S4 - Ep. 22 - Swarms: A Primitive For Sovereign Coordination W/ Daniel Ospina

Transcript

welcome to the green pillow. network podcast if you're just joining us we're building a coordination a network Society of thousands of hackers dreamers and doers focused on using crypto to bring positive some digital systems to the world this podcast features the people who are doing it and we published a season of about a dozen episodes every couple months this season is all about lean mean Capital allocation machines Capital allocation is the process of deciding how to spend or invest Financial Resources now that we have onchain Primitives how will onchain Capital allocation work and what ways can we build more democratic more scalable precise or just weird Capital allocation mechanisms what are the coolest experiments these are the themes of green pill season 4 LE mean Capital allocation machines one special thing we are doing this season is we're allowing

you to collect this episode all episodes this season including this one are available on chain you can go to pods. medgreen pill to find episodes and start collecting thank you to MMA on chain. E for being a recent collector of the green pill podcast if you want to learn more about the green pill podcast you can visit our website the green pill. Network where you can download the green pill book for free join the Discord and become a member of your local green pill. Network chapter okay well our guest today is Daniel opina Daniel is a dow org design and Community architecture decentralized governance and Innovation specialist he is the instigator at RN da and the ex- head of governance at Aragon and

supervisory council at singularitynet he was a fellow at the Royal Society for the Arts and is a visiting lecturer at said business school at Oxford University I was really excited to talk to Daniel because we've been just kind of like trading ideas on Twitter for years now and I think he's one of the most interesting thinkers when it comes to Dow design Dow governance network-based coordination and that's what we talk about a lot on this episode I'd say the the through line of this episode is how do you design for agility and connection in the age of networks and we talk about swarms as a mechanism for Capital allocation so quite a fun episode I think you're going to enjoy this episode with Daniel

opina hey Daniel what's up how are you hey I'm good thanks how you doing pretty good I'm excited to talk to you today about Capital allocation and your work at rnow why don't you uh tell us what you're up to there sure thanks so with arendal we start a little bit over two years ago thinking that the way we are going about building a lot of applications in web free had many different challenges one was that especially if you're trying to build something that is a B2B application some sort of product that is going to serve other organizations Etc to to do their thing there is a really really important to understand from the beginning what those users need what they want and

there wasn't a lot of that happening but also the the salale cycle or the amount of time it can takes to convince a group of people to try what you're building is really really long compared to convincing a single person to try something so if you're building an application for individuals all you need to convince is one person if you are building an application for groups or organizations you need to convince the whole group or the whole organization to even try it and at the same time then looking at the different Web Two approaches for entrepreneurship there is a huge failure rate uh like in venture capital we have roughly nine out of 10 startups that fail then if we look at hackathons there is some data showing that 75% of hacka winners abandon their projects so these are different teams at

which capital is being deployed that are trying really really hard to succeed but they encounter a lot of different challenges so with arendal we started to think about how can we do these differently and uh arriving to the sort of idea of a of a swarm as an innovation approach as a as a way to fund these teams but not only give them Capital but also put a whole support infrastructure around them that is very much based on peer-to-peer collaboration as well uh because we find that a lot of Entrepreneurship works as a sort of coage Industry like every startup is learning on their own especially if they're a first-time founder they're just kind of trying to learn so many different skills and assemble all of

these different networks Access Capital all of these things that they need to build a project that survives and it's extremely challenging and if we can turn these into more of a supportive system where people help each other where you can reinvest the lessons from one time to the other more effectively than we have done in web 2 then hopefully we can reduce the failure rate we can reduce the wastage that or traditional Innovation Capital deployment system has when we're trying to build what are commercially sustainable Ventures essentially those that have a business model that means that they can keep on going and keep on doing their thing uh and hopefully grow and bring it to more people want to get more into swarms but before we do I wonder if we could go deep for a couple moments on your

experience in the crypto ecosystem your ex- head of governance at Aragon which is a major project supervisory council at Singularity net over the years do you want to tell us a little bit about that and how that experience has informed our endow and your work there yeah sure so when when I joined Aragon that was early 2021 I mean I had been following Aragon since 2018 and and in a way it was Aragon and colony and that first generation of dows that got me into web free at the time I came from an organization design background uh so it was a little bit different than most people that arrive through trading uh I was more obsessed with organizations and I started working with a lot of these organizations or at least finding my way

