Epicenter - Learn about Crypto, Blockchain, Ethereum, Bitcoin and Distributed Technologies - Vitalik Buterin: Ethereum - Can It Go Beyond DeFi?

Episode Date: July 29, 2021

Vitalik Buterin joins us for an in-depth conversation at EthCC 4 in Paris. During his keynote presentation, he expressed his hope for Ethereum to go beyond DeFi as he wishes to see more non-financial applications built on the platform. From better social media platforms to novel approaches for funding public goods, from his perspective, Ethereum has the potential to change the world for the better, beyond financial applications.Topics covered in this episode:How has the past year been for Vitalik and EthereumThe state of crypto todayWhat interesting experiments are in crypto now defining membershipHas Ethereum gone too far into financial applicationsVitalik's views on using rollups on non-DeFi applicationsWhat are the biggest problems of the world today?NFTs and social mediaThe concept of retroactive public goods fundingThe future of DAOsEpisode links:Episode 171 - DAO Lessons, Casper and Blockchain InteroperabilityVitalik's talk at EthCC 4Vitalik on TwitterSponsors:CowSwap: CowSwap is a Meta-Dex Aggregator built by Gnosis. It taps into all on-chain liquidity offering the best prices on all trades and provides some UX perks (no gas costs for failed transactions!) and protects traders against MEV. - https://epicenter.rocks/cowswapThis episode is hosted by Sebastien Couture & Sunny Aggarwal. Show notes and listening options: epicenter.tv/402

Hi, I'm Sebastian Quiteo and you're listening to Epicenter, the podcast we're worried of your crypto founders, builders, and thought leaders. Today we have a real treat for you. We have a conversation with Vitalik Buterin. Sunny and I sat down with Vitalik after ECC in the ECC studio and we talked for about an hour, mostly about the contents of his talk. So he gave a really inspiring talk during the conference where he expressed his desire for the community to build products that go beyond defy. The built products that go beyond things that are financial in nature. And I think this is something that he's been really passionate about for some time now. But he really expressed it clearly during this keynote presentation. And one of the things that he expressed is his desire for new forms

of social media platforms to emerge in the defy space. And the convergence of, you know, scalable layer two technologies and NFTs, I think, you know, can really make that possible because we now have the technologies to build scalable social media platforms that can attract, you know, non-crypto users or new types of users to the space. He also discussed another area that he's really into, which is retroactive public good funding and being able to fund things after the fact and sort of flipping the funding model around. And, you know, generally, we just talked about, you know, where his heads at currently, you know, with the pandemic and how that may have sort of shifted his areas of focus. So it was a really fun conversation.

It was really kind of like lightweight and just like informal and really cool. So after the, after the after the after we finished the interview, Sunny and I both looked at each other and said like this was one of our favorite interviews in a long time and I think you'll enjoy it as well. If you're listening to this on the audio version of the show, there's also. a full-length video of this conversation. It's on YouTube on our YouTube channel. So check that out as well. Before we go to the interview, though, I'd like to tell you about our sponsor this week. Dexes are great, but they're vulnerable to problems like MEV, failed transactions, and high gas costs. CowSwap tackles these issues head-on and offers a new kind of trading experience. It's built

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here is our conversation with Vitalik Buterin. We're here with Vitalik Buterin. I'm here with my co-host, Sunny Agarwal. Thanks for joining us. Thank you. It's good to be here. Yeah, it's been a really long time since we're on an epicenter. So I think a lot of people have been waiting for this.

Yeah, so how have, I guess, like, how have you been since the beginning of the Panic? Like, how has the pandemic been treating you? I mean, for a big part of it, I guess, I was just hold up in Singapore, just having less human context than I had in, I guess, any of the six or seven years previously. So that was interesting, just like focused on some virtual things, also doing a lot of walking and running and just reading and continuing to do all the Ethereum related various things, of course. I guess in the past year, you know, just like last year has been so emblematic, I suppose. Has your sort of focused changed as a result of the pandemic? Has the pandemic sort of like awakened things, like interests and things that perhaps, you know,

how has things changed last year for you with regards to your Ethereum? It's a challenging question because like at the same time as the pandemic, a lot of things have changed. I mean, a lot of things about the world have changed. A lot of things about the crypto world have also changed. at the same time. I think the most important thing about the crypto world that's changed in the last year and a half is just like how big it's gotten, right? I mean, obviously, like you can see on the numbers, the price bumps and all of those things. Like, that's a sign of a bigger thing. And there's other signs too, right? Like there's all sorts of just mainstream figures talking

about it. Like even just one example is that tweet or that block post from my sister. and Jiang and optimism on our attractive public goods funding. Like Dominic Cummings, one of the top, I think Brexit people retweeted that. So that was, obviously, you know, there's all the celebrities focusing on crypto and, you know, Elon Musk, like fumbling around the space in his own very special way. And there's just large percentages of the population in general, like actually have heard of cryptocurrency at this point. And this is both good and bad, right? It's good because crypto is not going to slide into a relevance, but it's also a time when we have to think

