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

- Channel: [Devcon](https://streameth.org/devcon)
- Date: 2020-10-09
- Duration: 1:59:00
- Topics: Breakout Room B10, blockchain, smart contracts, distributed ledger, Devcon 5 Day 1, Science & Technology
- Watch: https://streameth.org/watch/yt-CJvNlf5blm4
- YouTube: https://www.youtube.com/watch?v=CJvNlf5blm4

## Description

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https://archive.devcon.org/archive/watch/5/funding-as-medium-and-message-how-we-get-capital-and-its-influence-on-buidl

Access to capital is likely one of the most fundamental tools to #BUIDL anything. But do we ever think of funding as a core tool and the implications that it has? And how does our choice of funding affect our message? Funding has many sources, both centralised and decentralized, and many legal implications. And funding strongly affects incentives, human behaviour, how we communicate and collaborate with a community.
This workshop will explore a topic that often feels taboo: namely how and why we obtain funding and what it means in a decentralized world. We will explore centralised funding (equity), non-profit funding (grants), decentralised funding (tokens), continuous funding (DAOs and bonding curves) and many more. More importantly, though, we explore what teams and developers should be aware of when looking for funding decentralized solutions, educating attendees on what sources are available in the Ethereum ecosystem, and what philosophical and behavioural implications funding actually has.

Speaker(s): Paul Kohlhaas
Skill level: Beginner
Track: Society and Systems


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Devcon is the Ethereum conference for developers, researchers, thinkers, and makers. 
Devcon 5 was held in Osaka, Japan on Oct 8 - 11, 2019.
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## Transcript

[Applause] hi everyone hi welcome to DEFCON 5 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 reason I chose this topic was because it came making a very personal topic for me as well I saw other kind of funding scenarios involving for system over over time and I think it's pretty important topic stacks the address we're opening what are the different sources of capital where does kind of come from what are the incentives that come with it and how do we decide where to get it from 58 oh cool so I'll just quickly konnichiwa konnichiwa our goals for today are really to first to foster an open conversation to explore the world of funding and habitats where three specifically in funding with three infrastructure we want to look at different sources of funding and in Senate design we're going to go from centralized model to very decentralized models that button and then what we really want to try and do is make this a very good platform for you guys to share your experiences discuss the problems that you encounter to ask questions yes so that's one of their core goals of the workshop we really want to try and make this as a drag so please feel free to engage US presidents interrupt it really should be like a very kind of front facing what's up cool our workshop challenge for today are energies from demo compo fortunately or unfortunately I've been raising money I feel like most of my adult career first at a tech startup with the consensus I raise money for the launch of the enterprise appearing Alliance so in the open source standards world and recently at dharma temple where we managed I think the largest actively managed the very fun hundred fifty million dollars opening permit and I think that can speak to some of the issues with institutional allocators open source grants and venture next up we have a meeting so money a little money I've been the recipient of grants on the floor from Jeff to channels and stuff and also summoner of Moloch Tao which are open source a mystery everybody working on a project called the common stack which is a collaboration between giveth and block science and we're pushing forward open source token engineering and robust design in economic systems and the first component we're building as an Augmented body meter which is a funding mechanism with continuous funding mechanism for open source projects or for communities around the cosmos I want to give a brief introduction to statement often we're going to try and cover a host of topics in this Marcel I always feel like to say I'd like to say I'm not qualified to talk about any of these topics but I've learned so much over the time and what I'm really trying to do is really just share share my experiences give you a very brief background about myself I first got into doors point in May 2013 but being interested in kinetics and the first community comments like the doors point I think no crypto presentation was ever I studied economics in Switzerland Cape Town's really fell down the rabbit hole in late 2015 some people little mouths worked on an identity put the group UNICEF went to Denmark to met a lot of people at consensus join consensus for the first time worked on you point that left consensus and under the income people Pollock Germans were aiming to redesign the way that essentially centralizes the drug development provided to confront we're launching our first back and the fundraising topic for meeting and became very prominent this year we got into fundraising mode I had to kind of go through a lot of these the challenges like with fundraising as well as the good sons Sarika Teixeira or 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 yeah it's a lot of people which is great so you can all kind of join individual topics later on maybe and has a quiz received VC funding well get it is so the structure the worst of the expense missing in about well what can it go into each funding category so the money categories of DC mm to target sales maybe hands up with who's received funding by doing a token sale so that's interesting array that's about nest equipment VC which is yeah I think that's maybe states made we received a grant before from any kind of Bradley string 33 dinners Wow I suppose that's more people that that we had with with we're talking sales less people that we see who is received funding from the table before nice okay maybe that hunts like an open question to the pro why do you guys feel that funding off the deals I could 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 the eServices where we all say yes to that persistent part of it so our grant funding I think for example of a two experiments really discuss probably things like VC funding less so it's kind of moving it's almost moving in from the scale from nonprofit perform profit which also changes the scale in terms of its grants there's almost me like that's a great opportunity gives us that was really hard to understand how any of these companies got VC funding borders because of level with the incentive the VC how does the round structure work valuation in Turkey yeah but maybe that's what about this that's really cool so why is funding a core 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 is fundamentally define point bill how you monetize it any one time to do that so getting a grant to fund your town it has very different implications that getting of 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 issue of 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 no spaces here in front thank you so much for joining us she also the other champions I've already introduced themselves do you want to give me a quick intro yeah sure so hi I'm Kevin o makki I'm one of the cofounders of 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 kick point grants which just round three raised just under 300 k 4 e 2.0 prolixity mrs. to and explained the matching yes this is so rad yes Oh Glenn while and metallic published his 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 a hundred dollars to project it'll get matched by a hundred dollars from the matching fund that's distributed according to the breadth of contributions not just the depth so if project a raises a hundred dollars from one donor then it'll get matched less than project B that got ten dollars from ten different donors so both projects raised a hundred dollars 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 one dollar 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 drew and I do up here okay cool so as we move through these different topics we'll look at what is they funded what is they often is this a for-profit model or nonprofit another governance who makes the decision on what gets funded no one doesn't the incentives or benefits from the funding and then what are the key issues that that can come we have this question already who is a planet before I'm actually really glad that you joined so I think one of the core questions that we have in this ecosystem and that keeps coming up again is like funding how do we fund to open source infrastructure and it's kind of the strategy of the comments 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 we've develop I think good models yet to to scale that 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 day is like monetizing day a 1 