DAOs and Blockchain Games: Lessons from Alien Worlds

Transcript

all right wonderful I think that was a great uh segue into some of the things that Sarah is going to be talking about uh right now uh on Dows and uh blockchain games so without further Ado let's welcome uh Sarah to the stage thank you thanks yeah great um in Alien worlds we've begun to implement some uh Dow governed AI systems um which I actually will not be covering in detail here but um it's so interesting that intersection especially of decentralization and Ai and whether communities can effectively govern any of these systems collectively right now those touch points are pretty

difficult um but it would certainly help with some of those topics of decentralization that were just discussed if if those touch points could become a little bit better in the future okay so uh Alien worlds um is what I'm talking about today so we were a homegrown project right here in zoo um I'll take you through a little bit of our timeline later but um we're the largest blockchain gaming project that was created right here in zoo based just down the road and in fact Alex denler is on our board so thank you to this um ecosystem for having helped us to to start um we're one of the largest daps um in the world we were the F we were

the largest we sorry we're the first D to exceed numerous nous scale thresholds 100,000 users 200,000 users half a million users a million users um and we became really the proof point for how large and how scaled a Dap could be um before sort of others had reached those thresholds um and that was really part I think of seeing the proof point that gaming was within blockchain for the story of utility why people would open a blockchain wallet in the first place was it just to hold Bitcoin or to hold any other token or could you actually do things with this technology okay so in the alien world's

gaming metaverse you use nfts utility nfts to mine on various planets and each planet is a dow an onchain Dow so you use nfts like a shovel or a digger and then you choose which terrain you want to mine on located on these different planets which are dows and you earn the fungible token Trillium in doing that and then you use that fungible token to stake into those Dows to gain governance control and so those Dows become teams within the game that are competing against each other so the rote in is mining using utility nfts uh but then you earn the token and

then you stake that back into governance and essentially the teams are competing for dominance within the metaverse this is all happening on chain okay so I think it's a little bit interesting for people to hear about how that idea actually came about because it was not a direct pathway um in 2017 we began early formation of ideas around what we call Dax at the time and the the initial concept actually was to be a block producer or a minor on a few different chains and that the block production rewards would go into an account that was governed by Dow permissions so that it could become a way to fund what a community might want to do so there would be block production

or mining activities going on but those rewards were then used by the community and governed by a dow and that was indeed what we did we were a block producer on a few different chains um and we had created this really robust Dow technology in order to govern that Dow and we knew that it was scalable it had lots of applications and we got to about seven different communities using our code base but that wasn't going to pay the bills right they we were in fact largely letting them do it for free I mean we might charge them a little bit but so we needed a use case for this Dow technology which we knew was scalable robust was really interesting people

loved interacting you know within these blockchain projects as Dows uh and so we decided let's put this inside of a game and let's combine nfts a toonomic structure and that's what end ended up happening and alien worlds became a viral hit um in 2020 and 2021 okay so just a few stats about $10 million worth of chilum is traded on global exchanges every day um there's between 50 and actually 100 custodians every week within alien worlds so you could run to be a custodian at any time at play. alen worlds. um our nft collection is actually the most owned nft collection

in world so more people own an alien world's nft than any other kind of nft okay and our mining game smart contract is one of the most at the time of writing it was the most called smart contract in the world I think there's a couple that are at various times um higher in the league tables but one of the most called smart contracts in the world and has been since 2021 so we're going to play this one alien worlds is the most popular web 3 metaverse over 240,000 unique active wallets connecting daily within the metaverse its most solicited smart contract action mining gets called up to 13 million times a day making it the most frequently executed action of any

smart contract or any blockchain in the world so that was true about six months ago I think it might be the case that there's some more scale daps now running and that's one of the things that happens as the tech keeps getting better and then you know more and more transactional volumes are going through these systems all the time so let's ask the question then so we've got within alien rules we've got these Dows that are competing as teams but that's a very novel implementation of dows in general Dows are ways of managing a treasury and there's a few different reasons why projects are managing a treasury and they are that as well in Alien worlds but they have this ad component to being teams that are competing against each other but so what are Dows used for in blockchain let's

have a show of hands how many of you have are a member of a DA or have voted within a dow okay a few less than half um okay so it's a super powerful thing to be able to collectively manage a treasury right and to manage it in a trustless way where it it's definitely the case that a requisite number of votes would be required before tokens would be sent out of that treasury in General within crypto Dows were successful there was a period of time when there were a lot of dows around special ideas or reasons why the Dow came about so some of you might be familiar with Constitution Dow which was a big Dow that was set up and got a huge amount of

money into it to buy the first copy of the United States Constitution uh now we have a lot of dows that are forming around projects to governed token Supply and essentially as part of the decentralization story of many projects that are trying over time to seed control to their community and so in those cases the Dows are helping to govern the direction of the project but fundamentally what a Dow is is it's just a blockchain account that people stake tokens into and that gives them voting power that voting power could just directly be for resolutions so a resolution might come before the voters of a dow that says let's transfer X number of tokens from the treasury to this blockchain account because they say they're going to buy a copy of the

