Funding as Medium and Message: How We Get Capital and Its Influence on #BUIDL (Devcon5)

[Applause] thank you so much for coming through for this workshop today my name is Paul cos I'm going to introduce this amazing gentleman in a second so the topic for today's workshop is funding as a medium and a message how we get capital and the influence that it has on what we built the least nine chose this topic was because it came became a very personal topic to me as well I saw other kind of funding scenarios involving the system over over time and I think it's pretty important topic tax the address for opening what are the different sources of capital where does capital come from what are the incentives that come with it and how do we decide where to get it from if you call so I'll just quickly konnichiwa to our goals for today are really two person to foster over conversation to explore the role of funding and capital and we're three specifically in funding with three infrastructure we want to look at different sources of funding and send it decide we're going to go from centralized model to very decentralized models of puppet and then what we really want to try and do is make this a very open platform for you guys to share your experiences discuss the problems that you've encountered to ask questions yes so that's one of their core goals of the workshop we really want to try and make this as interactive as we can so please feel free to engage ask questions interrupt if we shouldn't be like a very kind of front facing what's up cool our workshop challenge for today are energies from Mikado fortunately or unfortunately I've been raising money I feel like most of my adult career first at a tech startup with the census I agree as money for the launch of the enterprise etherion alliance so in the open source standards world and recently at Dharma capital where we managed I think the largest actively managed the very fun hundred fifty million dollars are being printed and I think that can speak to some of the issues with institutional alligator's book and source grants and venture next up we have a mean selling money a little money I have been the recipient of grant support from Jeff also summoner of Moloch Tao which are open source and mystery for everybody working on a project called the comments pack which is a collaboration between giveth and lock science and we're pushing forward open source token engineering and robust design in economic systems and the first important we're building as an Augmented body barrier which is a funding mechanism with continuous funding mechanism for open source projects or for communities around processes I want to give a brief intro to myself as well as something that's really interesting often we gonna try and cover a host of topics in this myself I always feel like to say I like to say I'm not qualified to talk about any of these topics but I've American so much it was a time and what I'm really trying to do is really just share share my experiences it'd be very brief background about myself I first got into Joe's point in late 2013 that we interested in genetics and the first community comments they came with Dortmund I think no crypto presentation is ever complete without material I studied economics in Switzerland really fell down the rabbit hole in late 2015 comment company filter the maps worked on an identity put the rapini set went to DEFCON 2 met a lot of people a consensus joined consensus for the first time worked a few pointed left consensus and under the a company copolymers were aiming to redesign the way that essentially centralized into the drug development provides a grunt we're launching out first at and the fundraising topic from being at became very prominent this year we're going to fundraising mode I had to kind of go through a lot of these the challenges that come with fundraising as well as the Goodson's sobriki to Teixeira would you also previously received a grant maker been involved in a lot of fundraising initiatives with Toby self yes cool so funny maybe quick question into the room who has received funding before in any other form [Music] yeah it's a lot of people which is great so you can all get up join in to the vigil hopes later on maybe it has a quiz receive VC funding well consists of the structure the works were experiencing in a different world what kind of go into each funding category so the main categories of DC 2002 grants so token sales may be hands up with who's received funding by during a token sale so that's interesting array that's a lot less people in DC which is yeah I think that's an interesting experience we received a grant to report from any kind of gravity string well I suppose that's more people that let me hide with rich we're talking sales less people than PC we received funding from a towel before that's cool okay maybe hunts like an open question to the room why do you guys feel that funding often feels like a have a taboo topic to talk about McCauley thank you do you guys feel like it is a tough topic okay so the funding is very overly discussed in these services where we all say yes to that for you shaking we persistently part of it so our grant funding I think for example is major experiments really discussed probably things like VC funding less so it's kind of moving it's almost moving in from the scale from nonprofit or for-profit which also changes the scale in terms of its grants there's almost me like has a great opportunity gives us that was really hard to understand how any of these companies got VC funding was because of all the incentive the VC how does a round structure work valuation in Turkey yeah but baby that's one of them that's that's cool so why is funding important tool to build anything well you've got to pay yourself you want to grow your team and your product legal expenses community building marketing and awareness but what's really important to realize is that the source of funding fundamentally defined point though how you monetize it any what time can you do that so getting a grant to fund your doubt it has very different implications that getting up trying to get to a VC to fund it up and it's really important to understand what are the different incentives for those different issuing authority cool so this is kind of a general framework that we're going to follow going through each of these topics and as I said before feel free to drop oh by the way if you wanted to come up and sit down there's still spaces here the front edit fun about hockey would you mind coming in here with us [Music] we literally an hour before that's been said that thank you so much for joining us she also the other of champions already introduced themselves do you want to give a quick intro yeah sure so hi I'm Kevin o makki I'm one of the co-founders a get coins our mission is to grow and sustain open source software a software platform that connects funders to coders when access to funding and vice versa and I guess our most recent funding stuff we did an ecosystem was given grants which just round three raised just under 300 k 4 e 2.0 projects and projects and misses to explain the matching yes this is so rad yes so Glen while and metallic publish this post called constrain capital liberal radicalism which is basically you have a pool of matching funds that will be distributed to projects that get crowd fund contributions and instead of a one to one match where if Andrew gives $100 to project it'll get matched by hundred dollars from the matching fund that's distributed according to the breadth of contributions not just the depth so if project a raises $100 from one donor then it'll get matched less than project B begged got $10 from ten different donors so both projects raised $100 but the second had much broader base of support and so with quadratic matching which is another word for constraint capital or liberal radicalism you can have some of the projects like nickel in grants would you with a $1 contribution would get $200 worth of matching just because they it's a broad base of support so it's a according to Glenn a while the mathematically optimal way to fund public goods that the ecosystem cares about I think that's why I entered in dead jail here okay cool so as we move through these different topics we'll look at what is being funded what is being offered is this a for-profit model or a non-profit level governance who makes the decision on what gets brother no one doesn't the incentives who benefits from the funding and then what are the key issues that that can come we have this question already or seen before I'm actually really glad that you joined so I think one of the core questions that we have this ecosystem and that keeps coming up again is like funding how do we fund the open source infrastructure and its kind of the strategy about the common problem yeah like how do we fund open source infrastructure there's a lot of expectation that funding goes into the base protocol layer once it's deployed but we haven't really develop I think good models yet to to scale them up and I think that's why we're seeing so much investment and so much kind of scaling away from the core layer to monetize on other layers like monetizing the a1 and a2 and so and of course think that I want to get into this is well kind of this is kind of what we're trying to do you guys can't see it it's just Public Works and so I mean in the kind of current society we pay taxes in order to like to pay for the roads to be done we kind of say we have to pay taxes to use either to the finest but that's the minors don't kind of invest back into that continuous development of the roads of the base layer so if we don't kind of find good ways to invest in public works will it be like refund of capital into Public Works then we end up like us like potholed roads and this is a really big problem I think not just a problem that we have in I think we can open the watching space but it's a problem in open-source maintainin in general Kevin maybe you have or like any of you I I know it's really really difficult to be maintained to be paid as an open-source maintainer for any kind of project yet something that I think that our mission is to crowd sustainable sources but everyone up here has an interesting model that could be used to solve the coordination problem of funding structure on the sack full of Dell Congrats I know we're all experimenting with space and so I think a diversification of funding models it'll make me miss system stronger so it looked eager from the others on the panel Jim we'll get into that each of the turnout just like as a base open okay so we don't want this so we need better funding models for the comments which would be one big something that will get to the end we also don't want this so this is tollgate in China and so like other ones that we have free Road but if they're not maintainable they're gonna end up like this and on the other side this kind of reminds me of some of the day of one source instead of being built up it's like if we start monetizing scalability too hard then essentially it become click like using Ethernet what we like pausing from tollgate deployed that's also something that we want to avoid okay so over the next hour plus we're really going to kind of take the journey from different for-profit models into nonprofit models and then finally to the comments the first one that we're going to start with is venture capital one of the oldest funding models in existence has been compared to the other ones cool so let's talk about a couple I think going back to the idea I saw the most amount of hats up for people that had previously received EC because my phrasing you have again okay does anyone want to speak about their experience Sharon's prints that have a PC maybe some of the issues they encounter yeah the only language just like so what's that so the only way I got to