also do a full on-chain order book. Augur is doing that. Oasis text is doing that. So those are basically the two or the three only fully decentralized exchanges I'm aware of. all of them have unfortunately significant game theoretic problems around front running around being able to provide enough liquidity because the costs are quite high to provide enough liquidity on those mechanisms so the bottom line is we are really into building something that is a fully decentralized market mechanism is fully decentralized is as efficient as possible, of course, and doesn't have any game theoretic attack vectors,

like minor front running is a big one. So could you go ahead and maybe walk through us a little bit about how the Dutch X system works and like, you know, the mechanisms of this exchange and how, you know, I feel most people might, when they think of exchanges, they're probably usually thinking of order books, because that's probably what most people are familiar with.

So how does this compare, to a traditional order book mechanism. Right, right. So it's kind of suggested to preface that the Dutch exchange is, yeah, I would make the claim it's right now the only fully decentralized mechanism that doesn't, that cannot be attacked by, with front running, especially from minors. So, and we had to do like compromises for that. So how does it work?

Yeah, it uses the Dutch auction model. So let's say, Sunny, you want to sell, what tokens do you want to sell? Let's say some maker token. Maker tokens, right. So there is a pair maker, and that's actually one of the pairs that's quite active on the Dutch X, Maker Ether, let's say. And roughly the system starts every six hours in auction. So there is a period for the auction where everyone who wants to sell maker tokens,

like puts their maker tokens in this pot. And at some point, the auction starts. And basically the auction mechanism is now trying to sell all those maker tokens that are all in one pot for as high price as possible. So what it will do is it will start a Dutch auction. So that means it starts at a high price. and high in our case is defined as two times the previous price. So the previous price is roughly the market price. So it starts at two times the previous price.

And then the price, or it kind of offers this to the market, to anyone who can do a Ethereum transaction on the blockchain, at a dropping rate. So the price continuously drops. And now as someone who wants to buy maker, you can, as soon as a price reaches the level where you are comfortable with, you can make a bid or you can send ether. And at that point, you know you have the guarantee that you will get that price or if the auction

continues and unless you clear it, it will continue. You then eventually get the final price and the clearing price is the price where there's enough by demand at that price to clear. the full auction. And the pricing function goes like after six hours, so it's the one divided by X function. After six hours, it reaches the previous price and it goes all the way to zero. So after 24 hours, it basically goes to zero. So then we definitely expect that they will then be shortly before zero.

There will be a buyer. I mean, obviously ideally around six hours, after six hours, when it reaches the market price, roughly the market price, it should close the auction. And so how often does this cycle begin again and again? More or less every six hours. So once the, as the auction is cleared, there's just a 15 minute, 15 minute like delay period. And if then there is enough volume and in the current design, enough volume means at least $1,000, the next auction would start immediately.

So on a somewhat liquid pair that has enough demand for a $1,000 trade every six hours, at least, yeah, it would more or less every six hours have a cycle. And so is the idea here that, or like how do you think about liquidity in this context? This is something that you think will just naturally come because there will be arbitrage opportunities

if there isn't, enough liquidity or right so i would say the dutch option is a good mechanism or there are two uh there two use cases i would say um maybe more of it so one for just very illiquid for for for illiquid tokens where you hardly have a market at all so there their order book is like or uh or uh there like finding a price every six hours is already like good enough for liquid tokens why would you use the Dutch exchange for liquid tokens I would say you would only use it for large or you would only want to use it for a large volume large enough volume so that on the competing liquid market you would already move

the price significantly there because there is a slipage. So one experiment we are doing, just the 10 days before the DXDAO will start to demonstrate this claim. We will for 10 days each day put $100,000 die order in. So we are each day selling or kind of buying ether. So selling dye for ESA. So NOSUS will basically just buy some more ESA with Dye.

And yeah, we are very curious what the final price will be and how the final price will compare to the market price at the time. So our claim would be there is no decks currently that can handle $100,000 market order. the Dutch X should be one that can do that. And roughly the reason is because it basically gives market makers the perfect setting to do arbitrage or to kind of to well trade on all on everything where they can get liquidity because it's totally predictable. So like this order is coming in. They can see this $100,000.

dollar. It's starting at this high price and they see over six hours, they slowly see it coming. And during this time, they can do all the market makers, all the arbitrage people can like compete against each other to give this, to give that order the best price. Compare that to if you would just put it, the market order on a normal exchange, then you only get the price that is available. at that moment. So here, the market maker can act after they see, or have the guarantee that this volume is incoming.

That's really cool. So a few weeks ago, we actually had James Prestwich on with, and he was on a project called Summa One. And so they were actually using sort of cross-chain Dutch auctions, where they were selling ether in exchange for Bitcoin. And so it was actually very interesting to see that on all of their auctions that they've been running, they've been doing something similar where they've just been putting up their own ether.

And everyone, it's always been being sold almost at like a 10 to 20% discount every time from like, you know, the market price on like centralized exchanges. So like, you know, I, while reading through your documentation, I read about this like Magnolia token and stuff, like these things that will help incentivize liquidity. Can you talk a little bit about what these mechanisms are? Yeah. So, um, so liquidity is of course the biggest, the biggest, uh, challenge to get the liquidity running.

And so basically the Dutch eggs has a built-in mechanism that will only kick in on February 18s and like in parallel to the DX launch. And that will basically, it's a simple, simple strategy that those who trade earn, earn a new token. and there's no pre-mine or whatever. So all the tokens that are purely created from trading on the Dutch X. And for one ether worth of trade, every time a new Magnolia token is minted. And the Magnolia token is the token intrinsic to the Dutch X. And it, we have this fee, this liquidity contribution.

So now you can think, all right, from each auction, a fraction is, is taken in the, in the order of magnitude of 0.5%. So in something that's somewhat comparable to a fee, 0.5% is taken out of this auction. And it's like put into the next auction. as an incentive to start this auction. So basically this liquidity contribution is put into the next auction and will be distributed among those who participate in this auction.

