DAPPCON 2025: Ethereum is for Defipunk - Hsiao-Wei Wang

Transcript

Test test test and can you hear me? Hello everyone. Um so I'm Shawe. I'm the consecutive director of the foundation. So today I'm going to talk about isan is for defy punk. So defy punk is um something we made up here is like the the decentralized finance that uh champions for privacy decentralizations opensource collaborations and user surveillance and defy punk at least kind of cyber punk values that apply to the D5 protocols and we believe that this is the path that Ethereum is um Ethereum

should take going forward. So um on June 4th we published this the Ethereum Foundation Treasury policy. In this document, we explained like what how we think about the micro policy and then like how to rebalance our ease and then also visited like the our fiat denominated policy and then the unchurched assets policy. So um in this document it's clearly align that our finance show strategies with Ethereum

core values. The EF wanted the EF um manages its um substantial treasury and they wanted to support long-term success and health. So um we're instead of like chasing for very high yields or like doing nothing in the in a traditional way, we decided to um use our investments that we decided that our investment should reflect what Ethereum stands for.

So yeah so in this document we visit like what are the important considerations when we think about the treasury management. So first security and safety is the most fundamental um basic requirements. We wanted to chose the strategies that it has been battle tested. It's mutable and then it's permissionless as possible. And then we also uh wanted also financially responsible to to reduce the risk and then so we will only look at the more uh conservative and more safer uh more safer strategies.

Okay. Yeah. U but we also when when the EF looking into like the grants allocations or uh like resource allocations we also ask ourself like um does this use of funds advance is core values. We wanted to support the so we added this um deeper goals into our considerations. We want to support maximal um secure decentralized open-source cyber punk applications.

And then we want to um advocate ideal defy protocols that are trust minimized, composable and privacy friendly. So we will not just um in we are not just um invest in the financial upside we also invest etheerance value okay so if we compare the today's defy ecosystem and then the cyber punk ideals that we wanted there's still a gap between it so first the uh privacy features it usually take higher cost and then it's most of them like you will

need extra steps to interact with the smart contract. So um yeah there's al some challenge in the UX and the cost and um on other hand like there was also the challenges found the external threads like if there will be political or like social um challenges pressures um that again push against builders to build um the privacy tools or like um the more decentralized tools.

So this given this um challenges many defy protocols they would probably chose the shortcuts that we will use more KYC's or use more like like multi in their protocols. So um this short shortcuts are usually leads to the more centralized system. So we wanted to challenge this shortcuts like uh wanted to the users to think more about like are you really using the decentralized system or you are using

CFI instead. So when the EF were looking to our treasury developments and um iteration it's a it will be a continuous um interactive journey. We will start it from the internal operation and then uh from there we advocate our core values which is the crops like centralized resilience and um open source and privacy and security.

So um in the the the way we advocate this um core values, we would also deploy the treasury strategies to support these initiatives and then this is not just one year strategy. I think it will be we will iterate the the process um over years and then when we I think when we finish the the loops more and more times like EF will also grow and um learn from the community a lot.

Okay. So um core values it leads it leads us to define some uh basic defy punk pol uh properties that we want to use in defy and those properties translate into some practical uh criteria. So um these are the D5 punk properties.

So first security first it's the most important thing is that like we need the system to be robust and um um tested and second of course open source in the D5 is required and but moreover we wanted to be the more um free and labor opensource software license and then Um also like find we wanted user to be able to self-custody their assets and then fourth is like if there's a technical solution that could replace

the trust uh based solutions for example like if you can use the cryptography over like trusting in some like other people's smarty seek or like NPCs overused NPCs or like and with this technical solution that could also be used in the privacy tools and then the um the crypto tools like we can advocate and support the defy features and then six is like sorry let's repeat it again but privacy is normal and we should take it by default so uh if we want to uh lead it by setting in the examples

and we know that privacy is often o overlooked in defy. So uh yeah, we wanted to step up to encourage it more and then advocate like um if I think we believe that if community the current metro projects that like if they also move forward to the more cyber punk defy punk values it will also be a good for their business for in the long run. you have to think longer.

