building a d/combinator

Transcript

Okay cool. Okay. Hi, everybody. Um I'm Ela and I'm here to tell you about D Combinator, which is what we're building at Zuzalu and Um so, D Combinator very briefly, it's a permanent accelerator and a builder hub for the DEAC ecosystem. Um who here has heard about DEAC? Great. At least half of you. Awesome. Um and it's a hub that is anchored in Switzerland, but uh we aim to build a network of hubs and uh expand this to as many places as possible.

Um but first off, just talking a little bit about why we're building this and why right now. So, right now we're in the critical decade, also the the critical century for humanity, quite possibly. Um AI is accelerating in a way where if we don't act now, it may be too late. Vitalik has talked about this extensively in his DEAC essays. Uh one quote that I like particularly is this one, "The 21st century may well be the pivotal century for humanity. Do we fall into one of a number of traps from which we cannot escape, or do we find a way toward a future where we retain freedom and agency?"

And that's what Zuzalu is ultimately all about. It's about accelerating frontier tech in a way that we retain our freedom and agency and that we thrive as human beings. >> [snorts] >> What is happening in this decade in this century that matters so much and why do we need to act to to shift it? So, the first shift is technological. AI is challenging all of our existing systems. The systems are not changing fast enough and the people in them even less [laughter] so. >> [gasps] >> Then we have geopolitical issues. The democracies that we've come to rely on that are stable are being challenged by AI and by the shifts in technology and by all sorts of

other things. The rules-based order is no longer. But, you know, smart contracts, long live the rules-based order. >> [laughter] >> So, and then the third shift that we're seeing is institutional. Um we've had these digital communities, but as AI and all of this digital slop, AI slop, slop puppets, all these fake identities are increasing, we're seeing that it's increasingly hard to actually build credibility and legitimacy and to know what is real and what is not. So, the things that we relied on as our online institutions are actually becoming less reliable.

And final shift that matters a lot to me personally as well is that venture capital has drifted towards very short timelines and narratives. And the capital, so if you know a little bit about venture capital, originally it was actually primarily about being able to fund high-risk, high-reward technologies that ideally actually benefit benefit us as humanity. And that has evolved into an industry that makes a lot of people a lot of money, but the part where it benefits humanity has gotten lost and I think that probably if you looked at a lot of venture capital, I think you could probably reliably say 90% of it is going into things that won't really

help us >> [laughter] >> at all. And so, there's this issue there. There's also an issue with the fact that most people that are building in the DEAC space are building open source, uh trying to build things that are not primarily focused on commercialization and it's very hard to fund those things with venture capital the way it's currently designed. Which is why we think that Ethereum needs something different. Um so, our mission has become to create a defensive social layer for Ethereum.

Why a defensive social layer? So, as we talked about, legitimacy is getting harder and harder. We need to create that legitimacy ourselves and once we create it, we're going to have the path to fund the right things, to allocate capital, and to scale those things also into the online environment. But we need that legitimacy first. It's collapsed online. We don't really have a proper, legible human layer for Ethereum at the moment. We have it hey, sorry. [laughter] Personally, we know these wonderful people that we see at events, but we don't have anything legible on chain. We need to change that. And also, Ethereum web3 has no real home base. Not everybody wants to live live in SF and

arguably SF is not the right place to build DEAC. >> [laughter] [gasps] >> So, those are three things that we're trying to fix. Why specifically builder hubs? Why does the physical element matter if we want to change all of these things? So, I was part of Zuzalu in Montenegro, which is now already 3 years ago, and the primary observation from that experience was that this physical element is an incredibly powerful way of creating tight social graphs that allow you to then also build together, collaborate, uh work more freely.

Um the anonymity that we have online can be useful and powerful for some things, but it's very troublesome if you're trying to build trust and reliable relationships. Um so, these physical hubs, as we've gone on in our journey with Zuzalu, done more pop-ups around the world. We had one in May in Switzerland. The primary observation became, "Oh, these things are really good at doing social due diligence. This is how we build the legitimacy layer in Ethereum." Um but obviously we're here in the Cypherpunk track and it matters that we do that with privacy.

