Self-regulate: Don't give governments a chance

Transcript

hello uh i'm alais uh from cleros and for those who don't know clerdos is a disputed solution protocol uh completely decentralized and yeah in ethereum so yeah that means that anyone with a dispute can just call our smart contract and we will draw a random set of jurors that will resolve that question and yeah i'm doing this brief introduction because this will come up later but yeah this talk is about self-regulation and i would like to start with a brief landscape evaluation because i think

it's really important to get the context uh i think we are in a highly technological field meaning that we are in the edge of technology and that creates a gap between knowledgeable users and users new to the ecosystem and these tied together with the fact that the the blockchain is mostly focused on financial as use cases that most of the times require a monetary investment this makes a scammy project um the opportunity to create a discourse that is not that different from

legitimate projects you know you i can go to twitter and start advertising high guild and from the perspective on of a new user my discourse and the discourse of a legitimate project might not be that different so this makes that the new users coming in the ecosystem are going to be faced with tokens that go up go up go up until they don't rock pools and yeah even ponzi schemes and from their perspective it's really really hard to differentiate the discourse of this project from legitimate projects yeah so

what can we do about it and the answer to that uh is another question do you recognize this logo if you raise your hand okay so you are not alone uh this is the forest stewardship council logo and in their latest market report these are their numbers it's a logo that is recognized by by more than 70 percent of the population and even higher numbers in the newer generations and more importantly 35 percent of people buying actively look for these certifications and i'm bringing this up because uh

quoting from their website they are a group of enterprises and local communities that wanted to create a certification to improve uh how people were exploiting the the forest the rainforest and yeah they they say that they wanted to create a non-questive market-based approach to improve the situation and i'm glad to tell you that rather than this being the exception uh there's a huge environment of private-led certification and private regulation that

helps every consumer making their buying decisions you can see reinforced alliance and so on and we might have a question okay so we get together we realize we need to make some certification for uh new people coming in to differentiate legitimate from legitimate projects and how we do that in a decentralized manner okay here's where clerus comes in at cleros we have been launching from quite a long time our token list which is a decentralized list of tokens tokens compliant with the erc20 standard

currently is the biggest decentralized list of tokens with more than 1 000 tokens and you can use it on uniswap para swap and a whole number of integrations and yeah this is important because i want to show you how efficient the community is at detecting scams and to do that i will highlight this case there was a time at the beginning of this list that we had a partnership with a centralized exchange and yeah this list as i said before it's a list of tokens compliant with the erc20 standard but we were able to add badges or certification standards on top of it so we agreed with a centralized exchange

that we could give up a award a new a batch based on more strict certification for example we needed to docs the team members and we needed to review the white paper and so on and so forth and yeah there was a project called by chain that first applied for the erc20 compliance and it got it passed but then they applied for this extra compliance batch and the community started to investigate and they detected that the cto was in fact a fake person they took a random picture from from facebook and created a fictional curriculum

and yeah the community by themselves just investigated they called oxford because in the in the curriculum of the cto they they said that it was part of some offshore research laboratory so they called luxor oxford said that that laboratory didn't exist and yeah months later we saw that the chinese police department classified biochain as a ponzi scheme so we can see that the community was way more efficient and quick than centralized regulators but let's see how this works under the hood okay so the the bare bones version would be like this we create a list on chain

with an admission policy then anyone any user is able to submit things to this list to submit entries with a deposit so in this case we have alice submitting the pinnacle token to the list adding a deposit and now there are two paths that this can follow if the submission is legitimate then she will go unchallenged and the entry will get accepted and alice will get the deposit back but what happens if the user is proposing an incorrect entry meaning an entity that does not conform or does not comply with admission policy so again anyone because we are in a

permissionless and open protocol anyone can challenge this entry putting another deposit and here's where cleros comes in as i said before it's a dispute resolution mechanism here's there's a dispute the proposal believes that the token pertains in the list the challenger thinks it does not so claire's just draws uh a set of jurors from the the staked pnk holders and this set of jurors will vote on on a verdict for this for this token in this case as you can see it then didn't make it into the list so bob the challenger got his deposit back plus ali's deposit so that's the incentive to

keep the list clean and yeah we at cleros didn't stop there and we are still experimenting and one good uh example of that is openvino which is a project that was recently incubated by us and they are doing organic wine certification using clerus using a mechanism really similar to this one and yeah which are the benefits of a certification-based regulation so for once i think that leveling the playing field because right now we have legitimate projects that are competing with illegitimate projects uh promising a higher and unsustainable yields so in this environment if we add a

