Rotki vs The Cloud Empire: an Aligned App Manifesto

Hi everybody, good morning. Can you guys hear me well? Great. So, good morning. I'm going to make a talk about something that has been really bothering me lately, that most of the apps that we use do not serve us, but instead they serve their creators or their investors.

So, we're going to talk about a new kind of app, the concept of an aligned app, such as Roski, which is something that I'm working on. So, Roski versus the cloud empire and an aligned app manifesto. So, the status quo today is quite simple. Almost all of the apps that we use are misaligned. They run on somebody else's cloud.

They are not open source, not transparent. You don't know what they do. They mine your data, they sell it, or worse, they exploit it. Be it from Instagram to a wallet with hidden telemetry, this is unfortunately the status quo today. This is your red pill moment.

It hasn't been only this year. It has been happening and getting worse and worse every year, but even in the crypto field, we like to say that we are creating this new utopia and that everything is under our control. Maybe the keys that we use are self-custody, but your history, your data, your infrastructure, your indexes, everything is centralized somewhere else. Somebody can cut you off at any point. Even in Web3, we are becoming the product and we are no longer the users.

When we started this, when we were building Ethereum more than 10 years ago, we were like 20 guys in the room thinking, you know, we want to create something different. We want to get rid of the fallible and corruptible systems of the old world and create this new system that is creating sovereignty for the user, decentralization, transparency, empower the user. But today, unfortunately, this is what we have ended up with. We have DeFi, in quotes, that is almost all of it hosted on AWS. It's most of the time closed source, using a lot of closed APIs.

It's basically a black box. So what does that leave us with? That leaves us with essentially having managed to recreate the Web2 stack, the exploitative Web2 stack, but it's even slower and it's a lot worse U.S. To go towards the Star Wars narrative, what we are right now, we are the rebels that we've been dreaming of changing the world and defeating the evil cloud empire.

But we decided to do so by setting up our base inside the Death Star. This is where we are today. Instead of actually building stuff that empowers our users, we have started to collaborate with the Imperials. So how can we fix this? How can we get out of the Death Star?

By using apps that respect the user's data, apps that don't track you, and especially apps that would run locally, empower the user by making them own their data, and apps that can survive their creators. This is what I call aligned apps. And it's not about some vague values. It's aligned with the Ethereum values or aligned with whatever, Cypherpunk values. They're apps that are aligned with you.

Apps that are aligned with the user's interest. That's what alignment is about. So what makes an app an aligned app? Four key principles. The app needs to be open source.

It needs to transparently explain to the user what it does and to be able to be understood and to prove that the claims that the creators are saying about the app are true. It needs to be local first. That means that the majority of the functionality runs locally and not everything is a round trip through a server. Privacy should be paramount. Without privacy, the user runs into too many dangers that we're going to see later.

And the business model should be sustainable and not based on exploiting the users. Alignment is a spectrum. It's not binary. On the far left, we have full cloud capitalism things, the Metas and the Googles of the world. Then as you go towards the right, you start to have some more attributes.

It's not a great example, but imagine that Telegram also allows encrypted communication, but it's not by default. There is false advertising. And the more you go towards the right, the more you end up with transparent, open source apps like Rotki. Your job as users and your job as builders of apps is to go more towards the right of this particular spectrum. Enter Rotki.

Rotki is something that my team and I have been building that empowers you to own your data. It runs on your machine. Rotki is an aligned app. It's an app that's built for you guys. It's not built for a VC to do 100x return on their investment.

What are the credentials that make Rotki an aligned app? As we mentioned before, local storage of data. That means that you are in control of your data as a user. It's transparent thanks to being open source. Everything that I claim about the app all of these years can be confirmed, has been confirmed by just looking at the code.

I can't lie to you. You don't need to trust me. This is really important. There is no hidden phone home features or any hidden telemetry. It can run offline with a big asterisk.