So if you have a lot of Magnolia, you basically have to pay less for this liquidity contribution, but you still benefit from others paying this liquid liquidity distribution because a contribution because it's always distributed among all traders. Okay, so that means if I'm like a market maker, I do a lot of trading, I get a lot of magnolia. And then I guess it's like in a centralized exchange, right? If you trade a lot, maybe your fee goes from 0.3 to 0.1. And so here also the fee goes from this liquidity contribution would go down from 0.5 to, you know,

I don't know, 0.1 or something too, because I have a lot of Magnolia. But then I still get the distribution each time for those who have less. So it can actually mean that even if I sort of trade at the same price, every auction, that's actually profitable for me. And then you ensure liquidity that way. Correct. Correct. So the fee is, yeah, your effective fee is basically the fee rate or the liquidity contribution

you are paying, or it's plus the average liquidity contribution everyone else is paying, and if everyone else pays a higher liquidity contribution, you are a net gainer of that fee. So you pay a negative fee if you want to put it that way. What if I just wanted to try trading with myself and just like earning Magnolia token? So could I create a bunch of like fake tokens and just like do auctions where I'm the only buyer and seller. Here we come for one of the reasons why we need to DAO. So yeah.

So only anyone can add any token to the Dutch Exchange protocol anytime, but only whitelisted tokens will generate Magnolias for specifically that reason. Otherwise, you create your Sunny token and you have 100% supply of it and you make a lot of fake trades exactly. And that's why we need to DAO to curate such a white list. But could you still have this sort of fake trading and generation of like me trading with myself? Yeah, sure. I mean, as soon as you use a real token, well, one token that's whitelisted, you can, of course,

well, put it on the sell side, but also put it on the buy side. The thing, or also, I mean, yeah, you put it up for sale and then you participate yourself during the auction. The thing is, that doesn't hurt the Dutch X. it would even benefit the Dutch X because you're nevertheless providing real liquidity because, or at least to some extent. So on an order book, you can specifically fill your own order. And then you, I mean, then you can even fake it by pretending, or in some models you can fake it by pretending you broadcast this order. But in reality, you didn't.

And you just like matches yourself. And you can completely, it's completely worthless to the exchange. However, here, remember, all funds are pulled together into an auction. So unless there's no activity and you're the only one putting funds up for sale, if you then participate as a buyer, you also have to, well, give everyone else basically in this auction that price. and if you want to make sure that you don't lose funds, bottom line is every trading activity provides real liquidity for those who just want to trade. Right.

But couldn't I still, I find some token that nobody cares about. I mean, it's white listed. I mean, some people are trading it. But now I'm doing like, I don't know, 500,000 per every cycle and I'm just trading with myself. Then at least that token will be very liquid. the Dutch exchange. Sure. I mean, basically, if you put in 500,000, that means I or a random trader can, like,

easily put in 10,000 and you are very, very much incentivized to not, like, keep the price dropping too much because you risk your 500,000. So you are, like, very much committed to give the 10,000 that kind of piggybacked on your 500,000 order a very good price because otherwise you risk that other. can buy your 500,000 below market price. Yeah, so I guess you could think of it. Like, you know, the assumption is that if a token was white-listed, there exists like some other, someone else out there willing to buy or sell it.

And so therefore the Dutch X auction mechanism will work properly because of that. Yeah. Or at least I would say there is utility provided by having sufficient liquid on the Dutch eggs. So I remember a few months ago when we were in Berlin, you and I were talking about like threshold decryption and stuff. So is that something that's like in the current version of the Dutch X protocol? Is this like a future improvement?

No. So that is diffusion exchange. That's its own topic in a way. So the Dutch eggs should really be seen as a demonstration. and it's live now and everything to say it's possible to do something fully decentralized and game theoretically sound. But it, well, I mean, six hours, it's, of course, a big trade-off. So we are working on a much more sophisticated exchange, as badge auction exchange,

using snarks for scalability, using threshold encryption, to combat, like, front-roids. running in whatever, but that's more still in the, it's getting out of research stage and into development stage, but it's at least nine months ahead, or until that will see the light of main net. Hiring is stressful. Let's face it, it's a long process of sifting through resumes and interviewing candidates without any guarantee of quality, but it doesn't have to be this way. Companies all over the place are experiencing a new way of hiring with TopTal. If you go to their trust pilot page, you'll see that of the hundreds of people that have

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and you'll get $1,000 credit when you decide to hire. We'd like to thank TopTal for their supportive Epicenter. Well, let's move to the topic of the DAO. So why does the Dutch Exchange need the DAW?

Yeah, on one level, so the Dutch exchange is really meant to be an infrastructure component for Ethereum. So, for example, many, many smart contract systems need at some point the ability to just simply exchange one token for another or convert. They get some income in some token and they want to convert it in another token. And the Dutch X should be a mechanism also for smart contracts to do that.

So remember, for example, smart contracts, they can't sign an order, they can't have a strategy for, for, for to kind of to participate on an orderbook. So they need such a simple, simple way and they still want to get a fair price and so on. So it should be an infrastructure component. And if it's a smart contract, the smart contract can't easily upgrade itself or change itself. So so the Dutch X needs to provide a high level of. reliability, extremely high level of reliability, ideally you would have the guarantee that if you kind of use it, you have the very, very high guarantee that in the next 10 years, ideally in the next 100 years you can just use that thing. And now you are, of course, you can do a trade-off.

