The Breakdown - The Value Prop - Digital Asset Use Cases with Rebecca Rettig

Episode Date: June 23, 2023

Rebecca Rettig is the Chief Policy Officer at Polygon Labs and recently spearheaded The Value Prop -- a new project creating a database of digital asset use cases.  APOLOGIES FOR POOR NLW AUDIO - WE HAD A RIVERSIDE MISHAP!  Read the announcement here: https://twitter.com/RebeccaRettig1/status/1669327966503829506 Check out the Value Prop https://thevalueprop.io/ Enjoying this content? SUBSCRIBE to the Podcast: https://pod.link/1438693620 Watch on YouTube: https://www.youtube.com/nathanielwhittemorecrypto Subscribeto the newsletter: https://breakdown.beehiiv.com/ Join the discussion: https://discord.gg/VrKRrfKCz8 Follow on Twitter: NLW: https://twitter.com/nlw Breakdown: https://twitter.com/BreakdownNLW

Welcome back to The Breakdown with me, NLW. It's a daily podcast on macro, Bitcoin, and the big picture power shifts remaking our world. What's going on, guys? It is Friday, June 23rd, and today I am joined by Rebecca Reddick from Polygon to discuss the value prop. Before we get into that, however, if you are enjoying the breakdown, please go subscribe to it. Give it a rating, give it a review, or if you want to dive deeper into the conversation, come join us on the Breakers Discord. You can find a link in the show notes or go to Bit.L.Y. podcast. Hello, friends, welcome back to The Breakdown. We continue our interviews today with a conversation with Polygon Chief Policy Officer Rebecca Reddick. Rebecca has been in and around the

crypto policy space for years, and recently she announced a project called the ValueProp. It's at the ValueProp.io, and basically what it is is a database of use cases for blockchain technology. Now, we discussed this a little bit on the show, but there has been a very interesting evolutionary discourse, let's call it, around the VALUPS. value of blockchains outside of financial use cases and for many people outside of Bitcoin specifically. It has had ebbs and flows and highs and lows, but what the value prop tries to do is put more acutely what projects are actually attempting to use blockchains for outside of just financial use cases. In today's conversation, we look at where the project came from,

how it evolved, and what it says about the state of the industry right now. All right, Rebecca, welcome to The Breakdown. How are you doing? I'm good. Thanks so much for having me. excited to be here. Yeah, I'm super excited. I was just mentioning off-off air. This came up right after I had just had another conversation that's going to be in another show about this exact idea, that there's a much broader discourse around value propositions and use cases for kind of crypto more broadly. So when this project showed up, I really wanted to grab you and pull you on the show, and luckily you're able to make it happen. So thank you so much. But for people who aren't familiar with you, Can we just do a really brief introduction to who you are and what you do in the space?

Sure. So I'm the chief policy officer of Polygon Labs. I handle all global policy issues, which, as I'm sure you can imagine, there's a lot going on all over the world with people thinking about not just crypto assets, but blockchain technology more broadly. prior to this, I was just a lawyer in the space for about seven years, really dealing with software developers and a lot of the regulatory issues that come up when you have a new technology that doesn't fit into sort of the old legal regime. So I've been around the crypto space for a while, but excited to really be doing policy work and thinking about how this entire technology is going to move forward all over the world. Yeah. And I think that this question of what it's used for

is obviously quite integral to the questions of how you make policy for it. Because I think that part of what makes it a more complicated thing to regulate, to make policy around is the diversity of potential applications, both sort of current, imagine, future, et cetera. But let's talk a little bit about the value prop, what it is and where the idea came from before we get into maybe some of the specifics. Yep. So even before I took on this full policy role,

I was doing unofficial policy work because regulators and policymakers all over the world would want to learn about the tech. And so they always would come and ask lawyers in the space to have sessions and things like that. And there were two big questions, which were always one, how do you make money as a company in the space? But two, great that you've built some application. But like, what is this good for? Why does this actually move our world forward in any way that's meaningful?