be seen to invest in my company basically going in and said the balance bowl and a week when yes and that was have to show that there is you know a chance of missing out or you get one Here I am any good that doesn't really cut it [Music] that's appealing in nature thanks to her not one one other thing different the environment was very I think so easy to raise like 27 let me try to raise like this year it was like a completely different eight scared of space so I think a lot depends on the environment you see that's what the round sizes well I mean round sizes were like didn't have now gone down to like very major others I think that speaks to exactly what the previous said it's like so much decreased a lot of it yeah [Music] similar but depends on mr. eel so environment supporting but also the tendencies we decide we're probably seeing that [Music] although I think that these needs do well no I think that also some users are really great and a lot of greatness but issue is that filthy fingers do is way different than BC obsessed right so that your comment works for a lot of models but a lot of the businesses and the projects that we're building right now crypto aren't served by the traditional venture capital return structures investment process and just a federal like Jesus is overseeing this without venture capital we applied to 50 projects and that's all ego surprised like how private capital is being funneled to really second nation in numbers it's really really interesting comment I think something that will be very interesting to see play out is a lot I think a lot of it a lot of companies that we fund at the moment you don't have a business model yet but we've been interesting to see at some point if if kind of like healthy pressure starts rising on investments that will be that have large user bases that people are not using them to create at this covert infrastructure but that now need to start monetizing that open infrastructure which might fill those user bases so be interesting to see really interesting to see how that all together these patterns accessible in the past and they look to apply that moving for developing your own map [Music] generally speaking some races on with tech startups just heard a lot of fail stories where there's been the author of investor that had some power to do something wrong in anything so yeah basically try to oh just a time time in the old story of the 100 best of the mississipp for everyone and then there's a lot of pain and torture again that's awesome I think another generalization is of what we're seeing right now with with entities that try to become ubiquitous like we work in uber that wanted to grow as quickly as possible that didn't necessarily consider the balance sheets and we're seeing that kind of unwind right now and that was driven primarily by investor pressure and kind of balancing actually building a sustainable business with if I put a dollar in I don't we get $5 out and and recognizing that that we actually do need bound cheats in the end before everyone was kind of one you to the public I want to give a very quick overview so EC is general the for-profit funding model B C's invests to make money like and that's a big of juice that's on this people can happen if you're like building this cool open source projects on the blockchain and C centralized like does it make money no if it doesn't then like that's a hard unless you can convince someone that you're going to grow an enormous user base and somehow be able to monetize a that was some burning for me coming out of there open source watching space it's like people that I make money if you don't make the money they got it's generally in exchange for company equity we've seen a lot of South bottles evolve over time there's also an increasing there's an increasing trend back to equity and then they go maybe into South once again but if it's generally done in the outwards if you don't have a company if you're twenty ways BC and you don't have a company yet and decentralized team of go-getters and you making it work it's gonna be hard to raise even before staff are we familiar with Y Combinator's safe standard agreement future okay so like that's even more nuanced than that it spoken part versus the echo angry that three gated yeah but it's a great comment so just as a quick recap company a company normally has equity equity share effectively issue the easiest ways to raise early stage financing either through a safe which is a simple agreement for future equity or through something called a convertible note incredible known as a definite instrument that can be converted into equity added later liquidation stage so you can say for example you're now you because it just starting out you have an early stage team you've created your company and now you seduce for example you're raising two hundred thousand in financing by a convertible note so that's essentially a depth that comes out to about chain and then depth you would then say to the VC cool head we're looking to raise a million in here once we put those milestones and when she wears that million that depth thank you burns a little bit about generally it's based on consecutive funding rounds based on progress and it's kind of like doubling up which makes a lot of sense imagine it's a video game you're moving from level to level the bosses become harder it becomes like more and more and generally to go for her friends and family rounds to a proceed round to a seed round and then series a CD disc a few companies in the crypto space that have penetrated into like this range like in quite basement we hear most companies encompass most companies that we've seen the seed stage in series debut nobody wants serious kind of customer interaction so like your business is starting to work starting to generate revenue in general it's only reading exchanges in my opinion that have made it into like it's like further for the office line Andrew I don't know if you have any maybe two maybe to give you guys a range as well so maybe friends and family routes tend to be like you're really just raising early-stage money to get going maybe up to like 50,000 or 100,000 really depends on your obviously on your different system it is a horrible idea from proceedures in general anything that you refer to the first kind of institutional money so this could be a very early stage fund and a couple of angels it could also be a couple of angels this range would be anywhere from like a conference or up to like up to a million there's even like one and a half million dollar receive grants now but this is tends to be the range then see that all starts when he starts up with of like 750 to a million and then goes up top of it so there's seed rounds after quarter pipeline a lot of this is very flexible the numbers over the past two or three years have just been going up up up so companies raise more money on a purely estate which is part of like I think we're seeing and to have this really big just excess in capital which is also starting to flip not as Andrew said earlier with like IPOs can go across the time line so really you want to start making money within three to five years this few businesses like that I mean there's very long term big project companies but that doesn't apply it to like to go to jail it's very centralized decision-making so one thing that you have to remember is selling equity means you're selling stake in your company which means others people have a say over the government's and how you run your property so there's many examples anaphora stories look like if a VC doesn't like the way that you lead your company or your team they might just replace you you know at work the board will try to push you out doesn't have really seen that the imagining in crypto but it is something to consider just from a governance perspective then this is a real value for 10x business models so if you can't demonstrate how this is going to like 10x in terms of an investment if they invest the million they want an exit with ten million which means resolve your business at that point needs to be it's a really grow to match those numbers the valuations and turns so valuation is basically once you go to a VC or even to an angel once you select you're going to try and want to get to evaluation which means you need to convert a price on your company it's not going to need to evaluate and how much money could this company make at some point and then ideally you want to get to a term sheet a term sheet is kind of the offer from the me see how much they willing to invest in what terms oh and then there is best thing which there's something that is often forgotten crypto we'll get to that a little later but it's essentially how your own shares of the company or your employees shares confessed over time well so this is really just to cover the basis I know how II want to make this select open kind of discussion around to discuss worst of all the VCS and funding he centralized open infrastructure but also the role of PCs in like funding projects in the space of general a be just had a great comment earlier that I think for a lot of open source business models VC funding doesn't actually work on and yet maybe to kick it off I want to hand it over to you guys in terms of experiences in terms of [Music] that's that's one thing we've come up in the common stack looking for funding to build the common stack looking at VCS and the first question something what's our profit model we're building open source components for communities to use basically like a you know an SDK for dows we don't have a profit but we don't want a profit model and that makes the VC road very difficult road to walk for an open source project like the comments Act projects that seem to have had some success raising theses our projects that they might have an open source but they you know are going to bend figure out to come to mind the I recently won in project one is the swap the other Serena swap hispanic annuity office medical it's not happening it's like one of the coolest exchanges on aetherium these bonding curves and it's a automated parking maker that's where it's been nothing to you it doesn't matter it just means that you can always trade against it straight back with you buddy there it doesn't actually take any of these in its current implementation but the team is building services around them and there isn't on the premise that those services would be valuable insta-death on the other hand it allows you to better manage your CDP's so who here knows what make your doubts and died almost all me so you can take a loan and do anything of interest but maybe there's a compound which is another pot one where you can take a loan and that gives you a better interest rate and the process of moving your debt over one of those platforms the other is actually quite annoying and link prone to error and so they provide a valuable service and they take a fee for doing that because something like point five percent for being able to migrate your your loan over and that's been an investable business model they just forgot nice so to answer this question I really think there has been a role for the B C's in funding decentralized open infrastructure and I think that the notion of decentralized open infrastructure being funded by a small beekeeper really juxtaposes the notion of what we're trying to do or what that infrastructure is trying to do and I think that was kind of the op-amp moment with I would say the etherium token sale was that it wasn't a bunch of people on Sand Hill Road that would hate papers to the person I think that was kind of the aha moment of the token sale although it got a little silly token sales in general but but I mean this is the future of Finance is we're witnessing it where you can where you don't need the VCS or everyone that comes abuse you how do you guys feel