The Cutting Edge: Experiments in DAO Governance | Julz Rosenberg, Charles St. Louis

Transcript

all right everyone welcome back to another episode of bell curve before we jump in quick disclaimer the views expressed by my co-hosts today are their personal views and they do not represent the views of any organization with which the co-hosts are associated with uh nothing in the episode is construed or relied upon as Financial technical tax legal or other advice you know the deal now let's jump into the episode all right everyone before we jump into this episode super excited about our newest sponsor Reserve big shout out to reserve they are the easiest way to design deploy and govern stable coins backed by a diverse set of assets with access to defy yield and insurance if you don't know Reserve we're super

excited about them here at bell curve you'll hear more about them later in the show Community is and it is a overused meme um around launching tokens and I think the part that like is very frustrating for me is that like who are you even talking about when you say community like if you can't clearly Define a SQL or group within your organization then they're not meaningful enough participants all right buddy another episode all right buddy all right but well I'm switching to from coffee to tea I've got some some matcha green tea here so oh yeah I think this I think this makes me

what this is It's not that I'm not excited it's just more balanced you know like just rip the T solo I I put milk in I put milk in all right I'll I'll Give All right I'll drop it in the show notes how I make my tea uh you can all you can all see that but for now let's talk about this episode is a great episode with Jules and uh Charles St Louis this was all about what are some of the new and exciting innovations that are being done in governance landed specifically with those we wanted to do an episode so far we sort of looked at what is the current status quo for Dallas how does governance look like today what are some of the big problems what lesson should we borrow from corporate governance Etc I think we wanted to dedicate an episode

to what are some of the edge case experimentation that's happening in Dao land in governance world and these two I would say there are two of the people that are on the very Frontier event we got to hear a lot of the experimentation that's being done in this episode also the banter it's just flowing there's both of them like I mean Charles St Louis has has this like really deep experience he was a maker Dao for a while in the early days um and just working on some really interesting experiments at element and then Jules is like pushing the pushing the frontier I would say of what's what's possible in on chain on chain organization so yeah this was totally agreeing yeah really like this one all right for more information about how my uh make my tea stick around you'll

get at the end of the episode look around that's what that's why the folks are here let's get into it all right guys uh welcome back to another episode of bell curve today uh you know and I are joined by Jules and Charles St Louis guys welcome to the show thank you thanks for having us where you clap every time you ask a question is it I am an Italian I speak with my hands you know this we're big clappers yeah I love it I'll do a clap I'll do a bow I've got all manner of uh you know body language that I'm willing to bust down all right for those of you on video beautiful uh Jules I wonder about this before the call I'm gonna put you on the spot I fair warning to everyone listened I I listened to Jules describe uh her sort

of vision for Dao's and and what the important context was to understand around them a little while ago I haven't been able to get out of my head since so with that high bar Jules can I just start from your 10 000 foot view on on how you think about Dows in general I'm worried that I'm now gonna undercut this like Grand explanation of Dallas no pressure no pressure [Laughter] in the frustrations around what a Dao is and I think in the last cycle we had like 10 million articles come out of like what is a dow like d-a-o let's get down into it and none of them really got to the point of it um and I think just generally we built a

lot of misconceptions around um Dao's and on-chain organizations and sort of the last 12 to 18 months in which Dao's had like a little explosion because it was more based around like the social implementations around these organizations like uh holocracy um like co-ops and it was more attached to these like social implementations rather than the technical implementations which is essentially building on-chain organizations um and so that is sort of the view I come to it now which is um these are organizations that are built on this novel concept called the blockchain

um which we are all very familiar with uh and at its core that means that um the very makeup of these organizations is defined by their on-chain structures activity and permissions that exist on chain so I think there's probably a lot less Dows based on that definition that exist um than what we probably think of so that's kind of how I like to think about jazz so maybe let's try to flesh out um some more details about about what that really means so you know they're the pretty famous theory of the firm right the theory of the firm is just a Nexus of contracts so when I hear you say Dows are an on-chain organization

it's a Nexus of maybe smart smart contracts right or smart contract code can you kind of walk me through the ways in which an on-chain organization which is uh you know smart contract executed is different from what we have today with uh kosa's theory of the firm this is another little mini rant that I love to go on is um a few months ago I listened to this wonderful podcast from Planet Money I think and it was talking about productivity in the United States and essentially like over the last 100 years productivity has just been like skyrocketing like we just become more and more productive as a Workforce like every year and there's like a lot of obvious answers to that like Industrial Revolution like computers the Internet these are all things that make us like

increasingly more productive over over time um but what's super interesting is that in the last 10 to 20 years when you know technical Innovation and software is at an all-time high we've actually be like our productivity levels in the United States at least have completely plateaued so we haven't we have like lost our ability to become more and more productive and so we've kind of hit like the ceiling in our ability to uh grow and become more effective as an organization um my sort of theory around that is that uh in the last 20 years like what we've been innovating on is the measurement of

activity in these organizations rather than the execution um of actions within these organizations so we're pushing people further away from the decision-making abilities of an organization rather than bringing them closer to that meet space um and as a result creating much more transaction costs because we're involving so many decision makers and so closely trying to Monitor and measure the activity within these organizations um which isn't to say like measuring activity and kpis and all these things isn't beneficial but that is kind of like the direction that traditional organizations have grown in in the last again 10 to 20 years

so I think that's where we have like a really like unique opportunity with those is that we're actually uh allowing ourselves to bring us closer to the execution meat space like that is what the blockchain enables is execution abilities in a trustless format um and I think that's where there's like a real opportunity with on-chain organizations is that we get to rely on this new trust mechanism um and create you know more executable formats and we are more easily to Monitor and measure those things since everything is open and public Jules I could keep going down this line of question for you Charles

I'd love to get your thoughts here uh and if you agree or wildly disagree and uh you know tag you in here yeah I mean I I think in general there is a lot of pressure on like the term Dow too kind of emulate or n plus one like certain organizational structures from like traditional like Finance or Tech and whatnot and I kind of have those like different like hierarchies and a lot of people do dream of having like the idea idealistic flat organization of a dial but what I'm starting to realize is that I think like the working group format for like Dallas in general might not be the most

scalable because like they're kind of like siled and then the com meaning or the calm channels or the communication channels between these groups it's often like fragmented so like when certain groups work on other things it doesn't really work like efficiently and like yeah everything has to go on chain or like be recorded somehow but I like the idea I'm not sure how familiar you all are with um runes for maker that was like End Game Plan like there are parts of that that are very complicated and yes it can be kind of broken down better but the idea that you have like actual teams working like in kind of competitive nature or together versus having like working groups like separate so like having a team with like

a marketing person a like a couple kind of protocol devs and different teams like that can actually make things push forward more faster and I'm starting to kind of appreciate that model more as I've seen kind of working groups from like ens get coin even element for example bit of a tangential point from what you asked but that is something that I've kind of noticed on like a lot of people see like dials as more automated like on-chain transparent organizations from the past but I think maybe we should probably like Define something newer and like not just follow on that path there are things that work in the past like I'm sure we'll get into it later but like Council models with board of directors like I do see that kind of scaling decision making is endows we

don't want to like take everything from the past and kind of like emulate it Charles what's the um Jules laid out this really nice like framework for just like what is a dow I think at the beginning what maybe like take what you'll said one step further and like why what is the benefit of being a doubt in your mind is it the transparency is it like it's a organization that's built to be Global from day one what what is the benefit I mean the global nature is something that kind of comes with like the internet being accessible to everyone like that's awesome but I think I mean it's more of a high level point but what I really like with thousas in like traditional Tech and finance and like operations whatever you have the ability of