Many of you that may have tried it, sometimes things break. We need to improve that. And it's funded by you guys, by the users, not by exploiting you. Then, let's see Rotki a bit in action. So, it's a portfolio tracking, accounting, and you can connect it to centralized exchanges like Kraken Bybit.

You can connect it to all of the various chains, all of the EVM chains, Arbitrum, Ethereum, and so on and so forth. Substrate chains, Bitcoin chains, even connect to, manually connect, basically to a bank so that you can also track your bank accounts. And then you have this beautiful graph on the top that shows you how your network has evolved over time. The heart and soul of Rotki is its history event. The history view is really the core of the app.

Rotki pulls data from all of the exchanges, from all of the chains, combines it with data that you input, and then forwards it all into the decoding engines that we have that try to make it into a human readable format and understand what it does. What comes at the end is basically a list of history events like this, which you can filter with many filters that can be combined. Filter by an address, filter by a particular asset, by a particular protocol. You can limit the time range of your history, say I want to check the last month or the last year for my accounting. And best of all, you can export any particular filter history of events, save it with your accountant, manually work on it later, or just import it into any other tool.

It's important that an app doesn't limit you to only work in it. You can take your data away whenever you want. We have a lot of statistics that basically operate on top of this data, such as the net value over time. For each asset you can see how the amount and value over time has evolved. Distribution by location, distribution by asset.

I somehow cut it in the slide. And we have various protocol analysis, such as for Ethereum Staking, of course, since this is an Ethereum conference. You can analyze your validators, how their performance has been for all of your validators, how much you earned in rewards, split in execution and consensus layer. For consensus layer, you can see how much has the MEV been or how much is pure block rewards. And here, too, you can filter and see, for example, the rewards only in the last year or only for a particular validator.

More exciting and much more recently, we have gone towards management from inside Rotki. So you can, even today, if you open your Rotki, you can interact with the chain directly from inside the app. Send ETH, send tokens, send XDAI, anything you want for EVM chains, only for now, without leaving the app. The plan is to go also towards providing the ability to do swaps and select DeFi protocols from inside the app. If any of you remember, very long ago, a local browser and local wallet that allowed you to interact with the chain.

This is kind of the vision that we are trying to go for. So, this is a really silly comparison of Rotki versus your typical cloud app. And I say silly because this is what you would see in a typical pitch deck. This is my app. These are the attributes.

Checkmark for all of the attributes. Our competitors, very, very bad. Please invest all your money in us because look at this comparison. This is kind of the opposite. An investor would try to see for ways to take advantage of the user.

If they don't see that they want to invest of you, like a typical investor, a typical, I want 100x VC. There are many good angels. There are even good VC firms. So, for example, let's look at the typical cloud app. Everything is in the cloud.

Your data will be leaked. Your data will be exploited. Rotki, everything is local. You can take it with you. Nobody takes it away from you.

Your typical cloud app will tell you that they are private, that they respect you. They respect your privacy. This is very, very typical. And they have a privacy policy. So, this is very important.

But in reality, there is no privacy there. In Rotki, everything is local. We can't see what you are doing. This is also difficult because sometimes we need to see to help you. But privacy by default is important.

Your typical cloud app is intransparent. It's closed source. You can't know what they do, see how they calculate it, what they calculated. And this is extremely important, especially for something like accounting, because I've checked many of our competitors and the results are so wrong that it's not even funny. We also make mistakes, but then we can look at the code with the user, show them why.

Sometimes it surprises them why the result is as it is. Making money. Your typical cloud app will exploit the shit out of your data, sour you with ads. They will do everything they can to milk you for profit. While an aligned app like Rotki just really tries to provide value to the user and from that make money.

A typical cloud app will track everything they can about you. The metadata that they are gathering is insane if you have ever looked at what an app gathers from the user. For example, Rotki, if you look at the code, you can see what kind of services it contacts and so on and so forth. So when a VC sees this, they're like, no, I'll pass. Because there is no mode that they can create around this.

