Decentralizing Consensys to Catalyze a Network State in the Emerging Decentralized Web3 + AI Global Economy

Transcript

[Music] there we go so this talk uh will have a different tone given the the recent political shift in the United States uh than if it was written a month ago um though I've lived in the US for years uh I'm a proud Canadian I would describe myself as politically Centrist and neutral uh if there was a progressive rigorous open decentralization party uh I would be an nft caring member for years in the US companies in our industry have been living in fear feeling unable to engage

in certain activities that should be natural for a web 3 company like issuing utility tokens for instance we're operating in the climate characterized by regulatory uncertainty G uh by regulatory uncertainty by gaslighting and carpet bombing of our industry with inquiries that felt like inquisitions Wells notices and lawsuits from the SEC the industry asked for rul making and engaged in good faith but a strategy of Regulation by enforcement action replaced the approach any lawful or constructive regulator would take because the goal was to slow kill or

co-opt our our industry in the US this was the case for three reasons the progressive wing of the democratic party believes a large strong central government should have granular control over the population two Central large financial institutions preferred to keep winning a rigged game rather than compete on the Level Playing Field of decentralized finance and three the US controls as much of the world as possible via intermediaries especially financial intermediaries and ethereum represents the most power powerful Unstoppable disintermediation technology on the planet there's been concern about a

second American Revolution there's indeed going to be another Revolution it will be a bloodless and probably bipartisan Revolution that sheds the regulatory Cru and reformats America according to the principles under which she was founded liberty and justice for all distrust for overreaching centralized Authority and a healthy reverence for self-determination and decentralization paraphrasing William Gibson the world of decentralization is already here it is just unevenly distributed while it is finally looking like America is getting on track decentralization has already been blossoming in many places where it is

needed or where opportunity presents decentralized protocols flourish in places like Argentina where industrious people need weight ways to Route around the damage wrought by centralized government or in Asia or in the Middle East where the population is hungry for opportunity and agile in how it responds we have an opening now to reformat the world bottom up the whole world the massive shift that America is about to drive including an Embrace of our technology will become an imperative for the world's countries to follow something like the American experiment or the American project that be began with the American Revolution and was soon followed by the French Revolution in the 18th century will soon take hold

in various parts of the world this Age of Enlightenment led to the development of the western liberal Democratic philosophy in Many Nations this philosophy is characterized by many ideals that have been corrupted over the past few decades rationality reason and progress individual liberty and rights empiricism and scientific methods Limited in Democratic governance pluralism and tolerance and genuinely free markets our globalist decentralization project the Natural Evolution of the American project will bring new kinds of sovereignty to the people and communities of the planet and it will grow viral crossing different

kinds of borders because once you see decentralization at work you can't unse it our Tech ecosystem and sociopolitical movement must always be about progression towards rigorous decentralization in the Deep foundational infrastructure of the world with rigorous decentralization we get all of the characteristics of West Western liberal Democratic philosophy and more specifically we get open source transparency and credible neutrality we get permissionless participation and Innovation we get a world computer with a verifiable computation stack and software supply chain we will be the world computer on which all the World

Systems will eventually be rearchitecturing attestations with censorship resistance we get instant onchain news alerts disclosures of political business and social events and unfettered journalism shout out to multiple concurrent proposers distributed globally with robust real-time information dissemination and journalism we get an informed public and an informed public is an Engaged public with an informed and engaged public we

get healthy local Regional and Global participation in governance broad participation in open governance at all levels makes it hard for exploiters to capture and control the important systems of the world with good governance globally we get a healthy rapidly evolving Society waves of decentralization are cyclical see the ancient Greeks and then the Romans and the recent American elections but the secular decentralization trend has been underway for centuries as monarchies have seated power to nation states which have seed power to joint stock corporations First

