The hyperscale public infrastructure thesis for DAOs

Transcript

hello my name is Denison Bertram today I'm going to be talking to you about the hyperscale infrastructure thesis for Dows this was kind of a a work on trying to get the best buzzwords into a title and I think I've made that work so I'm going to start with this image and then I'm going to explain why I'm showing this a little bit later but this is back in 2016 if many of you don't remember but Facebook kicked Zynga to the curb Publishers are next and if you remember in 2016 Zynga was kind of the hottest thing out there they were worth like a billion dollars and all because of FarmVille on top of Facebook so to get started with my talk I'm going

to start with part one the road behind us and tell you a little bit about tally I am the co-founder and CEO of tally and our Focus has been on building Dow tooling looking back this is the original tally thesis not sure how well you can read this but we really focused on the idea that existing dial Services weren't ideal governance is the underpinning of a successful thriving decentralized ecosystem and that we believe in lightweight composable secure governance systems while not all of our original thesis three years ago remains true the core of it the most important pieces are more important today than ever tally today is used by the top teams of the ecosystem

but let's fast forward to 2023 where we are now tally in this period of time using the governor framework as the Primitive for this interoperable composable governance framework helps scale the ecosystem from 10 million in treasury value assets to 10 billion so we saw here that okay our original thesis had legs there was something here that was really important that we really did need the version of erc20 but for governance but that was really only the beginning today there are hundreds of dials on tally there are hundreds of thousands of users and many many hundreds of thousands of participants in Dows

everyone who's been a part of the 2020 Dow class was right Dows are the future so part two that makes sense I think a lot of folks here are probably bought in on Dows if you came to see this talk you probably think yeah Dows do work but something has happened since then and that is scaling scaling really changes everything because now we are moving away from just the ethereum layer one ethereum when we think about it natively is a decentralized system by Design but when we start building on top of it we have to think about what

decentralization looks like more closely we need to be more careful and choosy about it because scaling is really unlocked an entirely new set of questions now some of these questions might not be obvious some of them are obvious but I'll get into them a little bit while ethereum L1 and Bitcoin are decentralized by Design let's think about more about the l2s and the l3s and the l4s what is the decentralization look like for our messaging layers our sequencers our data availability committees our bridges staking Services you can go on to provers block Builders all the infrastructure necessary to run l2s at

scale now also need to be decentralized all of these pieces are critical to have operate in order to have l2s that are secure so one thing you might wonder as well okay but tell me a little bit more generally when we talk about things like ethereum when we talk about how do we enforce decentralization we give L1 people the ability to Fork the chain right if you have ethereum and you don't like what's happening you can Fork it and that has been done many times but l2s present a different problem here L2 State L2 liquidity contract entry points these things are not forkable you

cannot Fork an L2 because you don't take the liquidity with you right when you bridge tokens over to your L2 if you Fork it those Bridge tokens still remain in the original instance right that presents a really complex challenge because the original decentralization guarantees that you get with ethereum you no longer get here this is not your option of decentralization of Last Resort all of these things are unforkable so what does political decision making mean in these environments and what does it mean for you and when I say for you I mean also the user but also the

platforms also the people building on top of it also the relationship of l2s with other l2s so I'm going to get into the meat which is hyperscale infrastructure so what is hyperscale infrastructure right like I like to start with the buzzwords sometimes people cringe when I say hyperscale infrastructure but I think I can win you over to what I'm trying to express here hyperscale infrastructure is infrastructure with no value capture ceiling there's no limit to the amount of value that can accrue in these layers l2s anchor into L1 but l3s anchor into L2 l4s anchor into l3s we have messaging Bridges shared

sequencers provers executors staking Services all of these things any one L2 in our ecosystem can theoretically service trillions of dollars of value there's no upper limit to what these networks can service in terms of value or is there think about this for a moment why can't arbitrum or optimism or Linea or in any number of the other projects host trillions of dollars when you think about how you can build new systems on top of those systems if you trust them the most important part here and the point that I really want to drive home

in this presentation is they must all have a credibly neutral decision-making layer a decentralization stack they must have this right why because everything sufficiently large must be decentralized okay but why because you cannot risk building on a layer that is not credibly neutral you cannot risk being Zynga on top of Facebook and the most obvious thing here is people tend to think about is oh you're talking about censorship Denison right