There is no way to milk the user for profit and keep them in. It's not aligned with a VC's interest, but it is aligned with your interest, with the interest of the users. But building an aligned app is not easy. As you grow, as you gain more users, as your app gains traction, you will have a lot more feature requests. You will need to provide support, create many, many more stuff.

That means resources. That means funding. And then you will get tempted. You will say, hmm, maybe I should close this part of the code. Or create a walled garden around this part of the ecosystem.

Or, you know, maybe somehow monetize. Because this is what my VC told me would guarantee my next funding round. Alignment is fragile and the dark side is tempting, so we really should be vigilant and be careful not to fall into this trap. Because the costs of misalignment are very, very steep. It has very steep consequences, from lost funds when an exchange collapses or gets hacked, to data leaks when an app that supposedly is self-custodial and doesn't have any of this data ends up exposing the speech phrases of the user via email.

I don't know how that even happened. To censoring. It has become kind of a standard, but four or five years ago, Microsoft started sharing the IP addresses and the wallet addresses and God knows what else with friendly network like TRM Labs for compliance and risk reasons. More severe of all the consequences is the loss of privacy. The loss of privacy leads to violence, as we have unfortunately seen very recently many times this year in France.

And violence can lead to loss of life. So misalignment with the user's interests can lead to loss of life. And misalignment is extremely dangerous. So how can we stop this misalignment and really build for the users? In the title of the app there was the word here it is.

This V1 I guess because I had to make the slides fast. Your data, your device, point one. You should try to empower the user to own their data inside their devices. The code should be open source or get the fuck out. There is really like nothing I would do with an app that is not open source.

Bullet point three. Privacy is the default. As we know privacy can lead to violence and harassment and loss of life. So this is an extremely important bullet point. Local first, cloud last.

Doesn't mean that you won't use cloud for some reason. Doesn't mean that there won't be network connections. I mean like of course we live in an interconnected world. But try to do everything that you can locally. Build for your users, not for your investors.

And that finally your business model should focus on sustainability and not exploit the users. We are thankfully not alone. There is many aligned apps and this is just some that I thought of when I was making these slides. We have Signal like the end to end encrypted communication. We have our friends at FileVest that are building an aligned version of the Google Docs suite.

We have notes app like something that sounds misaligned like analytics. Why would you want analytics? You do want analytics. You need to know what your users do. But when you analyze the data you need to do it in a privacy preserving manner like Mami Analytics does.

So talk to me if you are building aligned apps. Let's build a movement around aligned apps together. So let's go to call to action for the users. It all starts with you guys. Vote with your tweets.

Use aligned apps over the surveillance alternatives. Support them in any way you can. Use them. Buy them if they have a subscription program or anything, lifetime subscription. Donate to them.

Evangelize them. Support them. If you are a developer, also make PR for them. Make issues. Give feedback.

In general, question what apps do with your data. Don't just accept them. Think where does your data go and ask the developers what do they do with your data. This may push them to build more aligned apps. Build something that is more aligned with you guys.

Be vigilant. Don't just accept the situation as it is. To the builders here, some things to keep in mind. Would you use your app as a user if you knew how it exploits the user's data? Probably not, right?

Try to provide value to the user. Don't take advantage of them. Providing value is much more sustainable long term. So strive for sustainability. You need to make money.

The poor open source dev idea is fun and all, but after a year, you will burn out. Think of your business model. Really try to make money. Everything that I'm saying here is about not being exploitative. You do need to make money because otherwise your users will suffer.

Again, be vigilant. Closing, alignment is actually punk. Alignment is rebellion. It's not rebellion against banks or regulators or something boring like that, but it's rebellion against corporations, against VCs that would want you to build software that exploits the user and makes the data for profit. So yeah, stay aligned.

And if you want to work with an aligned app like Rotki we're hiring, we do welcome open source contributors. And if you want to work with us, probably you should start by doing quite a few open source contributions because we have so many applications that only those stand out that have already contributed. As a user, use Rotki daily, spread the word, buy our premium subscription, engage with us and talk about aligned apps. That's all. Thank you and stay aligned.