and a 2 and so on and of course thing that I want to get into this is well kind of this is kind of what we're trying to do you guys not see it it's just the public works entertain in the kind of current society we pay taxes in order to like pay for the roads to be done the kind of state was having pain taxes to use these theorem to the finest but that the miners don't kind of invest back into that continuous development of the rows of the base there so if we don't kind of find good ways to invest in public works will it be like refundable capital into public works then we end up like us like shitty fun whole throats and this is a really big problem I think not just a problem that we have in I think the current open watching space but it's a problem an open source maintained man in general Kevin maybe you have or lacking 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 so I mean I think that our mission is to crowd sustainable sources whatever went up here has an interesting model that could be used to solve the coordination problem of funding , sack full of dal Congrats I know we're all experimenting with space and so I think a diversification of funding models it will make me miss system stronger so it look to hear from the others on the panel Jim we'll get into that each of the models you're not just like as a base open it okay so we don't like this so we need better funding models for the Commons which would be want to make sure that we 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 roads but if they're not maintained well they're gonna end up like this and on the other side this kind of reminds me of some of the day or one solutions that are being built up it's like if we start monetizing scalability too hard then essentially it become click like using a theater will be like pausing from toll gate to target that's also something that we want to avoid okay so over the next half hour plus we're really gonna kind of take the journey from different for-profit models into nonprofit models and then finally to their comments the first one that we're going to start with is venture capital one of the oldest funding models in existence I think compared to the other ones about cool so let's talk about in Chicago I think going back to Ellie I saw the most amount intact up for people that had previously received VC because my phrasing you have again okay does anyone want to speak about their experience chants prints that haven't DC maybe some additions they encountered yeah the only language be seen so you haven't seen one lineman ever watch that so the only way I got to be seen to invest basically governance and ground roll and weaker UN and that was have to show that there is yeah or you may get funding Here I am any good your mom that doesn't really cut it that's a field imager thanks to their and one other is like the environment was very it's so easy to raise like 27 and when we tried to raise like a serious I can completely different eight so I think alive you see that from the ground sizes why me ground sizes were like doesn't have now there are not to my very major others I think that speaks to exactly what your penis is said it's like so much decreased a lot of twists I'm going to say something similar but their deal so environments before me but else that I've been teased okay coming from the VC side work Adebisi although I think that you know I think that also some really great in a lot of ways issue is that maybe there's no way different than vici obsessed right so a venture capital works for a lot of models but a lot of the business and projects that we're building right now in crypto aren't served but in traditional venture capital return structures and as the process and just in federal like Jesus is overseeing this disassociation with how Bichir capital can be applied to prove to projects and that's on the other question like how private capital is being funneled to early tech invasion in other words really really interesting comic I think something that will be very interesting to see play out there's a lot of thing a lot of it a lot of companies that be planning at the moment that they don't have a business together and we've been interesting to see at some point if if kind of like healthy pressure starts rising on investments that were made that have large user bases that people are now using that have created the slogan infrastructure but that not need to start monetizing that open infrastructure which might kill those user bases they'll be interesting to see really interesting inevitable together these patterns successful in the past and they apply that moving forward bathroom yeah general students we detect ups I've just heard a lot of stories where there's been the author of investor that had some power to do something wrong yeah basically try to maintain yeah I've just had times I'm in the old story of the one who invested the mississipp for everyone and then there's a lot of pain and torture in getting rid of that that's awesome I think another generalization is what we're seeing right now with with entities that try to become ubiquitous like we work in Newberg 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 and uh kind of balancing actually building a sustainable business with if I put a dollar in we get five dollars out and and recognizing that that we actually do mean baljeets in the end before everyone was kind of born new to the topic I want to give a very quick overview so this is general for college funding model B C's invests to make money like and and that's a big confusion that's understood we can happen if you're like building this cool open source projects on the walked in and see centralized like does it make money know if it doesn't then like that's a hard pitch unless you can convince someone that you're going to grow to enormous user base and somehow be able to monitor the news against them that was some learning from you coming out of their open source watching space it's like people that make money and if you don't make the money together 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 the other generally generally how it works if you don't have a company if you're tiny ways we see and you don't have a company yet and decentralized t aim of go-getters and you making it work it's gonna be hard to raisers in taking before staff are we familiar with Y Combinator state standard agreement feature ok so like that's even more nuance the get spoken part versus the actual I agree that created yeah but it's a great comment so just as a quick recap company a company normally has equity equity shares that to be 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 convertible known as a death instrument that can be converted into equity at a later liquidation stage so you could say for example you're now you guys are just starting out you have an early stage team you've created your company and now if you seduce for example you're raising two hundred thousand in financing buy a convertible note so that's essentially a debt that comes out to about chain and then depth you would then say to the VC cool let me look into a civilian in here once we put those milestones and when she wears that million that depth Thank You burns is a little bit about generally it's based on consecutive funding rounds based on progress and it's kind of like leveling 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 you go from a friends-and-family round to a proceed round to a seed round and then series a/b c/d this very few companies in the chorus made it into like this range like a quite basement here most companies encompass most companies that we've seen the seed stage a lot of companies are in series 8 in series debut nobody want 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 an intellect it's like further for the office line and read it I feel okay maybe 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 it really depends on your obviously on your different system it is a horrible idea yes sir procedures in general anything that you refer to the first kind of institutional money so this could be a very early stage button and a couple of angels it could also be a couple of angels this range would be anywhere from like a hundred through up to like up to a million there's even like one of the half million dollar receive grants now but this is intensity the range then see now starts when he starts out with of like 750 to a million and then goes up top to pit so there's seed rounds up to fortified light a lot of this is very flexible the numbers from the past two or three years have just been going up up up so companies raise more money under various state which is part of like I think we're seeing end to end this really big just excess in capital which is also starting to flip not as a have we said earlier with like IPOs been going to awesome so really you want to start making money within three to five years minimum this few businesses like that I mean there's very long term big project companies but that doesn't apply it to like to cook our general 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 money probably so there's many examples kind of horror stories