And I think that there was a lot of focus on financial use cases. for so long. You know, Bitcoin, I would say it was, you know, as the first, it was really about peer-to-peer value transfers and things like Defi really came out of that. But I think we've seen such an enormous proliferation of non-financial use cases and ways that our interaction with the internet are improved through blockchain technology. And I think a lot of that has gotten lost in the discourse, especially after some of the really unfortunate events of 2022. But now it's really, I think of this and really try to talk. about this as blockchain is just a new product feature of the internet. So a lot of what you see when

you interact with, even a blockchain-based application will look the same. But the features and the ability for you to have ownership and control over your interactions with the internet are much more enhanced when it has blockchain technology behind it. It's really interesting. So there have been a few distinct phases in this journey of blockchains or Bitcoin or, you know, more recently blockchains versus financial use cases. So you have a few different. So you have a few distinct phases. So you had obviously the, you know, the blockchain, not Bitcoin kind of enterprise era. And then you had the ICO tokenized the world, you know, blockchain for everything era. And holding aside the cynical money grab part of that, there were legitimately, you know, the people who were in that for the

right reasons tended to be really excited about these disruptive or hopefully disruptive use cases of more decentralized ownership of lots and lots of different processes, right? But then when that faded when that sort of hype or that bubble burst and the hype went away, you had this interesting resurgence of financial use cases where, you know, if you look at the last bear market, Ethereum in a lot of ways also returned to its financial roots with defy. And so you had kind of, you know, we're back then. We shifted, we're hard back into the financial use case. You've got Bitcoin as an inflation hedge and Paul Tudor Jones coinciding with Defi summer and boom, all of that's back. But the fascinating thing is that then over the course of the rest of the bull market,

it, you started to see for the first time real meaningful divergence in different parts of the space, particularly, I think, with the rise of NFTs that showed that this really wasn't just one industry in a lot of ways. It really started to branch off into its own sectors. And I think now it's interesting to see, you know, I'm looking at the database now. I think there are something like 39 different categories of use cases that came up from this. So let's talk a little bit about, I guess, know, you'd been spending time thinking about this, you'd be having these conversations, what was the genesis of this project, this database project specifically, and then what was the process of actually aggregating this information like?

Sure. So, you know, I took on the chief policy officer role at Polygon Labs in January, and so we'd have a lot of these intense discussions about, like, what's the value of this? So one of, I talked with my other team member, and we said, okay, let's start aggregating really good use cases that we like to be able to highlight in these types. conversations. And then from there we said, okay, we found some. Let's see if we can find a lot more, so we have a lot of options. And one of the things we found is, look, this industry is so global and so diffuse that looking for good use cases, things aren't aggregated in one place. They're, you know,

they are all over the internet. And we didn't see one repository that put them together. And we thought, well, that would be extremely useful because then we knew that obviously we were having those types of discussions with regulators and policymakers. And because everybody in crypto policy sort of speaks to each other, everybody is having those types of conversations too. And so we wanted this to just be one useful tool. The other part of it is when I first took on the policy role, especially after everything that happened last year, I thought, we have to do something to change the narrative and to do this, you know, hearts and mind sort of discussion. Like, what is it really good for? And I think the thing that really catalyzed it for me was reading the president's economic

report a few months ago. Chapter 8 was all about digital assets. And it ended with, well, we decided crypto has no fundamental value. And I thought we just can't go forward like that. I mean, as crypto for the replacement for a national currency or fiat, you know, probably it has different types of value. And that's not where we're going. But there has to be a change in the discourse because this isn't just sort of a one-trick pony industry, as you were saying. There's a lot being built and a lot expanding out into what the technology is good for. So end of the day we thought it would be good for everybody. I think it's very aligned with, you know, the ethos of Polygon Labs, which is very aligned with Ethereum, which is transparency,