National than multinational and technology has increasingly empowered communities and individuals the trend is to make sovereignty more and more granular a simple definition of the network State a network state is an online digital first Collective of independent actors can be humans groups or AIS who are aligned with respect to exploring and addressing one or more issues Network Stakes can be realized as Dows social graphs online discussion forums or combination of tools Network States benefit from New web3 Primitives like decentralized ID constructs F bable credentials attestations governance tools Etc Network states have the

ability to create their own magic internet tokens for different purposes utility loyalty governance money Equity memes Etc people who are aligned with the mission of the network State might be inclined to do work in exchange for compensation in the form of some of these tokens others might also find the tokens of value for different reasons Network states that choose to work together May swap tokens to establish greater alignment a network State can bootstrap itself following various strategies Bitcoin ethereum and Salon can be considered a certain class of network State layer 2 networks can also be considered a class of network state to protect decentralization we

need rigorous incessant ritual ized vigilance Thomas Jefferson wrote The Tree Of Liberty must be refreshed from the from time to time with the blood of patriots and tyrants we too will have to tend to the long-term health of the tree of decentralized Liberty not with blood but with attention paid and shrill commentary on on crypto Twitter and other discourse platforms and with attention and gas paid to systems that are constantly monitoring the threats to decentralization sovereignty refers to the supreme authority or ultimate power that a state institution or individual holds over a specific territory or group of people

sovereignty has several Dimensions domestic sovereignty the state's control over its population and territory International legal sovereignty International recognition of all states Independence and authority and no interference into the internal affairs of a sovereign sovereignty can be limited by constitutions International agreements or inter or internal divisions of power one can imagine a web 3 plus AI uh one can imagine as web 3 plus AI enables new modes of living in overlapping Network states that we have the opportunity to Define new kinds of sovereignty and just as nation states Define their forms of sovereignty we've

started to Define new forms online and on chain one for individuals online self- sovereignty in various forms viid IDs and other identity constructs combined with reputational Primitives like attestations verifiable credentials webs of trust and rating systems in which the Raiders have skin in the game when they vouch for something two for communities online sovereignty embodied in Dows social graphs and other mechanisms these are network states that will take very different forms they will operate as sovereigns in online domains setting rules for their participants that are of by and for their people Sovereign individuals are already

becoming members or netizens of network States some of those Network States will eventually have arrangements with one or more nation states some of those Network States uh sorry um enabling temporary or permanent rights to be resident there the state of Wyoming for instance allows Dows to register as limited liability companies this is a small step but we can think of it as cracking the door open uh and that will lead to establishing relationships between Network States and more traditional polities many nation states are facing cat catastrophic demographic challenges they need more people to take care of the Boomers and keep the economies from collapsing some nation states provide

passports to citizens of other nations in exchange for investments in the country and some nation states actively recruit for talented immigrants Canada has targeted recruiting 485,000 immigrants to become permanent residents in 2024 we will soon live in a world in which legislators and Regulators consider themselves in the service of the citizenry as they do in Switzerland and compete for companies and people to choose residents there the internet begat web 1 which which begat Web Two which begat web 3 the red decentralized web the internet started out decentralized it was a bunch

of protocols running on nodes distributed around the US than the world on wires provided by telecom companies the internet was Loosely governed by the ietf a decentralized organization web 1 also started out decentralized it was a bunch of open protocols and specifications running on top of the internet protocols Web Two picked up steam in the late '90s and early a as it became clear that there were billions of dollars to be made as some sectors of the economy were moving online and brand new sectors were being invented web two companies had exciting New Primitives at their disposal in the form of protocols and open specifications and some new ones were created but the dominant mode of

operation of web 2 companies was Clos Source systems and if you were fortunate enough to grow your product into a platform the standard strategy was to invite companies and users oner platform so that they can get a leg up in offering their products but when the platform felt it necessary to grow revenues further it became opportun to rug pull those projects to capture their revenues the web two platform strategy became became to build as Broad and deep a moat as possible to stifle competition Moes not Bridges web 2 represents the centralization of the web eventually web 2 on steroids became big

