MolochDAO: Could This Decentralized Autonomous Organization Help Ethereum Scale Faster? -Ep. 111

Transcript

Hi, everyone. Welcome to Unchained, your no-hype resource for all things crypto. I'm your host, Laura Shin. In case you haven't heard, I am going to be doing a live podcast recording with Vitalik Buterin, the creator of Ethereum, for the first Unchained Live, sponsored by Quantstamp. It will be in New York City on the evening of March 20th at Columbia Journalism School's Joseph D. Jamel Lecture Hall. We'll be discussing Ethereum 2.0, Polkadot, governance, and so much more. We'll have food, giveaways, and audience members will have a chance to ask questions. If you missed your chance to buy tickets, check out the live stream, which will be available on the Unchained Podcast Facebook page at facebook.com slash unchainedpodcast. The discussion starts at 7 p.m. Eastern Time. If you're listening to this episode

after the live stream has happened, you can watch the video post-event at the same link, facebook.com slash unchainedpodcast. I look forward to meeting attendees and seeing participation from our live stream audience. Within months, cryptocurrency anti-money laundering regulations go global. Are you ready? Avoid stiff penalties or blacklisting by deploying effective anti-money laundering tools for exchanges and crypto businesses, the same tools used by regulators. Cyphertrace is securing the crypto economy. My guest today is Amin Soleimani, CEO of Spankchain. Welcome, Amin. Hi, Laura. Thanks for having me. You've been a sort of Ethereum gadfly recently, agitating for all kinds of change. But before we

get into your gadfly activities, briefly tell us what your involvement with Ethereum has been to date. I got into Ethereum in 2016 towards the beginning, started learning about it, going to meetups in SF. I worked at ConsenSys for about a year after that. And then I left and started SpankChain, where I've been working until today. And so in recent months, some of the things that you've been doing are that you commissioned the Kyocon report, which had a number of criticisms about Ethereum's transition to version 2.0. You've been forming a DAO to facilitate and fund Ethereum development initiatives. And you've been trying to remove one of the moderators from our Ethereum. What problems do you

see with Ethereum today that are motivating you to do all these things? For me, for SpankChain, we depend on this system, this infrastructure, and we've invested a lot, both financially and in learning about developing on it. And I want to see it succeed, and I want to see it grow, and I want to see it remain competitive. And so for me, what is motivating all of this is a desire to see things happen faster and to prepare us for the sort of maybe cultural shifts that we might need to go through as a community in order to be able to do that. So the state of ETH 2.0 report, I hadn't been paying much attention to ETH 2.0 development, but then once the specs started coming out and we

were able to learn more about it, I thought, let's look into this and try and find out more and see where we can contribute. And so we didn't know where to start. And so the ETH 2.0 report was just the start in that direction. What were the problems that the report identified that We talked about a little bit of a lack of coordination happening on the engineering side. The spec is being developed by an elite team of researchers. It's Vitalik, Xiaowei, Justin Drake, and Danny Ryan. Danny Ryan's been acting as a liaison between the researchers and the rest of the engineers. But there's a gap in the engineering management because there's a lot more that goes into building a client than just the

spec of, you know, that comes out of the research and no one is really owning that part of it. And Danny wasn't even really, even though he was sort of unofficially the lead, he hadn't been widely acknowledged as the lead with both the responsibility and power that a position like that comes with. And so, yeah, What our report pointed out was that maybe it asked the open question, like maybe he should be in charge and maybe we should be coordinating a little bit better in order to move things faster. We've sort of gotten into this decentralized everything ethos. And The people who are building rival chains are quite centralized in

their development, even though the output of their effort is a decentralized system. And so maybe it's time to make some compromises to centralize more of our development in order to accelerate to their pace. Yeah. And also from some of what was described in the report, it seemed like there was a lot of redundancy, like duplicate work or things having to be redone by people or work wasted because of poor communication, things like that. So then, you know, those were the problems you identified in the report. But now we're going to switch to talking about MolochDAO. What are the problems you're trying to solve with MolochDAO?

And are those different from the ones identified in the report or the same? We want to help pick up the pace on ETH2 development. And so that means trying to make, you know, submit proposals to the DAO that will fund efforts that might have otherwise gone unfunded or to provide additional funding for efforts that we collectively believe in. So the first one is actually I submitted just recently, and it's to pay Keokan back for the report that we commissioned. And so that'll get voted on over the next week, and then it'll be funded subsequently the week after that. How does Molok Tao work? Yeah, we tried to build the simplest possible DAO that would be able to coordinate a group of people and

their capital in order to allow them to vote on how that money is spent, but try to be as secure as possible. And to do that, we wanted to emphasize simplicity of the system. So the way it works is that you can, there's only a couple ways of interacting with it. You can submit a proposal, you can vote on a proposal, you can process a proposal once it's done, and you can also then exit. So when you submit a proposal, you specify the amount of Ether that you'd like to contribute. Right now, the Guild Bank only holds Ether.