openness, public goods. So it's a website. It's available at the value prop.io. And there's sort of no gating to it at all. You can go in. You don't need to give your email, no data, anything like that. Click on it and then click through the database. We also did something back in April where we crowdsourced information on apps and use. cases as well because we found a lot, but we knew the community knew, you know, more of what was being built out there too. So we put out just a public Google forum and people submitted a lot of different use cases or people would email them in. VCs emailed about their port codes that they thought were really valuable, which was a great experience. So we aggregated it. And we put it out,

you know, recently for everybody to be able to use its chain agnostic, which I think is really, really important. So it has Bitcoin. It has Ethereum, but it also has things like Cosmos, optimism, obviously, Polygon, and a lot of different networks out there because the great applications are built everywhere. And people don't have an idea and only put it on one network. It can be on any network. Yeah, I was just counting actually, just before you said that. I think there's 27 different networks as a part of the database at this particular moment. So what are, as you were going through this research, were there any use cases that either were surprising or something that you hadn't thought of or maybe they were, you know, as you were aggregating it, you were reminded of it and sort of reacquainted with something that was sort of, you know, got you re-excited about the entire space. I mean, kind of just the fact that there is so much out there going on got me extremely excited about the space.

there are things, you know, you feel like if you work in the space for a long time, you know, a lot of what is going on. And I think I probably, you know, there's so much that's happening that I haven't even touched on yet or learned about. And I think that's really, really exciting. I think the sustainability and social impact work through blockchain is even greater than I had imagined in terms of like forestry and carbon emissions, but also through, and not just emergency aid, but even through, you know, there's historically been issues around transparency with NGOs and nonprofits, and there's a lot of work being done with crypto to enhance the transparency. So that there is a lot of actual focus on public goods, including through

historically known nonprofits like UNICEF, was really inspiring to me because I think that means nobody is asking UNICEF to go ahead and have a crypto fund and track everything and show their transparency. It's that people actually do or companies do understand the inherent value or the fundamental value of blockchains and are really starting to experiment with it. So that's what got me really excited. Yeah, I think it's interesting. I think that there is still, I mean, this might be a little bit left over from that ICO kind of tokenize the world rhetoric. I think that there's a perception of non-financial use cases as being sort of specifically the provenance of thing X plus a token, right? Like that is what, you know, what sort of crypto

outside of financial use cases is. And certainly that's a part of it. Like tokens are experiments in resource alignment in some projects and things like that. But I think that one of the things that starts to service when you go through the value prop database is these common threads that relate back perhaps to sort of financially organized use cases, but that are applicable to other areas. So one you just mentioned is transparency. So what are areas around the world where greater transparency of asset flows or information flows are actually in service of a mission that existed in advance? I think NGOs, donors are a place where that happens. I think another area like that is places where less efficient democratic governance actually matters as sort of a good within this, you know?

Yeah, I guess maybe maybe maybe we try to reframe this as a question. were there common threads? So you've got this huge diversity of use cases, but then did you also, did you guys notice sort of things that seem to come up, you know, over and over again across different use cases and areas that sort of tied it back together? Well, a few different points on that. I think it all goes back to what we started talking about, which is how does blockchain make this offer a new product feature of the internet?

And it goes back to what is good for users, right? at the end of the day. One of the things that I actually am excited is on here, even though it's going to sound really boring and nerdy, is land registries. Because you hear about land registries as being a really important use case. And you hear a lot of people, a lot of cryptosceptics say, like, well, no, all our land registries now are digitized. And my response to that is always like, yes, in developed countries, to your point, it might be digitized and maybe it's easy. But it's, It's not even digitized in a developed country like the UK. It's very, very hard to buy a house in the UK because of the whole land registries not being digitized.

