How Aragon Hopes to Improve on Democracy - Ep.135

Transcript

hi everyone welcome to unchain your no hype resource for all things crypto I'm your host flourish in in case you haven't heard I have another crypto podcast called fun confirmed it's shorter news here and comes out Fridays if you haven't yet go subscribe now or ever you get your podcasts also find out what I think are the top stories in crypto by setting up from my weekly newsletter at unchained podcast com cipher trace cutting-edge crypto currency intelligence powers anti money laundering blockchain analytics and threat Intel leading exchanges virtual currency businesses banks and regulators themselves use cipher trace to comply with regulation and to monitor compliance are you passionate about

blockchain but fall short and the technical skills to build and deploy blockchain applications then check out simba chain the smart contract is a service blockchain simplification layer on simba chain comm and their new enterprise offering on the microsoft azure marketplace kraken is the best exchange in the world for buying and selling digital assets it has the tightest security deep liquidity and a great fee structure with no minimum or hidden fees whether you're looking for a simple fiat on ramp or leveraged options trading kraken is the place for you my guest today from berlin is luis Quinte the CEO at aragon one welcome Luis what problem are you trying to solve with

Aragon the thing that we're trying to solve with Aragon is that human governance is very broken both like the micro level like the way we interact with each other in the way we organize it was very hard for in the world that is nagging Tino to organize with some Iran for example because of multiple revelations that make it almost impossible but also the micro level like governance is broken and Morrissey years I would say in the last stages of growth and we need to come up with new systems that are better for human coordination as we have seen in also in the West with like Donald Trump winning the u.s.

elections and stuff like that yeah well actually so what makes you say that democracy is in the last stages of growth well I think if you look like technology they have this period some time in which they they have like early adopters and then they grow and then they have like this kind of productivity plateauing which they use kind of a stabilized over time and that means that we have taken the most out of them another it's time for a new thing to come up and I think we have taken out the most of the markers here already at least in the West and now new mothers have to come that are better for human coordination and maybe even the community forums maybe they come in the form of small communities that coordinate between them instead of highlight is huge monoliths that we can see their national states

there are like hundreds of millions of people so I think we stand the Spearman with new models and so what does ideal governance look like to you well I think that's very hard question because that depends to imagine like the the actual like governance model that we are looking at in the end the prayer in the word surrender solve I think in in terms of nation-states it's very very hard to empathize with millions of people and I think that's the number one problem in society today like we cannot empathize with another citizen because they are like a hundred million citizens in a country and they are so different from one another and so I think if we can start dividing that into like smaller units that way Dunbar's number which is the number of people you can you bring

can empathize with I think we may have better you know communities rather than having this monolith national states in which everyone starts fighting each other but what is Dunbar's number is not a really low number 115 here so ever so the world should be covered in little communities of 150 people that's something that really wanted to experiment with I would love to try that out try EF you know how many small communities also improves meaning in life because I think we have the crisis of meaning right now so like my innovation for example like there are literally like social apps in like Finland and in their art of Europe to like connect like teenagers because they feel isolated and that's so crazy to me today I would like Instagram and

Facebook and all of these things we feel more and more alone than you know any other time in life your generation meaning like how old are you I'm turning 3 right now and actually why don't you tell a little bit about your story how did you get into the blockchain space first her so according to software when I was 12 years old because of Linux and free software and it was kind of mind-blowing to me because I come from a humble family and the fact that you could basically get a computer and you start creating stuff and there was no limit there was no need to like go to the store and buy anything at all it was all for free and open that was mind blowing for me also that kind of post capitalistic sort of like idea that people were working for free on the

internet and they were like creating free software for other people to use it without any expectation of profit that was I didn't understand the reasoning behind it and I still I'm not sure I understand it yet but it was so mind-blowing for me and then I saw Bitcoin in 2009 when the white paper came out oh and yeah and I thought I was just come I thought like this is technically impossible I didn't really even print the white paper and then in session 11 I read about paper and I was man blown he was around the financial crisis that he's been very bad where I'm from and also hit my family very bad and when I read the whole lot paper at the end I was like oh my god this is gonna change the power dynamics of the world so much and I really wanna be involved

well okay all right and then I guess why don't you briefly fill us in and you know how you came from that point to launching Eragon yeah so in 2013 or 14 I really got involved more and more into a bit Cooney space I was doing some small price here and there but then I wanted to do a bit constrains with a couple partners I had back in the day and that didn't work out because of like we couldn't basically raise money for it and then in 2014 we came up with temporary which is blockchain time-stamping basically I think he's one of the main platforms were doing that now although it took a long time for it to gain any sort of traction so we launched that startup to allow people to like time stamp we had

the dream of like eliminating notary publics using the blockchain which was a pretty obvious use case right but then these things take a lot of time and then in 2016 I went out of the blockchain especially a few months to pursue something with my with my narco founder Jorge which we met when we were like 16 and yeah what is named Jorge scared OH now remember we were like 15 or 16 in in Spain via Twitter and we were both like young hackers and then we started working on multiple things and then in 2016 I asked him to join Chris ad I had related to patents and basically eliminating the patent system and then at some point we moved to the US with

the whole like Silicon Valley thing and at some point we'll realize that the underlying issue wasn't really the patent system in the US for example it was politicians and the power dynamics that you don't want to change it you just want to keep the patent trolls trolling and these big companies to own these patents so they can have huge models and so at some point we figured out the underlying issue was governance of the of the country and of the law system and not patent like themselves so we came up with our one yeah well also I don't know do you remember that I interviewed you once about stamp free seriously I did well yeah but the very first question I asked you was how you prevent lies or falsehoods from getting

on the blockchain and I'm just gonna tell you straight you didn't have a good answer for it so that's like mm-hmm I still don't I think wait right and any were saying you wanted to see a notary system so I was like okay this is like so far from being that but anyway all right so before we get an air gone why don't we just like define a few things because there's the Aragon Network there was arrogant Association there's Aragon one so why don't you just like high level overview describe being at the whole set up exactly yessir Aragon itself is the project in the movement that has the mission to create decentralized organizations for the world into basically a lot of people to experiment with governance at the speed of software and so for that we have the

