DAOs & Decentralized Decision Making

Transcript

okay let's let's give this a go hi everyone my name is emmy and i'm joined by by the painter here today because we are going to discuss a very exciting topic dao's and that decentralized decision making and have the pleasure to host some of the longest standing projects some brilliant minds from our industry who are going to discuss why on chain governance is necessary uh we will talk about voting mechanisms we'll talk about some of the pros and cons of various governance models and when we were preparing to this call it occurred to me that basically we are contemplating and the guests here are contemplating about

questions what platon and socrates was contemplating a couple of hundred years ago it's just what is what the difference is that blockchain tech is involved and um very excited about this conversation uh just briefly to my person my name is emmy and i have the pleasure to be on the board of this digital global association the crypto valley association and also have the pleasure of being on the council of b protocol and in my day job i work for ledger enterprise solutions which is the b2b arm of ledger the security company let's dive in and my first question is to to everyone to these fantastic guests is to

pre please introduce yourself say your name what is what or where your passion lies and maybe a few sentences about the project what you're representing uh today mark you want to go first i'd be happy to so uh my name is mark richardson um until recently i was a research scientist for the australian government and i made the transition into defy after uh proposing a a leverage system that can be used on on bancor that we now call the the banquet vortex and after shortly after publishing that i received a call from one of the bank called founders

um and was offered a job i now work for bangkok full-time uh my passion really is is more of the same i would say it's about finding really creative ways to uh to make markets more more efficient and to make uh d5 participants um you know more active right to to to get them more interested in using these products um and you know to make money doing it that's that's kind of um what what my personal interests are uh but bancor in general is is much more fundamental it is a decentralized exchange and its mission in a way is to to create continuous liquidity um for d5 assets and this is especially important for for new projects

um that are launching new tokens where getting listings on things like like coinbase or um or buying it might be further down the track bancore basically gives them a way to to have their their assets to be liquid and present defined in a meaningful way thank you so much bill you want to go next sure uh my name is bill laboon i'm the technical education lead at the web 3 foundation here in zug switzerland which means that my job is to teach people about polka dot and their related ecosystems so things like kusama and our framework for building blockchain substrate

so as my title might suggest as the education lead my passion really is about teaching people about blockchain so before i came to here i was a lecturer in the computer science department at the university of pittsburgh for five years where i taught a blockchain course i uh reviewed papers uh for ledger the academic journal of blockchain um and uh here i'm you know i i work on you know teaching people writing tutorials uh you're giving presentations like this one uh and and videos and explaining how uh polka dot works so if you haven't heard about polka dot

uh it's a project uh that you know what we call a layer zero blockchain it allows people to develop their own blockchains using uh this substrate framework that can connect to our relay chain but these blockchains can be uh you're developed any way you like so if you want to have your particular features or not have particular features in them perhaps use different cryptography or have you know a new kind of you know instead of using the evm use some other uh virtual machine or some other language for your smart contracts then you can develop your own blockchain and yet share in the security and interoperate with the rest of the blockchains in the polkadot ecosystem

thank you bill cyrus i see some some voting is going on there in the background yeah exactly direct democracy yeah it's full speed right um well big fan of of exactly both those topics we just mentioned which is uh d5 and and and bringing new infrastructure layers of protocols such as polka dot to change the game um i'm the founder of swiss fork uh swiss bar essentially were born out of an ico uh in 2017 2018 out of switzerland our mission is to democratize uh wealth management by making it fun fair and community-centric and yeah i mean uh you know it's it's it's been a a a great time to be in

in crypto for the last four years uh even more today than than yesterday and probably even better after tomorrow and uh and i think so this panel comes to the to the the main uh one of the most fascinating topics which i believe is to uh essentially bring governance into uh what we're doing because we're all playing this game which is living in this beautiful planet and there's different theories and today these theories could be applied with rules and with with a great community that could eventually decentralized nation so happy to be with you guys thank you for the random intros

so bill the first question is to you um and pocket has been rumbling the past weeks we are getting closer to the parachain launch uh complementi here um what's the point of governance and why why do we need it if you could elaborate on on this question a bit yeah sure so i think something to keep in mind is that even though when people talk about blockchain governance often what they mean is on-chain governance but any system with more than a single person involved is going to have some sort of governance there has to be some way to make decisions about the future of the protocol

and so you see in a lot of these like generation one blockchains you know uh that there is a form of governance but it's often sort of informal ad hoc it was uh uh you know developed over time without strict rules and there are certain um your benefits to doing something like that right evolution as opposed to sort of centralized planning uh but on the other hand there are a lot of drawbacks to that and you so we see that often trying to direct the future where the where the blockchain is going to go into the future what features are wanted it's something that's kind of uh

monopolized by the developers or you know a very small group of people uh so by having on-chain governance by having that you know basically the the the uh your your the users of the network can help uh to decide where that where the network is going then we think this is a bit fairer and more transparent uh that you know anyone can you know see what happened how many people agree on it uh what is the the right way forward that doesn't always mean they're going to make the right decision because there's no you know perfect uh solution right for for how to govern things but by putting um uh decisions on the blockchain right

we can see or who is deciding on this you know what percentage of people this helps avoid uh disputes it helps avoid hard forks uh which again you can argue whether or not they're they're good or bad um but they they do allow a sort of like you know unifying force right because just like you in the real world right by having your government you can have people that that disagree but you have some solution for determining what the way is forward for people to move forward as a group even if there are disagreements thank you very much uh for that and in the meanwhile their audience welcomes honest that you're here please throw in questions if you

have as we go we will take that uh in the in at the half time and also at the end so my next question is to mark and banker is a very transformative monetary force in the world and we have been some we have we have seen some exciting developments uh bankrupt vortex is out bnt was surging the past weeks maybe just briefly if you could say why ibnt surged this is not the governance question the governance question comes after them that relating um how do how do you move from a trustless system like ethereum to a decentralized system like snapshot for instance and and please also familiarize

