J2 PAIN 08 Jorge Izquierdo decentralized governance

so hi everyone my name is Jorge I'm the tech lead at at Aragon I'm today I'm gonna do a new talk a bit unusual talk I'm not gonna steal Aragon like I usually do I'm gonna do another talk about pay protocol which is a side project that I've been doing in the context of Aragon labs that tack tries to tackle fixing the fix in the transition to a to a cashless society I let me track the time so I don't go off okay so let's start with a couple disclaimers this is mostly a third exercise and an exploration of how four different projects can be created in 2018 it's not only I cos this is mostly a side project so please bear with me and yes I know about payment channels but I think this problem this problem is so big that a little bit of hedging in these strategies it's not bad even if it's a bit more naive that other solutions out there so why these matters at all if like why do we need to like fixing anything if catalyst is great and we can pay with our Apple watch which is super convenient yeah I agree like cash sucks I barely use Casson any today because it's like really really clunky but the thing about cars is that it's a completely fungible medium of exchange and it allows free trade between free humans and this is something that governments don't like because like free trade means that they cannot control and people can do whatever they want in their freedom and that's something that people in power some people in power don't like so we all know that credit cards are very centralized information network and the problem with centralized information network is that they can be easily centralized and this happens in every nation state every single day it might not happen to you because you're lucky but it might be happening to you so the problem with a cashless world it means that imagine a world in which like caste doesn't exist we only have credit cards and we pay with our Apple watches censoring someone it doesn't mean like censoring their political ideas we totally suck it means that they cannot play in the global economy so means a complete explosion or like way worse things and then you might be again like enough to like thing I have nothing to hide why should I care about which probably is not what people in this room thing but people might think that and the problem is like you might not have anything to hide today but because we live in a democratic regime people in power might decide that you're a threat and you become a minority and then you do have something to hide enjoy a 3232 power so we should all have this better money that cannot be in which anyone can be censored and again if you're in this room you already know the solution for this which was brought to us by someone in 2009 and we have that but what happens why crypto payments never took off like there's a lot of signs like that all over the world some of you might have paid with that I personally never did well I did it once because it was fun but it really it really sucks and or like what we think the main core reasons for this not to happen are these four reasons and we might add like privacy order but I think these are the core reasons she's like Network scalability price volatility network effect and user experience and you probably know about all of this and the main problem is that people really don't give a J will just use whatever works better if they don't feel threatened but even people that are really principled they just use like whatever is more convenient for them at any time so what's the problem with network scalability we have the debate of the century the or of the decade like how do we pay for a coffee on chain or of chain and the fact is like in my opinion like different transactions and translation ships require different security it's not the same doing a transaction with a local Bitcoin guy that you're not gonna be seen anyone make no and again in your wall and in the world or like doing a transaction with a friend I opinion those transactions don't require the same trust and same security then the problem with crypto is like they're like a super poor proof account that unit of account they're great for hurdle but not so much for like actually living and the proof of that is would you do nominate your mortgage in in Eve yeah probably not not a great idea then the network you fed which is again the classic chicken and egg and the reason is like there's no until there's you cannot do a significant number of transactions there's no real incentive for you to start using these this new thing and then the user experience like I mean you've seen using crypto sex and we are like really not really friendly to new people like we just ask them when something goes wrong and people are so weird like we tell them did you send enough gas and it will be like what gas it's like no it's like this seeing that you need to send you said the gas price but Rhino is like three gig away but if it's during an icy road you might need to do it like more because it might take like three days - this is not friendly people like if they imagine like just having to give a dollar rather than explaining them like what gases it's we can do a lot better in the UX part so what are our kind of solutions for like really making crypto payments happen so I've like splitted dissolutions in two blocks there's like the super smart people block and then there's like what paper local tries to do so super smarter people are solving Network scalability and price volatility paper called tries to tackle the network effect and user experience so in network scalability there was this like Mason workshop that the giveth and web free foundation organized in Barcelona and like there's a lot of alternatives to like doing network scalability and like we're getting there there's a lot more effort that needs to happen but we will get there and with price volatility we have like a lot of effort done in stable coins so we we can assume that we'll have some sort of standard token that it's like has a standard like kind of like a stable value I can