carefully about responsibility because we know for the last 10 years of the space have basically been able to hide behind the excuse that, hey, this is experimental technology. And I know that like to most people, this seems kind of useless except for some prices going up, but it's, you know, really, when the technology gets better, this is really going to go places. And now, like, it's, the technology is close to ready, right? The scaling solutions. Lots of them are coming out this year. Some of them are coming out next year. The ecosystem is maturing in all sorts of ways. Like, you know, proof of stake actually is happening. All of a whole bunch of technologies that we've said are happening for a long time actually are happening. And there's just a lot of eyes on the space. And so

five years from now, we're not going to be able to get away with saying this is just an experiment. People are going to need some kind of results from the crypto space. And the question of exactly how much value and what kind of value we can actually provide for people, that's something that I think has been on people's minds since the beginning, but I think it just has to be on people's minds in a much more serious way. And I think so far there is definitely value that has to have. has been provided, right? But so far, it's mostly been financial. And, like, there's a lot of financial value that doesn't get recognized, like, even just a whole bunch of random people in

various countries around the world that just, like, quietly use it as a way to, you know, send money back to their families or just making international transactions for businesses and all of these things. But, like, the kinds of hopes that people have on the crypto space, at least from what I've seen, like, go even further than that, right? Like, even, like, it's Tyler Cohen, one of the GMU economists, I think I was even called, was it like myself in Bology, like the two most interesting libertarians or something like this. What do you think about his whole like state libertarianism? State capacity libertarianism? I mean, it's definitely one of those kind of interesting synthesis

perspectives, I guess. I see the philosophy and like I see lots of correct things about the philosophy, which is basically that like surgical, high quality, smart government action happening earlier can be a substitute for problems that end up creating a trade-off between or end up leading to

otherwise much more ham-fisted government regulation later. Like, even just COVID vaccines were an excellent example of this, right? Like, if governments had just gotten off their butts realized the enormity of the problem and just properly, like, told Pfizer and Medina, hey, guys, like if you guys figure out, we're literally going to give you a hundred billion dollar price.

Like, lots of people would yell and scream at this. But in my opinion, like, the world would have been so much better had that happened, right? And, like, the problem would have been solved in, you know, like, six months instead of 18, potentially. So, and, I mean, obviously on top of that also do the work of, like, queering off the red tape and all of that. But, like, that requires a actually, like, skilled response. And so that's the, like, the good side of, I guess, some of that perspective. And the interesting thing actually is that I think there is parallels between that perspective and things that the crypto space is doing because the crypto space has these kind of constructs that sometimes get analogized to being kind of like nation states but also kind of not like nation states. And they have these foundations that are kind of like governments but they're also not like governments.

They have a pool of funds that they can use to fund public goods, but they do not have the ability to enforce and change rules in the, in the blockchain. They can only propose things and then people may or may not accept them. If you treat these like foundations as sort of these like public entities, do you think that there's like current in the space there's a lack of accountability or just like voice that the people of the communities have over their governments or these foundations? I think the challenge is that in the crypto space we don't really know how to define or quantify membership, right? Like the cons, once you start talking about voice, then their question is who deserves to have that voice.

And clearly the answer is not like everyone in the world to an equal extent, right? But then what is the answer? And it's a question that actually does like have a lot of meaning, right? Because if you go back to say the Dow Fork and you remember some of the arguments around the Dow Fork, right? Like one of the comments that I remember being made at the time was that people who were in favor of the Dow Fork were arguing that people who were against the Dow Fork at the beginning and then people who were in favor of VTC later on

were just like shills coming in from the Bitcoin side basically trying to either impose their foreign values on the Ethereum community or worse just like stir trouble and create chaos in the Ethereum community because that's good for Bitcoin. Now my opinion is that like those kinds of perspectives tends to be overblown and people tends to underappreciate that like even you know people within their own community tends to like don't align exactly on values to the extent that they think they do

but like even still it would have been interesting if we had a clear way to know the answer, right? And like so far, the ways that we have of defining community membership, they're not very good. Like, what is there? Like, there's coin holdings, but, like, in my opinion, coin holdings are an extremely imperfect proxy, right? Like, for example, if you compare, I don't know, the number of coins, let's say, like Joe Lubin has to the number of coins that, I don't know, like, say Tim Beko has, right? Like, that's, it's a, it's, it's, going to end up being pretty lopsided, right? But that's, like, let's say that I don't know what the difference is, but I'm going to guess somewhere between a factor of 100 and 1,000 could be

wrong in either direction. But that does not mean that Joe Lubin is like, you know, 100 to 1,000 times more of importance to Ethereum than Tim Beko is. Like, Tim does a lot of important core deft coordination work. And so, like, money is a very imperfect proxy, but then what are the more perfect, what are the better proxies? And, like, there are things like, for example, in the Zcash Foundation, there's like this community advisory council, like, you know, you're either part of it or you're not, and it's somewhat more of a kind of, I guess, um, technocratic, uh, design. There's, uh, obviously just foundations themselves that have kind of even more closed membership. So I think, yeah, exactly. Like, I think my answer to the, this is that, like, I don't think there's,

there is a perfect solution, but I do think we need more thinking, more ideas and more work on, like, better approaches. Like, I think if we can just figure out, like, what is a sensible concept of membership so we can figure out like what is like if we want to and what who are are we even trying to give representation to then we've at least made the first step toward like figuring out what the actual problem is right and then like potentially governance is going to become easier and like potentially you know there's a possibility that like it'll actually be kind of more responsive to the community's actual values and um going back to kind of state capacity libertarianism, like even by being more competent at the same time, be more respectful of the fundamental guarantees that the community wants to preserve.