Aragon Network we have the organization a few other entities and so we have this a multi team model in which is through having one team that grows to like a thousand people we want to decentralize also development and so we have this model in which the holders of a token that is the agro network token can vote proposals to basically govern the whole project and so one one of the proposals for one of the ways that they they can do that is to choose the development team are gonna carry development and so our young one is a team elite and that's the foundational team working on Oregon's development but there is also Aragon black or dark and there are many other Aragon azmorigan teams that are working on the ecosystem then there is the Aragon network and the Aragon network is

like the broad sort of doubt that governs the project itself and it also wants to provide services to other dowse and so for example one of them is the argon court we want to create a dispute resolution system for the house so they can use the right code which is you know smart contracts but they can also use wet code which is basically like you know human written agreements that we were used to in the like in traditional world let's say so we can combine the best of both worlds so that's a little bit of an overview then we have also like a Grants program called argon nest and that has been given a grants for multiple things we were the first ones to give grants to for a theory on 2.0 development but that's a little bit of

an overview of the ecosystem ok yeah and early on when you talked about Aragon one for listeners you know kind of how a theory on development happened there was a period early on where there was a theorem foundation and then east of was the company that was formed to to do the development for the network alright so then why don't we just start with like what it is and what people can do if they're if they want to use this system yes right now we have the Aragon client which is this app that allows you to create these centralized organizations and so you can do multiple things you can for example create like like a membership organization in which you can literally use list members and manage

funds for example that's a very easy use case that prefer doing the theory on community with other kind of the house like Moroccan comes to mind and stuff like that right in which you have the care of of friends and then they put fancy in and then the mass fund such like we're a very easy use case but then George have like use cases are I think a little more ambitious that are more like open house in which anyone can join well we actually but to go back to the membership one is that like a centralized type of entity using the Aragon network or oh well we like a decentralized kind of entity that you create on our and then it's like a basically like a permission and in the sensor like people have to vote for new members to come in that would be something that would live

on the theorem blockchain will be like fully decentralized yeah and then there is like just cases that are more in terms of like you know open open doubts and so one of them that we are super excited about this fundraising so there was this model proposed by vitaliy called the eCos and this model proposed by look from our team also called AP re and so what we're doing here is we're basically creating a doll that Sun raises money and then the token holders can decide to set what's called the top rate and so that's the amount of like minor flows to like development teams to implement this idea for this project and so the cool thing there is that basically you are like inverting the depth power structure so token holders are the ones that control

the project and then the money flows I know the other way around so basically I think with that you can you can have fundraisers that are like 2017 scale like you know very big fundraisers but with accountability and transparency that we didn't see in 2017 so that's one model that I'm super super excited about did that pass well that's gonna be launching like a couple weeks from now oh okay yeah because he he's worried about that for quite a while I think yeah yeah okay there's I mean in the in the data space there's always like it takes some time to actually implement things because everyone is afraid of like consequences right so like when did that happened and the fork happened and all of that it took years until like someone literally said like you know

we're gonna implement douse again because there's like those those things that people are really fearful about and I think like and racing is I think that people are very fearful about as well right because we have a lot of like legal implications and the SEC you know of these things right and so but that so then indeed ask for innovating that's what we're here right I'm personally not here to see that like there are SEC compliant I see what's happening like I don't really care about that oh really yeah I mean I I didn't get into this place to like you know basically facilitate the life for the nation estate I go into the state so we can replace the national state okay well so to tie all that together I did want to ask you about you know the fact that you're trying to build it out because

you know given the history with the Dow that might seem kind of bold to some people because that was a huge failure so why did you decide to build it Dow in a platform for Dallas well when we looked at the Dow it was it was interesting because you know you look at it and a itself was really great then the program was implementation right but it's one of these cases where it was very unfortunate that it was called dead down because then the whole concept is called basically screwed over for years but if you look at it like the concept itself is a brilliant concept the program was implementation and so if you're rational you think you know let's just make an implementation that works right and and we invested a lot of money and time into making sure that this gets

out there and I think we've in life for like a year and and someone's with no bags found or critical once at least so super super happy about that all right so why don't we we'll just talk about the platform so you kind of actually walked through it's a little bit so if I've a simple Darrell like a membership thing I can do that so then actually talk about some of the other features that people can implement yeah so there are various system with like multiple apps you can install an uninstalled you can think about it like like is like Lego bricks like basically you can build very basic very complex structures use like putting together this breaks their burden Eric and so by default there is a can finance app which

allows you to manage finances and then you can send the URL 21 for them to check the finances my transparent way they're supporting that allows you to vote on stuff and there are there's token manager app that allows you to like manage tech imbalances means tokens for foreign people it's less than as well so you can do all of those things and then there are more apps that are kind of not by default but there are super important as well so for example there is this suite of apps for Aragon called open Enterprise allows people to manage like more like open organizations and so for example you can have something like get going working on bounties and and and people can come and claim those bounties and directly on our own on the on the organ down you can

have like a dog body nap which is like another kind of a condition for a foreboding you can have like an allocation SAP to have like multiple bank accounts inside it now there are control in different ways and with different permissions of like who can withdraw money so you can do all of these things that are very composable I think right now we are starting to see it how people actually use it for for something because when you create a platform like a DNR one insect like a platform for this apps to be built and then with this app secret new organizational structures but I think the interesting point is when you start having a critical mass in which you can like like these components in different ways to create new models and and that's where like com possibility at sea and I think that