uh those who are not uh who don't know what uh snapshot is with what snapshot is thank you mark so many questions i know yeah yeah that's okay let me i'll start at the beginning so yes uh bnt which is that the bank or network token um has recently appreciated in price quite somewhere um i think back in the end of last year it was somewhere towards october of last year it was hovering around 50 cents um it recently broke nine dollars and it has retraced a little bit since then part of the reason why i think we saw such a surge in the token price is that the protocol has has gained traction very very quickly so when i first joined

uh the dow i think we had something like 50 million in liquidity and we're now we've recently breached 1.6 billion dollars in liquidity um so clearly the the protocol is attracting uh the user base that it was designed to attract um and that is driving demand for the token and that's why it's prices it's appreciating the way it is um one of the reasons why i think we're starting to attract liquidity providers so quickly is that bancor allows um people to to provide liquidity as a single asset whereas most of our competitors require require liquidity providers to provide two different assets and so this single-sided exposure is extremely attractive to a lot of people

in d5 because they're usually long you know they have a specific token that that is their favorites very close to their heart and they would really would prefer not having to sell half of that by something else and so bancor sort of gives them a way out of having to do that um the other thing that the bank has achieved is that it has removed a um a um an omnipresent force in d5 that we call impermanent plus um and i don't have time probably to explain it on this call exactly as to how that works but it's it works something like an option straddle if um if members of the audience are familiar with how that works but basically as the price of these two assets starts to

deviate um market participants called arbitrage are able to extract value from your position over time and so this has been a major bottleneck i think for getting people involved in liquidity provision and bancor has managed to move that risk off of liquidity providers and back on to the the monetary policy of the protocol and so this means that uh the participants in the bank network are you know basically free of that risk now and that means tbl has been spiking and demand for the token has been spiking and it's been you know a really really terrific ride honestly um so for the the next part which was um you've

you've commented that we're moving our governance structure off of ethereum and onto snapshot uh this is uh so let's just talk about the advantages of ethereum foreign ethereum has this outstanding security which is that at any time um any activity on the blockchain can be verified by anyone and that makes it um highly trustworthy the problem with voting on ethereum though is that unless you earn a significant amount of capital participating in governance can be pretty expensive um when the the gas rates are hovering around you know between 150 and 300 most of our community members

were forced to pay about 50 every time they cast the vote and we vote about twice a week because there's so much to moderate on vancouver so with ethereum it's like you get this really terrific security from its technological decentralization but the actual people making decisions are limited to people with the the capital to do so so the actual decision-making part of it was highly centralized and that can't be tolerated so snapshot basically trades those in the other direction snapshot is a an off-chain server that records uh people's votes um on a centralized server

and it because it doesn't use the ethereum um consensus mechanism there's no gas cost associated with it and so this means that people with a small amount of capital on our platform will be able to have a voice in governance whereas previously they wouldn't have been able to do that and so here we're really trading the the decentralization security situation that we have on ethereum for the decentralized decision making of snapshot um but maybe we can we can talk a little bit later about um specifically how we are integrating because there is a way to do this in a highly secure way um but that's that's currently what's happening without without doubt it's a

pretty profound transformation i'm really excited to see more community involvement in future dow decisions thanks mark and for those of you who don't know much about impermanent losses mark has a fantastic youtube channel mark richardson you can just uh follow that and subscribe um so cyrus kudos on the two billion transaction volume to date it's it's crypto summer so it's so nice to to congratulate all of you guys on these fantastic achievements basically um when we were prepping for this koi we're talking about direct democracy and why is direct democracy important in your book and how how is swissboard empowering its users

yeah thank you so much yeah it really is crypto summer or spring or whatever it is but it's doing great uh so tremendously we launched our wealth up just like a year ago it's our anniversary actually today uh and we already have 285 thousand verified users more than 100 000 active users every day over a billion on the platform our souza board token has nine thousand percent here today anyway it's been a fantastic year for crypto for swiss pork for d5 for new protocols i think so as well it's been there's there's so much and uh to to to congratulate here um i think so the main thing is that why are we

creating this new infrastructure and this new way of interacting with people and and and how do you really believe that this is going to be successful or not if people put trust and faith in it and people could only put trust if the technology is reliable but they can only put faith if they are allowed to essentially participate in the decision making and that's what it is everyone in the world wants to have that little green you know paper that red paper and say you know i was the person who potentially made that decision and that decision led to create this

initiative that was voted and that's voted make this and this and that and i think so that's what we're all supposed to do is consensually find great opportunities for the world not for people but for the world and accelerate that transition and and i think so blockchain has been uh through bitcoin one way where people are able to transact freely with having ownership and all that but the governance part is something fundamental so right after our ico uh that was late 2017 early 2018 uh you know we raised our hard cap amazing you know like other different projects and then crypto winter like

you know really wrecked us like most and we want to have a real use case of our token very quickly so we said what is the thing that most important well it's giving that direct uh voting power and uh very similar to what happens in in switzerland we said like okay let's make them vote on one subject and the the subject was our wealth is it going to be desktop-based so would i want it or is it going to be mobile based what the co-founder anthony wanted and uh we asked everyone you know around our community to vote not everyone voted mark i think so you you did take a point that was very valid which

means that in order to vote you need you had to spend some gas and for those of parts who've been in ico with like ten dollars well it was probably not worth for them for voting uh and and how did we do this we just said okay back then 2000 early 2018 how can we do it okay well let's let's mint these new tokens and everyone who has uh 10 chsb 10 swiss work tokens will receive 10 rsb referendum swissborg tokens then we'll just create two wallets and we'll say okay one wallet is going to to vote for essentially the wealth app on the mobile version and the other one for the desktop it was as easy as that because back then there was not so much