So either you make it completely unchangeable with no upgrade functionality whatsoever. You just deploy the contract, they're immutable. which of course has the disadvantage that you can't improve it and you can't and like everything you, every parameter you said, even things like this white list, everything has to be like correct in the first try and then you can never do anything about it. The alternatives, of course, you have a centralized entity that can make an upgrade, but then you also lose this strong guarantees because you now,

dependent on this central party that has, well, the keys to it. So we think DAO is the very reasonable, or is the most reasonable middle ground between, but can still provide, given that the DAO is widely distributed and has like 10,000 reputation holders, it can provide those strong guarantees that you are not reliant on a single entity and a single point of failure if you want so. But it still is agile and can make upgrades and improvements and yeah, and provide a better system. And so you mentioned that the Dutch Exchange has been running for six months.

So does the DXDAO take over the Dutch Exchange smart contracts? Or can you talk a little bit about how this transition is going to work? So when we deployed the Dutch X, we, well, threw away the key or that there is no way to upgrade it. So the Dutch X instance that is live right now on Mainnet will be in this form as long life on Mainnet as long as Mainnet exists. And maybe storage rent will eat it at some point, but whatever. We have to deploy a new one. We have to deploy a new version of the Dutch Exchange, which as owner, and the Dow will obviously be the owner and the owner has, yeah, like the abilities to widen this tokens to upgrade the contract. And through the update mechanism, basically do arbitrary changes.

So why can't you, you know, use this same mechanism actually forever, where instead of having to have a proper upgrade path, we just keep on. leaving the old version of the Dutch Act sitting on Ethereum and just like keep deploying new versions. And as people want to switch over to the new version, they can move their liquidity over to the new version. Right. I think that would be a sensible strategy if that thing would be its own like debt and end users would directly like trade on it.

And then the end users could just decide to switch to the new version or like stay on the old version. However, if you really want to build many layers on top and you see this exchange more as, again, infrastructure component, you want to build all the defy centralized finance applications. For example, those things, all the margin trading that needs a price feed. And the Dutch X, by the way, should provide quite reliable or hard to manipulate. price feeds. They need a price feed. They need a liquidation mechanism.

And you want to build smart contracts layers on top and maybe another smart contract layer on top and then only an application. Then it becomes really messy if all of those layers and layers have to have their own upgrade mechanisms or then. So I do think there is, there are fundamental. infrastructure components where ideally you can build on top of them and have the guarantee that they will run and be maintained or yeah, will run and have continuous liquidity for a long time. And just assume there would be this fork and everyone would move to the new one, but there's

one contract that's still running on the old one. And then suddenly the old one runs out of liquidity and it's then really not. not anymore a very reliable price feed or you get shitty prices. Yeah, all those things. On the other hand, though, isn't this also can be seen somewhat as a security vulnerability as well, which like, you know, when we're doing like programming, like, you know, if you're, this is why you do package locking where like you don't want your underlying libraries. You just like swap out from under you, break interfaces, etc.

Of course, of course. I mean, absolutely. So the DXDAO is a radical experiment. And it has to prove itself that it can provide this level of reliability. And it has to prove itself on many levels. So it has to prove itself. The DXDAO has to prove itself on a technical level. The contracts needs to be, need to be, well, secure, obviously.

It has to prove itself on a, on a, like, yeah, social or on a game theoretic level, that the kind of the actions of the DAO or the value system of the DAO, yeah, there are many, there are many ifs and things that first need to be proven. But eventually, I would say, a DAO might be able to provide those strong guarantees that it keeps keeps things going, does updates, does like stays on top of the, on top of the, well, most recent technology, but doesn't, yeah, but again, you are not dependent on a single actor,

but on this collective, this is 10,000 people or maybe more. Maybe to add some thoughts on this. So basically, well, forc rules is good. So first, two things. Fork rules is one only good for upgrades, but it's not good for many other kind of decisions that the doubt can make. So a down can make many decisions

that the fork rule cannot make. But I think more importantly, fork rule is good, forcruly is a great governance, actually, mechanism. It's the best decentralized governance mechanism for decisions that are very, very infrequent. So if you need to make a decision once in a year, I would say that probably,

yeah, fork rule is probably the best the central governance mechanism. But once you want to make many, many small decisions, and now we can kind of like enter like what kind of decision, including in the upgrade situation, what do we call upgrade, token-wide listings, token-wide listing and upgrade, do you want to fork every time, you know,

the crowd needs to decide about whether to list a token or not? So once you're starting to speak about tens and hundreds, and eventually thousands and tens of thousands of decisions a year, then fork rule will just make absolutely no sense. And you will have to have a DAO to collect decisions at scale. And I'm saying at scale, I mean at scale in terms of throughput of decisions. But then scale of throughput of decisions correlate with scale, natural scale of DAO itself. So if you have thousands of people, they will have thousands of ideas to execute on.

And that's something that's simply you have to have a DAO. if you want to harvest that potential. So, like, yeah, I guess that kind of actually makes a lot of sense. So I've had this, like, similar discussion a lot with Will Warren from ZeroX about, like, you know, does the ZeroX protocol really need a governance mechanism? And because, you know, I was kind of making a similar claim there saying that, okay, look, you can upgrade, you can just launch XV2 and then all of the relays who are like, you know, can just point to Xerox V2.

But I guess like sort of the big difference here is that work, my perception of that works for X because it's centralized relays and they can like individually just choose to point to the new version of the X contract. But if you're really trying to focus more on like the whole a larger decentralized finance ecosystem, it's kind of, you know, who knows what the up, like, you know, it might not be centralized rel layers who are pointing at at DX Dow. I'm sorry, at Dutch X.

It could be like other decentralized apps that I'm pointing at it. So you do need a more coordinated system than you would in something like 0X, for example. Yeah, I mean, I would even try to argue that even in 0X, I mean, the minimal feature that you need, which is maybe an upgrade once a year, yeah, I would say I agree with you. Like fork is just as good. But if I also think that for 0X, you can think of many more things that you could do in DeSendres fashion, And for this, you need DAO's as well. So, Martin, you mentioned this, you know, this ultimate ambition, right,

that something like DXDA could make 10,000 decisions a year or maybe more. And I guess that ties into very much what we spoke a few last time, right? So holographic consensus and sort of, you know, the mechanisms of Dow. So can you explain a little bit? How is that going to work? And I was specifically curious also about, you know, reputation, right? There's this thing called reputation, which is going to have a key role in the DX style. Sure.

