On Economic Self-Sovereignty - Awa Sun Yin

okay um hello everyone welcome to my talk on economic self-sovereignty so i'll start let's start with the setting up definitions on i define economic self-sovereignty as the ability to carry out day-to-day economic functions with tools that you the end user can control so economic functions are essential for everyone here it just basically means um it involves getting paid for your work paying for goods and services delaying the payments for goods and services for essential things like student loans ensure they can pay for things in the future enabling these preservation of your purchasing power into the future the ability to improve the quality of life the ones who care contributing to the community and a very important one commerce and other mutually beneficial relationships by control i actually mean that the tools that allow us to do all of those kinds of things are controlled and controllable by the people who actually use them and control is a spectrum we'll get back to it a bit later i would like to start by talking about why what is wrong with existing systems where i was so excited to talk about economic self-sovereignty so first of all current systems are not private your economic history data i would argue that it is actually a lot more sensitive than your socials it is more sensitive that the data that you show in your profiles which is in the end what you want people to see and you you can also just make it the transactional data of your economic history is actually very different with every single transaction people are able to tell with 100 accuracy what it is that you buy what your situation is with terms of relationships how much you earn your gender so much and this data is 100 accurate in fact banks and analysis companies advertisers are able to determine just by a couple of your transactions uh performing credit card who you are with a lot of accuracy so now that you have the data available for for perfect operations to do something about and there's some things other to make profit another problem that exists are by design exploitative so there are third parties out there offering from unilever without your cons so now you have payment providers financials advertising companies and merchants and probably many other kinds of corporations around there are profiting the [ __ ] out of your data and your individuality and you get nothing from it and also you probably weren't even aware of it so it gets even darker from here current systems have also pretty [ __ ] up incentives as in for example they can make they actually are in some device to make money out of people who when they get in in debt so here's an example it's an european example for the ones who come from that side of the world and clarina for the ones that i don't know is this vinsec company basically the product is once you have the shopping cart on the ecommerce website how like how do i get you to commit to paying with the least amount of clicks possible like the user experience is amazing it's like two clicks i don't even have to enter credit card information um i don't even have the time really to think what i can afford a thing but anyways i actually looked up the history of klarna and it is um pretty interesting so in the early days they had some you know process issues as in they would just send you like a debt collector without without sending you the invoice um it turned out that clarinet even had a direct subsidiary that collected debt and if you just check out the article um it's like very clear it's obvious to everyone that um they actually the best customer is the one that doesn't pay on time it's the one that uh does not pay on time it's even best when they can't even ever pay back the invoice so now you've got the payment providers and the financial intermediaries and advertising companies and merchants that profit the [ __ ] out of you being in zapped and that is like pretty messed up so another issue with the current systems is that they are designed to work around fiat currencies they are not asset agnostic you as a user you cannot choose to for example leverage an existing currency local currency or one that is just not one that wants to support it they that means that they also will derive the limitations via currencies and that institutions like the federal reserve in the u.s bank of england european central bank those institutions they make really lots of decisions and considering that most people earn in one currency and they keep their savings in one currency those decisions can lead to strong impact in your your personal household in your personal economy for example 10 of inflation in the us means that you can afford 10 percent less this year that is crazy for arbitrary decisions that they don't even bother explaining to people why they make sense and it doesn't even only affect locally right there are other central banks that actually keep a fraction of reserve in u.s dollars so there is cascading effect in also other countries existing systems are really not neutral they are subject to the capture by local and foreign governments here's a really fun example so there's this article on vice it talks about these instances where paypal censored a few transactions this was a guy that made these cute little tardigrade ornaments for your christmas tree or just like as a keychain and he was just using paypal as a platform to like sell those things and people start to censor the transactions and it turns out that it's because tardigrade the word is in the sanctions list um and so therefore paypal goes out there and says anything that has the word higher grade we're going to basically blacklist those in sensors and something funny to notice is that vice talks about this as like a bug like it was a scenario but i actually argued that existing systems are designed to act this way so yeah sorry to hear that um for you guys but we won't be able to use paypal to sell tara merch tara is a