Ameen Soleimani: Moloch DAO – A Simple Yet Unforgiving DAO to Fund Ethereum Development (#297)

Transcript

[Music] this episode of epicenter is brought to you by Microsoft Azure do you have an idea for a blockchain at but are worried about the time and costs it will take to develop the new Azure blockchain dev kit is a free download that brings together the tools you need to get your first app running in less than 30 minutes learn more at aka OMS slash epicenter and by Trello Fitz don't leave your project security audit to just any firm trust a team with decades of experience at the forefront

of blockchain security research go to trail of bits calm to learn more hi welcome to epicenter my name is Sebastian Cujo and I am free to be cast today we're speaking with I mean soleimani Amin is quite well known in the if your community he was an early employee at consensus and then went on to found spank chain which is an adult entertainment industry watching platform and more recently he was the Summoner not to say founder but the Summoner of the Moloch Dow which is a Dow that is aimed at funding the development of aetherium and specifically a theorem 2.0

so yeah Moloch has a really interesting way that it wears like summons itself but also it has really interesting mechanism for signaling ones intention to fund proposal or not and it's heavily influenced on the design of the original Dow the Dow of 2016 and it's a it's attracted some of the most prolific thinkers of the etherium ecosystems who have since become members of the MODOK Dow with the intention of furthering the cause of aetherium 2.0 so we're excited to hear what I mean has to say about this yeah furthering the cause of herein

2.0 is something I think that we should all be thinking about and and trying to further so before we go to our interview with Amin want to mention again that we will be participating in napkin so DEP Khan is on the week of any first 23rd when he first was 23rd and so we'll be participating kavika sunny and myself and we'll be doing a live podcast there and you can get tickets at Keio and we have a 20% discount code and that discount code is epicenter con 2019 it will be in the show notes and as we usually do when we travel to events we will be doing a drinks meet up on the 22nd the venue has yet to be announced but you can sign up

on the meet up on the event bread page and the venue will be announced shortly and it'll probably be close to the venue of that pawn so you can go to epicenter dot rocks slash Berlin meet up to sign up and as soon as we have the venue and time and everything we'll put up there and what you know so yeah come have a drink with us right before the right before the party that night yeah and it's it's definitely worth going so Def Con is part of the Berlin blockchain week so there's tons of other events also taking place such as East Berlin Dow fast the web 3 summit thematic hotel conference so there's lots of things going on and I can't even

begin to mention all the meetups that's a massive week I think it's like the most dense blotching week I've ever seen or at least in Berlin yeah so basically I think so it's not as dense as New York Rock chain week but there is a lot of event so you won't go without an event and it is if you want to check out the schedule it's at blockchain week dot Berlin all right I'm really looking forward to it and hope to see many of you guys there and hopefully grab a drink with you so with that here's an interview with I mean Soleimani hi so we're here with Amin Soleimani he is the CEO of spank chain and also the Summoner of the Moloch town and so today we're speaking

primarily about the mo elect Al and but also his the project that he's built this Bank chain briefly and and also it's time to consensus hi I mean thanks for joining us thanks for having me so yeah let's talk about your background how did you get involved in blockchain space and get to where you are today yeah so this the story starts as many a Bitcoin and blockchain story starts with ordering mushrooms on the Silk Road in college on doing and they're excellent and very mind-opening after that I built a Bitcoin arbitrage bot right after I graduated as the first thing I did when I wouldn't had a code I was making money between two exchanges

made a little bit of money there and then lost everything in math Cox made way more money off of the the price run up than I was making with the arbitrage but ultimately got Cox so I took a hiatus from crypto for about two years until I discovered aetherium and when I discovered a theory of my join consensus and that's sort of where this story begins what did you do at consensus yeah so at consensus I was there state channels expert it's the only one there who's really talking about it or thinking about it at the time and I did

some research there I also worked on the energy project which was a sort of predecessor to a grid plus it was a partnership with RWE were trying to build a new energy market infrastructure I also helped launch add chain which was the first TCR token curated registry just basically as decided I think decrypt media would put a list with equity is the most distinct the description I've seen mm-hmm so you don't content is pretty early on how many is a person where you had contenders do you know yes I joined in the summer of 2016 so I was about 100

okay and you also left a while ago yes I left in the summer of 2017 and after that you started spanking which is an died entertainment ethion business tell us about that well I was sitting around at consensus and a lot of people were proposing very you know ambitious and and forward-thinking use cases that I thought would never work and so I thought well I'm you know where is this stuff gonna happen first who actually cares about decentralization about sovereignty about money and I thought well the adult industry not only do they tend to be on the cutting edge of

innovation but in this specific case for this specific technology where you can you know have access the money that can't be frozen and but like they are the ones who are sort of ostracized by the existing banking systems they are the most motivated to switch to a new financial system and so that's what motivated us to starts Bank chain and so we did an IC o---- we raised about six and a half million dollars in November of 2017 put together a team of engineers and designers we shipped the first payment channel system on aetherium to main net in April of 2018

we have iterated on it since then with connect built a bank card which I think now is is going to be a metaphor for channels as a sort of like fast instant you know payment system that will be used again and again and the ecosystem and then launched a bunch of other things and now we we've also just launched a bank pay which is our b2b payment processors look a bit pay clone but for the adult industry so you know yesterday I'm on the phone with Naughty America CEO trying to pitch him on it so these days I do a lot of sales and stuff like that so essentially you came at the adult

industry from the technological side so like there's this idea that like all old technologies you know first start and blossom and the technology and in the other industry like you know DVDs and the internet and like VR and this sort of thing I believe like I've seen you speak about this like your ambition also was to create a space where people in needle industry could have more sovereignty like not only with their funds but also with like you know removing middlemen and and I think you also had aspirations to stop or at least reduce sex trafficking can you tell us about like how you see that playing out now that spank chain is I believe like