Why curation matters? Well, we've kind of talked about it, but the more that we've done these things, the more we've learned that curation matters. The more that you have freedom, privacy, um that you I can trust the people around you, the more that you can relax and thrive. In Vitalik's DEAC essay, he talks about Switzerland and the importance of the mountains. Now, I personally have different views on why Switzerland is amazing, but he talks about >> [laughter] >> the value of the mountains is providing protection from what is outside and allowing the people to focus on building things that matter.

And that's a little bit what we're talking about when we say curation. Those are our mountains. They're giving us the freedom when we curate, when we get into a space where people think similarly to us, where they where we have some legitimacy and they don't scam us, we're getting into a space where we can trust and build things together and flourish. So, what are we actually building? A D Combinator, which is an accelerator for DEAC and open source tech, a permanent society sandbox where we can experiment on how humanity's future looks and how the governance models will work that actually design for that, and a compounding endowment fund. We've taken a lot of inspiration from

things like Stanford and Harvard endowment funds. We looked at how places like Stanford, for example, they're a mix of a lot of funding, a physical space, and a lot of talent. The funding helps them bring in the talent, but it's not what keeps them. What keeps them is the gravity that is created by the talent that comes. And so, that's what we're building for. Once the Once the builders come, there is gravity and the Once there is gravity and talent, there is value and once there is value, there is funding to keep funding these things.

So, this is an example of what we're thinking for um how the accelerator will work. Uh we think that pop-ups are really important. Um they're expensive and they're annoying to do only as pop-ups and I think a lot of people question and wonder like, "What is this stupid Zuzalu thing? These I don't know, like rich kids hanging out in Montenegro. What's it all about?" Well, here's the answer. It's this curation aspect. But let's not just do pop-ups that are expensive. Let's build them into permanent hubs where we're compounding and building on those things and building permanent, reliable institutions around them. So, the accelerator will work by having at the beginning a 1-month pop-up village for whichever topic we are working on.

We'll bring together 150 fellows, researchers, builders in the space, say AI x crypto. We bring them all together. For a lot of them, there will be fellowships for them to be there. For others, it will be because they're, let's say, Aztec building in the space want to work with the builders in the space. Uh we'll also bring investors. We'll bring institutions like universities. And then we'll spend a month thinking about these topics together, iterating on ideas, building social graphs that actually show which ideas are really matter and which are worth accelerating and building more on. For the best ideas, we'll spend 3 months accelerating them with additional funding in our hub.

With those best teams that come out of that, some of them will go on to stay with us. We'll fund them more and we'll ideally keep them as permanent residents. Obviously, we've modeled for the fact that not everyone will stay. That's normal. But ideally, the best people over time keep compounding and that compounding means that people keep coming. Everybody wants to be where Vitalik is. Everybody wants to be where Who's the coolest person that you want to be around? Ela. Oh. >> [laughter] >> You're cheating. Okay. But you get the idea.

>> [laughter] >> Um yeah, so that is the idea with the cohorts. But how do we actually make this really investable and repeatable so that this isn't just us spending a lot of money and not being able to keep it going. We've come up with an idea around convertible grants. So, we want to build that endowment fund. We model that we need to start with around 25 million. That over 5 years we would allocate 5 million per year, and after 5 years the endowment fund would be self-sustaining. How does that work? We do in convertible grants. So, convertible grants are a lot like grants.

We focus on open source and D app tech. If people stay open source, they remain grants. They don't have to pay it back. There's no obligation, and we're excited for them. If they do decide to commercialize and tokenize, then we ask for the tokens and equity because we invested in them early, and we also want to see them succeed. And then we also have a financial upside that goes back into the endowment and returns funds that can keep funding more public goods and open source things in the future. So, it's a win-win for the community. And talking about gravity, I just want to show you quickly how we imagine this working. So, in our eyes it starts with legitimacy.

