3. Fireside Chat with Guy Wuollet - Paris 2023

uh and we're here to talk sort about our I guess with our experiences and public goods funding uh decentralized Finance uh what else what were the other like hot topics we were going to cover well one of the things that I'm particularly excited about and going to talk a bit more about in longer form tomorrow are decentralized physical infrastructure projects which I think are a very interesting application of the sorts of mechanisms that political Labs is focused on and the space is focused on more broadly to things outside of finance things like Telecom Transportation things that would otherwise be often government sponsored utilities and monopolies that I'm very hopeful we can end up having crypto economic mechanisms to allow normal users and everyday people to own and operate those networks for hopefully much better efficiency yeah um I so I started looking into deepen or decentralized sort of networks like this I worked with helium really extensively when they started on sort of their governance mechan mechanisms and other things um sorry I'm getting a call from friends and one of the things that I'm I'm curious about because I don't know a lot about what you've been working on so it's going to be a little bit exploratory for me as well as sort of how have you addressed the redundancies and the current infrastructure so for example like with subsea cabling for the kind of like Trad net I see that as a major bottleneck and sort of how we approach decentralization and web 3 and I would love to hear your thoughts on on that if you have any yeah I think one answer is to focus on uh networks that haven't been deployed at the scale that they're needed to be useful so you mentioned helium which deployed a lorawan network which is not widely deployed at the time and there were not good incentives to deploy it and so they were trying to create sort of a net new functionality and doing so in a way that a big company is in existing telecom companies were not particularly interested in deploying it at the time and I think uh like the another version of this uh helium and several other decentralized value those projects have focused on creating 5G networks which were only really enabled and made feasible by at least in the US by cbrs yeah which is a 2017 law and and uh difference that that was passed uh creating Spectrum that's open to anyone uh um for 5G instead of having a requirement to go through spectrum auxins and purchase it which is really only constrained to large companies and Enterprises that have typically provided things like uh Wireless communication Services yeah with 5G is an interesting I think case study because I recall it being a 10-year kind of r d process in something like nine billion dollars and again that's sort of one of the things that we come up against around within web3 is like scaling quickly and consensus mechanism and mechanism design I think is a very important aspect to how we kind of address these dependencies that we hope to have redundancy around yeah I think one other answer is to focus on specific geographies so whenever you're dealing with something physical unlike an ethereum or Bitcoin you can have a meaningful impact by concentration in a specific physical area and so one version of this is you just focus on an initial target market uh much like you know Uber and Lyft did originally as well and if you can prove it works in a specific location then you can expand that model much more broadly in I think this is perhaps uh a better or a more practical way to deploy instead of saying we're just going to write a protocol specification implement it and then let anyone sort of have their own small homegrown instance I would be excited to see more people focus on having concentrated areas where you really show genuine success both on the supply and demand side of the market and then expand more broadly afterwards yeah um what do you see sort of the sustainable either retractive or proactive as I like to call it Revenue models for these things like especially within the context of filecoin or uh mvmebs how would you sort of address that yeah I think uh what is happening for some of the ltus on ethereum optimism for example has a series of retroactive public goods funding airdrops are are an interesting uh application or instance of how if a network is generating revenue and there's no clear way to distribute one to distribute it one approach is to use it for public goods funding and I think this applies to Mev specifically as more networks try to internalize Med and this has been a general Trend that seems to be uh the the way things are are going instead of you know taking those funds and either Distributing them back to the individual participants in the network I you could in theory have it dedicated towards building public goods or compliments to the network itself and and that I mean I I think I am perhaps a bit more applied uh or or sort of commercial to use a dirty word uh than a lot of people in Public's good public goods funding but I think uh you could almost Envision those as being compliments to the original Network and a lot of uh very valuable and useful software has been built as a complement to an otherwise very profitable business I think you could look at a lot of the open source machine learning Frameworks that have helped catalyze uh the the current state we're in as complements to otherwise very successful businesses at companies like Google yeah what do you see as sort of um successful case studies or examples of current protocol or public goods mechanism funding that's more proactive and I know like we have a lot of really interesting successful mechanisms in terms of specifically on chain for like retroactive stuff but having I worked in Open Source Hardware and software for about 10 years before I came into crypto and one of the consistent bottlenecks was we needed to produce proactive models of Runway to essentially be able to keep the project viable long enough that we could then kind of generate a sustainable Revenue stream if that was even a possibility within the project and so I'd be really interested to know from your perspective as the sort of like the VC commercial dirty word as you said um of this of this group which I'm actually very Pro by the way uh if there's specific things that you you would like Point people to look at yeah I'm not sure if this will answer your question so uh if it doesn't just call me out on that I think one thing that I would be uh very excited to see more of are ways to allow people to contribute permissionlessly to a protocol or to a Dao and be compensated accurately after the fact and after the fact doesn't mean like a decade from now but you work for a month and your compensation is determined at the end of the month and uh I mean PL has helped fund uh and and organize a project called Source grab that I think was one of the best attempts at doing this in recent years uh unfortunately it hasn't quite worked yet but I would be very interested in seeing uh essentially new models of how an organization should hire or compensate people for the work they do and if that sort of thing can be implemented my hope would be that you don't need proactive funding someone doesn't need to you know go to a fund or a public goods Grant committee and ask for a year or two years of funding for their researcher for their work they can start contributing and to the extent what they're doing is quite useful well