What are some of the most interesting experiments that you're seeing right now in crypto of like new ways of defining membership? So aside from coins, I mean, what is there? Like there's there's just like, I guess, the zero to one function where you get one if you put in the top. finest amount of effort. Like, proof of humanity is one example. Like, I think if you do Ethereum governance by proof of humanity vote, like, it's not going to be great, but it's actually not going to be terrible either. Like, you are still selecting for people who care at least a little bit about Ethereum. Now, in the long term, I mean, once, like, eventually you are going to get, like, hostile blockchain communities that start, like, you know, registering identities and

brigading. But, you know, for now, it's already an improvement. We actually had this in the in the Cosmos Hub launch, there was the Game of Stakes thing, and we use, like, passports to, like, do it. And, you know, one validator actually just, like, basically got, like, a bunch of their community members to, like, submit passports,

and they just civil attack the game of Stakes just to, like, show that off that they could. But, like... Right. Yeah, it's also, like, philosophically interesting what the dividing line is between a, just a successful political campaign and a civil attack. No, no, no.

Gekwin grants has had a lot of, like, deep philosophical debates about this as well, which is also fascinating. So there's that. If you want to get more granular, there's like Pope tokens, right? And with Pope tokens, you know, you can have one, but you can get five and you can get 10. And so there's like a greater ladder of kind of effort. The Gitcoin Dow was trying this interesting quadratic voting thing where your voting powers, I think, proportional to the square root of your token counts, which could be an interesting 50-50 compromise between coin quantity, but also being a more egalitarian. what other things are there

there's obviously the whole kind of like biology thing of like basically proof of passing education and you know getting some kind of proof that you're knowledgeable about some topic there's a collection of ideas

like I think the optimal mix is just or the result is just going to end up mixing a lot of them look we don't really know what that looks like yet and we need to just keep trying more So yesterday during your talk, you talked about defy and I guess I don't know if lament is the right word, but you cautioned perhaps that the defy space was turning into something that is far too speculative and of financial nature. And it seems that you're hopeful that defy sort of comes, I mean, Ethereum comes back to its original vision of building useful and like utilitarian products. and, like, you said, you know, the price should be,

the price of Ethereum should be a consequence of utility. Do you think that, like, Ethereum has gone too far into the financial side of things and that, you know, there isn't enough utility in the applications that are being built on a platform? I think, I guess I mentioned in my presentation, I do think that the early kind of dominance of finance is a bit inevitable.

I think, like, the two reasons that I mentioned, right? One is that, like, centralized finance finances crap to a greater extent than the centralized non-finances crap. Say what you want about email and how, like, if I send a centralized email to someone in Guatemala, they are going to receive it in one second. Now, maybe the NSA is also going to receive it in one second, but like at least the recipient Guatemala is going to receive it in one second. But if, like, international bank wires do not work like this, right?

And so the level of quality that you need as, like, basically it's much easier to be not only better than C-5, but better than C-5, by enough to actually get people to switch over on mass. But in the case of non-financial things, like that barrier is smaller. So that's fact one. And in fact two is that finance is just more willing to pay high fees inherently because of what it is. You're willing to pay a $12.42. transaction fee to do some fancy $5,000 insta-fash of a thing.

But you're not going to be willing to make that much. follow someone on decentralized Twitter. So the, like, and this has been my consistent opinion for probably the last five years. Like I think once we have solved scaling and fees can go back down, we at least have a fair chance at getting the non-financial stuff to take off. But once, so we'll see, right? Like this year, what's interesting is that we actually have the scaling solutions, right? Like there's optimism, there's arbitram, there's ZK sync, loopering, Starknet. But do you think these like roll-up solutions are, you know, so obviously, you know, as you know, I work on Cosmos. And so what, one of the worries I see is that you have these great roll-up platforms, but at the end of the day, there's still these generalized chains. And I see that Defi is just going to start dominating these chains as well. And so one of the interesting things we see in Cosmos right now is a lot of the chains are actually non-Defi things. I think most of them are actually non-Defi. So we have like a Kosh network, which is a decentralized cloud. We have like Sentinel, which is a decentralized cloud. We have like Sentinel, which is a decentralized.

as a VPN. And so I see a lot of these Web 3 and, you know, Stargays as a social network. Do you think like the way for how important do you think like application specific chains or roll-ups are going to be to sort of giving these non-Defi applications a

you know? I'm bearish on that. The reason why I'm bearish on that is that I think the most interesting future applications are not going to be defy or non-Defi. I think they're going to be a combination of FIA and non-Defi. And I think being able to benefit from even

tightly coupled composability between five things and non-fie things is going to be valuable. I think in terms of solving scalability problems I personally just think that there are obviously any chain if the fees are low there's going to be

certain kind of like use cases that just kind of like flow in there because they have to flow somewhere. Like if gas fees ever go down to like 10 way then I'm just going to use the chain to store and encrypt a backup of my hard drive. So, like, there's always going to be this kind of, like, you know, user kind of cosmic microwave background radiation. And as long as the total level of scalability

