Governance for Blockchain Protocols Panel featuring Tracey Wang, Pablo, Sergej Kunz and Clara Tsao

um so i hope everybody enjoyed their last panel um the last panel you know great talk on dows and kind of how that fostering communities and today or i guess right now we've got another panel which i think is the perfect follow-up on governance uh leading the panel we've got tracy uh from coindesk we have sergey from one inch and clara from filecoin so can we all give them a nice warm welcome and uh let's hear governance [Applause] hello well hi everyone and good afternoon um unfortunately like we know it is 4pm on a saturday so we will try and make this highly entertaining i'm tracy a senior reporter at coindesk and we have a lovely panel on um governance for blockchain protocols and uh we have sergey here from one inch and clara here from filecoin and uh to kick it off could you just kind of introduce yourselves and kind of your project for people here that are not familiar also pablo from uh cheat out protocol oh pablo he showed up okay amazing people there i got kind of pushed with the crowd but glad to be here so let's go let's go this way so pablo if you just want to introduce yourself and explain your protocol for people who um might not be familiar with sure uh my name is pablo and i am one of the founders of child protocol also known as my.finance our website and we're a cdp-based stablecoin and we do a lot of different algorithmic market operations as well we're on 17 chains and you can use this borrow my which is our stablecoin with many different assets and so i build a lot of that the contracts the underlying architecture and the assessing of the security the protocol so hi everyone my name is sergey i'm co-founder of one-inch network oneish network itself is actually a hackathon project which we have built uh back in 2019 in hh new york over two to sleep last night and recognize afterwards that a lot of people start using that we started with aggregation among taxes uh it was like unions of kyber banker uh we found out that makes sense to split uh the swap amount among multiple resources to just achieve the best rate by using algorithms and all this we achieved already one 180 billions of dollars for volume sounds insane also for us we're still like very impressed um yeah and nowadays it's a distributed network of digitalized protocols a lot of products are there wallets limit order protocol liquidity protocol aggregation protocol and everyone's uh yeah can join the one inch network and apply for the grants from the foundation sorry for the ads here hi my name is clara i am the co-founder of the file point foundation for those that don't know filecoin if you've ever watched silicon valley uh tv show um there's a starter called pied piper we are like pied piper but without the compression algorithm but to recap um we are trying to build the decentralized file storage layer um today most blockchain protocols um say they are decentralized but at the storage layer they are not in fact if you own an nft over 25 million nfts are stored on filecoin uh but if the file if your nft is not on ipfs you don't truly own it it's actually belonging to a centralized server so that is a little bit about falcoin the foundation was started close to um as an idea several years ago but really took roots around two years ago where today we have actually two arms we have a falcon foundation which is a c corp based here in the u.s and we also have a non-profit we're really trying to think about funding um public interest data on the decentralized web that everyone should be able to access and so well thank you all for the introductions um so let's kick it off uh you know with a question about like how your project approaches governance and so we have three kind of different projects on here and governance in crypto kind of spans a whole it looks different for all types of projects so if you want to talk about how you approach governance and the answer can be very technical or can be very philosophical i i would like to start um so um one day we came to the to the point that uh we found out that we have a couple of protocols and uh there are a lot of settings to set with someone and i actually didn't want that one guys as well and um and there are a lot of this this great community one-inch community which uh is really engaged and uh we thought maybe it makes sense to give them the power to set all the fees of whatever in the liquidity protocol also uh how to split the revenue stream and aggregation protocol and we came to the idea to build instant governance this is unique in the market right now everyone who's take one inch tokens gets kind of kind of power to vote on on specific settings and the protocol takes the weighted average of the value which the the community sets and after like six seven months we came to the point that the community would like to propose something and we introduced uh snapshot governance on top of nowadays on top of noisesf multisig which is governed by the community and the revenue streams are all redirected to this treasury so one inch talk collects in a month almost two millions of dollars little bit more and the community can decide what to do with that it should be spent for the for the charity or it should be spent for for grants for example because a lot of people would love to build something but they don't have enough resources and we know it how it is we and then we were working like one half years just in the nights because we had normal shots so and um this is just how it is right now snapshot governance uh everyone whose take can can participate great proposals can vote on the proposals and yeah just so it is a big fan of snapshot by the way we do a similar process so uh our protocol has been live for about almost a year now started on may 4th star wars day and we wanted to from the get-go do governance starting with a multi-sig because it's a little simpler for the users not to have to do an on-chain transaction or anything they can just sign a message we look at the balance of their account and they can vote from there things get trickier as always because we launched in multiple chains and snapshot requires a variety of different implementations to actually work on checking your balance on avalanche and checking your balance on phantom and other chains so we're still working on that but the future is pretty nice because we are able to then implement things like safesnap which for those uninitiated nosy safe is a multi-state platform lets you collect signatures from multiple people and so it ideally lets you have four out of ten or four out of five people vote and execute the changes that the people vote for so from there we want to use that as the veto power in case there's a governance attack for example if we didn't think about someone lending a button to our tokens