in and one thing that stroke me is that there were a lot of really talented developers there were a couple of business people but there were not many people thinking about organizations and how how they actually work and because web fre had sort of this idea of being the Leading Edge then people were coming here to learn from web free but we were not learning a lot from what had happened outside of web free so like learning from political science and behavioral economics and group psychology and all of these fields were especially at the time extremely extremely disconnected so I absolutely adore these p and and the reason I came here is because you have this wonderful

combination of people willing to try new ideas a lot of really really smart Tech talent and this amazing infrastructure has been built over the years and also Capital to try and do new things to to to run new experiments that you wouldn't really be able to fund or try anywhere else but then in the way we were executing on it it was at times kind of frustrating to see us Reinventing the wheel or or or failing where we had we as suspicious have like very plural we we have already failed before and I was thinking is there some way that we can make new mistakes as opposed to repeating some of the mistakes that have happened and and how can we do that more effectively when we're also trying to

move fast and do new things and all of that yeah I mean I think it's a very fruitful ground for new experiments in governance and capital allocation and digital scale coordination and uh yeah it's it's really fun to be to be working in crypto and I I feel I feel like you and I are working on similar problems but from different angles yeah yeah very very much so you know it's it's kind of one of those spaces where if you can dream it and convince a few people it's going to become real more like faster more more naturally than anywhere else but then you go and try to do those things and hit the complexity of this problem straight in your face and have to deal with all the mess at results speaking of the complexity hitting you straight in the face um it says in my

notes here that you were a chef before you got into crypto there's a few years in between the two has that informed any of the the ways that you approached building things in crypto uh yeah a lot uh I mean I I went into food because I was really fascinated with the sort of blend of creativity technology culture and all the kind of stuff that was happening around molecular cine and I went and work with a bunch of well at the time some of the highest ranked chefs in the world and these guys weren't Were Meant To Be extraordinarily creative but by the time you got there they were no longer creative because actually they had so much pressure from their success that they had no time to explore new ideas and they were at the

same time surrounded by all the people that have come around because of this reputation of it being a really exciting Innovative place so all these young people full of ideas but that had no clue how to translate those ideas into practice and didn't have the resources to do so so it was kind of like having all the right ingredients in the right place but not working together and so these very famous organizations will slowly Decline and the talent will eventually leave and go somewhere else and start building somewhere else as opposed to actually collaborating in in a way that could be more efficient they had to go and start and build one star second Michelin star and then build up from there and then finally be something else but then one concept that has really really struck me is this idea of

Misan plus and and that's something that I took very dearly from from the food world that is because when when you're in a restaurant you don't really know what's going to hit you customers might order a fish dish or a meat dish or a vegetable dish they might arrive a table of five or five tables of five might arrive at the same time and and it can very very quickly become a mess so what these good rest do is this thing called Misan plus which literally translates to stuff in the right place so it's thinking very carefully what's this sort of setup that you can have that allows you to react very fast and effectively to whatever is coming your way and and it becomes kind of like a mindset of you organize all the stuff so then when

something comes in you can process it you can react to it very very effectively and and that as a metaphor for organizations I think is really powerful because you're not trying to design necessarily just for what is happening right now but you're trying to design a system that can react to constant changes in the environment to constant evolution of ideas to people coming in and out to all kind of different circumstances and you want to have that system that is resilient and flexible at the same time yeah um when we were doing our our research on you to build this episode this quote really stuck out to me uh sameness and scale where advantages in the Industrial Age agility and connection are what matters in the age of networks and so I think that you're you're taking these lessons

that you had from being a chef and applying them in the 21st century building dials in in in governance tools yeah I guess it's what what becomes a little bit different here is how or or or actually not even like thinking about it like kind of thinking out loud how it relates to the restaurant world but one of the most successful restaurant Empires that I saw was very networked it was not a top- down Corporation with huge monolithic business units but it was multiple businesses that were collaborating together and they had a sort of R&D lab that was doing some of the initial development process and passing these ideas to the other teams but they all together had these very coherent philosophy of what they they