is high enough that the intersection of, you know, the supply with that cosmic microwave, you know, demand curve is, like, at a point that's low enough, then, like, whatever people want to do is going to be affordable. And, like, the nice thing about non-Defi, I think, is that non-Defi depends on synchronous composability less than DeFi does. And it's still useful, but it depends on, like, especially even depends on synchrony less, right? Like, you don't need five apps to talk to each other in one, like, atomic transaction. And so, like, non-Defi things, I think we'll be able to bounce between shards or, like, bounce between roll-ups more easily. So I'm, like, I'm confident that, you know, in the more mature ecosystem,

at least I think they're not going to be squirt over by fees. How much of, how much of, like, to the D-Gen side of defy do you think is a consequence of, you know, I'd say like general, more broad, like broad macroeconomic trends of decreasing scarcity in, you know, in the traditional finance system with like just like massive monetary inflation. But on the crypto side, also just the ability to just create new assets. I don't know if you're familiar with this idea of financial nihilism, but to me, like, I feel that the, the, the incentive to just like create new assets and like to create new forms of value is so high that, there's a little incentive to

say create something that isn't like in a finance whole in nature for founders but also for like communities that are following those things because they're like sort of naturally going to go to the thing that could potentially you know make them money like I tend to agree with with Sunny on this and I wonder like

if you've given any thought to this sort of broader macro trend like well of that trend like there's a few different aspects to that right like one is this kind of I guess ideological and philosophical thing of like, hey, you know, the, like, mainstream civilization is, like, basically bullshit. And so, like, you know, for, if we're going to make, you know, a couple of, like, fireponsies and, like, send around, like, links to the ENS to them, then, like, that's, that's not doing

anything worse than the game. That's just playing the game that already exists. So, like, it's definitely a mindset that I think motivates some people in the space. So that's something that exists. There's also the well, this question of like, well,

if you want to build something meaningful, then like to what extent is this possibility hanging there of like building some defy thing and potentially getting more money more easily. Like to what extent is that taking away? from your motivation to do that. I think my answer is short-term, it definitely can. Long-term, it won't.

And I think part of the reason is, like, there's a common meme that the crypto space is more productive in bare markets. And, like, I think it's true. In my observation, it's true. And it's definitely true that in the short periods of time during which, like, there are these big bull cycles and everyone's just, you know, making $10,000. day from just like sitting back on their chairs like there's there's less motivation to do anything but at the same time like those phases are a loser right and uh you might think that

you're earning $10,000 a day and that's a replacement for your job but then when the bear cycle comes you'll lose it all again and then you're going to be sad you didn't you weren't actually doing anything substantive um so eventually these things do like burn out right like eventually like if making a some crazy financial contraption actually is more profitable than doing other things. And at some point, enough people are going to do it and people are going to start doing it really, even like really formulaically until like that stops being true. So I'm, I guess, optimistic in the medium and long term. Though at the same time, like, I do think that it's not a given. Like, I think that it's also important to like kind of explicitly, like, talk about

support and spread the ideas and culture of building things that are not just financial, like both to like let people who have those ideas and know that. that there are other people who also feel that way, give them some kind of framework to start with, and just point out to people in general that, like, this is a community where you can come and do those kinds of things. Like, I think communities that don't do that, right, they're going to end up just, like, degrading into being, like, financial whatever's, right?

Like, like, Binance smart chain, you know, it's not going to be the, like, a locus of, like, you know, super meaningful, like, revamp. social media to improve humanity type of projects. Do you think that this like degenification of everything? So you mentioned the talk yesterday about like is the price the product? And that's not, we don't want that.

But it seems like, you know, I think what we saw with like the Wall Street Bet stuff that happened earlier this year where it's like this whole the price is the product idea is spreading even, you know, you have like meme coins like for Dogecoin. Maybe the price is the product. But like for stocks, there's supposed to be something. that's more utility-driven, but like, well, now GME is the price of the product. And do you think this was, is there something in our culture that's like leading us this way? Or did we just like pull the rug back, pull up the covers?

And it turns out, you know, we just, this has always been the case and it's just more transparent now. Again, I guess that gambling has been like a human cultural universal for thousands of years, right? But how do we, but how do we, the over-gamblification of all things? Like, you know, let's say, you know, there's a lot of really useful defy-finding. product that are like, you know, have like utility. But I feel for a lot of them, the price is slowly starting to become the product rather than the actual product itself. Do you think that's a long-term property of the space, or do you think that's a property of the bull market? Because we have been into two years of a ball market now. Right. So I guess we'll see how people think in 2020.

Like in, like if you remember even going back to how you thought in 2019 and how you thought in 2017, for example. I would bet that your perspective right now is probably more similar to your perspective in 2017 to your perspective in 2019. Right. Right. Because, you know, in 2019, like, nobody had the ability to say the price is the product. Except die. So I remember a little while ago you tweeted, I don't remember how long ago, but it was like, you said, like, defy and like Bitcoin-esque stuff is solving the problems of the world in 2008, but those aren't necessarily the biggest problems of the world today. What would you say are the biggest problems of the world today that we should be thinking about?

