DAPPCON 2025: Token Value Accrual Framework - Nathan Van Der Heyden

Transcript

But yeah, uh thank you everyone that joined uh late in the day. I can see it. So you're you really are the people that are left. Thank you so much for joining. Uh so yeah, today I just kind of want to talk about value acrruel. Uh the idea of a value acrruel obviously is you have a token. What does your token do? If your token does nothing, that's obviously not great, right? Like so that's how we we're kind of getting to the value acral topic. Just small questions uh based on the people that are here. Are you here because you're interested in launching a token? Are you here because you're interesting interested in Oh, maybe we'll do like hand raises. Who's here because they're going to launch a token?

Awesome. Who's here because they're kind of looking for better models for their tokens, existing ones? Excellent. Who's here because they're an investor and care about that that sort of things? Interesting. Uh, and something else. Something else. Excellent. Well, all right. Let's start with a simple question that kind of implicates the audience. What is a method of value acral that you've seen for tokens that actually creates value for tokens? And I would say governance of these tokens. Uh have you seen anything in the wild where you've been like oh that works really well that has shown to transfer some of the value that the protocol or the project

is created to their token holders me auctions that's a great example actually me auctions and then the proceeds go to token orders who's doing this Ethereum that's pretty that's a pretty good idea. Uh that does help. I I do think MEV is a huge something. Yeah. Yeah. With flashb uh it's definitely a very interesting I've been reading more about like how me is this driver value for chains I I do agree that there's definitely something there. It's funny how the thinking has evolved from me as a problem we have to solve to me is actually a a value

creation tool for chains. uh any really bad incentive alignment between tokens and projects that you have in mind? using definitely a bad value across uh models. Anything else? This is recorded. You're right. We we'll we'll do that during the the the

discussion afterwards. So, kind of the reason I'm here is that at Aragon, we've been building these solutions around governance and around tokens for a long time. You know, ever since 2017, we've been building from very infrastructure centric things to more like coordination and tooling software. And something we've we've obviously noticed is that you can create great coordination tools, but if you don't create token mechanisms that make sense, nobody wants to coordinate this pile of worthless governance tokens. So we've realized if we actually want governance to matter, we need tokens that make sense. And tokens that make sense are tokens that

somehow align the interest of stakeholders and in some way acrue value to those token holders. And I think there's different ways of doing this. Um this last point makes a lot of sense. I think a lot of time we're seeing governance failing and people losing faith in governance. Not really because the project doesn't make sense or it doesn't have traction but because the tokens don't work to actually support the people that are buying those tokens, right? So you can have two sides to tokens. You have a demand side and a supply side. The supply side is obviously people who are who bought your token way before your

token ever existed. Whether it's with their time and effort through like a team or whether it's through investing and this could be like your VCs. And then your demand side is the people that are actually interested to buy your tokens for intrinsic reasons. What are those reasons? The main one, the main reason why tokens exist. Actually, this is a great audience question. What What do you think is like historically the main reason tokens exist? For founders to make money.

Another way of saying that would be fundraising. Yeah. I I I think honestly if we're looking at the crypto industry over the last 10 years, the main reason tokens have existed is capital formation. is saying, "We're pulling our resources together. Maybe these resources are are time and effort. Maybe they're actual money and we're going to create something together." And if you're looking at like the projects that are still doing it today and that are, you know, in in many different ways, right? Like there's pumped fun in this slide, uh it is obviously not the same thing as Echo or Coin List, but in both ways there ways to form pools of capital together based on a common enterprise.

this enterprise can be as mimi as you as you think, but it could also be like extremely valid and and make sense long term, right? Um, so if you're if you're looking at like historically how we thought about tokens, I think obviously in 2013, everyone sort of thought about tokens as money, right? Like this was Bitcoin type era when you have you know this is when stuff like Litecoin started and we thought all right tokens are money that we're going to exchange them on on blockchains. Interesting.