Constitution for us or they say they're going to create a website for us so it could be simple like that where it's like a almost like a referendum where on each resolution you have to cast your Vote or it could be like in our case where it's delegated so in our case what happens is voters vote for a group of custodians and then those custodians have permissions that are ascribed to them and it and it takes a majority of those custodians to be able to vote in favor of it in every case it the the way that the voting works is through stake weighted voting so if I have 50 tokens and you have 100 tokens you have twice the the voting power that I do so it's not like in normal Democratic systems where it's one person one vote and the

reason why it has to be like that is because it's very easy in blockchain systems unless they're kyc to just split up your tokens amongst numerous accounts right so it doesn't make sense to have a concept of one account one vote because you could just split up your accounts into 10,000 accounts and then you'd suddenly have 10,000 votes so we have to have stake weighted voting um but that in itself creates some issues that I'm going to come on to so this is how it works in Alien worlds uh members stake their tokens they vote for candidates five of them are elected on each Dow every week and then those five custodians themselves then have programmatic permissions on on the Dows account so it

takes three out of five custodians to pass a resolution and then once that once those three out of five custodians vote in favor of something the the funds go out it's programmatic right there's no way of stopping it or getting it back that's just once those three out of five custodians vote that's it okay and this is an example of what one of our Dows is voting for at any given time so it's all happening on chain and the resolutions are going in front of the Dow and then the Dow is voting the Dow custodians are voting in favor or against this is a community created

website that's showing the actual so that's this is making it a little bit easier to understand what those resolutions are so the community created that so that they could understand what was going on because we hadn't gotten around to it yet and so here you can see there there's a custodian allowance being being considered I supporting the ipf and so on so these types of resolutions will come before the doubt and then they vote in favor or against these are our token our token flow so this is how inflationary Trillium in our case flows throughout the metaverse and I think what's interesting to see is inflation is generated every day and then it directly flows to those six Planet Dows yeah so they're getting essentially they're

getting play to earn rewards as a dow and that's what's seeding their treasury or funding their Treasury and then the Dow custodians vote on how to spend that treasury in other cases like with Constitution da or other special purpose Dows there had to be a fundraising event to to get the tokens into the treasury in the first place whereas in our case they're being funded out of inflation okay so Dows are super interesting right um if we want to think of them slightly more conceptually we would think that fungible tokens are ways of representing aggregate value right I can have 100,000 tokens or I can have one nfts are ways of representing unique items right so I could have a

particular piece of art I might be able to represent the value of a car on chain in in our case I might have a shovel or a piece of land those are all nfts so unique items or series of unique items Dows are ways of representing a group of people on chain which I would say of all of those three concepts might even be the most interesting right if you didn't know otherwise which one has been most impactful that's a very impactful concept that you can represent a group of people and their Collective intention their collective decision making on chain and also that group of people can come and go because you can just sell your to your Dow tokens if you want to get out of the Dow and you can buy some Dow tokens if you want to come in so it's a very fluid structure but we're

discovering that there are real benefits to this I mean for starters the massive scale that we were able to achieve was in part because we had this community of people all making decisions and going off and doing their own marketing and promotion and highly evangelized within the system so there's numerous benefits to to Dows and there are also some challenges and so we've been building them since 2018 and we have some learnings now about how do human beings kind of respond Within These systems and what are some of the the pain points and some of the and some of the benefits okay so one of the issues in a stake weighted voting system is that you have to have engaged voters so you can have a massive treasury billions of

dollars sometimes even and amazingly Within These system sometimes you have very small numbers of people voting the token distribution is what defines the voting distribution right so because each token is a single voting unit the token distribution is what defines the the voting if you ended up having five whales with 50% or 60% of the total token distribution and if those five whales just happen not to care about your project anymore they could be millionaires in various parts of the world who went in and bought tokens of different projects 6 months 9 months later they don't even really realize that they have your token

anymore especially interestingly if the Dows token has gone down in value and if all they ever thought of it as was was a speculative instrument now those are just some tokens sitting in a wallet and they don't really care but within the context of your system and whatever that da is trying to do that's really significant that that Community really needs those people to vote because otherwise what's happening is you're getting these tiny percentage of the electorate voting and sometimes you can't actually reach the minimum level that's required to pass a resolution or sometimes what happens is just a small handful of well-organized people can get together and almost drain the coffers of the Dow right so if you don't have a sort of minimum level of people voting