I mean, I actually, well, I talked yesterday once again about this concept of just coming up with ways to improve social media, right? Like, I think that's, like, that's a big, like, cultural and mechanism design and, like, very interdisciplinary problem. And it's an important problem. And it's an important problem for lots of different communities for lots of different reasons, right? Like there's, like we're getting all the problems at once, right? Like you get the censorship and the arbitrary deep platforming that happens in a just extremely closed and non-transparent way. There's the just very poor quality. Like, I can't have conversations on Twitter anymore.

It's so sad. Buy some Shiba. Buy some Harmony Dollar Sign 1. Harmony Dollar Sign 1 is the best crypticor. look at it. Yeah. So the, and there's just, you know, the ways in which, like, engagement is misaligned with, like, any longer-term goals that pretty much, like, any reasonable person has. So, like, these are all important problems.

And, like, I talked about why I think crypto has some unique and interesting tools for solving that problem. And I think, like, we could be doing more to try, right? Do you think that the explosion of NFTs and like all the standards around NFTs and combined with that, you know, layer two's being more like being ready and like being more available? Do you think that the combination of these two technologies can be can make it such that now, you know, because there's been so many attempts of doing decentralized social networks. And you said that like, you know, BitCloud and all these things were not graveyards. but I mean, like, relatively speaking, their graveyards compared to like the Facebooks and stuff. But do you think that these technologies and sort of like their convergence

and can can be the catalyst for, you know, decentralized social networks to finally emerge and like have sufficient, like, network effects? Right. I think a really underrated aspect of the crypto space is just how it's like in the wake of just being a financial like a DGEN, an ape, you go, whatever system. It's also creating network effects that could be piggybacked on for very meaningful purposes, right?

Like one example of this that's, I think, a little different from what you were saying, is like how just giving everyone public keys and creating a registry of public keys has been a dream of the cipherpunk since the 1990s, right? Like everyone wanted to have just like a society where just everyone has a key and you can just go and send an encrypted message to someone that doesn't require any any kind of extra setup, right? But those PGPWabs of trust and never will end up taking off. But now, you know, we have everyone's got an Ethereum wallet,

or at least everyone within the community has an Ethereum wallet. So it's not the world, but it is a subset of the world that talks to each other. And, you know, everyone in the, they've got either a Mademask wallet or a status wallet or some other kind of Ethereum wallet, or it could also even be a hardware wallet. So on top of the just having key, there's even this powerful ecosystem of coming up with better ways of storing your keys. And you can use those keys for signing, and potentially you could also use those keys for encryption.

I think, like, ethmail.cc was trying to do encryption. I mean, I think that's something that should be standardized much more, potentially, and turn into some kind of standard. Then once you have an account, you can use that accounts to log into things. And so, we also, what we have is you have just a community of people who have common values and interests, and who talk to each other.

And that's also an excellent bootstrapping ground for any kind of system, right? Like, new projects that were demand on, depend on network effects can take off. Like, they just need to have seat communities to take off in, right? Like, if Facebook started with, I think it was Harvard College students, right? So, like, why can't the next generation

of actually good social media take off starting from the crypto community? Do you think it's possible to, do you think it would be beneficial to bootstrap off of the existing identity systems? So for context, two years ago at ETH Waterloo, I created something called Sheetcoin, which was a way of moving ETH onto a Google Sheet and blah, blah, blah. But I actually met someone at ETC yesterday, and he was really excited about sheetcoin, because one of the things that we did was we actually made it so you can send to an email address,

and then we actually, like, sort of hacked Google Oath to allow us to verify our. say on like Ethereum and we got Google to sign. But the coolest part is I could send to people's email addresses. Everyone already has an email address. Not everyone has a private key yet. And then you use that as an onboarding flow into when they want to come on to main chain, then they can, you know, create a private key then. I mean, I...

That sounds both enticing and scary. Enticing because, like, I actually want to, like, directly compete with Google and Twitter on the identity side. not entrenched them, but and also enticing because like that definitely is a very fast onboarding process that like it does for a lot of users

have higher security than a wallet they might lose the keys for. You could have an influencer who wants to air drop an NFT to all their followers, you can just snapshot their followers. Yeah, totally, right. I mean I think Polymarket also like they were using magic links, right? So we're basically doing a very similar thing. So that's

yeah, that's definitely interesting. I'm also bullish on social recovery, like I think so because social recovery, in my opinion, is like a very like noob-friendly way of storing, like just having accounts because like even people who are very non-technical, like they can understand the concept of like here, I'm selecting 10 people and I trust at least five of them, right? So that's something, like if we just come up, so I think that's good for onboarding, but at the same time, like I do also want to, uh, kind of kind of onboard people, like not just onto an application, but actually properly on those kind of

accounts that gives them within the crypto ecosystem. When it comes to social media, you know, there's one view of crypto, which is that like it's about making scarcity more legible. And so what do you, have you heard of like their friends with benefits community and that token? Well, I mean, the concept of friends and benefits is that like what you have like a sexual relationship and then you're also, you know. There's a token.

Oh, wait, wait, wait, wait. Just to, like, poke this category of human activity, and they made a token of it? No, no, no. So it's by Trevor McVedries. He created this company called Broad. He came really, you know, a lot from the NFT space. But they basically created this community, which is, like, token-gated. And you, like, you know, everyone who's in the community has an opportunity to invite the...