Founders to continue working with their company in private make a lot of money and and like have the company grow internally and so on or you can have an IPO or you can get acquired but like with the concept of doubs it now allows your Founders and core team to actually pass over or at least support control from your entire most like active users and community so it's like not just like the founders and the team that build this thing now like everyone gets to build it together and shape how they want it whether the vision changes or continues I think that's really like awesome I have a so I've got a maybe a couple of different lines of questioning here and um maybe maybe Jules just just talking about let me let me ask actually both of you a

high level question do Dows have to be are they the appropriate form can you have a dow without it being based on a crypto protocol maybe let's start from there I feel like again to my earlier point on what a Dao is like I am more focused on on-chain organization so I think that is the key element of it is like again what what's our trust assurance that we're operating off of and that's what defines like the organizations that I'm interested in we sometimes call them daus um but I'm more focused on like on-chain organization so yes I think that it is a essential part of it

hmm um let's let's like dig in about how that on chain structure could minimize trust let's call them trust interactions right so I'm just trying to to piece that onto my own experience of uh trying to manage a small business basically uh you know which block Works um and some of the areas that have like really surprised like first of all when you're joining a company there's some element of trust that like you have to when you're going through the interview process you have to trust that the vision that you're being painted from the people that are trying to recruit you is an accurate one maybe to say something that we take for granted but this does happen sometimes you have to trust that your employer is going to pay you for the services that you actually uh perform right that's supposed to be

like a baked an assumption but sometimes people don't end up getting paid you have to pay you have to trust that the other participants of the organization that you've been hired are capable at doing their jobs right there are all these like different trust assumptions and interactions that are built into getting recruited at a company I'd love to know like how that might be different because those are some of the first things that I thought about especially around payments like one thing that has amazed me is that you can just not pay your bills and there's nothing that you can really do you know if it's under a certain threshold which shocked me and upset me deeply when I found that found that out um but what what are some of the other ways that a an on-chain organization might minimize some of those trust

requirements yeah so this is something that we have talked a lot about at Metropolis um we actually wrote an entertained framework um around what we call social aware and trustwear which is kind of trying to like get at the meat of this um and just to like lay it out the way that we think about social wear um is a mechanism that creates assurances through human relationships and as a result it has like a very high social coordination cost of maintain whereas trustwear is a mechanism that creates assurances through technology and as a result has a much lower social coordination cost so

and basically like traditional organizations are completely reliant on social wear there are very few instances in which they have um again like off-boarded some of those execution uh or decision rights into trustwear so again also just like create a parallel you can kind of think of social wear as a lemonade stand like you know it's five dollars I'm agreeing to give you five dollars and you're giving me a lemonade exchange I'm just assuming that we are making a benevolent like contract here and we're both going to uphold our end of the agreement whereas trustworth is more of like a vending machine like I put my five dollars in and I am automatically and pretty much

guaranteed to get eliminated unless there's some like technical flaw in the vending machine um and basically like as I kind of said traditional organizations sort of over index on social wear and that is kind of like you know you joining a company and saying we're gonna pay you we're going to um you know these are the values and this is the mission that we abide by these are the sort of policies of our organization like that's all just social wear you're just trusting those people to maintain these agreements that they've made to you or these promises they've made to you but we've also seen like a ton of problems with that um and I think that's where we see a ton of problems in in davs today is people

not implementing the trustwear element of it a trustwor example is like a governor contract that is the contract that allows you to do token voting on chain um that is a binding agreement and uh there's no way to really go around that like we've seen a ton of fatal examples in which that has actually worked against organizations for example compound themselves having a technical like vulnerability and them essentially just watching money be drained over a seven day period that the time lock Governor contract was waiting for those technical changes to be implemented like these are trusted executable contracts with are which are backed by technology

and code rather than us trusting on individuals as people here's another something that kind of Springs to mind is maybe some of you who are listening might have had the experience for getting recruited for a company of oh you're going to oversee X Y and Z things you're going to have all this stuff blah blah blah but then when you join maybe the reality doesn't match up to what you were sold and maybe you have less Buy in and say so uh than you were otherwise promised and that would be maybe an example of social wear could the trustwear analog to that be well actually you are given some amount of tokens which guarantees you uh say over X Y and Z things do you see like is that an example of that or am I trying to is my five-year-old brain uh I don't know I I

hear your question is essentially around the difference between ownership and control it's kind of basically yeah yeah well I think that's kind of the unsolved problem is like we've kind of created the solution for um like simple ownership um and that with simple things ownership and control are one-to-one um but as we get more sophisticated and you know the systems that we're creating the relationship between who owns something and control something is increasingly complicated and um I think like the point you're sort of getting at is that governance tokens

don't represent that very well or maybe you're actually making the opposite agreement um or argument I'm arguing that governance tokens do not um represent control very well sure they might represent ownership but just because you have you know a certain stake in the company and or a certain token allocation in the organization you're participating in that doesn't really guarantee your control in the organization but I think that's more because of the current state of Dallas I do think there are ways to have like your governance token be a denomination of voting power in your entire Dow though like for example like we denominate everything in like way in certain areas in ethereum or like USD

and like the states we've had like if you have a certain kind of denomination of voting weight in a system I think a governance token is really great for that the only way to like kind of split it up is like using different voting techniques to have like multipliers on that for like different audiences different like people different working groups and all of that I think that would be a really like cool use to see move forward with governance tokens but yeah I agree with you there are a lot of problems with the now based on what you said yeah but I think it's just like fundamentally these systems weren't intended for this like governance tokens are just regulatory Arbitrage like they are saving everyone's ass someone said it someone said it on the podcast I've been waiting for that one all right only took five episodes yeah Jason and I

so we were talking about this before we got on here and we were like what's your like big takeaway like we've done you know four episodes in this series so far is like it's regulatory Arbitrage that's the right right now I feel like Casio said that though like or you might have not said it directly but he was talking around it like a big part of Dallas is regulatory Arbitrage and like I think sorry Hugo Donna you had a point I know I haven't I had no no I no no okay I'm just happy that I'm just happy that you brought that up but I did have another question for you Jules on the social whereverse trustworth thing um okay I read the piece I really like I read the people I think it was a