stand for and and it was this philosophy like the coherence the convergence on this philosophy that gave them on the other side the ability to react very quickly to each of these different businesses that were part of the network to do their own thing in their own style for their own needs like one was a pob another one was a one Mission star another one was a free Mission star so they were serving very different customers they were serving very different needs but they had managed to create crystallize very coherently a cohesive philosophy that meant that they could all be evolving all could be changing very quickly and at the same time share resources share learnings share a common brand that they that allow them to attract more customers and

so on and and it's kind of like that idea of keeping the balance while in movement is they were not static they were their menu was changing on very very reg regular basis and they were not centralizing that it was only one person mandating everything for all of them because there were just too many decisions for that to ever work uh but it was finding the the underlying principles and the and the setup the organizational setup that allowed them to do that I've been a software entrepreneur for longer but in crypto for seven years and uh the more and more I learn about the philosophy of networks and how networks organize it's really fascinating to me I feel like I grew up in a hierarchical world or the end of the hierarchical world and now I'm learning a lot uh about about networks um would love to focus the conversation

from here into talking about swarms and networks and swarms as a mechanism for for Capital allocation so it feels like you're really behind this phrase swarm how do you define a swarm and what are what's exciting about them to you the way I'm framing a swarm is as a network of teams where each team is fundamentally autonomous and independent but these teams can very easily work together and collaborate now the the thing here and the difference with a market if you just look if you have different companies or projects Etc in the market and they're maybe doing Partnerships maybe buying and selling from each other that's just a market when it becomes a swarm is when you can create more collaboration between these

teams in a way that is very agile so collaboration in a way that doesn't constrain them so you have the in one extreme when teams become completely codependent and let's say they're part of the same Corporation so you have the HR team the marketing team the finance team Etc and none of these teams can survive in isolation if you remove any of them the whole system cannot dies and and that makes it fragile and makes it slow in a swarm the idea is that each of these teams could more or less survive in isolation but together they can Thrive uh so borrowing some you know some of the metaphors that you have used recently like around the melium thing and so on is is not about being fully independent like in a market is not about being fully dependent like in a

corporation it's about being interdependent and so the the way we are we're developing these thesis and developing these ideas is that these teams have some cross ownership between them so similar to in Japan there was a phenomenon like this in the 80s that was called Kus and these were companies that bought shares into each other so in web fre we can design it a little bit different but essentially all of these organizations all of these teams have some interest the some benefits in the others succeeding but each of them can make make decisions autonomously and can very quickly find the best opportunities for them to pursue uh this is also for example happening in well in China with a big multinational that is higher that

became the the number one iot company in the world so what we're trying to do in arendal is create a swarm that is focused on collaboration technology so we have a a set of different programs that allows us to inspire entrepreneurs to work on different challenges to research different challenges and start prototyping start developing a solution we offer them a lot of support along the way but as they join the Swarm as they start to develop their ideas if they succeed they become co-owners of rnow and rnow becomes a co-owner of them so we create this network of interdependence and then a set of platforms and processes for them to

collaborate so we have for example what we call a collaborative CRM that is essentially a database of who they are selling to and each of these teams can see who the others are selling to and ask for introductions they can also have a CRM for investors or capital allocators and say hey we we need more Capital can you introduce us to this and this person they refer talent to each other they also have a database for Market insights so we start to have these different tools that allow them to collaborate in a way that doesn't require them necessarily to find a lot of common agreement on many things uh but allow them to find the maximum amount of support on each other these networks of inter interdependence seem

really fascinating to me One Vision that we've had at getcoin uh was basically of this idea of a DA of DS which is basically um a mesh network of dows that are either all collaborating with each other on the social layer on the technology layer or the economic layer and we felt like we saw a glimmer of the Dow of dows at at getcoin when when all of the different Dows in the ecosystem were funding the getcoin matching pool um so there was like a a transfer where basically like chain Ling and urine finance and other Dows were funding the matching pool and then they would get like brand recognition and then getcoin would would like fund the ethereum ecosystem and it almost felt like the emergence of multicellular life for us

this is I'm using a getcoin Centric example because that's the one that's native to me but there's probably hundreds of other examples like this out there in the ecosystem it feels like what you're talking about with swarms is like a little bit more on like the team level than on like the the Dow level but it's interesting to think about the interdependence of the projects up and down the stack within the ethereum ecosystem and I'm wondering if there's any other Primitives of interdependence that are interesting to you you mentioned uh katus which are Japanese conglomerates you know are there there any other sort of interdependent systems that have that have inspired you in in coming up with this Vision well there is a a range of different organizations that have tried to do these over the years and and by the way I think with

