Blue Chip Forays Into Crypto Jeff John Roberts; Kristin Smith; Kevin Wang Nervos; Malcolm Navarro Me

uh welcome welcome everyone thanks for joining on a saturday afternoon you're probably tired you're probably sleepy uh there's a bar at the back that can fix that if it's getting really bad um thanks for joining we have a fun panel today the theme i know it's called blue chip stuff but what we're going to talk about is going from web 2 to web 3. we've got four very accomplished people who've done that journey they've lit it up in web 2 are doing it in web 3 now and they're going to tell talk a little bit about what that's like how to hire people how to deal with the government what's different there so um i'm going to let people introduce themselves um christina start yeah absolutely thanks jeff great to be here today and i'm excited for the bar to open as well we i come from washington i worked on capitol hill as a staffer for 10 years working on internet policy which largely dealt with this issue of net neutrality and getting web companies these little web startups like facebook access to internet service in an equal way and here we are fast forward and they've sort of become everything that nobody wanted them to become and now i run the blockchain association where we represent crypto companies in the industry who are working to advance policies that support decentralization and i think what's really cool about being in this space is that there is this marketplace solution this technological solution to the problems that policy makers think they want to solve with policy but can't quite figure out how to do so i think it's going to happen naturally but yeah super exciting to be on this on this journey and excited to be in the battle for web 3. awesome hello uh so my name is malcolm i work at massari i started my career at jp morgan bank of america uh your trad fi route uh and then uh took the pledge in 2016. uh enjoyed i'm sorry about eight months ago i think one of the biggest challenges we're facing is how to become a more web3 company i think a lot of companies are facing a similar challenge uh so i think navigating that is a very fascinating place to operate in the space but uh not just for going into web three for the sake of going into web three but to solve real problems at scale uh so there's quite a bit to talk about that there and we'll talk about it but uh i'll pass the mic hi marik i'm the ceo of the near foundation near the layer 1 protocol fully sharded in terms of career i started in luxury goods industry at lvmh in shanghai in china and then i worked in different industries also expedia had a stint and worked for circle which launched usdc between 2015 and 2019 then led the neo bank and now at near and i think what's fascinating for me from this transition web 2 to web 3 is actually the amount of talent that we need and the amount of actually skill sets that we need to succeed i think so far we've been very focused on actually developers because that's the core of building infrastructure but it's actually time to move on and bring a lot of different skill set within the space hi my name is kevin uh kevin wong i'm the co-founder of nervos nervous is uh also a layer one protocol uh and uh application platform um so we're we're also very focused on you know attracting talent to attracting developers and then we do see a lot of people coming from uh sort of traditional web and mobile you know web 2 background and uh you know we got a lot of questions about you know how to start a web 3 projects and obviously tokens and you know which is unique for web 3. my own background i came from engineering backgrounds i've worked in large [Music] technology companies as well as before uh co-founded nervous uh i also was the co-founder of web2 project uh focus on online education so yeah let's we've got a couple engineers on the panel which is fine so i want to ask you guys like you know in theory everyone's going to web three we need web three devs for us sort of non-engineers how hard is it you know because to us you guys are just the people who write the code and you know so we have two code web three code you know how how hard is it to make that leap uh why don't you start off malcolm sure yeah i think there's uh two challenges there uh the industry with web three is very new it's still an end of infancy so finding talent there is difficult because the the pool of talent that you're now trying to tap into is significantly smaller um on top of that uh web 3 is very abstract and there's a lot of ways for you to go into web3 i think there are some areas where it's easier right open sourcing some of your protocols or your front ends and allowing people to plug in and build on top of it but there are harder technical challenges uh you know whether it's data storage in a distributed place as opposed to your you know proprietary database or some other you know more distributed fashion of you running your services um but all those are new challenges uh and there's not not many that you can just google right your traditional web 2 problems have have been solved before and there's a lot of people that have gone through those motions with web 3 you sort of have to machete a new path um and so that challenge with a pool of people that are new to the industry you know presents a pretty big task for the engineering side uh yeah neat yeah no how about you kevin i mean you've lived it you built a web 2 company you're building a web 3 company now just from an engineer technical perspective like can anyone do it or you know is there some things but web3 that are harder or different than web 2 yeah i would say there are well i would say at least two very different types of engineering in web three one is to build infrastructure right and this is um you know the you you know the person will need training on cryptography and then you know distribute the systems and uh you know obviously you know system performance and that sort of thing and then you have sort of application builders right and and this is good about having abstractions from engineering point of view because you know for a lot of people coming more from application builders even in web 2 there are a lot more application builders than the infrastructure i wouldn't say that hurdle is too big to overcome because a lot of abstractions are again provided for you right so you can you know work with apis you can work with um you know other uh you know tooling and then most you know blockchains have that for you and just focusing on building application logic it is a little bit difficult in this aspect i think it just you know the the engineers need to be minded about security um because you know unlike traditional applications you know if if there's a bug the most you know most likely it's okay you just fix it right the next day but uh when you write uh you