The participation economy

Transcript

thank you everyone for showing up in the morning uh so early today we're going to talk about the participation economy uh more specifically it's uh retrospective from last year last year i came here and i wanted to tell everyone that you should vote when you participate in your protocol when you buy tokens you should expect that participation is going to create value for your project we can say that we've been a bit disillusioned over the past year so i think we have to be a bit more pragmatic uh so the whole point is to introduce some kind of new concept that's going to allow us to push forward the ecosystem so yeah that's called the participation economy and it's inspired from what legion has built with the

creators economy so what have we built so far in crypto very briefly we've done three things the first one is that we've built blockchains so it's just a database enabling trust trustless social interactions on top of that we have built dapps decentralized applications so these are decentralized central banks decentralized lending protocols centralized exchanges and so forth there's a lot of them and they've been successful at scaling they can they can work with thousands even hundred thousands of users uh they can host and be custodian of billions of dollars these are successful applications and the last thing we have started developing over the past two three years our governance systems

what's really interesting to take into account is that these systems haven't matured enough compared to the speed at which uh the protocols have matured so these protocols are worth billions they're the equivalent of very big companies uh this over trillion dollar of crypto assets today but at the same time we don't have good systems that enable us to scale and to be able to allow the stakeholders to coordinate correctly to manage these protocols efficiently so this is the situation we are in today um to make a bit of sense i wanted to explain a bit how protocols are supposed to work on the decision-making level just a small parenthesis you have two styles of governance the basically the governance minimization and the full governance my governance

maximalism my argument and this can be a debate that we can have after is that most projects cannot survive without governance because it's the upgradability option of the actual protocol so how did this happen it actually is a full circle permanently a contributor or a core member or anyone is going to notice that there's a new problem there's an opportunity for a project so it can be a bug can be a need for change an opportunity anything he is going to write a post probably and they're going to create a proposal people are going to debate about it whether or not it is relevant whether or not it is the most efficient solution whether or not the timing is right once the discussions are done they vote and then there's usually ideally uh

automatic execution on and resource deployment after the the vote is passed basically and this is the implementation and because this is the magic of crypto there's probably a new bug somewhere else so you need to keep going for round and if there's not there's going to be a new opportunity because someone has an idea every day which is great so we have this kind of governance circle that's very interesting that we're seeing the question that we're asking ourselves at palin and that i think every day we should ask is how do we push this protocol to keep being pushing for the protocol how do we create this like positive life cycle in our in our organizations um i think that to understand that we have to understand the challenges that are here in crypto and they're mainly due to speculation in the sense that crypto is

mostly focused about a short-term profit instead of long-term value creation so today we're doing roughly 50 billion dollars of daily volume and we're in a bear market and the crypto total crypto ecosystem is over a thousand billion so it's a trillion market cap means that we're not in the little kids league anymore we are a very very big ecosystem and we have to be aware of that if you look at the crypto projects the one who are actually doing really well not just in terms of community in terms of revenue in term of traction these are almost exclusively exchanges and landing protocols so this is what works today in crypto uh if you talk with the a lot of the users today they expect dyna direct

financial rewards so they want to farm they want the token they want to earn their life they want to make general their generational wealth right um and this is reflected on the voting because you realize that we we had this statistic last year we realized it was even worse than we thought because it's not just 95 percent of the tokens are not used to vote uh it's also 99 of the users are not voting so it means you have a very small core community that's actually participating and everyone else doesn't care but the truth is is that we are building right now systems to push for marketing to attract liquidity because these are the needs that we as builders have put as priorities that's a problem because we cannot expect people to participate if we redirect most of the incentive in

attracting liquidity or in marketing or things like that what we should push most of the incentives for is participation once you have product market fit it's growth so you have to recruit contributors you have to make them go into it so we're going to go back to the cycle i just showed before and i just want to very briefly try to give a name to the the people who contribute in these parts of the of the cycle these are our own name any protocol any person can give out a different classification of them i think it's important at least to understand who are your the people in your ecosystem so very quickly and by the way anyone can be all for or any of them like of this category they're not like mutually uh exclusive