and doing something malicious to the platform but as you can see it's incremental in our protocol we want to move to a fully decentralized model where we can take the training wheels if you will um and i'm pretty excited for like things like snapshot x which will enable us to do more cross-chain messaging and basically execute transactions so that's a little bit of what we do you can also stick your cheat to get more voting power v curved style yeah nice transition from one inch i'm happy to talk about governance a little bit since we are really building infrastructure for web3 we think about governance a little bit different than some of the d5 companies up here the way governance works and how many of you here in the room know what a crypto foundation what their function generally is i see some not some yeses so most uh blockchain companies when they start even if we think about linux and the linux foundation there is a really bad mechanism if the same governance mechanisms are governed by a company that births technology and that's uh really something where if a company is seen as owning most of the equity that they're actually trying to govern against there's a lack of trust and so that's why you'll see a number of crypto uh cryptocurrencies or protocols having a foundation arm we are very much in the same light we filecoin was created by a company called protocol labs um back in 2016-2017 and we were created really to say we are an independent entity that will really ensure that the economics of follcoin will work as it is intended um because it should be governed by a group that is neutral and that is truly independent in order for everyone that's invested and is participating to be able to feel like they can trust the system at large um so today we have a number of stakeholders that care about governance the way that file point works is very much like airbnb you have extra storage and you can be a storage provider to say i have extra space how can i give up my space and i will be rewarded through filecoin as part of that a lot of the original ecosystem of filecoin came from something called ipfs not sure how many of you guys know ipfs the interplanetary file system but there's a really strong community of people very early on even before the different blockchain cycles went up and down and up and down that said we really want to have a place where file storage can be decentralized and stored but the problem is without an incentive model it became really hard for ipfs to scale people would only do it as hobbies there were a lot of amazing initiatives like we had uploaded a backup copy of wikipedia to um when the turkish government took it down there's a lot of information integrity and ways that we can really see democratic access to knowledge that didn't become possible when we think about centralized storage systems so today we serve places like storage providers that are upkeeping information we make sure that token holders obviously feel like they can participate we make sure that clients people that are storing information feel like they have input but most importantly to everyone here we also want to make sure that developers and different contributors to our protocol they feel like they have a voice that they are not necessarily thrown under a rug so it's a little bit different than what we see on the d5 side but wanted to share a little bit about that yeah we appreciate the perspective um let's talk a little bit more about kind of some examples of governance that we've seen in the past several months and weeks the two that come to mind are sushi swap and the curve wars and so i'm wondering if anybody on this panel has any input on on either one of those two well i can start with sushi is very interesting because you it goes to show that you need a leader you need a leader in your protocol if you don't have some someone that tells you hey this is a roadmap this is where we want to go there are just too many cooks everyone's trying to come up with their own idea of what sushi should be like and you end up with a variety of ideas being implemented at the same time and a lot of the time it could work you end up with a cheesecake factory one huge book of menu but then someone might come in with a bigger checkbook and try to take over your protocol and that is a risk if you don't do it slowly develop and deploy your products and kind of take over one chain at a time if you will or you know take over one hor one vertical if you want you know like texas or nft marketplaces so from our perspective we're trying to do this uh slowly so that there are no issues in governance um but yeah i wasn't too happy when sushi was slowly being getting taken over um i would like to add uh so it's the the dog thing is this experimental thing i would say um and sometimes uh it happens that like did they'll get an attack uh like from from someone who would like take over the ownership of it uh what we have seen from up when you and sushi so uh i know this guy who left the team and um this is it can happen when people like try to to participate as a core contributor and actually would love to build something but at the end they would like that the idea behind this group of people just to over just to take over the ownership of the protocol and this this shouldn't be the case uh and very well working project in our case for example we try to structure the doll in in the manner that there are different teams so every team is independent and but every team needs to be aligned and so every every every team is going in the right direction in the same direction as all all others and building on the same product uh and services if you look on the aws or on spotify for example guys they are they try to to implement it this did they implement actually this every team is independent own piece of of of the product but they are all aligned and go in the same direction and uh you should we should work um to on on yeah in similar manner from our point of view to achieve best results because like if you see aws what you find they are successful and they try to really to decentralize also everything inside because this is highly efficient how that works from my experience definitely they follow i think a squad model and the squads can talk to each other and the idea is that you can still have the teams talk and communicate because you're not a silo team you're working on the suggestions page the suggestions page needs to work with the song api team um similar with us we do committees and each committee is handling a certain for example an event list con or pogs for the polapothon or dora hacks or sometimes marketing sometimes events and we deputize groups because then they're responsible and there's a clear person that can say they're going to be hurting information from everybody because otherwise who's going to be working on east