frameworks polkadot didn't exist and uh essentially it was not that that hard so uh so we did have 9000 that participated in that referendum which is a very big amount of number for uh um as we've seen a lot of device projects there's not so many voting people people that vote and by the end uh the mobile version like like one like 50 and a half versus 49 and a half so the mobile version did win and then now people are fortunate to uh essentially be able to say like i chose the mobile app and even better i remember a guy working at swissborg he applied for the mobile ios team

and he said and he came in like during the interview i'm like why do you want to come what's your purpose in life and why do you want to work for swissport so my personal life is this and that and why i want to come for swizzleboard because i chose to develop the mobile app and now i'm going to do it and i thought that that is exactly what you want it's those stories that people dream about take initiatives vote then and then we make it happen and that's the power of i think so of governance and that's why it's it's profoundly very important as a twist board i'm sorry you didn't get the desktop app seriously yeah i know well that's it but it doesn't matter maybe one day you know we'll have one maybe not cool thanks for sharing that little

anecdote and this is exactly what what i wanted to ask bill that uh it would be interesting to hear your take on how we are providing fair representation also to those who are not participating in the voting yeah i mean that's that's a real problem again you know again in your normal governance right real world uh governance as well you have a large percentage of people who giving the opportunity won't vote because there's always some cost to voting it doesn't have to be gas fees although those can be substantial but just you know like time and uh you again you in in the real world going to the polling place etc uh so you see actually you again even in real world voting uh you never

see 100 turnout uh you know in in reality barring you know dictatorships uh and you know so there are some solutions to this uh you know some like um i think in australia you know you're fined if you don't vote that's certainly something you could uh implement somehow if you don't vote uh but you you also ask is that the type of person you want voting uh you know on a blockchain someone that's only doing it to avoid getting uh the equivalent of slashed right so um we look you know when you look at blockchains uh your voting tends to be very very low turnout rates so on polka dot the average turnout uh for a referendum is less than one percent uh you so we did see you know there was

one very uh contentious um uh vote this summer where turnout was at 31 and that was you know a huge outlier like absolutely you know orders of magnitude uh you know greater or i guess you know ordered a half of magnitude more than we ever uh have seen before so you have like a huge chunk of of holders of a token that are not going to be you know again paying the transaction fees and uh you know it's paying attention to all of the details of what's happening so yeah so the question is how can you make sure that their voice is is heard and so what what uh polka dot has done is on on its relay chain so the individual what we call para chains these separate block chains

can have their own uh voting mechanisms but for for the relay chain is is we've added a few uh features to help uh make sure that passive stakeholders are represented as well uh so the first is the polka dot council which has some very strict limited powers but you know powers nonetheless uh that you can vote for them any user can put their dot behind individuals like individual accounts that are running for uh the council to have these you know specific powers uh some of these people are are well known in the polka dot community uh and some are pseudonymous so we actually have some counselors that

you know are pseudonymous but they take part in all the council votes um uh et cetera so uh this this is a way that we represent the the passive stakeholders we also have a technical committee that has you know again very limited uh powers but they can make referenda pass more quickly you know so if you're voting on something they can adjust the timing if they think that from a technical perspective uh it's not it's it's necessary um so that's really how we're you're helping to represent these passive stakeholders it's very easy to vote uh for council members you it's sort of set it and forget it uh for every election you'll keep voting for the the same people so you don't need to come online and keep voting every every day or anything like that

every month even you can just do it forever so that helps us provide some representation for the for the passive stakeholders um and in order to uh allow you know like some fairness to for minority interests as well uh because you can imagine if i have 50 plus one of all dot then maybe i'll vote to you know just give me all of the dot or something like that uh is that you you actually can uh adjust the weight of your vote by locking uh your your token uh so you can uh lock for up to like six times your voting power but then your your dot your tokens are stuck there so this allows someone that has like you know if they really

believe in a particular referendum they want it to pass they actually can give themselves more power uh simply by locking up uh this and this lock uh you're locking up their tokens and this lock actually does not take place if the vote goes against you so if you really believe that you know this we we should not upgrade to this next run time for instance you know it has some feature we really don't want uh and you you vote you have what's called 6x conviction so you're worth your your weight is six times what it normally is but the vote goes against you then that lock is is eliminated so if you want to get out of the ecosystem if you believe strongly enough that you're go you know it's going down the

wrong path then you know you have done what you could but uh know you you are then free to leave and we obviously don't want people to leave the ecosystem um but we think having it in this way helps is one of the ways we help prevent uh you know uh uh contentious forks right that if you don't want to be a part of it that you're not going to be locked uh into the system so there again there's never any perfect solution and you're protecting a minority interest is something that um is really difficult and a lot is sort of handled by cultural norms uh you know both you know in blockchain and elsewhere but we've really tried you know to to have you know some ways to make sure that the majority doesn't just run

rampant over uh minority in polka dot thanks so much bill for that we have some exciting questions uh from the audience for instance dj cool before we take that i have a question to you mark if you could tell us a bit more about vote delegation when you can delegate per authority but also per vote delegation yeah absolutely so i think this was touched on a couple of times by bill and cyrus separately um but you know the the way that we run governance on bancor is you know it's probably slightly different to you know polkadot and and some of these other chains because

a lot of what we have to make decisions on is really about sort of core economic policies right and so a lot of it is is quite complicated um and if you don't understand what's going on um you could easily make a bad decision which is why um you know governor in some vancouver's opt-in right you just because you have a stake on the platform doesn't necessarily mean you're being forced to vote um there are no penalties for not voting so there are competing models like kaiba for example if you have your private token staked in their system um in order to be in order to receive the the revenue from the platform you actually need to participate in voting so bankroll doesn't do that it's completely opt-in there's no rewards for