Yeah. So, so firstly, reputation, I mean, it's a sensitive word. And, you know, some people interpret it differently. And even more so when you compare it with rep of ogre. So let's just clear the definition. When we say reputation, we simply mean voting power. Like your weight of the weight of your voting is your reputation. It's just a number.

But the way that this reputation is, you know, is allocated to you can be anything you think of. It can also be related to some tokens, such as locking of tokens. We'll probably speak about that. But reputation is we just mean your voting power. The second thing about reputation is to say, so often people talk, when they talk about reputation, what they mean, and again, that's very different from the rep token of auger. What they mean is that reputation is not transferable. Now, it is partially true, but then we need to decide what we mean by transferable.

But I think that what people usually not speak about is a more important feature of reputation, which is reputation is slashable. It's deductible. So I can, in fact, while in the contract of the reputation contract itself, it is non-transferable. So you cannot transfer your reputation. directly from an address to an address, you can do that indirectly. So I can hold my reputation in a smart contract and then have a token owning that smart contract and then I can transfer the ownership token to another address and indirectly

transfer the reputation to a different owner. But still, my reputation score that is tied one-to-one and solidly to this address, in this case, the smart contract address, can be deductible by the owner of the reputation system, which in this case is the DAO. So if I'm making something which is socially unacceptable, the DAO can decide to slash my reputation. And that's, in fact, that's a critical element. I would even say boldly that. I think that's the only way to fight with, for example, on-chain bribery attacks. So this is roughly about the reputation. And maybe just, just really quickly about holographic consensus.

I mean, the whole problem, well, the whole, I think the biggest problem of DAO's that was triggering this line of thoughts is that, well, basically, you get into a scalability problem right from the beginning,

just as much as you get to a scalability problem with consensus protocol, with blockchain, in the same way, in fact, pretty analogously, you get to a scalable, scalability problem with centralized governance, and you cannot really, it seems naively you cannot make many decisions that are also resilient.

So this started kind of like the line of thought of photographic consensus, which is basically allowing you to make decisions by relatively a small amount of reputation out of the DAO, so that does, they are scalable. But in a way that guarantees that that representative, that, sorry, that small group is actually representative in the sense that decision made in those groups. groups actually reflect what the entire reputation system would think if they would just have the attention to consider those decisions. So thus, resiliency.

So as far as I know, as far as I know, that's the only current mechanism I'm aware of that resolve this detention between scalability and resilience in the domain of decentralized governance. And that's maybe also one element that brought our two projects together is that that is used through, this is achieved more or less through prediction markets. So you have like prediction markets for the proposals that asks the question, will the proposals, will that proposal be accepted by the vote? And that serves in a way as a filter or you, yeah, as a way to prioritize or like boost boost proposals.

So if the market has a high confident that this proposal will be accepted, then it might be fine to lower the thresholds or the requirements for the vote mechanism to accept this proposal.

Yeah, maybe just to comment on that, I mean, for a long time, this big question was on the table and people have realized that governance systems, you know, the regular notion of government systems, I mean, voting with static reputation,

they are relatively resilient, but they're very not scalable. At the same time, markets are usually more effective, but they are very not resilient. You can easily manipulate them. So the solution eventually was to actually combine the two. So the decisions are made by voters, by reputation holders only. But then in order to scale their capacity,

there is another system in market, prediction market, of people who only make predictions, they are not making decisions. In that case, in this manner, it's different from fritarchy. The predictors do not make a decision, but they just predict what the voters will say.

And by doing that prediction, they basically scale the capacity of things that the voter can decide about. So I have a question here. Now, Martin, right, like no C's all. about creating markets for like garriefing and you guys made the point that you know reputation can be sort of transferred right like it could be held by the smart contract and then maybe that controls

reputation then you could sell kind of shares in this smart contract i mean why not just make reputation like fully tokenized and transferable it seems like almost making where there naturally a market could be you don't allow a market or Yeah, I mean, I mean, the point, so firstly, again, the important point is less whether it's transferable or non-transferable. And as I said, in some sense, it's indirectly transferable. So I'm admitting. That's a conversation Martin and I had like for the past three years. So it is transferable.

And but but it's deductible. And that's really what matters. It's less. So it's true that making it on chain transfer. directly transferable in a way kind of like just opens up more, you know, maybe potentially opens up more problems and we don't see the reason to do that, to do that. But it's not the main point. The main point is the deductible. And we, I would say that you probably can transfer and you can sell your reputation in a very, very small scale, like maybe to your brother.

But you would not be able to scalably, you know, have it like an on-chain marketplace where you can buy as much reputation as you want or sell as much as you want. So it's similar to the situation where, for example, off-chain, you know, people talk about bribery in Daos. So off-chain bribery is not, I would not call it an attack vector. So off-chain bribery is something that is very hard to coordinate and scale up. But on-chain bribery is super attack-up. Like, it's a huge attack vector.