something the portal very well for aetherium and now we're seeing starting to see that for Aragon although it takes a little bit to like you know from building about 400 likes in how people use it and compose these things and so just to clarify something because when I was browsing the materials about Aragon for some reason I got under the conception that companies could use it and obviously companies are centralized so is that true or not true well you can definitely implement a centralized hierarchical company on Aragon like for example Aragon one we use Aragon but we are like a Swiss company and we use it for finances we use it for money and finances and important so we can definitely depend affinity that I think the issue there is

the legal part of it so for example in our case we implemented these functionality in the finance apps you can export a CSV because our accountants really wanted to and and I think if you want to do is simple stuff like that you may use Aragon but if you want to listen to more complex you may want to use some kind of like legal wrapper so there is this project called open law and they build this very very cool integration with Oregon and Wyoming LLC's so they have this own language hard in which you can create an LLC and the automatically creates an Oregon Dow and it links both so like you have legal agreements that literally say like you know membership is gonna be defined answers are gonna be defined by this token up on Oregon so when you create a new document

Oregon it automatically basically is a legally valid way of saying you know that's a new share on the Wyoming a let's see so that's a very very cold use case as well how did that come about it was a few months ago community member called from from open law and he just made it happen I think they were going to expand to like New York as well oh cool okay yeah I know Caitlin long was like really instrumental in getting a lot of black she and friendly laws passed in Wyoming so nice I wondered if she was part of that but actually something else I wanted to ask about was earlier when you were talking about like how you can there composable and like you can make different kinds of organizations so how are people using them and like are you seeing any innovative uses that you

hadn't really thought of before well it was funny so like way before we came up with our icons and racing implementing this fundraising mechanism on Eragon we we saw a doubt that was basically the world like a race mode my contract that would basically use the finance app on our icon in the tokens app on Eragon so that if there was new deposit to the finance app they would meet a new token for that member to effectively fundraising before we implemented on racing and notice that was really fun to see it it's actually a very cool project they are and what am i I think I would use case is most of the developers are based in Iran so of course like you know if your based their jaw automatically discriminated in the whole world right

so like I think argument was one of the only ways that they could have you know fundraise to Builder their software in their project well and so this is actually a perfect segue to my next question because I was wondering so obviously we've got like the normal traditional legal jurisdictions all around the world so how did those laws fit with or not fit with these entities that you're creating on aragón well it's the intersection between dry cold and wet code which is well like Nick Szabo used to do all these things it's it's very and just clarify that for people so which code is like human courts of law and then dry coat is like code this a

computer code yeah it's not contracts and that's that's super interesting because for example when I think about you know declaring taxes right so you wanna declare your taxes you see your your Kube the portfolio but then like how do you declare our CDP how do you declare and an empty house declare and I said that maybe even like a liquid in the market like it's just kind of so hard because the the the system of so like you know smart contracts art or incomplete and and the way that the law works is that they try to cover every edge case with like you know revelation this is that you cannot cover a turing-complete set of options with Revelation because I was like infinite like every line of code maybe like Tolliver and me doing a lot of different

things like it's intrinsically impossible to make this two system work that's my that's my sort of like idea that I have built over the course of the often past years I think you can you can implement something like these legal rappers like you open up Wyoming LLC and then you have like shares on your Aragon corporation and then like the finances but if you wanna install a new app on Aragon that is totally different for example this fundraising app or use like a bonding core for one of these like more business technologies how do you translate that to a legal system is like totally I think out of the out of the reach of the legal system and so I think if you want to split the like a hundred percent of the potential of this enterprise organizations we have to forget about the olden we just have to

build the new well so then if someone's creating and down Aragon and the different people that are using it are in different jurisdictions then does that create problems for you know one or the other of them that is a great question well I think you can the way you can look at it and we've been looking at some of these jurisdictions some of them may treat the dow as a general partnership so maybe don't and the issue there i mean one of the issues with like how legality works is days is that it's not built for the internet it's not built for a world where you can join a dow and just be part of it right so and there are a lot of interesting questions

that arise so for example if you're a passive stake holder of a dow let's say you are token holder of you don't make her down and make her down that's something that is illegal in one jurisdiction which i mean it's not that hard there are greased exchanging which like many things are illegal for example think about your systems like like thailand or or even explain were like just cannot insult the the monarchy right so in my in that there is the the Idaho Network Dow which has the ability to the proclamations like to say as a Dow I Pro commit something on behalf of my members and this Dow in sold the monarchy in one of these places are you liable now for that it's a it's a very hard question and I think I mean

I don't have the answer I just think we should be brave and try to experiment with it yeah actually unrelated no and this might seem unrelated but I I think it is similar I literally just yesterday read this article where there was some astronaut who basically did something in space and and it she I guess she was going for a divorce and she accessed the bank account of her of her wife who she was separating from and the wife was claiming that it was like a criminal act and she was claiming that they had been shared financial accounts to you know manage the finances for their son and anyway so but the article was saying

like there are no laws around like you know what like if she's in space at the time then like you know what how do you manage that so I agree that obviously not you know with blockchains also there's like this whole new territory that opens up and it's not clear how these things will be managed but actually it yet another perfect subway segue cuz I was gonna ask you about disputes as well and you have this whole dispute system managed by the Aragon Court so what is that and you know when do people use that function and how does it work yeah for sure so I think one of the most exciting parts of a decentralized organization is that you may be able to use completely create new restrictions on the internet but the problem with the smart contract is that

