Staking: The Foundation of Web3 - TOKEN2049 Singapore

hello everyone is the advice that we have such continue to have such great attendance um at conferences in events like this um I think it's very reassuring in a lot of ways um I kind of joke that maybe a structure company we should uh a uh a conference company it's maybe the original business model um but it's really great to see these new communities in in a bear Market that everyone still is enthusiastic as they are so I think it's really positive for the space um as mentioned I'm a co-founder of figment uh we are staking infrastructure to hundreds of institutional clients um and to their clients and through through our exchange partners and custodial Partners we um we serve millions of uh consumers who are staking their tokens so um I don't want to talk about figma too much I kind of I developed theory that um staking is gonna onward on the next users you want to give me this instead okay all right I have two microphones now all right so um this is something new that I want to try out and I have a theory that um staking which sounds fairly Technical and maybe not that interesting is actually how we're going to get to the next billion users in crypto so um maybe a a couple definitions first so over the last three or four years um we've really seen a fairly significant change in how blockchains are run so one that shouldn't be construed is a negative statement about Bitcoin I love Bitcoin it has its role uh in the next version of the internet but what we've really seen is that blockchains are now running on something called proof of stake as opposed to proof of work and so with the ethereumerge which I'm sure everyone has heard I think that's really cemented proof of stake is the dominant consensus mechanism for for blockchains I think of it as an operating system and so I think this is much more important than people realize it's not just a technical change that it really is a way that people are going to actually participate in blockchains and I think that that's been somewhat of the problem for a user from from a user adoption perspective so um let's see uh proof of stake um what do you do when you stake a token essentially it's a it sounds like a fairly technical service but what you really do is you have uh for you know in the case of figment you have nodes physical infrastructure you have a software way or you have a set of apis that abstract that away and then you may have governance and research Etc and so if you need to know one really important difference from proof of work is that with Bitcoin or proof of work you have a token holder um and they don't really participate in running on the protocol at all so those two audiences the miners um the token holders are very separate um and so really as a token owner and Bitcoin um if you see it as a store value there's really no way to participate in the actual running of the protocol with proof of stake that really brings those two functions together so you effectively have as a token holder you know if you have 32 East you can essentially run a um an ethereum node and participate in consensus and run the protocol and I think that's you know again goes to my thesis that proof of stake has been on board the next billion users I think that's really important so so hold that hold that thought for a second um I want to talk about web 3 it's another poorly defined term for me web3 is really like a better internet it's the next version of the internet um we started out running infrastructure over 30 years ago so what does that mean other than I'm old it means that we've been through multiple versions of the internet um and uh when it started we started before there was a browser there really was a dream around disintermediated peer-to-peer communication and I think for the first 10 years from the the 90s to the early 2000s we saw that we really saw the explosion in creativity disintermediation really for the benefit of people in general and what's happened in the last 10 years I really think that that Vision has slid backwards in some ways so you have very large data monopolies that um basically siphon often siphon off all the consumer values so everything you're doing on your phone every day you don't really see all the value that you create in that um it's a little bit worse than that too I think there's these large social media platforms aforementioned data monopolies and they actually have really significant negative externalities that we're starting to see so that's the algorithm that makes you angry when you read Twitter for five minutes and I think that what we're doing is we're not seeing the benefits from this technology and we're actually suffering as individuals in a society and so I kind of asked the question would it be better or worse off if there was no would you be better worse off if Twitter didn't exist or something like it maybe you'd be better off but the fact that it's even a legitimate question I think um I think has shown that something's gone wrong and so I've really firmly believe that blockchain is going to be a counterbalance to what I've seen is a really negative Trend in centralization of the internet um so we're not anarchists obviously we have hundreds of institutional clients um and I really see this technology as a counterbalance and and really important if we're going to see the internet almost realize its version or its Vision 30 years ago of a really true peer-to-peer communication mechanism between people okay so um so that's the difference between proof of stake and proof of work um and that's what I mean by web3 which is just a better internet so again I want to make the claim that because proof of stake enables you every token holder can actually participate in running your protocols so we all know that ethereum has just made the migration so again as I said if you have 32 East you can run your own node if you're a large holder or fiduciary hopefully you outsources someone like figment um uh but essentially you know there's not you just don't hold a token to wait for number to go up there's actually a role for token holders It's relatively easy to participate um in a blockchain and again why is that important um because going back to where we started all these people here I think what we're actually building is a set of new communities and they're bottom up they're decentralized in their participatory so you're all here you're spending your time um you've flown here whatever and so for most tokens up until proof of stake there's really no way other than you to hold the token and hope the number goes up so I think that's held back to space but again if you have a staking token you can participate in consensus you can participate in the community I think one interesting thing with the ethereum urge you're going to see is that every token holder now has an incentive to drive usage so um the way your reward rate is defined is partly by effectively the amount of gas used and so now every ethereum holder actually has a reason to in some way in their own way increase adoption of that protocol so with these incentive mechanisms going on I think we'll we'll see much much greater adoption and participation in web3 hopefully the next billion users and I think this is going to result in a much much better internet than what we have now which I think is not great um so that's it uh that's what I had to talk about that if um anyone we're not allowed to take questions I said no okay so um if you have to if you have a token stake it somehow through an exchange through your Ledger um if you're an Institutional holder um you know talk to a company such as ours but really see this as a way to fundamentally um change what you can do with a token and how you can grow web3 which I think again will be better for us all thank you very much