about a year old or some like that yeah I think we've had a healthy narrowing of focus as we've grown as a company where you know we the timing of when we raised our money lent itself to wanting to explore a lot of things in parallel but as we've you know gone as a company we've tried to focus on just like a couple more business use cases in order to drive our initial growth but I think that we will get to the other types of more ambitious use cases over time so for example you know reducing middlemen

like the payment processors in the adult industry charge about 10% on transactions normally that's around 3% so just being able to offer a payment processor that recharge point five percent like that's you know saves 10% on every transaction for businesses in the space and there's no charge backs which are rampant in the adult industry and so for them like they actually need this new payment system and to accept crypto and then further a lot of the payout options so like First Bank dot live for our live camp site we've been doing crypto payouts since day one but a lot of these sites have issues with

their you know bankers to be able to pay out their performers and so the bank will get shut down that they use or they'll get have their accounts closed and that just you know interrupts the payment schedule for any of the models that they're getting paid which is pretty important for them because you know sometimes they're even living like paycheck to paycheck all right and that can be really disruptive and so we're also talking to other sites platforms to help manage them pay out their models to through crypto if they would like as for the sex trafficking stuff I think that's mostly going to be like if there's a solution to that type of problem it'll

be in like decentralized reputation systems I'm thinking carefully about how to roll those out because they also happen to be like if they are effective against sex traffickers they would also be effective against law enforcement for the same reasons because they both try to abduct you while you're doing your job so you mentioned the campsite I believe that's like your primary product at least for the moment I mean in doing research for this episode I like went on the site and had a look at it like it's very nicely designed everything like it looks really cool but there seems to be like very little activity there at most I think I saw like two performers at a time it's mostly it seems mostly empty

you know how do you see that product do you think it's successful or do you think you know there are other things that are other forces at play here that are preventing growth yeah so I don't consider it successful today with only a few performers and we're not really helping that many people right but the the growth trajectory is sort of mapped very closely onto the crypto crisis where because for the last year up until really last week we were offering only crypto payments as an option we were excluding the other 99% of people or

more who don't have crypt and so it also made it so that any sort of marketing we did was less worth it to do than if we could convert the other 99% of people so we have been holding back on marketing but as of last week we've both started to accept fiat payments through one of these you know high-risk adult payment processors that charges us ten percent as well as opening the platform up to international models and so I think we are going to see a lot more growth in the next couple months and we're also starting to pay for marketing directly how is this modern now better in than other adult

entertainment sites seeing that you also have to have that ten percent cut yeah there's a couple things that we can still do to be more competitive I think at the beginning I was a little bit naive and I was like okay we have crypto payments this is going to be a silver bullet and it will solve all our problems and you know user adoption is right around the corner for for crypto like these you know these things ended up taking longer than we would have expected and so as far as the advantages there's a couple things that one is like I said we only we have crypto payouts so you can always get your money when you

want it you're not like on its two-week schedule for the money that you're getting and so that's actually new for basically all models and they value that a lot at the same time we also have ways that we're exploring of subsidizing our users and so with our spanked token and so we're looking at ways of distributing it for like you know three like stream mining so if you're a performer and you are you know you make up 25% of the tips for a given hour we want to give you a 25%

chance at winning some like very simple a thousand bonus bank and you can do this and spread the bank token itself more broadly because it is a utility token because it's not a security one of the competitive edges is that you get a lot more incentive alignment and I think that it's really powerful when you have a platform where the creators on that platform have a stake in the success of the platform and I think that'll be pretty competitive too but ultimately it'll it'll compete on merit right we will have to do many of the things that other campsites do in terms of setting up affiliate programs and we try to

avoid doing that but I think that if you if you're trying to enter a new business where you know less than the other people it would be wise to at least start out by doing what most of them do this episode of epicenter is brought to you by Microsoft and the Azure blockchain workbench getting your block Tang from the whiteboard to production can be a big undertaking and something as simple as connecting your blockchain to IOT devices or existing ERP systems is a project in itself well the folks at Microsoft had you covered you already know about the azure blockchain workbench and how easy it makes bootstrapping your blockchain network pre-configured with all the cloud services you need for your enterprise app their new development kit is the

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blockchain we'd like to thank Microsoft and Azure for their support of epicenter a couple of months ago you started the Modoc Dow which I am sure takes up a lot of your time so how does this Bank chain community feel about this Maalik doesn't actually take up that much of my time people people ask me that because they're like myths italic and German like how do you you know how are you going to juggle this and I'm like so and rolling this back just a second right Maalik took a bunch of time when I was launching it Moloch took time when you know we were writing the code and testing it and deploying it and really organizing the first cohort of you know co-founders to each you know there's 22

people we each put in a hundred ether and the people came from all you know avenues of the etherium community came from maker gnosis consensus you know summer dev summer investors summer evangelists you know connects team is in James Young Cassandra he used to run the ECF help me start it there's there's a bunch of us that that really wanted to see this through and you know chef shepherding that along in the very beginning explaining like how it worked and getting the first couple proposals out that that took a bit of time but then now that Joe and metallic and consensus in the yeah also joined for a

thousand either it takes a lot less time because the pitch is a lot more straightforward it's hey look these guys are in this is clearly a cool thing you should also join where it would have taken more of my time had they not joined to be able to accomplish the same types of things I can leverage you know their money essentially to do it so I think that Moloch is actually helpful for spank chain because it shows the you know not only the that we can ship something that you know how can really coordinate a lot of financial value but

also that we are part of this community is I don't want to say a theorem leadership but you know some of the most respected people in the etherium community are the ones who are in it and that has earned us some recognition from people in the adult industry who are now more willing to work with us because they recognize our status in that community now that's interesting that it works that way around as well and so maybe let's back up here a second so what is the Modoc Dow and what what made you and your co-founders actually launch it yes is Maalik dollars of grants making organization it is aimed at trying to