And And then you also request the number of shares and the shares will be newly minted if that proposal passes. So once you submit a proposal, which can either be for funding, if you want a grant, you just don't offer any Ether as tribute. And if you want to provide capital, then you do offer Ether as tribute. Once the proposal is submitted, it goes into a voting period, which lasts seven days. It's a no quorum, simple majority vote. So even if there's just one yes vote, that's enough to carry the day. And then once the seven-day voting period is done, there's a seven-day grace period. And so during the grace period, anybody who did not vote yes, if they voted no or didn't vote, let's say they think they don't

want to spend their money on this proposal, they can actually rage quit. And what that'll do is they take any number of shares that they have and they can liquidate them and get their proportional share of ether from the guild bank. And they can do this for up to all of their shares. So it's completely voluntary. And then at the end of the grace period, once a proposal is processed, those shares are minted and everybody who is, you know, remaining in the guild is diluted in order to pay for it. And so it creates a system where we can pool our money and then proportionally dilute ourselves to, where we also have votes relative to how much money we put in or have earned through this proposal process if we're getting grants for contributing our labor to the guild. And so that's how it works

in a nutshell. And there's a couple other things in terms of the game theory, but that's the overview. And who can join? So you have to only members can submit proposals. So not everybody can just, you know, submit a proposal if they want. But if the member submits a proposal for you and then you are voted in, then you're in. And what do you hope to accomplish? Like you mentioned that first project, which is just to pay for this report that was already commissioned. But I that seems like a very small project. you know, kind of thing to do. So kind of big picture, what are you hoping comes out of Mollic Dow? Yeah, so this is like the zero to one, right? So it doesn't look very significant, but

it's mostly intended to prove that the system works. I think over the next couple months, we'll see a couple more proposals go out, you know, sort of in the same low thousands range, because right now we just sort of completed the founding, which has 22 members that committed 100 Ether each. So there's 2,200 Ether, about $275,000 plus going into this. That's the starting position. I think this could end up with several millions or tens of millions or possibly even more dollars. Maybe not this version of the contracts, but something like this in general because The ultimate sort of vision for this is, well, it comes from the realization that Ethereum does not have inflation funding currently. And so that means all of the funding for development

has to come on a voluntary basis from people who already have Ether, which means making it easier for people to pool their Ether and spend it on the things that they want is really important. And so we want to do that. We have sort of two options. you know, missions here. One is like do useful things. And then the other is show people that, you know, we can do useful things in order to scale up how much useful things we can do. And so I could see this paying salaries or bonuses from teams. I could see it commissioning contract work to pay for development tooling as ETH 2.0 gets closer. I could see it funding 1.x efforts. I could see it funding Layer 2 stuff like state channels and Plasma, trying to focus more on where others are focusing less on. Let's just, because

you described how it works kind of quickly, let's just unpack it a little bit. So essentially, there's five proposals that can be submitted per day. Each proposal then has seven days during which the members can vote up or down on it. And after it's voted on, then there's a seven-day grace period during which members who are I guess vehemently disagree with any particular proposal can rage quit, meaning they can exit a Molok Dow or, or they can actually, I guess, rage quit just a portion of their shares. If, if they, you know, just don't want all of their money going to fund that project or what, or whatever it is.

And then after that, the funding goes to, you know, wherever it's supposed to go. But then at that point, you know, Is there any way, because like, so I guess in a foundation normally when they make a grant, then they have these different reporting requirements to ensure that the goals are met. Do you have any function like that with Moloch Dow? Nope. We don't have a function like that. Somebody could run away with the money. There's ways of addressing this, though. For example, when typical grant bodies make these grants, it tends to be for very high amounts. The coordination cost is really high, so they only want to do it every few months or maybe even over the course of a couple of years. But in this one, if you...

If there is, if there's a risk that the person you're giving a grant to might not deliver, then what you can do instead is offer like smaller incremental grants and have one be every month, for example. And so that way, you know, if at any point somebody runs away with the money, then it's only for a month's worth of money. And I think in the future, we'll probably have like managers for specific types of tasks that are more trusted members of the guild itself that then, you know, can even allocate and potentially withdraw the rest of the funds if they see that, you know, there's some sort of foul play. And it also seems like what you were describing where you could kind of meet out the grants, they could

even be performance based, like, you know, once you hit this milestone, then we could give you more money, that kind of thing. Yeah, for sure. Another thing I wanted to unpack a little bit more was the rage quit function. So let's say that I'm a member and I generally tend to vote yes. And I generally really like everything the guild is doing. But there's just one proposal that I really, really hate. And it's been voted in. If I rage quit all my shares, then I run the risk of the members not voting me back in. But then what if I decide, okay, so I'm going to rate quit all of my shares except for one.

Then after that point, how easy is it to increase my shares after that proposal has been adopted and is paid for? Like if I, you know, if I want to kind of increase my holdings again. I think the answer is, I don't know, because nobody's ever tried it yet. I mean, if you rage quit all but one of your shares, that means as far as the DAO is concerned, you're still a member, which means you can still submit proposals and vote on them. So it means it's slightly easier than if you would have to exit completely and then ask somebody else to submit a proposal for you to get back in. But you're still going to have to convince all of the other members that they should let you back in, given that you just sort of turned your back on, you know, them and

the proposal that they just accepted, even though they tend to, you know, maybe vote on the, you know, even if they might not agree with something that you've put forth and voted yes on, they've still been on the hook for paying for it. So I think it'll be difficult. And I think it might end up that you'd probably have to pay more than you tried to dodge in order to get back in. It seems like it might be the equilibrium point. And then there's two ways of getting shares. One is to just essentially purchase them by submitting Ether to get a share. But then what about if you submit work instead of money? How does it determine how many shares you get? So whoever submits a proposal determines the number of shares that are being requested at the time. So it's up to you to

come up with a proposal that you think that the members will approve of and then get it voted in. So there's some amount of coordination that needs to go on up. off-chain where you have some price that you figure out and then determine and then put it down. Because if you're submitting something for you want a grant and it's too high, maybe people vote no. And maybe if it's too low, then you might get it, but you're unhappy with it. So the same types of negotiations need to happen where somebody in the guild who acts as your champion, they might talk to people, say, hey, will you vote yes on this if it is $10,000?