voting um in terms of vote delegation this would be a system where you can have a stake in the platform and you want your vote to to count um but you are kind of entrusting someone with the decision for you right it's kind of like electing a local uh a local representative to um to voice you know your uh to voice your your concerns in parliament or something like that so that would be a a per vote delegation and this could be simple you just uh attach your your vote to their address and then that person who is receiving the delegation from you would then have uh you would control

their vote plus all the votes delegated to them um in terms of delegation of authority this is uh exactly what we're doing with so i i mentioned in my answer previously that the way that we're implementing snapshot is slightly different i think to how other dows have managed it and that is that the authority of ethereum the on-chain system that we have there is always absolute so if anyone was to ever gain control of snapshot or compromise that system um an on-chain vote to remove authority from from snapshot um can be done at any time and so this would be akin to for example a governor

general sacking a you know a prime minister or um it could also be you know be seen as like the crown um you know deposing a leader um and so this gives the dow the confidence that no matter what happens on on snapshot if someone a hacker or something gets control of that system they will never actually gain control of voting authority because as soon as we detect it the dow will just simply withdraw from snapshot using an ethereum on chain part thanks so much mark so let's take um to mix up the order but let's take maria's question to allow for minority involvement

are you limiting the weight that wales have on the governance system can have on the governing system i'm sorry who wants to take this so can you repeat the question you broke up a little bit for me to allow for minority involvement are limiting the weight that whales can have on the governance system yeah su super informed question uh this is something that i take very very we have struggled before with um you know very large bangkok participants having at once at any one stage uh you know a controlling uh a controlling vote so there are a couple of things that bangkok did

to to overcome this one is that we introduced a super majority rule so this is super common in traditional finance so for um if you're a shareholder for example in tesla or something and they're proposing a merger with another company it's it's not uncommon um in those situations to have something like a 95 super majority rule and so this means that if you control as bill said 51 of the vote it won't help you you need to get to a very very high majority and so on bancor we're using a two-thirds majority rule um which because of the um you know how distributed bank core is being able to control 66 percent of the vote on governance is is

um essentially impossible so this helps to water down the effect of whale votes the other thing that we have is very high quorum requirements so for routine maintenance of the protocol there's only something like a 20 quorum requirement but for token listings which is the the most severe security threat that the protocol faces this has a 40 core requirement so if anyone is deliberately trying to subvert governance they have all of their work ahead of them it's really really difficult to do but there's another thing that has entered into the discussion recently which is what has i i can't remember it was coined somewhere else but

it's been called quadratic voting and so this would be basically that the the voting power you have is always the square root of the tokens that you own and so this means to double your voting power you need to square the number of tokens so this would mean that on the lower tiers the amount of vote you get per token is much much higher than when people own you know multi-million dollar stakes on and so this does help to even it out a little bit the problem is is that it's gameable so if uh if you were a person in one of these positions you could easily transfer your tokens between different wallets um you know it's so that it's not perfect um but there may be there may be something like this that we could

implement to um to make sure that the ultra wealthy and the world don't control dows into the future so there's a lot of things being done super majority high quality requirements and then something like a quadratic voting system but you know the best way to uh to to get these to get these answers and help us develop it is to actually get involved with these community projects and and you know help us think of a better way that it can be done yeah actually i just want to extend off of what what mark said uh a bit there because yeah like you said unless we have some sort of decentralized identity system running on top you know then it quadratic voting or really a lot of this

uh game of gaming that of whales can do it's really hard to avoid right um so you know polka dot also has a few uh you know anti-whale i guess uh you could say uh features uh so one is instead of having a quorum we have something called adaptive quorum biasing uh we're basically the lower the turnout the harder it is to pass something uh so for instance if there is two percent turnout then i i don't know the equation off top my head but it's around 95 would have to vote in favor of something to make it pass your bias towards failing uh whereas if a hundred percent of uh if everyone voted then it would be just you know fifty percent plus one um so you know this helps prevent you know

some you know some whale that has whatever two percent of all dot or something to come in make a vote when you know over christmas when not many people are paying attention uh and you'll be able to you know uh get fifty percent uh pl you know plus of of the voting uh the second thing is sort of a last-ditch uh uh thing is that there is always a delay between when a vote passes and what's executed and with with super majority support from the council which remember is uh represents the interest of the passive stakeholders it can be vetoed so you uh and like that proposal can be can be cancelled so there's always sort of a lowercase c conservative bias

right of chain these major changes to the protocol it should be difficult and it you know this helps to to make sure that you know you don't have one whale who is doing something or something cabal who is doing something that would be uh negative for the rest of the network for chiming in there we have dj cool in the house who actually asked two questions i'm going to take one now uh once we're live so what's actually new in off chain governance systems why are crypto projects not innovating with off-chain governance and prefer to revert to hierarchy in the real world yeah i think that's a very good point actually because it remembers our second referendum our

second referendum was about like what investment theme that we like to start first and unchain governance it's not always the best thing i know everyone does believe it's it's not it's definitely not because i'll tell you a very clear there was five different investment teams right and five different address to send these different wallets to these different tokens to to vote and what happened is uh we sent this out we had back then a lot of asian communities so they went directly into two different teams because they they were probably at the time they finished work and people in europe came after right

so we sent this like was at noon so a lot of people voted directly for gaming and for another theme which i first don't i don't remember and then as we say this process that was on chain people were not looking then towards voting they were trying to to choose the less the thing that they let they hate it the less right so if if it was a b c d e and f in an average thing you would probably have seen a lot a little b a lot of c instead of d and and would be pretty much equilibrium in this case we saw that the first votes essentially determined if it was going to be a or d and the others like c or e or f just people didn't vote for it