solve at least some of the tragedy of the Commons around funding public goods in etherium so it is a smart contract it is way for people to to deposit their ether and then they get votes proportional to how much ether they brought in you have to get voted in by the existing members but once you're in you can then also vote on other proposals which can be either other new members or grants and if at any point you don't like how the grant funding is going or who is being admitted how the votes are going you can take whatever ether you have left in the guild bank and ragequit which means you just exit

with your proportional share of all your remaining money so there's a couple of grant programs actually around and they were around at the time that that the mod octa was launched so things like the human Community Fund or the e theorem Foundation grant program and how do you see those and why did you see still see the need for the Modoc tau so Moloch is faster the voting period is seven days so if you submit a proposal you'll get your response within seven days that might not be enough time for everybody to do a great amount of due diligence but it does put this sort of baseline floor on you know the the responsiveness

of of that grant-making organization which i think is really powerful because especially for sort of unexpected needs or you know the grants that might have otherwise taken a long time to do through either consensus or the EF it can be really helpful right ultimately you know we we have the sort of aetherium meta organization right and like there's a feedback loop and the feedback loop is how fast can we identify a need find the person to do it and secure funding for them to do it and we from talking to a theorem 2.0 people for you know about a test runner that would run amongst all of the different

clients and give them a way to standardize their tests so that they can make sure that they're all synchronized properly and we you know I tweeted about it we found the guy and then we submitted the proposal in three days and so we had our answer in in ten days and I think that was like the fastest feedback cycle I'd ever seen for a grants organization in my entire life so that was pretty cool the EF obviously has about a hundred times more money so we're not really competing with them in any sort of sense I'm not trying to compete with them in any sense half of molix money is their money anyway not a half it's about a thousand of the ethers is their money but I think it's also

helpful to have alternatives and especially helpful to have cross-organizational alternatives where the people who actually make up the decision making for Moloch Moloch represents a new way of bringing their knowledge together right so there's some people at consensus or just some you know individuals within the community who are in Moloch but aren't in the EF that might have something to contribute to that process and within Moloch they can all do this together interesting did this project come out of sort of maybe a frustration that you saw and things not moving along as fast as

you would like could you talk about the motivation behind this I believe there was a report that was written by yourself and another organization where you guys pointed out some of those issues I have gotten a grant from the EF before and it was an arduous process so anything that allows that process to move faster is great in my eyes I care a lot about aetherium working and aetherium working depends on our speed of execution and so being able to accelerate generally how fast we can you know execute on projects is a benefit for everybody in the ecosystem so one of the sort of easiest things for etherium

community members to rally around is ET 2.0 and that was the original sort of mandate for Maalik was to try to accelerate a 2.0 and so we started doing that by putting out reports adding specs and so the first report that we put out was called the state of eath 2.0 and we just you know I realized one day that I didn't know really what was going on at all if somebody had asked me how is these 2.0 what are they doing my answer would have been I don't know I think they're still working on it right this was like before the any spec freezes before any of that so we I organized interviews with all of the e 2.0 client

team leads as well as Danny Ryan the researcher from the foundation and we chatted for about an hour and we had a bunch of questions and we asked them where they're at who's on their team stuff like that and we compiled it all into a report and try to identify you know what are the what are the most important challenges that this effort is going to be facing in the upcoming months and years and we published that it was primarily authored by Matt slipper who is the CTO of Kaioken they've done great work in the space minimus Yunis WAP also thank hard on the payment channels for spank Shane and so big you know have been helping part-time since that report also in helping with a sort of ona muck

we put them on like retainer if the doubt can have somebody on retainer I don't really know but we keep paying them every month and so they have that has been spending some of his time helping eats you effort they've he wrote the first draft of the networking spec which moved things forward but then he realized that lit p2p was a sort of critical dependency that hadn't really been thought through all the way and so we actually yesterday just published a report about the p2p how the client teams are using it how they're able to interact with the PDB team in order to get the changes that they need included because it's sort of become this bottleneck for the the networking layer

and we're trying to move past that how exactly does it that will put someone on retainer that's a great question I don't know we just have an implicit agreement where I keep submitting proposals every month and people keep voting yes and so they keep getting paid and you know world moves on I will come back to to the the governance and and the and and sort of e 2.0 and in the state of each of aetherium more generally a little bit later on the episode but first like I spent some time and Moloch can you explain how it works at a basic level Moloch has two contracts there's the sort of governance contract and then there's a Gil tank and so when I want to

join I have to get an existing member who has shares if you have at least one share you remember I forget that member to submit a proposal and so when you submit a proposal you there's a couple fields that are important one is the amount of tribute that I'm willing to offer in ether and the other is the number of shares that I'm requesting and the number of shares that I'm requesting will if the proposal passes be newly minted and so the only difference between a grant proposal the membership proposal in Moloch is you set the tribute to zero if it's a grant if it's if I'm working for the the Dow then I am not putting up money but if

I'm joining as a member and then I'm coming in capital then I offer tribute and I I put up money and so when it in the Grant's case if after a seven day voting period where there is no quorum the people just vote it could pass with one vote has in the past actually so after the seven day voting period there's a seven-day grace period where anybody who doesn't like how a vote went can leave by calling the ragequit function yes that is a technical term and then they withdraw with the remaining ether are not on the hook for

for the grant but if if at the end of the grace period you know the grant requested 10 shares there are a hundred shares total in the Dow then those ten shares will be newly minted and so whoever was the recipient of that grant will now have ten over a hundred and ten shares and this presents a way for you know grants to sort of automatically be proportionally paid by diluting all of the existing members this is a sort of very simplified accounting system and that kind of is what you would expect right we say we're putting our money in this together you get votes proportional to the money and we all spend our money

equally based on how much we've put in for every time we want to make a grant okay so it just made me rephrase that as there are two types of proposals that you can make to the organization one is I have capital and I want to contribute capital in this grant pool and so therefore I make a proposal to become a member of moloch and I believe there's sort of a there's a referral system where you have to be referred by someone oh yeah there's within the dal essentially an anti-spam mechanism because we don't want anybody to just be able to submit proposals so you have to have an existing member submit a proposal for