what you guys were doing at gitcoin were were very much sensing into the same vision like I the more I look the more I see this thing starting to emerge everywhere is just taking slightly different shapes like everywhere from Amazon which I don't love by the way but Amazon the company you start to see some of the patterns they start to organize teams they are increasingly tending towards these uh the I mentioned higher the the Chinese company that are performing really really extraordinarily well well doing there is some signs of these happening in the US with Morning Star which is a tomato manufacturing plant and they're really amazing in that the whole organization is governed by agreements between peers so let's say the the truck

driver has an agreement with the person that unloads the tomatoes from the truck and that's actually their their Contracting method uh it's not a top- down Contracting method is a peer-to-peer Contracting method that in aggregate creates a whole manufacturing plan for Tom and tomato tomato processing is fascinating because it's a very low margin business like if if your can of tomatoes cost two cents 5 cents more than another company then you're not going to be able to compete in that market people very often choose the cheapest can of tomatoes so the fact that a furly decentralized organization can compete and not only compete but

actually they're the largest tomato manufacturer in the US the fact that they can do that extremely efficiently is really really surprising and goes on to show that when these things are properly designed they're not only viable they're not only resilient they're they can actually be very efficient too and that's that's very very challenging like in web 3 we we have still a lot of gaps in in tooling a lot of gaps in systems in processes Etc to I think get to those levels of efficiency and Effectiveness that that these guys have um but the difference is once we're doing it in web 3 is a lot more exponential like a lot of the code is open source a lot of the tools we're

making them available for many other networks Etc and and so it's kind of like this new organizational form that is trying to emerged that's where I I was searching for a meme I was like well this is really the essence of Dow has always been a little bit in this direction for me like I I keep evolving my idea of what the what a good da would be or you know of course there is going to be many different ones but trying to evolve my idea of that pattern and I end up naming it more recently swarms simply because there was a lot of backlash with the term of dows uh but what we're talking about is like this sort of digitally native network based form of collaboration that is more natural given the fundamentals of or of

our age of the technologies that we have available of the sort of cultures that we have of the speed at which the Market changes top down corporations cannot adapt they cannot keep up with these so we start to have these small Focus teams that aggregate to a bigger thing and once they aggregate that is the Dow layer or the Dow or Dow layers that you're talking about I was tweeting something the other day about Dows and I think you you responded with uh how do we evolve Dallas to be something actual F actually functional instead of the current oligarchical mess there are many better options it feels like you're te teasing swarms a little bit there yeah pretty much I mean I was being a bit of a reply guy uh but that but that's that's the idea is I the way I'm I'm getting excited about it

is we had a lot of dows being built kind of like from a central product then outwards and now that the ecosystem is richer maybe we can start to think of how do we create these Dows uh bottom up as in like aggregating a few people that want to work together into a thing a few teams that want to work together into a thing and this is very different because in the traditional way you have kind of all the resources and all the powers at the top layer or at the center and then you're delegating these and this is possible like a lot of the work we were doing with Singularity net and some some and with Aragon back in the day Etc was trying to find paths to progressively decentralize but there is also the

opposite path and we have had nowhere as much experimentation here of teams that start to find more ways in which they can collaborate and so create a shared layer like a share pool of resources or a share pool of data that they can share a share brand Etc to do certain things which is kind of like the essence of joint ventures Etc and or imag I think our imagination into the types of collaborations that can happen here is still quite limited and there is a whole universe to be explored it was not too different from what the guys of like inverter Network and so on were sensing like Prime da were sensing in back in the day it was just too early but now we're getting more and more to the point

that we have actually the Technologies to bring communities together and do more ambitious projects that we do as a collective I see all the reasons a priority why this is a strong Vision um I'm wondering who you think is doing it well in practice or at least who's attempting to to do this well in practice and could we dive into any of those examples it's very hard I don't know if I have like one example that is that is really championing it I I'm taking elements from a lot of them I I can already mention it but like the the Chinese Corporation hire I think they have a lot of things really really right it's also like Chinese culture so they overwork they're a little bit obsessive with measuring everything in in a way