enough 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 we have really seen that yet mentioning in crypto but it is something to consider just from a governance system then this is a really looking for 10x business models so if you can't demonstrate how this is going to have like 10x in terms of an investment if they invest the billion they want to exit with ten million which means resolve your business at that point needs to be it's a really grow to match those numbers valuations and terpenes so valuation is basically once you go to VC or give it to an angel once you select early you're going to try and want to get to evaluation which means you need to now put a price on your company which not means you need to evaluate and how much money could this company make in some place and then the idea you want to get to a term seen a term sheet is kind of the offer from the me see how much they're willing to invest any one terms go and then there is best thing which this supplement is often forgotten crypto we'll get to that a little bit later but it's essentially how your own shares of the company or your employees chairs invest over time so this is really just to cover the basis I know you want to make this like open kind of discussion around to discuss worst of all the VCS and funding he centralized open infrastructure but also the polar pcs in like funding projects in the space of general Abby just had a great comment earlier that I think for a lot of open source business models VC funding doesn't actually work off and yeah maybe to kick it off I want to hand it over to you guys in terms of experiences in terms of that's that's one thing we've come up in the common stack looking for funding to build the common stack I'm looking at VCS and the first question of supplements or 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 bot we don't want a profit model and that makes the VC Road very difficult route to walk for an open source project like the contact projects that seem to have had some success raising theses our projects that they might have an open source construction but they you know are going to bend figure out to come to mind that recently one in project one is the swamp Sabrina 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 me nothing to you it doesn't matter it just means that you can always trade against it I'll always trade back with you you can put money there it doesn't actually take anything use it 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 downs and die thankful almost all day so you can take a loan and interest but maybe there's compound which is another platform 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 like crunch an error and so they provide a valuable service and then 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 nice so to answer this question I really think there has been a role and VC'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 on moment with I would say the imperium token sale the is that it wasn't a bunch of people on Sand Hill Road that would hate papers with us and I think that was kind of the aha moment of the token sale although a little silly token sales in general but but I mean this the future of Finance is we're witnessing it where you can where you don't need the visas for everyone to come seduce you how do you guys feel though so you see I think we've got to we got to target sales just as well I think we've largely seen to excel disappear 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 for example projects like the comments that I think you guys would totally go to the option of like raising from everyone as a VC but the market isn't there anyone that it couldn't be isn't there yeah and 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 the investment models where you are paying a subscription fee and you receive you know a token and asset 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 down as a human society as we pool any hospital and then allocated towards what's best now we do that through taxes that isn't necessarily efficient we do that through the stock market global calendar tools to provide the Trinity for for profits to do work and grow the value of what we gave them but we don't have this for the non profit 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 common stack is basically creating that capital pool for a non-profit open source infrastructure to survive and thrive yeah I hope the questions yeah even if you say that the internet took a blockchain which other potential creating making people micro investors right we most people are conditioned okay that I'm going to invest my money okay I want this to make a return so they are thinking like the beauty they are thinking invader how can an open source generate returns for me so how do you monetize forever so appreciate your views it's like VCS literally ten hundred thousand extra turns absolutely they're doing look like angar Singh they're like pushing me to go through there 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 2x returns or like something you know something that might get you back over our timeline right all right but it's also potentially less risky right right and so there's different ways you know thinking like a VC is sort of a box where it's like you could think like a capitalist but not necessarily a PC okay any other burning questions about visa funny I would just say one thing about corporate structures in the space I think bring consensus and I think with respect to venture capital since this is no surprise or secret that they have tried or trying to raise capital and when having these conversations there were lots of businesses where the value essentially improved to the protocols of the theory things like education of things like the funding research but that didn't fit into the box of 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 about your capital if there is in many cases kind of like product markets there modeling if I put one dollar and how do I do this by the $10 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 it it's if my business is going to improve to a token word to be enterprise value maybe personal experience from Electra myself look I found I found the experience of interacting with VCS at least the ones that would general that's not like super deep crypto small TV very small fun so the more general big PC is I always found them to very disillusioning experienced like these can be very smart but they can also just be extremely like close-minded and you come in there and you like you how to speak minute that 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 on 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 in 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 applies in their respective fields but at the same time being a VC like a partner analyst I don't know why B for some reason it's such a prestigious job title to help so there's also this vanity detail video that comes with the culture of like being a VC being funded by a VC into activity C that's yeah I found it a little bit all always disillusioning to to be to be interacting with oh I guess it's a really high experience like a few guys have I get to the point is also feed on experience of a pinch to someone to like give them money and kind of go through those continues pitches for Franco kids yeah his extra be interesting to see if I compare like early slide Tex that I mean to like to like going through the experience and then like data statistics you'll see how you keep boiling it down to play just core questions like okay but in any experience relating getting support from venture capital but from maybe corporations like offered to them impact instead of 10x experience that he knows ain't them polska saying hey you know you're gonna have this impact and you're gonna have to give that to the people at the big operation platform where you will have benefit from that it's not necessarily economic so so the like most fortune 500s now have corporate entry and you're seeing a lot of it in the financial sector where with things like that Frank most banks are just kind of keeping the lights on with their budgets and they have to look fire with that in to your point it has to solve a specific problem or that's entity and really think they are very so if if you are you know building the next best thing wailing gasps maybe ExxonMobil 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 but you might not mean that you essentially become that company's butter well through them and it might mean like if you get funded by Exxon for example that Chevron or anyone says before justice which it'll be well a stager 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 his panel which are seemed seemed to be just ICM utility companies but there's no the tokenize securities and how that is actually a more or let's say digitized form cowboy racing words I see us with community building since they don't actually offer people equity to most companies what does the panel my securities and their comparison to sort of traditional is it great question I don't think we define good I don't think we even started talking about