We Built This: Engineering Decentralization in the Real World

Transcript

Now I have a lot of respect for people who are actually building projects in Switzerland and our next keynote speaker Sorrow is one of the perfect examples. Her and her team are building something very very wonderful or have been building over the years something wonderful that has grown expon exponentially. Um so she will tell you a bit more about it. Um you probably already know the project alien worlds. Um, sorry, the floor is yours panel with I think it was the phrase full transparency does not necessarily lead to accountability. And that's so

true, isn't it? And now that we have some projects that have been in the wild now for a few years, we can see how the rubber is actually hitting the road in terms of how these blockchain ideals of decentralization and transparency and security and so on have ended up actually growing and and establishing themselves within live projects containing thousands, tens of thousands of users. And where those roadblocks have been, where those hiccups have been, and how we've begun to try to resolve those. Okay. So, I'm S. Okay. I'm Sarah McKenna. I'm the uh co-founder and CEO of Doooko. We built the viral blockchain game Alien Worlds. Um, which was one of the kind of large blockchain games in

2021 and is still played by tens of thousands of you users every day. Um, and I'm going to talk about the aspect of the game and of many blockchain projects of decentralization, but specifically from the perspective of a DAP, so a decentralized application rather than just from the perspective of a chain and what it means particularly to decentralize a DAP, why you would want to do that, where the roadblocks are. Okay, so just to give a bit of context of what Alien Worlds is so that then we can all kind of baseline on what we're talking about and how decentralization has worked within our gaming metaverse. Alien Worlds is um a blockchain game in which you use utility

NFTts to acquire to mine for or to do other gaming actions that lead you to acquire the funible token Trillium which you can then stake into one of numerous Dows. Uh there are 12 Dows within Alien Worlds that are competing with each other for the scarce resources of the game. So the Dows function as teams and users select their teams and they're they're competing against each other. So each of these Dows is built on the premise of a delegated democracy dowo rather than direct democracy. So most of the Dows that you will have interacted with yourself would be direct democracy or sort of referendum based voting. So

that means that proposals would come up normally whether funds should be spent from the treasury and you would vote yes or no to whether that proposal should should succeed and if it's successful then tokens leave the treasury. In our case, what we observed and we began life in 2017 as miners. So we were a minor on numerous chains and we were getting mining rewards into a DAO. And we observed that direct democracy or referendum based voting wasn't really producing very good decision-m.

It's quite hard. It's very peacemeal for people to kind of select um on a case-byase basis, you know, amongst various proposals. And so instead what we found would what we thought would be better and I think this has been vindicated sort of six seven years on is that if you have a custodian board or a group of people that are making those decisions they can take longer term decisions and they can prioritize various competing claims on the treasury. So in our case we have these 12 Dows each has five custodians elected on a weekly basis. All voting is dynamic and live on chain. It is um stake weighted voting which I actually think is probably better than one token holder one vote for numerous reasons. Um and so

this is how our Dows work. They've been live for many years and we have many many proposals that have been through the Dows and millions of dollars worth of um tokens that have been disseminated in that way and the Dows are competing against each other. Okay. So um at our peak we were the number one DAP on DAP radar. means that we had the most players or the most users interacting with our smart contracts. We actually maintained that position for over a year. Um during the sort of peak time of blockchain gaming and kind of the bull run in 2021, we were actually the reason why many people opened up their first crypto account um was to play Alien Worlds. Uh we're the most widely held NFT collection in the world. Um, so over 27 million NFTts are in the wild and

still today about $8 million worth of trillium is traded every day. So that mean and you know we kind of at our peak in 2021. So we've I think achieved relatively good longevity even though price is very volatile. We still have thousands of users on a daily basis. A lot of liquidity actually behind the token relative to other projects sort of at that vintage. And that's really I think because of decentralization. So I think we can look at what are the ways that decentralization can benefit a project over especially the medium term.