The Friends with Benefits name is just a little bit of a meme. Oh, okay. What do you think, do you think that... What are the... I guess maybe in other way is, like, What are the applications of blockchains that can help social media? Like, you know, you talked a lot about cryptography. You know, everyone having a private key.

That's great. But is there anything about this blockchain thing about scarcity or anything that can... So I think like two possible, two or three possible directions. One of them is accounts and just the concept that, like, you could basically have an account that is multi-platform. And the interesting thing about ENS names, right, is that they're an accounts that is multi-platform. And they're all... and there are a name that is multiple platforms that people are willing to use as a name, right?

Like the only other like really widely adopted multi-platform accounts would be like email addresses, but like nobody wants to use your email address as your name, right? Like it's, I think it's because of like names are self-expression and like you're okay with like, what's your ENS name? SunnyA97.e?

Yeah, SunnyA97.97.e. The handle I use every. Yeah, like that's like a, you know, It's something that, you know, you'd be happy to use as, like, one of your names. But, like, having something at gmail.com as your name, like, it feels like, you know, like, awkward. Yeah, like, why would I want to be, like, basically wearing a Gmail pride sticker as part of my name? So Balaji has the other take, right, where he's, like, you know, he's been pushing recently

that everyone should have their own personal domain. And, like, so your email out just is, I'm not going to say it. But, you know, it is more personal. It's not at gmail.com. Right. So what do you think about that view? I mean, that's also possible, but in practice so far, like, there aren't really easy to use tools for that, and there isn't really a good incentive to make easier to use tools for that. Because, like, centralized people, they don't want to build tools. They want to build empires, right? And Web3 space is all about fewer empires and more tools.

But there isn't a natural incentive to build a tool. The natural incentive is to build an empire so you can capture the network effect. So, like, there's, yeah, the incentives to, like, actually build the tools to make it easier to work with having your own domain name, like, don't seem like they're there. Whereas with a, like, a crypto-based name, they kind of, like, they are there. But, like, to some extent, right, because, you know, you have the crypto tokens and foundations and grants and all of, and projects and all of these entities. But I guess this was a digression, right? because the names are only one aspect of where I think crypto is interesting. So identifiers that are like accounts that are also, that also have nice names as one. Another is a lot of people thinking about improving social media are interested in this concept

of a kind of content view separation. So there's like the content layer where anyone can just publish whatever content they want and like maybe you can bundle in a bit of anti-spam and like either it's on chain or it's on some whisper-like network where if you have an identity, you can send maximum end things every day. And then the views are interfaces that look at that information and show you some of it in some order. And if you want to have content view separation, which is really powerful because instead of different platforms having totally being separate from each other, different views can still share most of the same network effects. But the content has to be on some credibly

mutual ground. And like decentralized cryptographic networks are an excellent kind of kind of cryptographical and mutual ground. So that's number two. And then number three is incentives, right? Like I don't know exactly what is the correct way to incorporate incentives and crypto social media. I know that there's definitely like a lot of very wrong ways to do that. But I mean, I'm sure there's some like potentially correct and very powerful ways to. But if you want to do that, then like the blockchains have their own financial layers. built in, which makes them, once again, like, I think a really powerful ground for doing this sort of stuff. So those are the three areas where I see it, like why I see the cryptos

basis is sort of naturally fit to do something. So during your talk, you also discussed retroactive public good funding, which is a concept that was new to me, and I thought it was really interesting. So what is retroactive public good funding and why do you think it's interesting? Sure. So the concept of retroactive public goods funding is basically that, You would have some mechanism that decides, like, what projects are important and, like, what projects are good and provide, and what projects deserve funding because they provide, like, values us to a community, and it funds them. But the difference from a grants program is that a grants program is proactive, right? It's like, it gives you $100,000 because you wrote up a plan for how you believe that you can use this $100,000 to do good things and, like, here are some reasons why it's credible.

But here it's giving grants after the fact to projects that have already shown some value. And this is coupled with basically like a prediction market through an investment ecosystem. So like one of the ways of doing this, well, obviously you could just as a solo developer, develop something, like spend your own time, work for free. And then if you create something, it's really valuable. Then like after two years, you get a bigger attractive grant and it was all worth it. But what you could also do is you could issue what I call project tokens, right? So you just create a project token for a project, and you could set up some allocation mechanism, anyone who contributes to that project, gets some project tokens. You could even sell some project tokens on uniswap, but then the project tokens become tradable.

And think about it, ETH was that, right? Like, ETH was a project token for this world computer. Definitely. And the idea would be that, like, these. this retroactive grant mechanism would then basically just buy up these project tokens after the fact, right? And so

not only do the founders of the project benefit, but also anyone who bought into the project token and so gave the founders like funding in like, you know, fiat or ether, like whatever normal currencies to actually like do the work ahead of time, they would also get rewarded for that.

So I think the core principle behind retroactive public goods funding is that institutions in general, like I think they're either centralized or they're decentralized. If an institution is centralized, then it ends up excluding a lot of important perspectives. And if an institution is decentralized, it's conformist. And those are both problems. And so, but in both cases, it's easier for something conformist to be right about retrospective questions, to be right about what already was important. then it is for something to conformist to be right about prospective questions, right?