they'll actually receive compensation fairly quickly to continue their work I'm not sure this always is going to be applicable because there are some things where it's not a linear stepping stone of like in month one I accomplished this and you know as a result there's a tangible outcome but I am hopeful that more of that will happen uh and and I also think this will hopefully help alleviate some of the coordination problems of very large decentralized organizations where you don't have the hierarchical structure and sort of middle management so to speak of much larger companies yeah um one of the things that I wish I had this tweet pulled up but I think Kevin might be in the room so maybe I can call him out I don't see him but he said something around Uh Kevin like posted something on Twitter the last few days about one of the things is not the power of the most powerful people are like the anons building the decentralization or like communication mechanism tooling and that kind of comes back I think a lot to governance and the question of how do we delineate funding because right now like most of the funding structures that we have in place are completely obfuscated they're not on chain there's no transparency there's no ability to depend on the sustainability or from the sustainability from the standpoint of actual payouts not from a Green Point by the way although that should be also included um the sustainability of how we fund developers and projects in a way that's consistent and dependable and repeatable um is not something I've seen solved yet and I'm curious if if that sort of aligns with your model as well or do you see that there's people that have been looking at about from because because again like ethereum and Foundation or whatever file coin wherever we're looking at they tend to have these massive pots of money and the biggest issue I see consistently is like who decides who allocates that and if it is the community is that something that they're willing to do or is that just kind of they like decentralization and public goods for like the intellectualism of it they don't actually want to deploy it in that way yeah I mean I think this is a good question for people at those organizations like I used to work for Evan that's how I I got more interested in and crypto in the space I I would agree to some extent that there are often uh big uh companies that help facilitate the development of these protocols or decentralized organizations that have large treasuries and those could probably be better utilized uh one of the reasons I'm excited about allowing permissionless contribution is that hopefully it will reduce the amount of coordination required to make use of of those uh uh you know treasuries or or grants committees uh I think the coordination is frankly quite complicated today and getting people to not only agree but first just participate is often quite challenging so I'm not sure that's uh I think there are like very tangible simple straightforward things of how do we encourage people to pay attention and how do we create better coordination mechanisms even before you get to like how do we fund things and do you have any examples of of those that you want to talk about or I mean I think this sort of event is very positive getting people interested and talking about how we create better mechanisms is quite useful I also think I mean a lot of this uh like I'm certainly guilty of it occasionally we end up talking very intellectually about what is positive and what should we be focused on instead of just actually doing things yeah uh and and I think like there is probably not enough focus on like being very pragmatic and very tangible and you know I again perhaps that's my perspective and and something that uh you know other people disagree with me on but I I would be excited to see more people focused on like you know better utilizing the funding mechanisms that we we have today and from kind of a VC standpoint I'd be really curious sitting with sort of within that institutional structure if you will um how do you how do you approach public goods funding when you're up against funding things that have really tangible returns or like tokens or there's some kind of equity allocation that has a very high upside where I think public goods is sort of like a longer bleed if you will a lot of the really viable projects are 5 to 15 to 10 year out kind of things best case I think 5G is like a good use case if that was to be a public good it's a long expensive project but there's a huge upside to that so is there like people or is are there people are sort of VC culture if you will that is like addressing those things in a way that is specific to like maybe one percent of a fund allocation or there's some kind of way that they're recognizing that that they're contributing to uh actively I think BCS get like a very bad rap but I I work with a lot of them and they tend to be genuinely very very um curious and accessible to the conversation of public goods and I'm curious if you've seen any like funds specifically either within your own groups or others who have who've kind of built out successful models for public good funding within the instructor those are two things uh first none of this is legal tax or investment advice please you know you know component of this like us specifically me personally I'm not terribly worried about very long timelines I think uh like crypto actually moves much faster than other Industries where you see uh venture capital or similar funding models and so you can do often a lot more in two years in this space than you can in a space like uh you know more traditional enterprise software and so from that perspective I don't really see as much of the time constraint as perhaps other people uh and you know other people have different approaches that take shorter timelines uh I'm not sure if that answers your your question yeah kind of I think one of the disconnects is like a lot of funding entities and institutions or groups or companies whatever that we've worked with has been well like why should I give um you know one percent of this fund to develop or deploy like a ruby implementation on chromium versus like I don't know do something that uh would you know inject Capital into Airbnb or something that's just like very clean and obvious how that mechanism Works uh without kind of being able to uh explain or insinuate sort of what the Direct Value prop is there one way of thinking about this something we talk about is the difference between a library and a network a library being a single player tool that can involve a lot of time and effort to develop and build but often doesn't have the sort of Leverage or scale typically associated with the network and then things that look more like a network something that looks more like you know ethereum or file client and I think it's often much easier to find funding for things that look like a network because they tend to have Network effects and tend to have greater leverage uh and so I I would agree to some extent that oftentimes tools and libraries that are very individually valuable tend not to receive as much attention from different funding methods um we have a minute I see or two minutes is there anything else that you'd like to say I actually have a lot more questions so maybe we'll talk after this but uh no I'm really excited that everyone came today and I hope we keep talking about this and solve all these problems yeah thanks thank you [Music]