Activate by Codefi Networks: A new way of launching and participating in decentralized networks

cool so I think the chat we just listened to that might Alec gave gave a perfect intro into kind of what we want exporting this conversation and introduce you guys to what we've been working on and how that kind of lines up in the context of that so yeah I guess let's I'll have my own microphone sorry I guess let's just start with we're gonna walk through like a historical evolution of how people have launched or sold tokens and the different chapters that we've seen in the macro themes of this like beginning stage of blockchain which is the first use of a smart contract was to create a token so we've kind of advanced now beyond that a little bit but still at the end of the day or building the foundation to a new financial ecosystem so as of right now things are lending and borrowing and swapping and trading but those are the pillars like those are the pillars that create all human infrastructure I'm commerce essentially so they're quite primitive but it makes sense because this is what humans have been doing for thousands of years so we'll walk through the stages so chapter one is kind of like the Wild West this is from a macro theme what we like to think of as 2016 to 2018 high innovation but the macro themes here are what is it where can i buy it who can I like who's allowed to buy it who's allowed to sell it where do I sell it how do I transfer it these were all these discovery stage themes of what are these things they're being introduced to us what do we do with them and ultimately what is this so during this time period I guess some of the characteristics to some positive more than some negative ones high innovation unfortunately high fraud most of these tokens had really terrible incentive design or mechanisms popular theme then was just a pump through a payment token that wasn't tied to absolutely any use work or resource sharing and kind of the birth of the coin there was really bad distribution done there were multiple different attempts at different ways to do air drops but ultimately that that really wasn't solving any problems what you were doing is just dropping tokens to individual that were most likely just speculating and already speculators to begin with so it just actually increased the speculation and not really the distribution in small ways maybe because it eventually did add liquidity to the system and who knows who picked up the other side of it but ultimately the distribution was was weak from a mechanism perspective and methodology in a standard perspective that really led to centralized ownership which we still see today with VC coins which is kind of not part of this chapter but like still a little bit as well it exists in both chapters but even worse today than what it was at the beginning this led to also ICO pooling which is actually in my opinion kind of cool and was a way for a bunch of people to come together to fill in accredited positions that they weren't able to fill otherwise so that appeared to be centralized but those pools were made up of one degree of decentralisation it's not super decentralized but it's the beginning of all this so at least the the pooling aspect added more individuals which we think is interesting and another thing obviously is like flipping tokens on exchanges crazy valuations a huddle mentality problem mentality came from a few different reasons from one of the main reasons is that there was nothing to use these things for so I had to hold on to it because I couldn't use it most of these tokens were launched without a network most of them were launched with just a white paper and ultimately all of these things as they compiled each other led to there's no utilization of tokens whatsoever and no one's really using these things and they're meant to be used and these networks are designed to inherently gain strength as people use so we view that as chapter one and from a broad theme this is 2016 to middle 2018 as this kind of takes us to the second chapter this is the chapter that we find ourselves in today and how we interpret it so crossing the chasm just to give some perspective on that I think we're in a really interesting time period at the moment both in relation to kind of coming out of the bear market and seeing how we're evolving our thinking incentive designs and new and improved ways of token utilization how that plays into the networks and I'm gonna run you guys through a little bit of how this is characterized I don't know if you guys woke up in January 2018 feeling really great but I was part of part of that train and it's interesting because since then we've we've seen a huge amount of market clearing right and you can almost think of it as those who have weathered those who have weathered that winter have drawn strong lessons from what we've seen previously right so people have come up with better ways of designing their protocols and their network incentives we've seen an increasing rise in kind of what dominates now in the consents algorithm since proof of stake networks and derivatives of proof of stake right and this kind of all ties in with now the way that we think about holding tokens right you're you're now engaged or you're incentivized to not just hold them but to contribute to the network so the utilization becomes a fundamental pillar of the way that the entire machine is working now right so if you think about it like this just huddling your tokens which as we've talked about in the last chapter was kind of a predominant emphasis of how people and participants in that network engaged is now becoming increasing increasingly more cost costly to do so if we look at what's going on here if you want to do say an optimistic extrapolation of what we see in the adoption space right if you look at the unique address is registered and theorems network utilization reaching up to 95% we we can extrapolate from that that we may be entering entering a new chapter right but looking into that chapter what is it that people care about now right so Colin touched on it earlier people still care about where can I get my tokens right who can sell them to me but now we're getting into a phase of what can I do with these tokens how can I use them and can I go to use these tokens right so what are kind of the issues that we feel that we see and getting