though so you see I think we've got to we got to target sales as far as well I think we've largely seen to exhaustion here and now there seems to be a big gap as well in terms of because now a lot of people are going back to the VCS very thoughtful context like the comments that I think you guys would totally go for the option of of like raising from everyone as a VC but the market isn't there anyone that it couldn't be isn't there yeah who tweeted this just a couple weeks ago and they said the internet turned everyone into micro bloggers and the blockchain will turn everyone into micro investors and we see with the common stack a future of kind of communities subscription models or community investment models where you are paying a subscription fee and you receive you know a token and a set which gives you governance in that community and also provides capital to that community to continue doing good work so kind of merging these for-profit and nonprofit actually going back to the point you made earlier about public works the way we get things done as a human society as we cool let me have a little event allocated towards what's best now we do know through taxes that isn't necessarily efficient we do that through the stock market global capital pools to provide the humidity for to do the work and grow you the value of what you gave them but we don't have this for the nonprofit open source infrastructure that doesn't have a revenue model so I think that's we're really on the cusp of figuring that out and that's what we're really excited about the comment stack is basically creating that capital pool for a nonprofit open source infrastructure to survive and thrive couple questions even if you say that the internet okay go change potentially making people micro investors right we most people are conditioned okay that I'm going to investment money okay I want this to make a return so they are thinking like community they are thinking together how can an open source generate returns for me so how do you monitor it's like we see is really ten hundred thousand extra turns right absolutely they're doing look like a nursing they're like pushing to go to the moon or explode capacity yeah you know get their money out stop wasting time to move on to the next project right but like if you're trying to build a community you might not want to go that way right you might want to focus on like two extra turns or like something you know something that might pay you back over maybe a longer timeline right but it's also potentially less risky right okay and so there's different ways like you know thinking like a VC is the sort of box where it's like you can think like a capitalist but not necessarily a VC okay [Music] any other burning questions about visa funny I would just say one thing about corporate structures in this case I think when consensus and I think with perspective I venture capital since it's no surprise or a secret that they have tried or crying to raise capital and when having these conversations there were lots of businesses where the value essentially improved to the protocol of a theory things like education of things like funding research but that didn't fit into the box so if I put a dollar in I get five dollars out so so I think one one other piece that I would say is that when we are talking venture capital if there is in many cases kind of like product markets there modeling if I click one other end how to light at this five ten dollar cell and there is not too much and what I've experienced room for creativity and and I think that it one has to have you know a serious conversation on if it's if my business is going to improve to a token work to be enterprise value maybe a personal experience for myself look I found I found the experience of interacting with VCS at least the ones that would generalists not like super deep crypto small team very small but sort of what general big VCS I always found them a very disillusioning experience like these can be very spot but they can also just be extremely like Louis my building and you come in there and you like you how to speak minute and you're not cool this is what we're trying to do this is all the cool things and you get boiled down to like this very narrow set of questions or like very kind of a very narrow view of the world that also doesn't fit I think with a lot of these new business models that we are kind of BC's are also like put the bulky PCs are historically late to the party and like tend to be on the wrong side of the spectrum there's really very few VCS that actually in out lies in their respective fields but at the same time being a VC like a partner analyst I don't know why but for some reason it's such a prestigious job title to help so there's also this vanity tasty meal that comes with the culture of like being a VC being funded by a VC into activity see that's yeah I found it a little bit always dissolution negative to be to be interacting with I guess it's a really hot experience like a few guys ever get to the point and also a few how expensive a pitch to someone to like give them money and kind of go through those continues pitches to refine her pension yeah as extra BD interesting to see if I compare like early slide decks that I mean to like to like going through the experience and then like data analytics you'll see how you keep boiling it down to play those core questions like in spirits related getting support from venture capital but from a big corporations like offered to them impact instead of 10x nose ain't them polska saying hey you know you're gonna have this impact and you're gonna have to be done the operation platform where you will have benefit from that it's not necessarily so so the like most Fortune 500's now have corporate venturing and you're seeing a lot of it in the financial sector where with things like dodd-frank most banks are just I'm keeping the lights on with their budgets and they have to look wire with that to your point it has to solve a specific problem for that entity and really they are very so if if you work you know building the next best a prevailing gasps maybe Exxon Mobil will help but it has to be very specific to the industries that there's hope and it also ties in basic sanity to that company which might not mean that you essentially become that company's product well to defend and it might then mean like if you get funded by XM for example that Chevron anyone says before it does this originally was to a cure yeah okay okay yes I'm surprised by the person that's being drawn between traditional VC and token cells as they're being defined on this panel which are seemed to be just ice fields and utility companies but there's no mention of tokenize securities and how that is actually a more or less a digitized form cowboy raising awareness I see us with community building since they don't actually offer people equity and most companies about what does the panel feel or how does everyone feel about choking on securities and their comparison desert great question I don't think we have to find food I don't think we even started talking about so that's good but I think that right now the capital markets don't necessarily have the appetite for them we're seeing them as basically my opinion glorified big sheets where that was maybe five ten million dollars raised what would I do agreed for finance I would just like to see corporations or investors be able to pull them easily on their balance sheets and I think things like custody or furlough split up right now it also doesn't seem like acting right liquid securities that are getting tokenize darling yes so we realize that it's so it's not quite like a VC looking for that [Music] I think they're to your point I think it's important to differentiate you can have tokens and then even have tokens representing equity which benefits just as well into the venture capital great conference lasting colorful and appear a vigil for them we'll have people wanna put money behind something from venture capital perspective maybe this capital recycling as opposed to getting something back we also have these um donor advised funds when you're kind of like the approach we give these guys and all they want babies to recycler gabba and that's a huge subset of the kind of money that goes to these open source also like UNICEF they have a venture capital type fund which is you know open source and there get one problem that they want both with that but take a great great fanatic on it maybe I think to context classify it's very easy to pass me to see but I think theses VC can have a ton of value to your startup you just have to know that you're kind of that you fit into like that box so that you don't move too far out of the box and then it's gonna add a ton of value like in terms of like I've seen like very young inexperienced team get VC funding and whether PC really tries to help you out do an executive coaching make sure you guys stay on the track really read back marketing think about you going to market so VC's also I think especially to the interim space and to the concerns that could come that have not done an enormous amount of rationalization in the space I think that specifically from identity but we need that code of professionalization because we come build everything of its source of all life decentralized we want to service real customers they reveal people then need professional products and VC's do an enormous amount to like purchase there is an ecosystem as well and then I think without VC funding the same space in terms of growth would have struggled enormously over the past one of the years just as like any other form of financing essentially fell into the traffic into the winter they were seen cool next up tokens who has I saw lessons out there from DC who has received funding from Tokra Nautica - you guys wanna does anyone want to share an experience what was it like breakthrough that maybe at what point did you launch what is a bit like engaging for that community of my brushes the public share a little bit together we ready we go through the VC first and then we realize here which is it's a very mixed it was in February 18 which is very good yeah so for the other running a start Beautif beautiful project so the matter is be CEO for knives here if you need the real money each it is the plan but at the startup giving these guys here they definitely cost of other a lot of energies to worry about to be faced as easy as women to after you I worry about to what what when those cameras would have hurt the reputation of the project and I think the even worse nothing necessarily understand word of any visions for your project they just because people just want to make big money but the way the market is going down we and me myself spending tons a lot of time try to get a copper pin and try to communicate with these in position I have a say these are too much some really really good cars yeah any anyone just into is less miss me obviously Pilkington so lucky I think that this was like I was like self-help group before like honest series but I had a friend who did they do the tour itself and like you've got like death threats like for multiple different accounts and when the whole market is crashing and you're getting desperate from like your best unis and that's an enormous amount of like and then you don't even know if like yes he's gonna come after you like you said that's an enormous amount of psychological pressure which i think is a lot at that it's not at that stage yeah yeah I thought that remains handlers when I decided I guess for some insights those who I'm from golden so we did one the early token sales back in 2016 and honestly but then I thought that this is a very natural - that type of project exactly because there is like a very deep conflict between funding and infrastructure part open source part of the stock