know decentralized applications smart contracts when there's a bug it could be very very consequential in terms of you know money loss and all that so speaking of money i got one um for marie for a second because i interview companies that want to become daos or want to get web 3 and stuff like that but guess what you need a wallet for that and you know if you're a company you're you know government registered you have a bank account and treasury management like how do you go about that you know you're a former banker right and you know if a company suddenly wants to go web 3 they need a wallet and stuff like that so just tell me what you've encountered there is like our companies do they know how to do that and are governments ready to recognize them and to you know recognize them as legitimate as a traditional company i think it's a great question and one of the things we see actually is that when you're traditional companies that want to get into the spaces number one what's a wallet how do i set it up number two what do i do with that where do i custody right because custodying your assets actually is not that straightforward and you need to have the right partners in place and what does that mean so i think there's a whole shift actually between what is what is an asset where do you put it how do you actually safeguard it and we are seeing more and more uh let's call them blue chip for for namesake of the panel but more and more actually traditional companies wanting to get into the space but you need to wrap their head around so many things and i liked a lot of what you say around security ultimately because it's still so complicated to get through even for large institutions it's all down to security and making sure that the steps are being done so back to the point i think there's definitely a lot of education to be done but also a lot of like streamlined usability to make sure that we can actually get to the same the same understanding but i would say yes we definitely see like the barrier to step two is is still quite stiff so what is the answer what does a legacy company do does it go hire some consultant and they set up a wallet and they promptly convert it to cash and that's that right so we guide a lot of people to actually what are the steps and what you do but here's one thing the other thing is also it's almost um so for near ecosystem it's going to be one way right but then if you actually go in in another layer one it's going to be another way because the ecosystem of things that work for that so at the moment i think it's still very much like still handhold the way you have to guide the blue chip or web 2 companies that want to come with you chris i want to bring you in here too kristen's got a really neat job in my opinion she kind of takes one for the team for the rest of the web 3 and crypto community she has to deal with washington all day long and to try to you know tell people these aren't all criminals which it was the attitude for the longest time crypto is bad guys you know that's starting to change a little bit now but what's it like dealing with like these senators and the white house trying to persuade people that crypt is not evil yeah i mean we're making progress i think we still have a long ways to go um weirdly the web 3 narrative is sticking all of the sudden with congress i think just as it's gone more mainstream as an idea and you know you read about web 3 in the new york times or the wall street journal we now get a lot of offices reaching out to us and talking about web3 but i i actually think of you know this was a narrative that we at the blockchain association knew from the very beginning and actually our very first blog post after we announced three and a half years ago that this was a group that was coming together was all about how how cryptocurrencies in the decentralized web we're going to create a new and better internet and so that was something we were trying to talk about for about a year in 2018 2019 and it wasn't landing it was too complicated too far out in the future and then facebook comes out and announces libra and that totally destroyed that whole narrative because all of the sudden you have this confusion about cryptocurrencies and this facebook company and everybody hates facebook and i think it's actually had to you know now that that's sort of run its course and i guess facebook is no longer a company and libra is no longer a an actual live project the the web 3 narrative is something that really gets members of congress excited and something that on the democratic side of the aisle they're very interested about because we've all seen the hearings where we've had you know the big tech companies that have been called up and the senators and the congressmen are asking really stupid questions trying to figure out what they do but there's just a lot of you know sort of anger and dislike for that for for that part of the industry and so even um you know if i look at some of my professional colleagues that work for web 2 companies doing policy work doing advocacy work they're all wanting to get into crypto and get into web 3 because there's really this sense in washington that this is a thing this is early early enough but that there's a lot of promise there and so i think that this is a narrative that's been a really positive um a positive and welcome development in washington yeah and hopefully facebook gets out of the way because if uh web3 has to make you know facebook's the face of that that's uh that's not gonna work out well um just quick follow up for you kristin very quickly um my understanding is most congressmen and senators do not own crypto but a lot of their staff do is that correct yeah i would say probably more staff than members there um are a handful of members that do own cryptocurrencies um members of congress just like other senior government officials have uh you know disclosures for um any you know sort of significant asset that they own and you know i i think that it's a really good thing for them to own a little bit to figure out what does self-custody mean to go through that process you know it's a little bit cumbersome i think still today for you know new people to interact with that process but you learn a lot by doing it and so you know i think there are some that have called for you know to not hold these assets that that's a conflict of interest like i think that's i don't know if i could say that but you know these people deal with you know things that impact you know other types of investments every day and that that shouldn't be there i i want more members of congress to buy a little bit of crypto and at least get some of the basic principles down by interacting with it and holding it themselves yeah another broad trend we're seeing with web 3 is governance like you know people even talk about legacy governments i.