offense buddy but I think that right now the capital markets don't necessarily have the appetite for them we're seeing them as basically in my opinion glorified you sheets where it was maybe five ten million dollars raised what would I do agree if you're a 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 fertile stood up right now with securities that are getting took knives darling [Music] so for that I'm gonna get you what I think is important to differentiate you can have tokens and then even have tokens representing equity which benefits just as well into the venture capital great colleges lasting change your philanthropy or a venue for we'll have people willing to put money behind something from a venture capital perspective maybe this capital recycling as opposed to getting something back we also have these donor advised funds and you're kind of like a tease these guys all they want babies to recycle their capital 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 focus on out open source and they're good one problem that they want to hold that the ID took a great great fanatic on it or maybe I think to context classify it's very easy to pass b2c but I think these BC can have a ton of value to your startup just have to know that you're kind of that you fit into like that box so that you don't move too far a lot of bucks and then it's gonna add a ton of value like in terms of like I've seen like very young inexperienced he'd get VC funding and whether PC really tries to help you out do an executive coaching make sure you got stay on the track really revamp marketing think about you going to market so V sees also I think especially to the theorem space and different service that could come that have not done an enormous amount of rationalization in the space I think that specifically content in T but we need that professionalisation because we come build everything of its source of all X's and Y's we want to service real customers like real people that need professional product and these do an enormous amount to like push was there as 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 fears just as like any other form of financing essentially fell into the trough into the winter they were seen cool next up tokens who has I saw less heads up there from DC who has received funding from a token octagon do you guys wanna does anyone want to share an experience what was it like breakthrough that maybe at one point did you launch what is it like engaging with that community of investors is it public is it still private let's share a little bit together we we read he goes through the bc first and then we realize here which is it's a very mixed it was in February 18 which is very good yeah so therefore the other running a startup Buda Buda project and so the matter is the BCE or for knives here if you need the real money good money this money for you know but ever startup giving these guys here I say definitely cost a lot of energies to be the leading to worry about to debase se C's do too after you I worry about to what but this inversely defer the repetition of the project and I think the even worse these later donors not necessarily understand more of any visions for your project they just because of the pain people just want to make big money but the way the market is going down we and we myself spent a lot of time trying to get a comparability threat to communicate with reason so these I have to say these are too much some really really good cars yeah any anyone just did to dismiss me obviously - so like I was like self-help group before like honestly I have 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 that that that's not at that stage yeah yeah I thought that remains handed but 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 path - that type of project exactly because there is like a very deep conflict between funding and infrastructure part of the source part of the stock and venture panic like that to me it is obvious and I and I believe this is still like that of course you can do a venture funding ability 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 levels projects but then a perfectly the D holyday idea of token sales of that type of funding products got derailed 2017 when we have like a dating app tokenized products doing SEO send them 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 a part of that well really you know in we really did the sailing in November 2016 that looked like like really a 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 Acurio mikkel system other other parts of the decentralized in the system that and then that DC finally cannot solve I believe that even today we can see maybe not exactly in the current urine community but in a burglar locked a space that but I have a feeling I have like I mean I heard a done that maybe someone from this comment on that statement but if I think like we started now the the race they bring worry that they think it it kind of like a blockchain maximally but but driven by the by the Vista funding said that that the now the approach is that that you know the real document will be for for a VC funded project that who feels they're like the clothes that everyone who's using that the kind of technologies that we worked in love so yeah dude just summarize III believe that you know pokken is a great way to do finance take a very special type 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 E we didn't token economies in general so we need they 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 apart from like a very special low level cases like in Korea for example but not forty forty many projects how you are in this time so so and I think that that really like things like like like for example like you 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 of to come out move on with with with tokens and of course a cool idea that compared Campari Dow approach the with the IC o---- approach that you have some control over the poly Malik's panic and terminated funding to the teams they ceased anything and so on that's also important and I don't really know about VC how that can be recurrent and that you mean so yeah III think you are talking to luck sir I know I just wanted to thank you so much I think that shows really great comment savory previous speaker I want to add to that so specifically those early token sales I think fully follow the ethos of what we were trying to do and then later on we got dating apps and all kinds of stuff I still think 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 that madness that was going on because the DA would have been this could have been this collective efficient capital allocation mechanism into good projects forcing them to action if you diligence how they spend their furthest all of that rather than everyone just slapping like a smart contract on to me and let me exit sent funds to this address we decided to do the token say laughter now 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 that I haven't been having the Dom itself was complete madness like right there but like if it had worked then I think it would have been a great filter correct price so you not even you have a lot to write I had a beginning so gross was actually one of the original lets a collaborator 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 accountability on chain play well the doubt with fact so put the money my multi say Oh fancy and yeah this kind of do what was in your best interest there's 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 10 to 20 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 venture 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 could see in 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 they become someone that sought-after to do technically diligence so you can really kind of decentralize the concept of venture funding I try to get a sense of the room who bought tokens who are tokens in 2017 and who who in 2017 or 18 thought that like tokenization was the future and then we were like totally owning the messiest right 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 marketplace 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 come her I see her buyers 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 falling market whatever you're like it's been hard for us to get traction and but like as you know as we continue to grow the 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 further the way that we've 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 and I could 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 state channels for this outlet state channel guide census so you and you would deposit a bunch of your either on to 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 down 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 or 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 checkpoints 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 to 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 for X it's 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 die into a simple gland is he and that single collateral died and in the future we're gonna have logger or I forget