And they'll be like, no, that's too high. I'll vote yes if it's eight. And so then you'll determine what you think you can get passed, and then you'll submit that proposal. And then if it does get passed and you receive the proposal, shares, the newly minted shares, then it's sort of on you to decide if you need that liquidity immediately. Because if you don't, then you can continue to stay in the guild and then vote on new proposals that come out, though you will also be diluted proportionally from the the amount that you got in a grant. But you could also pick any point on that spectrum. You could rage quit 70% or 80% and keep some in or all but one share in order to make it so that

you don't have to rely on somebody else to submit future proposals for your grants. Okay, that's actually really interesting because then it's sort of like you can either be paid in actual money or in power to then allocate more funds. So one other thing that I want to ask about is, so right now the price of a share is one ETH. Will that value remain constant or will the value of shares rise and fall? So that's entirely up to the members. I think that it's likely going to stay there for a while. I think that it could go up over time if members think that there should be a coordination cost paid by the person who's trying to join because everybody else needs to spend some of their time and

energy voting them in. And additionally, that every new member presents some sort of risk to the organization because somebody could spam the proposal queue, for example. and then make it so that the existing members have to adapt. And because there's no upgrade mechanism and there's no way of kicking anybody out, at least in this version of the contract, what we would have to do is everybody rage quits and then we deploy a new contract and then everybody moves to that one. That's the upgrade mechanism. Yeah. There's something about it that has echoes of the DAO from 2016 and then the ensuing Ethereum hard fork, but like this would be much cleaner and therefore, and it's like essentially like a planned function. So... Yeah. One other? Go ahead. I was just

going to say, there's similarities between this kind of rage quitting and hard fork governance, where when you have something like Ethereum, where the only governance system there is, is you hard fork, and then every single node on that network needs to decide to move over to the new fork at the same time. And that's how the network stays together. And rage quitting in this is sort of the same. It's like we can upgrade and then you can choose whether or not at that time you'd like to continue being a part of this or not. Maybe future versions of the contract will have upgrade mechanisms built in. We left it out in the first version because we wanted it to be maximally simple and it wasn't necessary, at

least at this time. But, you know, I kind of like it. Yeah, yeah. Well, I imagine also, and this is actually a question I had for you for later, but we can talk about it now. I just imagine, in a way, part of the reason you did that was because, as we know from the previous DAO, these things can be very unpredictable and can go south very, very quickly. So what lessons did you learn from the DAO from 2016? Yeah. Yeah, we are heavily inspired by the Dow of 2016. The Dow is actually my first week at ConsenSys, which is hilarious. Joe walks in on a Friday that the Dow hack happened and buys everyone tacos and beer and we're just sort of hanging out. And it's like the calm

before the storm. And then the next month, all hell breaks loose and people start getting confused and there's a hard fork and there's a soft fork and you you know, all this stuff is going on. And then eventually, you know, we, we hard fork and move on. This all happened like in a month. It was, it was crazy time. But it happened because, you know, not only was the DAO hacked and that was terrible, but like, The game theory of the DAO was quite flawed. And this was pointed out in detail by Iman Gunsair, a professor at Cornell, among with many of his fellow researchers. And they prepared this post called The Moratorium, A Call for a Moratorium on the DAO. And it had two major points. And the first one was that you have post-vote grace periods so that people have a chance to

leave after a vote takes place. And the second one was instant withdrawals so that at any time you can leave with the amount of money that you have a claim on. And we implemented both of those as sort of the guiding principles of this, right? We knew that we wanted security, but we also didn't want to lock people in. Like when you're trying to leave the original DAO, there was an attack that somebody could do. I think it was called the stalker attack. And basically you create this child DAO for yourself. But when you create that child DAO and then you can withdraw from that and the child DAO has like your proportional share of the original DAO tokens and the Ether and stuff. Well, somebody could follow you into your child DAO and They could keep doing that forever. There's essentially no way to

get rid of them. And this is exactly what happened. So there was further complications beyond just the hack. And we wanted to make sure we learned as much as we could. Yeah. So just going back to the shares, one other thing, or not the shares, but just how the You mentioned earlier that right now the guild only accepts Ether, but I read that you guys do plan to allow the guild to accept other tokens. So how would that work in the future? Like, would you even accept tokens that at least you or at least some people in the community perceive to be competitive to ETH? Like, for instance, I saw some tweets from you recently where you seem to view Polkadot maybe as a competitor to Ethereum. So would you

allow DOTS to be used in the guild bank? I mean, it depends on what these, whatever everyone decides, right? It's a decentralized system. The decisions are made by vote. If we all pull a bunch of ether and, you know, upgrade, like, you know, Then some time later we decide, "Hey, we're going to upgrade to a new contract. It's going to also allow your C20s." Then we all ragequit, we move all our ETH to this new contract. Then people start submitting proposals, but instead of ETH offered as tribute, they offer DOTs or ATOMs or what have you. Then it's on everybody to decide at that point. It's actually on an individual proposal basis if we keep most of the current system the same. Another way of doing it would be to

whitelist those tokens and then decide what can be accepted in general and then do that as a one-time decision. But you could see this transcending Ethereum. That's one way this might play out. It might be that this type of organizing structure is effective enough and maybe there are positive some ways of working with other organizations blockchains that make it worth it to allow them to join. That's really interesting. But I guess if I imagine how that would play out... I feel like it would be very strange to have different blockchains managed by the same