the mascot of one of the languages that we're building but i have stickers and at least given them for free i won't need people so um but it's here's a more serious example um the swift protocol is a the thing that allows um cross-continent or international bank wires to settle it is actually has a pretty neat history it started as a very it was designed to be neutral and most countries banks actually follow this protocol however uh over the last decades it became pretty obvious that um in practice might not be so neutral so think of like if i use this um infrastructure right and then like let's make the issue with um the lack of neutrality of swift a little bit less abstract so imagine that i am a restaurant owner from spain actually from swing and i have the commitment of offering the best paella to my customers so the color that you see in the paella which is this yellow color and the very complex flavor comes from a spice called saffron saffron is this bread like spice that comes from flowers it's very delicate you have to hand pick it and it's actually one of the most expensive spices in the world and as many of you know the biggest exporter of saffron is actually iran and um iran was now like dropped out of swift and actually me now that i used to buy the saffron directly from this provider and it was the best one i actually can't do this anymore i can't pay this profit anymore so now i am forced by this sanction i am now forced to look for alternatives as i might not be able to get best suffering anymore and the price might spike because by constraining the commerce with this country's biggest export of saffron it drives up artificially the price of this commodity in this case and another thing is that we actually have zero control over current systems even if we rely on them on a day-to-day basis there are many examples of this and the fact is that governments can ban cash tomorrow and force you to lose local banks ecash systems or even worse visa mastercard many of you know that if you ever visit china it is now it is really hard to pay with cash i don't think except for a few rural places you can not use wechat pay but this is not only a phenomena or something that happens in just the far east the autocratic governments you know that being them but it actually happens a lot in even in the western societies like a lot of scandinavian countries are going cashless and i actually think that if the infrastructure for going cashless is local as in for example the swedish bank offers the solution and then you say okay the swedish bank is actually owned partially by the government the new trust model doesn't change it's fine um but there are a lot of cases where this is not the the case well first of all the banks are usually for-profit entities so you will never know really when incentive is going to drive them but i get actually really concerned when actually a government decides to like try to go and practice cash less but then use infrastructure that comes from the us so to summarize this um existing systems are not private they are exploitative they have backed up incentives required fiat currency is not neutral and they give zero control to its users so where does economic self-sovereignty matter we need them for everything the current systems suck and at the moment we don't actually have any alternatives so how does the path towards it look like we are not starting from zero as in ever since bitcoin launched we actually have seen lots of alternatives to centralized monetary policies and some of them even come with like some other features for example zcash is an alternative to a centralized monetary policy that comes with shield transfers privacy features that's super cool and then we've also seen with the pioneer nearby ethereum of course but the release of more and more decentralized world computers and they enable you to create different assets with different characteristics allowing us to represent more even more things that are in in the digital world or even in the real world i hope to see but if we were to design this system what would be the criteria so although this system should enable flexible privacy this should not be exploited if or at least discourage [ __ ] up incentives they should be astro-agnostic and neutral designed to be neutral and it should give as much control to its users as possible so if i had to focus on the center of the design criteria i will actually pick control and control is actually a spectrum so what's happening in this diagram i am mostly looking at people or users in three groups people who are involved in the design and the development of the systems the people who operate it and the people who end up just using it and the ideals end state is the far most one where you see as much overlap as possible and this is actually the only way you can achieve the highest amount of sovereignty the highest amount of self-control over the systems that you depend on because there is very little incentive if you're if you're the one that designs the system that operates and uses it there's very little incentive to like screw yourself up so going um continuing with the foremost side of the spectrum right side of the spectrum the way you can achieve this is by making it really trivial for users to operate the tools themselves make it really easy to customize tools for the dynamics and centers that they want and then there's going to be naturally organically there's going to be dynamics the favorite locality for example when there's a system that is local let's say in your neighborhood you are actually able to go there and meet the people who operate it if they like screw something up um you can always ostracize them so the social enforcement side of it comes with the added benefit and on the other side of the spectrum because not everyone wants to be actually so involved the way you enable control for the very end user for the ones that actually don't want to operate or design the systems is by