what what tokens are gonna be launched in multi collateral die but you can basically look as as more tokens or States 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 the flow of the tokens in multi 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 died couldn't do that it already started it's not facility centralized but he was two weeks ago when they said Hall is creating a reading to define if something's the utility or security and I think that's a step in the right direction that was ridiculous now that he's not very much from a high level interesting you know just supposing it's our previous discussion of PCs and happened a fine sois not necessary model-driven yeah I think it's interesting 20 over 11 Toki prices like you a token model I think that really goes against what we're saying we're token like I need is good or you know really in fact people who are funny are they just looking for a return that went to bring expectant mothers and so I think it's very important to think about why you're raising money that's expected a Western think you are and you can't sell please I think from that level chest I think a great comment as well how just we talk to kind of question how does he theorem you can we fit into that model like days Democrats up yeah uh-huh I don't personally I don't think they at lunch ever come to sass model he's an avid ship so that I probably doesn't than you're always like the dollars Tish like if your protocol depends on the stable value without it you could never operate and I'm not saying sometime you're saying okay for the same time move on we kind of went through a lot of this but yeah okay so this is what we saw by the white paper I think you saw a ton of this which also discredited the whole block chain space unfortunately but I think about a man who President had made the 360 circle come come to realize like it's brother space be very disillusioned but they've come to realize okay there is actual value to be delivered quotes to show it to anything and yeah and the half cycle and we saw a lot of this as well what is your business I think what is the non capture for the token I think 95 percent of tokens that are one for American Catholic feminity don't have like there's no working model does be gone like there's a limited supply and it's listed summer okay we went through a lot of this I'm not gonna I'm not gonna go into that again and maybe some of the important things to differentiate with token models I think there's both for-profit and nonprofit in separate models something that Andrew mentioned hey I think we need to strongly differentiating token models or token sales of token as business models between an application here token 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 run at a competing protocol level etc you know making that type of behavioral economic incentives makes a lot of sense I think block stream is an example with a Bitcoin where they they invest time-release bitcoins and obviously that's a little bit of a different it's a for-profit entity but kind of baking 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 vs. gap or work or Jeff Wilkie who I think added value to you know you won't point out but 300,000 ether of it hanging so I think thinking about those types of tragedy the Commons shoes is very important I think there I think there was a lot of like miss raised funds right talking cells at the application layer which fundamentally be should have been maybe like ideally like maybe we catch the positive businesses bootstrap or VC funded if they happen if they have tried again pcs money probably a lot of that space a lot of the coins that we see the support existed it vertically and I think it's great to think just some general mozzie things in in general we do it open sale to exchange for Network statement assets so that goes into was raised with the security over here it's often impossible that bumps on financing it's also comes with a lot of issues so we'll use 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 you have we DC which is that kind of leveling up aspect kind of a more decentralized decision making that pundits like or what he said like everyone's Avicii there's various business operating models we've run through that I think the key problems that a lot of companies are faces like the legal incentives other funders and then there the token models cool maybe as a last question before we close the talker topic to come back again what what do you guys feel is the role of tokens and funding he says urban infrastructure building I got especially healthy Achebe's as well like get warning confusion she listened and then after one good she Pierce's mantra more rapidly instead of using too huge first then absolutely yeah and I mean if you if you can build the utility without raising a token that you probably should integrate a token into the model later on unless it souls like a fundamental or Katniss 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 etherium made that and but 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 with oligarchs in the network fins bass booth proof-of-work you can improve that minors are at a guide to the network because there's consensus algorithm that says that minors riding bikes the network but with software development the value proposition is inherently abstracts and you know the software developers are sometimes not great communicators and I don't even know if the projects that I worked on for the last month that we don't intend 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 buta inflation funding the toxins that sums up really nicely in his blog post on Volusion which is on this 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 be varying from a net that that yep he 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 going to see it on the theory at a time soon enough name a showmance quiz for inflation funding but in what context 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 VIP 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 contour of a fully baked inocent controversy where I don't think I think in this room people would how many people agree that software development is valuable to etherium 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 you to put out clients information there you go so that's the gradient right there variation like probably if it's out sure that's wicked - it's just like that I know that's being done are they completely Mitchell Michelina protocol this is like a really fun conversation having the abstract and Kevin process 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 found the works you made a telegram group there's a couple hundred people in it with like a lot of people came in and like started being all I think the Chordettes should be responsible for distributing funding because we know best right and then like Aragon comes 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 to give me the legitimacy even if I think I think it's the same exact way I'm thinking about other people trying to spend the money and so it's a deadlock right and it's devolve into this sort of like political power struggle and then that's when I Ridge but that whole thing and I was like I'm outta here I see the words it was that I think this is this is what people want you about right it's that the whole thing could was legitimacy because people could leave that it has been captured by some special interests and that potentially is more damaging to the project and the value that the funding 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 we 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 conversation with the goal of like you know kind of a little noble goal 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 whatever like we still wanted what you're doing this right so the fat 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 our legitimacy to drive that conversation great and we're like the proposals are like let's just put it in and out really yes whatever happened last time Lee and and like we as a community haven't even participated and downs because we're not used to this like we haven't learned from your experience of managing funds it'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 summoned Moloch down and you can talk more about that later but like it's it's still possible for this to be involved in the direction where some now like structure doesn't play it out other people want it to like use the money to pay for quartets immediately and the situation there is like youth was like $100 yeah front plate was like you know and people were definitely 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 right that's that's my thought so um I think it's still an important thing to consider very slowly maybe if we overly can right honey figure it out speaking of experiments here we are experimenting with different funding levels right we'll work our way to explain matching is I love it like I think this is the perfect segue into next topic we talk for just going to be talked about investing maybe one last thing that we haven't talked about that like and but after 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 