organization. Like I would imagine there would be just, you know, other Moloch DAOs or however you want to use other DAOs for other blockchains. But anyway, we're getting like super theoretical. I mean, this is like... We don't even know if this is going to work. Yeah, I think it's way more likely that people will fork it. And I think I'm going to put a giant title on this that says, steal this code. Because I really want to see more experimentation. I don't think that everything is going to be in this DAO, this instance of the DAO, like this specific contract. I think people are going to run with it and make their own DAOs for their own types of transactions. coordination that they want to see. And we'll all learn a lot from each other. And over time, maybe these things will grow in ways

that they're compatible. And one other thing that I was wondering about the shares, and this is just kind of a small technical question, but I noticed that you built the shares so they're not transferable. So out of curiosity, how does that work on the back end? It's just the number on the contract. It's not a ERC-20 token. So you don't get a token. Well, no, but they have to have something like in a wallet somewhere, right? Well, it's saved by your key. So when you join, you have a key and the key can never change. That's your member address. And the member address is the only thing that can rage quit. But the DAO also has a mini permission system built in. So you can have a delegate key. And the delegate key can be the same as your member address, or it could be

a different key. And that allows you to have maybe like a multi-sig as your member key, and then like your MetaMask as your delegate key. And the delegate key can do two things. It can vote and it can submit proposals. So, you can have this sort of separation where one key doesn't necessarily have to have a lot of money. It can be a little less secure because it can't withdraw the funds that you've deposited into the DAO. But the other key could also be like hold storage that you use to withdraw the money if you need to or change the other key if it gets compromised. Okay, okay. So, essentially, there's a way where you can use or exercise your shares on different devices, right? Is that what you're saying?

But not? Okay. Okay. But you can't sell them. One other thing is, I was just wondering with the Molok Dau, how do you mitigate the influence of whales? Because couldn't this just sort of be dominated by large bag holders? If we vote them in. And so that's sort of the beauty of it is that we have to accept that, you know, having a whale join would be really great, right? Because it would mean for everything else that we wanted to do, you know, somebody else is picking up a lot of the bill. That said, the whale would also be able to influence votes. And so if, you know, somebody comes in and... just throwing an example out there, exceeds 50% of the total shares and we vote yes to allow them in, then they have complete control over all the votes. However, all of us

can leave at any time. So the second that they vote on something that we don't agree with, that we don't want our money spent towards, any individual member can leave. So I think having this be completely voluntary, allowing the option to leave at any time, gets around a lot of the game theoretic issues. problems with pooling capital, especially for something like GrantsTown in the first place. The thing that everybody's most concerned about when you ask them to put money in something like this is, will I get bullied by the larger voters in the system? Is there a way for them to get me to use their power to fund something that I don't agree with?

And if you can leave at any time, the answer to that's no. And it then also makes it so that the people who might otherwise be able to control this thing, they don't even have an incentive to try and do the types of things that would get you to leave because they know you can. But if you can't leave, then they do. See what I mean? I do. I do. But it's just one of those things where... Until we see how it plays out in the wild, I am not fully confident it's going to work. Yeah, I'm also not fully confident it'll work. I treat this as an experiment and I tried to put as many safeguards in place, but I think that the most likely failure case is like, you know, it gets spammed or like some, you know, somehow fizzles out. But I

think that no matter what, there's a lot to be learned from this because ultimately like Ethereum is a coordination platform. And what we should expect is like, once we have these coordination platforms, like as the cost of coordination itself drops, the, like the most disruptive opportunities are the ones that require unprecedented levels of coordination. And so that's what I'm most excited for about Ethereum in terms of its impact in the world. And I see this as one high stakes experiment that we can run to further Ethereum itself and also further our ability to coordinate on top of it. We're going to continue discussing a few aspects of Molotow, as well as the importance of the value of Ether after the break. But first, a quick word from our fabulous sponsors.

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the block rewards goes towards development. Is that something that you think should happen on Ethereum? And if so, is there any mechanism by which MollicDAO could make that happen? So my answer is yes, but. I do think it should happen, but I don't think it should happen right now. Part of the reason is that as soon as you start suggesting inflation funding, everybody's heads who's listening is going to go, well, who's going to manage the money? This is a conflict of interest scenario. How are we going to decide who gets the money and who actually is doing the most important things for Ethereum? Without having a way to address that question, it's dead in the water. And so for me, something like the Moloch DAO is also important because

it gives us the ability to practice. We haven't tried, except for the DAO, really organizing around our common interests and around furthering Ethereum. in this way. And that's something that would be required, right? If inflation is being allocated, it's being allocated to somebody, some organization, some set of decision makers that have the trust of the community and are expected to then, you know, be accountable to the community and also use the money properly to pursue the interests of Ethereum. And so like, if we We basically need to prove that DAOs work first. And Moloch is absolutely, in its current form, not designed to handle inflation funding because if a giant pool of capital just sat inside the guild bank, any of the members could just rage quit and take their

share of it. So you don't really want that. That's not really what I had in mind when I designed this, but there is actually an EIP that was authored by Kevin Iwaki of Gitcoin about inflation funding and contributing to that. And we're trying to think about ways that we could evolve the mechanisms that Moloch uses to be more suitable for something like that. Actually, just one question about the inflation funding. Obviously, Bitcoin is an example of a blockchain that has been successful in incentivizing developers to continue to work on its development despite the fact that they do not get paid for their work. Why do you think that is? So I think Ethereum...