Tech big Tech itself built Big Tech built itself into a weapon of mass manipulation available to any actor who would pay and big Tech learned how to use Ai and behavioral psychology to addict its users to its product one result is that discourse on the planet is now hopelessly polarized and dysfunctional big Tech has fed as a negative externality of its business processes the shredding of the social fabric of much of the world and now big Tech on even stronger steroids is poised to convert its control of AI Talent Plus vast amounts of data and computation into building

the most powerful tool in history for the centralized control of humanity fortunately the pendulum is swinging back hard now towards decentralization and web 3 the red decentralization of the worldwide web consensus was formed to continue the vision and mission of the ethereum project and just like ethereum we're dedicated to Progressive prudent decentralization of everything we do prudent because it must be done with care to ensure that we always Focus first on the safety of and benefits to our users and also that we never destroy value in evolving a project towards

rigorous decentralization we decentralize to build better more valuable systems metam mass for instance is progressively decentralizing itself the metam Mas snaps plug-in architecture allows users to add functionality to their metamask individual Snaps are features created by thirdparty developers that metamask users can install directly into their metamask and the metamask team has been leaning into account abstraction for a while when the account abstraction dust settles uh somewhat at least we expect to expand metamask scope and capabilities with components embedded in applications and enable you to add superpowers to your metamask or to any project via Dan

Finley's delegation toolkit and framework continuing the pattern of progressing the vision and mission of the ethereum project consensus software announced yesterday yesterday that we're externalizing our Linea ZK evm rollup technology and network into its own ecosystem Linea is accelerating on the Progressive path to rigorous decentralization and token-based Community governance linea's Evolution will be maximally ethereum aligned D the decentralized infrastructure Network blockchains are complicated databases in INF fur enables developers products to read from and write to various

blockchains with these but in a web 3 world of potentially millions of blockchains infura can't integrate them all on its own so infura has been progressively centralizing itself into din the decentralized infrastructure Network a robust multi-chain RPC provider din is already operational with 50 plus partner providers offering connectivity to various networks and is already handling a 100 million requests daily and din is about to evolve into an igen layer AVS INF fur will become a premier specialized provider on the D Network INF fear's openly sharing its optimizations distribution to customers and Revenue opportunities with other

providers in order to evolve the ecosystem Bridges not Moes can't be evil din Linea and metam mass snaps enable permissionless Innovation and onboarding to our infrastructure we will not be The Gatekeepers as our systems become more rigorously decentralized it will not be possible for us to deplatform projects Bridges not modes can't be evil there are many other projects that are on our product development pipeline that runs from ideation through development through product Market fit and into Pro protocolization externalization and tokenization we expect many of these to have powerful synergies in both functionality and

benefit to the user standing up a Proto Network State the initial consensus company consensus mesh began as a tiny multinational startup because we had to look globally to find find people who had a clue about what we were doing becoming a large multinational corporation is not cool becoming a Global Network state is cool in order to operate most effectively in web 3 we build Bridges not silos so we're working towards making consensus software Inc more permeable or porous for example we've had policies for a while that enable our members to spend more time spend some of their work time on

projects outside of consensus like Dow consensus is embarking on a new phase in its Evolution consensus software Inc sever several of its products projects and other projects in the extended consensus ecosystem and Beyond will soon set up shop on what we're calling the consensus Network State Network states are about alignment transparency broad governance and Collective benefit we will progressively iterate in those directions the capital city or da of the consensus Network date will be resident on Linea mainnet the first island composed of Linea digital real estate while consensus will operate throughout

web 3 we will consider Linea mainnet our home network on which we build cores of our critical infrastructure we will continuously look to build synergies among our products via explicit onchain agreements and we will look to create synergies among our products and your products via explicit onchain agreements our friends at soal soo. are in the early stages of building an onchain agreements framework that we will use to form agreements between projects that specify in explicit and measurable terms what should be done by each party and what compensation yes token compensation is Due based on levels of performance performance can be

measured in usage of our products and protocols or in providing liquidity or in bringing your project onto Linea or attaining levels of performance in your project in terms of users transaction volume tvl Etc we will be employing a new yet ancient meta work to earn if a person or project adds value to the Linea ecosystem Andor the consensus Network State they will be compensated in tokens based on onchain explicit agreements many of you there are already self- Sovereign on chain but we're all in the early stages

of discovering what self- sovereignty means we will be living more of Our Lives onchain as our finances identities Communications art and entertainment are increasingly mediated by open networks and decentralized protocols the new relationships and communities that form will be the basis of new overlapping Network States in which we will all participate today we're launching soles. XYZ a project inviting everyone to declare their personal sovereignty as another small step towards the decentralized future you can go to soles.