certification this legitimate project will have a market-based a non-questive advantage over these illegitimate projects another good point is that it will ease the entry for new users because new users will be able to look as we saw before people actively look for this for certifications when they are in the market so if we could tell them hey we have this badge just look for it and you will be somewhat safe and also and i think this is quite important negotiation opportunities right now we are seeing a huge supranational entities like the european union trying

to regulate crypto and if i try to put myself in in their position and they picking in into this environment uh yeah they will be quite afraid because we are like everyone doing our thing and nobody is trying to coordinate and make something to to create a safe environment i believe that we if we get together and if we self-regulate these entities will have something to look uh when they peek into this ecosystem and i think this will ease the the policies that that will regulate us in the end

and there's also uh extra benefit and that this is the perfect example to show what the blockchain is capable of because all this solution will be completely unchanged it will be public meaning that anyone can audit any part of the process it will be open and permissionless meaning that anyone can participate and without asking permission or authorization for anything you can propose entries you can challenge entries and there's no there's no restriction on that it's decentralized meaning that there is no central uh entity that has to publish the canonical list because it's already in the blockchain so that's the single source of truth and it's always updated and you can check the history

and finally it's an amazing decentralized finance building block imagine insurance giving flat rate across all projects in the list imagine wallets adding projects in the list to the user interfaces possibilities are endless but there's an elephant in the room right how are we going to make the policy for the list because okay yeah we have seen how we are able to award this certification in a decentralized way but how do we actually make the policy to to prevent illegitimate coins from going into the list how how can we discriminate between them so that's a really hard question and

the way to organize that i i would like to see jillian hatfield in he in her book rules for a flat world she theorizes about this entity this super regulator setting a baseline and a set of objectives for this policy and then having different regulators taking this general policy adapting making it their own and applying them to the centralized exchanges token projects etc we believe that cleros can play that role as i explained before and yeah i would like to hope that this super regulator can be some kind of dao

and yeah so to to sum up a bit uh there's a gap currently because the crypto assets are growing exponentially every day there are more but the regulator's capacity is quite linear so that creates a scam risk and i believe that we can help to close this gap and reduce the scam risk for new users so for the regulators if you find this interesting or have any ideas come and talk to us and for the builders if you want to contribute if you want to actually build this into a dao or into a project talk to us also because we have an incubator and we can help funding this project

and yeah that's it thank you [Applause] jag do you guys have any questions who do you think is going to be the super regulator what uh you had like a image of regulations and clairos was in the middle and you said you would like to see someone like a dao be a super regulator

yeah uh do you see uh it's happening anytime soon or would that be some combined efforts from clara's with some other organizations yeah i think that it would be interesting to see the uh huge players coming together and saying hey we are seeing scams every day what can we do about it that's how the the forest starship council was born there was a convention in rio to protect the rainforest and the politicians didn't arrive to any conclusion so the local communities and the big enterprises exploding the the rainforest they got together and they created a

policy toward the certification so i would like to think that we can do something similar using the blockchain that we brand as the ultimate coordination mechanism i think we have to put it to use so yeah and i think the perfect way to do it would be a dao but how do we govern the dao i don't know so if anyone has any idea or wants to build this now we at clarus will be happy to help um i can imagine that for uh making these calls by the the court or i don't know if that's the the term you use at clarus that a certain level of expertise is

required certain specific areas of specialized specialization how does clara's deal with that depending on which cases come up and which experts are required yeah at cleros our court is divided into a tree so you have the general code that is divided into technical and non-technical and then those are further divided into more specialized courts and you can choose to stake in a specific court so that's how we deal with a specialization the thing is that if you vote in a non-coherent way with the rest of the jurors you're going to lose part of your stake so if you are not knowledgeable in certain field it's

not a good idea to stay there because you're not going to be coherent and then you're going to get a slice and you're going to lose money so that's more or less how we deal with a specialization and someone says it's that other specialization a when when the dispute is created they choose a court a support and that's up to the decentralized application that integrates us we are not really choosing the court where it goes so if you are a gaming use case and you create a gaming uh dispute but maybe someone could argue that it's not a

gaming dispute because we are treating harassment or verbal abuse maybe it's more in a content moderation court yeah uh maybe they should be more flexible i mean that's a parameter that can be chosen in the moment of dispute creation so it's up to the decentralized application to decide thank you one last question if um tara and luna were on ethereum would they have made your list no that's an interesting question because in the uh clerus token list uh as i said before it's an erc20 compliant list so ust was in the list but we also have a batch for stable coins dai has it

and there are a bunch of others but terra does not so it didn't got it any other questions guys thank you [Applause] you