Aligning Ecosystem Incentives for Sustainable Outcomes

well next up we have another panel um that's going to be the aligning ecosystem and incentives for sustainable outcomes panel with a huge group of panelists and we're actually waiting to corral some of them in here right now so until then i have been told to vamp um i have my joke from last year uh i can do that one first uh let's see my joke is tron thank you thank you uh what else can i vamp on uh eat denver this year i think has been very different because it's virtual but it's a little bit better that way too how many people do we have total real quick one two three four five okay we're missing two people so uh eat denver um is virtual this year i said that's better in some ways not better than others i really need any more virtual this year i said that's better on that i think you're getting gecko there you go uh no problem uh and i i'm just really excited that we all get to come here together anyway and do stuff like go to the virtual castle and have poker and chess tournaments it's all really great stuff how's everyone doing today panelists hey great good very well how many people are on this panel one two three four five seven we're missing shira she's uh looks like having a couple technical difficulties but here we see if we can get her in all right yeah we're working on that for sure um and we also have oh let's see what's comments in the chat are going all right chat give me some stuff to vamp on i think with the format of this being fairly you know roundtably maybe you guys can uh take it away until she gets in yeah that sounds good y'all take it away thank you all so much okay guys wants to start going sure i mean um we we talked about this right before the call and unfortunately shira isn't here yet uh but well we are actually going to be talking uh about how to incentivize an ecosystem that is decentralized and ensure the sustainability of the ecosystem and um we have several views on it um hi tegan hello hi i'm not the moderator in fact i'm just acting the moderator um so let's let's just go around the table and each of us can share their vision on what what i'll start i'll start um so i think in terms of what we are currently doing uh for decentralization uh we need to uh always make sure that the proper people get the proper incentives and also we need to make sure that decentralization is maintained for the entire lifetime of a platform um i think those are goals and questions that we need to answer together so my interpretation of what is sustainable is whether uh the supplies platform can remain decentralized even after uh vcs come in after the money comes in even the enterprise people come in that's what i think um what do you guys think and then ponder just one thing we didn't since we don't have it give a second on your background i think we have to introduce ourselves as well yeah actually that's actually true um because we don't have a moderator i'm gonna introduce myself um so i'm pandu i've been in this space for for several years i've started two blockchain consulting companies blockchain zoo and blocksphere.id i started an association of 22 blockchain companies which is the indonesian blockchain association and i started several projects i'm representing unique one today we're sponsoring at denver and uh yeah that's basically uh what i'm doing in the space i'm more of a consulting person i used to work for ibm uh for about six years did a lot of enterprise iet so i came from that side of the space more towards the tech inside of the crypto and uh that's me all right uh who wants to go next do you want do you guys want to do alphabetical maybe yeah sure i'll go ahead no problem hey everyone my name is ahmed i am ceo and co-founded by economy and um in short we're making um web 3 and um the crypto transactional extremely easy um and simple to use excited to be here alphabetically because me next um i'm brian um one of the co-founders of sobol dot io um and my fascination around this is is is the the different layers of the ecosystems i mean in particular the organizations and communities that are trying to drive um change uh and and looking at organizational behavior um and organizational structures is really quite fascinating to me the self-organizing movement um now what's happening with daos uh all in relation to how do we collaborate to move um you know our mission vision or uh uh outcome forward and how do we do that in a sustainable way so looking at how we're organizing within our own companies first right i got breaking news everyone i am now the moderator because our moderator is having technical difficulties uh so let's keep going around the room and uh introducing ourselves uh who wants to go next um we're doing alphabetical so it's probably jesse right oh yeah alphabetical that's good jesse go ahead okay hi everyone i'm i'm jesse i'm i'm the founder of variant fund which is a venture fund that's investing in what i call the ownership economy which has a lot to do with aligning ecosystem incentives um in in in a nutshell the idea of the ownership economy is is that the next generation of internet products and services are going to be built operated and owned by their users just like bitcoin ethereum and and a lot of you know marketplaces and defy are starting to be today and um and so in order for the ownership economy thesis to come to fruition economic incentive alignment is really key and that's my interest in what we're discussing today go ahead amazing my name is tegan klein i am the co-founder of edge and node we are the team behind the graph protocol and we are really working to make open data a public good and make you know indexing and querying available to every layer of the stack within the decentralized internet which we call web3 and my background is in traditional finance i started in investment banking at bank of america moved