to evolve more than Bitcoin does. I think the point of Bitcoin is kind of that it stays the same. There's not a whole lot to do. Maybe I'm missing something or being naive. I think the Lightning Network stuff is really interesting. And it ends up still being people that made their money on Bitcoin that have large Bitcoin holdings that end up funding this stuff. Or it's very profitable businesses that end up building on it. So But compared to Ethereum, especially if Ethereum's building smart contracts and competing with all of the other up-and-coming smart contract platforms out there, it has a lot to do with developer experience. There's a reason that I'm building on Ethereum and not Bitcoin, and it's because I can't write something like the Moloch DAO in Bitcoin

where I can write it in Solidity and 400 lines. And so... The time that it takes me, the effort that is required to develop something like that, that is secure, that works as intended, matters. And you can put a price on that. And if that price... goes down a lot for rival smart contract platforms, then it's going to make more and more sense to build on those instead of Ethereum. Now, there's a whole host of other factors, right? The security of the chain, the network effects, open source libraries, stuff like that. But we need to compete on basically all of those axes. And that takes a lot of development effort. Another way of thinking about this is Bitcoin doesn't have a roadmap. Right. Like it's just supposed to do its

thing. Whereas Ethereum has a roadmap. There's there's proof of stake and beacon chains and, you know, 1x stuff. And and there's there's even a roadmap beyond the the ETH 2.0. Right. There's an ETH 3 and maybe an ETH 4 on the horizon. And so how are we going to pay for all this? Like either ETH moons or we figure out a way to pool our money or we use inflation to do it. Those are like the only three options that I can see. Yeah, I mean, there's so many interesting comparisons to be made, I guess, because so earlier when you were talking about how it's harder to program on Bitcoin, right? For that reason, it's even more remarkable that there has been continued development on it without any inflation funding.

But yeah, I don't know if I feel I mean, I guess. So in a certain respect, I do see what you mean about the Ethereum roadmap, like, Maybe some of what Ethereum is trying to accomplish is just bigger in scope. But obviously, Bitcoin development does continue. And there is a lot of work being done on layer two, that kind of thing. So, you know, it's not it's not really like an apples to apples comparison, of course. Yeah. But it is kind of like an interesting counterpoint. One other thing I wanted to ask about was how does MolochDAO work with the Ethereum Foundation? Are the two completely separate or are there instances in which both of you guys might be working on the same or funding the same thing or... Short

answer is I don't really know yet. I've gotten closer to some of the members of the foundation. Thus far, nobody from the foundation has... I think there's one member of the foundation that's joined the DAO, but none of the executives or Vitalik or the higher-up people. And I think they want to... have that separation exist. Maybe they'll join something like this in the future. Maybe they'll call it something else to be more palatable. But I think that ultimately they're going to be complementary. So Moloch could fund things that the EF either isn't paying attention to, or we could both fund some of the same people in the sense that Moloch could give somebody a grant and they could do a follow-on. Or

they could give people grants and we could give them bonuses. Right? Right. And I don't think that this is going to be seen as like stepping on their toes, for example, because I think that as far as the EF is concerned, like I don't think they want to exist forever. I think they've actually been pretty clear about this, that like they want the space to grow and they want the EF to remain roughly the same size or maybe shrink. And so over time, it's going to become more and more of, you know, the. the ecosystem's responsibility to take care of itself. If you look at the beginning of Ethereum, most of the people who were working on the protocol, who were working on the tooling, and so forth, they were paid by the foundation. And that's very much no longer the case. So we're already

on this trajectory where the foundation is becoming less and less relevant. And so MolochDAO is just one other effort in that direction, not to make them irrelevant, but to prepare people you know, the rest of the ecosystem to become self-reliant. And you mentioned that there are 22 members so far, who are some of them? Yeah, so it's a pretty broad group. It's developers in the space as well as some executives. So for example, it's myself, Cassandra, who used to run the ECF, Sam Cassatt. Cassandra Shee. Cassandra Shee, yeah. Sam Cassatt, who's the chief strategy officer at ConsenSys. There's a developer on ETH2 named Joseph DeLong. There's James Young, who was working closely with me

at SpankChain and AdChain before that. Arjun Bhattani, who is the CEO of Connext. Martin Koppelman and Stefan George, the CEO and CTO of Gnosis. Joe Ergo from District0x. Mark D'Agostino from GridPlus. A couple early ETH buyers. Griff Green. I think he, you know, he has PTS DAO cause he built the original DAO. His comments in our group are hilarious. Yeah. I like that BTS Dow. Yep. So, so yeah, it's a, it's a pretty good group. I'm excited because partly because like the coordination is, you know, the sort of the whole is greater than the sum of its parts type of thing. Like we have some of the most, you know, invested in the space in terms of, you know, personally

their, their companies, their reputations, their, you know, holdings, but also those who have been around the long time, like a very long time and, and, really want to, you know, don't plan on going anywhere and really want to see this grow and take Ethereum to the next level. So let's now switch to talking about the value of Ether. You have this I think somewhat maybe uncommon philosophy that the value of ether is important and that the chain should try to maximize its value. Why do you think the price of ETH matters long term? It's absolutely nuts that this is an uncommon view, first of all. Second of all, the price of ETH matters first and foremost because of the security of the network. If ETH is worth more, the network

is harder to attack. Full stop. That's the point. of all of this. If we build a network worth $1, then to attack it, somebody doesn't need to spend very much money. The more it costs to purchase enough Ether to meaningfully disrupt the system, the more secure it is for everybody building on top of it. And so how do you think Ethereum should try to create that value? I see Ethereum as like I see smart contract platforms in general as the internet of blockchains. And everybody, maybe even Bitcoin, we're basically all competing on the amount of settlement value that goes through the chain. So when you stake in a proof of stake system,

you get rewards from the transaction fees and from the inflation rewards. And what you're trying to optimize for is that you want the most... value to be settled on your chain. And so maybe that means directly on your chain. Like if I trade with somebody on Uniswap, right, if I'm trading as a reserve pool, if I'm trading on 0x and these transactions are actually happening from, you know, one Ethereum account to another, that's settlement on chain. But it could also be that, you know, I run a plasma chain, totally off chain, and some people from Ethereum have transferred their value into that plasma chain. And that plasma chain is still secured by Ethereum in the sense that we can exit onto Ethereum and withdraw our funds at any time.