Okay. So we were beginning to form our ideas in 2027 formed the company right here in Zoo in 2018 launched the game in 2020 and now we have some learnings to be able to talk about. Okay. So why would we want decentralization of ADAP? So mostly I think when we talk about decentralization we're thinking kind of the level prior which is of the chain itself and we understand why blockchains should be decentralized. Can someone give me a reason why a blockchain should be decentralized? What's good about a decentralized chain?

Yeah, exactly. So no single person or entity controls the chain. And why is that a good thing? Point of failure. Exactly. Point of failure. So it's unstoppable. Right. So it's this concept that it's censorship resistant that you can run extremely high value assets on a chain that where consensus is extremely distributed because you know that there's no risk that those assets and the functions of the chain could be subverted by any centralized actor. So basically security and the ability to run high value assets is a is one of the reasons why we like decentralization for a chain. But what is one of the things that we sacrifice when a chain is very decentralized.

So you're probably familiar with the blockchain trillemma which is that you can't necessarily achieve security decentralization and speed all at the same time. You normally have to sacrifice something to an extent. So basically speed is one of the things that we sacrifice when um protocols are more decentralized and you've got lots and lots of nodes running all over the world. So decentralization is good but it also costs us something right at the level of the chain. And really that's also true at the level of the DAP or in our case a game. So why what is decentralization of a gaming metaverse like Alien Worlds. Well I'm giving some examples there. It can look like for example numerous different companies groups within the environment control different smart contracts.

You might have um a tiered permission structure such that different groups control different levels of permission of those accounts and those features. You might have different frontends being able to read the actions of those smart contracts. So in our case, what that really looks like is we run a gaming front end. So you can come and play Alien Worlds at a URL that my company delivers, but you can also play Alien Worlds, various Alien Worlds gaming features on frontends that the community has developed. And in fact, if you're running a particular strategy, some of those other frontends are better at running those strategies than ours because they're geared towards that particular mode of playing. So those

people who are running those front ends didn't have to come to my company and ask could they do it. they would have if they were using any of our IP, right? Because we own that legally and we can license that. But just to be able to read the blockchain actions, the smart contract actions that make up the game, they don't have to come to us for permission. So there's lots of user interfaces um that are running the same same game. Um if you have tokens on different chains, then you can have decentralized bridging which leads to confidence in the in the fact that that bridging is happening appropriately and that supply is being maintained across all chains.

Um, in our case, you would have different game powers being distributed so that different elements within the game can choose how certain things are going. So the Dows are one of the main places that can control various elements of the game. And why do we want that in adapt? Because you can scale more quickly. We scaled very very rapidly and had my team at that time which I mean it started with three founders and we had five and 10. If we had been the the only productive force behind the project at that time, we never would have scaled at anything like the same extent. But what happened was that community teams were able to come in, build frontends, build other gaming applications that use the

tokens. So scale is one of the key reasons why you want to um build in such a way that decentralization is possible. Um there's also this concept of the assets themselves be potentially being perpetual and of course the smart contracts being perpetual so that even if you know one of the actors within the system stops functioning others can pick up that activity. What are some of the things that go wrong when you're decentralizing a more complex system like a DAP? Well, the key one of course is coordination problems, right? So you have all of these disperate teams adding in various components. They might run a front end.

They might run a block explorer. They might run a service to a particular part of the game. And if they're relying on each other and if one of them falls away, various things can stop working. So coordination problems are a problem in most of these systems. In most apps, tokens are a key part of what's powering the lifeblood of that DAP, right? So inflationary rewards are often being disseminated to various participants. And of course we all know what happens when tokens are part of anything in crypto. Everyone's very excited during a bull run and they just kind of wander off during a bare market, right? So you get these waves of enthusiasm, waves of activity.