couple months ago that you guys put it out like maybe over the summer or something I'm trying to remember so a little foggy but I like the way that you laid out my where my mind goes though is like the reason that startups specifically and companies do social wear instead of like trustwear is because it's really easy like social wear super flexible it's really easy to implement it's like you you don't need like a block like let's say when block works is starting we didn't have a bunch of Engineers so like you sure trustworth sounds great but like hey we didn't have like Engineers who could go implement this and B what block Works look like in q1 of 2018 was like a world of difference from block Works in Q2 of 2018 which was different than like block works the next month even so if we had

implemented like trustwear in 2018 well block Works in 2019 would have been like a disaster so I'm just curious how you how you think about like that shift from social wear to trustwear that's a really good question and you're completely right trustwear is expensive like it's way easier to be a lemonade stand instead of building an entire vending machine like that is expensive it's complicated there's risks involved all those things we've also internally debated um you know to something how the transition from social where to trustwear um but I think a lot of what we sort of landed on when we were writing that that framework is

that you need to have like basically governance Market fit or social Market fit around the social wear before you can implement the trustwear because I think a huge problem that we saw in or even in Dallas today is that they too quickly jump the gun on the trustwear and then it didn't match the social systems of their organization so token governance is a perfect example of that you know to make sure that um they were credibly decentralized especially in regards to regulation people launch a governance or sorry

people launch a governor Bravo contract for token weighted voting um and then no one shows up to vote and it's like what what's happening here why is no one voting but it's again like there were never social systems around a plutocratic system like there was a core team that was running the show behind the scenes and then decided to invite you know a community into the into the process of it at an arbitrary date and now we're expecting everyone to catch up with the social system of plutocratic voting yeah Charles how do you think about at element

and um Charles before this were you were you you were a maker if I'm remembering yeah sure that was the decentralized governance architect there and before that was uh just a technical engineering consultant um helping with McD so pretty pretty yeah relevant I would say to this uh on the maker side of things um like how do you think about when almost what what Jules is saying here like when do you move from when do you implement this when do you implement like the social contracts to become like real con like uh technical contracts or move from social workers maker is an interesting case because like the token existed before like the actual protocol um so you can't really retroactively

like shift around like Supply I mean yeah there's like mint and burn functionalities in the system to like increase decrease Supply to like increase voting weight but um with maker I mean they had a governance contract it was the first on-chain voting system in ethereum and they introduced this over a long period there's like a voting portal so like yeah I mean I think earlier in the earlier days they just had kind of TeamSpeak calls um every Sunday where people would like talk and like give updates on building and then after a couple years I mean after MCD launched they then decided to create a proposal framework much like VIP Zips inspired by Python's enhancement proposals perhaps

and that's when like the actual process that have been kind of occurring with just token voting was formalized into like stages and proposal Frameworks and like who's involved in different people that's what I worked on and like looking back I think I mean still working today the only thing that I would probably change is like introduce less process up front because like this thing was extremely thorough like robust like stages for everything different stakeholders it was almost too much to handle right away and I think that is one of the kind of like things that Dao should learn for makers in that early stage of launching a dialogue you need to be open you need to be Lean Like A startup where you can like work together in a small group with like very little process and get stuff done

and I think like a lot of jobs too early said too early social Frameworks with processes especially for us at onboarding that stuff like bogs down so many protocols and then like once you've learned that I've got the training wheels shaken off you can then put a process in place that reflects like the most optimal and efficient in many cases you don't even need like processes for us at onboarding because it's like a permissionless deployment um but yeah my recommendation and lesson from that is that like too much social process early on actually like slows down and like I think that's such a good point Charles too because I think everyone knows like bureaucracy is the killer like across any type of organization and like too much process equals bureaucracy

and I think it's kind of an interesting pattern we've gone into into Dao's is that we over index on The Upfront processes and we don't pay enough attention to the um more like consequential actions like what drawback measures do we have and it's kind of like optimistic governance like why are we not assuming people are acting benevolently and then have drawback powers in case you know they make a bad decision or there's veto actions um and instead we've done the reverse of like let's put all of this bureaucracy and rules up front and then make people go through these really lengthy processes in order to make a decision I

think in part it's definitely due to like laziness and like not as much of a prioritization on like governance being important when in reality governance is the backbone of your protocol once you've launched it like it's what it's going to make or break your protocol in the future whether you like it or not and I think too many projects especially like summer when things were just like cranking up they just forked like whatever they use Snapshot multi-sig and like they put very little attention to it and they just expected people to do these things they didn't think about the actual use case of governance in their system just like took the quick route lazy Road and like pushed it Forward they said they'd like develop it over time but in many cases they just kind of left it and never innovated which is why governance

innovation has been lacking until kind of this year Charles can you talk about the just the governance element and like how you've taken everything that you've learned at maker and like what you said up there and you've you've implemented some really cool stuff so can you just expand on that yeah for sure I love talking about it um I might talk a bit too much so cut me off um yeah so learned a lot from maker I mean obviously the system's still working today there's definitely a lot of improvements to be made but it's still robust and working in in many ways um but like the main things we wanted to do kind of with element is to first of all like make governance way more inclusive so like as Jules was saying earlier the one token one vote is just like non-inclusive thing it's like

plutocratic um it just doesn't really like scale either so we introduced this concept called voting vaults which essentially allow you to assign voting power to any like use case and like that's very vague so a couple examples would be if you have a governance token and as opposed to a maker where you just stake your mkr in the voting contract and all you can do is vote there's a huge opportunity cost there there's a lot of um Capital inefficiency so what you could do now with the voting vault is have like essentially an NLP Vault where like your governance tokens in NLP position and you can still delegate or vote in the system or like borrowing maker compound or Ave and like still be able to do that but the coolest part is you're actually allowed to use a voting Vault to do things like nft ownership

like and it's all based on like a denomination of voting power of that governance token like I mentioned earlier so for example like for all the core team in element with um the core team investors advisors they're in a vesting Vault with a lower multiplier I think it's like almost more than half so for everyone in the system who has one L5 governance token all the voting power of those core team members is half of that um but the ones that I really want to see unfold is like an L1 L2 synthesis so you can vote on L2 like gaslessly and then a post L1 the last one is like an identity verified Vault so you actually kind of you can assign voting power to your GitHub contributors your Discord members your people who run like

governance calls and give them voting power on the system the more voting vaults you have in the system the more equal your whole like ecosystem is weighted in terms of voting Powers so it's not just like the token holders who can buy it on the open market having a say it's like kind of balanced through everything that's my favorite part of the system the other part that we kind of mentioned earlier is the governed steering Council which is kind of inspired by board of directors and like traditional um companies and the idea there is that we didn't do it on an election style because it's really hard to off-board people once you've kind of elected them through an election model you'd have to like put up a proposal emergency off for them

which would take weeks and whatnot so we did a delegation threshold so if someone meets a delegated the delegation threshold they can opt in to be a GSC member and what that comes with is Authority because in a lot of dows a lot of teams were voted in paid by the protocol don't actually have Authority or the area of expertise to get done they basically just kind of go through the regular process that everyone has to do and that's like really inefficient so the GSC members can spend part of the treasury up to a certain limit they can put proposals directly on chain instead of the whole process and they can be assigned many other powers as like they come again respect in the community um and we have like in element right now I think we have nine GSE members they push like forward a bunch of proposals