e like washington and then web 3 government is supposed to be dowse and it's crazy i've seen some people do it i was speaking with eric voorhees at shapeshift famous you know earl og crypto company and he converted the whole thing into a dao like fired himself as ceo which you know i don't think most people are ready to do that yet but the promise of the of taos is intriguing but i don't know how viable it is um maybe marie could speak to that you're dealing with foundations and how do you organize a web3 foundation is it look like a standard non-profit or is it a dow or what are you doing so um nier is a swiss not-for-profit foundation and i think to your point and how to structure things part of our ecosystem we do have a lot of guilds that set themselves up as group that get self-organized and then use a tool which is dao so we have a basically launch pad it's called astrodaw where you can actually launch your dow and have the voting systems on that and what we see is most often those daos attach themselves to a legal entity and so the real question then becomes where do you set that legal entity and what's the jurisdiction and then how do you make that choice but for me there's three things that we're seeing it's usually the group that gets organized often in discord then it's actually the dao which is the tool itself which is the multisig of actually allocating the assets and then it's actually the legal entity that is next to that um we find that combination actually to be quite powerful to help also empower our community members to start to start getting self-organized and actually to say this is something i want to do can i apply for a grant and can i actually get fund allocated to help the near the near ecosystem so that's how we think about it but back to governance the challenge is still like you know what's a dao and where do you put the legal wrapper and what are the implications of doing that kevin this is something you pay attention to dao's like would you ever turn your startup into a dow or do you interact with them at all are you just kind of waiting for them to figure it out yeah i think dials are definitely coming and i think it's not for every web3 company um you know most uh you know most web three teams or projects go through uh like a various rounds of funding process where they take early you know money from investors and a lot of these are fiat so whenever you know your team has fia currency uh fiat money and that need to be they need to exist in the bank and then you have to set up you know all the entities to you know work through work through that that's one of the um you know sort of crypto touches real world right and and you just have to have all the legal entities and um you know chapters and for that to happen contracts and then you know we do see on the other hand we do have sort of more self-organizing like crypto native uh groups where uh you know the funding uh all our cryptocurrencies as well and uh you know the decision-making process are also you know uh people who own the dow themselves make decisions and you know distribute money uh and make decisions i think those are more naturally become adele um so i think it's and you know i think right now we're seeing a lot of doubts emerging like specifically on these crypto native things like nfts and um uh you know we see like investment dows and you know again all crypto native or crypto denominated if you will yeah so those are the trends that we see yeah malcolm let's bring it back to you for a sec i mean just putting your masari research hat on most you're probably familiar with missouri but a very you know tight accomplished research group they surveyed the whole landscape and write about it so you know putting your research hat on malcolm what do you see about dallas what are they doing right what are they doing wrong and what's happening next yeah dows are interesting because it's still a very raw new concept uh and uh they exist in very like different forms right like you mentioned there are investment dows like flamingo dial is probably the most famous like nft dow and they actually i think they passed a one billion worth of nfts and so you can see uh the power of uh coordinating people uh with the specific effort and so from messiah's perspective we see a lot of different dows and i specifically work on our governance products which is trying to bring all the proposals and delegation and uh the space is becoming really fragmented which each dow has their own way to vote with their own way to discuss proposals uh et cetera and so from that perspective i think we're gonna see a little bit of standardization coming into the future because uh as the dow landscape expands uh and everyone starts doing things a little bit different it becomes really hard to be a participant into the dao sort of universe um this is a big hurdle for everyone to understand how does this dow work or how do i find a dow et cetera um so i think it's fascinating to see all these different use cases i mean constitution dao was an interesting one try to buy the constitution uh and so i think the ability does allow you to move really quickly creating a company it requires money and requires real world action dowse can happen pretty organically and pretty quickly online uh and so i think we're going to see an emerging sort of trend across different use cases that we probably didn't even think of before and now we can bring this community and tie it together as a dao yeah as nell said it's so interesting watching it because some of the possibility you have a checkbook and you can come together with anywhere in the world build a community but there's a dark side too i mean you've seen dows you you form it you get people give tokens and you rug pull them and then just like don't pay anyone who did all the work you know that's not ideal but yeah i think we're we're in early days there um another web two to web three topic or you know sort of debate going on did some of you see the fight on twitter between um sort of jack dorsey and andreessen horowitz the giant venture capital firm and remember that you know web 3 is going to be democratic liberators all will all get some