broad stream adoption on these things and what kind of hurdles that a lot of people have been touching on in the previous talks as well so UX and UI friction right so there's still compared to web 2 interfaces right a lot of UX and UI friction that you have an onboarding and guiding user through the experience of interacting and participating in decentralized networks at the same time a lot of things that we're seeing especially in the way that we're aggregating opportunities of engaging in these networks is fragmentation of that experience when really all these things are built to be modular and integrated with each other to foster better opportunities for token holders and to understand their respective opportunities in participation both in inter and intra network participation so regulatory uncertainty we've seen in in the previous chapter there was a sheer lack of regulate regulatory guidance which which kind of led to the natural consequence of you know what it led to in terms of the ICO room there is more stringent regulation that has been imposed since then but really there's still a lack of general guidance and standards in doing network launches and how they should be structured carried out and enabled to basically promote fair fair distribution and fair pricing and then the last part being there's still a very large educational barrier and finding better methods and mechanisms to guide people through that educational step right and explaining and easy terms what's taking is how you can participate in it right and guiding them through that experience so from that perspective I think there's three fundamental pillars right it's building the right standards to navigate or to help networks launch in fair transparent and distributed ways building an educational pillar of guiding new participants and not just the Crypt enthusiast through the experience of participating in networks then sort of the third part which is building better interfaces for people to herself what's going on okay cool so that's kind of like where we were and then where we're at today and what we're focused on is where we're going to go tomorrow and what what makes what makes the most sense in this space there still are a number of active projects in the space who are still focused on launching tokens in in ways that we don't necessarily think are the healthiest way to do it as Mara alluded to there there is there is no guidance on this so it's pretty much up to to each party who decides to step into this space it's up to them to base our methodology on on risk that that we don't know exists exactly it's almost worse to have no guidelines than some guidelines even if they're strict so what we're focused on now is what we like to call activate which recently came out with them will kind of walk you guys through you know why why it's different what we're building for in kind of the world that we vision moving forward when it comes to launching and using tokens and what we think makes the most sense so ultimately you can think of activate is at the beginning of activate where we're focused on two key stakeholders stakeholder number one is being the token holder and the participant in that network and what we provide for them is launches of partners that are fully vetted where all the token economics and the mechanism design the team has been vetted with background checks and also I guess technological know-how so we vet the team's fully we go through the whole process with them so they can guarantee that that what they're receiving at least has our stamp of approval and that's that's waited as as however they'd like to wait it the second part here is is that mostly the way that this works right now and this is due to fragmentation which is one of the issues of is that you know if if I have a token and I want to use it there's probably a few different ways that I can use it but there's probably also like a few different platforms to use it on so then while while using it there's thing where where my tokens at what is going on I have to track and manage all these things for me for example like I bought token sets I backed it up through Fort mattock through my cell phone number at the beginning when all this stuff launched recently had my like my backpack stolen with my UK SIM card in it so now it's been like tracking down wearing my sets out how do I get my sets back so ultimately the fragmentation we think that exists in the spaces it makes sense based on where we're at but ultimately it's it's about people stepping in and try to help fix that so that's what we're here to do for the token holder and how we serve them is to provide them a holistic platform where when they participated in the launches is also the same platform that they use it and also that in iterations manage and then have other use cases for their portfolio of tokens the second person that we serve is networks if you are decentralized network and it makes sense for for us to work with you which is a multitude of different things what we can help you do is is that leading up to maintenance and all these other things are like super important steps and they're part of the puzzle pieces that eventually get you to that end puzzle but ultimately ensuring that the launch that you do is done in a very distributed manner with a group of individuals who actually want to participate and trying to do everything we can to get away from this ie model or this VC Coyne model essentially which is developed today which is still rampant with speculation nothing has really changed but it's a matter of if you are decentralized network we have a methodology that will help you bootstrap your network from the very beginning and ensure that that initial distribution is wide and that the people who do participate in that distribution leading up to main net will bootstrap it and use the tokens inside of it and we'll get into kind of how we how we do that and what that looks like here's a little sneak peek but let's let's touch back on some of the points we touched on earlier so the key pillars that are guiding principles of the methodology that we're trying to work with when building out this platform is enabling both networks on token holders throughout lifecycle of the network right we're not just focusing on the launch period because there's a lot of periods that come after right bootstrapping