they are very limited like you can encode a very small part of the of the world because of the mean space because there are like like love like human subtlety so so you may be able to describe a lot of things with that computer code but you cannot for example say you know aetherium should know about my time later on my computer and when I leave a company is to know that I need to like return that right to my to my employer and so the idea with your own Court is that you can also add these human written language or human written code or basically like a contract to a smart contract so in the way you have the best of both worlds and the problem

there when we thought about it was like right this is amazing for this pollution is missing for basically creating or adding a lot of capabilities to the centralized organization didn't have before but the issues that courts are hard to run and I mean it's not that easy to recreate literally court you have to create the system of law around it right and so when we thought about it we we saw that courts are traditionally very expensive they are very slow like we have cases or I have seen cases where there are claims against like you know huge corporations and it is very clear but these corporations have so much money that they are able to extend it for years or decades and then settle and

that's it right and so I believe if we can incentivize fairness by creating that global huge diction which basically has a court I think the court is a core component the one that makes sure that you will send device fairness or incentivize like people to follow the system of law we can empower those much more and so the idea here is with the court is basically you can create a dispute you can access this pool of euros there instant device to actually behave because of current economic incentives and then the cool thing is that over time you're going to build jurisprudence that is global it's not like linked to an in local jurisdiction so you may be able to study this one system of law and then basically use it anywhere in the world as a global way

and who are the jurors like how are they chosen are they just people who hold the Aragon Network token or yes you don't need to stake a ante in order to become participants of this network and so duro is like anyone can be you're basically which I think it's very cool and then they are chosen randomly so for example in the in the first round when you open a dispute you may be assigned five euros randomly and then you can if you don't agree with the result you can basically you know raise it to like the next level and then maybe like 21 and then or and until you raise the dispute to like the whole network and all the US can participate and so that makes it very very hard for anyone to try to gain

the system because at the end you're gonna make it very responsive to basically make it so expensive that they will have to buy the entire network or lie 51% of the whole like I don't network for them to like win a case and I mean you keep talking about how you know the normal legal jurist a legal system is expensive so how do you guys pay for your court yeah so there's like a flat subscription fee that organizations paid and then there's a caddy speed feat and so wait do they pay the fee only one they have a dispute going over like forever well we're thinking about it this field I think this would be like a very small kind of flat fee like yearly flat fee kind of thing and then just like very dispute because I think it makes sense to have a

dispute so you only pay when you really use it right but on the other hand you also need to like keep the yours being paid in some way because what you want like the systems that the him that you want them to use for is you want to have them there so you need that you can use them but hopefully you incentivize everyone to not use them right and so you need to like even pay us for doing nothing because they are just there so you don't need to use them I mean you need to use them right at some point in time but ideally you don't write it just like everyone sees that they are going to lose money by opening a dispute there's no one does that's like the sort of like incentive structure that makes sense alright so in a moment we're gonna

discuss more about governance in the Aragon Network but first a quick word from the sponsors who make this show possible today's episode is brought to you by Kraken Kraken is the best exchange in the world for buying and selling digital assets with all the recent exchange hacks and other troubles you want to trade on an exchange you can trust Krakens focus on security is utterly amazing their liquidity is deep and their fee structure is great with no minimum or hidden fees reward you for trading so you can make more trades for less if you're a beginner you will find an easy on-ramp from five fiat currencies and if you're an advanced trader you'll love their 5x

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of the future sign up to stay up to date on the privacy enhanced compliance initiative and receive authoritative crypto AML reports quarterly WWC fruit trees calm /keep crypto clean back to my conversation with Lisa Aragon so the court system also has appeals how two appeals work yes abuse is a system where you don't agree with the result of the of the case and you basically raised to like the next round and so it just basically grows the amount of users are in both until the whole network and but I think like once is one site appeals and then the and then you have to put up a stake for that or something and then the other side

doesn't then the side that puts up the money automatically wins right you have to like basically a stake more and more over time and the cool thing about this though is that because I mean I'm pretty worried about this world where like people who don't have resources cannot appeal and so they basically lose the it was the case right they will think about like programmatically like correcting these cases is that you can fundraise for them and so let's see there's a very clear case like David versus Goliath kind of case right and so David can do to indicate against Goliath is like he can say all right I'm going to create this now and this I was gonna fundraise for for all the proceeds from my case and then I'm going to basically split the profits with all the participants that

invest in this fundraiser and so the evidence is public anyone can just see it and then if people believe on it they are like not only instant device to make it fair but also incentivize from an economic point of view to invest in this case so david ends up winning the case and then they split perceives very interesting so let's also now talk about the token because aragon actually was first built without a token so let's talk about what the ante token does within the system and how you justify its existence if the Ergo network actually existed before without without the token yeah well so the history was like the following basically we created Eragon and then at some point we were

thinking all right if these centralized organizations are mainstream what comes next like one of the services that we'll need and so we identified this very important service that was a court and I think that's actually very likely useful for those for one simple reason and it's 51 percent attacks like we're seeing that will open the house there is this very very easy attack that is basically you know numb you can say I want to propose to withdraw all the money from this now to this no doubt that is made out of just 51 percent of the participants of this original dowel right and then all these participants are incentivized both yes to take the money out and the other $40 like forty nine percent that maybe like pacifistic holders they basically get a screw over and they cannot do anything Errol and

so if you have the system of of this video solution you can say alright like these are the things that are not allowed in this Dao and so one of them is 51% attacks and so when someone opens a boat anyone can dispute it and can basically stop that from happening and so I think that's the very very first service that will make douse mainstream or help make the mainstream because otherwise 51% attack school is like stop this trend for open house but there are also other things that may like be useful for those in the long term so we are thinking I will build in our own layer one protocol our own like block China's world very optimized for the use case of the house and so that yeah or how we're thinking about it yes ent is useful for two