denver oh we're all going okay but who's planning it uh i planned my thing but did you plan yours so we want to make sure that we're thinking more in teams and squads that works out really well so let's move on pablo you said something really interesting um about kind of cheetah you're slowly trying to kind of um you know uh like slowly trying to kind of well the goal of most uh crypto protocols is to eventually have it be community owned um in the beginning there's gonna be more handholding and so how do you think about in terms of like delegating responsibilities to the community versus kind of the core team um how do you think about which responsibilities you want to kind of delegate out to the community earlier versus later eventually to kind of achieve a like a self-sustaining protocol yeah so um a good example of this is wonderland where you're looking at governance and you're looking at what is okay to do you know um a protocol can vote on you adding a new collateral but maybe you leave the door open for changing parameters increasing debt ceilings where people can borrow more based on market operations or market situations if the market i don't know your your peg and your stable coin goes up a lot you might want to increase the debt ceiling so that it helps the pet come down but you can't necessarily wait three to five days to gather votes so you try to look at what the community is okay with and what are things that are necessary to be run immediately and back to the wonderland the issue was they they wanted to do a lot of market operations they wanted to buy tokens and do things without letting others know because they didn't want to be front run now it they came under fire because they didn't check with the community initially they didn't go and say hey guys we were going to do this it's going to be for the best of the community and well at the end of the communication right so they didn't necessarily go up to everybody and say we're going to be doing this keep in mind don't mind if we do we're going to do it for the best of y'all and so we try to get to staying let everyone know what we're doing without actually telling other people that might possibly front run us in any particular area i would like to add the yeah this is a good question what is the responsibility of a doll so there are different thoughts out there something that like dal can decide yeah the core contributors should leave the team because like they they don't like how they tweet um but um yeah and i can share maybe some some insights from our site um we we never published a roadmap so we we we act like we are building something and uh we release it and if the community likes it it use it if not don't use and if you miss something go and build this foundation ask for a grant uh go through the approval process of core contributors and then you can start building with like we have already a couple of teams who just joined one inch network and building different things one team is building digital storage the other team is building hardware wallet for for our one inch wallet it's also a really cool cool idea a very very simple one um other teams are like building for example also like other aggregation services which we plan those to release and ft aggregation for example dirty segregation and everyone is like free we are like like saying uh be free defy is about freedom and um and uh yeah we help a lot d foundation has like a grant of like three millions of dollars right now but it's gonna be increased very soon um to just help the people to build new things and if you miss something just go and build one question about that um where do you i guess is there a line where do you invest in somebody else's idea like a company for example or do you invest in them to build within the one-inch branding so um there are a couple of options so if you build something which what helps defy which on board more people and also if one inch protocols can use it potentially yeah the other option is when the team would like to join as independent team to vanish network and just build for example nft aggregator yeah which could be uh implemented in ui as our own kind of space it's also possible if you are independent contributor you you're alone you can also just join us a core contributor and you can participate in one of the teams or just independent like awesome then i can wait for the one-inch ledger type hardware wallet once again one inch size ledger wallet maybe we're waiting for one inch ledger swag exactly one inch the name one is just not about the size it's about the power of one inch punch of bruce lee would you like to jump in at all um yeah i was gonna say for us at the foundation we um we have a couple of functions we have a governance summit we try to participate and get everyone who wants to speak to get involved but i did want to say that i spent a few years working in civic tech and one of the things that i really carried away is government is who shows up the same thing with governance governance is who decides to show up and a lot of times there are government mechanisms that are in place we heard some great examples and stories up here but we also struggle sometimes where people who show up are not representative of everyone we want to serve and so that's always something that we're trying to keep on top of mind of how we engage communities how we engage with those that might have language barriers globally because distributed storage means we're everywhere and we want democratic participation from everyone that can can access us we also think the same way with our grants i talked about having a non-profit arm of our foundation and we actually set it up originally um so that we can also really seed fast grants to those internationally so we thought about those mechanisms that not only serve those that's in this room we have a very um population of people from north america here some from europe but um there's very few from you know corners of the world where a lot of defy and decentralized technology is supposed to serve and we constantly think about how do we raise those voices in the room one thing that i think is so amazing about everyone in this community is you can you can be someone visible or you can be invisible there's a degree of being anonymous and being able to participate that serves at least in my hand my head a new kind of way to engage and participate even if it might be things that is not popular to say so i think that that itself is quite beautiful thank you um so this is the last question and we're probably gonna have some time at the end uh to open it up to questions from from you guys uh so you have a couple minutes now to start thinking uh so my last question is just about like legal enforcement or kind of enforcement mechanisms so right now say we wanted to vote sergey off the stage and we get a 50 