you to join okay so to become a member I have to propose to the other shareholders that I want to become a member so that's sort of a governor's proposal get that gets voted on and I can do that by submitting a proposal with the amount of capital that I'm willing to hella Kate or I can make a proposal to receive grant funding so let's say I have a great idea and I want to build something that like for 18 people I know for instance well he'll make a proposal write it out I presume posted on a TFS and say hey like who's willing to fund this and well those who funded or those who vote yes and if you don't want to find that you can ragequit within the grace period and just receive

your your shares back correct or yeah Moloch is a all about collective sacrifice right it's a named after that Conan I got a child sacrifice if you want to join Moloch you have to be willing to plead with us you can plead with us by giving us your money or you can do some work that's how it works let's talk about security you know the apps are pretty unique because unlike other types of software they can hold astronomical amounts of value that's why getting systems audited creating robust security processes and fostering a culture of security in your organization is so important and to do this you should only trust experts with real security expertise there are a lot of

security firms in the blockchain space but few have the experience and track record of trail fits and they've been in business since 2012 long before things like the Dow hack were even imaginable trail of bits works with your team to audit every aspect of your project and smart contract code is just the beginning they'll help you implement best practices around things like DevOps key storage and user facing applications and once your software has been rigorously tested and reviewed by trail of bits they'll provide the tools you need to make sure that your code remains safe over every new commit they can even put a software security expert at your team's disposal will give you advice and answer your questions when you need them it's like having your own security engineer on staff but don't take my word for it go to their publications repo on

github to read their papers presentations and security reviews it's no wonder teams like parody status new cipher and organizations like Facebook and DARPA trust trillo bits for those security audits to learn more go to trail viscom and if you decide to reach out make sure you let them know you heard about them on epicenter we'd like to thank trail of bits for their support how much of moloch is influenced by other dows like for example the Dow or D X Dow or even you know I would say like cosmos is some like some sort of Dow since it has governance as well how much how much of the work is influenced by previous projects yeah it is heavily influenced by the Dow the Dow kept me up

at night because well the Dow for me was my first week at consensus so it's really fun watching everyone sort of initially not know what was going on and then lose their and there's like a whole bunch of uncertainty ever get a soft fork oh wait no that's a terrible idea we could get spammed are we gonna hard work okay we're gonna hard fork okay like what does this mean is it immutable who knows like this is the next essential crisis right 10% of all the eath was was at stake there so I didn't really want that to happen and so I spent a lot of time trying to make sure that that wouldn't happen for for Maalik but the simplicity of the design is heavily informed by the Dow so Moloch is only 400 lines of code

it doesn't do anything except for what we've talked about it just you know lastly to pull money vote and leave that's it and it was designed to allow you to leave the excellent posts on called the moratorium a call for a moratorium on the Dow by 'man goons Sarah who is a noted professor at Cornell along I think it's like Vlad and Dino so they wrote this post actually before the Dow hack just about all the game theoretical problems with the Dow and so even if it hadn't gotten hacked it would have been broken in all sorts of ways what one of the attack vectors was called the stalking attack so if you

wanted to leave the Dow you actually had to create a try ow the problem was anyone else in the doubt could join your child doubt and so if you wanted to try and leave that child Dow you'd have to make another child out and they could follow you forever and that's exactly what happened I was attacked when people tried to to leave um so one of their it's essentially two recommendations that they made at the bottom of of that post and the first one was incident withdrawals um and the second one was post about grace periods and I just took that as sort of my design outline and then that's how we got to Moloch the the combination of the two is very powerful if you have instant

withdrawals without the post filled grace period you can leave but you can only ever leave before you know how a boat is going to go but if you if you make it so that there's a grace period between when the vote on a proposal is final and when the execution of that vote essentially the printing of the shares and the diluting of all members then you you give all the members who don't like how that you know vote went a chance to leave before it is it is executed and we have to add like you know a small amount of nuance around that because you know just trying to get this this sort of ragequit functionality and came with its own little edge cases so one of those edge cases was well what if I vote YES

on something and then I leave and then everybody else is now on the hook for paying for that thing that I wanted right and so we actually the only circumstance where you cannot leave is if you have voted YES on something that has yet to be processed that it is either in the voting or grace period so you have to be a little bit careful on not voting you know on something that you might want to leave after on you know because of some other proposal and the other thing is that the if I vote YES on a proposal that is for example requesting 1% of the Guild's money then let's say 99 percent of the other

members leave and let's say it's even not related to that this is a proposal but another proposal which just happened to be before it right well now I'm on the hook for a hundred times more money than I thought I would trying to be giving to this because if there's like a hundred shares its requesting one new share 99% of the other people leave I'm the only share now I'm about to dilute my self 50 percent because I'm gonna create one share from one chair and I'm going to pay for a lot more money than I thought I was going to it's unbounded risk right and so we have to introduce a little mechanism just for that so that if more than 2/3 of the

people leave between when a proposal gets voted on and when it is processed at the end of the grace period it just automatically fails and then you know you could try it again if you want it ok I see so basically say I have submitted a proposal and it was passed for a you know a payout for grant for building eath 2.0 unit whatever so I'm issued shares and do I then how do I actually retrieve the money so I effect if they have to rage quit in order to actually get the ether back out right the shares that I've been issued for for nothing for doing this work yes that's correct you it has to rage quit the share so you have the option you you can either keep the voting power if you don't

immediately need the money or if you want the money or you don't want to hold it in ether then you have to to exit so long as you keep at least one share all right which is we started out with just just one share run eath so you keep at least one share you will be you know allowed to stay in the discord channel you'll be considered a member you'll be allowed to submit future proposals for either other members or more grants for yourself or others and do you have any kind of mechanism that this payout is contingent on so basically typically if I apply for grant there's some kind of payment schedule or there's some sort of milestone that I

need to reach before payout is this the case for the more octa no um the idea is because the system's fast we would just probably split it up on like a month month basis and then just do separate proposals every month you can do a sort of ad hoc right like if I'm if it's a larger proposal you want to have somebody manage it we could find somebody who's trusted within the Dow to act as a manager give dispersed students every month and like if they decide you know that we don't want to continue this just give the rest of the money back to the doubt we haven't done this yet so far we haven't given out to like you know there's only about a little over a

million dollars in the Dow right now so I haven't given out I think the largest one was like twenty thousand dollars for a mixer UI on top of the Argan hopper smart contracts and so these have all been in the range of like one to two months right and I think the the reputational risk for anybody involved is is also quite high if you want to go and you know fail the Moloch Dow you're you're failing quite a lot of the most important people in the space so do so at your own risk okay I bad that in mind okay can I delegate my vote for someone else in the