decent by the point Trust goes public and then loses the majority of its valuation to the public market so maybe as Abbas caveat here but this tune there's too many things to bring up just what is C cash and the other isn't green yeah see catch you who here knows what C terminus everybody I think here notice that is he has 20 percent inflation funding so they put that into the beginning they said working for 3 years we're gonna give developer fun 20 percent of the protocol rewards to pay 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 he sounded like a source of contract like okay it's can you opt into the in the beginning of the movie a minute but once later if you try to change the contact later on then you got for me right and the other thing is this friend and Brin raised so much money and it like touted by all the me seasons like fair money creature knows what greatness like happy and they had no inflation funding for Deb's they had no depth well they're like everybody makes money off this past mine and what happened was like the most predictable tragedy the comments effort which is like one all the people who are operating first of all of our pcs were greedy and and - you have no money set for death certificate the devs were like broke and trying to like you know plead with 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 went I stopped following it which fundamentally doesn't make sense but that's the classic tragedy of the Commons probably a bunch of PCs that invested into the miners but no one's going to continue funding the actual protocol Alvin right it doesn't make any cognitive sense but if I gets this yeah it's like from the single act from a single actors perspective you're like well then somebody else about that why should be from them I think that's one of the reasons why I think in the buggy movies you saw the creation of these community funds like a lot of big of the of the bigger projects simultaneously also raise their own easy fund to support their community which now obviously operated under much best kind of narrow-minded okay but before we get too deep into the little things I want to talk about maths scientists actually the last few comments are a great segue from from tokens not to graphs as the funding option after - after tokens we're going to go into dowels and then kind of - well how's everybody doing with like should we take a really break or should we just keep it going I figure you take a break my disperse - fun cool that's our bug that's who's received a grant what so maybe someone in the vacuum business permit was your experience Oh - that's apart but to a liner go inside the bunker quite as opposed you're always delivering and quite so like you guys around a little bit more I think Austin's right that going forward there should be clear mechanisms for the same mouthful difference and also accountability for using those will also help with that process because often people are saying they want to see the value on what they are paying for I thought maybe just doesn't and I think almost like I've seen some grant funding processes to be like more stringent than the much smaller amounts but much more stringent see in chapter that the situating process in terms of the pasta 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 when I add something they experience yes grants are like bandits you know they give you like okay I have a problem I don't have any economic model I wanted through 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 runs out and then it's a sad thing that's why I love get point grants they're not like grants it's like a continuous funny you even you can start making plans when you rely on both Frank's at the beginning it's like you have to use that money to figure out how you're going to get your next money you know it's almost like it's kind of wasted just on playing a 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 I'd sell of course that one's out but that 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 and were 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 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 BBC's mother distressful actually probably any type of funding if you're not running a sustainable businesses and safety stress this economy could you're gonna feel like a week recap again it's clearly mother who mean grant said nobody in exchange for services for like a community so build something to the read specific service that serves the common good nobody it's payment on that they read what I've seen it's like it's like very milestone based payments not on full delivery but it's like to the one thing you gotta do the other thing in general fund infrastructure community initiatives it's generally very small amounts compared to VC and tokens and I think maybe that's where the whole model again of like how can we brothers open source infrastructure false show it pumping so much money into the one direction for for-profit policy not like nearly enough into the other direction how I have a lot of value who's to the protocol later here in centralized decision-making and centralized governance in many cases what it feels like even if it's a cream iam I've heard it can take a really long time to like to hear from the ground because I 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 to come in and just be like oh yeah it'll come up in the next batch and this is like a very would not grant funding coming company foundation in these namespace we still have government and if we were relying on that as business I mean the grandmas recruits like not to go and then the first payment came about after and we still do the rest it's like we're super dependent on it for like party emails angry and I'm a objected big migrants is pushing to decentralize decision-making about grants to an algorithm on the CL art stuff so it's not all of them are decentralized if our artisan tries I'd also say the vault au has a decentralized decision making process so people are pushing pushing that's sweet as I kind of not reading a grant-funded follow but I wanted to add it to give it a new chance to talk a little bit about consensus as I thought I think it census did so much in DTM spaces early on and really invested a lot at the protocol data it's definitely like grant funding lot of fun although they have a grant funding Jeff do you wanna talk a little bit about that and Senate but basically compared to traditional venture where the dollar rating of five dollars out here's our product here sir here's our contraption consensus had lots of different tentacles independent and in some of them the value would accrue to the ether token things like consensus diligent incisional things like education and things like was marketing for awareness and and those we necessarily lose something that would be venture festival so just defining that but but I think that consensus did not shirking economies I think I think grant served an important part of the penny ecosystem because like if you have a vested interest like yeah spend money we I received a grant from the f was 420 we're playing is that better connects team we work with them to play and that's like you know source infrastructure for the hold space some of that work it was like research oriented because first wants to do it and it's hard to you know take that kind of risk if you are 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 aetherium because of the grants that we receive also receive leading the end rupees grant so this was you know I was like broke it working let me crash his house for mobile he wasn't trying to raise money you know people are really helpful you know you're also trying to help that succeed something that I've noticed with threats as well like personalities still that are a lot at building every good relationship with a grant funding Authority it may seem like you're applying to the for example to the ETF and like it's a very technical thing that happens you must be funded and someone else gets funded before you and it is still very relationship that's that's an expense that I've been listening because the space is small yeah I was super super cool let's talk about that it's getting to King so we can make you through this whole like for-profit older models into like none and to the models into the profits and now activate you don't have the models exactly - we'll get into like the last section of the watchtower just just discussing new hybrid models so slapping about bonding here want a job see what happens but here let's talk about ours were more generally initially I want to open it up to the audience again audience works out for me you guys are the base nice what about the time have you received planning from down and I say that I'm a bad actor I am part of the molecule and I think that's our have a core part of our town 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 a mean kind of sort of himself and and I think that that's an issue with like a public utility like a doubt like governance and funky-looking I mean you just create Monica I know today's bang grenades I found personally in the doubt and then our limitations like I said before