This is one of the reasons why, and this was a theme that we've talked about before at the Crypto Valley Conference a lot, which is utility. You know, when people's motivation is primarily speculation, then you get this very pronounced ebbing and flowing of people and activity through the market cycle. But when people are also gaining other things through their participation, like in our case, they're making friends with each other. They're having fun gaming. There's a strong competitive element between the Dows. um they're building things that mean a lot to them that helps to create more longevity and to and to kind of smooth out the peaks and troughs that would otherwise be present because of the market cycle. Another consequence, you could call this sort of

a con like a like a downside of decentralization especially of a DAFF like a complex um a complex feature is that it can't sometimes the user experience is less good right so a a user might have to go to different websites to interact with different components they might find it confusing that there isn't sort of one place to go where that in our case game could be said to be. So, you know, different groups are running different games and of course their assets themselves are sitting inside of an account. There isn't just one place where alien worlds exist. There are numerous Telegram channels. Some of them are owned by Dooko, some of them are not. So, it's

not entirely um sometimes it can be confusing for a new player coming in and they they say, "Well, where's the official channel?" Doooko, my company does run some channels, but I wouldn't even necessarily say that those are necessarily definitive, right? There are large communities within Alien Worlds that run their own Discord channels. They might be just as sort of definitive. So, that can be a confusing element of decentralized applications. Okay, I'm going to skip over this. I'd like to add a little thought here, which is that I've been talking a lot about technology with respect to decentralization. So building the the blockchain components which are capable of being distributed across numerous

participants which is you know capable of being decentralized. But in a DAP which is you know a piece of software that is decentralized but which has many users interacting with it. There are many soft elements that also essentially get distributed. And so this is something that goes beyond just the technology. But I would say the technologies prior to it. So you do have to have the technology being decentralized. But one of the things additionally that's useful to give thought to is what is being decentralized. So it's all very well and good and this is something that comes up in crypto a lot where we sit on panels or we give presentations and we say well you can do this you can do that but five years later how much of it actually was

done right? So you know in theory a DAO could do this it could do that but did constitution DAO actually buy a copy of the constitution right so you still need to think about what is the actual purpose behind what's being built and will the people there be interested in that purpose for a long time and that goes beyond the tokens and the smart contracts. In our case, one of the kind of layers and we think of it as a foundational layer just as foundational actually as a technology is the storytelling because we're a game. We're set in outer space where, you know, different comp different elements of the game are competing against each other.

We have a foundational lore and we did write that lore. In fact, we commissioned quite a well-known sci-fi author called Kevin J. Anderson to write the lore. Uh but that lore was then had to be adopted by the community. So it was put to the community um to to community vote as to whether that would be adopted as canon, right, as sort of official. And now there is an onchain mechanism that allows for the community to propose extensions to the lore and for that to be canonized. And when a community member um successfully um has some lore, you know, approved, they get issued with an NFT that says that that

has become official alien worlds cannon. So here's an example of another element of decentralization to kind of consider when it's something like a complex DAP, which isn't just the technology, but there might be something else kind of the the softer or sort of the the human element that also you need to think about. How is that going to be given to many people so that they have a sense of ownership over it? Uh, one final point. Do I have a second? Yeah. Okay. One little thing to think about.

I wanted to give you this one. No, this one. Okay. So, we talk a lot about decision- making in crypto. The last panel was talking about governance, but of course decision-m is kind of the beginning of the process, isn't it? It's a decision to do something, but whether it actually gets done is more of an operational element. And this is something that blockchain is traditionally quite bad at doing. Thinking about accountability, whether those things happened actually happened is key. One of the ways that we've done it is by building an onchain smart contract that's very used. It's called the worker proposal contract whereby when a DAO approves a piece of work, the funds go into an escrow and are only

claimable when the piece of work is done and there's a voting mechanism that decides whether that work was done. So I do think that there are still onchain ways of resolving this problem but it does need to be given careful thought to especially if decentralization is to actually be a success. If five, six, seven years later, you want to look back and be able to say, "Yes, there was there were lots of things that were produced through the funds that were disseminated from the treasury." In our case, numerous games have been created by these community groups who've received funding through this DAO structure, including over 10 games that have um ended up in the app and play store um and achieved fairly broad distribution uh which I would say to an

extent actually leapfrogs over our initial game which we didn't even get our game into the app and play store because at the time that was prohibited. So yes, I think that's my time. Thank you so much. Decentralization in the real world. Thank you. the