Dow uh you so you can't delegate your vote to another member in the sense that like I can't fool votes that would have been a really helpful feature from a UX perspective um if we'd allowed that we built a mini permission system so that you can essentially have two addresses you have address that controls your ability to leave with the money like they can call the ragequit function and then another address which acts as your delegate key but two members cannot give you know another member like to act as their delegates also you have to have separate delegate keys and this was annoying because when like for example the EF wanted to join it would have been really easy if they could just join with

a thousand either and then say okay this address has 100 shares this address is 100 shares this addresses hunger trace but instead they had to join ten times from ten separate accounts which each controlled 100 shares I then delegate those addresses to the voting to the universe of the member within the EF that wanted to vote so those were ten different proposals to have the EF join but now yeah our lack of foresight there cause an EF ops guy to spend an afternoon making 31 transactions which you know it's not the end of the world but it would have been better to be able to appoint it there's

there's a lot of things now that are really obvious that could be improved about the dow and i think it's i think it's great that we've been able to identify those because we sort of you know we tried to do our best but ultimately our focus was shipping it this is a side project of you know a couple of us that had other full-time jobs is our jun wrote the white paper at me and the connects team we did a lot of solidity extender is helping to sign the game theory like had we spent too much time on this and tried to figure everything out upfront like it might not have shipped for another several months writing solidity is easy shipping

solidity is not easy and so you end up designing the entire process just to optimize for how easy will this be to understand and get audited and how confident am i that you know the tests are are thorough and every single thing that you add on especially if it interacts with any other thing increases that complexity and makes it much harder to ship something and the fact that we're having this conversation at all to me means that you know i've already won in terms of signing a thing that works well enough that it got attention and and can now be iterated on and so you know you foresee then a ragequit and any point soon like everybody rage quits and

then there's like a new one that comes out and with all these added features there's no upgrade mechanism right so people that kept asking me like how do we upgrade i'm like here's how we upgrade we all leave and then we make another contract and i'll join that right and i do I think that maybe in six months to a year we'll do it it's it's not pressing because nobody has abused the system yet for example it would be you you have to spend ten either two as a deposit when you want to submit a proposal and you get that back in two weeks period after the voting grace period are done but if you really want it to spend the dough it

you know cost you there can be there's five new proposals per day so the maximum throughput is thirty five proposals per week so you'd have to put down temperature so you'd have to put down seven hundred ether to occupy the entire proposal throughput during the voting and grace period 35 and 35 so 70 and then times ten for pause it's a seven hundred ether and this it's not that expensive if you really think about it and what would happen is somebody does this some member defects right and then well it becomes a more pressing issue to figure out how do we design a better anti-spam mechanism and the one that came to mind that wasn't obvious at

the time was well you can non linearly increase the cost of the the proposal deposit costs just on the person who is submitting so for example if I'm the only one spamming right then my proposal deposit cost should go up with every other proposal that I've already submitted so it starts at 10 then it goes to 11 12 13 14 right and then it becomes a lot more expensive for me and only me to submit proposals but everybody else is fine right not like these kinds of mechanisms would have been harder to explain at the beginning at the outset right have to go and say hey well this is what we think and they're like why would you do it that way right and there's the whole other conversation which makes the

getting people in the door you know a little less socially scalable but you know if somebody's fans it then it's really easy conversation hat which is like hey look this happened here's how we're gonna fix it moving on right also having the ability to forcibly remove members um not take their money but just kick them out would also be nice if you know we feel members compromising and standing all the time and we would prefer to instead of moving to the contract just kick them out yeah there's all really great points yeah totally agree that it's it's preferable to ship early and often and if necessary iterate over what you're offering

maybe maybe let's talk a little bit of the funding and the influence of the Dow so how many people are currently members or how many entities are members of the Dow I'm looking at the website it says 65 it's a little hard to tell who's who so 10 of those or consensus people 10 of those are ethereal aetherium foundation people about you know what one of those is vitalik with a thousand eath one of those is Joe the the original 22 co-founders that they're largely individuals spanked chained joined with five people each with 100 ether as well so so probably yeah around 60 members

total so Vitalik the etherium foundation consensus and Joe have can vote for a thousand shares each right so they put in the thousand ethers consensus and the ef-s are split between ten people so there's 10 people who each at 100 shares that is like two-thirds of the total pool right yeah mm-hmm do you think there's a problem with this voting power distribution so the great thing about how this works is that if it was ever perceived as a problem everyone else could leave so even if they're sitting there you know

the way the game theory of of the doubt works out is you don't want to vote in ways that incentivize other people to quit because then you're just back to funding things by yourself right so you know this is Joan Vitalik to date have not voted at all some people within consensus in the EF have voted so so let's say I felt like being exploiting the votes that spank chain has right we have I have personally a hundred votes and then I have spank chain has 500 votes so I see this a theorem 2.0 lodestar proposal here has five hundred yes votes right now right so I could go and swing that whole thing inside that

you know what this eats 2.0 team does not deserve a grant for Maalik now do I want to do that right and so if I did that I might you know piss off those 510 shareholders worth of capital and and maybe they no longer are interested in participating and and that would be sort of self-destructive right and so so maybe I don't want to do that at all on the other hand there is another series of votes for another because also they will also lose the funds if you were to vote no on this right well the they wouldn't lose any funds it's just that the team that was trying to get the grant wouldn't get the