either she's like yeah but then I reach but that work it's a okay can you talking about like the project loading they're talking about all this stuff yeah so all who hears her tomalak doubt all right it's and I got a grant from the app as a little frustrated about how inefficient that process was so I decided to launch a competing grants organization or you know walk curry so wait while looked at works is you can put money in and you buy shares you have to be voted in by the existing members and you get voting power proportional to the amount of money that you put in and the only way that the doubting 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 ground will mint those shares and that proportionally dilutes all of the existing members so that the money comes from everybody you if 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 but when the temperatures and then those temperatures you can Rachel it so two other mechanisms there's a there's a seven-day of voting period and a seven-day grace period so during the voting period everybody can vote and that vote 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 they were basically everybody else to pay for it and it's and it makes it so that if you disagree strongly enough with the way that the doubt is going to spend your money you can take your money and leave alright so the thing is you know it's not really a bad actor and it's 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 he can pull he has a week to pull out his money but before that money gets spent and that's pretty powerful because it means he always has sovereignty over his month unlike some days were like if you want to take you actually have to submit a proposal and get everybody else to vote to let you pull out your money and so if that doubt gets captured you can potentially never again I think that was safe so so far that 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 ether at the beginning we're just like you know no idea where this should we go but like it seems like a good idea that striveth and then eventually we proved that we could coordinate and font grants per we funded these two reports we funded b2 development we funded we funded 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 2000 also and really give us a lot more firepower to be able to not only like engage well 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 will have your answer in a week and you will get your money in a week after that right if it passes and so you know that 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 I do we need you to test runner so that the client teams can run tests against their bills make sure that like if something changes you know they know it broke something and the next day it guys like I'll do it earlier we interview him the next day after that you're like variable seems good and so we used to the proposal $20,000 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 white lucky he came on to help execute it was like a one you know one month project great the key thing is like a one month contract work it's like not even worth doing it's not even worth thinking about for like going to the yet for money because the amount of time and effort you have to spend just to get the proposal through is like more tough you know value than the whole grant right and so being able to have like fast efficient grants as I think a nice slate complimentary aspected City F grants and I think that the model has sort of taken off also because we're seeing the same code or getting doubt which is like a super PAC to fund and your yang beams and like meta cartel which is like a bunch of application-layer developers coming up on application-layer infrastructure and like Church of doubters and our collective they're different story but I think that it also presents a model for the yet to incredibly decentralize their funding so they get criticisms because they you know they're like how do you guys make your decisions or how do you decide the fritz but their money all this stuff and it's like well if they could put more of their money into denounce for like 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 is on chain funding that's the mullet primer I think it's a nice much for that again 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 Moloch 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 Mallen came out 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 and that we test cookie I think he wouldn't be gone before calling itself is trying to cheat the code itself has taken on its own life form and things like meta cartel is anyone from Erica Tyler yeah the anyone that can explain this a hotel yeah yeah okay she took that second cell basically predicted by Monica think you tried together grab her molecule right join as a member right I tried to get him in the rest of the to that first look like now so they you don't reject it you've got a seems like right I'm gonna have a hood and so these are the next on a background so it's really more in the application there dux and so meta car travel is basically he was saying primer has more but to fund the application later and but as a different story that model because Monica since its funding to is seed grants giving but may take a cell makes more sense to maybe switch to the for-profit and so it is going to is like an ongoing discussion is probably like finalized because the first wave of grants so Francis a quick front in basically package like event occurring an MTS for taking Monica thing and basically they're like starting to incorporate and so maybe we're gonna do another tau structure to kind of get maybe system and investors or other support so anyways like recording business follows is different from Moloch which is to like a charity and we might switch to for-profit there so he elicited cyclic for the application layer Super Bowl and like now great segue into the next topic as well but like we're seeing like a lot of expectation and people actually moving for nonprofit balls again into for-profit models which is being quality good so I think I think what we'll see over the next six months in here as well is like the reinvigoration of models like what the dow were originally trying to do and I can't wait for like a VC to actually whether we'll be seen come along with it but actually let's allocate capital into the sub now that will then invest into like these these set of projects which is going to be really yeah exactly actually also playing twister is cohort-based funding so kind of like going towards like a mini white linen or kind of thing about 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 as you pointed out I think centralization of decentralization is still a spectrum you know you can have without being more decentralized but also here than me and say if there's something you know that might you know he'll make a couple calls and like that's not gonna pass where is Tommy zatia in the ending how they're set up so there are 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 address 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 all ecumenical tell these are great examples but they're still deflating continuously deflating the state of everyone involved so if you carry this up to its logical conclusion once maulik has spent all this money the next person to come in puts in 100 E and they suddenly have a very small proportion of governance over their money and meanwhile everyone who is in moment before who spent all of all its 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 which is I think the problem that we're here to discuss is they're all valid criticisms but 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 the sense that systems and so you can see what you want but like I mean kind of an eerie electronic table let's say that there's a lot of things that's 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 like there's a lot of people who didn't want hang down to get funding for bowling and I really wanted gang now it's very metabolic so I voted with every single one of my 601 shares to make sure you get one sumner share at a hundred personally to make sure that an egg now went through and some people were like it's 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 can say maybe I anticipated that it would piss people off just enough that they wouldn't leave but that's you know ended up and I think actually most of the members are in retrospect happy with that decision because the people who try and have people who like Peter Pan who now runs mana cartel who was doing the coordination for Yangon and that just it was the young us to use the same code there they're actually what we were funding was the mobile app about mobile UI for our small town could eventually use also right and he's also planning building Dow house which now can like you can spit up your own ball of talent and see all the dashboard of all the motels I think that's maybe one aspect of dowels that in this large chain space where there's a large ethos of code is law we often forget that there's a cultural aspect to these as well and having mean as the steward of Moloch and I mean each now kind