suspend in basket in this case like makers died so yeah what's what's pay protocol at all so as I said we're trying to solve this - two other issues like making the UX like not stack a lot and kicking off the network effect so it kind of becomes picking up so in case of the UX the first thing that's really important is like if we assume that E is going to sack off a unit of account we need a way for people to transfer transfer tokens without needing if needed to know what's like like what's the guy's price so like they shouldn't like be asking for eath if they want to transact with with tokens so kind of like a super brief review of what a token is like a token is just that later of a simple list of ballot love of accounts and what the balance of an account is and you transfer to just transfer from one account to another really simple so what's protocol paper looks like a made a token thingy so and for each account we track what the balance of that account is in any token this works with any ERC 20 or triple7 soon so how it works is if you have one INT that you want to deposit into pay protocol to do a transaction then it removes that from your balance in the aent token and it creates that too deep a protocol int account and then it will give you one ENT inside the protocol when you have that we'll have it you have it there you can transfer inside a protocol in a really really gasps efficient way and the great thing about this like you can do like both transactions and process many transaction at a time or like for example a ENT for is very expensive to transfer gas weighs like 100 K gas because like we it's a mini-me token for governance reasons so here it would be much more tip to transfer and then when you want to do we throw paper alcohol gives you the D token in whatever account in a transit way then there's like it all happens in like it can happen in just one function because like we have these two parameters which are pool and push with pool means is like if pool is true what you're telling the protocol is rather than using my account in the paper echo I want you to pull the tokens from my token balance do you need to create like a PI D arcy 20 approval first so then it's a deposit because you take tokens that you have in the token and you put them into pay protocol and if pool is false it's like just use my token balance inside the protocol and same with push if push is poor false it's like I don't want you to send the tokens really I just want you to transfer the tokens inside a protocol but if pushes through is like okay like just put some outer so like we can achieve this for for like the entire product thingy the main function of the other protocol which is a really simple function that is just 35 lines of code which are barely readable so there's like two main parts of it the first one is like authentication and checking dependencies which we will go in today later with that SEC said okay it's providing the right signature you can transfer those tokens expire this you're not double spending all the time all the dependencies are right which I will go into add later you save that okay that's done you kind of tweet again you locked it and then you just set all the transfer depending on like pull and push if pull and push and you just do it in the token you could you don't even care about talking to like pay per call or intend appending of pull and pull like to do your stuff it's really easy so how this is he this is working in like a more visual if works well example so say that I have a hundred I in the protocol already I've already deposit dad and I were to send that to my mom my mom is like not a crypto users he doesn't know what gas is he doesn't have like not even one way but she wants to like start using the like using crypto payments so I will sign up I will sign a message in which I said okay ma'am here you have a hundred I and then I will give her that sign message I don't pay for any transaction fees she just has that message then it's up to her to decide when she wants to set all that transaction and really get the tokens because I hope she trusts me she can decide the moment that she wants to like settle that transaction and how much he wants to pay to settle that say that she needs the money now so what she does is like secant you like a second sign a message from her account see like that account still doesn't have any ether so she will sign like okay I'm here and I will give to anyone that settle this transaction one died and then but with the condition that this transaction has a dependency on transaction has one two three four so what that makes is like if anyone and then you can like broadcast into a network of people that can perform these transfers so if anyone wants to get that one died because it's worth it for them to like settle both transactions for one day they will just settle both transactions in a bulk transaction and you will get to die and then my mom will will have 99 died and the other one will have one die and she's never touched ether at this point and then there's this other third experiment that we begin during an Oregon off-site it's like what would happen if you never settle like if there's a really strong translation see between like all the Holly hop Cindy in the chain maybe you can like never sell oh the transfer and then my mom rather than the second transfer rather than settle in it she can create like another transfer for like 30 die and sign it and send it to like the grocery store and then the grocery store can like sign another transaction worth fifteen day for another person I don't know if this will work like in a chain of like 1000 transactions but if you got like a thousand of transactions that you can compute that if you wanted to settle all those transactions you will effectively get your get your money probably would be is like you could like anyone in the middle of the chain at any moment good overdraft and then if one point in the in the chain feels like then everything fails which would be a problem but I think this will be a fun experiment to see how how this