things one of them it's pure governance where the project so like in the holders right now have basically all the governance for the project they can choose what the development teams they can choose proclamations they can claim for example there is like the fight for freedom day february 10th which is the day that they are gonna tour dow proclaimed as like the sort of like yearly vacation for the network they can do all of these things and also they will be able to basically change int in this bonding curve for other tokens that are like the Duras talk and maybe the like Aragon chain talk and all of these things right but again piece like a pure governance token basically and you mentioned that you guys might try to build your own watching and you're

currently on aetherium why would you switch what what is not optimal about aetherium for Oregon well things are things in a theory migrate in terms of composability the the problem with a theory on right now is of course like in terms of the road map I would say it's not very appealing they if the point no road map I think three years from now it's really a lot of time and so we are real worried about the scalability so for example you know in 2017 there was the whole like SEO craziness and so you have one SEO and that one insurer will basically stop the network from be operational and and now with argan fundraising we are gonna see that maybe multiply but like you know one order of

magnitude more because you can open a fundraise with like two clicks have this love and raise money and it's all Unchained a bonding curve so like basically all transactions happen on chain so they are even more expensive than like you know the ico craze back in 2017 and so if that happens we could have like serious scalability issues and the problem there is that you know like their to waste to it one of them is to optimize the whole network or the other one is to use optimize another network that you tailor for that specific use case and so for example you may you make make cheap or like basically free to run operations that are important for those so like one of them that's very important for us is permission checking

so like that's this that is holder have permission to that whitter finances from the dow and if they don't what is the best route that they could do it maybe they have tokens maybe they can open a boarding so they can withdraw money from the dow all these primitives that we have in our smart control framework called aragon OS they could have way way way cheaper prices if we have our own chain then we the problem there is composability so like ideally you have a lot these protocols on a theorem right and then you are able to access them from these other chains like a towel can still open a CVP at all can still own die but that's kind of the the rationale that would you know you can build these chains that are very optimized for certain things and then the connect back

to theory on for like how network effects or composability or security even maybe yeah theorem is like the most secure like market or network and there is I think no doubt that is gonna have like the maximum security compared to other like application-specific chains um just to go back earlier in that description you were saying token bonding curve can you describe what that is for people yeah so if if anyone is familiar with like stuff like like you swap like it's it's a very similar concept it's basically a way in which we're going to change two tokens in a fully decentralized way and the the whole thing about the bonding curve is that you can basically define like the demand and supply sides so you can sort of like architect the price that's gonna

take so if there is more demand it might go up more and you can also basically have reserves attached to this one the curve so let's say for example in Eragon fundraising like when you when you buy tokens into a curve what we are doing Israel for example sending dye or ether or something into this curve and then this curve is minting new tokens for you in this doubt that is fundraising and so what happens in the in the other way around is you sell these tokens and then you you get part of these reserves out in ether or die or whatever the the reserve ratio is a fine in and so that's how bonding curve works and it's very very exciting because you can basically and in the case of Aragon fundraising get rid of

centralized changes you don't need to like be listed in finance or coding base or anything like that you can just have this bonding curve and then in any sense right away anyone can exchange it well yeah it's really cool it's like having a market that's just determined by the software exactly or something yeah so then the other thing I wanted a spot was he kept saying that basically you can build a blockchain said that certain functions are cheaper but why can't you do that via the smart contract do you know what I'm saying like yeah yeah well it's my contract so like it's really in a theory for example like everything is is very generic and and then you have some functionalities that it's they are built to be faster so the way they do that is via op codes or pre compiles

which basically means that the client understands certain code and instead of like run it in a virtual machine he just runs it in a much more efficient way directly almost like native way right instead of this virtual machine and so you can and the whole thesis around I poked about cosmos lot of these protocols is that you may be able to architect your whole chain using these things so everything is faster and cheaper instead of running like super generic built on machines of course I think the the concept of a virtual machine is amazing because with etherium you can call anything that you are not constrained to what the pre compiles or the OP code say you can build anything that's been different with Bitcoin right and what me the attractive but on the other hand I think having the power for

the whole Ariane community also basically govern well goes into a pre-compile when work was interred up coal was optimized what is you know optimized maybe there are things that we don't want automatic for that we want to make them as lowers like winston device less use use of that so I think that's a very cool concept like reclaiming sovereignty from layer one basically oh now I'm under says so that's why there have been all these votes around whether or not to either invest in polka dot or build on polka dot it's because you if you do that if you build on polka dot then you could have a pair of chain that is oh now I see it where it's like kind of customized for the needs of Aragon exactly and then and then those can choose right maybe if you are

building a doubt that is all about interacting with like compound and I even love these protocols maybe there is a case for aetherium and you want to have super high security is gonna be super expensive to interact with that doubt for sure but if you want to do that there's a still a huge use case for that but we also want to enable other use cases like you know organizing with my friends maybe I want a great on that with like ten people or I want to run a fundraising and I want people to be able to put money in without having to pay a dollar per transaction then you want to you want to enable that other set of use cases as well okay I actually want to go back to ask about the the jury one more the court because I was noticing so basically when you were

describing how the jurors come to their decision you guys you know conceded that okay jurors might discuss the vote with each other offline but then you also said that the juror fees are quote distributed proportionally among the jurors that voted for the final ruling option meaning like they basically get paid only if they vote voted for the one that one mhm but I feel like does not give the jurors a financial incentive to collude and then also like because you know they have to stake the ante it seems like they would be incentivized to always vote in favor of what is the best for the value of their own token but I didn't know if that could sometimes skew the outcomes in a weird way and if you