they've done some like asset diversification and things like that but the cool thing here is that the GSC contract is actually a voting vault which assigns like a certain amount of like voting power to them and makes it cyber resistant so everyone in the GSC only has one vote it's not like their delegation vote kind of outweighs the other GSE members they each have one vote and there's certain thresholds for them to pass things so that model can be used for other like consoles as well like if you want to have like people have expertise over like protocol engineering and push fixes up in emergency situations you could have a council for technical experts where they're there something bad happens they can push things something right away and fix it um so that's kind of where we're at

those are my two favorite Parts I can keep going but I'll probably pause here I no it's really interesting what what is the when you think about the system that you set up what is the main thing that you're trying to solve for with this system I think there's a few things um I mean one is liquid democracy just doesn't scale like why does everyone have to have a say in something like it doesn't even work in like the real world like it just results in poor decisions often um so why can't we have that more representative democracy model where like you're trusting these people to make decisions scale things faster and so on so one is like scaling decisions and devs like I think scalability like

excluding the concept of scalability from like blockchains like in doubts it's like scaling the amount of decisions that can happen period of time in a Dao so that is the number one thing we're scaling for two is like the problem I meant with inclusivity and plutocracy in like the blockchain world is like actually making your Dows like people in your desk be able to vote no matter what position they're in and um the third is kind of more on like the funding model which I didn't really get into around like optimistic rants so play on like the optimistic Roll-Ups but also um governance where like you assume the best in a grantee because every Grant system I've ever encountered like assumes that the grantee is gonna fail

and the the way the compensation is like kind of set that way and like also like their milestones so this way it's like if they don't if no one calls this function that they're not like getting their stuff done like the funds are basically given to the grantee if not like you have the ability to clot back through governance um but I think that model hasn't really been tested yet but I'm really excited to see that happen how would you rank the success thus far of the the element governance experiment I think it hasn't been enough time to really like gauge all these different um things um like the GSC has nine people which is awesome I mean they're actually putting boats forward there's working groups but

I don't think it's been through like a tough situation yet and like I think it definitely needs to do that before I can like answer that question um the one thing that I really like about the model is it is built for experimentation so the governance system has one core voting contract um core system and everything else is a module on top of that so like the GSC like a time lock a treasury like a spender contract voting vaults they're all kind of like tools in your tool belt that you can kind of plug into this core voting contract so if the GSE ends up not scaling the Dow like you can basically just like cut ties with that and go back to normal delegation or if like you don't want a time lock I don't know why you would but like you can remove that and it the

whole system is kind of just built so it's a modular aspect that can be kind of shaped to whatever Dow or use case that you want whether it's like a certain type of governance model of like democracy representative democracy like whatever you choose and remove that um but for now the GST is working but who knows if like it doesn't end up scaling like we might just kind of like deprecate it and go back to delegation there was a tweet from that happened wait Jules tell me why you tell me why you say that though I mean I think I think we're just continually creating experiments and

like trying to create newness um rather than just like defaulting to what we are using in front of us and so that's why I say that is like even if it does fail which I mean who knows I think it's been really successful so far um I think that just further proves like another Avenue for people to explore rather than like continuously falling back on like what we know are extremely broken methods such as like the traditional delegation model that we have all right everyone brief break in the show here to talk about our newest sponsor Reserve so you know it's looking pretty bleak out there it's not looking that great but you know what the one thing there's no bear marketing stable coins Stables babies Stables we love those stable Coins app which is why

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single startup raising was Raising as a dow like every everyone was everyone was Raising as as a dow and then if you look at like the startups that raised in the last several months really like no Dows I would say it was everyone was kind of like uh maybe maybe the dab model does make sense maybe it's like you start as a centralized company and then yeah then you and then you figure out the Dow thing later I'm curious how you when you look at like the next cycle maybe what how will like will folks raise as a dow like when will people pivot to become a dow or maybe Jules you'd be happy if I said on chain organization like when does uh like basically what's the how will this look if you look at the like the facts of like all these teams

raising that way you'll probably see more teams that are actually just like research and development like Studios for a lot of better terms that are like building really cool stuff like they're building protocols whether it's like defy infrastructure um and so on and they're releasing these things into the wild and a dial will help govern those individual projects I think we'd probably see more teams that are like just like engineering like powerhouses that are very kind of good at building things and then after that once it's kind of been released like they'll be core contributors but like it's up to governance to allow them to keep contributing I think that would actually help like the the idea of dows grow as well versus like raising them as a dow and like remaining like a core

team as a dow forever I also just think that we um potentially just like over index on like this North Star of like the Dao um I still think that there are like a lot of really valuable things that um like for example my team is is working on um that can help just like any organization that is interacting with crypto in some way and I think like obviously I really believe in on training organizations and Dows because I think we have the potential to build very similar patterns like we see in you

know the traditional world with legal patterns um and these are like very common tools that are used by traditional organizations but we don't really have that for like crypto native organizations um but we have like a very unique opportunity because we're building it on this new trust mechanism which is the blockchain and I even though I made a whole fuss of this earlier like I do believe that like what tokens did for ownership um Dows will do for enabling like new and different types of of control um but I think there's been like a huge bearishness around ours recently because like a lot of them have failed like there's been so many problems and a lot

of the protections that we see in the traditional world like don't exist on chain or on dials like for example fiduciary duty is like a concept that whoever controls this thing must control it in a way that benefits the owners of that thing um it's like very abstract and um it creates you know a mechanism for us to bridge that separation between ownership and control but you can't really like codify fiduciary duty on chain and like this has been a theme in in maker Dow is who um you know Andreessen stepping in and saying like Okay who's actually running the like who is looking out for our

interest um and I think a big part of this is just we need New Primitives to sort of bridge that Gap um and I think that's just like where we have a lot of of work to do such as like what Charles has worked on with um element team and like a big part of what we're working on at Metropolis too so I think it's just like we need these new mechanisms um and Primitives to be able to start to bridge the gap between ownership and control and some of the like responsibilities there look the the theme to be honest a little bit of this season is that we've been struggling to get people to say super positives this is a very positive conversation uh it's been people are it's easier to point out

the stuff that isn't working at this particular moment in time than what is working and what I love what we're starting to get at uh Chow Wang had a great tweet where a lot of kryptos detractors it's very easy to point out the 99 things that crypto doesn't do as well but they don't focus on the one thing that it does better than anyone else and that would be very difficult to replicate on the example that I used was mobile like mobile tech it's smaller you don't have as much control over the screen but it ended up winning because convenience it did that better than anyone else um and so that's what I'd like to I think what haasu meant was kind of this idea that especially the early stage of an organization you want the people to be that are making decisions to be the most competent and