And so the fact that people are actually digitizing land registries, one just, and when you see the ones on here, they're not in even developing countries. They're in places like Illinois, and there's been a partnership there. But I think it's really important to know that these types of things are being found to have use already. And so when people have dismissed them, I think it's important to bring it back and say, like, no, there's actually still value for this. So the theme really is a lot of the things that have been dismissed have a lot of value because it's good for people, right? It's good for sort of like a common good, which is very antithetical to what people have been saying about blockchain,

which is there's no common good. There's no fundamental value. Yeah, it's fascinating. You know, one of the things, if you go back in internet history and you look at a lot of the dot-coms that burst, you know, 2000, 2001, 2002, a lot of times it wasn't that the ideas were bad. It was that they were before their time or the product wasn't created well or there was just an excess of capital and it sort of crumbled under its own weight versus, you know, and pets.com wasn't a stupid idea. It was just the wrong time, the wrong implementation, the wrong business model. know, the wrong everything. But obviously, you know, that that became or turned into lots and lots of things that are just completely normalized now. And I do think that, you know, one of the megatrends that blockchains as a public digital ledger address is questions of institutional credibility. And a great answer to questions of institutional credibility is removing the need for that

credibility to exist because there is a shared database that you plug into. And I think it, It feels like we're maybe just still at the very verge, the very kind of tip of where people decide that that matters to them. That's right. So two points on that. One, the Polygon Labs president spoke at the Energy and Commerce Committee earlier in June. And one of the things that he said in his opening statement was our data is collected everywhere.

Our privacy is completely compromised. And we're accustomed to it, right? We're okay with that right now. But I do think people are slowly waking up to the fact that, no, I don't want somebody to have my location. No, I don't want my phone to hear everything I say and give me ads based on that and things like that. But to your point, I think this is just dawning. And so the advent and the expansion of where blockchain-based internet applications are really going is important. And I think on your issue with there being some sort of intermediary, people have been thinking about that from a financial perspective.

but I think we are seeing it really become more and more problematic in all areas of how we interact online and like most of our life is online and digital. And one of my favorite use cases is Web3 Social because you never give over your data and you never lose your content. And so many different people and different have been deplatformed or have had their information compromised or when you have somebody impersonating you on the web, if you go report it to Twitter or something, something like that, they ask you for your passport or your driver's license. And you think, like,

no, I'll just have the impersonator on Twitter. Like, why do I want to give them my passport? So I do think there are these great ways that we're disintermediating all the different types of things that have taken from us what is naturally ours, our data, our privacy, our content, our ideas and things like that. And they're returning it to us, which I think over the long haul will sort of shift the balance, right? It's never like, oh, companies aren't going to have power anymore. or, you know, be able to use information about you. But I think it will shift it back for people being able to make that part of their decision when they use the internet. Yeah, absolutely.

I tend to think that the sort of rise of Web2 companies and the extraordinary power that was aggregated through network effects will be seen as one early part of this shift in thinking. But I think, I believe that artificial intelligence and the rise there of is going to be a massive force multiplier in people's cognizance of these issues. You know, it's one thing when someone is imitating you, because, you're going to be a massive force multiplier of these issues. you because they copied your profile photo, blocked you, and retweeted everything that you did. It's an entirely different thing when they're, you know, scraping your YouTube channel to imitate your voice. And, you know, it's a very different world that we're moving into. That's right. And you know what's a really good sort of ring fence around AI is proof of humanity and the types of things that blockchain can do to sort of put guardrails around

the use of AI. So how do you see or hope that the value prop will be used in practice? Yeah. So that's a great question. This is just the beginning of it. We got a lot, after we launched the value prop, we had a ton more submissions, both on new chains and just new applications and use cases. And we also had some people say like, no, this project wasn't great.