And then like and the third is like often like often the most centralized piece of decentralized protocol is the front-end website. So um when we think about the the web the web UIs you can you have to check like if it it's the distributed uh front end software and then can you self-hosted it and then is there uh are there multiple independent UIs are available and then moreover like for the powerful users uh is there like COI tools for them to use so like to make sure that the SS isn't controlled or just by one single domain.

So I think EF is not doing this alone. Um of course uh I think many of you like the builders, the users, the auditors um we're pushing this they are pushing these values that in their own projects. So our the in for the EF our role is to amplify and to back stop this um their work. Okay. Yeah. So uh the next I wanted to share the the framework that we use to um think about the defy projects or like the the

decisions we make into nodes like um I think so like the reason we share this criteria is like um we want wider community to consider to adopt to apply them when and then forming your own views. Um then we wanted to um we're looking forward to the more credible process and then a longer road map um improvements to get the project toward this criterias rather than just like perfection on the day one.

Yeah. So this are like eight criterias here. So if a protocol that checks all these boxes uh well that's a defy punk superstar. But even if like um it only meets him like most of them it's still something that we will very great and we wanted to encourage. So like this eight years and I will explain them one by one.

So first is the uh permissionless assets. Uh this is also like repeated fundamental uh requirements like uh there should not be no gatekeepers prevent you from using the uh smart contract and then whether you are like um developer in San Francisco or like a day-to-day user in Vietnam or like enthusiast in Nigeria then the door should be opened for everyone. one because Ethereum is open for everyone. So the defy punks must um open to everyone as well and the second value here is the second

criteria here is the um self custody. So all use the are the users able to maintain their uh custody to maintain the custody of their own assets and also like in other words like uh are does the protocol provide and then empower the users to hold their own keys and control the assets by default. So since it's safe console I want also wanted to shout out to safe wallet. I think that's a very fantastic product like super the self-custody.

Yeah. And then the third value here is the um yeah the free li and the open source softwares for flows. So like is the contract code and then also like if it's better the UIs are like are freely open source softwares like copy left AgPL or like the permissive um NIT or Apach licensed. We understand like some projects chose business source license like BSL or like delay the the open source to protect their IP.

we get the reason but um just for fiber punk's perspective I think that could we could do better uh together like we want could we would like to like coordinated to see the world could be more like collaborative and innovative with software there. Yeah. And then privacy. Yeah. So, um, privacy is often treated as a luxury features or like after sorts in D5. Um but here we wanted

to put it to the first class value like um yeah for privacy to white press it must be part of the social contract. So like when you look using a um app you can ask yourself like are this translations visible to for everyone and can is your use in this protocol like actually will reveal your IP address reveal your identity on chain. Okay. So next the uh open source require criteria al lead us to the open development process

like um so like the I think the most important thing is like if the contract has been I mean the protocol has been launched and then there's potentially some upgrades there and then the user have to know like what's the decision making process and then if the process process um like how they set the upgrades, how they set the uh parameters, how they set the road maps. Yeah, that should be transparent. Next is the um maximally useless sorry maximally trustless core logics is like how we evaluate like how trust this part

this um project is like is it immutable or like is it up like if it's immutable it means like it's not upgra up upgradable so usually it will be more secure or like if the upgrade process is governance by a very very decentralized uh governance system. Yeah. So also like when design assistant could design it with minimal oracle usage. So y next is the general security.

So from the basic is like has the contract been audited? has the contract be formal verified or like if the if the they use some frameworks to uh at least ma mathematically like prove like some critical components are correct. So like or at least at least like to make sure that the contract by codes on GitHub is same as what you see on the um is scan also. So like if to make you should make sure like you the country you're using it was not like um there were no like sneaky changes on the there

and then also like if you are a defi digent then you can try to do some homework about like if there's a attack or a bug to the protocol and how what did how did the the team um fix this bug? what's their like responsive time? What's their retrospective report look like? So this uh homework you can when is some criteria like we can choose from for security and the EF we also have this one trillion security program that Frederick introduced in the morning and we wanted to support to advocate security in

certain community more and more. Yep. And then um last one is the yeah distributed UIs like we don't want that the censorship is still the censorship happen in the um if if it's has done very good in proto layer but it break in user layer then that point list so uh think UIs are mostly be over overlooked then that needs to be observed when you choose the the U the protocols also like you can look into their monitor system if that's also like

can you self-host the monitor system yeah uh yeah so I I think that's all the criterias and I so today this talk I think at least hope people can try to remember a couple of those criterias um that um resonated with you most and then try to use this as the the lens when you look at the protocol when you build the protocol and then ask yourself like is this protocol uh is project actually decentralized? Is it actually permissionless?