If we look back on the last 50 years, we can say, like, you know, certain vaccines were... Yes, certain vaccines were very important for humanity. But, you know, had we thought about that, 50 years ago, perhaps it would not have been up. Right, exactly. Like, I think, like, take life extension research, for example, right? Like, this is sort of my, one of my pet, entrepreneurial public goods that I think is really important. Like, there's, like, someone like Aubrey de Grey, like, he has just been working really hard on just making life extension research happen ever since. I know the early 2000s,

so pretty much nobody believed him. And, like, there just isn't an institutional structure by which people who believe in these kinds of things ahead of everyone else get any kind of reward for it. And so, like, if that kind of structure existed, then, like, you know, Aubrey could have gotten quite a bit more kind of economic firepower behind him much more quickly. Would that also work for, like,

private investment? Do you think that there could be like retroactive VC investment or this? Well, I mean, I think like VC investment already is retroactive investment, right? Because like the VC investment itself is proactive. The thing that's retroactive is the exit, right? So like a lot of the VC ecosystem is already implicitly a retroactive grants program because there is an entire set of startups whose exit strategy is entirely, entirely designed on the possibility that they'll just get bought up by Facebook and Google. This is literally exists, right? And there's plenty of startups that just pitch to VC is that this is a possible exit for us. So, yeah. So, like, basically, I think, to a large extent, this already exists in the

startup space. And I'm just trying, like, retroactive public goods funding is about taking that same principle and, like, basically making an equivalent version of that, but where the metric people are optimizing for instead of just being, like, profit generation or satisfying the desires of, you know, the Zuck or the Sergei, like, it is something that tries to approximate a community's value. and the public good more. So do you think Dow's are good at doing this? Because one of my worries right now is that DAOs are a little bit too short-term thinking.

And so an example I'm thinking about is on Eutoswap, there was a proposal to do a $30 million grant to get development. And a lot of people were like up in arms, like, oh my God, this is so much money. He's like, no, don't you understand that this is actually a retroactive grant for like all the work that the guest team has done for the last four years? So do you think that Daos, this decentralized collectives, will ever be as, on being able to play long-term games as, like, for example, maybe more centralized institutions can? Hmm. And Daoes are definitely conformist, at least in their current form, right? And it's hard to say things about Dao's as a category because Dao's are a much broader category than, like, Dao's as they exist today are. But Daoes are definitely conformist.

And so a Tao that has, whose governance is, like, constrained to give. of retroactive grants, like, is something that could potentially be quite powerful, potentially more powerful than a Dow that's giving proactive grants, right? Because, like, make, like, in order to succeed, you have to make some risky bets about the future, and a conformist system is just not going to do that. So, make, like, can you describe a little bit what conformist versus nonconformist means? I, like, basically the, just making, like, only, like, only, you, just, like, only, taking actions on the basis of a viewpoints for which there is already consensus. Okay.

One of the things you mentioned in your talk was about how we have to make sure crypto continues to align with our values. As the community grows, how do we think the values shift as well? So one of the things is like, you know, NFTs, right? This, I don't like calling things NFT movement because I think NFT is like a technical term. Let's call it the digital art movement. That has brought definitely a big cultural shift, right? We brought, and I think it has some good aspects.

Like, you know, I think that friends with benefits community is something that really I don't would, I think only would have come out of the kind of person who came from the digital art world. But at the same time, it brings, like, those crypto influencers who are shilling Ethereum Max and how do we like, so how do you like, well, was the Ethereum Max thing even connected to NFTs? I thought that was just like a garden variety shit coin. But it's not connected NFTs, but the people it targeted, like the Kim Kardashian's,

these are people who came into crypto via this digital art movement. And so how do you sort of, how do you think the culture and values have to evolve or try to, yeah, how do you think it goes forward as the scope and of crypto? I mean, I don't think the NFT space was like net bad even as far as scammingness goes, because, like, you know, there's definitely specific examples of, like, scammy people in projects that either are NFTs or were inspired by the NFT space. But, like, before NFTs existed, there were a lot of that, right? No one said there won scams before. The other person who came to Bitcoin Miami with an Ethereum max t-shirt, which is, like, I don't know, like, such a Chad move in a very dark way, because he just, like, totally discredited himself in front of both the Bitcoin and Ethereum communities in one move. But, like, he, I believe even in 2018, right?

Like, he, I think, was sued by the SEC, I believe, for, like, shilling some other, like, very scammy project, like, I seal. So, like, he was definitely not brought into the space by NFTs. Like, this was just, you know, he seems like a, honestly, not very joyful fellow who also has multiple domestic violence convictions, who, like, also is interested in chilling stuff. But the, so those kinds of people exist and like anything that has money is going to attract those kinds of people. But the thing that NFT is brought that I like is just, like, it did bring cultural balance because like it brought this kind of like community that cares about artistic things and that is less kind of like purely money oriented.

And like if it was, if it was just the NFT community, it would have like very weird excesses of its own. But it's a good complement and it's a good balance to, like, what was there before the NAFT community, which is like the Defi community. And then the defy community itself was in improvements to what was there before, which is the ICO community. So like whatever the flaws of the new thing, you know, you do have to, I think, also think about it. Like remember the often even crazier or older things that came before. And to me it actually does feel like, you know, the craziness is slowly decreasing and the

have interestingness is increasing. And like especially like if after NFTs we start talking about like crypto social, you know, there are going to be crypto social things that like we at, you know, epicenter at 2023, um, are going to, can just laugh at and consider to be totally like, you know, crazy. But after these logos back here. Yeah. No, no, no. Status is fine. Um, but like it's, uh, the thing. But it's, I mean, At the same time, there's going to be a lot of, like, actually, like, genuine and very interesting crypto-social stuff happening to.