Well, then every time that plasma chain checkpoints its hash onto Ethereum, that transaction is matters that is more value that is being settled somewhat indirectly, but still on Ethereum. And so you imagine this network. And if you're in like the greatest number of shortest paths of value transfer, right, if your chain is also in between like many chains where people's money are on some chain and they want to transfer to another chain, that's how you accrue value. That's how you accrue value in the sort of like discounted cash flow analysis. The other way you queue value is you inspire people who believe in your money. Ethereum can accrue a monetary premium if everybody believes in Ethereum's future and does not want to

sell no matter what. Right. That's another way of going about it. And so I think these two things are both really important. One of them has a lot more to do with community philosophy, and the other has a lot more to do with building interoperability into Ethereum, building effective Layer 2 systems to... bring, you know, plasma chains that accrue a lot of value themselves to connect to Ethereum and use its security. And some of it comes from, you know, the network effects around building on Ethereum in general and maintaining Ethereum as the most secure chain because, you know, everybody sort of wants to build on the most secure chain, which has a, you know, nice feedback loop. So I'm going to put words in your mouth just for a

second and you tell me if I'm right or wrong. But if I'm going to pull together kind of like all the stuff that you've been doing, trying to make these changes happen on Ethereum and your philosophy about the value of Ether, in a way, it almost seems to me like the reason why you want to help change happen more quickly on Ethereum or facilitate it is because You view Ethereum's path to success as essentially getting as much activity on Ethereum or related to Ethereum as possible. And that's why the value of Ether is important, because that will be a reflection of that activity. Is that kind of a way of tying those two things together? Yeah. This is

what's important for the long-term value accrual to Ethereum. So... Now I want to ask you about something related. As you know, in recent weeks, Ethereum core developer Afri, actually I don't know how to pronounce his last name, Shodan, was driven from the project after he tweeted, Polkadot delivers what Serenity ought to be. Changed my mind. Were you on the side of people who thought Afri should be kicked out of Ethereum or on the side of people who thought he should have stayed? I wasn't really paying attention, to be honest. I thought that He was looking for a reaction and he got one. I don't think it's what he expected. I think he made really important contributions to the space. He was delivering code for Parity, the client.

He was building the Gorley testnet. He was acting as the release manager. These things are all important, way more important than any idiot on Reddit's voice. So... No, I wouldn't want to have seen him kicked out. And he wasn't kicked out. He could have told all of the angry Redditors to go f*** themselves and stayed on. But he decided instead to quit. I don't know what he's doing now. I don't know if he wants to come back. But it is harder to come back after you sort of declare that you're quitting something. And I also... I'm not happy with whoever it is in the community that's being super aggro. The stuff about calling for physical violence is never appropriate, and that stuff should be moderated. But I also don't think

that it makes sense to look at those comments made by anonymous people on Reddit and have that reflect the whole community. I think that's a bit unfair as well. Yeah. And what's your take on like a similar situation where I guess some people have been trying to ostracize Aragon after they announced that they plan to deploy their smart contracts on Polkadot? What's your opinion on that? I knew about that a long time before they publicly said anything about it. But if you get the goodwill of the community by saying that you're going to build on Ethereum and contribute to the chain, then you should also expect that if you stop... you know, some of that goodwill might go away. I don't necessarily think like ostracizing is the

best strategy there. I think we still want to be welcoming, but we should take a hard look at ourselves and try to figure out like, you know, what is the technical reason that's motivating this? And like, can we address that? Like, is it that they prefer, you know, polka dot people. Um, in which case, you know, there's sort of nothing to be done. Uh, if it, if, is it that they prefer to build on substrate? Is it that they prefer to operate their own layer one? Oh, well in that case, great. Like let's figure out how to provide them the tools for doing that on a theory. And two, um, if we, you know, have, have the wherewithal and the time to, to do that, then like, great. And if not, then, you know, maybe it's like a, Hey, we're still friends, but like we

get that you're either hedging or like committing to move on. And that's, you know, that's how it is. I don't think they should be ostracized. I think they've done a huge amount of work in the space already. And I think that should speak for itself. So, like, I know you've been calling for the removal of one of the R Ethereum moderators. And from your tweets about that, I actually would have thought that maybe you would have agreed that Afri should be kicked out or that, you know, people, I mean, I guess you did kind of say you understood why some people might be trying to ostracize Aragon. So like, how do you kind of square your position about our Ethereum moderator, you know, on the Ethereum subreddit? It

sounds like you have a more moderate tone about some of the others that are trying to experiment on other chains. Yeah. I mean, we're talking about a guy named Ryan Zur. He is a director of Polkadot and the Web3 Foundation. I don't know exactly the organizations between who's Polkadot, who's Web3, but he's been working with them for, I don't know, three months, six months, something like that, maybe longer. I don't think it makes sense to have competitors, people who have started to focus far more on competitors being moderators of the subreddit. That was the only point I was making. I don't fault Ryan for doing what's in his best interest. I

think that it makes a lot of sense for him to... leverage the goodwill that he's already earned in the community as much as he can in order to make friends and attract people to Polkadot. But I also don't think that it makes sense for us, who are still focused on Ethereum, to elevate his voice in giving him this position of status that the moderator position is. We had a discussion about whether or not that is the case, and it seems... seemed that that was like one of the biggest disconnects between the community and the moderators is that the moderators didn't see themselves as, you know, getting any sort of points for doing this. They

saw it as a chore, some task, you know, an administrative function. something wrote. Whereas in the community, like we look to these people for guidance, for, uh, you know, to be, to be examples of, you know, how we should act, uh, how we should discuss things. And when Ryan continues to bring up like fund recovery and then calls everybody who disagrees with him, a bunch of trolls and like completely ignores the, you know, points I was making about him, uh, And being sort of duplicitous in how he approached the Ethereum community publicly and how he did it privately when he was trying to sell me DOTS, his reaction was to deny it and try to gaslight me and pretend like it never happened and that I was making shit up.