that sometimes can be a little bit toxic but these guys have a few really amazing patterns that I see us replicating a lot in web three uh but so they have small teams where the leaders are democratically elected or at least can be democratically kicked out and and these are small teams like up to 15 people the the teams they they have their Rewards or their compensation is based on the team succeeding so a lot of them have a very very small fixed salary and then a very large part that is variable that depends on the team's performance and and that performance is not assessed by some arbitrary criteria of what the executives believe this team

is adding value or not but is actually created through a network work of teams that are buying and selling products and services from each other like we're trying to advance this Vision in Arend I think we have a bunch of things right already in in this regard like one thing that we invested a lot of energy and attention into was creating a compensation system that would allow contributors to operate across two or three teams and essentially each contributor to customize how much commitment to each team they would have and in a way that also the allow them to either be paid in Fiat like in value that they could immediately cash out or be rewarded with some form of ownership

or participation in the future success of that team uh and the more we enable this the more we Ena essentially people to find within the network the place where they could add the most value and as well tailor their risk profile so they could be working in a team that pays them good amount of fat in another team that is more early stage that could be a moonshot but so they're investing their labor there a little bit hoping for future rewards kind of thing and and it gives people a lot of flexibility to customize their their risk profile and F and find the places where they contribute the most I also think that you guys in gitcoin have done multiple things really well like the direction that is going now of separating more into these different product teams but having a very cohesive philosophy of how

these Aggregates that I think that's exciting I haven't followed maker with a lot of detail uh but I believe they're fundamentally sensing into the same vision and going after it uh at some to some degree bankl DA used to be doing this is just that there was not enough discipline in the process of allocating funds and having enough external Focus uh ultimately like I think like the majority or of launch dos have tried to do this the issue is if you have a really big Central treasury everyone starts dancing around it figuring out how to get more more resources from the core yeah tell me about it and and what is really hard to

instill is is Market discipline is like find ways to add value to someone who's not the central doubt like go and deliver value for the ecosystem if you can deliver value to the ecosystem and you can actually then bring in some of that value to sustain the organism then you're going to as an organism you're going to grow and you're going to have more resources to nurture and devel Vel your and develop yourself and and that is super super hard but that's like I guess the the key thing that a lot of us are missing also something that we are working very very hard on in our endow is ensuring that we have methodologies and we're training kind of everyone wanting to start a pod or a unit as we call them or a venture

within us training them in user research training them in how to get resources from the outside world and then the capital allocation part of it can be matching or giving them some sort of sdpn but they need to show actually traction and success and progress in validating that they are delivering value to the larger ecosystem before they can get more capital from the inside I find this all really fascinating I I think the audience will too uh given that we're getting towards the bottom half or bottom third of the episode I think I'm going to start moving into final questions if you're massively successful Daniel in the next 10 years what does the world look like uh or what does that look like so take us forward to 2034 and there's a world in which swarms

are everywhere what does that look like I mean the the most important thing for swarms being everywhere is that we have enabled millions or even billions of people to pursue their dreams and to especially to tailor work to their needs right now the entrepreneurial ecosystem is chasing unicorns is extremely high pressure is very much like All or Nothing SW worms can create a more resilient ecosystem that is extremely Innovative where we're developing new new products new Services new ways to to serve people in a way that's way way more efficient right now but also at a lot less cost to the individuals a lot

less of give it everything lose your hair by not sleeping you know work 20 hours a day sort of Madness we have actually been able to change that and create a more resilient well-being oriented but also not less performing in terms of generating new technologies new Innovations ecosystem beautiful is there anything I didn't ask that you want to say no not at this stage okay Daniel I think you're really uh a very thoughtful writer and thinker and you're putting it into practice at rnal those are the type of people that I like to have on the green pill podcast you've got a priority Knowledge from the theory of this and then also the empirical knowledge of putting into

practice so uh I think it makes for really interesting listening and swarms seem really fascinating I'm looking for ways that I can apply them at gitcoin and I'm wondering if there's listeners out there that are looking to apply some of this work in their own Dow or within their own team are are there any links where they can check out your work or places where they can figure out how how to put it into practice yeah absolutely we're we're working more and more on the documentation side of these but for now the best resource is just go go to the our website rn. so that's RND ao. and there you will find the link to join your Discord join your Discord