It didn't. So we're going to go through in the next week or so a process of recultivating. and also adding new use cases. And then I think the other thing we are going to be doing, and I think our vision is, you know, it will be the Wikipedia for crypto use cases for a while. And then I think the other thing that we are going to start doing is adding real-life testimonials to it

to sort of bring some of these use cases to life where either a certain project will give, you know, just a quick two-minute little pitch about what they do and why it's good, you know, and how there is positive social impact, or users, people in developing countries who've had, as you said, you know, ways to deal with governance or governments and those types of things. So we'll have it, you know, brought to life a little bit more and not just be a database. I will say I previewed it with a number of regulators and

policymakers before it was officially launched and people said it will be very useful. I had people in European governments say, I always keep to, you know, trying to convince my colleagues that it's not just this, you know, financial thing. This is going to be really helpful for that. So we're going to make it more of a living, breathing type of website over time, but we thought it was important to get it out there now because it's just such a part of the discourse. And I think in a positive perspective, to go back to this energy and commerce hearing, the U.S. is starting to expand its view of what this technology can really do. And other countries have been doing that for a long time. So I think it is an important part of the discourse. And I hope everyone will just

use it. Community, great, people, you know, adding to it over time. So as I said, you know, it grows and expands. But also when you're talking to policymakers, when you're talking to your parents, somebody texted me the other day and said, I'll actually show this to my mom because she was having a really hard time understanding what blockchain can even do. So I just hope it becomes more part of a wider discourse and not just something that's great for the crypto community, although for that too. Yeah. Listen, I think it's quite clearly a congressional staffer's best friend, right? You talk about hours of time saving.

I guess if you're trying to understand from a good faith, positive effort is probably an enemy if you're just trying to say that it's a terrible industry that should be banned out of existence. No, I think it's really interesting to think about how it could, you know, become living. I mean, you know, as a content creator, I immediately go to ways to integrate. Like, every one of these projects has so much content created about it. you can easily see those pages expanding to have, you know, sort of flags back to everywhere that they are mentioned. And, you know, even before you get into the sort of product on style rating,

there's all these different dimensions that I think could go with it. So it's very, very cool to see. And I think, you know, has a lot of potential to grow even from a great base that it has so far. Thanks. Well, we are super open to feedback yours and everybody's, both about what projects to add and also how it can bring more meaning to people about each of the products. send all of that along. You can do it at Policy at Polygon Technology where we have a Google form that's available on the website if you scroll all the way down where you can give feedback.

But we are super open to it. We want to make it as useful as possible to everybody. Amazing. Well, Rebecca, thank you so much, both for your great work on this and also for coming to share with us today. Thanks so much for having me really appreciate it. All right, guys, back to NLW for just a quick wrap up.

If you listen to my conversation with Dan Tapiero yesterday, you heard him say that one of the things that shifted for him in his conversations with LPs and potential investors is that he doesn't get the same sort of skepticism about whether there are use cases for blockchain technologies and for crypto companies the way that he might formally have. I think the value prop and all the projects listed herein, 300 plus of them or so, help explain why that is. As I mentioned during that conversation with Rebecca, there really was a stain after the ICO boom of these non-financial use cases for digital assets and for blockchains. And I think understandably so. Huge numbers of them

were used just as another way to hype up a token that was then dumped on the public. And so it's totally reasonable for people to be skeptical. However, I do think that tokenization and blockchainization, to invent a word that doesn't exist or doesn't really need to exist, are different phenomenons. And I really do think that the same things that made blockchains an interesting solution in the context of money, a desire, for example, to get out of systems that rely on trusted intermediaries are very likely to find their way into more use cases going forward. Now, again, that's a totally separate conversation from the specific implementations thereof, whether things require a token, et cetera, et cetera.

But if you were even the least bit open to the possibilities that this technology that underlies things like Bitcoin can be useful for other domains, the value prop.io is a great way to see what people are actually trying to use it for in practice. Anyways, it strikes me as a great community asset, and I'm glad to see that there is effort around this. So thanks to Rebecca and her team. Thanks, of course, to you guys for listening. And until tomorrow, be safe and take care of each other. Peace.