So you want to make sure that these things are not scalable and un-chainable. If I understand correctly, the main reason you're trying to avoid the transferability is so you have stuff be slashable. And so if someone does something, you know, not according to social consensus, they can be slashed by the doubt. Why not, you know, we have a similar problem as well in the proof of stake world. And we solve this using unbonding periods where why not have a system where, you know, if you want voting power, you have to bond the tokens. And then you have to go through a long unbonding period.

but once it goes to the unbonding period, then they're transferable again. Isn't that also a potential solution? This is an equivalent solution. And what we're representing is just more generic than that. So basically, one of the way, so in fact, actually the relevant way, the relevant way for DXDAO,

but more generally, one of the way to have reputation is indeed locking some tokens. So you lock some tokens, and then reputation score is simply the number that reflects how much voting power you got from locking the tokens. And then you can actually, you can play with it with a formula much more generally. For example, it can be the amount of tokens that you locked,

but it can also be the amount of tokens that you locked time the time that you lock it for or many other formula. And more generally, you can also have reputation systems that are not coming from tokens. So yes, the answer is that it is equivalent, but much more general than that. And, well, maybe to jump there in, that is actually one of the one of the main mechanisms how the reputation of this DXDAO will be distributed. So one thing that's super important to us is we set up or we tried to set up the initial distribution of this reputation or the ownership of if you want or the stakeholdership of the

Dow to be really broad and to be kind of this fair, decentralized, no, no, no, no pre-mine or no kind of pre-allocation to noses or to to Dow stack. So there will be like mainly two two things or three things you can do. So one is trade on the Dutch exchange and earn those Magnolia tokens that that will distribute 50% of the reputation. roughly 30% will just, or not roughly, exactly 30% will be given to those who lock down tokens. And that will be all tokens. We expect currently a number of like 50 ERC 20 tokens.

It will be whitelisted on the Dutch exchange. So any ERC 20 tokens that's whitelisted and traded on the Dutch exchange, holders of this token can just like lock down this token for up to a year. And depending on how much value they lock for how long, they will get a fraction of that 30%, 8% to 10% to Ether, the same for just locking down Ether, and the last 10% will be auctioned off for Gen tokens, the Dow stack tokens, so the Dow will start having those Gen tokens,

and they are used to, kind of subsidize the governance mechanism. So in a way, the Dow will pay out those gen tokens for successful proposals. Or more specifically, it will use those gen tokens to incentivize the prediction markets, or to incentivize for people to make predictions that or can find good proposals. Is there a cap to the amount? a reputation? So what is the initial supply of reputation?

Because it seems that to me that the 50% that's distributed by Magnolia, as well as the 30% that's distributed by locking ERC20s, both require the white list. But it seems that the white list doesn't exist until the DX Dow exists. So it seems to be like a circular situation. That's one of the few things we unfortunately have to, well, just pre-define. So yeah, we have to pre-define the white list. we basically try to do, it's somewhat random, but the top, or most of the top 50,

maybe we can extend it to 100 tokens. And if anyone wants to be on the white list, they can contact us and then we will make sure that that's also added. But I mean, we have to like, it just, it just work for us because we have to evaluate each token. And is there, is there, is it actually a real? token in the sense that I mean each token is in some way

it can be in a tactic vector if there's one malicious token then then someone could grab way too much yeah if you're going to put your your sunny token and then control the sunny economy then you you'll maliciously generate a lot of magnolia and basically wipe up the value of

magnolia so so that yeah we want to make sure that there's no sunny tokens on the on the on the on the at the beginning and then that that will be the guard for later on. Yeah. Do you need price oracles for each of these tokens as well then?

Well, that's exchange. Yeah. So it's really interesting because you're just now seeing how two systems use each other. So one system, a system A uses B, and C says B uses A. But this is just the beginning. We already have in mind, you know, three, four, five systems that we would like to attach to that. And we already see the bidirectional interdependence of them. And that's really the power of on-chain daps.

I mean, that they can really emerge and integrate with each other and keep decentralization. And I think that's something that we haven't seen before. That's also the power of Ethereum. So what about the economic value of the reputation token? Does it have value and what will drive its value? So, yeah, let me make this outrageous statement. I think there is a small chance, but I would probably go on record and say it's like roughly one,

well, maybe not exactly one percent, one percent chance, that the DXDAO will be the biggest organization on Earth in 10 years. So the biggest organization, means like control the most resources or like the most influential yeah control the most resources so can you can you can you expand that justify that what would that look like i mean that's an outrageous statement which is of course great but right right i mean i mean i i think that we need to like like separate in two parts so we really need here to like speak about the the potential of douse And I think the way Matan and me and Matan, Chimp in any time, see it, DAWS are really probably the next, yeah, the next big, like, step forward in ways how humans organize.

So I like this quote that DAO's might be as important as the invention of the firm. in the 16th, 17th century, because they are, yeah, in my expectation, or to our expectation, the only mechanism that allows coordination, strong coordination between 10,000 up to millions, millions of people. And so we think DAUs are, can be significantly more efficient in decision making, in processing input from,

from 10,000, 1 million members in coming to decisions. So this may be overused term of collective intelligence and stuff like that. So that's, I mean, probably talk about more about that, but that's roughly the general idea that there is a good chance, or small, I mean, still small chance, but there's a good chance that the DAO's will really be the next evolution and will replace firms as kind of the most powerful things for humans to organize. Now we can talk about why might the DX DAO have a chance to be the first DAO that kind of achieves that scale, or it kind of makes those throughputs, those large achievements. And we would say the timing finally might be right. So I think with the DAO two and a half years ago, we already got an idea of like how things can explode and go wrong of course but but i mean beside that kind of going wrong part

it already for those who who who were close to it it was it was magical kind of what happened once this was with this dow was created and suddenly all teams in the space uh were like looking at this dow and trying to interact with this dow and become part of this dow make proposals for this dow it was a huge magnet for, I mean, this was really just a period of five weeks, I believe, or I recalled correctly. But again, it gave already an idea of what might be possible. And, yeah, the DXDAO in a way does a more conservative, somewhat more conservative approach in the sense that it doesn't like start with a big token sale, but it starts with this, yeah,

a big reputation distribution period, but it is, I mean, it might decide, well, it will be up to the Dow to decide to do a token sale or other forms of raising capital once its life. So it has the DXDAO has a full power to do anything that's possible on Ethereum right now. And that's much, much more than two and a half years ago. So this Dow can, well, it can have dollars. It's a trivial one, but we have now Di and all the stable coins. This Dow can host, well, host a website and control content. So we have E&S and IPFS.