over to sales and trading at barclays helped to launch orchid which is a distributed vpn backed by andreessen and sequoia and i've been with uh the graph and edunode for the last year cool um uh tom here i am co-founder of fluence labs influence labs is an open application platform that i think fits right into this because we're trying to bring in the decentralized in bringing along incentives to both both the open source community even larger communities and we think we can accomplish that by a decentralized peer-to-peer hosting platform where revenue is shared and prior to fluence i helped found hedera hashgraph um when those were my initial entree and everything back in uh back in guess 16 which feels like you know 10 years ago at this point but uh 17 but but there we are all right thank you all so much for the introductions so when we talk about aligning ecosystem incentives a big thing that just pops up into my head already is like governance and structure of the organizations organizations that are having to cross-collaborate cross-communicate in order to get things done because this is a decentralized world this is a decentralized uh community that we have within these blockchain communities so who wants to speak up and have thoughts on how governance structures are going to work on that pandu sure i'm thinking more towards the governance related to data sharing we need to create something that is more sustainable in terms of the data sharing perspective today's big data culture is actually i think not very sustainable since it makes companies covet data too much and then privacy becomes something not desired especially big companies that has invested a ton of money to create a new platform and uh i think that goes against a lot of things that we are thinking about identity sovereignty and all of the uh things related to your personal data so um there's there's uh there needs to be a way for governance to maintain uh the privacy of data from the outset and i think that should be something that is the crops of all of the projects that are going out today privacy is a big deal in this space for sure and something that's very much connected when it comes to this stuff um so what else do we got from other panelists yeah brian what's up yeah i mean the governance one's interesting to me i think um you know sort of one of the things that seems really important to me is making sure that we with the governance structures that we're defining we're making sure to bring all of the participants in like getting good at mapping all the participants in the ecosystem and bringing them into the government system so that they are able to provide their unique perspectives um and and hash out uh sort of the signal um from the noise for that larger ecosystem if only some participants are able to come in or the power structures are sort of asymmetric um relative to the total ecosystem i think we end up with some serious problems so i know that sounds like a captain obvious fairly simple thing but i'm not convinced that that's happening um all the time and one that's in particular would be the way in which we're funding things right now you know are funders builders um and the ultimate consumers of the things that are being created all on the same canvas or in the same arena governing um what's happening and making sure that that complex adaptive system is evolving in a healthy way and sustainable way awesome yeah i i i think i get what you're saying there there's like this need for i guess diversity of participants in order to get those perspectives those fresh takes uh what what other people have to say yeah i'll jump in um one one lens that i think is has been helpful to me in thinking about governance in this space is i think it's um it's useful to divide the space into two buckets there are projects that aim to to minimize governance at all costs and automate as much as possible and you know bitcoin of course is one of those projects where there is some governance but the protocol itself is entirely automated and deterministic there's nothing you know human and subjective happening in bitcoin consensus you know everyone's just racing to solve this really complicated math problem and it's deterministic governance happens outside of the the scope of the protocol and ethereum you know at layer one today is kind of similar it's governance by rough consensus so that's one bucket of projects that try to minimize governance and you see that at the application layer too with projects like uniswap and and others where there's no um sort of parameters in the protocol that are controlled by governance it's all sort of automated as much as possible and then in the second bucket there's projects that are kind of more complicated and they require sort of subjective inputs and kind of human decision making in order for things to proceed they can't be totally automated they're not deterministic and there for those kinds of projects you do need some kind of formal governance system in the protocol for things to keep operating as expected um and and i think you know i'm excited to see a lot of innovation and how that kind of governance works but um i think there's also a lot to learn from the way subjective decisions are made in other kinds of organizations like from corporate governance or you know political governance for example um because we've had a lot of time as a species to figure out effective ways to make decisions as as large groups of people and that's sort of what a lot of these projects need to do um and so you know maker dow and compound governance they have parameters that are controlled by um by the the token holders um and there i think like you know some form of um hierarchical decision making is likely the most efficient way to get those decisions made but also excited to see innovation on um now that all that's programmable well i'll