incentivized people but the way governments is governance is being implemented today is this one token one vote let's distribute the tokens as far and wide as possible and it's a hindrance on decision making so if you're just optimizing for what's good decision making right now you would want to limit the surface area of your governance say hey I know we want this and we kind of need this for regulatory purposes but we don't want to actually be able to touch a lot of core parts of what we're doing with this protocol because if we have to submit everything to a vote we're never going to get anything done so I think I don't want to totally speak for hasu but I think that's what he meant when he said that um

so I'd love to maybe just respond to that whole Soliloquy I also think I think there is haasu's also speaking from experience with maker that have been extremely frustrating in the last like year or so and he's been very vocal in saying like who is deciding our strategy for maker like who is it's kind of like this Untamed Beast right now which he's been very vocal about so I think that he's also very much speaking from um like it actually has been a huge risk maker because I think Maker's governance expanded so robustly that it became to Charles's earlier Point like a little bureaucratic and like overly robust

um and they might have kind of like flicked on themselves as in like they shot themselves in the foot um official way of saying that that expression yeah I mean I think the I'll speak to what how soon said about liabilities after this but with like maker for example I think it's just this huge debate between scaling the efficiency of the Dow like through the model that Jesu and a few others tried to propose which it was like basically a board of directors Council and so like the group of people in the ecosystem that want to scale it out make

decisions have a vision and push it forward like an organization and then the people who are like kind of true to like ogs of crypto like eat those flat organizations like very complete like autonomy and all that and like the governance system in terms of like voting weight is split between those two so like every decision is kind of like 50 50 almost or like marginally close on each side so like that's why it's really tough to get any kind of vision or or kind of more scalable processes in place because the 50 on the other side disagree with it and that's definitely where his frustration comes in in terms of like the liability side I think that right now we have the

training wheels on for all our governance systems we're doing a lot of things very manually and that's really important it's not a liability but it sucks and it crosses voter apathy voter fatigue even like people just leaving the ecosystems but it's really crucial to kind of how those people be here now train and maybe some of them leave but the ones that stick around are going to be there to understand everything and once the whole like government system understands these things you can then automate as much as possible which is the goal of maker and always has been is to automate as much of governance as you can but still have the ability for humans at the end of the day to step in emergency situations so they've done things like this with like the automated debt ceiling module where

like a certain thresholds hit it increases a debt ceiling and anyone in the community can sign a message it doesn't require a vote so like I think governance needs to be automated as much as possible but you do need to have that like dedicated aspect for humans to step in when it's necessary and like once we get to that level I think people are going to complain a lot less about governance as a liability there's this guy um I think his name is like Georgie egarov he's a he's like a I think he does a managerial like economics and decision making at a Northwestern like smart he wrote this paper that basically he laid out the argument that who is like who is in power matters much more than what system of government you have and there's this thought that democracy should perform much better because

politicians are accountable right and in dictatorships politicians are not accountable to anyone so they should hypothetically perform worse but this is not actually how the world works and when you actually look at countries that perform really well it's like it it's much more about who's in charge less so but like the system of government that theory ends up breaking down actually if you if that's only in good that's only in good markets basically when things really like hits the fan that's when dictatorships usually turn bad um is what this paper argues but anyways what what would you um do you think that like Dao should look more to have should they look at this paper for as an example and say

like okay we do need some leaders internally more yeah for sure oh Charles God you're disagreeing I don't know Jules like hell yeah I don't think decentralized means that it's like flat or spread across too much like there can be leaders that emerge I mean that's like how natural kind of selection works anyways like leaders emerge and like kind of show up when they need to be um but I think we almost Focus too much on the like I mean some doubts just focus way too much on one of the three like letters like it's really obvious when a dad focuses way too much on the organization making it like a

traditional organization and like when someone like for example Rye like they focus way too much on the autonomous part where like everything's automated and like it causes problems and like you can't make a whole lot of changes and things like that so like I think that like I said earlier with like decentralization um it is a spectrum so I mean when you first launched like maybe it's not going to be as decentralized as you want but it allows you to actually like get the structures in place like make the right decisions for like a base Foundation layer and then kind of spread it as you go but I think decentralized is more the idea that anyone can join if they want to not like an initial voting distribution it's like this is a decentralized Workforce where people can come in and like if they're accepted

they can join it's like permissionless to join versus like the other definition yeah what do you think Jules I don't actually think it's about making it open to everyone like I think that's how we've probably ended up in a bad situation and I think I mean that's a whole other tangent but to like workforces and devs but um Yana to your point around like um like over focusing on decentralization I think a lot of this too comes back to like who actually needs to decentralize because decentralization is still like very important in a lot of cases

um like you decentralized because it makes things it makes things like durable robust and non-capturable which is very important in a lot of cases and I think like even though anovitox articles are like sometimes just kind of a mind and overly dense and complicated his concave and convex article was honestly as a light bulb yeah yeah it was really good because you talked about first order organizations and basically organizations that need to decentralize it's not like a cute fun option where we're like let's do this decentralization thing it's like a must-have and the three reasons he gave for why you must decentralize are censorship

resistance so it cannot be captured by a single actor like a corrupt actor it can't be captured by a government like regulator like regulation et cetera et cetera these are super super important like in the case of maker there's also credible fairness um which is making sure you have like a diverse ecosystem of many stakeholders and that there's a robust governance like there's provable robustness in that ecosystem like that could be ethereum or EMS like these are ecosystems that are providing like a very important public good and if that infrastructure becomes compromised like that's massively problematic to the value that they're providing and creating

and then the third reason he gave was the concave decision making which is like kind of complicated and also I think like yeah it's not as clear where the lines are there and I think a lot of people try to like bucket themselves into the concave decision making which is essentially like the middle area of decision making like there are better outcomes when more people are participating in it rather or like the middle ground of decisions rather than the extremes which is like iffy territory but I think the first two are like they're a very clear requirements around that of like who needs to decentralize in those cases uh one one thought to share and then a question that I want to put back to you Jules or or Charles

um or you you know too uh but I think I think the uh if you cut thoughts um the convex concave decision making my when I was listening to him described that I actually think that has to do more with the maturity of an organization and kind of like expected value bets because in the beginning many just there are a couple big decisions that you want to be convex it's like you sort of at a really early stage of a startup I don't want to say you bet the farm but you kind of bet the farm and the reason why that makes sense is because if you if the decision fails you make the wrong decision you end up failing but if you make the right decision and you pivot your business model or hire the right person or whatever it is there's like a

hundred times upfold and then as you get older and older in an organization you know you don't want to be making as many convex decisions because you're never going to get that 100 you know Apple's never get 100x from where it is today right so all the decisions that Apple makes at a certain point because of its upside potential look more concave I would I would venture but the question that I want to turn back to you is is do you think that in terms of censorship resistant what makes sense to be a Dao is actually a societal decision and the example that I'll give to you is like power companies we talked about power companies and utilities if you just let power companies those are natural