all the time what you end up with is a very vulnerable Dow sometimes which has a lot of resources within it this goes along with um the fact that in general these are Anonymous systems so there's very little accountability and in fact you don't even necessarily know how to contact the people you could have whales in your system who aren't voting you don't know how to get in touch with them uh there have been cases that we could come on to if there's time of dows in which Founders have actually ended up taking large quantities of the tokens and this was only later discovered this type of thing happens in Anonymous systems there's also some issues around how do these Dows eventually become self-sufficient or sort of

self-perpetuating in the long long term it could be the case if they were a single purpose Dow like Constitution Dow once they buy a copy of the Constitution that's it they don't have a purpose anymore but in most cases there's some concept of there needing to be a long-term purpose for the Dow so if it's a dow that governs a particular project um that needs to have ongoing activity within it unfortunately what happens in many cases is that there's an initial burst of enthusiasm especially when the token price is high but in the long run you get under sort of involvement or interest in the Dow the other thing that can happen is that oftentimes Dows are a way to give power to the community but if the

community is not yet able to self-organize if they actually are still quite reliant on the founding projects team then again you get sort of an underbound team to have a role when in fact sometimes the whole purpose of the Dow is so that the community can gradually take over okay so here are some examples of some Dows in the world and what's happened I think one that I'll just close on one sort of interesting example is spice da which was a dow that got together to buy a copy sorry to buy um Dune what they thought they were doing was buying

Dune and unfortunately it turned out that all they did was buy a copy of Dune a copy of the book they they thought that so this is the the Sci-Fi franchise Dune right these these people got together they raised a bunch of money and they thought that they were buying the IP and it turned out they were just buying a copy of the book so this is the type of thing that is so common in unfortunately in decentralized systems right is because you've got you know let's think that think through how that happened you know you had maybe 50 people all around the world coordinating to make this purchase they would have had to nominate a company to do it on their behalf because Dows can't actually contract right the Dow can't sign one side of a contract because it's just a

decentralized entity so they would have contracted a company to help them do it there would have been some miscommunication this type of thing is happening all the time right where it's very difficult for disperate groups of people all over the world to self-organize and sort of nail the delivery every time and I think especially since you know the overlay to almost everything in crypto is asset price volatility right so that what in general will have happened is that people piled in when prices were going up and then when they start to come down or level off a lot of times people have lost interest and you only get a few people left over who maybe just don't

have the skills or aren't that interested to actually execute effectively but you might actually have quite sizable systems underneath that big treasuries of hundreds of thousands millions or times you know even billions of dollars Within These Dows so that's a little bit of the sort of learnings that we've discovered over the years but what I would like to come back to is this so these are the blockchain transactions running through this Dow this is still valuable it's still super valuable to have a piece of technology that allows people to programmatically govern a blockchain treasury that is fundamentally something that adds value to the system and so if we think of

Dow tokens as one of the next iterations in the in the lineage of fungible tokens nfts and DOW tokens Dows have intrinsic value there's a use case for them I think what we're discovering is that Dows when Al is that Dows are people and when that is also overlaid with asset price uh volatility it's very difficult to get that group of people to effectively coordinate towards a common purpose but I don't think that that's the end of the story that just means that we're part of way through the story um it means that we're still evolving I think it does you know introduce a bit of a note of caution when you see a doubt you know is that the type of thing that could have longevity what's its purpose what's its legacy plan um but

fundamentally we're still looking at a piece of technology that has huge value uh but we're sort of dealing with some human friction in the meantime especially since crypto is so volatile thanks I think I'm at time should I take a question any questions yeah yeah so in fact our company dcoo first we first founded the company in order to be the legal rapper for that block producer DAC that I mentioned um so sometimes a company can form um there are jurisdictions where Dows are as a native entity being recognized like a company um basically what you have to do is appoint a company to act for the Dow

but there's a lot of friction in that because the Dow is like if there's a if there's a custodian board that changes for example every week it's a different entity every single week so there's no there's no easy answer to the question of how do you create a legal entity that that reflects the Dow without there being quite a bit of liability on all sides the other thing to mention is that there's a lot of liability issues for people involved in Dows in general there's joint and several liability for them which is kind of what you don't want so um yeah oh Alex yeah [Music]

def yeah it's a really good point um the the resolutions being easy to understand is a huge part part of the story but even when they are we don't necessarily see you know a massive change in behaviors um because I think the communities do figure out in general what the resolution is that they're being asked to to app on but yeah you need user interfaces that make it very clear what you're voting on and also I think one of the functions of a central team whilst there is one is to sort of like be the purveyor of news you know like to say okay here the resolutions on this Dow this week that you might want to pay attention to um yeah there's lots of sort of um utilities that can be provided to the community thanks so much for your time

thank you