because they sell that as it's there's very low chances and you're seeing all this transparency it's it's it's not always the best outcome so you know what we thought is that how can we process uh a mix of combination between the two which to be honest we have it on paper we still haven't applied it into any product yet but but but it's true that uh there's there's that issue and then the second issue that i think so i think so that mark and bill was really saying very well is that you know you don't want big whales to just take the big decision because if not the democracy is not really working very well so we try to think about double votation

whatever we're doing at swiss swissport we're just pretty much copy pasting what's the swiss democracy has done right there we're not trying to reinvent the role we're just trying to make it like faster and better and and hopefully uh universal and and i think so that that that's a little bit what we're trying to play is how to have a double levitation so based on stake but based as well on the number of voters uh that's one way and what we thought as well is that right now uh so i think so tomorrow tomorrow at 11 o'clock we are electing our parliament so switzerland is divided into three different main big chambers there's the government the federal council essentially there's

then the parliament which is essentially a mix between uh state of kanto and it's just continual states very and then it's as well the national council and the last but not least is the judiciary and we elected obviously the government which is swiss borg essentially employees that have to do the work and the national council we thought about how can we create a parliament where essentially it would represent the best token holders so the first way we set it out of the 200 we say we'll we'll take the top 50 biggest takers that's good because we know that they're they're gonna fight for the super token that's

for sure but if we took only these guys it would not represent essentially our community because if it's only based on staking i believe it's you're gonna you're gonna get to a moment that you're probably not going to favor the entire ecosystem but only the early comers which is great but probably not the best so because then you essentially get less decentralized and then you just recreate the centralized system so what we thought is that okay where do we put the most heart and love and switchboard well it's in the wealth app it's in the community app which is the game and the do itself so we're trying to essentially get not only based on staking but based on

actually how much work how much dedication how many points during these different games or how many missions that you take in the deal and to make sure that we combine and we elect essentially the national council that reflects the whole entire chain of our of our community members and not only based on stake and the idea behind after it's essentially is to pass initiatives like in switzerland then vote for these initiatives and then obviously see it's our job to make them happen and that could be the decisions on token listing similar to bank represent on new premium tiers on whatever we want to develop in the future

as utilities for the token and things like that and and that's how we're trying to play a non-chain off chain and uh hopefully yeah hopefully we'll find out a way and tomorrow electing these guys so we'll see how it goes fantastic there is a swiss board question from quentin if you want to type the answer there i'm not going to take that live i will quickly take we will take the question of tim would bankrupt considering voting on converting its governance to quadratic or would it simply implement quadratic voting without the dao's opinion on it and then i have three more questions to you guys so let's answer this quickly mark please

yes everything all changes to the bangkok protocol require a decision so it's something absolutely would require a proposal and that proposal would need to be voted on it would in this case be subject to a 20 quorum and a 66.7 super majority um i i assume the reason you're you're asking it is because um there's an obvious you know the elephant in the room is that the whales that control the majority of the vote have an incentive to vote it down and that makes the um the proposal more difficult to pass um but we already know that's that that doesn't happen in fact some of the the biggest whales in bangkor are the most pro-democracy um

you know at the we left the snapshot um vote live for for um three days and you know mostly to see how um how the community was going to vote for and we had one of the largest turnouts you know with people voting with very small amounts for the very first time to sort of show their support for it and even though it was already over the line there were some last-minute whale votes in favor of it making sure that we actually do go and go on to snapshot so i think that it's a myth that the um the whales indeed fire and endows enjoy the um the centralization of power that they have

i think that they know that that's a weakness of the system and it's in their best interest for the protocol overall um to make sure that it's that there's a greater level of participation so if we did go to quadratic voting um i actually don't think that it would it would struggle to pass the the reason we haven't got a proposal for it yet is as i discussed with bill um it's it's not the best system because it's easy to skirt around it so if there wasn't a firearms influence that did want a controlling um a controlling boat and i don't think that we have any of those influences right now but certainly it's a threat that exists and we need to prepare for um quadratic voting isn't the best way to to get around it but yeah anything that takes uh the power away from the whales generally the

whales are extremely in favor of which is a delightful realization thank you so much so i have a question for you cyrus uh basically how could nfts play a great role in governance when we were prepping for the school you you were sharing your two cents if you could share with the audience yeah i think so um so you know nfts obviously everyone talked about as a piece of art or you know if my friends at engine you're gonna say it's the revolution of uh video games and and of collectionables and whatsoever and i i definitely believe that's true um i do believe that uh

nfts could be like essentially uh you know accomplishment of a smart id right whatever you do on on the chain or whatever you want even the centralized platforms we could then like pass over and say like uh this person is uh has these different rights like i don't know let's say you do kyc at uh swissport right and you go through the three different levels because we have different levels we're regulated so if you go to third level that means you're a high net worth individuals and it's the standards of european uh and switzerland we really go for the both so that means essentially your accredited investor

right so what if now swiss fork we say like hey this guy is accredited investor he has a wallet we created an ft and we tell to the to essentially we send an nft to this person the person keeps it in his wallet and then if he or she wants to go i don't know on another platform let's go he wants to go to to get panda or whatsoever he or she then doesn't essentially need to do uh kyc or doesn't need to at least to prove he's not an institutional investor right uh and and and i think so that is the the beginning of a reflection of how nfts essentially could be a way of creating

a digital id with credit scores with the behaviors that could be uh really uh yeah bring more trusts and uh you know uh i don't know if you've been yield farming for ages at ave maybe you get a special thing that therefore you're gonna go on to i don't know a new protocol lending and that'll enable you at polkadot to be a super farmer as well because you've been you know granted that you've done great things for a long time and i think so that that could open a lot of chapters of essentially unchained and off chain uh uh collaboration and then and you know it's been now a year and a half we talked about this at swiss work