found that desirable or if you even had thought that you know realized that that might happen yeah well first on collision the the idea is that if that happens we can still like you know kind of race that to the next level and then the next set of yours but the appeal you do that appeal and then the next step of yours may not call it again so like it may go back to like they're you know sort of outcome that the case you have and in the first place and then for for A&T and actually like sort of the incentive there that's an interesting question and there is some research this one's going to be in our version one it's it's too complex but and that has been researched on basically if the whole network gets corrupted and on doing well it's called like a full

turkey fork so basically what will happen there is that if the whole just describe for people what few turkey is yeah for surf you turkey is this very cool almost governance mechanism but not really in which do you basically have like two different prediction markets and so basically you you predict what is going to be the winning option over a certain metric so for example let's say do you run in a country and so this country you define that this access metric is a GDP of the country and then you you have like two different presidents and so they you may boat or you may bet on the president that is gonna increase the GDP more and then if a president if one person wins and then I increase the GDP you get rewarded for

betting on that and then if on the contrary DDP goes down then you get as last or you may just not not get rewarded for for that outcome and so there's this final process that is very much in research right now which is that you the whole network gets corrupted so like int holders all get corrupted and there's a guy 51% attack on the whole network which will be movie like bear Spencer but it could happen and then you could basically split the network in two and then run a full turkey market on which which is gonna be the enterprise in the future and so if we if the network is incentivize to keep to keep running and to keep the cords running

you could predict that a enterprise will go up if the court case is actually resolved in a rational way right instead of being like corrupt and so if you do that you could basically choose a fork in which int is valued more because that's the one in which people are betting that the outcome was right and each the other one is like a physical barrier sort of like sci-fi structure but it's very interesting look don't come from our team proposed a few months ago and I think it makes a lot of sense in wait so just understand it's sort of like like you it would be like if back when aetherium classic split from aetherium if they were like markets placed on which one but then what would happen so if one so

whichever one has the high GDP or whatever then then what you kill off the other chain like how it like that's not possible right yeah I mean basically what will happen is that people just kind of migrate from one to the other and that's it like and you have like two different tokens and then there is one dog and a cat Chris value people bet on it and the other one loses value and may end up being worthless okay I don't know with ideology some people might be convinced that they were right anyway but anyway okay all right so we've been talking a lot about governance of like the Dow is within Aragon but then let's talk about the governance of Aragon itself because you you have a way of governing Aragon which is called AGP which is sort of similar to like an etherium improvement

proposal or a Bitcoin improvement proposal so describe the HCP system yes we Peace Aragon governance proposals and they are the ways that you can change Aragon or govern Aragon and so there is a EP 0 which is the AYGO manifesto it's like a very broad mission statement about the project which lists the values that the project has and then there is a ep 1 which is the governance process itself like how how you can submit a GPS and get them passed and approved and then there are using a piece of people are proposing and so this a piece may take different shapes so one of them is like a finance track IEP which basically is around fans management and funding different teams and planning initiatives there is a meta track which changes the

process itself the governance process itself and there's a proclamation struck for example this like fight or Freedom Day that I was talking about that was put in by the network he was a proclamation it was the network proclaiming I want to have a national holiday so to say and and so instead cool thing with this a EPS is that they get boarded by a whole network and then in the holders are free to vote and then whatever happens is executed so right now there is a point in centralization though that I have to talk about which is there is this legal entity in Switzerland called the organization and that one Ragnar curates proposals and uses this mechanism this body mechanism as signaling for what to do but like in the end the other precision is the one

that is executing these things and insecurities in them as well and so that's the point of centralization and the issue why we cannot get away with it right now is because the iron position has secured eight these proposals so they are not outright illegal right because right now the organization is the one brand like the hands of fans for taking care of a project and and so he has the power over this finances and he of the organization just basically send money somewhere that was maybe illegal then I would have been held liable how we want to change it for decentralized project is actually using the Oregon Court so that one of the first use cases that we are going to have for the court is actually ourselves we're gonna

transition the money the finances the funds for the project in to allow and then we instead of curating that via the r-1 decision we're just gonna have this sort of like manifesto and then people will be able to propose a EPS and the network like talking holders may actually approval react them for for the ballot so if they if the EPS don't agree or don't really empower or don't really follow the Aragon manifesto then you can open a dispute and basically they don't go to the vote so that's how we plan to decent reservoirs entirely okay there's so much to unpack there but basically so the Aragon Association is sort of like the etherium foundation in Switzerland exactly where essentially it has control of the funds from the crowd

sale but then there are like literal people that have signed on as directors we're in Switzerland if you know you guys do anything out of line with the mission of the Association then you can be held personally personally liable so now you want to decentralize that into did you say it was a smart contract or a dowel since I yeah but like so what I didn't get was this part where people vote and then then you disperse the funds based on how they vote so how does that happen because it like to my mind it would seem like you would need a multi-sig but then there's like people and control that multi-sig know so well we want to decentralize the funds as well so like the Dow will be one having the funds okay right but then

but then for the down to make a transaction who who initiates that and they were things that the like the governors of this dog would be IND holders so in the hall there's initiate the the vote and then II the support threshold is passed in the boat passes and it automatically gets a security and the money goes out like the like the support contract does it or exactly I guess just coded yeah okay so people vote like let's give Laura 100 percent of the tokens and that passes then like what then then happens so the smart contract sees okay it's passed okay so so I get it so then whoever makes the proposal they're proposing a piece of

code where it's like if such-and-such then move the money to Laura's address something like that yeah it's pretty much like that yeah like when you create when you open it out these days and you create like a finance proposal for example what you're saying is I my intent is to get money from this place to this place and I want to get you know maybe a hundred a NT like you know talking and it's amount and then when it's passed then I romantically like this my contract basically execute that intent okay so this is having multiple times down in the conversation but it's very good because work you keep like answering the question almost before I get there because my next question was asked was to ask about your ideal governance here which you remember I