So Dow can control the domain. And that alone kind of means the business model of, let's say, Bloomberg and TechCrunch and New York Times. I mean, basically most of the value of those three companies is just captured by their website or by their kind of their ability to publish information that is kind of curated by them. Then there's much more. The stout can take a lot of the smart contract systems that are developed are open source. it could deploy them, it could, it could, I mean, projects could decide to on purpose hand over upgradeability to the style because they want to give up their centralized control. They, they often do have.

So yeah, those are a few. Maybe I can just add on that. So I guess why the X Dow can be so big? So I think, I mean, I'm slightly repeating and echoing what Martin says, but just to be more specific, the claim, the bold claim about DAWs or expectation is that they can be sort of like super scalable organization. So the problem of centralized organizations is really that they do not scale well, meaning that they can scale, but when they scale it become less and less effective. So less and less, if you wish, effective per person.

And this decay factor is really, you know, it's really strong. And, you know, every time that you invent new technology, you kind of like allow to stretch somewhat that factor. And then, you know, we went from firms to eventually corporations. But still, the pay that you're paying for scanning is very, very big. So very big organization are very ineffective. And we believe that Dow, the centralized organization, actually can keep effectiveness when they grow.

And maybe, we don't know, we will see. but maybe they can even increase effectively, just like network effect. They can increase effectiveness per person as they grow. And if that is true, then those to corporations would be the same thing that network effect,

you know, in the early internet days, were to previous apps. So, for example, network effect-based social media to previous old media. They just took over because they become more effective as they grow and they completely become predominant in there.

So there is expectation to DAOs will basically in a way, eat up the domain of production in some sense. And then the second thing to identify is that because of this exponential network effect thing,

then there is just an enormous advantage for early movers. So basically that is to say that the first doubt that will be successful in that sense that it can super scale itself effectively will probably be the biggest eventually, at least biggest in its own domain.

So then the last point is just to ask whether we are ready, whether the technology is in place in the sense of making it able to scale up and whether its technology is ready in terms of not having a huge breakdown. Of course, we don't know, and that's why, you know, that's why Martin is saying just 1%, there's so many things can get wrong,

but we want to say that technology has matured so much in the last few years that there is some chance, some non-negligible but small chance that things are ready to scale up without a major breakdown. And if that happens and the premise that Dow is super-scalable will just see that the first Dow basically eating up its own domain. And then you can ask, but what is this domain? So I would say that the X-Dou is really a defy.

It's decentralized finance DAW. That check is just, you know, it's first products, first asset. But there are so many tools that you want to decentralize, that can be decentralized financial tools. And if DXDAO succeeds, I would expect it to be the, basically the largest financial organization on the planet, you know, without so. Of course, everything is, you know, these are the pink, the hopeful scenario. scenario, but of course, and everything can go wrong. But I think definitely we are trying to argue

that technology has made such a big mileage in the past few years that this is possible. Okay, this is super fascinating. Thanks so much for explaining this. Now, in the traditional financial world, right, we have banks, right, banks can get to a certain size or, like, you know, different companies can get to a certain size. And I guess the base, the biggest, biggest companies, you know, maybe they have like a million employees, right? Something like Walmart. Now, you made the point, right, that the effectiveness to some extent decreases, right? So there tends to be this kind of limit, right? We don't have companies of like super enormous or, you know, much more enormous size. And then the other thing is we have things like antitrust law and some

government regulations that say, okay, we actually have to make sure that no company, you know, totally dominates a market. Now, with what you're saying, if that's true, right, that actually there are network effects around the DAO and the efficiency increases as it grows, I mean, what's the ultimate outcome here? Does this mean that there would be, if it turns out like that, and let's say DFI ends up being, you know, finance ends up just being eaten by decentralized finance? and then you have this defy DAO that, you know, completely consumes defy.

Like, what is the ultimate outcome here? Right. So I want to clarify something. I mean, the problem, so yes, one problem of companies that they cannot grow above a million people, let's say. But the problem is harder. The problem is that not only the, I mean, even in million, even in 100,000, they are not effective. and they are not effective because the interest, the incentives are not aligned.

So the incentive of the owner of the company or the other influencers of the company, whether it's the owner or I don't know, the biggest stakeholder or the CEO or the board of directors, their incentive and the incentive of the stakeholders and the incentive of the employees and the instead of the clients, all of these incentives are not well aligned.

And that's why it's not effective. And it's not effective. I mean, you can look at it from an effectiveness point of you, it's just not effective, like be more effective, but you also look at it from it from, you know, more social point of view. It's not, but then, you know, I don't want to get too much to subjective, you know, terms like just, but it doesn't serve the incentive of, of most of the people that are involved in that organization. That's the point. And, and if a DAO can maintain effectiveness at scale, it also means that by definition that it can maintain the alignment

of interest at scale. And if that, I mean, all of the trust laws and regulation that you need to have in order not to have one company controlling the market is because that that company is controlled by a single person or maybe a few persons, some of these huge companies actually controlled by a single person. And then it leads to such a distort of alignment of interest of one to billion, literally one to billion. And here we have, if we are right in our wild guess, then basically, that body can take over the market,

but in a way that maintains the line of interest of all of those billion people involved. So you don't need to worry about the trust laws. You basically get what you get at the end. You simply get, and that's all what that was about, you simply get a very well effective and in a way fair, but fair is built into effective coordination between one billion agents.