And so, yeah. And just for the record, he views your conversation as you trying to lure him into certain positions and then, you know, telling the story differently from how it happened. So, you know, I think there's two sides. And so it's just kind of funny that I think both of you view the other person as having you're both accusing each other of doing things. And yet each of you think that that person has done that to you. So, yeah, that's normally how this goes. Hey listeners, this is Laura jumping in here after we recorded. I reached out to Ryan Zur to get his response to these allegations and he said about recovery of frozen funds that he never called those who oppose it trolls, that he respects their position but doesn't feel that the issue has been closed and that he's allowed to support

fund recovery. He also pointed me to a medium post from July 2018 that lays out his position in which he makes several points but one is quote Dogma surrounding immutability severely disincentivizes innovators from taking otherwise reasonable risks to build the technology of the future. I've linked to this post in the show notes. As for the description of the phone call, Ryan wrote via email, quote, in the short call that I had with Amin, which was my only interaction with him, he was clearly trying to entrap me the entire time. He lamented his scalability issues and asked directly how I think Polkadot could be a better option for him than Ethereum and led the conversation in this direction. Ryan then goes on to say that he views Polkadot as experimental, but that it has some very interesting design features, quote, such as the ability

to plug and play your consensus and security model and build your own chain specifically for your users slash use case. Ryan doesn't believe that everyone should abandon Ethereum, but that it is prudent for developers to understand Polkadot and explore it. And he views the two projects as more synergistic than competitive. He says, quote, just because a team or dev experiments with Polkadot does not make them disloyal to Ethereum and they should not be ostracized. Again, that is a maximalist view and unhealthy as it leads to the online bullying that I and others are suffering from due to our desire to experiment. Now, back to the show. I mean, long story short, I think Taylor Monaghan, CEO of MyCrypto, like really brought the community together because she took my request to

have him removed, like, Instead of acting on it, she did the far more reasonable thing, which was to try and create a policy where everybody... Not try to create a policy, but try to drive a community discussion about policy that would be used to govern our Ethereum moderator privileges in the future so that she could do this in a scalable way and doesn't have to deal with it every two weeks when we all get our panties up in a bunch about getting some other mod removed. Yes. Which makes a lot of sense, and I totally support it. And the one policy request that I made was to have mods be at least primarily focused on Ethereum projects, not competitors. which I specified would have proactively removed Ryan when he started focusing on Polkadot with no sort of drama, right? It's like

a, hey man, we can see that you're focused on something else now. We're going to remove you as mod. It's not really that important, but you know, anyway, but. Like, there you go. Have a nice day, right? But it wouldn't have removed Afri because he was still focused primarily on Ethereum, right? Even though he was working for Parity, which gets money from Polkadot, like Parity itself also got, you know, a $5 million grant from the EF. So he's like, at least in some sense, getting paid by the EF and working primarily on Ethereum things. So I don't think it would have proactively removed Afri. That policy would have required him to leave or be asked to step down in the way that it would for Orion. Now, when Afri said, I quit, I'm done with Ethereum, then maybe the mods would have removed him inactivity.

But it also wouldn't remove any of the other mods because they're all working on, you know, status or being paid by the EF like Hudson and Alex Van de Sand on stuff or like running my crypto, which is one of the most widely used wallets in Ethereum today. Hi, listeners. Again, it's Laura jumping in with Ryan's response. He says, quote, the idea that someone has to be majority focused on Ethereum in order to be a mod is a means opinion. And I respect that even if I don't agree. If someone worked outside the space as their day job, does that mean they can't be a mod? Clearly not. Ryan then goes on to say that he's been a big Ethereum supporter since day one, that his largest crypto holding by a significant margin is ETH, that he was the sponsor of the DAO WhiteHat Group,

that he's been a mod since 2016 and has faithfully executed his duties in that role, that he's invested in and directly helped dozens of Ethereum projects, including rewriting the original MakerDAO white paper with the team and advising it through its development. Among other activities. Then he says, quote, the fact that I support other experiments in the space should not take away from the contributions I have made and will continue to make in Ethereum, nor do they preclude me from being a moderator of our Ethereum as has been decided by the other mods. And just to clarify what that means. There was an announcement on our Ethereum that no current mods will be removed at this time and that they will remove moderators when and if they are not upholding their duty as a moderator. I'll also link to that in the show notes. Back to

my conversation with Amin. For years, I've been interviewing various people, who have said things to me about how they gravitated toward Ethereum after having unpleasant experiences with the Bitcoin community. And a lot of those people kind of like decried Bitcoin maximalism or any kind of maximalism. And obviously, we've seen over the years that Ethereum has been very welcoming to other projects. So, you know, for instance, Zcash and Eternity went to DEVCON4. But I feel like in recent weeks, we've seen a sort of Ethereum maximalism emerge with the off-free situation, people getting really mad about Aragon deploying on Polkadot. So what do you think that Do you agree with that?

