The DePIN Mullet: A Crypto-Native Growth Playbook | Dermot O’Riordan - POKT Network Foundation

welcome back e Enver uh hope you enjoyed the nice intermission and whatever ads we playing uh next up we've got dermit from pocket Network who's coming to share some nice insights about what's going on in that space and what they've been up to so everybody a round of applause uh dermit hey everyone so my name is ger Ruden and I'm one of the directors on the pocket Network Foundation and I'm here today to talk a little bit about growth but first off what is pocket Network and and what do we have to add to this story well first of all we've been around a while um pocket launch's main net back in July 2020 and 3 and a half years later we've made our fair share of mistakes along the way but we're still here and we're stronger than ever and we like to think we've learned a few things along the way too so in terms of what pocket network is pocket network is a deep in or decentralized physical infrastructure Network that coordinates and incentivizes access to any open data source and we do this by a method known as remote procedure call or RPC and essentially this is a communication protocol for machines and today pocket and uses this method to enable anyone to essentially talk to a blockchain so to send a transaction or to query to State and tomorrow this will the same protocol be able to enable adjacent uh open data sources as even as well as even non-blockchain data sources too and one of the more interesting things about pocket is that we enable this service through a network of over 15,000 nodes distributed across over 22 countries and despite starting off with close to no growth similar to many projects we've evolved over time and uh developed some interesting strategies that we like to talk to you about today So today we're going to talk about some of the key problems that face pretty much all major crypto networks we'll introduce the idea of deepin what is that give you some background as well as to introduce the growth strategy that we've been pioneering at pocket Network that we feel is dramatically underutilized and is potentially incredibly valuable to the space and then we'll also talk about a few practical tips and tricks and things to think about if you want to implement this strategy for your own project so first off yes walking the corridors of e Denver or the streets of Denver you can feel the exuberance and the excitement but you know come on we're not just there yet so let's not get too excited and it's important to realize that we've got a lot to do if you really want to reach that Promise Land and achieve the global adoption that I think we all believe we can really get to so here are some of the three high level problems that we see across the space first off I don't need to labor this too much but if you're really going to use a blockchain and go through all that pain make sure you have a really good use case for it and don't just slap it on for the sake of it and this slide is quite a nuan nuanced one but really it's pointing out the fact that while you may not agree with the rules of the game that a centralized platform gives to you as well as uh how you interact with It ultimately it's often very transparent and you know what you're getting on the other hand once you get into the funny uncanny valley of decentralization theater or projects that don't know if they're fully centralized or decentralized often end end users can end up worse off than they would be if the project was fully centralized in the first place so this is something that Builders need to be really thoughtful about about when and where they use decentralization in their system and yeah I guess this slide speaks to what we want to talk about today and where is all that growth despite all the billions of capital the amazing Innovation and talent we haven't quite seen all that growth just yet at least on a sustainable basis and before I I go into to talk about deep in and what that is it's helpful to go back 10 years to 2014 and an incredible article uh published in the Harvard Business Review that was titled understanding new power written by Jeremy haymans and Henry Tims and this essay described how the internet was accelerating a a cultural and behavioral shift um away from an era of passive consumption to a new age of active participation and ultimately this is talking about harnessing the power of the crowd and the two biggest examples used in this essay were the early rise of Airbnb and Uber as these new networked marketplaces that were leaning into more open and collaborative ways of working to unlock value in ways that simply wasn't achievable before and 10 years later in 2024 I think the concept of new power has never been more relevant however I think it's now clear to most at least in this space that a blockchain is necessary to unlock the True Value that new power discusses and really this is where it deep in enters the space so what is deepin if I was to ask 10 different deepin Founders or Builders I would 100% get 10 different answers and you can look at this sector map and see the many different services that deepins are looking to tackle and improve however the easiest and simplest definition comes from Sal from EV3 which is simply that deepens our community powered infrastructure they harness the power of the crowd to reimagine and improve centralized Digital Services in ways that simply aren't possible without leveraging a blockchain so to bring it all back to those three very simple and high level problems I put at the start of my uh presentation when you look at a deepin project does a blockchain fix this and this is a resounding yes without a blockchain it simply isn't possible to achieve the cost and scale benefits that a deep in can provide a a blockchain pared protocol can really efficiently and effectively match supply and demand by disintermediating all of that middle aay of middlemen and contracts and kyc and also handling all those payments to the supply side and from the demand side in a really programmatic and