your neck network effectively and then ensuring that it's lively and performant and secure right so what is the first pillar right making it easy for people to participate in the networks for network native functions right obviously these will depend on the network's themselves but you can think about it as if there's a delegated proof of state network right do I want to delegate my tokens do I want to stake my tokens if there's a voting function attached to this from a governance perspective this can be your home for using your tokens to participate in these networks right so that's the first pillar the second pillar education and providing data-driven insights so that people understand what is the network's health how is it performing where can I see all of this information about people who are participating in that work and like service providers as well right guiding that through transparency and being able to enable token holders to make data-driven decisions at the end of the day both about their portfolio but also in terms of the insight and transparency of the networks that they're partaking in and I guess the third part of this which comes with the user experience in general right so for us that's a key emphasis we want to make sure that we don't just target a user group that is crypto native and enthusiasts as at odd core right for us it's also kind of moving into the next chapter and being able to educate people on participating it's it's super crucial at this stage and that's kind of just us as consensus that's like where we fit in this puzzle pieces that I think everyone's done a really good job in the community getting like this core group of users and people into the space but like right now what we need to do is expand that circle of individuals in our world and we need to develop applications we need to develop processes and user onboarding flows and environments that people are comfortable with in in the web to world or people who participated at the beginning of this call it 2017-2018 they got involved just at the most simple level which is getting the underlying and going through all those friction points of getting into the ecosystem so we've kind of divided this up into four user groups and you'd like user group one through three all has like eath to begin with or Bitcoin at a minimal and then user four doesn't have any of it at all so what we're trying to do is create this experience and the methodology around people who care about doing distributions in the right way which is the core users of blockchain but then also create an experience for someone who's never participated in a network launch before someone who's who's never staked a token and has earned rewards before because they didn't know that it existed so it's about also expanding that bubble and that's something that we as consensus take on in different capacities and this right what we're trying to do is get more users inside of dphi in a different manner so I guess let's let's talk about the standards of like the way that it goes about so the standards that we use are based on like the consumer token framework by the brooklyn project that has been reiterated on over time and i believe it was started in 2017 this is a a light list of what the standards are and probably the most important ones to talk about so registration for token sales is open to everyone except for non sanctioned countries and yes this does include the u.s. so that we are comfortable with the methodology that we have with entering into the US and allowing your average person to participate without having to use the VPN and they can just do so in like a normal manner so that this all can just be normalized tokens can only be used initially so what does that mean a core component of this is proof of use which basically if you're a participant in a network launch we restrict your transfer ability of that token until you prove use for a set period of time so this is a way to deter speculation but this is also way to ensure that your network is being utilized at the very beginning because token holders cannot do so it's also an indefinite lock it's not like after one year you can do whatever you want with them it's an indefinite lock to where you must prove your use that kind of takes care of point two and three we only do these things with main net launches and they coincide within 30 to 45 days of a main net launch so that's a required status of the project that decides to do this with us is that it's you know it's not the white paper only it's not the we have a test net it's you know you have to be approaching main net launch and this can only take place between 30 or 45 days before this is about to take place token purchasers must participate in an assessment test as a way to kind of gauge gauge their knowledge of the usability of the token but also the knowledge of the protocol and it is a pass/fail like a hard fail type environment it's not penalizing it's more educational but ultimately there there is a test that you have to pass and you have to show at least knowledge of how the protocol works and what you would do and use the tokens for and then we do kyc and ID verification as well which has become fairly fairly standard in the industry a key point on here that that was left out due to space issues but there's also no discounts in this environment which for us is kind of very clear but I think it's important to get that across it's there's no discounts this doesn't exist anymore this is 100% fair pricing across the table everyone who participates from your you know average person who's coming in with call it 10 to $100 or someone who's coming in at a larger ticket it is all register first-come first-serve no one's given special treatment it's all fair pricing and it's the best way that we've come up with is to do a fair distribution so let's just kind of lay out the standards and what they mean for a fair distribution so one of them is is that it's open to everyone so anyone can participate aside from non-safe ten countries these tokens must like the users must their use inside of the network as well so if bootstraps it plus it gives it a wide distribution and then ultimately everything is fair on the pricing side so those are kind of the the three pillars and then there's some tack on things that are added to it but these are the standards that like we