and venture panic like the media this out the same time and I believe this is still like that of course you can do a venture funding cumulative things like that on the on the higher level like I can perfectly imagine like a consumer-oriented project building on top of local chains of infrastructure project that has taken venture funding but not for the lower level projects but then have perfectly the holy day idea of sales of that type of fundly products got derailed in 2017 when we had like a dating app tokenized products doing SEO sand and other things like that which like to me it was especially like painful to look at that because i felt like i do this and now part of that while really you know in we really did the sailing in November 2016 that looked like like really the way of collecting they get their very very special type of funding for very special type of projects like not thing and an easy tool for everyone to get money for whatever and and at the same time I believe that that's really appealing at what happened in 2017 like discredited the whole idea because exactly because of that we have a problem you mentioned of the funding for a curio metal system other other parts of the centralized in the system that and then that BC finally cannot solve I believe that even today we can see maybe not exactly the current urine community but in a burglar blocked in space that I have a feeling I have like I mean I've heard date on that maybe someone from panelists to comment on that statement but I think like we started now the race day ferny worry that they think it it kind of like it blockchain maximally but but driven by the by the visited funding that that now the approach is that that you know the real doctor will be four or a VC funded project that you feel they're like the solution that everyone who's using that the kind of technologies that we work in love yeah to summarize III believe that you know token is a great way to do finance take a very special types of product also I don't think this is like really discoverable for the meeting today but I think that we have like a problem with these we didn't token economies in general so we need they're like have much more exciting ways tokens can be used I think that that like they did the whole idea of protocols is not really working it may be a part from like a very special low level cases like in Korea for example but not forty forty many projects how you in this time so so and I think that that really like things like like like for example equipment discussed in radical targets of there are a lot of ideas that the funding in reputation in governance that can be used built around tokens and I think it's we were only the start that way so that's for sure needs to be taken care off to come out move on with with tokens and of course the cool idea of the campaign Campari Dow approach with the with the ICO approach that you have some control over the problem Alex panic and terminate responding to the teams they cease to do anything and so on that that's also important and I don't really know about we see how that can be recurrent and that you mean so yeah III think you I'm talking to Luxor I just wanted to thank you so much I think that shows really great comment save the previous speaker when I had to that so specifically those early token sales I think fully follow the ethos and what we were trying to do and then later on we got dating apps and all kinds of stuff I something if that if we would have if the Dow that original of the Dow would have survived I think it would have put a stop to a lot of the madness that was going on because the DA would have been this trip in this collective efficient capital allocation mechanism into good projects forcing them to execute diligence how they spend their furthest all of that rather than everyone just slapping like a swan contract on to me that that being sent sent funds to this address we decide to do the token sale after the Dow lastly the you know that we were preparing with proposal for me down I think I just think in terms of the madness that we saw I think if the DA haven't you have been the Dow itself was complete badness like not there but like if it had worked and I think it would have been a great filter graphite so you not if you have a lot to I hadn't been so good was actually one of the original let's take an operator so they are yeah I was one of the five employees of sloppy so yeah they definitely change that everyone kind of had an excuse to not put some kind of accountability on chain play well no the doubt the fact so put the money my multi say Oh fancy and yeah mechanics kind of do what was in your best interest there is an interesting evolution that I think is happening there's a group out of consensus called Tobin which which takes the concept of a two-and-twenty carrier let's just say the fees that would accrue to a venture fund and and basically parses it by the person who sources the deal could receive 10% of tension with twenty the people that do the testicle due diligence the business due diligence the legal due diligence could receive a part of that two and twenty and if you source the deal and no one wants to fund it you could actually lose your stake so there are these kind of next generation in theoretical models that are kind of creating the hybrid with mnsure and tokenization which I think there are kind of the evolution of what could happen and with that you have kind of this broader sense of your diligence where you can see the future State anybody could do that technical abilities and and you can have reputation and if you're great at this you get a score and become someone that sought-after to do technically diligence so you can really kind of decentralize the concept of venture funding okay try to get a sense of the room who bought tokens who bought tokens in 2017 and who who in 2017 or 18 thought that like tokenization was the future and no we were like totally owning the VCS it was still thinks that right so it was also pretty case specific right people launched a lot of different kinds of targets many of the tokens made absolutely no sense from an economic standpoint you said your goal right yeah so your token was a two-sided market place that was used to transact makes no sense thank you and some people launched token cells that were like super exploited and tried to get as much money as possible maybe this guy who's trying to calm her and I see a virus I launched worse than a dating token I run a porn company it's called spanking right so I watched I see Joe and I raised six and a half million dollars the global public auction for spanked tokens and the premise behind spank tokens is that you can stake them in the spank bank which is our algorithmic central bank that means booty tokens and so it actually powers the circular economy that makes sense right now the execution you know following market whatever you're like it's been hard for us to get traction and but like as as we continue to grow company the turkey holders like will benefit from the growth of our economy right like that there is value capture present in the protocol right and and further the way that we launched the the sole the target specifically was was not intending to capture as much of the possible value on the table I actually launched the most fair I CEO ever say that it's true so the way we designed it was it was a single round blind auction and so you would submit the series of bits so we actually sort of used a channels for this outlets they channel guide census so you and you would deposit bunch of your either onto the contract and afterwards you would place bids which we have the price and the quantity and so it'd be the amount of spank that you wanted and the price of rolling paper many of those up to the total deposit in place and not approximated your demand curve right and so then what we did is we we got all of those bids together and we we had our own supply curve which was the amount of tokens that we were willing to sell at each price we figured out where those matched we picked a strike price and then we gave everybody the same price and so we resold 30% of the tokens and raised six and a half million dollars and the benefit of doing it that way is it you know even it like in the best case the tokens up 30x from the sale and in the worst case it's found about 4x right and so it's like you know you give some token sales that were so exploitive that they're down 99% from the point of the sale and so you know what when you're talking about these don't try to lump everything into a category even if it is a dating app work and just just add on that based on Twitter about two months ago about how all tickets are not equal and we really need a decentralized rating agency to raid the triple-a coins from the horseshit coins and and so the problem with that is when you create a ratings agency well how do you prevent capture of that ratings agency - you know you give them a bribe and they rate your your clean higher and so so I think it would be interesting to see a trusted community source then that can separate the the worst chickens from the best ones and you know I think it means the way being framed it as being down 4x is way different than being down then you know percent and I agree with that the UM someone I was talking someone to do for Lynn who is saying Oh multi-floral die with maker is gonna be that so basically right now the collateral in maker that that makes dye into a simple gland is he and that single collateral die and in the future we're gonna have a guru or I forget what what tokens are gonna be launched in multi collateral die but you can basically look as as more tokens or stakes to create diet and makers economics at the different attributes of of those markets and then you can use that to approximate a rating for each of those tokens based off volume and in the flow of the tokens signal tech bundles I so I guess the to some of my point two points decentralized rating agency will be important it will and making sure that it's not capturable will be important and maybe multi collateral die couldn't do that you've already certain it's not michelle decentralized but two weeks ago when beta L is creating a reading - defining if something's the utility or security and I think that's a step in the right direction yep that's coming that was ridiculous I feel like I can say that thank from a high level interesting you know just supposing it's our previous discussion of me season happened a fine source and not necessarily pocket model-driven yeah I think it's interesting that when you know we're talking Toki prices like you hear that utopian model I think that it really goes against what we're saying where the token or some sort of like I need is good for you know finding open source really in fact people who are blending that or they just looking for a return there which brings us back to the smaller pieces so I think it's very important to think about why you're raising money you raising money that's expecting a bus Johnny thank you are you can't sell I think from that level it's important to note just I think it great comments law I've just moved on to kind of question how does he theorems you can we fit into that whole like days haircuts up yeah and I don't personally I don't we play at lunch that all thought the SAS model who's that beverage [Music] so that I found the doesn't that you're always like the dollars pitch like if your protocol depends on the stable value development you could never operate any kind of I'm not saying it's not I'm just saying there's no need for such as possible okay for the same time yeah the white paper I think we saw a ton of this which also discredited the whole block chain space unfortunately but I think about a man who president kind of made the 360 servo come come to realize like it's brother space be very