autonomous way so that achieves major cost and scale benefits and additionally a decentralized network is by definition more resilient than a centralized single point of failure that traditional businesses are and again this is a a much more nuanced question and clearly we need decentralization to unlock those cost and scale benefits enabled by a blockchain in terms of the onchain settlement and uh the resilience factors as well as arguably ownership however when it comes to crowdsource capex clearly Airbnb and Uber and other major Platforms in web 2 have achieved major scale by tapping into the crowd so clearly they've done this through availing of pools of private and public capital I think it's arguable that using a blockchain and token incentives we can do this more efficiently and effectively but this remains an open question on how to do this um best and additionally on the Innovation front I think many here would argue that token powered open source ecosystems can actually combine intrinsic and extrinsic incentives in a really unique and Powerful way however there are very many powerful and productive open source communities already and I think we've got a lot to learn from them in the space too and again problem number three so have deepins solved uh have a golden solution to where all the growth is clearly the answer is not yet despite all the talent and funding and building to date the levels of Revenue and impact doesn't hit the mark for where we all want to be as a space yeah at least so all of this Preamble is to really get to the point where we are at deep in and we're here climbing the hill staring at at a big climb ahead of us and a big Chasm to jump across and it's no surprise that there is so much problems with achieving the growth and getting to mainstream adoption when you think about all the problems that a deep in Project has to get through you have to build out the pro the protocol and the tooling coordinate and onboard a supply side enable a community that's productive and impactful you need to Avail of the capital to build out your project and likely to overcome the cold problem to build up your and bootstop your supply side and then you need to be super thoughtful about who the stakeholders are in your protocol and how they should be represented and ultimately have some governance and representation and then demand is multifaceted right you need worldclass BD super tar targeted and thoughtful Market getting fantastic customer support and most end users need much more than a basic service they often typically need value added features too and if you're not moving and adapting um you're going to die so standing still is not an option you ultimately need to move quickly and evolve as a project and this leads into the first Innovation and common I guess guess uh uh solution to much of the grow problems we see in across the deepin space and that is the realization that decentralization by itself does not sell you need to abstract away that painful ux layer of dealing with the protocol to make it much easier for people to interact with it and gateways are typically centralized interfaces often built by the core team that abstract the way a protocol and make it much more easy to interact with and so you can think about gateways from an end user perspective as a way to get a Trad SAS like experience so you can Avail of account management potentially value added features tailored customer support and all of the things that you'd expect if you were to use a web tool like competitor so this is again helping deepen projects achieve priority with their centralized competitors and I guess to many particularly in this space the idea of using any kind of centralization is almost seen as an absolute no however as I discussed a few slides before about the benefits of deepins in terms of the cost the scale the resilience and even the ownership that's all really enabled by the the core decentralized blockchain and protocol layer however when you get to the end user interfaces actually the need to move quicker the operational efficiency and speed often overcome the benefits you get from decentralization so it's important to not think this is all a one siiz um fits-all approach and this is where the deep in mullet comes in and for us I guess the way we think about the deepin mullet is this is sort of like a have your cake and eat it approach so often there's that tension between centralization and decentralization and often the question of whether you can have a token or an equity business and actually thanks to an in incentivized blockchain protocol we can actually separate out these concerns and actually we can enable token and and Equity business models to run in parallel without causing any unmanageable conflicts or even any unsustainable overheads and I guess the foundations of the deep in mullet come from the three principles of pragmatism minimalism and coopetition so the pragmatic ideal is that decentralization does not sell so you need a convenience layer once you realize that the principle of minimalism comes into place which is that Focus or a lack of focus is often the depth of most businesses so if you really want to achieve the best results you should not try to do everything yourself and that leads to the understanding that you need to partner and bring in others to bring in all the benefits that gateways can provide how however and this is where most deepin projects are today with one or two gateways in your ecosystem actually you've created other single points of failure and actually you're not failing to achieve the true levels of innovation that compet competition and a dynamic ecosystem can can enable and so this is the coopertition ideal where if you can foster a dynamic culture of collaboration while also putting in the right economic incen Ives and opportunities for a really competitive ecosystem on the demand layer you can bring all these benefits and additional benefits if you're successful and achieving this come from so much less redundancy in the ecosystem instead of every single new storage RPC