asked you about in the beginning and I was wondering how Aragon currently falls short so that seems like one way but are there any other ways where you feel like Aragon you know needs to make other changes to get closer to your ideal one interesting conversation we're hiring the our own community right now it's around locked poteen and the awards for warren so there was very interesting AEP that happened i think in the in the last boat or in the previous one which was about our icon by in dots and talked about and there was just because you guys wanted to invest like a 1.5 million dollars in two dots right yeah was something like that yes I'm okay and so and so that was that was a very

interesting proposal because basically it didn't pass at the end but then there was a server so-called AEP 42 which was about not build in Oregon on polka-dots so there was I mean from like Spanky and Moloch proposed that one in that one changing his people missed the episode you shouldn't listen to it very good anyway keep going yes there was a EP 42 which was about like Argonaut building on on polka dot and Amin posted this tweet like you know who can lend me 1 million a NT so I can like sway the boat I can both Omega post and I can get it passed right and these with tokens right now is that

they are tradable so I mean it's not an issue right this is like a functionality they have that you can buy them and if they are used for governance may be able to sway the rest of the boat and so there's this idea about lock pouring which is and use all your tokens for maybe a year and you get a reward for boarding so you get more wooden power to lock them for four years you get even more to block them for a hundred years ago even more and so the idea there is that you want to have people in your community that are real incentivize for the long term on the project so the more they lock their tokens the more incentive as they are for the like long-term outcomes not the certain ones so you prevent communities or having communities which are made of like you

know pump and dampers basically which is happens throughout in the crypt of space and so that's one interesting conversation your one is around rewarding both sort of working people who vote maybe via inflation but then you have the program of random boring so like you don't want anything to as people do you go there and like random both whatever they they want about that you need to make sure that they read and they understand it and so maybe a combination of rewards Lancelot mooring will be an ideal way to actually incentivize people to stay and take decisions in the long term and then just so I understand so for the locked boats like the longer you lock them than the more weight your vote has oh yeah yeah okay so it's similar to the lock drop that Edgware was doing where you get more tokens the longer you lock them up

well one other thing that I wanted to ask but was so voter participation has so far been low like on that for the one episode that vote in the spring on whether or not sit by dots at all less than 5% of all tokens were used in that vote so how do you plan to get higher levels of participation well I think there are multiple wastage if that one of them is user experience I think right now it is takes money to bolt it's a very long process and also if they're like 10 proposals in the ballot some of them are very complex and you need to like study them so it takes a lot of time it really takes it a full day for a narrowing community member to study them and vote accordingly so that's that's that we enhance way more I

think also delegated boring will help so we're planning to implement that so you can delegate your boat to someone else and then they can decompose I think in the future it will be less of a direct democracy but and more as like representative I think that's I mean that that's really the world and has been going for the last hundreds of years right we have like this representative democracies and so I think that's great but these new systems also allow you to both directly if you don't want to go to like this intermediaries right so I think that's right and also with with this liquid democracy you are able to basically delegate and then if the representative is doing something wrong you can automatically telling it to another one you don't have to wait for four years four year terms and so I think that's

super interesting to increase participation turnout on the other hand I have to say I think we're very obsessed with participation and we shouldn't focus on that so much we focus on the outcome of the decisions and so if you look at the arrow Network and the outcomes of their decisions so far it's been like amazing like I'm really amazed by there hasn't been any mayor like decision that has impact the project in a negative way and so I think the important part is you know outcome another participation trainer serving well one thing also is that at this moment there's not a lot of usage of the network like there are a few fewer than 700 organizations in Aragon so far and then there's even like less than 1 million dollars in Aragon smart

contracts so what are your plans to get more adoption that's a great question I think that's one of the main problems of this space that we are building technology that is very idealistic but this is how to get like actual like mainstream users I think the fan racing will really help use case I love Aragon fan racing in sexually I think the best way to fundraise from anywhere in the world and then do it in an accountable and transparent way so I think I would really have a lot of adoption there in the short term we're also launching a new version that is gonna make it way easier for people to use Aragon in terms of user experience so I think that will really help as well I think there is one missing piece which is onboarding I crypt onboarding and like private keys and all of these

things and I'm very excited to see that more and more projects are taking on it because I really like you don't need to remember private keys you don't need to install metal mask you just like use it like two up almost and so I think that will really help adoption as well focusing on nice use cases and kind of hand-holding users there is something that I'm very excited about and we have started doing more and more and because there is where you see these travels that people are having and and so I think that will really help in the medium term I think in the short term it's actually very tough to get mainstream adoption I think even what we are seeing is that people are using Aragon in the crypto has seen more than mainstream right now because they cured

people actually understand way better why why they need it right so we had this example of like melon protocol which launched their token sale time ago and they build the protocol with melon yeah melon oh she was some oh no was on my show too nice yeah yeah they're great and so I think as of like a few days ago actually they transition their whole governance to turn Aragon down oh so they have these valve token holders and they certain holders both a council and this council can operate these mark contracts so that's an option right there but I think we're gonna see mainstream adoption wearing the medium long term and not so much in the short term I think in the short term encrypted option is going to be the end the most powerful yeah yeah when I was researching this I was like this is

getting really futuristic and it was like you know this this isn't like something that people are really using a lot now yeah but it's really interesting and I did another episode with like Glenn while or Glen whale and Santiago theory and some the ideas were similar so we you kind of mentioned something about this but I wanted to ask you directly so and this is actually something I'm not certain about but I did read somewhere that you personally have a large percentage of ante I could not verify that figure that out but I couldn't so you can correct me if I'm wrong but regardless like do you think in general the concept of Wales adversely affects governance and if so how you know what you guys try to address that yeah well I