actually jump in there so i i think we should be very clear in separating consensus from governance and so ethereum bitcoin consensus happens it's fine but ethereum still has governance and bitcoin sells governance and you have you know real controversies with how some of those are managed particularly with ethereum not all that long ago and so i think we we have to recognize that even we don't like to think and talk about it there's relatively opaque processes with small numbers of people that actually are controlling some of these protocols over time and an on-chain governance you know process which is employed by some is a whole another way to do it which is which can be very effective my my sort of take on this is it's worth considering that not the governance is different for different projects with different ecosystems and different users and my sort of main thought is that whatever you're doing you just need to align your users with your governance and that is very different and and it's you know i think of hedera and it's governed by enterprise guess what the target market's enterprise it's not the rest it's not for the whole community right that's a different thing and if you have a different protocol that has a different type of target audience then that governance should be and probably is quite different and so i don't think it's a one-size-fits-all and is worth kind of but but really keeping in mind the alignment of those governors and the actual people and so if you also think back to like an eos just to pick names are those governance decisions made by the same right people that they want building and actually using it maybe maybe not but that's where you start to you that missile but there's a misalignment you run into problems all right very good take um so taygan and ahmed um as far as aligning ecosystem incentives go governance uh diversity of participation any anything on any of those topics that you have i guess on governance we're still kind of defining the best practices so i'm excited to kind of see what comes to fruition within the graph what we've done is kind of had a a technical console that might then turn into a dow but that technical console has ten folks on it um each representing a different piece of the ecosystem so we have the indexers which are the node operators and then we have another piece for the users and the developers that kind of represent that ecosystem another that represent kind of the backers or the grt holders and the researchers and then the initial team and that will likely expand from there but we're kind of starting small with the governance and then expanding over time awesome ahmed yeah i mean i know this is such a heavy topic i mean because i mean before we talk about like how do you find ecosystem how you define incentives how do you define like um sustainability and so all of these things you know coming together is quite heavy um but really how i like to see things is more a from a game theoretical side and then b from the emotional side right um because what's great about bitcoin is that like jesse said it's deterministic and so you know people have to be honest um and that's what's great about these systems like you're forced to be honest and so the game theory is correct i feel game theory is not talked about as much um um anymore as it was a couple of years ago but also there's the the emotional side as well i mean people are moved by um and actually you know are sort of you know um they make actions based on their emotions which have a particular incentive structure for them and how they think about it and i think those um things although are subjective also influence a lot on how governance is really made and how people make decisions as well awesome awesome answers um so we only have about uh five minutes left unfortunately maybe a little bit more than that so in 30 seconds or less um let's go ahead and go through what the ideal state of like a future blockchain platform that has properly aligned incentives uh would have like what what does the sustainable outcomes look like like ahmed said what's that in your mind like what's the perfect uh like place that we could get to that we should be striving for when it comes to sustainable outcomes yes um i mean the way i think of it is things should be fair things should be um on a merit basis and things should be very cute very clear and communicative as well um and at the end of the day like everyone's on the same you know um on the same level right and like it's interesting i'm talking to to a few projects and these projects you know um are saying yeah we're not gonna have any employees anymore right like everyone's gonna be on that same level and whoever wants to commit to something they will eventually be automatically rewarded in some way and really like how they're gonna get there like it's going to be amazing to see but i definitely see that to be sort of an initial ideal state um as a let's say version 1.0 as uh if you were i would jump in and say um the the key the key two words minimally extractive um is is sort of the ideal or platonic state of a an ecosystem with a lined incentive so key point to make there a lot of people think you know in crypto if you charge any fees at all you know you're doing something wrong because everything should be open source fees should be zero i don't think that's the case i think fees are tenable so long as they're minimally extractive and the fees are used to route value to where it needs to go to keep the thing running which could be to development it could be to the participants of a protocol for you know making the network valuable um so that i'll leave it at that minimally extractive as the ideal aligned incentive outcome i think yeah i think i think that that's that's super interesting i would i'd add to that i mean what um what we're trying to do with fluence is also grow