would work so yeah that's kind of like the UX part and now like because it is super easy like this is a super simple construct it would be great like we could get this in two different wallet providers and clients really easily or even do like a very simple wallet that just does this and it could have a fairly good user experience like things that we've been thinking about it's like because you just need to send like a bunch of bytes you can do this through Beautif Bluetooth le and you can like send transactions by saying your name and like there's a lot of crazy stuff that you can do to make crypto not only more friendly but like it would be cooler than paying with with an Apple watch which is kind of what we need to achieve - I like this is completely good like known-good storia like people always have a control over the private keys and how to talk and smooth so to kick off the network effect this is actually this is more early than the actual protocol but the idea is like all these other payment providers like PayPal or like their strategy to kick off the network effect has been like go to a Silicon Valley guy and ask them for money for growth which is basically okay give me money to like pay literally pay users to use use my thing and then you do if you pay for like if you invite someone else do you get $10 and then the other guy against $10 so George's bribing bribing users to use your thing but the thing is I went once you have user seen like it might start like it might kick off the network effect and then people will start using it because their friends are using it like one paper did that in like the early 2000s they were growing at the 7% a week which is like super crazy growth rate but if you give money for free to people like people like free money it's it's great and with like magic crypto money which we can just literally create money out of thin air you eat to people and what's the utility of this token it has no utility that's the beautiful thing we don't have like because there's no one's selling tokens we don't have to like make up silly token model that is going to suck and it's going to your investors we just say this has no utility but since no one is selling it we're just giving it away for free it's good so it's like just a pure governance token which I think we will see a lot of soon and then like this might be a networking which like different stakeholders like wallet providers or people that are in the fee market and settle fees so they're stakeholders that will will want to get some governance tokens to like insert the like the future of the protocol and I actually really enjoyed like trans token token engineering yesterday and I think the the function that this protocol will try to to optimize is like spread of the use of the protocol so I have some ideas I want to like process but I didn't have time so I just put that for now and this protocol was really like actually really easy to do because like let you seen are gonna West we were like able to like have a great ability and governance of the protocol really really easily and like by B&T like using these simple interfaces actually all the token maintained and all that doesn't even need to be audited because it's already audited it's just a link today to an Aragon app that says okay give tokens and to manage all that so that's that was really really easy to do so yeah what's what's the team there's no team this is this is the great thing like Aragon is not in the business of doing like crypto payments or whatever we're we fact we have actually decided that we want to be like a 20-ish people team we're 13 now but we want to keep it small we have our mission is really clear well billion I didn't tell jurisdiction for cows or like individuals to thrive but this is not part of our offer thing so but what we think it's like we can start doing project with no team like the idea of the projects would be strong enough not to need a team behind it and shilling the coin or whatever like the thing should be strong by it by itself also sadly like there's there's no ICO this is what makes the the whole thing legal like we don't need to make up like a stupid token model because like we can do say ok this is a governance token it will probably be a security it doesn't matter because like there's no one to go to jail it will be anonymous token holders getting the token for free so yeah like go go after like tau 0 X a B whatever this there's nothing to do so yeah this is kind of way I wanted to to talk about this because like this is also only becoming real to like build projects this way in like with ideas really have their own their own way of like for like the things that we're doing Trina tarragon and we are what as Reese likes to say like many times just make a Dhawan fatum and like get the sec to go after the dow like good luck with that so we are really soon to like make this a they make this a reality this actually argon corp 0.5 can we get the light a little bit because I don't think like Timur because I don't think this will be too video will be able to see the video otherwise okay okay so we'll see what this is like a like the first time we saw the sneak preview of Aragon 0.5 this is like life code running like actually video so here like all the templates that we are sleeping with right now do you claim your Aragon 80 for your organization you give the Yunus name do you actually parameterize your temple different templates can have like different parametrizations this is like setting up the democracy whatever boom do you get your Dow like in a real main blockchain like it would take a little bit more time but since we're running locally it's great these are the Bodines about liked eBay protocol then you boat and then that's that's happening on chain and like we are so happy to like we've been the last release that are granted it was like March 30th 2017 so that's like almost a year ago so we've been working for almost a year but like we're happy to announce that at one point five beta is coming next week and I couldn't be happier about this we're almost there