Around chain interest. But, like, you know, in modern, most companies today, like, you know, don't employees also have, like, aligned interests? Usually they have stuff like options agreements and whatnot or even like, you know, something that things that aren't even traditional companies. Like, you know, there was some news last year about like Uber and Airbnb trying to distribute equity to like what are currently their contractors. So, you know, could we couldn't we, don't we all already see this shift towards like, like, especially in the next. 90s, the big thing that happened in the 90s was like executives started getting paid, compensated primarily in equity rather than salary. And so do we not already see sort of this shift towards incentive alignment even in traditional companies or, you know, 21st century companies like Uber and

Airbnb? Absolutely. I mean, absolutely. I mean, it's just actually strengthening our claim. This transition from centralization to decentralization, this transition from a huge distortion of a line of interest into more equitable or, I don't know, balance or whatever you call it, a line of interest is absolutely an evolutionary transition. It's the Darwinistic evolutionary transition. And we see that transition happening for decades. And the only thing is that each time a new technology is coming in, it enables you to set up a higher level of that coordination and in civilization alignment, but we also experienced that the human grid, you know, wherever there is a way to take over power, you know, so you had like system that kind of

like started in course of decentralization, but then there was some power concentration that could re-centralize them. And we've seen that over and over again. And I think, and in that sense, I think the blockchain has really changed the rules in the sense that it allows for technology that in a way maybe cannot be captured. I mean, of course, we need to worry a lot about that and make all of the, and that's one of those things that can go wrong, of course. All of the game theoretic rules here

that the system won't be able to be captured at some point. It's a really new frontier in that sense. Another question I have really quickly about the reputation token is, you know, doesn't the non-transfer, in a way maybe limit the potential future decentralization of the system because like, you know, a lot of tokens today are like pretty centralized in their distribution. But the idea is that over time market mechanics will help decentralize them.

But if we don't allow reputation to be bought and sold on like public markets, how do we expect what if the initial distribution that comes out next month is like super centralized? What is the mechanism for resolving? that. So first of all, I would say if we don't achieve at least a sufficient level of decentralization, and I would say that our internal goals at least 1,000 participants, ideally 10,000 participants, well, the DAO will not be interesting. That's one element.

The other element is if it gets like this sufficiently decentralized initial distribution, of course it needs to have much more reputation holders over time and there are already ways built in that of course new reputation is issued so one one thing that is by default built in into the protocol is anyone can make a proposal towards this Dow anyone you don't have to have reputation if that proposal is accepted by the Dow you you will gain, you will get some reputation. And we just like today did the math, roughly, I think the numbers we,

or we were trying to set those parameters, how, what all those should be. And we roughly kind of said if the, if the Dow runs successfully for one year and successfully means like they're constantly proposals, they're constantly like, Well, accepted proposals. Then after one year, it should distribute another 30% or kind of a new 30% reputation in this first year to those who made those proposals. So in theory, also, the Dow could decide to print a bunch of new reputation and then auction that off on Dutch X. Correct, correct. I mean, well, it could do that.

I mean, it could also just decide to continue, like, incentivizing, like, trading on the Dutch X. If it says, okay, there's not enough liquidity, then it would just do the, whatever, whatever things is useful to grow the Dow or to grow the ecosystem. It will control over time. But just, just chime in. I mean, again, we said that there is an assumption here. We said that more decentralized is better. So if that is true, then if the DAO will, even if this, you know, let's say that the first phase of distribution was, you know, just mildly successful. And rather than the expected 1,000, you know, reputation holders, we just have 100.

But the thing is that if those 100 believe in the agenda of the DAO, if they believe that decentralized is good, they then have the incentive, the interest to keep on distributing reputation. So they can, you know, they can distribute reputation in so many other ways. and they just have the incentive to grow and grow that DAO. Secondly, there is also the mechanism of delegation that of course is another way to kind of like, you can have a, it's kind of like a mild form of transferability of reputation that can be retractable or not retractable depending on the condition.

So, yeah, just to say that definitely the centralization of reputation is important and we, more so, we are saying that it's evolutionarily advantages and thus will happen. And if not in the first DAO, in the second DAO that will make it better. I guess before we wrap up, I'm curious. So do you see, you know, if the Dutch of the DXDA becomes this defy doll, you also think that in the future maybe something like Gnosis prediction markets would be managed by the DXDAO?

Certainly, yeah. So, I mean, we are like, we are not. not yet going all in on the DX DAO, but if it would like turn out to be a DAO that gives kind of the guarantees, like we will trust the DAO that it would make reasonable decisions, then of course if we have any smart contract system that needs or that needs to have some maybe parameter change, upgrades, we would probably always give that power to the, yeah, to the DXDAO.

Because again, we think platforms are more attractive if they are decentralized. It's more attractive to build on top of a decentralized platform. We want to build decentralized platforms, and that means we have to give away control. And we think the DXDAO or something like the DXDAO is the right thing to give it to. I guess I have another question sort of related. here. So is there a role of the GNO token somewhere here? Yes. So the Gnote, well, not not in the DXDAO. So or not directly. Yeah, not in the DXDAO.

And again, that was important to us that that, yeah, the DXDAO should not be a NOSOSDAO. there is right now a role for G&O in the Dutch X and that is something super interesting to like watch so right now I described this this liquidity this liquidity contribution mechanism and the Magnolia so that's one part so you can like have a lot of Magnolia and that that gives you again an advantage by paying a little less liquidity contribution and effectively gaining fee.

And the other thing you can do is you can use owl. And that's kind of, or that is always the idea behind noses or G&O, that you lock down G&O and you get fee credits and we call them owl. Like two and a half years when I was last on the show, it was called Wiz still, but now I called Owl, whatever. So right now the DXDAO uses owl. So you can pay part of this liquidity,

contribution in AL. So roughly that means if you have G&O and you kind of get a slight advantage. It's similar like you can get the advantage with the Magnolia. And it will be super interesting to see what the DAO does with that. So in theory, the DAO could fork out G&O. Just to say, just to be precise, I mean, not fork out in the sense of blockchain, not even, I mean, that we don't, we want, that wouldn't need even to change the whole contract. It can just, it has the ownership and ability to change the logic and basically kick out a G&O.