grant right okay right there's no penalty for proposals like no don't get past no no no okay there's there's no penalty you get the deposit back at the end of the two weeks you get the ten a third back so that's why you know if you the cost of spamming the thing is seven hundred that you lock up for two weeks essentially and so there's another series of notes on yang Dao right which is much smaller it's it's ten times less money than what the load started to team is asking for thirty five hundred instead of like thirty thousand and it's something that I think is really important but so far many people have voted against and it's kind of consumption so like the votes are split here there's four

different proposals so we did it in four parts and so one is like it's funny because some of them are passing one is like 625 to 600 and other ones 425 to 600 and other ones 525 to 500 but I you know I could also make all of these tasks and so maybe what I'll do is I'll make all those pass and then I just won't interrupt the other though and that's the sort of compromise right it's it's not even a compromise I had to talk to anybody about it's a sort of compromise based on like the implicit game theory of the situation which is that the other members don't want me to leave so they might not vote in you know if we all have our own little like pet

project that we want to get funded through this it could happen through a series of compromises now I think that yang Dao is is critically important and having a grant from Moloch would signal boost and and you know add some legitimacy to the project I think it's an entire category of new use case where we are collectively funding marketing operations for a u.s. presidential candidate I think that could attract a lot of attention I think it could inspire other clones for other u.s. presidential candidates and I think like that's the kind of level that we as a community want to be operating right

it's sort of not enough to always be looking inside and and trying to think about you know research and tools and and scalability if nobody is using it and so I think the point is to bring aetherium to these other communities and if we're failing to do that and we're definitely not getting anywhere let's talk about the yang Tao in a second because this is actually truly fascinating but is it fair to summarize your entire stances as saying the monarch Tao works because we have an off chain reputation system within the etherium community and people know who I am and I know who the other people are and I know what what that hour interests in am getting etherium 2.0 off

the ground aligned yeah that's like pretty accurate you know it is a permission system after all right you have to know who who the other people are in order to get in there have been some people who have I have actually proposed that they join and I there's there's a couple people who I don't even know who they are and I proposed them anyway and the reason is they were able to prove to me that they have a Genesis you know wallet uh and I was like you know what fine that's good enough mmm-hmm so so basically the the system in and off itself is not something that's game theoretically locked in so basically you actually have to rely on

outside things so for instance I mean what what some other tower projects have tried to do is to build this fail-safe system so for instance what what can in principle happen with the Modoc towers you can actually turn a vote at the very last block right so basically you could actually submit your your 600 votes and at the very last block of the vote star voting period and you could still turn it and then no one else would actually have the chance to actually turn it back because no one would have known that so basically I mean what some sub projects actually actually have is for instance this quiet ending period where if the vote flips then you know the the voting period gets extended by a certain amount

of hours or days and in itself it's not a system that works in a vacuum yeah I think that the flippin the quiet period or you know whatever that is is a good feature I would have preferred it to be in this as well I think that so I talked to Martin Koppelman about about a stack a couple times how they had designed it and we basically came to the conclusion that they kind of wish they had a grace period and I kind of wish I had the vote flipping thing because right now people are incentivized in Moloch to vote at the fair

Yeah right there's there's like a day left on these proposals maybe you know I'm just gonna wait until the last like couple hours and then I'll start voting because then that gives less of the time for everybody else to organize around it like if I flip the vote and then it would keep going for a little bit longer and give other people a heads up at the same time the fact that there's this grace period means that I can't bully anybody into staying and paying for anything that they don't want which is also really helpful even if you know the boat flips because if you didn't have that grace period you would have to decide whether or not to leave based on you know like like you could leave because you think about is going to pass

and then it could get flipped right on the last block and so that that's sort of also kind of annoying right um not the point is it's like I'm not I'm not going to be like as game theoretically exploitative as I can be because that would in you know potentially backfire in incentivizing the other members to quit right and like if I do that then I'm back to funding everything just from spank chain itself which is where I started so I don't want to sue that that makes sense and I think it's it's a it's a great approach in that it actually did I mean I think this this this can't be stressed enough this is actually project that did get traction and that attracted

a lot of important community members to contribute their own money and with a common goal of furthering the cause of e theorem 2.0 so um so looking at the the proposals so there's there's 85 proposals in total and about 65 members I think so I guess a lot of those proposals are proposals to add new members and then of the rest quite a few of the ones that are pending at the moment or in the voting period are for this yang Tao will talk about the yang Tao in a second but can you talk about we've aside from the yang Tao proposals which how many of the proposals are actually about advancing east 2.0 and I guess my question is like has anything

come out of this that's actually usable and that is being used towards building a 2.0 yes so there's the first one was there state of each 2.0 report then we were funding Matt slipper just part-time contributing we did the first draft the networking spec we brought Anton to mace now the CTO of white block on to build a e 2.0 test runner that many of the clients were using and can integrate into their workflows we rack yeah and so then we we just published those a few report and now we're sort of in the RFP process for doing a validator client that can plug into any underlying node and have a GUI that shows you know

performance earnings and and stuff like that for a if to validator client that is you know trying to calculate their earnings as they go I would guess like around six years seventy percent of the grants actually have gone to east to stuff this is skewed slightly by the $20,000 recent grant for block X to build a web UI for the mixer because there's a mobile app that had a mixer integrated and so we were like well we can increase the end and a MIDI set and bring this to more users if we build a web UI as well it interfaces with the same contracts so the the mandate is

evolving right and we always knew it would in the sense that like we knew that you get a bunch of these people together and we're gonna have ideas of other essential things that we might want to fund above and beyond just you know e 2.0 and some of those things have also not gotten funded you know some of those proposals have failed there was a 2.0 block Explorer I think it was block squid and that was rejected and some of the membership proposals failed I tried to reach out and personally recruit somebody from the etherium community I'd never met because I liked his blog post name was Peter Pan and the other members felt that he didn't shouldn't be let in he his mistake was that he only didn't