oh they're going to censor my transactions and that's the obvious answer but the subtle answer is a bit more nuanced right so here I have here the main reason is if you grow valuable enough you'll get rugged by the layer itself and we start to see this happening in places Facebook is the great example right Zynga grew to be a billion dollars with Farmville and Facebook grew jealous of it and kicked them off and built their own game platform right and what did that do that killed Facebook's ability to encourage people to build on top of that layer no one has ever bothered realistically to think I can build an

independent business on top of Facebook again and you could argue the same about Twitter even recently with the API You could argue the same with Reddit even recently with the API these layers are so large that they are actually dangerous to you because they are not credibly neutral I have to put this up because this is a recent example of this in crypto land right the multi-chain service was a decentralized stack but was it credibly neutral was incredibly decentralized can you believe that they were decentralized right of course it was a decentralized service it just happened to all live at the CEO's house on his laptop and now so does the 120 million dollars that the

system had locked up oof right so I like to say if your stack is on Facebook you're the next Zynga and this is important to think about because getting back to my earlier Point okay what you're afraid of is being censored but if you think about building a business if you think about building a billion dollar ecosystem that's not really what you should really be worried about you should be worried about the subtle business decisions that l2's messaging relays Bridges all these subtle decisions that they need to make in their product as time goes on and wonder does that change

impact my business because it's possible that an L2 implements a new pre-compile that benefits your competitor and hinders you if anyone remembers not all that long ago Hayden and uniswap were in favor of a new EIP and the community on ethereum kind of lost their heads about it now imagine it on an L2 right where you have a network that you're building a business on but you're not quite sure if the network the underlying layer itself is aligned with your business Direction with your communities Direction so this is why I sort of just explained that the problem is more subtle but can you trust decision making to be made in

a credibly neutral way and this extends also to the social layer because Dows and these layers have a lot of money and how the money is spent is also a determinant in the success and the effectiveness of the underlying layer and the people who are building on top of it so I'm going to let that sink in for a little minute here there are so many infrastructure decisions that can benefit one party over another it is so early in the decentralization space and the scaling space that when you think about where are you going to build you have to choose a decentralized and credibly neutral layer it is too dangerous to build upon non-credibly

neutral layers even if it's decentralized that doesn't mean it's credibly neutral here at tally we are building the tools necessary to launch operate and govern hyperscale infrastructure infrastructure that has no value capture ceiling because if your layer is not credibly neutral there's a very low limit to the amount of value that can accrue in this layer there's a very low limit to how much value projects are willing to store on your layer you cannot risk becoming so large that the underlying layer rugs you itself this is what we are calling the

decentralization stack what we see is the evolution of just the concept of dows but really applied to these enormous ecosystems because l2s are not just a dow that votes on doing Acts or votes on doing why they maintain the political balance of an enormous ecosystem of really important participants these are data availability layer providers these are the messaging Bridges these are the sequencers these are the provers these are the process for approving new sequencers for decentralizing the sequencers these are the contracts that actually link the l2s back to L1 in the first place right this is not just the small committee that

votes on X or Y this is an entire huge organization that is working to power the future of digital infrastructure so what we are working on here is enabling credibly neutral infrastructure because it's early we've started at voting with Dows we started three years ago helping D5 protocols and now we see that the future actually is much larger the opportunity for everyone is much larger at small scales at medium scales at large scales and my favorite buzzword of all of course is that hyperscale

right because five or ten years from now how large will these l2s be if we are settling the world's Global transaction throughput how valuable will these infrastructure pieces be and who are going to be the players today you get airdrop tokens and you participate in a dial but tomorrow this is going to be Microsoft and Google and MasterCard who are working to gain political influence on our payment settlement rails on the infrastructure that will power their businesses right so they tried the the centralized service of side chains in the past right we all remember Enterprise blockchains right but now that we have l2s we will see them participate so the credible neutrality

will be even more important as the players become even more powerful so I think I'm almost out of time if you want to unblock your Project's potential please come and speak with me come please speak with Tally you can get in touch here at hello uh at tally.xyz and I think I've perfectly finished this I have 50 seconds left um but if you have any questions please catch me outside happy to talk more about it with you uh and I hope I've sold you on uh the buzzwords as being actually very necessary [Applause] foreign