we haven't implemented yet because obviously the world map is always very difficult to uh keep up with uh with all the berlin ideas uh our it comes that comes from our community but yeah i think so that could really be something that uh you know we could eventually really plug and potentially play and and and collaborate therefore uh between bank or yeah like bank or swiss board that could be like something we could look at right and uh and and and uh yeah i think so it could potentially change a lot um our interactions between uh projects thanks for elaborating on that cyrus and hinting some ideas there so before

we take this this is one of my favorite questions which is coming up which is um what are some of the pros and and uh cons of polka dot and bankers governance but i see that the questions are gaining momentum or i think more and more questions are coming and i really love aaron's question which is and i think this is for bill and and and yeah because we don't have much time i just want to be mindful of that so since blockchain solutions endows are undertaking age-old questions around decision making and governance are we about to see a renaissance in this in this area if so what are the top aspects of decentralized governance you

would like to see as a result of this renaissance wow that that is a really good question um and i'm afraid you know i i can't see the future uh so i don't know what will happen but i will say what i'm interested in seeing seeing happen um so so one you know there have been a lot of you know really interesting ideas put out in political science on like you know what is the right way uh to run a country and i think you know if you look back in history a lot of the constrictions of a government often were just from like you know more constrictions in like the political philosophy the more constrictions in what can be

done right in terms of communication so the reason you know you have like monarchies right well it's really easy just have our this one person is in charge um you know decentralized you know things like switzerland you know decentralization in some sense was well if i do if i'm a central power i don't have to worry too much about these outlying areas and so i think what we can see is these you know more complex um approaches to governance that actually you know would work on a blockchain since all of the data is there to to be visualized now computing things and how you know uh is is difficult still and coming to consensus is difficult but you know we can see things like you know we already see like a weighted like there's no reason that we couldn't

have weighted voting in you know a regular uh a voting system like in the united states or something but it'd be very difficult to implement from an engineering perspective um you know rule by prediction markets right you know this is certainly something uh you know that is physically possible but it's just so difficult to do to do in the real world that you know it just would be and just very different right from what's been done that i think you're not going to see it done in in a physical government anytime soon but i think that the two things that blockchain governance gives you is one these you know more complicated uh systems that again have been you know discussed um you know and and talked about but rarely implemented in these

real world systems uh just an example from polkadot the fragment algorithm which was used in like swedish elections in the late 1800s but it just took forever to do even for 20 people you know it's something that can be done right even with thousands of people uh nominating on polka dot uh and so we see it happening and you know it has a lot of additional like cool factors that help representation the the second thing is so so one i think like these more complicated systems can actually exist uh the second thing is that i think because there's not so much of a weight of tradition here and i'm not saying tradition is a bad thing obviously there are a lot of good things that these systems have evolved you know there's going to i see a sort of cambrian explosion

right as different blockchains try different things and they're willing to do it if you're you know a small blockchain with whatever a few hundred users in a few million dollar market cap that's very different than changing the governance of a nation-state and so because of that i think you're going to see a lot of interesting experiments and a lot of these things you know again that were you know discussed in you know political science textbooks but never actually implemented you know we're again we're starting to see this um and i think we're just going to see more of it i i'm really looking forward to see you know which teams think you know which features are interesting to to add uh for governance going forward one of the things oh sorry go ahead i'm just saying wow so much enthusiasm it's

uh it's coming through the screen so cool mark go ahead please yeah i think one of one of the really innovative things that's being done right now is the idea of continuous vote delegation so you know currently if you if you think about how how traditional governments are run um as a as a voter you never really have the ability to to be an agent in in decisions very frequently um mostly you have like local elections you know to to represent um your area and then they basically speak to the next rung up in the in the governance structure all the way up until the you know the federal um up to the federal level but when you vote that person in you're

basically trusting that they're going to you know deliver on the values that they you know campaigned on and the world overall we're used to the idea that um people can say whatever they want to get votes and then uh do something else entirely once they get into into power um with a with an active vote delegation system like we're considering for for bancor and that's already you know being investigated by other projects as soon as someone doesn't vote the way that you wanted them to you can change your um you can change your delegation to someone else and this means that on a you know per decision basis we get to elect leaders that are actually doing uh they're actually

making decisions that people agree with so i i think this idea of completely getting away from a term-based system where you have you know someone that's basically elected on a promise and then given you know however many years to to do whatever they want and not be held accountable for uh not delivering on what they said that they would do the um what we're considering for you know defy is actually answering some of the the problems that government faces in general which is just the process of it and so being able to use something like a blockchain technology to um to constantly and in real time move power around in terms of decision

making um i think is one of the the things that is likely to gain traction certainly within dfi um but could also start bleeding over into actual real world decisions because there's an accountability there that current um that the current you know electoral systems of the world don't really have okay because we don't have so much time and maybe we are going 10 minutes over anyways because we have fantastic questions how about we just uh focus on the positives here and each of you is going to highlight the major positive of of your governance model you want to go first or cyrus go for the bill please okay all right

um yeah so yeah i certainly could talk positives and negatives but i'll say one of the really cool things about polka dots governance model is based on the way that polka dot is structured so the entire polka dot relay chain runtime all the rules of the blockchain are held in a webassembly blob and so anything about the system can be changed right all the way down to you know to uh up upgrading the code so you can make your your the referenda can be on very small things uh such as um uh changing the the number of validators in the active set or it could be i'm going to change the entire rules

of of the uh the system without hard forking because i just update this webassembly blob this blob of byte code that defines all the rules so i can make uh any change that i want to and that's how you know we have done now uh 29 runtime upgrades uh on the polka dot main net just you know again all through governance it's always been voted on that people have decided like yes this is the code uh i want to add uh to it so i i will leave it as an exercise for the reader as to the negatives of that but i think it provides a lot of really cool uh benefits and like the capabilities for going forward and being very flexible thank you mark cyrus who goes next