of the pie but you know there's just this meme going around of this big funnel of tokens and the vcs drinking it all and getting all the bags and the retail people just get like you know a trickle of it you know and that sort of as a challenge maybe web 3 is you know just as bad as web 2 in that regard where the venture capitalists you know get fat and everyone else gets screwed um so you know let's let's throw that one it's not an easy one admittedly but um you know uh marik what's you know from the your banker's perspective we're running a foundation you know is it is web 3 really better i think actually webster is better because ultimately capital allocation is what's going to matter to make this space work and what we are seeing is definitely a lot of attraction for capital that is going into the space therefore that's attracting talent because if there is money then there'll be talent and that talent is going to build things ultimately which are going to be enabling the vision that is that is to happen so um yeah i i remember seeing the twit and and i thought you know it's it's a certain view of the world in our view i think actually it definitely helps to have that capital and that talent flowing around and so i'm actually quite positive on the fact that ultimately what webster is trying to do is have applications which are going to change the game for end users right and i think that's this mass adoption that we haven't seen yet because we're still in like a lot of the build phase but when we'll start having cases which get to like billions of active users or like millions of active users then that's when you can start actually seeing the distribution of of tokens and so on and so forth um need i'd like to throw it open for questions zach i just want to uh so if anyone has one please think one right now um kevin i just want to ask you quickly though you're kind of a silicon valley guy do you think in terms of the wealth you know is it web3 gonna spread it around more or is it kind of like the you know me the new boss name is the old boss yeah i mean it's already been that trend right because i mean uh crypto or blockchain in general it's uh it's global from day one right so uh whereas almost every other form of capital allocation is uh you know you're bound by you know either you go public or you go raid basic capital you're bound by a specific country like regulatory environments and you know who you can raise money from and most likely are sophisticated investors and uh you know sand hill in in california have to you know pay that trip and knock on doors whereas you know right now you know what blockchain allows is for the um you know your developer that locally they may not have the resource right i mean they made from a country that doesn't have a like a vibrant vc ecosystem but they can tap into this global uh capital pool and um you know as long as they provide valuable service and you know products then people will just you know fund uh the further development of it i think it's it's a drastic change from uh you know before crypto was like maybe 10 years ago right i mean it's just not even thinkable um especially from like less development countries and how do you how can you even tap into i mean unless you have a rich uncle maybe they can fund right and but otherwise it's just not imaginable so i think it's definitely better in in every way yeah absolutely no well put um uh so we have trevor here up front he has a question yeah um please say who you're directing it to and please speak loudly okay so this questions for the field because it's a little bit off uh topic but somewhat still relevant so i come from the esports world and uh i kind of almost look at that as like web 2.5 because we've been trading with nfts and we've had that type of the same type of uh economy that we're seeing in web 3 but under the old web 2 model with the games and servers and infrastructure and obviously vitalik making ethereum from getting his warlock you know downgraded to world of warcraft my question is is there a philosophy or a phrase or doctrine that helps some of these web 2.0 programs and infrastructures to migrate to web3 if there's a utility or use case in this case with gaming and esports is an obvious use case but we haven't seen the adoption and we've seen a lot of failure with nft projects uh recently this year so i'm i'm asking the field if for those that have the knowledge that makes sense how can we help some of these web 2.0 products our companies and entities migrate to web3 with utility cases that make sense yeah i'm happy to take a stop here um yeah actually we are working with uh you know several esports projects and um you know what we found out is he always start with a conversation right because every vertical every company is different and then nft is a perfect example because we see a lot of nft based uh sort of uh you know uh web two companies uh coming into crypto through nfts so ultimately you have to answer the question is you know how can nft help your audience how are your users your community sort of you know rally around and then to achieve uh the goal i mean a lot of it's you know it's for engagement and then uh how can the make them more active and then more loyal a lot of it's reach because typically um like i said right so blockchain allows like everybody in the world to have access to your nfts and uh and you can tap into a pool of users that never existed before and uh so i mean the the actual logistic of engineering transition i would say uh don't try to be you know like walk three steps at the same time just just take a baby like you said i think you said perfectly right so web 2.5 like have a solution that's definitely uh in the direction of web 3 and decentralized but don't feel ashamed if some of it you know that you can uh still like as faces right so when you launch has a mix of you know traditional web 2 element of it but also you know the um it also comes to your users it depends on where your users are what their knowledge about blockchain in general is so just meet them where they are i think that's probably the most important can get the ball rolling yeah i really like that web 2.