disillusioned but they come to realize Akita is actual value to reason to be delivered quotes to show anything and yeah and the half cycle and we saw a lot of this as well what is your business I think what does the man captain for the token I think 95 percent of tokens that are one for American Catholic premises don't have like this little working model that's be gone like there's a limited supply and it's listed some okay we went through a lot of this I'm not gonna I'm not gonna go into that again maybe so the important things to differentiate or token models I think there's both for-profit and nonprofit sector models something that Andrew mentioned very I think we've been too strong you differentiate and token models or token sales of talking to us an application mayor token at a protocol territory I think that's fair one thing to go back to the etherion crowd sale that I think triggered me was that there was no vesting the metallic is still grunting away and nine-tenths of the other people they've got what 15 million ether or off to raise another token or we're under a competing protocol level etc you know making that type of behavioral economic incentive makes a lot of sense I think block stream is an example with a Bitcoin where they they they vest time-release bitcoins and obviously that's a little bit of a different it's a for-profit entity but kind of diggin in typical concepts like best things in a corporation I think and I think if there's a huge tragedy of the commons issue you know think about all the people that were County 2.0 versus gap or work or Jeff Wilkie who I think added value to you know you won't point out but top 300,000 a third of it Hank so I think thinking about those types of tragedy the comments use is very important I think there I think there was a lot of like miss raised funds right token sells at the application layer which fundamentally D should have been maybe like ideally like maybe we catch the positive businesses bootstrap or VC funded if they happen if they have try to get pcs money probably a lot of that space a lot of the coins that we see the support existed it vertically anything is grateful thing just some general as he thinks in in general we do it open sale to exchange for Network statement assets so that goes into was raised with the security earlier it's often in the hospital bump some financing it's also comes with a lot of issues so we'll here's twenty million dollars how are you going to they cut you dispersed that over time in like with that there hasn't been like the same experience as yet we DC which is that kind of leveling up aspect kind of a more decentralized decision making about hundreds like or what he said like everyone's a PC there's very various business and operating models we run through that I think the key problems that a lot of companies are faces like the legal incentives of the funders and then there the talk about cool maybe as a last question before we close the target topic to come back again wanted what you guys because the role of tokens and funding he sent us over infrastructure [Music] sir Johnny I gotta solve it because I supposed to help you achieve your like get morning confusion she listened and then after one hit she abuses Monty Monty is death of using the children's first then children yeah and I mean if you if you can build the utility without raising a token then you probably shouldn't integrate a token into the model later on unless it's Souls like a fundamental Janice it's also fundamental problem I guess I'll chime in and say that several months ago I offered any IP that twice out using inflation funding the ethereum made that and boy the current controversy is prog pal I guess five months ago the controversy was blocked or worth something and you know the whole problem is is basically with if you create inflation funding at that layer one of a protocol then then how do you prevent capture of that inflation funding I I by people who just want to be like oligarchs and Americans this smooth proof-of-work you can improve that miners are at a guide to the network because there's consensus operates - heretic lights Network but with software development the value proposition is inherently abstracts and you know software developers are sometimes not great communicators and I don't need to know if the projects that I worked on for the last month - that you know launch event on is going to have any value to the community this diet propositions are subjective and so there's the room for capture of funding of open source infrastructure beauty inflation funding the toxins that sums up really nicely in his blog post on collusion which is on his website there is a inescapable trade-off between failure to fund legitimate public goods and enabling a plutocracy and I think that that's why the block award funding the etherium project main net that EIP is dead and and maybe we'll see it on a on a side network or maybe it's a testament that has value or some other platform but we're not gonna see it on the theory any time soon and okay maybe show that was for inflation but in what context and in the context that you just described so I mean like the picture of the horse that you had like being drawn out progressively is sort of relevant here I'm my IP IP was broken up into three sections the first is that software development is is valuable the second was that current methods of funding open source infrastructure are not working and the third is we should explore blockwork funding it was designed to be a gradient of contra of a fully baked innocent controversy where I don't think I think in this room people would how many people agree that software development is valuable to this area all right how many people think that current mechanisms are not working how many people think that we should use inflation funding to deploy capital to e 2.0 clients information there you go so that's the gradient narration likely probably in committee tonight sure that's frickin wise it's just like that I know that's being done are they going to be Mitchell my cleanup article is like a really fun conversation to have a abstract and Kevin across it just later bulldozing ahead and putting it into practice and so people like it's can of worms don't open it we're like let's just take a look so like we look to rebound the works and you've made a telegram group there's a couple other people in it weirdly love people came in and like started being well I think the poor devs should be responsible for distributing funding because we know best right I've had like Aragon comes and it's like well we should put the money in an arrogant down because you know and then I'm like well I should be in charge you know I'm right the point is is like by the virtue that nobody else wants to you know give me the loot I think it's the same exact way I'm thinking about other people who try to spend the money and so it's a deadlock right and it devolves into the sort of like political power struggle and then that's when I rich put that whole thing and I was like I'm outta here I see the words people warned you about right it's that the whole think of this legitimacy because people can believe that it has been captured by some special interest and that potentially is more damaging to the project and the value of the funding would provide I'll say that the architecture Motel is quite elegant where the amount of influence that you have is only relative to the amount of tokens that you've was it like staked or I guess you're called the tribute and walked out and so basically no one will ever have more influence than the value they brought to the table in the first place whereas with block rewards funding it the funding is being created on a thin air by inflation and therefore you don't have that sort of mechanism yeah I want to copy out this too but we started the invasion conversation with the goal of like you know a little bit of a goal if it's like long term how are we going to sustain this forever right like in five years how are we going to fund apps like yes you know runs out of money what doing this right so the back part I'm still in favor of like I believe that we should I'm optimistic that we'll you know come up with something and maybe be able to do it but I think that the bar is really high so her legitimacy to be able to drive that conversation great and and we're like the proposals are like let's just put it in and out like yes we're at last timely and and like we as a community haven't even participated in downs because we're not used to this like we haven't learned from through experience of managing funds that's where we haven't made mistakes right so my take on this was like let's run a bunch of controlled experiments and so I summon Moloch down and we can talk more about that later but like it's it's still possible for this to be involved in the direction where some down like structure doesn't play it down other people wanted to like use the money to pay for debts immediately and and the situation there's like youth was like $100 yeah roughly it was like you know shaggy and people were really concerned but then like a few throws immediacy of the the need was sort of faded away right and it means that like we shouldn't take an insane risk we should we should try to work up to it all right that's that's my lunch so um I think it's still an important thing to I could see it's a very slowly maybe if we open the can honey speaking of experiments here we are experimenting with different funding levels right we'll work our way I explained matching is I love it like I think this is the perfect segue into next topic we talk for just figure we talked about investing maybe one last thing that we haven't talked about that like and but actually we should mention it like VC token launches and just something like to quickly mention here it's a very common problem of like private capital versus public capital valuations and we now see this with companies like Google we work going public I think with there's many recent examples in crypto where VC extremely visas by the point trust goes to go public and then uses the majority of its valuation to the public markets maybe as a boss caveat here but this - there's too many things to bring up just one is sea cash and the other isn't green ya see catcher who here knows what sequence everybody who here knows that see catch has twenty percent inflation funding so they put that into the beginning they said working for three years we're gonna give the developer fund twenty percent of the protocol rewards it's a paper for development right that works when you do it bidding doesn't quite work when you try to add it later as we're seeing and it's are kind of like a social contract like in the beginning it's can you opt into the in the beginning of the new video and it but once later if you try to change the contact later on then you got for me right and the other thing is this grin and grin raised a bunch of money and it was like touted by all the B C's is like fair money for your nose apprentice they're like copy and they had no inflation for dads they have no death well they're like everybody explaining off this past mine and what happened was like the most predictable tragedy of the Commons effort which is like one all the people who are operating in first of all our pcs were greedy and - you have everybody set for necessary the devs were like broke and trying to like you know plead but the PCs to pay them to continue doing work and barely any of the PCs wanted to do it and I don't really know how that when I stopped falling which fundamentally doesn't make sense but that's the classic tragedy on the comments probably had a bunch of PCs that invested into the miners but no one's willing to continue funding the action protocol is often it doesn't make any cognitive sense but like it's this yeah it's like from the single