monopolies if we didn't decide that everyone should have access to power those companies could have infinite return on their Capital because everyone's going to pay for that it's completely inelastic Demand right if we just let that roam free but as a society we've said we don't think it's right that these companies should just be able to choose essentially the market rate or you know price at essentially the market rate so we're going to regulate it because we think it's a societal good to provide cheap power to people the almost the opposite is true in terms of financial infrastructure you could I could sit here all day and Eric Voorhees does this more eloquently than I could do it but he'll go and say this is why it's a public good which it's a it's a right it's a fundamental human right why we should have neutral Financial

infrastructure on a societal level clearly Washington does not believe that they just don't believe it and so that that's you know you we could kind of sit here and be like this is where it makes sense but how much do you think that what ultimately ends up becoming infrastructure what ultimately drives value from being decentralized or censorship resistance is less a technical thing but more of a societal Choice ultimate like adoption of like crypto and D5 will ultimately be like a social thing and I think like that will creep its way into like like the hierarchies of social governments politicians and so on so and I think the underlying thing that would probably push us through is like that it's like permissionless access to

financial support and and tools that is currently at a price point for a lot of people getting boxed out so I think I mean the solution there to actually make that a real thing is that this is an open finance system is a social solution they don't think the technology will always be there and I do think that in this industry we do Focus way too much on having a tactical solution to absolutely every problem when in reality a lot of it is just solving problems for humans so I I do think that um Society is definitely like the the focal point for anything that you just mentioned yeah yeah I feel like a lot of it is also just trust like something I always come

back to is that like a huge part of like D5 is that we no longer have to like trust these centralized institutions that have traditionally failed us like quite massively in in the past and I think that is where there's a societal uh change or difference is like the trust element of it um and I think that's kind of like the direction that we're heading into is like we have seen like a bad actor after a bad actor like continue to create problems because of these because they're obfuscating information and creating these black boxes um like FTS is a perfect example of that

like trusted socially by many in the ecosystem but they basically were able to create these complex webs of legal entities and Personnel that were involved in this that completely obfuscated what was actually happening under the hood and so I think eventually like this type of legibility will not be like an optional nice to have it will be a requirement um and I think that is like a huge part of Daz as well is building out the selectability one final kind of line of questioning for for both of you which is this is where people get also divided a little bit which is just in the value of the community and you heard people talking about this

a little bit more 12 months ago than you might today and I'd just be curious what you both see the pros and cons of having a strong Community are and where you ultimately see communities contributing to or what place do they do they play in a dow long term I and I take no credit for this I give credit to uh my friend Toby from other internet which is that Community is and it is a overused meme um around launching tokens and I think the part that very frustrating for me is that like who are you even talking about when

you say community like if you can't clearly Define a sequel to group within your organization then they're not meaningful enough participants yeah I mean I think the community is definitely like a broad way to just generalize like your users your kind of like contributors like researchers it's like early on with element I mean our community was just researchers helping us build and answer like tough questions and like they were doing that because they wanted to be future users so I think in many ways there are different types of communities but like it does exist and I mean there's communities around like Nike for example like what's the value of that I mean I think that's what gives it a the true value is like the people who actually

support it like they rep it like they do things for it they believe in it and like that's like the kind of center point of every like company whether it's in like this industry or not so I do think Community is important but I do think it has become a meme and it's like more of just like I mean there's a very huge difference between like a community and like governors like some people are just there to like use your product and like promote it or like do whatever but then there's people actually care about shaping the future of it so I think it could be kind of more focused on like the actual types of people as like Jules said yeah and I feel like a lot of it too is just that we're not giving Community any like discreet powers or control so I think that just creates like a lot

of problematic Behavior around it and I think people also generally take advantage of like benevolent maybe community members that are eager to participate or support your brand um and don't actually like invite them into the process like I think we just got in this really weird place of like Community is remote um which to me feels like you're taking advantage of people or you're not actually empowering them like in your organization it's like a way to keep them um a far enough distance Jules I gave a presentation like a month ago um and it was called they asked me to give the presentation on like how to

build community and uh I I don't know how to share a screen on this or on share screen or my share screen's not working but I basically was like first lives like how to build community the next level was like how to build a community with a huge Red X through it and then it switched to how to build it uh and then it switched to how to build a cult and I was like basically the basically basically the whole pieces of it I love that energy yeah I think I think a community is like a group of people who like your they like your business and um so like for me like block works like block works the they like like the what behind your business so for media it's content they like support your business they're your fans they hang out in a

Discord they hang out in a telegram you host some events for them they buy the tickets to the events they buy your merch voila like you have a community but the problem with Community is that um like when we like Community used to be a community used to be two you might have two communities in your world in like the meat space world you had like your Thursday night softball game and like your church on Sunday or something but now yeah are those your communities those of our communities no but like you had like two communities and they're just like yeah but on the on the internet you have an infinite amount of communities and what happened there is that communities are great when things are going well but when the going gets tough the tough get going and so I think

communities are really really quick to build but even quicker to disband and I think uh like Charles you mentioned Nike like Nike didn't build a community they built a cult following and I think that Cults are when that group of people like a community is when they're focused around the what like for media businesses it's like the content uh for Nike it's like shoes but people who like are devoted to Nike they don't care about the shoes they care about what Nike stands for it's the idea behind the business and so I think that like a cult is just this devoted attention to a particular idea of relief and I think that any company crypto or not can benefit really really greatly if they put their themselves at the center of that idea the link Marines

like that's definitely a cult that are like though like it's like a toxic like Community they'll like back anything that like the channeling people will say that was a definite have you guys read Toby shoren's life after lifestyle piece no it's kind of like tangentially related to this like his is more of like a commentary on um cultural production and like how we've attached that to um products so like his like the argument is that like cultural production has become like this service um for the supply chain like we just keep attaching like these communities and like cultures around like white

label products that we just like shoved down people's throats um but it's just like I think it's interesting when you think about like kind of furthering that argument is that I think where we're starting to like Circle back on is that culture like Community is it the product it's organization and organization is like a huge part of you know the byproduct of that and um there's potentially like not only a shift in culture but a shift in like how we organize and that culture is a means of like how we proliferate

the effort of organizing and that is like when it becomes most powerful because who wants like a like a random group of like super fans like sure that's awesome and like yeah they're gonna buy your tickets and your t-shirts and all these things but like when you actually invite them into the process of organizing like that's when I think of like things start to shift yeah I think that really emphasizes let me bring you back to Dallas is like the Downy division like if like without a vision you can't have a cult or a community or like users who actually support the future of it and I think a lot of dollars are a locking Vision because of like the immediate decentralization like from the core team passing over ownership to like everyone like who's leading this now we're all confused

we're like running around with our like heads cut off and like we just can't make things like happen so yeah I mean that's the power of of meme like Kevin owaki has done that so beautifully like Bitcoin doesn't even have a protocol yet like their Dao isn't a protocol Dao but their meme is so powerful of public goods like that is the mission and like core ethos of the pro like the the Dao and if you're not like participating in the meme of public goods and like that culture you're there's no way you're part of that organization like every single person that's part of get coined out is like bought in on that culture in me you're basically a bad person if you