5 i don't know if you came up with yourself or but yeah i think that my sticker up for it nice nice did you want to win like yeah i just wanted to add something i some web 2 businesses will not go into web 3 right and i'm actually quite fascinated by the creator economy and also like just you know individuals right so if you're a sportsman or sports women and for that matter the model we're in today with actually agents and leagues and firms controlling that actually what webster is trying to do is to flip that so i think also we need to be sometimes maybe mindful of what it means to want to translate everything from web 2 to web 3. yeah um well the other thing too actually i think we can benefit because malcolm you're a compliance guy once and you know chris that's who you work in you know the laws are different the rules are different when you set up and like what mistakes might a company make on the legal front you know people get you get sued by the sec pretty quickly these days so you know what do you do to avoid that you want to start kristen and then i'll kick you know sure um uh well hire a lawyer if you're gonna be doing anything that's like step one um the uh you know it's challenging right because a lot of what we're doing in web 3 really sort of goes to the line of securities laws and you know other types of regulations that are in place so you know i we need to do our work in washington and the blockchain association to make sure we pave the way for this to be done but i think having compelling stories and use cases and i think the empowerment of creators and individuals to monetize their work is one of the most powerful narratives with web3 but um you know i think the biggest kind of outstanding thing goes back to the the dow conversation you know there's the legal status of dowses is very complicated there's not a lot there one of the things that we're doing at the blockchain association is putting together model legislation that provides limited liability for the dows and seeing if we can get some traction on the state level but you know it's going to be a while before that's in place so you know i think as long as there's a really good effort to comply with any laws that are out there um and you know you have good coverage you need to go forth and build and build really cool things you know if you're going out and frauding and scamming people you know you're going to get in trouble but but you know you do get points for having good intentions i think sure well malcolm you ran uh compliance stuff during the ico era in 2017 and i saw some speaking of scams and frauds remember i seo in a box and like you know a lot of sketchy out there so what's your advice navigating web you know 3.0 to not get arrested yeah jill i can't imagine is a fun place to be but um yeah i think with the the ability to issue tokens and raise capital uh you see an influx of people attracted to the money and with that comes uh the noise especially when the bull market sort of hits uh maybe where we are now there's there's become a huge saturation of quality and uh projects and so i think it's important for people to be diligent about what they're investing in if you want to call it investing um but uh from an actual protocol side i think the token is the most sensitive piece and being web 3 doesn't mean you need to token and the token ultimately i think very holds a lot of risk uh organizationally there's risk as an entity but the token itself uh gets you in in goldman gary's crosshairs and so i think that's a place to be very careful about but yeah ultimately um you have to to be logical and can't chase the money all right well i i wish that were so but it's just easier yeah we're almost that time i do have our last really quick question uh you or chris want to take it hire a lawyer i think that's a good idea uh but good securities or top securities lawyers charge you know 800 an hour and if you're a startup that might not be too realistic what advice do you have if you're just like solo founder out there trying to do it and you don't want to you know pay 800 an hour so i have found that lawyers working in projects in this space are incredibly collaborative they're sharing ideas they're sharing best practices you know when somebody new gets hired on a new protocol to be the general counsel all of the other general counsels swoop in they want to meet they want to be productive so you know i would start by talking with your fellow projects i think there's i mean one of the things that i've been just in awe with this industry over the past couple years is how really collaborative people are and kind of open sourcing ideas about how how to move forward and um so yeah i would i would you know start by getting free advice and then that will narrow down the 800 an hour advice that you need well speaking of free advice i feel like we got a lot of great free advice right here so please uh give it a big hand of a yeah it's amazing