community pretty large and align economic incentives so those are two things so i say that part of what jessie's saying is alignment and so if you can make sure that the people who are contribute are actually compensated and fairly i think that's pretty vital to growing an ecosystem and i think when you think about ecosystem you think about a project first writer first a company then the outside community for that then we've got maybe the protocol which is built then maybe it's the blockchain community we're in right now and then maybe it's open source developers and how can we get it even bigger than that right we're going from five people to 100 to 10 000 to maybe a couple hundred thousand million to like 40 million open source developers and even bigger and so i think what we're trying to do is build something that's even bigger that aligns those incentives so well um that it actually grows this cu the community even larger and makes that's what will make it really self-sustaining over the long term other people i'd like to add to this um one of the things that we're trying to create at unique one um is to incentivize the very process of decentralization um we have a totally federal launch uh it starts with something that is uh well basically launched by us the founders but we're pushing it back to the community and that's that's the way uh we have structured uh the project itself but what i'm talking about this motor is basically having the algorithms incentivize this centralization uh make sure that a more decentralized uh platform is uh better and actually giving giving more kudos or help towards uh people who want to decentralize the platform um i think that needs to be baked in i know there are several projects actually starting to do that and um there's not uh like not all of the problems have been uh solved yet uh but i think uh if we can manage to do that then we can uh have platforms that are more sustainable for like we can prevent a lot of the issues with current centralization about current centralized control over data and privacy and everything else as long as we can maintain a decentralized platform in a way that is incentivizable by the technologies itself yeah i think one thing that we're really kind of undervaluing on this conversation is really community and i think that community is extremely important and we've kind of seen that obviously token economics are also important but if you look at like bitcoin or doge it's more so that community and i think that community needs to be really organic and not kind of pay to play like we've seen with some um projects and so i would say you know communities is a big piece of kind of aligning incentives for the different stakeholders within the ecosystem ryan got any closing thoughts here yeah i really want to echo that i think ed and tegan are kind of highlighting this like the emotional or like a more intrinsic component than the extrinsic elements of this and and i think like i've been a big fan of uh eleanor ostrom's principles around building um a commons and i think in the game theoretic that ahmed was mentioning uh we need to honor both of those elements the emotional um uh and and perhaps uh the other components but i think we just want to make sure that we're not defecting on the commons and so i think that does go in alignment with the things i'm hearing about minimally extractive and making sure rewards are flowing to the right folks but i think at the end of the day the goals should be that community that we're lifting up awesome and the final minute of this amazing panel we're going to go through in alphabetical order you get about less than 10 seconds to tell us where people can find you and where you if you want to show a project so ahmed you go ahead sure so um quick quick note about bi economy um we're basically growing the size of the crypto economy and by making web3 experiences very very simple to use and we work with many layer 2 networks such as matic which is now polygon um xdi and and other base layer chains so hit me up on twitter telegram happy to all right uh brian yeah sobel.io as in my name on the screen but uh what what we're working on is a visualization tool for a graph of accountabilities we need to get sort of transparent and clear of what our organization is are and our accountability structures are and so we can be api driven and so we're excited to work with anyone who needs a front end to these accountability graphs in their networks all right jesse yep um so variant.fund is the website and we are a venture capital fund that's backing founders at the earliest possible stages founders building in crypto and the ownership economy all right what do we got uh i think it'd be pandu um it's unique.

one uh deegenix.com and blocksphere.id one is an art markets marketplace that is nfp degeneres.com is decentralized genetics and uh blocksphere id is my consulting company all right tayden thank you yes you can go to edgeandnote.com we're hiring for many different roles also graph protocol on twitter if you're new to the graph ecosystem i encourage you to use it as it is intended uh delegate in the network to help us secure that network um and thank you so much for hosting this panel and last but finally but definitely not least tom thank you uh fluents.

network um as a website we are a distributed peer-to-peer network that is characterized by rewarding any code particularly open source authors by giving a share of hosting revenue to the authors so whenever any code any any applications anything is used on the fluence network some of that hosting revenue flows to the original authors and network's up all the language is live and the blockchain launches this summer thank you all right thank you so much to our panelists thank you so much for joining us today and y'all have a great rest of your day thank you so much bye hi everyone thank you thank you