XYZ to it you can go to sal. XYZ to attest the kinds of sovereignty that matter most to you and write your support for the emerging world of network States and our Liberation through them permanently on Linea we have bigger plans coming soon this is the beginning of a partnership with the community to build a network we all want to be part of when we hear www in the decentralized future we should think about a win-win-win world computer Humanity has flourished via communication and coordination capabilities that give us massive advantages over other species

coordination requires trust Satoshi invented centralized trust possibly the most profound invention in human history decentralized trust platforms are now broadly available to builders and users based on blockchain and smart contract based credible commitments web three Primitives plus AI automation are about to enable Humanity to distrust each other much less and collaboratively build towards a post scarcity abundance mindset that will enable us to evolve a massively positive sum world so what does leadership look like in the decentralized future self- sovereigns in the decentralized future will be the CEOs of themselves and they will

collaborate with other CEOs using credible commitments on ethereum they will have clouds of AI allies amplifying their capabilities and they will create complex delegations of onchain powers with those AIS and with other collaborator CEOs so what will leadership in a web 3 free world look like well that's up to you thank you all right uh take care of this all right thank you guys so much and Joe we do have some questions uh let's go from the first one

uh what can we do in 2025 in terms of tooling to boost the creation of Network States um well there are lots of Primitives out there um and uh we're exploring them so um Network States right now are more like Proto Network states where where The Primitives are available but uh um a a few systems are using them uh as I said you could you can call ethereum a network State you can call uh the avara set of projects a network States so uh it's happening and we just uh we to keep kicking the tires on our tools and and start living in them uh how can we make the ecosystem safer to allow real adoption in a

decentralized world um say it again uh the very first question ecosystem safer um we have to keep building and security auditing uh it's uh it's tough building uh web 3 on on live monetary rails with with the entire world watching um um so it's uh it is a complicated Prospect uh but uh we need to get better and better in terms of security uh here's another one uh we can actually take the second one if you prefer um how can we more urgently shift the ecosystem towards reputational Works where influence is in determined by

contributions to a project according to its values uh so uh consensus is built uh a reputation system uh an attestation system we're working on identity systems or or aggregating identity systems so um we're trying to figure out um uh exactly that uh so whether it's reputation for metam Mouse snaps or reputation for for your activities in a project or a network State uh it's uh it's pretty much the same system so it'll get a lot of exercise what makes a network a state um well a network State uh is a group of actors that are aligned uh to a specific

purpose um it has capabilities it could be anonymous people it could be identified people it could be um um could have the ability to create tokens for different purposes uh has the ability to set its values to set its goals and and to achieve its goals uh and we have one on the ecosystem fund would there be identity and reputation systems to align not just financially but personally and professionally um so uh the forthcoming Linea ecosystem fund or or consensus ecosyst consensus Network State ecosystem fund um will have

um um forms of decentralized ID uh forms of reputation systems um but it should also be possible to to be to operate as an Anon uh you may unlock fewer opportunities you might get compensated um less because there might be more risk in in working with you uh but I do believe that as reputation systems uh grow richer uh we should get much more comfortable um doing risky things with anons because you'll be able to to calculate your risk uh we have enough time for one more question how's Network State different from

Dows um a dow is uh very much like a network state in its uh in its superficial definition um uh if you ask bology S bason who who's been uh promoting the idea of network States um there's uh a an element of for uh which is initially onchain uh but then uh he likes the idea that uh it will reestablish itself itself or establish itself um in physical context perhaps in archipelagos all around the world and so um in his definition a network State could be composed of a DA

and other constructs it could be social graphs it could be discourse platforms but there will also be uh some sort of uh physical um touch Point all right so our time is actually up uh let's give a round of applause to Joe everyone