And then does it protect its user? And um the more we ask these questions um the more the market will bring the rewards to these projects to that fits the criteria. So I think that's a small changes that we can start from ourselves. Okay. Yeah. So um destiny is to be um stronghold of the cyber punk values in finance. I think um etheran is for defy punk. It's more than just a slogan. Uh it's a commitment and that's built the

crypto futures that we believe in. So um it's for the users that is are that in the politically or like economically up um upressed regions who needs the uncensored finance tools. And it's also for the dreamers that believing in the a vision of a open borderless and worldclass uh financial show system that own by its participants.

So like the EF is committing to this path and then if you can choose the uncensored most cyberpunk solutions then you also contributed to make Ethereum and the world better. So yeah, so we welcome the the people who uh like building protocols or tools or research in initiatives that um match these values or like who help with that this values. EF want to hear from you. So thank you and remember like Ethereum is for Defi Punk. Thank you.

[Applause] We have time. Yes, we have time for some questions if you agree. Yeah. Anie. Um um Shawi, one question I have is Ethereum has a lot of influence and resources, Ethereum Foundation specifically, and you're now signaling that the way you deploy those resources is going to be in a DeFi punk manner, right? uh do you think other enterprises, other institutions are going to look at the EF playbook and

kind of be inspired to deploy their large resources in the same with the same values as uh DeFi punk? Um I think for the EF it has a special role in Ethereum ecosystem at least. um like we wanted to the the EF's moves are like observed or also like being not saying censored but like being watched. So I think some attention is like okay sometimes make like we want we will make the moves more carefully and

more um sortally and then this sometimes it's it's um the over attention is bad for sometimes for us to operate it but we wanted to transfer this energy this attention to do something good which is this defy protocol of deployment is for Yeah. A question from the back right of the womb. Okay. Um, how does Defi Punk look like as a meme for you?

Yeah, I saw some meme coin. I think they are scam but not quite sure. I saw a token somewhere but I I like this as a is a is a good if we don't need make token but I think I like this as a mean okay are there any more questions yes um so okay if I have a project uh that I I apply at the I use the form to register and and you're going to look over over it. Um, what if, for example, not that I'm planning to do this, don't

don't arrest me immediately. Uh, but what if, uh, someone wants to do a second Silk Road, you know, it it match Silk Road, right? Selling drugs on the black. Okay. On on the the dark web. Um would the EF you know uphold the the values this far in the sense that you know it can go against some leg uh some legislation and and things like this like how far are you willing to go to go to do to to support us defy punk h how far you mean like how much against the potential state for example oh you mean like um well it's still hard to say. uh like uh like

I think we're increasing like right now we put like uh 50,000 E into the DeFi wallet and then we we still have like 5,000 E that has not been deployed and then I think the the total amount will be increased and then if you fill a form fill the form today and then we will we reviewed and then give you some feedback later. Uh I think if the pro if the project keep growing and um maybe there's a v2 v3 version and then becoming more and more defy punkish then

we also revisit this again if you are willing to like submit again over time. Yep. I think this form is like maybe um temporary solutions just a Google document is not ideal. Um yeah, just just to make sure the EF will not try to break the law is is my question. You will not try to break the law. Break the law? No. Okay, good. Yeah. Are there any more questions?

this one. Uh so the EF was quite public about how they've deployed the funds so far. Mhm. And going forward if they start if there is more useful privacy preserving methods, will you still maintain the same transparency if you're using a privacy focused protocol? The they're like both good things, but how do they mesh together in terms of transparency plus privacy? I think in at least for now at the moment like we will do everything transparently and then there was one we were thinking about using some privacy

tools but like I think like if we use it but we still want to tell everyone this is us and that was a bit strange but I think the sometimes for the the supporting it's um it's also part of it was signal signaling uh not for the yeling. More questions from the audience. Okay, then please a warm w