Token Engineering Stakeholder Study

Transcript

hello everybody hi my name is Livia and I'm here to present the stakeholder the token engineering stakeholder study so Ponzi Ponzi Ponzi when I talk to friends and people who are not in web 3 that's what everybody thinks about crypto that is just the Ponzi scheme that is just making the reach even richer and it's a fun game for investors it's all about being early in the game and it's so complicated to understand and etc etc and there's either a story of someone who invested a lot of money and lost everything or they ain't famous whoa you work in crypto what do I invest on

I would love to tell them oh don't worry this is not happening anymore we have such rigor in the space because now everybody understood the importance of token engineering which is an acid transdisciplinary movement concerned with the creation of ethical token-based socio-economic systems and they would look at me and ask yeah but what does that mean and that's what I've been asking myself I've been deep in the token engineering space for three years now and I still had so many questions without answers and I'm here to present the early findings of the stakeholder study that was born out of the need to better understand what token engineering

entails and what are the challenges and needs faced by practitioners in order to advance the field so ethical and safe cryptocurrencies can exist in the world and not just Ponzi schemes so the study is funded by the token engineering Commons and it's a collective effort since its Inception to this moment where I'll share some of our insights the primary research question we had was what is token engineering so we recruited participants who identified who were identified by our team and recommended by other participants as token engineers and overall we interviewed 41 individuals

based all over the world with various backgrounds all contributing to the field and this is a map of where they are spread around so it's a good spread the methodology we used is rooted in constructive grounded teary approach which focuses on exploring new or emerging phenomena we ask questions about participants career Journeys their view of the field and specific questions about ethics diversity finances Ai and many others and we are three social researchers looking at all of this data in a constant comparative method and just this is just a teaser that of the

final report that's being written and it's going to be shared soon so I'll briefly cover definition practice step-by-step challenges needs and Future is that it I think it I can't oh I clicked something around here um unfortunately I can tell my friends that ponzis are not a thing in crypto anymore Ponzi ponzypanzi became a cute nickname in our research team to refer to some of these challenges mentioned by a number of our participants so to quote a few we can't as an industry just keep churning out ponzis upon ponzis upon

ponzis nobody's going to take a serious Ponzi based designs as an area where they can be a potential ethical mismatch between what a particular company may want and be asking from a token engineer to create incentives that maximize Revenue within the system and that may come from creating incentives for activity greater than what an agent would naturally spend based on the fundamental product itself which basically means we will be selling more value than we are producing and a lot of companies reach out to me and like when I put myself out there I think a lot of them had really bad token models basically Ponzi schemes ethically I was very confused as to what I to what I should

be doing in any of those scenarios ethics is a key aspect of the study participants mentioned ethics and answers to multiple questions and not only those refer to ethics it seems to be intrinsic to the definition of token engineering and yesterday someone told me oh token engineering sounds like a niche term why not just using mechanism design or tokenomics and even though a couple of participants didn't like this term there was a major agreement on the importance of engineering as a word that carries a benchmark for ethics and safety when it comes to building public infrastructure so uh this quote strikes it well that for me token engineering was a shelling

point in the ethics space not a new technical field the extent to which we work on designing the automated procedures entrenched within our emerging organizations is Awesome by token engineering is in my opinion exists to bring attention to those ethics and those sort of you know design and validation practices that undergird public infrastructure in other sectors to web3 the name engineering is not enough to ensure an ethical standstill diversity and inclusivity is fundamental as exemplified in this story where a participant shared when asked about diversity a story about how in the 60s

in New York City Engineers were building a bridge in a fancy area in a fancy Beach and the bridge was purposely built too low so only cars could cross and buses would stay out of it and buses represented a lower class so that was a built in um an unethical practice and a design off this bridge so if we want to ensure engineering to be ethical and safe we need to have diversity in the field and what is token engineering really like what is the practice so um although not all our participants agreed there was a step by step to the

practice there was a substantial cohesion on the steps discover design verified deploy maintain and it's important to highlight that all of these processes are iterative and there's not necessarily a linear order to them and just a fun fact this image was what me Journey gave me when I prompted token engineering practice which looks quite accurate it's like super complex but looks like a fun park so let's dive in what is this step by step um just uh how how many people here know what token engineering is or have heard about token engineering okay you're all in the right room that's

great um so this covert the discovery phase was described as the initial contact with the client so trying to understand what is actually needed so starting to put conversations into diagrams in this phase we heard challenges like oh it's too complex what we're communicating clients don't understand or clients have no clarity about what they want and that takes a lot longer than we expected in this phase so this is a great place for you to explore your assumptions so ask what incentive problem you're actually trying to fix in fixing Society what is actually broken and why do you want to fix it what does