So I think the other thing, right, is that Ethereum, as it's growing, it's, like, early on in Ethereum's history, you could call Ethereum a community, but now I think Ethereum, like, it's not a community, it's an ecosystem, right? And ecosystems, like, there's definitely a lower level of cohesion that you can expect from an ecosystem,

but that's okay. That's, like, the price of growth and the price of, like, getting past a higher power of Dunbar number. But at the same time, like in an ecosystem, there are sub-communities. And as long as there are, like, meaningful sub-communities that are doing things that, like, we find important, and the good work continues to be done. So I guess one last thing, what I want to talk about is, you know, I know you like Tyler Cohen's podcast. So there is another well-known figure who has

also been sued by the SEC that has also been very active in crypto recently. So, overrated, underrated, Elon Musk, what do you think his game here? Like, what do you think? Is he just trolling? Or do you think

there's like something, a larger thing that he's pushing for? I think people overstate the extent to which he has, um, like he has some really deep,

like, scheming and thought behind the way that he's, um, approaching crypto. Like, I think he's just like a fun computer geek who likes dogs.

Okay. And like, he could, he's clearly attracted to some of the ideals and values behind crypto. And that's, you know, it's just something that he's excited on and he is acting on that excitement. And I think that's a totally healthy thing to be doing. But I mean, at the same time, obviously, there's definitely been, you know, big mistakes in the way that he's handled. And like, oh, I love Bitcoin.

And oh, actually, wait, there's all these environmental issues. And then, oh, doge. And also, I don't have the highest view, for example, of, like, the way that he is just kind of, like, walked into the doge coin community. And, like, he's just basically acting like he can be an important figure inside of it. Like, I don't know. Like, my own personal style is that I think, like, if I wanted to join a community and become important in it, I would do some significant good thing for the community first and then chill second. I'd like to see him do some development. Yeah, exactly.

Like, if he, even if all that he does is, like, donates, you know, $15 million to a Doge Deaf fund, like, that would be amazing, right? So, you know, Elon, if you're listening to this, like, if you just donate $15 million to a Doge debt fund, then I'm sure, you know, doge people, you know, including myself, I'm a doge person. Well, I definitely have a lot of respect for you for that. So I got you a gift, which is a sort of Shiba pajamas. Oh, amazing. Hopefully you can't dump these ones. but yeah so

yeah I think it's you know it's funny I actually before I started my current project osmosis I was thinking about building a

how to get dogecoin on to prove a stake and I started like kind of implementing it and I spent like a week really looking into it and I came away the conclusion that

no one's interested in Dogeco anymore not worth my time well I think I was a bit wrong about that one but so let's Let's wrap it up here. But before we do, you know, we talked about the space growing and everything.

And you talked about in your talk about, like, you know, aligning values and, you know, aligning what's useful. How do we ensure that, you know, we sort of like stick to, you know, the initial values and the sort of initial principles and, like, how does that not get diluted with, you know, like, an influx? I mean, you may have noticed, like, there's a lot of OGs here, but there's, like, a lot of new people, too, which is great because it brings in, like, all this sort of, like, new energy. but it can also dilute some of the values and some of the things that we as like the initial community building Ethereum think are useful what's your

what's your advice to say to the community to like stay true to like the your initial vision and sort of like the initial vision for Ethereum I think like either I come up with an idea and actually like build some interesting project or like look at the things that already exist

and participate in them I mean, one very concrete example is status, right? Like, it's a decentralized messenger. It's like, well, it's right there. It's one of the sponsors. Yay, everyone bow down to the sponsor, status. Status.I.M. So the, you, like, you know, like, it's a decentralized messenger.

You know, like, it uses, like, Waku, which is basically, like, the fork of whisper. I'm under the hood. It's got a built-in crypto wallet. Like, it's also not a ghost town. There's actually a lot of desktown. discussion and activity happening inside of it. The quality is like, it's not perfect, but it's like slowly improving and I think it's usable as a messenger at this point. So like you can just like I move my family chat to status. I actually yeah, no, I actually literally think that it's,

that like it is ready for that now. Okay, great. Yeah. So like actually good. Signal was hard enough. Yeah, no, I go around and actually like look into all of these things and they try actually using them. Great. And one thing that's been on my mind to this morning, what's this whole Minakunus, Ashton, like, how did this come together? Like, what is going on here? I don't know. Like, some, like, a friend introduced me to Ashton, and he's actually been interested in crypto for some time. I think I even might have met him a few years ago at some point. So he is, you know, also interested in crypto things. and I mean, he and Meele are also interested in NFTs and they're just interested in kind of like finding their way around the space and making something meaningful out of it.

I think that's great. Yeah, that would be terrific. Thanks so much for joining us. It's been a pleasure and hopefully we'll see you again. Yeah, no, no. Thank you for the interrogation. It's been great. Thank you for joining us on this week's episode.

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