or bandwidth project having to build out the same backend infrastructure and also coordinate incentivize the same supply side uh infrastructure or bring that in house you can actually build on that same base layer infrastructure so this lowers startup costs meaning that you need to charge less margin and ideally need less profits or Revenue to get to profitability so this is incredible for entrepreneurialism and ultimately growing out these markets and once you have teams that can focus on their end users they can look to innovate on providing value added features move a lot quicker and adapt to the needs of their local markets and regions so this all sounds well and good however to really achieve and adopt the deep in mullet you need to sort out some things in the back or the decentralized protocol end first and really like everything it starts with your culture your mission your vision your values and because no matter what your technology or your code may say the social contract is the layer zero and if you're going to be able to convince businesses is to offload some or all of their backend infrastructure to your protocol they're going to need to feel welcome they're going to need to feel like they can trust you and why and part of this comes from how you think about representing these stakeholders in your ecosystem will their voice be heard does it have weight and the more likely this is the case the less likely they are to exit and this is actually one of the strongest modes in open source and blockchain today and lastly if you can really succeed in enabling that culture of collaboration this can compound over time and Achieve incredible benefits that I think is what we all want to see from the communities that we're building and are participating in so again this is pretty much what it says on the tin I think we're all excited by the amazing blank canvas that the crypto World brings for these incredible cryptoeconomic experiments however while you may speak to someone who perhaps is a DJ in the street s if they build a business of any kind of scale they're going to have someone on their team who is a neat freak in the spreadsheets so if you really want to bring these businesses onto your platform and to use your protocol they're going to need some clarity around your costs um how predictable this is and have incredible user experience and transparency around the risks involved for them to build on your protocol and again this is pretty straightforward stuff but it's really important not to overpromise and overd deliver you can help people test on your protocol Prime them about the benefits of building a your protocol however it's important not to overstate the benefits of working with you and think about that timing it doesn't need to be perfect but it does need to be good enough and the key Dimensions here are typically reliability and performance But ultimately it also needs to be super easy to integrate and maintain this Gateway integration and adapted to their needs too so to bring this all together if you are able to bring in more gateways into your ecosystem this can not only enable more collaboration on your base layer so feeding back into your protocol to drive better quality of service and reliability this can also bring more Demand with more protocol Revenue this can incentivize more suppliers to join your Network raising the standards for everyone and again feeding into that flywheel and driving more and higher uh better quality of service and reliability for everyone so to close off the deepin mullet is a synergistic mechanism that leans into all available business models for an ecosystem without creating unmanageable conflix or an unsustainable overhead and it's built on the foundations of the three principles of pragmatism decentralization does not sell it's convenience that expands markets minimalism knowing that if you try to do everything yourself you're very unlikely to succeed and whatever you do succeed in is unlikely to be that good in the first place and lastly the true success comes from being able to Foster that healthy and dynamic collaboration and and competition uh Dynamic at your demand layer thank you all and uh look forward to taking any questions if you have any [Applause] time um hi I just wanted to ask since you mentioned that not everything need needed to be a blockchain and the mullet was specifying that you know in the back you will have this decentralized physical infrastructure but at the front you're you're going to have sort of a centralized experience but in the last wheel you present that maybe you will need more gateways you mean are the centralized system of gateways or a Gateway that comes from the community like what exactly did you mean by that um yeah so I guess more gateways I mean more businesses building on your protocol and so today if you look at most decentralized infrastructure protocols they typically have an option to connect directly to the protocol and that was the initial thinking with most of these storage bandwidth protocols that if you really want access to this decentralized service you would connect directly however nobody really wants that so almost every protocol has built one Gateway however the thesis of um this Gateway ecosystem and the deepin mullet is that you need to Foster many like tens if not hundreds of these businesses to build on top and so they may look like a one or two person team and I guess in pocket's case today we have three gateways so they are three different RPC businesses however of the next three we're planning to onboard um one is an existing RPC business but the next two are actually major developer communities that currently don't run any RPC realize they've a really strong brand and ultimately a distribution Channel they can tap into so actually by building an RPC business on top of the protocol we provide the infrastructure and they can exper they can provide the essentially the network and the the sales process does that answer your question Round of Applause for derad everybody thank you we'll jump back right into a quick