People come. Great people start there. Builders gather. Capital is allocated. Legitimacy is created. The cycle accelerates. More builders come. The endowment compounds because people are successful. More is returned to the fund. More people are getting funders. Funded builders want to be there. So, more builders come. So, more successful projects emerge. More permanent residents. More amazing builders living in our hub. More people getting funded.

Capital is allocating better. And I'll get to this a little bit in a moment, but we're really excited to work with conviction markets and on-chain mechanisms by bringing all of this stuff on chain. Bringing the local reputation and legitimacy built in these social graphs actually on chain and using them to power conviction and prediction markets. So, what does this look like? It's the accelerator and the venture side that's driving a full web 3 venture pipeline.

It's a builder residency and co-living experience where some people are living there for 1 month, some people are living there for 3 months, and some people are living there for good. And it's powered by something that we're calling the Zuzalu National Bank, >> [laughter] >> which is in our hypothesis of how this will work, a very large ETH staking pool that allows us to lend and buy real estate against an on-chain mortgage. And that powers our ability to work with Swiss real estate or local real estate and actually build real world assets that form the floor of our asset

class, you could say. So, what is it really that we're building? We keep coming back to this. We're going now from pop-ups to permanent populations. We're starting to think about wealth building, about the long-term of the builders that are in our hubs. I think that we're building a new social contract for the 21st century. If we're not going to have employment, if AI is going to take over some of our jobs, we're actually going to need these. We need to think about UBIs. So, working in these hubs, accelerating builders of open source, figuring out how to fund ourselves and then fund others, for us it's the pathway to UBIs and

experiments with UBIs. And we're really excited about that aspect. But it's a lot of ideas, and we've already learned quite a lot of along the way. I wanted to share some of those things with you. One is again curation, curation curation. Really curation matters. One single person, that one bad person is the ends up being the quality of your event. The more that you think about who you want there and why, the more you will build something valuable. I think it was Balaji that said community is the ultimate store of value, and we really believe that.

But it also needs funding, and that's what I've talked about. These things are expensive, and they need to get being funded. We need to find ways to make them investable, which is again what we've been working on. You need more leaders at every level. So, not just leaders at the top in a role, but leaders in the network. Each node is a leader of their own kind. Leadership doesn't always mean I'm telling people what to do. In fact, leadership really means that [laughter] I'm telling people what to do. >> [gasps] >> Leadership means the choices you make day-to-day over the long term that reflect your values, that allow people to thrive.

And what we really experienced, if I can break it down into reality, is that a lot of people are not leaders. >> [laughter] >> And again, coming back to curation, you need to curate for people that want to act in ways that align with your values and the things you want to build. But individuals still matter. We would have liked to disprove Balaji's theory that you often rely on a single founder or just the founders. Unfortunately, we haven't. It does ultimately often come down to people that are willing to do it 24-hour stint to get the thing done. Not everybody is going to be like that. We don't want to build something centralized, but we also have realized that decentralization from the beginning is not going to work in most cases.

And final lesson for us was judgment as a critical trait. We've loved many people on our journey. Not everybody has good judgment. Value people that have good judgment. >> [laughter] >> So, what is our core innovation, and how are we thinking about governance? I've talked about legitimacy and its importance. What we realize with Ethereum is that we have proof of stake in terms of capital, but we don't have proof of stake in terms of your social legitimacy. I can have the best reputation in Ethereum, but not have any way of getting token emissions from the ecosystem that I'm ultimately staking my career on. That's something that we would like to change and why we're designing our token around having a

hybrid of proof of capital stake and proof of social stake. We don't know everything about how that's going to work yet, but we're figuring it out. The value of the token has a floor in the real assets held by the cooperative in the foundation, and the upside is driven by the value created by the builders in the ecosystem that they share together. Not all of it. It's not communism. Communism is bad, but some of the tokens, some of the upside goes >> [laughter] >> to the builders and the network and the community and grows the the value of the token.