But then we also believe that there is actually advantage of the DAO to maintain. Maybe we'll see how it plays out, but maybe the DAO has incentive to be aligned with Ignatius economy. Right. So kind of the way we envision it is that there will be those many, the reputation holders of this, DAO will be token holders to do a larger extent of all the different token projects. And they kind of prove that by locking down tokens.

So ideally the DXDAO will have part of the NOSS community, part of the XRX community, a part of the whatever, I don't know, status and many others. So ideally the DAO will have shared in. interests with those groups and we would see NOSIS as a company as like someone interacting with this DAO and probably once in a while making proposals to build stuff for that DAO. And ideally the DAO would see that as valuable and therefore don't fork our GNO. But it's that is definitely the risk I guess we are taking. if you believe in decentralization,

if you believe in giving up control, yeah, that's a consequence that you give up control and you risk that you lose control. Cool. Well, thanks so much for coming on, guys. It was really, really interesting to speak about. I mean, I also remember, you know,

back in the day we did episodes about the DAO when that was happening. And I remember that incredible momentum and excitement around that. And certainly it was so obvious back then, even though this was such a primitive attempt of the incredible power that Taoists have. So finally we're at the point where this is kind of coming back and maybe with a much different level of maturity, that's something incredibly exciting. Now, we're going to have, of course, links to a bunch of different stuff, but probably some listeners do want to get involved.

and participate in the DAO. Do you guys have some maybe final words or pointers or what should people look out for? What's the timeline here? So one final word is, this thing is risky. Daos have unforeseeable consequences. You can lose everything.

You kind of and so on. So if you do it with that expectation, then, well, one, I mean, definitely the DAO's deck channels in the NOSS channels are channels where we will get relevant information. Dxdau.dow.dowstack.io, I believe, is, is, is, will be the website where from starting February 18th, this, this, this, this, this, this initial distribution period of the of the reputation will start and you can there do the different actions like locking down tokens and so on and get of course all all the relevant

information and this period will then this period will go for 30 days so for 30 days starting february 18s yeah you can do all the actions to become part of this DAO and then there's like just two weeks like cool down or kind of initiation period and then starting early April the DAO is life and and develop its own life and maybe just one one last comment. So with noses we made, we obviously, yeah, obviously noses in Dao Steg, like kicking off as Dow, but it's really important to us to make it clear that this is not a Nosis Dow. So we already made the the pre-commitment and we will make this announcement a few times, we will burn all bridges on April, earlier April. So basically, once this initiation period is over, we will basically say nois involvement

is over for now. Nosis involvement is over. Maybe eventually we will then start again, like interacting with the Tao as the script before. But at that point, we will basically say either the thing. develop its own life and kind of does something out of its own, or it will die. And we will let it die. We won't do anything.

So we will close our GitHub repository. We will close kind of the communication channels. And we really want to make it. It should develop its own like ways. Where does it communicate? How do people coordinate? We think really, I mean, we saw like projects like like like, like well, obviously Bitcoin, that it helps.

helps that at some point the creator steps back and allows the thing to become, to be not limited by the creator, basically. Yeah, maybe to add, so of course, as Martin says, like, Dowstack and diagnosis channels are open. And although, like I said, we're, you know, burning all bridges and, and Dow's second analysis will not, you know, will not drive, we'll just be linked to technology, but will not drive the Tao once it's alive. It has a life of its own.

But there are some places, I mean, so firstly, there is a forum that we're setting it up for that. And again, we're not, we don't want to have any ownership of that forum, but we're setting up a form where people can speak. So it's the Dowtalk.org. When you can already go there, Dowtalk.org. And right now, well, of course, right now it's not live, so there's no discussion, but people can decide on their own

to have a discussion there. Secondly, we're building the whole stack. So in that sense, we build the contracts and the protocols and more layers of technology. But at the end of that stack, there is an interface, which is called alchemy, which is right. now under the domain alchemy.dao stock.io. So that's an interface that could be through which you can operate or participate in the DAO.

But again, we have no wish to have a control on that interface. And in that sense, there's already a bunch of other alternative interfaces by independent actors that are being built up to also service gateways to the DAO. But anyway, you can you can participate in that DAO through that interface. And of course, they participate in the reputation, bootstrap period to get reputation. Yeah, I would mention that is, I would recommend everyone looking at the, the genesis Dow, so that is the Dow stack or a Dow that's running right now. And you can, it's kind of much more limited, I guess, in scope.

but it's super interesting to see like it currently has like 120 people in a ton maybe and it's super interesting already to see or to feel like it's developing its own life it's developing its own rules it's developing its own value set and you can there yeah it's a simpler an earlier version of the protocol but you already can get a sense how the dx dow then might look like right so if you go right now to alchemy.ddaustakio we indeed will find the Genesis Dow. Right now there is only one Dow there. It's Genesis Dow. It operates under

the alpha version of the stack and the interface and the protocol and everything. It's clunky. It is slow. It is, you know, it has a bad UX. It's, you know, everything that you would like from a product. And yet, you know, we just launch it completely anonymous, like completely quietly with 50 people and now it just grow to 125. And it's constantly making actually stuff.

It produced 200 proposals out of which I think 60 something has passed. Out of those 60 something proposal, there were documents, few interfaces, modules, browsers, three meetups, like things that we haven't, you know, a suggestion proposal that we haven't thought about. And we know, we could not, we can definitely not. I guess it's surprisingly an effective way. We kind of like fueled, we funded that Dow. This was a kind of experiment. And I think it was a super effective way to get.

return on that on that fund so this is just a sandbox it's a prototype and very soon in this q1 before even the the dx dow launches we will launch the the system in beta it will be completely different world different application much you know much more slicker fast design and many more features and so on so forth so but yeah so we are we are waiting for the beta cool well Tom, thanks so much for coming on. I'm really excited to see how this all turns out. Sounds like an amazing experiment. And yeah, I'll be following it closely.

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