don't support public goods like you can't really argue with that they have a cult that's based around this idea of public goods so I think all these every every crypto company was like we have a no I just I just skimmed Toby's piece like this life after lifestyle and he it's like he nailed it it's like the lifestyle Brands yeah it's like um I want to actually read it I'm not giving a justice but like it's life's the idea that every brand was a Lifestyle brand is the when really there were just these white label d2c products is the same idea that every nft project was a was a community like it's the they're it's the exact same idea just five years later um one one and one in a thousand will be

will be the next big brands of the future if they can put themselves at the center of this big idea like a public goods type of thing so yeah you know to your point you know when you think what no you know I did not even mean to do that that's just my cleverness yeah uh but if you think about analogs too what are some of the biggest brands in the world I mean look what Elon Musk has done with Tesla that's if that's not the definition of a cult I don't know what is uh I think Apple the largest company in the world you could ultimately say kind of a cult these people do wacky things like you know there was the whole Steve Jobs and he would go and he had the same

dress right he had the it wasn't a high priest gown but it was black turtleneck and and blue jeans you know and people would camp out every every time the you know there was a new iPhone and stuff like that so I think that's really I really wish I could share this presentation I literally have a slide in the deck because uh it's the Western Wall in Jerusalem next to an Apple Store historically you got historical there's a fire presentation honestly it's pretty good yeah you know it was a history major for those of you who might not be aware so that's a nice touch yeah it's all like oh that's all like [Laughter] good wrapping Point yeah you both have been super generous with your time

um if people want to find out more about the work that you do or follow you or or whatever what's the best way to do that one thing that I do want to kind of float with the end is like what I was talking about earlier about the governance system Council that we built um we've actually really like started focusing on building it as a standalone product so that's like the full governance protocol that you can Fork but it also comes with like a reference UI that you can copy as well um and like documentation and SDK and all these different things because there's no governance framework out there that has all the bundle together to make it easy to Fork which is like has decentralization at the Forefront in mind like the only thing that was really easy to afford before was like setting

up a snapshot over a multi-sick and like compound has a great model but like it doesn't come with everything you have to build your own UI you have to like work around your software development kid needs and documentation so we are really excited to like start working with tons of Partners on that and like have them actually use our governance system and like test it out and experiment for themselves but yeah you can you can reach me at Charlie St Louis on Twitter and at elementfi also find me on Twitter is Rose with z um and also check out what I'm building with Metropolis I didn't really like give the tldr Metropolis but basically we're building a protocol to manage on-chain or relationships and

permissions um and pods which is like our core product are the sort of nuclear unit of formation that you can build this sort of relationality between so creating um better Assurance mechanisms and accountability systems and ensuring that we're building safe secure um organizations who's like the dream customer that you could get in front of right now honestly like we've been pretty picky about who we actually work with like I think as you probably noticed on this podcast like I'm pretty opinionated about the future of um daos and organizations so um we're like most focused on working

with organizations that um you know need to credibly decentralize and have auditable and provable um you know decentralized power relationships so um I think you start to look at a lot of like wonderful defy Dows and protocols and um ones that uh have like something very valuable that is worth protecting essentially Charles Jules thank you yes thank you so much all right buddy we're back and this time we've got matching shirts uh for those of you who are following Along on video black long sleeve it is the season baby hey the classics are classic for a reason all

right um although I am feeling a little bit uh self-conscious about this computer setup we've got a very HD camera I don't think I'm good looking enough for this bringing out the blemishes you know yeah I know you're gonna tell Rito we actually got a downgrade on the HD quality here because uh you know I've got a face for radio but get a haircut you know you're the second person asked me that today and no I did not she like blow dry this hair today or something I bet can't confirm a deny you know I gotta look good I'm going on camera um all right buddy this you know you're not supposed to pick favorites just like your kids but I gotta admit this was one of my favorite interviews of the season I think it's been tough to find people who are willing to say or genuinely feel

positive about the Dow landscape I think both of these people did and it was there's a breath of fresh air honestly and I just I just really enjoyed the conversation in general I I love the combo of like Jules is like such a deep thinker with like why on chain organizations should exist in the world and is obviously building Metropolis um but like just real has really thought deeply about it and then obviously Charles is just like Charles has implemented a lot of this stuff at scale at at you know first at maker right which was like the first to really do it um and it was just a really nice cause I thought they bounced off each other really nicely so I'll throw up you always ask me first so I'll I'll throw this to you what what were some of your takeaways okay so I

really like the way Jules and I was hoping that she would do this at the top of the episode she defined Dao's on-chain organizations yeah I think that's a lot cleaner you know I'm still I'm still deciding to what degree I really deeply agree with that but it's it's a it was a very clean nice explanation it was a good impetus for Dao's to exist and you know the more that I think about it the more that I like her definition that she spelled out and I think that her what what she laid out in between social wear and trustwear was also a big takeaway for me and I thought you you made some made a really good observation to use her analogy of social wear versus trustwear you know we talked with haasu

and some of the earlier episodes the earlier episodes the season about you know where is it appropriate to become a doubt and what maturation of the Dow do we really want decentralization you know I think in her definition of like social wear and trustwear you kind of want social wear in the beginning because you point out it's a good way to bootstrap right it's easy and cheap and cost effective and just makes a lot of sense in the beginning but as you get larger and more mature as an organization you want to be investing in tools that sort of ossify that that trust and remove the need for for trust in organizations you kind of get trustwear later in a Dallas development so I I really liked what you had to say about that she really got me thinking the more I think about what

Jules said about that the more I like it and and the reason for that is um I still do agree with what I said about like so social I think you need to have just like social work at the beginning or like you don't want to put in place these like you know hard-coded Trust Systems at the beginning but if you actually zoom out from just building a startup it's like trust in society is eroding right and like we this week the biggest thing that happened this week was like SPF interviewing um at the New York Times deal book Summit with with Sorkin and it's like you just look at like I feel like trust and government governments is eroding like trust in like large financial institutions this is eroding like trust in like kind of mainstream media Outlets is eroding a

bit and when you think about what makes society's amazing societies it's really actually not governance stuff it's it's trust like trust is the backbone of society um and it's like if if on-chain organizations can bring more trust or to society like right now it might seem kind of crazy to put organizations on chain but like you could see this world where like that flips one day and it's like you can't have an organization if it's not on chain or or else people won't trust it 'll take time but like that could that you could see that happening I think it was selkis who originally pointed this out you know and one of the ways that he's described Masari over the years which was it's it's not even the