I won't go into this too much because we don't have unlimited time, but this is roughly how we're thinking about the structuring. So, we want to have an endowment fund as the foundation. We call it the Pope. You need something that's capture resistant. Capture resistant crops. Yay. >> [laughter] >> You need something that will retain the mission against populism. We've learned that with Zuzalu populism does very quickly actually dilute the mission. So, we need that foundation as element, but we also need the direct democracy. One of our key elements is learning from Switzerland. Switzerland does direct democracy really well. It does curation really well. It's very hard to get a passport, I can tell you.

>> [laughter] >> Um we need a token house and a way of governing. We have this hybrid token staking model, and then we have the Zuzalu National Bank there, the one that's allowing us to borrow against assets that are brought in by investors. We thought deeply about how do we separate between investors and residents? How do we ensure that the whole thing is not captured by people with capital. At the same time, how do we make this something that's attractive for investors to put their money in and be able to rely on. And this is kind of the answer that we've come up with.

And so, we're building this in Switzerland first because Switzerland is like the OG D app society, which I could talk alone about for 20 minutes. So, I'll keep it short, but just say that for example, the government recently committed to building all tech in the government as open source tech. Um but ultimately, we're seeing Switzerland as like the Vatican of our network. It's where we start, but it's not where we finish. We want to build these hubs in other places. Doesn't mean that it has to be our own hub. In fact, it's really important that this is not like an empire, that this is a network of autonomous hubs that share similar principles and values, are building on a shared stack, have maybe a shared identity layer, but is this identity

layer is autonomous. So, for example, using ZK, something like Zupass, but the next generation, where you have your private uh you have your privacy and your private passport. You have credit No. Attestations. >> [laughter] >> Um you're able to prove which reputation you have, but you don't have to. That's your choice to reveal. You have that reputation in your local community. Theoretically, you can also take it to another community, but it's the choice of the other community whether to recognize that reputation or not. Equally, it's your choice whether to reveal your reputation to that community.

That's how we're thinking about a Zuzalu Village Network, and we're super excited to see how that will evolve. I think I've talked enough about this. Um I'm good. Okay. >> [laughter] >> Um so, the way we see the network being powerful is that it turns into a fund of funds like structure. We start with one hub. We have one fund, one accelerator. Once we funded one hub and we're happy there's many other really cool projects and founders that are building hubs in other countries that we want to be able to support.

If that's financially viable, which we think it very much is, then we want to be able to fund those hubs and help them to get started. Again, keeping their autonomy, not being our hubs, but being able to share the operating stack and be able to share the technology that we build open source. Ultimately, even in a local hub, we have the thinking that everything should be relatively forkable. If we build something that someone doesn't like, that they should be able to fork that community and go off and do their own thing. Theoretically, you could have two different communities, two different cooperatives, two different individual tokens working in one hub. I think that that's like future music.

>> [laughter] >> But that's how we're thinking about it. Everything should be forkable, everything should be able to be approved and then potentially re-merged back to main. So, that's that is how we're thinking about it. Um the idea would be ultimately in the long term that it turns into a Zuzalu ecosystem fund, that each hub has its own local fund and accelerator and its local endowment, but that ultimately there's an overarching backing and funding, especially because not every country starts with the same, let's say, prerequisites. I think it's a lot easier to fund something in Switzerland or SF than it is to fund to um to Yeah, to fund something in, say, Mozambique. Um and so, we're really keen to see these things be built also in

places where it's not as easy yet. I think that's pretty much everything I've got for you today. Um please, if you're finding this interesting, do get in touch with me. Um that's the signal icon. I am on Signal as well, but you have to add a dot zero one at the end if you want to get me on Signal. Otherwise, that's my Telegram. And yeah, please send me an email. Um say hi and happy to chat. Thank you for your presentation. We run out of time right now, but if you guys have a question, you can ask later on.

Thank you. >> Thank you for your presentation. It was very good. Yeah.