believe should be a no-brainer inside of all of this it's kind of amazing to see that things are still happening the way that they are and iOS are dying out and now there's really no methodology so this is kind of something that we've been working on for a while we feel it's like perfect time to kind of bring this back to the table and reintroduce the standards they are so the sort of so the so I would say that the standards that were published by token foundry were based on the burthen project as well and since time has I guess evolved more since then there are less things in that set of standards that are needed than what once were but the standards regardless of what the entity is using them are a consensus based effort not a token boundary based effort so yeah it was an industry initiative to drive towards or I guess navigate a territory of like regulatory uncertainty and provide a framework for setting a standard in the industry yeah so i think colin touched on it so the way that we have so let's let's take a step back and let's go back to chapter one right what was one of the main reasons why huddle became the mentality that guided a lot of that behavior right because there was actually no maenette that launched for you to actually use the tokens in the network right so speculation was really the only thing that you could be using your tokens for so proof of network for us is the network launch partners that we partner with our networks that are at a certain degree of technical maturity right for us it's critical that once there is a token distribution event that participants can actually use their tokens and the network so proof of network for us is within 20 25 30 days of the actual token distribution event there is a main that for people to actually partake in the network and regardless of how soon or late the maintenance oaken's that were part of that distribution proof of use is attached to to all of them so you know it's just a matter of that clock starts when main net does go so at the end of the day everyone's incentivized to to it it only makes sense for this process to exist in coinciding with the main that launch I mean it would be I think beneficial for us to to know about like attack vectors and if like you you've seen them or you've used them before I mean we've we've kind of suss out the approaches as much as possible but it's when this methodology was used before it was but like ahead of its time so and there's been there's been quite a few improvements made since then but yeah we'd love feedback on that I mean I think and this is kind of my personal opinion on the topic right but whether you call it proof of use or whether you call it a work lock there's different people exploring a way to deter speculation in these systems right by actually not just looking at the way that they're distributing but who they're distributing to and those are participants were actually gonna add long term value to those networks right and these are different mechanisms and people are trying out different things and I'm actually quite excited to see how that evolves and less than a friction point it should be seen as an opportunity to educate people who aren't educated about how participation can the rewards right but also effectively bootstrap and network as it launches if if the tokens designed the right way why wouldn't you want to use it you know because if we're gonna move into a POS environment which I do believe that most of these things will for the next I guess maybe decade are under we shall see but ultimately if if you're not participating in the network then you don't get rewards and therefore your participation level in the network is slowly diluted over time so in a sense of where if using your token means that you don't get anything in return for it I can see people wanting to try to game that system but if the tokens designed better which we'd now hit a more mature level of incentive designs then using it it should be a should be a no-brainer we're actually rewarding you for doing what you're supposed to do at the end of the day so activates part of a networks group inside a consensus and right now we've been kind of like rapidly prototyping and building different stuff in the dphi space some of that we've come out with a lot of it we haven't so a couple of their efforts that we're doing around like education transparency and this broad theme of like this next chapter of use and how we communicate things inside of it defy score is something that maybe some of you have seen before but it but it's an open-source rating methodology for borrowing and lending protocols that's also something that has existed inside of networks and has kind of branched out which recently had an update is about to come to the market with another update which would be much larger the EQ calculator is also something that we're working on in collaboration with the foundation and these are different ways to basically provide transparency insight and education is to you know how do the economics of eath to work how is the machine designed you know how do I participate as a validator what are the tools that I need to do so and then ultimately that that effort out of the calculator will will also stem into working with the foundation on the actual deposit ceremony interface and helping them with some design and education work around that as well so these are you know the eath to calculate or defy score for us these are more kind of community efforts but we've kind of like I said taken on this how do we grow users how do we educate because you know the mounted like we're not here to monetizable but other parts of what we're doing inside of networks is super educational because we think that's that's crucial right now so check out the - telegram groups if you guys want to get involved and participate in side of that and voice your opinions if anyone has thoughts on it and we're also looking to expand as well on the dev side of the equation we have a whole list of different modular things that have been built that need to come together and we also have some other roadmap ideas as we iterate on activate and what v2 we can't I already have what b2 and b3 look like and we're excited to get started on building them so thanks everyone for coming out you guys skip the MCD chat to come hang out with us which is cool so really appreciate it