you know 75 vote uh which is typically what happens in a protocol some some proposal happens and then people vote and then kind of the enforcement section the enforcement part is a little bit separate and it's kind of up to trust you know that that you know the protocol will go with what the people decide um you know do you feel like there should be some type of legal legal action because now there are some um dows that are incorporating as legal entities that kind of it helps with enforcement and so how do you think about um you know the enforcement part and if you can't enforce it does the 49 fork uh so how do you think about that well from our perspective we we're a fully fledged dial um without getting into the nitty-gritty we're all having our own separate entities so there's individual like ownership of the protocol through tokens and we manage it through the governance portals so when it comes to legal action if we were an entity it would get tricky imagine if sergey was also like the ceo and director of the llc how could you like it would really affect the underlying architecture of the company how do you change all the paperwork and would would certainly do that well or anyone else and do that in that situation yeah i think it is changes can be difficult i don't know how is a one-inch setup as a company so in our case we see like proposals as signals so for example we had one one signal uh last week's uh from udall someone proposed to to introduce aggregation among derivatives so it's a cool nice idea i love this but i personally have no capacity to build to to write an algorithm and yeah i don't know ui what would cells needed and um yeah the the community proposed that the core contributors should implement something because like they see opportunity to take this market yeah kind of and uh and not more or less and from our point of view if the community decides to just like uh i should leave the team or my co-founder anton um i wouldn't say no it's uh like i'm an independent contributor and i would love to build continue to build on that and i and did all is not paying my salary yeah so we had the financial rounds and i'm i can i can i guess the next 20 years work on this project uh if that what would be collected and contribute and and also deliver my promise uh to to to invest to backers so um it starts getting more complicated than the dog pays the the salaries like in case of uh i guess iron uh i see a lot of problems there because it's transparent everyone knows how much the other earns from a point of view it's like individual uh everyone should shouldn't show what they like uh get and then you have all if everyone knows yeah then there are conflicts uh we are all humans and why the other person gets more than i and i work like 24 hours almost so um and also dog can then just say okay you have to leave this is bad from my point of view once again i already said if it's about freedom and stay independently free and build on what what you love to to to build and uh yeah i mean i just to talk more about what sergey had just talked about with someone earning more or less one of my favorite parts of our team is we are fully distributed but we are also hiring just as a pitch if you guys are interested but we pay everyone san francisco salaries no matter where in the world they live because that is very much a value of participation distributed storage as a matter where you are you are uploading the same storage as a team we are working together no matter where you are and you're contributing the same and when we think about basic things like salary and respect we truly believe that everyone is an equal on our team and most of the time people get frustrated in the workplace because they find out that while they bring same if not more value they're paid significantly less than their peers this happens a lot with women actually in tech and so that is one of the reasons why we think governance is not just community it's inside out for the people that participate in it and we try to instill very strong values of what we feel like is important for our community and attract the right people a lot of times government issues come governance issues come from friction that comes from lack of core values that a community has and that's something that we think about every day and every action that we take in our ecosystem thank you i think we have time for probably one question does anybody uh no oh yes uh can you guys talk about the core value of your company and how like the governance and the dows and all the incentive structure kind of ties to that i guess i can start our core values providing liquidity for everybody take the qi the strength of your token and be able to use it somewhere not necessarily having to go sell it which is bad let's say you get them i don't know a million dollars in tokens uh this year and you are the that's your governance token at the end of the year you're gonna have to sell uh 20 30 because of taxes one way or another now if you were able to borrow against it be fantastic you can pay taxes and you know that the value will potentially keep going upward especially if you get in at the early values so you can't go to a bank and say hey i have a million dollars in tokens they're going to laugh you out but you can go to these particles you can our protocol you can see the value of your you show the value of your token extract it and use it so that's our core proposition and we do everything to help sustain that for as much as long as we can i guess at coindesk we're not a protocol but we want to be the best crypto media uh company and uh write great stories and entertaining stories and educate people about crypto the question was did i answered right what is the value behind the governance talking or the governance itself of structure obstruction the payments from very briefly 10 seconds we're out of time yeah i already said we've erased multiple times already and there's a kind of lapse which paste contributors which are just freelancers like me as well and and in the future i will see i would love to see also ddo provide grants not paying salaries proving grant to to independent people like single influencers or a company and they should manage that by them often because they can manage it better from up on you yeah um our core values is we are trying to build a better distributed internet for all um we are very global we are very ethical as a team which sometimes is hard when a lot of crypto twitter is very controversial and sometimes people ship posting on each other so there's a lot of things that we struggle with but we really do try to attract really passionate ethical actors that really care about coming together as a community and building this infrastructure of web3 that we're all here for so all right thank you this wraps up our governance panel thank you very much