enabling end-to-end integration but also of not just like you have this protocol and you have this tool set and then users but also integrate incentives and you make it also end-to-end verifiable as in open source code and then you make it lower the various a little bit you make a few things that allow people to actually actively check this protocol or this system it only is only doing the thing they're supposed to do so here's an example how you achieve the right side of the spectrum um to make it trivial easy to operate the instances so anonymous a set of protocols and in this case a normal could provide could serve as a settlement layer think of swift but um a decentralized version of it where it just for historical reasons there was the first instance and the very first instance is a settlement layer that has validators validators are the ones that are like the equivalence miners in the proof of stake model they are validation entities spread from around the world so when you start with that what's important is that the existence of other fractal instances can appear organically so assume that it's actually a lot of demand for the global instance the transaction starts to become quite expensive um and then the is usually in the world of economic activities there is um a natural tendency for local solutions to appear so you can imagine a world where even then it started with one instance you actually have other versions where are more local for example one day in the us where it's operated by validators and entities that are based in the u.s another one of the state of colorado et cetera et cetera and go lower lower level and what's going to be interesting is that for example if you go to the city park instance and this is the one of the neighborhoods around here people can actually customize the rules as in for example at the moment there's some defaults in like what it is that you can provide but you can turn it into the fees are shared equally across all validators to participate in the system and what's also really cool is that instances can interoperate with each other you could see how it might make a lot of sense for the instance of colorado to be connected to the instance of the us the global wants to be connected to all of them and local instances like the city park instance can decide uh to say i don't want to be connected i might make sense something connected to the instance in denver but that's it but again not everyone wants to be so involved in like operating everything that they use right so here's a quote that i really like i feel like it really describes the current world it says modern humanity is distinguished by paralytic emotions medieval institutions like banks and governments and got like technology like ethereum and all the ai and drones that well you know what i mean so even if um even if your words provide this god-like technology which is self-sovereign coordination mechanisms so software and economic systems for people we can expect that some people we just not care about so how do we turn paralytic emotions into collective goods and collective action here's another example i'm not covering the one that i mentioned before for the settlement layer but there could be another fractal instance of anoma that focuses on enabling multi-asset privacy or some of the azure shielded transfers just the gist of it this rectangular instance of anoma is a sovereign chain that has a multi-asset shield pool which means that when connected to other sovereign chains like ones that speak bft under support ibc for example atom um osmo terra a bunch of other ones uh or when connect and when connected to chains that don't speak vhc via custom bridges like ethereum um you can actually transfer all these assets to anoma into the shield pool and then all these assets no matter the nature be like cryptocurrency fungible asset nft whatever they can all share the same anonymity they said by the way so if any of you accidentally talks to your ethereum accounts by like using this token thing to pay for lunch the good news is that you should be able to undox them later this year but going back to the paleolithic thing um and this entire system so for end users how do we turn the paleolithic emotion of i don't care about privacy because actually a lot of people don't as in the political emotion comes from the idea of privacy right now doesn't offer me direct benefits i can't really see it even though we all know that it is a universal human rights and you can't really be yourself if you're doing so well all the time even though if you know that anonymity sets are actually collective goods they're public goods we even if you don't have do not have anything to hide providing stronger individual sets makes it easier for for example journalists whistleblowers all those people who sacrifice themselves to provide you with the truth which we all need to make sense of this world and will truly benefit from so anyways that is the political motion right and you can imagine even if i enable this system um some people might actually not care about privacy so how do i turn this into even if i don't care about privacy how do i turn this behavior into actually using multi-astral level so the answer would be in the end to end integration also at the end user interface so you can play around with incentives like for example the shielded transfers um are actually cheaper than the transparent transfers or you can do even go further and say like shiller transfers actually rewarded people get like an extra um when they use this uh system over transparent ones so also no one is a user that actually says transparent or or private they actually don't care about private usually they would just go for transparent right but in this case there are actually instant devices to pick the one that is private okay actually that was it i am one of the co-founders of anoma anoma is a suit of protocols for self-sovereign coordination and yeah thanks for listening