And if so, what do you think of that attitude? Do you think I'm an Ethereum maximalist? Well, actually, that's a question for you. Are you? Yeah. No. I'm an Ethereum, I don't know if there's a good word for this, maybe like preferentialist or something. I prefer it. I'm not categorically for it. I don't think it's the one chain to rule them all. I think it is in the lead. I think it could sustain its lead indefinitely if we play the game right. I Also, it's a little bit different when you're an investor and when you're a developer. When you're working on a project, I only have time to invest in so many ecosystems. I can't learn EOS development and Tron development and Ethereum development and Polkadot development. I sort of

have to pick. So it doesn't really make sense to talk to... accuse devs of maximalism just because they like one chain over another. For me, it's A large part of this is just me trying to protect my investment. Not just the financial one, but it would take a long time for me to figure out another chain and how to build on it and make all new friends. And it's more convenient for me to contribute to the chain they're on. And as I specified in the thing, I think Polkadot's going to do really well, not... have anything to do with Ryan. I think maybe he's done a decent job of business development, but mostly because of Gavin and

his army of fanatical open source contributors that ship code every day. And so we purchased Dots. I was pretty transparent about that. I plan to maybe poke around and learn some Rust and work in their ecosystem too. But I'm pretty conflicted. When you ask about this stuff, it's not just a question of technology either. It's also a lot about community. The Ethereum community has thus far embraced BankChain. They give us opportunities to talk at their conferences and everybody has sort of come around to our mission being one that they support. And that's really important for

me. That's really important for the community of adult performers that they see that we're accepted and that this is actually different than how they, you know, are used to being interacted with by the mainstream culture. Right. Ethereum is different because it is welcoming. And that is part of why it makes me want to protect it. And part of why it makes me want to, you know, hesitant to like go to other communities where maybe they don't feel that way. See what I mean? So. I feel like you're kind of wavering a little bit. So I'm just going to ask you, like, so do you think that somebody can be for Ethereum plus also at the same time experiment with other chains? Or do you think that's not possible? I started having open relationships recently. Wait, you mean like in your personal life or do you

mean with your blockchain life? Oh, okay. And I think it's opened my eyes to a lot of things. I think maybe we should decentralize relationships in general, but I think this kind of experimentation is fine. I think that obviously if you're more on one side than another, you shouldn't expect to you know, be in a sort of management role in, in the other side. So like, I don't know what Ryan, Ryan hasn't like, you know, stepped down or something as a mod, given that he's far more a polka dot maximalist than an Ethereum maximalist. And I think maximalism is sort of like a term that people use to describe like incumbent now. It's sort of like lost all meaning. It's supposed to describe the fanatical far end of the spectrum. But it's basically being used to describe anybody that prefers one chain over

another. So I don't think that there's anything wrong with using other technology. At the end of the day, most Most of the reason that I started building on Ethereum was because I could write smart contracts on it. And then what kept me here and what made me fall in love with it is that the community is amazing and the culture is incredible and it's really hard to replicate anywhere else. If Ethereum 2.0 fails, what do you think the reason will have been? So a couple of things. Like one, ETH 2.0 could fail if ETH drops precipitously and everybody runs out of money. ETH 2.0 could fail if there's coordination problems and it gets delayed longer and longer and then people get discouraged. It could fail because

of scope creep. So people trying to jam too many things into a release and underestimating the complexity of doing so. I don't think it's likely that ETH 2.0 will fail. I think that everybody working on it is super committed to seeing it through. And collectively, we do have the resources to see it through. It's just that the timeline's a little long for my personal liking. And is there any way that you think the Ethereum roadmap should be changed so that Ethereum is less likely to lose its lead? I think that There are, but they're not obvious to me right now. So it's more of like a wait and see. I think the beacon chain is pretty much the focus right now, and it is enough of a bedrock that

it needs to happen no matter what. That's kind of like stage one of the three-step roadmap to Ethereum 2.0. Exactly. It's like the first of the three stages, which are called phase zero, one, and two, because people like to start with zero in this case. Yeah. So yeah, phase zero, it should be, you know, test nets are up right now and should be out before the end of the year. And the plan is that phase one should be out by the end of the year, the next year, 2020, and then phase two would be out the year after that. I don't think it will take that long. I think with better coordination, we'll be able to do it much faster. Oh, really? Even though so far everything has been delayed?

Yeah, I think like two years is a good target, not three. Okay. Yeah. All right. Well, we'll see how it all plays out. And we'll definitely see what happens with Moloch Dao. Hopefully it won't see the same fate as the Dao. Yeah. I spent a lot of nights writing tests just like, please don't be Stefan Tualik. Please don't be Stefan Tualik. Who created the Dao. Not the creator, but I guess one of the... Yeah, I don't know what he's up to now, but like, yeah, he went through some fish. So, yeah. All right. Okay. Well, this has been a fabulous discussion. Thank you so much for coming on the show. Where can people learn more about you and Moloch Dow? MolochDow.com is the website that just went up and we're

on Twitter at Moloch Dow. Perfect. All right. Well, thanks for coming on Unchained. Cheers. Thanks for having me, Laura. Thanks so much for joining us today. To learn more about Amin and Mollic Dow, check out the show notes inside your podcast player. If you don't have tickets to the first Unchained Live, don't forget to tune in Wednesday, March 20th at 7pm Eastern on facebook.com/unchainedpodcast to catch the live stream of my interview with Vitalik Buterin, creator of Ethereum. Unchained is produced by me, Laura Shin, with help from Raylene Gallipoli, Fractional Recording, Jenny Josephson, Daniel Ness, and

Rich Straffolino. Thanks for listening.