usually someone who's going to see a problem it's going to be a community member so he wants value he wants to keep pushing more for more things happening in the protocol he's going to notice it doesn't mean he's going to build the solution right the person who is going to build a solution it's a contributor because he's actually taking his time to and giving his time giving his energy giving his intelligence to the project the people who are actually actively participating are going to be the governors they're also going to be the one who votes and then the person who executes are the operators um there are a lot of community members doesn't mean all of their opinions are valid but that's the whole point of democracy there's much less contributors there's even less governors

and i would argue there's even less experimented and experienced operators so the whole challenge today when we're building a dao is identifying who in your community can become a contributor and who has the right skills the right time to actually become a governor um so what's really interesting is that if you kind of look at these four different types of people you're going to realize that they have different involvement in the protocol so as you mentioned committee member is most of the time lurking so he's going to have very sporadic involvement sometimes just a discord message oh look this thing in interface is not working oh i wonder what why we're not farming crv oh i wonder if we couldn't do something like that but it just stops there a

contributor is someone who is recurring you're also often gonna find these guys like just saying gm in your discord for example and these are people who just keep coming back um something a bit more regular are going to be the governors and then you're going to have the operators who should probably be part time or full-time in your protocol what's really interesting and that's my personal opinion where we want to get to is that i think governor and operators should be paid because they are spending regular and recurrent sorry recurrent time in europe and they're basically doing a full-time job the problem we have is that imagine the budget we're spending on liquidity mining if we spend just 10 percent of that in making the people participate in our protocol so i think that's kind of the golden

ratio we should get to there's been a lot of talk about governance mining but in a sense it's not about governance mining it's probably just about paying people but there's a lot of problem with that because today most protocols the resources they own the most is their own governance token so how can you give your governance token to someone he can't pay rent with them the only obser option for him today it's dumping the token and if there's no liquidity he can dump it so you actually have to prove out to provide incentives for the liquidity so there's all these kind of problems that need to be sold if you want to get to a point where it's actually going to be efficient so let's talk a bit about the future what can we expect not just from us but from a lot of projects that have been

building things uh as we mentioned just before i'm just gonna come back to the slide uh all these four contributors they have a different uh hierarchical importance right in terms of contribution but they're all necessary in a sense i think that we have to learn that this hurricane is necessary so it's almost uh to move from a democracy to republic in the sense that you're accepting that there's going to be an expert committee representing you and your interests and it's supposed to be backed by the actual liquid democracy that you have with token voting right so the token holders should always be have a constant video of their decision and there should be transparency reports for them to be aware of what's

happening then you're going to have an executive council that has the strategical decisions we're seeing this a lot it's usually what we call a community multisig executive team a spartan council if you look at snx this decision-making organ we're saying it like in almost any any structure and then after that once you grow you're going to have working groups people managing your treasury people managing your marketing people managing the growth communications etc and that's how dao should organically grow and if you look at all the big protocols today they are going towards a direction maker has the core units group ave slowly spinning out they have bgd for development they have a grounds for some kind of treasury around the community they have the risk team

jiren is doing the same thing with the white team so this is kind of the trajectory that we're seeing and if you actually look at it we're basically going back full circle to the traditional system that we had in our traditional organization so yeah uh that's why we wanted to talk about this because what are we trying to do with spawning is basically enable more person to understand this game and to play the game of incentives to play it right so for the past year year and a half we've been building influence market to understand what were the behaviors between different stakeholders and to generate revenue to basically finance the next part of what we want to build we have released our governance token at the beginning of the year and the the

idea is to transform this into a gateway to participate into the game of governance without any friction so enable people to rally more governance power get more incentives in different projects etc etc in the end all of this has to become a game for us where we extract the complexity for holders because if you have 10 governance token you will not have the time to follow everything that's happening all of these 10 protocols so you have to make choices this protocol interests me i want to participate this protocol doesn't i have to delegate and that's where that's the gold standard we should get to and this is a responsibility that wallets or things like that actually have to also play into account because today the gateway for was it's just like a custodian experience it doesn't go further than that

so yeah that's more or less it uh we basically growing into the step two of what we want to build now that we finished the basis of what we wanted with influence markets and yeah we can't wait to show you more and i hope that at least if you don't vote you will delegate or you will choose to basically come full time in crypto there's a lot of opportunity around governance thank you very much [Applause]