act from a single actors perspective you like well let somebody else present why should we fund them I think that's one of the reasons why I think in the budget movies you saw the creation of of these community funds like a lot of big of the of the bigger projects simultaneously also raise their own VC fund to support the community which now obviously operated under much this kind of narrow-minded program but before we get too deep into the little things I want to talk about grants so this is actually the last few comments are a great segue from from tokens not to grabs as funding options after - after tokens we're going to go into vows and then kind of higher quality how's everybody doing with like should we take a pretty break or should we just keep it going I figure if you take a break you might express - too far cool that's our buck that's who's received a grant once so maybe some of the vacuum residence permit boys your experience [Music] apart but difficult to align equalities in the bumper quite difficult to be centralized process that you're always delivering and quite so they denied runs on the belt so looking at a more practical straight that going for it there should be clear mechanisms for the mountain difference and also comfortability for using those will also help with that process because often people are saying you want to see the value on what they are paying for I thought maybe just doesn't that I think almost like I've seen some grant funding processes be like more stringent than the much smaller amounts but much more stringent see incentive that the situating process in terms of the bus stop I guess it's a very different accountability layer as well because there is no investment being made so it has to be a general person it does anyone else wanna add something their experience yet grants are like bandits you know they give you like okay I have a problem I don't have any economic model I wanted to do this value but the value isn't valued by like the market so like give me some money I'll do it for a while until the grant funding and then it's a sad thing okay that's why I love get point grants they're not like grants it's like a continuous funny you and you can start making plans but if when you rely on both brands at the beginning it's like you have to use that money to figure out how you're gonna get your next money you know it's almost like it's kind of wasted just on playing the grant circuit if you can actually have a residual income coming in and you can count on that you can hire a developer and you know where they're getting paid every month you know until of course that one's out but it helps a lot this is the opportunity cost of the nonprofit space in general is grants are time-consuming process you have to conform to each different grant making body and fill out their application you know dude the whole thing that is time spent applying for money that governments and for-profits have supplied to them in spades in capital markets or in the tax pools so this is where the the nonprofit is really like as a huge opportunity cost in and continually trying to find these grants and donations rather than just getting to work changing the world yeah I think as a business being dependent on like grant funding on a continuous level must be like must be extremely stressful I mean like ABC Methodist Episcopal Ashby probably any type of funding if you're not running a sustainable businesses and safety stress okay thanks so much crickets were like a weed recap again right it's clear it's not funny mother for me grabs a nobody in exchange for services or like a community so build something to the res Pacific service that serves the Concord nobody is payment on there's every what I've seen it's like it's like three milestone based payments not on full delivery but it's like you do the one thing you gotta do the other thing in general fund our infrastructure community initiatives it's generally very small amounts compared to VC and tokens and I think maybe that's where the whole model end of like how can we draw this open source infrastructure falls short for pumping so much money into the one direction for foreign policy not like leading them into the other direction how I have a lot of value who's to the percolator here in centralized decision-making and centralized governance in many cases what it feels like even if it's agree Miam I've heard it can take a really long time like to hear from the graphic Authority we go to crap once ourselves and to this date still haven't received to second favorite of the crowd and just be mad yeah when is it coming when is it coming and just be like oh yeah it'll come under the next patch and this is like a very without grant funding coming company foundation in these namespace we still haven't gotten it and if we were relying on that as business I mean the grant is a good spike not to go and then the first payment came about after and the other best as I listen depended on it but like a female finger I might even objected I give my grants is pushing to decentralize decision-making about the grants to an algorithm the CL arts know so it's not all of ever decentralized if our our consent rising I'd also say the ball cow has a decentralized grant decision-making process people are pushing pushing that number that's weak as I kind of not reading ratified follow but I wanted to matter to give another chance to talk a little bit about consensus doesn't stop I think it census did so much in ATM spaces early on and really invested a lot at the protocol data it's definitely like grant funding model although they have a granted funding Jeff do you wanna talk about that I already sent it but basically I'm here to traditional venture we're tolerating in five dollars out here's our product user here's our fraction this had different tentacles independent and and some of them the value would accrue to the ether token things like consensus diligence things like education and things lasers marketing for awareness and and those we necessarily need something that will be venture in festival so so just defining that but but I think a hurricane economy to a certain extent or are these the long time I think I think grant served an important part of any ecosystem because like if you have a vested interest like yeah spend money because they want further consensus we I received a grant from the Epis 420 for image channels work is not better the connects team we work with them to deploy and that's like you know source structure for the whole space some of that work it was like research oriented because we're the first ones to do it and it's hard to you know take that kind of risk if you aren't being supported in any way whereas like you know that they're still making a venture funded business out of that but like we're able to build a better product for a theory of because of the grants that we receive also receive leading the enter key is grant this was I was like broken working and really let me crash this house for a month when he wasn't trying to everybody you know people are really helpful you know you're also trying to help that succeeds you something that I've noticed with Francis well-liked person now that he's still better a lot at building every good relationship with a granting authority it may seem like you're flying to the for example to the ETF and like it's a very technical thing that have something must be plugged in and someone else gets bothered before you go and it is still very relationship but that's that's the extent that I've anticipated because the space is small yeah I was super super bro [Music] yeah I think I think we can cool let's talk about Dallas scary it's getting so we could have a baby through this whole like for-profit older models into like numbers into nonprofits and now it's like you don't know exactly we'll get into like the last section of the water just just discussing new hybrid model so slapping if I have bonding here want to table see what happens but here let's talk about our generally initially I want to open it up to the audience again you guys are the basis what about ah have you received funding from Tom and I say that I am a fat cow actor I am part of the molecule and I think we have a propeller Malta and and I haven't voted yet and I think that with respect to these let's say common utilities governance is is not necessarily prioritized or incentivized and and you know I'm a proxy vote I just had to trust Amin kind of sort of himself and and I think that that's an issue with later public utility like metallic governance epoxy booking I mean you just create scratch Monica I know bang grenades I personally in 100 no farming extinctions just like half put yeah but then I read about that mark [Music] okay can you talk about like the project loading they're talking about all the stuff yeah so Oh who hears her locked out its and I got a grant from the F as a little frustrated about how inefficient that process was so I decided to launch a competing grants organization or you know walk green so the way mom looked out works is you can put money in and you buy shares you have to be voted existing numbers and you get voting power proportional to the amount of money that you put in and the only way that the doubt spent money is to make new shares and so if you want a grant from the Dow you will say I want you know X shares and the grant will in those chairs and that proportionally dilutes all of the existing members so that the money comes from everybody who's in the Dow has for example you know a thousand ether you want any of their grant it will if it has like a thousand shares will be the tension areas and then those temperatures you can then rage with so two other mechanisms there's a there's a seven-day of accounting period and a seven-day grace period so during the voting period everybody can vote and that boat is final and before the money is actually spent everybody who didn't vote yes has the opportunity to withdraw all of their funds and leave basically everybody else to pay for it it's it makes it so that if you disagree strongly enough with the way that the Dow is going to spend your money you can take your money and leave all right so the thing is you know it's not really a bad actor and is just like implicitly trusting the people who are voting to make decent decisions and if he's ever made aware of the people who are actually going to spend the money not making decisions that he thinks are reasonable you can pull it he has a week to pull out his money but before that money gets spent that's pretty powerful because it means he always has sovereignty over his month unlike some days were like if you want to take out your money you actually have to submit a proposal and get everybody else to vote so that you pull out your money and so if that doubt gets captured you can potentially never again that's I don't think that was safe so so far that's like the mechanism of moloch but we launched it in February we raised right now it has about a million dollars has there's about 20 of us that were crazy enough to put in 100 either at the beginning whether it was like you know no idea where this can he go but like it seems like a good idea that's try it and then eventually we proved that we could coordinate and fund grants for we funded these two reports we funded b2 development we funded we founded a mixer recently what funded a bunch of core infrastructure audits or the payment channels that connects this building and you know sort of the highest moment of this was like when metallic and Joe and consensus in the up each decided to put in two thousand there also and really it gives us a lot more firepower to be able to not only like engage people in the community to you know potentially execute grants that we wanted to see see done but also just amplifies the amount of value that we have to spend and so