of has this leader or group of people that that the community looks to to steward these towels in the right direction and that's not necessarily a bad thing 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 of there are certain puzzle pieces we need before we can continue moving down down that speculative so also a little more things I'm actually taking a step back from my sort of active participation in public doubt in terms of just like a lot of the coordination work due diligence some of that and we're excited to see how it's going to move all of us other members step up and fill the void that we were that I was doing to the court so I'm gonna maybe there's a lot of people who building websites and like popular teams during middleware a platform is going to work cool I'm gonna move to the I think we've discussed this again one of them to the last topic I think it's really exciting and guys thanks a lot for bearing with us it's been entertaining through those pretty long parts up 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 want to ask it to the audience is anyone will expand a little bit well is anyone already familiar with models like the con stack or the Eragon fundraising out or something like continuous organizations that's up okay I've got a half of the room cool maybe tone that the person meant to those people raised their hand would might you explain it to the rest of us simpletons yes of me when these two bottles really come with these two one was really combined higher now combining governance and our structures with fundraising and and target cells but the main I think a key difference between these two is that these are now they're looking at continues financing mechanisms and a lot of them are looking through financing mechanisms through bonding curves which are instead of just issuing a lump sum of tokens you really issue them continuously over time according to supply and demand in the market in exchange for funding there's taxation mechanisms that we can filled into the curves yet so for me the hybrid models kind of our continuous by raising models for dollars which is ours the first Olympics financing that we put here doesn't know where to talk about occur is but you know what populate okay I'm assuming I'm assuming most people know but I'll just just expand 500ms market maker what do me with autonomous market maker so normally if you the previous store manage that we seen someone makes the smart contract and issues all the total at once 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 the stereotypical design that you see a lot of the time we'll just pictured the representative is actually a terrible way to represent body groups but it's what the use T is positive so this is the supply to monitor for my big night we have the price at one side and then the supplies bottom and then you have a curve that governs the issuance it's essentially a function mathematical functions can be exponential or conducive point that gets encoded into this markup and so has more focus in issue the price increases according to that curve if people can also prepare took it's by just sending the back to the content and then the price decreases again so essentially people are always training on this girl does it mean though that the actual trading looks like that the training can look very much like a normal chart so remember that this is the supply and it's kind of time 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 terminal representing membership but they're obviously membership but also first off what equates to that are generated by that containers organization and we have champion from the Cossack as well as Griff and I think the comics egg is one of the most exciting projects that I've seen in the space come about that is really pursuing these hybrid tub models and specifically interesting in the context of funding open source infrastructure so I think we've 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 the issues with it long term the fund slowly deflate so you 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 bonding curve and the basic auditing 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 and 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 a token bottom curve model we're calling the Augmented bonding curve and that token is not worth just a claim on the collateral pool in law like if your age great you take your portion or what's left of it out but we also give it another value in the governance 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 bonding curve comes in but with the Augmented bonding curve as the price as people sell them if you're the last person on holding tokens in holic you're holding the bag basically and the Augmented bonding 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 do in this community you understand that when you sell this token you're going to pay 5% or 10% to the community this goes a communal funding pool and then if you help hold on all those tokens you basically have covered / that funding 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 governments over that collateral pool and that 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 solutions based 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 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 in each of those votes is going on the user interface is 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 broadcast you're always signaling what you want to see done in the ecosystem and that conviction grows 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 Unchained governance if there's a certain vote maybe a mola 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 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 this is how much should go now 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's proper community representation and 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 the simulation so if every president 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 month ago and the cool thing about the common sack components is all of these will be rigorously designed from mathematical first principles 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 read 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 building there you're it's our go yeah it's old thing is like it's really fun watching you play up the explore apartment mics because you know we're you know I didn't do this we didn't start Moloch to like save the world right we just wanted to fund it to stuff like that continued to fund it so we kind of you know practice meme driven development so we with Paula we have beamed the evaluated 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 take that with any other doubt that they join and have that knowledge and bring it to other other projects as well so it's it's fun you know to have this kinds of there's like there always needs to be something to this first like just to try something you're not doing it for all the use cases and then other people use that as like a research project in order to learn from that and hope something that might be able to be taken to the broader market and market so people might not have even anticipated that that may be smart so katkat doesn't attempt to simulate human behavior I've seen in the hits the Explorer exploit I'm just wondering how some sort of how does that work based on theory just greedy algorithms sure 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 yeah 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 love 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 Kovach 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 parameters 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 behaviors and if we throw in 10,000 agents with 10,000 different objectives and run Monte Carlo analyses sweets 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 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 lives so this is turning crypto economic design into an engineering discipline basically that we can continue improving that model the more we learn thank you so much I think maybe the last moment for me I think we're kind of been well Whitney another workshop we did kind of a full and then almost like a 360 around them going from traditional for-profit models into the token icos craze that we saw then to grant funding facility 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 see 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 Landgraf is describing which are incredibly new thoughtful ways of reading using simulation design to build these economies and using kind of I think these moniker type models are much closer and incentive design as to what you might see in 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 of tools together at this stage I'm really really excited to see keep and given I have all these initiatives continue specifically as they are we kind of pushing the space boarded up and then I want to give a huge thank you to all of you for sitting in this two-hour workshop and for bringing all these amazing massive thank you to add you Jeff and a mean for all of their insights thank you guys so much [Applause] you [Music]