Bloomberg for crypto it's the Edgar database for crypto which is almost one layer of infrastructure below the Bloomberg of crypto and back in the we talked about this during the episode but when Benjamin Graham was famously writing you know the intelligent investor or whatever it was very difficult to actually procure good information about companies but when Edgar launched and became a thing eventually was like oh this is actually really helpful and that more from oh this is good and helpful to companies actually have to do that because we view this as something that this is the best way to get information out there to everyone in a transparent way that was sort of an Overton window shift and you know one thing that I've sort of been thinking about internally and this gets to where we were talking about how

much of these things are actually just societal choices I'm I'm starting to wonder and play with this idea that we might need an Overton window to shift for a lot of crypto to work and I think I I think that was a big question that I walked away from this from this episode with is is how much how much of the stuff do we need to just is it just a matter of time before some of these Overton window shifts that yeah you wouldn't trust an off-chain organization because why would you it's opaque you know you could you could see a future where the you know everything being on chain is demanded of people but I also wonder you know zooming out for a second talking about this neutral Financial error that we're trying to build I wonder you know Society doesn't seem

to want or value that at this particular moment in time so I'm wondering how much we need an Overton window to shift for a lot of what we're building to make sense so when you look at like how the internet was created it took like 50 years right like protocols start getting built in like the 70s and the 80s and then you don't it doesn't doesn't really take off until the mid 90s and then you don't get Facebook until 2004 and then you don't get like the Ubers and lifts until 2008 and like that's like a 30-year window 40 sometimes depending on how you look at it like a 40-year window and I think we always said with crypto like we're just going to speed run all of that because we have web 2 social networks as the distribution layer the internet didn't really have that native

distribution layer baked in and so like crypto is just going to go much much faster um I know but I'm starting to rethink that it will go much faster but like I'm just starting to think that some of this stuff just takes time because you need Society to actually catch up to what the technology is the problem that technology is trying to solve and I think that's what's going to happen here I think so too I thought you made a really good point about cults I like first time for everything yeah first time everything I like that little rant that you went on I found myself nodding and looking up like this and pondering well you know it's funny I don't even know if I told you this I got asked by um by Work Week um say Adam Ryan's organization is another Media company to give this

presentation to a bunch of media execs in New York and the the I like kicked off this event and the conversation was about how to build community and because we've built this community with burmes and um I was I was like I sat down on Sunday to make this presentation I was like I don't believe that that is a good strategy for every company to just go be like I want to build a community it but building a cult the com the few companies that can build these cult followings it's really powerful so glad you enjoyed it you know what it also made me think about was one of the ideas that I forget who said this but it resonated with me and we've talked about it over the years is one of the advantages of having a Dao in the community as an extension of the Dow

is you get to run ideas by them so theory in theory right it's like hey I'm thinking about rolling out a new product feature what do you guys think hey I'm thinking about potentially taking the business in this direction what do you think you might be able to a get like somewhat useful product feedback but B avoid these disasters like when Netflix rolled out quickster and they far too early separated the streaming part of their business from the Legacy DVD shipping and Rental part of their business and their stock created and all that kind of stuff they rated the ship but it just took him a long time and it was a distraction but one of the business things that you hear a lot of the time that is kind of right but also really kind of wrong is just talk to your customers and they'll tell you what

they want you can't really do how many times have we done that where we sat down talked to our customers maybe 25 of them and got 25 different pieces of advice because the step that there needs to be some sort of filter there you have to pick the market and the type of customer that you want before you just start listening to all of your customers so one of the benefits may be of having a cult is there's some uniformity in what you're trying to do because there's a bunch of different ways to skin a cat right a blank on the express there's a lot of different things you could do and having a cult with everyone on the same wavelength is probably more useful than having a whole bunch of different disparate opinions sometimes yeah if that makes sense no it does make sense

and like so one of the parts of the presentation I didn't talk about in the episode is I kind of laid it out in three like like three ways to build a call it's like first you have to like Define your beliefs right Define your beliefs and usually it's like the founders are if you're using startups as an example like the founders to find the beliefs of the company then you then you have to take those beliefs and build and and you have to take them internal basically like you have to get people internally at the company on board the third thing is then you can take those beliefs and share them externally the fourth thing though that few and far between like it's really hard to do is um or they're just like really aren't opportunities to do it is what Tesla's been able to do which is you align the

cult uh financially um and you kind of give them Financial incentives and one of the reasons Tesla's got such a strong cult is because people buy the Tesla stock so so they're super bought in and like that's that's what that's one of the ways that crypto can like incentivize these Cults um a little bit more is like there are tokens here so I know all right so that we did I didn't really want to get into this because we're all already going down a couple of different tangents but I not to be annoying about this but I see a bull and a bear case for that the bull case is there are these examples of communities or Cults that have been built so Tesla and apple being two really famous examples here's another example of where Community has actually been a moat in a business

Excel forms you know there's a million if you Google what's this Excel shortcut or how to do this on Excel there's a bunch of people on these forums that are just dedicated to being they're all these how-to videos and and how to do it Etc and that's actually an enormous moat for your business because then you don't need to pay people to go and type up how do you do model question XYZ people are just doing that for free so there's a lot of value there and I could imagine if you could financially incentivize that stuff by non-cash compensation the form of stock give people upside man those are some really powerful lovers that you can start to play with on the other hand even when I just heard you describing that Tesla example something inside me went oh maybe that's not a good idea and

pretty famously Enron did that with stock right they had their stock price in the elevator and that now that's a very famous warning sign that right you don't necessarily want everyone motivated by the stock price there's something to be said about intrinsic value of work and stuff like that so it'll it'll be interesting it's it's a new experimental playground and that's why I actually have a lot of respect for Charles St Louis and the the work that he's doing at element because in addition to building we didn't even talk about element the protocol at all which is trying to strip out hey it's a hearkening back to season one right fix versus variable interest rate borrowing in in defy we didn't even talk about that he's not only trying to build that ship he's Reinventing the ship of okay how do you organize a

a uh a company or or a Dao or whatever so he's trying to build two planes as they're falling in the air so just a tremendous amount of respect to trolls and and the Pioneer the work that he's doing at element I agree I agree yeah I think that's yeah anything else from the episode no that the the you know the point of this episode and I think we really got that was this is what are the what are some of the experimentation that's being done in Dow land that wouldn't necessarily have been possible in uh corporate governance Corporate Finance land and I thought Jules example of uh social Ware versus trustwear was really powerful an example of trustwear being the governor and the experimentation that Charles is doing with um you know the the council model

at element and some of the the uh you know the voting vaults that he described in the episode is was really great um who do we got coming on for the next episode you know Kevin owaki coming up next great um yeah what are we talking to Kevin owaki about uh we are talking to Kevin owaki about Dows in the next Bull cycle but you tell me what that really means well what it means is I mean Kevin owaki got brought up actually in this episode by tools we didn't even ask her to do that but it's a great example of someone who's built um a very strong meme brand so we should definitely ask him about your building a cult versus building a community question but I think Kevin is an example of someone who

has been able to maintain he's been sort of a face and brand of a dow without necessarily overpowering how the Dow is run so I think he sort of walked the tightrope balance of early leadership days of of a Dao while actually having it be something that's relatively decentralized and and keeping that ethos uh very down pat so we wanted to get an understanding from him of okay this is what Dallas look like today what are the problems what are the sort of green shoots promising areas how do you expect them to change in the next Bull cycle so that's what we're going to be talking about pumped cool foreign [Music]