you can take a time yeah um so um yeah i think so for sure by the way i'm not really a big fan of uh polka dot by the way for the government system i for us it's gonna be a new breed right we just had this popular referendums in 2018 and now it's going to be how these new national council are going you know talk together and create these initiatives but i think so it's great because again it's you know it just the same idea again is how you could really entice people to collaborate on multiple different different subjects it's not about the voting it's about proposing these initiatives that prior to the voting right and then prioritizing these initiatives to see which are the ones we're going to vote for so i think so that that is a

lot to do and um and yeah i'm really very very uh optimistic about it because you know uh at the end you know as i said earlier it's you know you could only trust technology but if you want to have faith in something it's something you usually have you you really you feel like it's really important or you want to be part of it and now it's not being part of it it's actually making the part and uh and that's why i'm confident if you replicate what switzerland has been doing the only democracy around the world for the last 500 years well we have a very big chance of of making a great impact here fantastic take the the last word so to

speak um but uh i think my favorite part of bangkok governance is that it you don't have to be a stakeholder to participate um out of necessity like out of necessity we are constantly collaborating with new token projects existing token communities who are interested in um in getting their their tokens listed on on bancor because you know they want to provide liquidity but to support the use case of their project um but also because they you know have been heartbroken by impermanent loss on on other exchanges um and so we don't just you know we don't ask them to step aside and let bancor you know token holders take care of

things they are invited into our telegram channels they can author and publish proposals on our governance pages and even though the actual decision making comes back down to to bnt holders at the end of the day it's still an open collaborative environment right with it it's not a uh you know a black box citadel type um situation where where uh you know that's completely insulated from the rest of the environment i think that this is extremely important because defy is a sort of collaborative space and bancor does have lots of projects on its on its platform and

i want these token communities to get involved because in a sense they are also entrusting you know their assets with um with the code that the bancor has has deployed on ethereum so i that's the part i really like about it it's not a um you know it's not a closed cell where we just have conversations with each other but it's this messy chaotic sometimes at the end of the day getting stuff done quickly um sort of a way of making decisions and having conversations i really like that about how the bank hotel operates my last question is that what's a good decision in on chain governance uh

what what you guys looking back i think what was a great decision in the history your respective uh protocols uh but i feel like we touched based on on some major positives so um if anyone wants to add something you're welcome too let's take a question from the from the community from the audience instead okay okay i love that you're helping me co-moderate thank you uh we're gonna go we're gonna go over 10 minutes because we have some fantastic questions i would love to take ben's question that how can people vote for what funds in crypto banks for that that that's a hard question to

answer i was like girlfriend i'm not gonna answer that one yeah i mean i can think i mean if if the bank uh uh if you think about this right like really a bank is just holding you know some accounts right they're holding keys uh for you right so they could vote for you because they have power over your entire account now you can imagine uh you know some you know centralized exchange just you know putting in something in their ui that would let you vote some percentage of the token for something or you know put together you know i can imagine some other things like them having their own sort of mini dow or maybe not so decentralized ao uh that like it lets you all the members that

are in that account you know under that account vote on behalf of the account but i mean really anytime you do this if you have some sort of centralized place that's holding funds for you you know they have power over your account so anything you do is going to have to go through them that you've just added a level of trust it's hard to do that in a decentralized way but in a centralized trusted way then you know if the banks are interested in doing it if they have enough demand from their customers they could do it you know on their behalf i think that there is a way that this could be done and it can't be done right now because i'm because of the way that most banks are structured right when you when you have a deposit with them it's not just sitting in cold storage or

something they're actively using it right lending it out and that sort of thing and that would change um your actual voting power but it could be that the the amount of of the tokens that they haven't actually used um you know in uh in other uh market making activities that the balance because you if you have the actual address even if you don't have the private keys then it's possible to delegate those votes to someone else so even if you are incapable of uh you know actively participating in the vote you could still actually ask the bank to use whatever reserve that that you actually do have ownership of um that's currently in the

um that's currently in the the ethereum address that the back owns to be used to vote a certain way um we don't have a way to do this in an automated way yet but technologically it's actually not that difficult to do so i have here a fun one uh which like 20 years ahead which is yeah it's just uh i can't wrap my head around but like curious what you guys say that how votes made today impact the community in 20 years time do you think votes made today would be representative of the community 20 years down the line i mean we don't even have these protocols for for 10 years yet but curious to to hear your take maybe maybe someone dreamt about the future

so i think it's important to remember that nothing nothing that's ever done on these towers is is generally concrete um we've already had a proposal for example once that was um that had to do with how uh swat commissions are used on the platform and then that was followed up with you know after some research um with essentially a proposal to retract the last proposal right and so there is a dynamic to it it's not like once a proposal is passed is that this is going to be the law forever um we don't use precedent or anything like like you know the legal system does it's totally fine to revert to another situation so i would say that whatever decisions are being passed right now only affect the

immediate future and then as the as the protocol progresses and as the community grows it can cherry pick what worked and throw away the stuff that didn't work so over time in the i'm hoping that things will just keep getting better and better the bad decisions will be reversed and a good decision good decisions will be kept so i'd say 20 years from now we're going to have a very different looking product and a lot of the stuff that we're doing today maybe some of it sticks and maybe some of it gets replaced with something thank you mark so sarah i'm going to take your other question is there a governance algorithm that can recognize and reconcile all your government's governance uh structures i mean would you mind if i just added

something on to what mark said there before oh absolutely please go for it sorry um but i really want to say like mark said like that there is no precedent and like you know that you know we see that in you know on polka dot too where you know argue about reverting previous things um but i think that even though there's no like technical precedent like in a legal system uh i think culturally you know we we are seeing in polkadot and kusama like you know some form of this precedence right it's it's seeping in like you know culturally on like you know and we see this like on what sort of things to do about like your people with locked accounts and things like that um you know even if like your governance has power to do something you know we see people