think there is a lot of hate against like bureaucracy and I think on one hand like that's understandable but on the other hand having people who have like strong history in the game is actually very good like I think if you if you put up if you're a PC fan for example and you put up a significant amount of your portfolio is by a token because you really believe in the picture of it and then I mean capital at the end of the day is like how you stake in the systems if you will so like if you build that position over time you of course it serve like to govern it in some way I think the confusion comes in where when we talk about common good versus not common good and so and actually I have I have an interesting discussion yesterday

about this where someone was arguing that Bitcoin etherion we're not protocols because protocols are used standards and standards are free so with Bitcoin anything you need to like you know buy to be part of it so I think actually what we are seeing is that what we call protocols are not protocols they are networks and they are as you see them they are like a next version or next generation should hold their governance so in traditional corporate you have sir holders and they govern the whole system usually they are you know very institutionalized and we have companies like Apple Google which had a lot of like early investors back in the day which basically kind of held all the all the growth of the upside from these

networks and now with Bitcoin theory and we're seeing more and more retail investors are getting in and they are also profiting from this huge networks that are being built in the early beginning and as a beautiful like they are much more open they're much more fluid you don't need to be an accredited investor you need to be a VC to access it real like real quick or in the break baby engine of the project like if you look at Bitcoin for example it wasn't busy firms that got Bitcoin at $1 he was hyper banks people who were buying drugs it was like completely different crowd and I think that's like the way to look at it it's like an extended version of shareholder governance second generations or holder governance and not so much come on good although it also has a little bit of a common good but I

wouldn't say I wouldn't look at it that way as a reckoner at least yeah then one come and I have that about that as I think there were some wealthy people who got in at a dollar but I won't name them on the podcast but anyway actually so I actually wanted to just ask more directly about that issue with the polka dot vote you kind of addressed it with a lock to voting but I didn't know if there was like anything else he would rad but basically um so just for people who don't know and I can't remember if we described on the show but basically there was this vote you know should we stay focused on etherium or should we also develop on polkadot and as the vote was going along it seemed like the sentiment was to stay vote developing on etherium and then at

the very last minute somebody put in a ton of tokens to sway the vote in the other direction where like it would be really impossible in a short amount of time to overcome the the took as they put in so with the locked voting solved that or is are there any other solutions you guys are thinking of yeah to be more specific like the boat the outcome of the boat was like no but like I think was like 1% more no than yes and then this whale made it like wait you know more kind of note and then yes in the end but it was already know I think we lock bought him you may be able to solve it but I don't think it's an issue like in this particular case I was trying to like and if I his person was and I I

couldn't that's the beauty of it but I was trying to identify it like just going to a thorough scan and seeing what tokens they haul they held and all of that and it was again like an OG like an Oregon oh he's like this person was in the community for a long time and so I think with lock boarding actually like maybe even this person has more power but you know they were an OG I think they I don't know if they bought in the market only I cannot remember but definitely things you know if they have bought this sort of their of their cake I think they saw the item eight that they vote okay so you don't have any other ways to kind of prevent the gaming of the system in this way or do you not see it as gaming well there is there is

wrong way I don't see this game in three honest but there is one way that you can prevent this kind of last-minute boats like I think this is last night both right in being someone basically changing the outcome and so you can have this mechanism for boarding there's actually also been discussed in the community which is that if there's a significant change in a mincer in the last like minutes or hours or if there's like a significant amount of boats and you can extend the period of time of the boat for like 24 hours for a fourier something like that and then do that again and again until like basically there are no like final last-minute votes and then at that point it's like the final outcome is revealed so I think in stuff like that may help also like

kind of log an unrevealed boring were both are not transparent my default but you have to like you know committed first and then reveal it at the end and then like all boats are public but use at the end and not like real-time I think that will help and obviously you and I were here this weekend brilliant for web 3 and Def Con so did you guys present anything or like what what milestones will people be looking at going forward yeah so my co-founder Jorge presented the i/o network and it was it was so cool because like the room was so packed I was really missing to see like the interest on on a court system which like two years ago was sci-fi and no one really believed that could be like you know then then I had the opening keynote at the way through

summit and the weather semi this year was very much about those like it was kind of crazy it was it was me and then Ryan server presenting some IDs around very interesting data coming up then it wasn't out panel then it was Giada from one of the Aragon development teams called arc presenting there are gaps and there's with for like Aragon organization so it was pretty much about Dallas and I'm super excited because like I think you know we saw this trend coming but we didn't see the interest so much in the community this past two years or so I think this thing learned that were still being carried around and I think now we are like liberating ourselves from that and we are ready to like you know like the doubt 2.0 kind of thing right so and super super said about it and then we also presented the

aragon design system which is our take on enhancing consistency across all the Aragon platform and making sure that Aragon app developers can easily design a new apps by like basically dragging and dropping components yeah so a couple things so I wanted to do this show partially because I know everybody's talking about dowels again so I was like okay this is like a good way to kind of you know be on trend but then the other thing was that actually it's funny that we mentioned the space thing before because y'all doves idea is about governance and space yeah like she she wants to what was it it's like something like it's like it's a centralized organization to explore space or something yes okay I think of these centralized SpaceX basically okay

yeah yeah so that's funny that thought was a theme in this episode anyway thanks so much for coming on Unchained yeah thanks Laura thanks love thanks so much for joining us today to learn more about Lewis and aragón check out the show notes inside your podcast player if you're not yet subscribed to my other podcast fun confirmed which is shorter in a bit noisier be sure to check that out also find out what I think are the top crypto stories each week by sending up for my email newsletter at Unchained podcast.com Unchained is produced by me Laura Shin without regard to recording Anthony Yoon Daniel Ness and Bristow Foligno thanks for listening [Music]