far that's been going really well I think one of the key things that's really cool about it is just how efficient the whole process is right from the time that you submit a proposal you would have your answer in a week and you will get your money in after that right if it passes and so you know there's some do diligence you know going back and forth negotiating process before you submit it but like that will think the fastest we ever ran this was like item we need to test runner so that the client teams can run tests against their bills and make sure that like if something changes you know they know it broke something and the next day that guy was like I'll do it interview him the next day after that you're like variable seems good and so we submitted a proposal really twenty thousand dollars now under he beat so we worked with him to form the proposal because it was our idea and then it was you know and and so on it's not the CTO of wedlock he came on to help execute it was like a one you know one month project right the key thing is like a one month contract work it's like not even worth doing it's not even worth thinking of or like going to the yet funny because take the amount of time and effort you have to spend just to get the proposal through is like more tongue you know value than the whole grant right and so being able to have like fast efficient grants as Iping a nice like complementary aspect and I think that the model has sort of taken off also because we're seeing the same code being used for gang down which is like a super PAC to fund and your yang beams and like Bennett cartel which is like a bunch of application-layer developers coming together application layer infrastructure and like Church accounts and are collectively different story but I think that it also presents a model for that yet to credibly decentralize their funding so they get criticisms because they you know they're like how do you guys make your decisions how do you decide the first but your money all this stuff and it's like well if they could put more of their money into beach house for like in specific areas of the ecosystem then they would be engaging the other ecosystem stakeholders and being able to collaborate on making these decisions and do it in a transparent way it's all the stuff that's on chain all of those funding that's the wallet primary I think it's a nice mess for that I mean I think it's one of the biggest contributions in the space like that I've seen it like for the pasta I think the amount of bring the coolest one of the things that I love most about Pollock is the way that their actual contract starts look at it it says like please steal this code which is like one of the guiding principles of open source but like since weeks since fallen came out and we've seen so many iterations of that and so quickly like the space is literally exploding with ideas and that's something that is really important at this point that we iterate in every test booking I think he wouldn't be gone before tomalak itself is trying to cheat the code itself has taken on its own life-form and things like Medicare know is anyone from Eric Italian yeah the anyone can explain the hotel yeah yeah okay she took that which is the similar second so basically Clarissa pi-model good thing to try to get a grant from all right organism right I tried to get him in the rest of the food that freezer like now so they you don't reject it you've got paste it was like right I'm gonna have both the good and so these are the textile of background so it's really more the application layer dux and so meta cartel is basically is saying primer has more but to fund the application later and but as a different story that model because Maliki since its funding to his cigarettes giving but may take that cell makes more sense to maybe switch to the for-profit and so it is going to is like an ongoing discussion it's probably like finalized because the first wave of grants so for instance cyclic funds invasive keep back which I like event occurring NF T's for staking the point of thing and basically they're like starting to incorporate and so maybe we're going to do another towel structure to kind of get maybe system investors or other support so anyways like recording business follows is different from Moloch which is to like machardie and we might switch to fall for him personally amazing it's like model for the application they're super cool like great segue into the next time it explodes like we're seeing like a lot of exploitation and people actually moving for nonprofit balls again to for-profit models which is really cool it pretty good so I think I think what we'll see over the next six months in year as well as like the reintegration of models like what the dow original transit earth and I can't wait for like a decent actually for real be seen come along and take what actually lets allocate capital into the sub table I will there invest into like these these set of projects which is going to be really exactly actually we also plan to explore this cohort based funding so kind of like going to us like a mini white manator or kind of thing I'll go coming next year possibly I think there's been some really really great experiments so far with doubts but I think we're still in the very early stages of this experimentation that's you there pointed out I think centralization of decentralization is still a spectrum you know what you can have without being more decentralized but also at me and say if there's something he doesn't like you know he'll make a couple calls and like that's not pasteurization that was depending how they're set up so there's certain aspects of Dallas where governance is one question of how do we make decisions so that you know they're they're representative of the group how do we in a dress on chain voting issues with people who are not voting and is that really a representative decision or these stakeholders actually checked out and not really paying attention to these voting systems also long-term sustainability and scalability Mollica mehta cartel these are great examples but they're still deflating continuously deflating the steak of everyone at all so if you carry this out to its logical conclusion once maulik has spent all this money the next person to come in puts in a hundred e and they suddenly have a very small proportion of governance over their money and meanwhile everyone who is in moment before who spend all the Pollack's old money now has an equal say over the new money coming in so if you take this to the long term it still has a question of sustainability and scalability of funding which is I think the problem that we're here to discuss is they're all valid criticisms by the way I think one thing to remember with all of these decentralized models is that humans and human nature naturally tend to flock or look for leadership and intend to look for leaders even in these centralized systems so you can see what you want but I mean you're kind of the leader of like da the same way that there's a lot of things I've wanted that didn't happen and also just to be clear right and like there's a couple things where like I had to bring all my shares to bear right there is a lot of people who didn't want gang down to get funding for bowling and I knew they wanted gang down here in tektaalik so I voted with every single one of my six hundreds of blood shares to make sure you get one summoner share at a hundred personally to make sure that Nick now went through and some people were like so upset about that but they almost rage quit and took their money and went home but then you know they decided not to and that's interesting because they have that option right and so you could say maybe I anticipated that it would piss people off just enough that they wouldn't leave but that's you know but I think actually most of the members are retrospect happy with that decision because the people who joined are people who like Peter Pan who now runs mana cartel that was doing the coordination free income and that just who is being us to use the same code they're they're actually what we were the mobile app above mobile UI for town where small town could eventually use also right building Dow house which now can like you didn't spit up your own mullick down and see all the dashboard all won't does I think that's maybe one aspect of Dow is that in this large chain space where there's a large ethos of code is law you often forget that there's a cultural aspect to these as well and having mean as the steward of Pollock and I mean each now kind of has this leader or group of people that that the community looks to - Stewart these towels in the right direction that's not necessarily a bad thing and that's a decentralization is the spectrum and we are at one point on that spectrum and hopefully we can move further towards that decentralization that there are certain puzzle pieces we need before we can continue moving down down that speculators so also a little more thing is just like I'm actually instead taking a step back from my sort of active participation and Pollock doubt in terms of just like a lot of the coordination work and we're excited to see how it's going to evolve as other members step up and fill the hole that we were that I was doing to the port and so I'm going to be talking me there's a lot of people who help make this happen building sites and like popular teams and bring ideas there I think during the war a platform is going to award cool I'm gonna move to the discuss this again one of them to the lost puppet I think it's really exciting and guys thanks a lot for bearing with us I hope it's been entertaining through those pretty long workshop and cool the last thing to really talk about our new hybrid models that are emerging personally something that I think is really really interesting and I just gonna ask it to the audience is anyone will expend a little is well is anyone already familiar with models like the common stock or the Eragon fundraising out or something like continuous organizations that's up okay about half of the room cool maybe children that they are cement to those people who raise their hand would might you explain it to the rest of us simpletons yeah show me what these two models really come with these two models really combined are now combining governance and dalla structures with fundraising and and token sales but the main I think a key difference between these two is that these are now and they're looking at continuous financing mechanisms and a lot of them are looking through dancing mechanisms do bonding curves which are instead of just issuing a lump sum of tokens you really issue them continuously over time according to supplying the money to market in exchange for funding there's taxation mechanisms that we can build into the curves yet so for me the hybrid models kind of our continuous about raising models for dolls where just hours to induce financing that's before here doesn't know where the okay I see I'm assuming I'm assuming most people know but I'll just just expand factor it's essentially a novice market maker what to be with autonomous market maker so nobody if you the previous or garages that we seen someone makes the smart contract and issues all the tokens of at once and in this case the targets are continuously issues through kind of marketing and what the speeds also it's not just a token issues but it's also an exchange and liquidity provider and this is the most than the stereotypical design that you see a lot design will just mention to represent is actually a terrible way to represent money groups but it's what the ears tears competitor so this is the supply to monitor for my big night you have the price on one side and then the supplies bottom and then you have a curve that governs the issuers it's essentially a function mathematical function Sequoyah