it mean to you sit with that for like a month maybe not that much be very very clear what is the incentive problem what incentive structure is actually broken why do you want to fix it why are you well placed to fix them and only then you might begin a project and then you go to the design phase where value flows very flow value flow diagrams are refined and translated into math specifications so this is where models are going to be built and you should consider agents actions behaviors reactions and how incentives are placed and leave space for adaptation run simulations and reiterate as needed a couple

participants alluded to the to only using a token when there is no other way so the token is not the meal is the seasoning it can bring out the flavors of food but you can't be nourished just by eating salt it can enhance what's there so who is creating the value and how can you distribute tokens to Value creators and then who is consuming the value and how they're brought broadly paying with tokens to consume that value and finally the models are only as good as the assumptions you have so now you're implementing the assumptions that you were bringing up and discover phase and verify I want to start by sharing this quote of a tenored participant that

analog verification isn't as common of a thing anymore sorry isn't a common of a thing yet in token engineering and that's actually where a lot of the problems still exist many hacks that we've seen in the last year year and a half for D5 type hacks where it's about exploiting incentives an analog verification here he refers to auditing the system as a whole by understanding just the parts of the system you don't get to understand the entire system so verification is where you test different scenarios before deployment and deployment finally is the phase where everything you planned so far is going to be put into practice and is where

humans are introduced in the system which is not a little thing so it is second third order effects of incentive alignment that are kind of unknown until you actually deploy and so it's one of those adages of like no plan survive contact with reality so no matter how well you construct or you understand what the incentives are there's always people doing things in way that you don't expect them to behave and finally that's where it comes the maintain part I think the maintain um the maintained part that is where how you're dealing with the humans and how

they are using the systems so this is about the longevity of the system after deployment it is is the system operating as intended economies are dynamic complex systems they are alive and something will always need to be changed so Gathering data and feedback monitoring and adapting the metrics and improving the metrics upon the design is very important so the structure doesn't need to be changed or redesigned or re-engineered you're simply applying a governance surface or repairmentization in the existing structure so it's good that you leave space for those adaptations in the design in the design phase and that the adoption of the system as a dynamic leaving entity

is always going to require disciplines that you might not otherwise have thought are important the post-engineering stage let's say the maintenance of the system stage and that comes to the multidisciplinarity of the field and all of this phases so many expertises were needed to get to the point where the system is functioning correctly optimally and this token engineering flower represents well a lot of what we heard from participants but there was still a lot more than what is there that we're going to bring more in depth in the report and also we understood that token engineering is not as much of a role as it is a team so

there is a token engineering team with multiple expertises and if we could call token engineering a role um maybe we would risk pointing back to the verification point that is a system auditor so someone that can look at the whole system and point oh maybe this part is wrong maybe this part is flawed that's where we need to fix someone that can be liable for the system as a whole so challenges needs in future there's a lot to cover here so I'll just paint a little bit on it the need of provenance so what are the stories behind the models how can people understand the process that went into putting token

economies together if people understand that process maybe it will be clearer to them how to create token economies standards 25 out of 41 of our participants mentioned the need for standardization this also comes from poor data accessibility hard to access which projects worked on why how they did things how to compare models between what is successful or not and how to build standards from there and Regulatory Clarity so regulatory concerns were very present if we're talking about designing safe and ethical systems lack of clarity around regulation becomes a real block to knowing the limits of your design space an education which was unanimous everybody mentioned how education is

important and highlighted the need for more educational materials and also how challenging that is to create materials in such a fast-changing environment for multi-disciplinary multi-disciplines where most of the experts are super busy with everything they're doing so kudos to token engineering Academy who has been creating amazing materials for a long time and um yeah I'm gonna close with this quote of what you didn't do token engineering audit you didn't have anyone review the system you say it's gonna do this but

like that anyone actually say that because okay hacking didn't find any bugs but like you know it's like how Ponzi is this so you can check uh our much more information about what's happening in the token engineering Commons there is a a qf grandch round coming up and there's many initiatives from the token engineering Academy token engineering Commons there is a bar camp on token engineering on the 22nd there is a whole track on token engineering here on the 19th and um you if you sign up here you you can receive the report and um yeah thank you thank you

[Applause] quick questions processing and processing in the report what were the most let's just say juiciest controversial findings that you had like anything that really you were surprised at or you know you feel might be like contradictory to most people's beliefs um that's a good question I think well maybe something that was surprising is that there was an anomaly but there

was a couple of people that didn't think that ethics was something important even though that was mentioned by the whole majority of the of of of the of who we interviewed so that was an interesting point and I think also something juicy was maybe this big engineering little e engineering of like Big E engineering being all the feuds of engineering that are concerned with ethics and the build of public infrastructure and little e engineering being like software engineering that is moving like move fast break things and see later how you fix them and some people mentioned that being like Oh it feels like that's how the space is operating now and this doesn't look good yeah actually we have to close because

there is another speech but if you want to keep going with questions I think she's available also not on stage thanks everyone foreign