you again it's not as as formal as like the legal system but arguing oh we did not do this in case x maybe we shouldn't do it here so we see it when people talking you know off chain and in conversations this this precedence is seeping in so i think it will have have a you know an impact thank you very much um would you like to take this one as well the governance algorithms that can recognize and reconcile all your governance structures is there is there something like that out there i'm not sure i really know what what that what that means like right like some sort of like meta governance protocol that can fit all kinds of of governance in it

some kind of uh hybrid i don't know yeah yeah so i'm not really sure i understand the question um but i mean like you that something like polka dot that allows you to you know rewrite the you know the rules of the run time like you know the entire rules of the would certainly you know it's turing complete so you could do anything that can be computed uh so that you know but that's i think that's like you know once you get to like well of course if there's a programming language you can make anything that can be computed it's um so so yeah i'm just really not sure what what they're asking there aside from like that's sort of a very generalized answer okay so um

then let's let's take two more questions if you had an orange pill to convert the opinion of someone to help amplify the reach and impact of crypto and defy who would you give that to the orange pill who wouldn't use it right it would be it would be meaningless right to to force someone to change their mind it would would be yeah it would be an empty um accomplishment i i would rather that defy and and you know blockchain technology basically continue as it is slowly you know uh people start to to

realize the value and it pulls users and value into itself i think that that's a much more profound victory than um than orange peeling somebody thank you very much for for thank you i would i would still give it to uh the creators of uh what's that called that video game that everyone plays um world of warcraft no the other one where these these youngsters make a lot of money knowing it uh oh fortnight yeah there you go i would put on a fortnight i'll i'll tell these guys guys like stop that just

keep your own thing doing the only nfts do it through engine and like that uh yeah they take over the whole uh yeah financial digital world within the next three years uh they have the power for it i would give to them um but maybe they're too corrupted by the vcs now who knows let's take uh from from the audience as last question from the the one from conor who asks what do you guys think dac's decentralized autonomous charities such as garrett camps ecocoin will social enterprises become an integral feature

of the future system yeah i don't know a huge amount about it um but it's a use case that i think sells itself you know it is often concerning um when you see some you know forensic accountants and stuff coming out and speaking against what certain charities are actually doing with the the funds that they're uh that their supporters have given them so blockchain absolutely is a perfect use case um to prevent that kind of corruption yeah i love it i've been trying to help a lot of different projects and like and i think it's you know whenever i'm gonna be able to maybe

uh spend some more time not working only on swissborg it's probably not going to happen for next decade i will definitely focus all my time and energy in that on because i think so that's at the end one of the most the best chain that you could provide is sending good karma and love to the ones that need it and in the most transparent way we'll just boost that industry to to people that really say okay i'm i am making that difference i'm not giving 50 into advertisement or high salary paid jobs in these different uh lovely countries we live in but we're actually giving it to build a life for someone else and i think so

that's that's for sure peace out that's that's very positive uh closing totes maybe just like last question so we finish at 7 15 p.m what do you think is next for for you uh as an individual in the ecosystem and for your projects and if if we can have a short and quick round here before we say bye yeah i mean next for me is is just more work you know i've i know exactly what is uh is in our pipeline and how much needs to get done between you know now and any amount of time from

now i feel like i've got deadlines approaching every 15 minutes sometime um so as an individual you know i i'm just going to keep building um you know new products for bangkok and trying to make the protocol um as performant as it can possibly be i think for the the protocol itself um i i see bancor as becoming something like a um you know a d5 staple right as supporting sort of the the core of like you know it's forming a a very strong foundation for for d5 forever um but i think the bnt token as well is likely to play a role there

because of its shared liquidity with so many resources it's likely to be become something like an index token um that has a you know a value commensurate with the market overall um so you could see that if we do have many many assets maybe one day every cryptocurrency asset represented on on bancor with decent depths to the the liquidity there um that it would no longer make sense to quote the price of things in us dollars that should be quoted in in terms of b t instead um because you know that that uh exchange pair exists for all assets um way out in the future i would also like to see this happen for things like

tokenized energy such as energy web um tokenized oil tokenized gold right basically get the entire economy into into d5 and i think the bank hall will continue to serve you know the needs of an exchange between these things forever so that's that's where i see us going thanks mark i guess i guess i'll go um so i think that in the in the near future we're looking at uh the parachain launch uh for kusama first and then polka dot and here we're really going to see uh so you know not just

you know the interesting uh aspects of the of these new pair chains i'm really specifically looking forward to how they have their own take on governance because again you know they can produce their own rules for how you know governance takes place uh many of them have sort of uh you know uh copied or made slight modifications to sort of the default polka dot rules but some have some you know really interesting ones uh ways of operating and so not only am i looking forward uh to helping you know support these and talk about them and teach people about them but also sort of you know learn about you know their pluses and minuses once we see them uh you know in the real world and not

just in test net form thanks so much cyrus yeah i mean you know i said there's a lot to be done uh the national council the first 50 seats will be elected uh tomorrow at 11 a.m so that's going to be a big change uh you know uh then we're gonna very soon i think so after tomorrow we're gonna release uh ether yields for the the best defy uh way to yield on ether out of swissborg so that's gonna be really exciting and um and if not well always try to be a very humble ceo and make sure that our community is happy and and we're we're

continuing to rock uh in the most fair fun way mark uh bill and uh cyrus thanks so much the painter and i are putting your hands together clap clap clap uh thanks being here thanks for building teaching and advancing this exciting community and and aria and hope we can do this soon again because this has been mind-blowing and and i wish you all the best to to you i hope to see you soon so thank you for sharing the platform thank you guys bye everyone bye