have very much money and at the time the members were trying to people who would join with less than a hundred shares because they thought it would increase the coordination overhead which you know seemed like a valid concern at the time but then they rejected him and well that's how the meta cartel Dow was actually born so I called him up and I said hey I was with 6th and rose ok let's let's make another gap you know screw it let's do it again and he's like two steps ahead of you I've actually already gotten all the medic cartel people like we're all excited about building UX focused Dow for building tools for the application

there because the meta cartel started with meta transactions which is a way to use real Ayres and for transactions so you don't have to pay for the gas you can even abstract the you know unit of account that you pay for your gas you can pay for it we can die and so forth and you just like sign the transaction and uses a smart contract wallet and not enough right that's all great and and then it's it's evolving into funding both other tools of that kind and to make DAP development easier and some apps themselves and now the meta cartel I think has a couple hundred ether maybe like between a hundred and two hundred thousand dollars and it's like 750 there's something yet so they are trying

to decide what what their first grants should be and so this shows a way that this can scale and it's using the exact same contracts when I when we say I'm going to call it a fork of moloch it's really just a redeploy and yeah it has a different set of members who are pooling their funds and advancing the cause that they are you know passionate about um and so one of the proposals for yang Tao is actually to I've had Peter Pan he's a surprisingly good dau coordinator to help PM a lot of the young house stuff and I thought that maybe mala could reward him for that and so now I would have like cows spawning other dowels so let's spend a little bit of time in this

young dough idea so what is the yang Tao and why is it becoming a proposal within Moloch why wouldn't they just spin an office as their own thing and yeah as a fork of the Moloch yeah well it I mean it's also the same contract right so meta cartel Moloch yang Dow there's even a you know earlier stages there's a lobby Dow now but we'll come back to that so it it could have you know I could have funded out of pocket wouldn't have been as interesting I think I think it it's you know people are watching Moloch now right has has some attention it's it's not quite you know that yes but when

when molecules give us a grant it's you know axes axis signal within the community also I'm sort of using Moloch to just accumulate talented people that I want to work with and that I want to be able to have access to if we have stuff that needs to get done and so the people who are you know proposed to be getting money for yang Dow are one of the designers who made a site which is a you know the art for the the yang gorg site so you can if you want to join the yang doubt you can pre-register it's possible we actually have to give some background at this point so forever it's not based in the US so Andrew yang is one of the Democratic presidential

candidates for the next election his main talking point is the unconditional basic income as far as I know he's been gaining a lot of traction and I think one more thing we should say about us campaign financing is that there are very strict laws about this right so basically you can only contribute a certain amount towards any any given candidate and and you also have have to be a resident or a national of the US I'm not quite sure maybe you can talk about this I mean if the contributions are going to the candidate but if the contributions are going to marketing around the candidate but the candidate is not explicitly not coordinating with

which is the sort of rules that cover in super pacs then you have i think a little bit more leeway i didn't actually expect the Maalik doubt code to be used in this way I was just talking to somebody who was close to the campaign and they were like yeah we're raising money I was like how does that work I was like you know they explained and that I was like well you know we built this interesting grants system that you might be interested in to use it and it turns out that it Maps really well onto that use case because normally when you donate money to politicians campaign or like a super PAC right you just give them the money and then you hope that they do they spend it well right in this case you actually get the option to not only

vote on it but also leave with your money if you don't like how they're spending it so has some advantages in that regard yeah so so with the end yo one of the other things that we're building is James Young who was one of the he was a BP engineering beng Shane for a while moved on he's been building the abridged wallet and so we it's like a really nice bridge between web 2 and web 3 where you can sort of counterfactually instantiate is you know basically without having to send any transactions until you have money in this contract and the contract gets deployed to kind of have the notes of safe works you you get this wallet and this wallet can have any number of your

keys plug into it so it's not like an EM event multi-sig but it's also a you know it's much safer if you already have one or two wallets to just plug your existing waltz into a contract and authorize them as spenders of the money or as people who can execute transactions through that then you know needing to make a new wallet and the right data C phrase and dot it up and and so word the yang-da when it launches in like about a week it'll be the first app that uses that and so we're paying for the the developers there and the designers there and for the coordinators who are sort of managing and this is very well something that could hit the mainstream media if it becomes

successful right so I mean people people will talk about this so is your ambition in promoting this to a large part a PR exercise or is it's essentially the idealism that fuels it PR for idealism is never bad right like if you have ideals and they get more attention that's that's a benefit I mean it's because we have maybe for the first time a presidential Democratic candidate that is crypto friendly right and so if we can help support them with our crypto then maybe we'll you know change the narrative truck Trump has already started tweeting

about Bitcoin I expect crypto to be at least if not you know the topic a topic during this you know nomination process and I think that being able to have our voice in this process would be really important and if that blows up then great people will look at aetherium and say hey like this can actually be used for stuff that maybe isn't even around finance right this is just purely a social coordination mechanism and if that and you know brings more activity onto the etherium network then I think that's a win I I think that would be super interesting to see and I'm I'm personally rooting for the angle yeah it's very interesting like design and I

think your approach to building it has been I see this kind of like a lean product approach where you know you just build the features that you need and and then you know if if you need to implement new features and then everybody just exit and there's like a new a new Dow and I think like that's a really good way to try to bootstrap this thing like the whole weight you lose chapters is very interesting it's a it's a new type of development practice it's called meme drip and development MDG meme is good enough will do it that's the point right so moving now to so a future of the ecosystem and your your views on the use

and we've talked about this a little bit but I'm curious to get your thoughts on you know where you see the future of aetherium going and if you could you know share your thoughts on you know the foundation more generally yeah I think the theorems gonna do well I mean I think if 2.0 will ship a lot of talented people working on it so it's a hard problem but I think they've solved a lot of the research problems and moved on to engineering I think I think it's going to be a heroic effort that's required because you have to like build all the tools again to adapt to this new Charlotte future I think the the community will we'll get there it's like one of those things where you