that gets encoded into the smart contract and so has more focus at issue the price increases according to that curve if people can also prepare tokens by the sending the back to the content and the price decreases again so essentially people are always trading along this curve does it mean though that the actual trading looks like that the training isn't very much like like a normal chart so remember that this is that supply and it's kind of tight so it's a really interesting new mechanism because it provides the quiddity instantaneously and it provides really great feedback loops to whatever that combinations mechanism represents so a lot of these let's say hybrid funding models or hybrid organizations I'm looking at the total amount of representing membership but then obviously membership could also first off what equates to returns that are generated by that continues organization and we have a champ here from the Cossack as well as Griff and I think the comments egg is one of the most exciting projects that I've seen in the space come about that is really suing these hybrid tub models and specifically interesting in the context of funny open source infrastructure so I think we've talked touched on these topics multiple times throughout the day and I think that we really need to need to close the loop from raising funds allocating those funds making decisions as a group and then measuring impact without those though that full loop we have a really hard time basically governing how we're going to raise and allocate those funds so we look at Moloch now we see this as an amazing community of people who have come together basically contributed their funds into a pool and then make decisions based on the amount contributed on how those should be spent awesome the issues with it long-term the funds slowly deflates we have more people joining contributing funds but there's less funds to be spent over time because those funds are continually being spent when you introduce something like Bondi curve and the basic funding curve that Paul described here and a lot of people have criticisms of it and that it could be considered a Ponzi scheme basically people put money in when someone else puts money in that first person can sell to make a profit so this is an issue but if we give that token multiple forms of value so with the in the common stack we're working on the token banneker model are calling the Augmented bonding curve and that token is not worth just a claim on the collateral you know like if you rage great you take your portion or what's left of it but we also give it another value in the governance of of how those tokens are spent so when you go when more people buy in the price of the token goes up some people may want to sell and this is where the race to the exit the Ponzi scheme of a traditional logic curve comes in with the Augmented boni curve as the price as people sell it if you're the last person holding tokens in holic you're holding the bag basically and the Augmented bottom curve you are holding all the governance power of that community so we have a special mechanism called the exit tribute when people exit the curve you pay a small tribute to the community which is kind of like we talked about before the opt-in agreement you know if you are going to join this community you understand that when you sell this token you're going to pay 5% or 10% to the community this goes into a communal funding pool and then if you help hold on all those tokens you basically have a governance over that funding pool so this also encourages the opposite pressure more people to buy so you have this interplay of people wanting to sell to fake returns people wanting to buy for governance over that collateral pool and that creates a natural volatility on the curve and that creates continuous funding for the project through the exit Tribune so this is just one type of mechanism the bonding curves are a very new concept with solution space is very open and I think we've designed the Augmented money curve for a non profit model you could have all sorts of different mechanisms included there you can include quadratic voting or CLR matching you could and this is kind of the approach of the common stack as we're coming at this from a modular component approach so you can have all sorts of different mechanisms that you could build into those bonding curves to suit that to each nice use case on top of that we are working on some novel governance processes that we see a lot of problems with Unchained governance mostly apathy or you know people being busy or people not you know following up how many dollars are you a part of you know are you checking in with each of them do you know when each of those votes is going on the user interface isn't always great in these early experiments so we're working on a governance process called conviction voting which is less of a voting system but more of a preference broadcasts are always signaling what you want to see done in the ecosystem and that conviction prose over time so this also gives long-standing minorities more weight over a last minute whale that comes in and says no this is how the vote should go which we also see in on chain governance if there's a certain vote maybe in mullet maybe there's someone with a lot of tokens who doesn't want to see that go through and last minute they come in and just squash it I mean that yeah there are protections against it but we just want to see sort of this this balance of a long-standing minority having some weight against a late whale coming in and saying don't you go not that that's a bad thing in the small ecosystem that we're working with today we do want these safeguards these people who know what's best for these communities but when we're looking at long-term scaling this into larger ecosystems we want to make sure that there is proper community representation in the governance so yeah so that's basically basically the long in the short of the common snack there are we're basically looking to build a library of components that can be used to build dowels for all sorts of different use cases there is no one answer to how do we cover the economies you know an economy around e 2.

0 may be very different from an economy around trash cleanup may be very different from community economies so we have all sorts of different components that you can basically combine and create your own endow suited for your ecosystem and one other really important part of the common stack is the simulation so if ever present has anyone heard Cat Cat here show of hands quickly so this is a simulation tool that is just going from block grants it was just open source through the common stack on the go and the cool thing about the common stack component since all of these will be rigorously designed from mathematical first so you can just take them off the shelf combine them plug them into the simulator and see how your token network will respond to stress test before you start coding and we can go away from this whole idea of I have an idea I'm gonna write a white paper and I now launch this economy and then we'll see what happens which could have disastrous consequences when we're talking about a billion dollar public infrastructure which is really what we're what we're building there sargo something he's like it's really fun watching you play up the explore part of my explore exploit algorithm because you know we're you know I didn't do this we didn't start bawling to like save the world right we just wanted to fund me to stuff like that continue to fund it so we kind of you know practice being driven development so we with Paula we have beamed the dominated pool again and you know people want to join them and we've all been able to learn from this experience and and we're all sort of inspired by them and everybody who's in the Dow will be able to take that with any other job that they join and have that knowledge and bring to other other projects as well so it's been fun you know to have this kinds of there's like there always needs to be something this first like just try something you're not doing it for all the use cases and other people who use that as like a research project in order to learn from that and hope something that might been able to be taken to the broader market and market so people might not have even anticipated that being used for so what you guys what katkat doesn't attempt to seem like human behavior I'm just wondering how sort of how does that work based on theory just greedy algorithms so cat cat stands for complex adaptive dynamics computer-aided design so economies are complex systems when you embed humans and actually it's a cybernetic governance system and also second-order cybernetic governance system where we are part of the system that we're trying to govern so it makes it a really tricky problem the only and I mean we definitely get a lot of skepticism when we say we're simulating economic behavior because humans are predictable that is not a rational economic actor that we can predict behavior but when we put human behavior on a blockchain you only have a certain number of lot actions so in for example to myself very basic network in other networks there might be governance there might be voting there might be different things but still you have a very well-defined set of actions and because on a blockchain economic code or the code is what you have to follow in our in our real economies we have gray markets we have black markets we have cash transactions this can be captured but when you put it all on a blockchain you kind of get this economic big data and you can define agents that pursue a profit extractive behavior for example and when you run Monte Carlo analyses and parameter sweeps you can get a pretty good at least envelope of behavior you can see where your system fails systemically before you start coding so it's not necessarily predictive saying someone is going to do this it's saying this is the list of allowed and if we throw in 10,000 agents with 10,000 different objectives and run Monte Carlo analysis and parameter sweeps really use the big data crunching algorithms and say this is where the system can fail it's not saying we're going to capture everything I mean when we started simulating bridges you know someone forgot to include her body residents and until Tacoma Narrows and now we've built that into our body so this is turning crypto economic design into an engineering discipline basically that we can continue improving that model the more we learned thank you so much I think maybe the last part for me I think we're kind of been well with the end of the workshop we did kind of a full and then almost like a 360 round of going from traditional for-profit models into the token icos craze that we saw then to grant funding until infrastructure always guiding with us questions like how can we fund in the comments what model is right for which business case I think if we are to every seemed kind of like a revival of like very large-scale open source funding like we did with the early i ciose it will probably be through models and as like grove is describing which are incredibly new thoughtful ways of reading using simulation design to build these economies and using kind of I think these wanna curve type models are much closer and incentive design as to what you might seem like in like pinch of venture capital funding runs really like leveling up going from stage to stage to stage so I think we're making like the best with two walls together at this stage I'm really really excited to see keep and keep an eye out of all of these initiatives specifically as they are really kind of pushing the space boarded up and then I want to give a huge thank you to all of you for sitting and through our workshop talking all these amazing contributions and thank you so much guys [Applause] you