introduce yourself and then you will you'll speak with one of our community members we put a lot of attention to everyone who introduces themselves we try to have a call with them oneon-one and and then we can share a lot about how we organized and how you're doing or give you access to our Internal Documentation it's not publicly available but once you join the the community you can learn a lot of the different patterns also like the key thing is we're trying to build the tool we're trying to operate as a swarm building the tools for swarms uh because otherwise it would be quite contradictory so as as we progress and anyone who's interested in this sort of space we want to make it super easy for

anyone to build an operate a swarm and it's still early days but we're starting more and more to have those tools available for others to use the dog fooding Loop is the interesting thing to me there I know that I've been trying to get getcoin to run more qf and retr pgf rounds in order to build gitcoin which builds qf and retrop pgf rounds so it's sort of interesting if you think about these ecosystems using their own tools to build their own ecosystems there's this law of organizational Dynamics called conways law which basically says that organizations build products that reflect their organizational structure and I kind of think of like if you're building uh Capital allocation tools that that you then use it's like an inverse conways law where you're designing products from your

organizational structure and then those products affect the organizational structure and it creates this like infinite Loop or like like infinite game upward spiral and so yeah I don't know how what has it been like having building swarms in a swarm so one thing that's been actually very challenging has been being able to get this idea clear enough and Crystal enough and people to sense into it within enough strength that it doesn't get polluted by the traditional mechanisms so there is kind of like a constant role of inquiring what is a swarm and why is it different and is it valuable that kind of permeates all the other conversations but then the other thing is now that is

gathered some momentum and at the beginning it was kind of quite hard and and draining and I was trying to convince people that this made sense and it was during the be market so I had a lot of capital and people who were interested to invest and they all kind of disappear once the bare Market got really bad uh so at the beginning it was quite tough but now that is sort of taking its own momentum what I find really beautiful is that I'm surprised every day with some of these people who started having a conversation around some topic that they thought was important and now they're launching a new initiative they're doing something about it this guy wrote something someone else came into the organization they started a new product and now they're using that product to improve

how we operate internally so constantly every time I'm kind of having a challenge there is very frequently someone raising their hand is like hey how about we we use this new tool that I'm prototyping this could have these other ideas so we're changing our compensation model thanks to someone that did a research fellowship with us on compensation and now he's developing a new compensation model at the same time or decision-making process we we have we used to have a lot of meetings Etc now there is someone who create some some mechanism to Al an analyze the responses of surveys with some algorithm and and now they're changing the way we we make certain decisions using this and and these are all a lot of still early prototypes uh but it starts to become more and more generative with those new

ideas and that's the most exciting thing it's pretty cool all right I was trying to enter final questions and to close the episode but then we went down a little rabbit hole there I think better though anything else you want to say before we wrap no well mostly thanks uh thanks a lot for having me I follow your work for a while I love what you what you guys are doing is really really great to be here and be able to share a little bit more of these ideas so hopefully we can have more collaboration I in a way I left Aragon and and started this because I strongly believe that doing these things very collaboratively as even through small teams that we each do our thing well we collaborate with others we can go a lot further so I hope the these ideas resonate with other people and we can

advance this mindset shift of if you have an idea you don't necessarily need to go and do everything by yourself you can also find other people who are doing that and either collaborate with them build on top reinvent It remix it somehow uh but through collaboration we can make web free really what is meant to be I love that what's the whole the old uh proverb is if you want to go fast go yourself if you want to go far go together and I think this maybe could be providing us swarms could be a structure through which we could go far together that would be the idea so so we can do it as well quickly that is very important seems like a great place to end thanks so much for being on the green pill podcast Daniel thanks a lot for having me Kevin have a good day

everyone you just heard from Daniel Opa I'm really excited about rnow and swarms I think that they are doing some interesting work over there thank you for listening to the green pill. network podcast again we are featuring the people who are building a coordination a network Society of thousands of hackers dreamers and doers using crypto to bring positive some digital systems to the world if you value our work you can collect this episode go to pods. media green pill and find episodes and start collecting while you're here may as well make an offering to our algorithmic overlords Please Subscribe R and review helps people find the green pill Network and the regenerative cryptoeconomic movement peace and love see you next time bye-bye