know you're anxious about it but at the same time you're you're pretty sure you it's like you're gonna win you know the in in terms of like EF I'm really impressed they've stepped up a lot increased their transparency they shift the new website you know people have opinions about it I kind of like it to be honest but they have committed to spending you know thirty million dollars over the next year as an organization they see more willing to you know let go people if if needed which i think is healthy so we had a case of that and and also there but by participating in stuff like Moloch they

are decentralizing themselves right so they are planning to be obsolete at some point right they don't want to go obsolete too soon because the ecosystem needs that their support but they also don't want to go obsolete too late where they stick around for you know longer than they're needed and so they're playing a delicate balance game and they're also trying to support other you know decision makers and community members who can potentially complement them in in coordinating the resource allocation which i think is pretty cool so one question that I often ask people who are deep in the theory system and is

with regards to so the the road map and how long it's expected to take to to deploy a theorem Cupido so you know like how long do you think this will take look one you think that if you're in people will ship if you have any indication there or any ideas and and secondly do you think that you know introduction of other blotching systems that you know have a lot of the features that aetherium people in Orr is wanting to have like you know things like cosmos and polka dot which is coming soon do you think that the fact that these chains are ready or near ready can harm Ethier ecosystem and take away some of

the talent and mindshare and just like generally like the the projects that were there looking to build non-blocking systems yeah I think they'll develop communities I don't think competition is necessarily a bad thing I think it you know inspires you to push yourself to new heights it going back to roadmap question for a sec though uh q1 2020 is like the planned you know beacon chain release date so if a zero of sharding which is just the backbone the data layer should be made available by the end of 2020

so maybe q4 or q1 the next year and then I think the interoperability between shards and adding smart contracting to the shards will come you know something like a year after that it could be faster depending on how well teams transition between implementing a spec and like the sort of other engineering challenges that go into building a client additional coordination on the engineering side I think would probably be welcome because the most of the coordination that's going on is happening at the research level like here is the spec build the spec did you build the spec yes okay good okay what

about all the rest of the work that goes into building client that is not just this lot well you know but you know the teams are sort of on their own to manage that part and I think that maybe there's there's room to be better there um cosmos and polka dot are you know that they are not in and of them smart contract platforms right but I can connect them to other chain space chains right and so they're actually glorified layer twos in in my mind right because they don't really exist without layer once so will they get traction you know probably will it you know people people might launch experiments on them in the

mean time but ultimately like I have a choice when you know I'm building something for my users and it's like you know I can plug into this one ecosystem where I have all these other developers that built out a bunch of stuff that I don't even realized I needed yet or you know I can be a pioneer but that's gonna be like aetherium five years ago right not a whole lot of the tooling is built they haven't really figured out what what it's supposed to be used for stuff like that and so I expect maybe it'll drain some of the value from etherium in the short term over the next few years well there's uncertainty around the

etherium roadmap execution but i think at the end of that right when it's when there's no longer uncertainty about the etherium roadmap execution all of that value and more is going to come back to aetherium and theorem will continue to dominate that's my bet I yeah could be wrong there's a lot of people who have you know and said you know I'm sort of incentivized to to play this way but like I'm also you know there's the thing we're like your holdings reflect your beliefs and then your beliefs reflect your holding in a sort of cyclical way right so I'm sure that's it that's at play here too and there's lots of Cosmos and polka dot bag holders but which

would tell me otherwise and they'd say oh but you need governance like how are you gonna get anything done if you don't have a governance structure it's like well you know what I don't actually really like the governance structure can make protocol updates or determine it for example and polka dot like who gets the Lisa pair chain because I also run a adult-oriented company and historically uh you know adult companies have had issues with banking with that they are on the other side of consensus if you will like that means that if I'm operating a pair of chain or on a pair chain then I always have to wonder like will the dock holders decide that you know they no longer want my

community on their chain which they could do because you know that they're about to bring in some banking partners are really excited about it and then they decide you know it do we really need these this you know the sex worker community and every single time that question has been asked in that way the answer is No so aetherium gives me a lot of benefits because for people to remove something like spank chain you'd literally have to get everybody to update their full notes at the same time and do it via heart fork and and like people I think really underestimate the power of that kind of decentralization cuz like the reason I'm building on a theorem not like the

Twitter API is so that I can't get shut down right if you can shut me down via kind of coin vote like I'm not as interested in building on your chain you know and and I think that the most value in the world is you know held in like central banking reserves and so when they decide who wants to like what they want to build on they will want to build on something neutral and so I don't see you know platforms that have captured all governance being useful for them to build for example settlement layers between central banks on which is like

sort of the ultimate bull you know case for any sort of crypto settlement layer to begin with perfect thank you I mean I think those were fantastic closing words thank you thank you so much for being on the show we're excited to see what the future of my knocked-out brings great thanks for having me add fun and where can people learn more about Moloch and perhaps even you know how do people become a member of like someone wants to make a proposal to become for example yeah so to make a Molotov proposal to join you can't write you have to you have to find somebody who's in in DME I'm I mean soul on Twitter Moloch DICOM we're about to set up a

forum for Moloch now so that you can you can post a sort of like hey I'd like to join here's me hosts there and then yang Dao is yang gorg you can pre-register for the launch there's also a medic our child out check it out if you're into adapts and UX and you know as as always there is smoke change calm and spanked live which are our you know adult friendly platforms okay thanks for joining us I mean yep choose we release new episodes of epicenter every week click here to subscribe for hundreds of insightful interviews with some of the leading minds in blockchain and crypto you can also listen to the audio version of the podcast on iTunes Spotify

stitcher and other podcast apps click here for a full list of places where you can listen thanks for watching at the center and we hope you'll join us for our next episode