This is good by the way anticapture very very interesting website they're doing cool work. Um 2017 is when we started thinking of uh of tokens that as methods of payment. That's when like stuff like Dogecoin started happening. But obviously tokens as payments make little sense in today's world for two main reasons. Way too volatile and not enough throughput to actually support any kind of real world use case. Especially in 2017. Maybe this is changing now. In 2019 that's when we invented what the the industry that Aragon has been for so long which is governance tokens. And the main idea of governance tokens is you have this claim on the future direction of the project.

you don't have like a clear financial claim on the future of that project, but you do have a very serious uh claim on on where it's going to go based on the proportionality of the tokens that you hold yourself. And then in 2024, I think that sadly that model sort of break down broke down. And I think the main reason is because we never actually finished the promise of these governance tokens, which kind of was to own a financial interest because that of the previous slide where we were talking about like capital formation, the goal of capital formation. I'm only going to put money in it if I think that I will have upside in the future of this. It didn't really happen. And now we have stuff like the

for those of you who've seen the recent Zora token launch where they generally say this is a memecoin. This is a memecoin. But actually like investors are getting a certain percentage of this. Team members are getting a certain percentage. But the team is razor focused on saying it's a memecoin. And to give you an idea like I even DM'd my friend in Zora and asked her like what the is this? She was like no memecoin. No more comments. Like no more comments. No, no more comments, right? Like, and we've kind of brought this on ourselves, right? I think it's based on regulations. It's not all based on the crypto industry. Uh, but yeah, we we've just not done a good job of um of completing the promise of this capital

formation thing. Uh why I think that a big reason is that governance is not the demand driver that we thought it was. We thought that actually having a stake in the future of the protocol that you're on is sufficient for you to want to buy this. But obviously it's not, right? And I think part of it is because we thought that people that buy into like let's say what's your name? Etananiel. The people that buy into Ethan chain do it because they want to decide where Ethan chain is going to go.

But actually I'm not sure that's true anymore. I think that people that buy into your chain that are businesses that are creating things on top of your chain, they sort of want to know where it's going to go. Yeah. But they sort of also trust the team to make the right decision. They they've been building aananiel chain for ages. So what they care about is protecting themselves from getting deplatformed. And this is something we've been talking about for for ages, right? It's the classic like Facebook uh example with Farmville. Well, like the the publisher of Farmville got deplatformed and he couldn't do anything about it. I think it's something protecting yourself from getting deplatformed is something. But then it kind of puts you into this weird

formula where the the value of governance is basically the value of uh like the the risk that you're going to get the platform plus the switching cost that it would take you to go all right on optimism anymore. I'm going to move to ZK sync and that's going to be fine. So for me building an app on top of Ethanual chain, the real value that I'm putting into the governance tokens that I'm buying is equal to how much of a pain in the ass it would be to switch chains and that's not enough, right?

like especially because now we're talking about like Ethanual chain a wellrespected L2 uh that has like billions of TVL but if it's Carlos chain that just started and has like 100K on it the switching cost are so low and ridiculous that why would anyone buy this in the first place right which we don't want to see happen because we don't want to see all new tokens all new projects or new chains be worth nothing until they reach a certain amount and then obviously I think A bad way of thinking about governance is I'm going to buy governance tokens so I can see how much I can fund out from the common treasury in terms of like grants or service contracts. That's obviously terrible,

right? Like that cannot be the goal of governance. So how do we make governance sort of valuable? I I heard that people love beautiful quotes in black and white. So there's a beautiful quote in in black and white. We make better incentives. It has to be better incentives. it there have to be better incentives to hold tokens than what we're currently offering. So let's do a mini exercise. Uh and we're not that many. So I think we can kind of like join up and think about it uh jointly. Uh and maybe this is too long especially seeing like the the crowd that we have right now.

But try to think about one project which is either your own project or a project you care about a lot and try to sort of differentiate the different like stakeholders that are part of that project and see what they need from each other and how the token of your project is facilitating these links right uh one one example that I think is very clear and on they've made like a really nice triangle on their website is drrome where they've said all right we have like traders liquid liquidity providers and we have uh token holders. What do they want from each other? The token holders are buying the token making the token more valuable which means that the rewards that are going to the liquidity providers are

worth more money. So liquidity providers are likely to put even more money in terms of liquidity provision which makes it a much better experience for traders. So traders trade more create more fees more fees go to token holders. That's the sort of thing. And obviously a DEX is much easier. If we're going to go talk about like arbitrum for example, it's going to be a very different idea because a chain is a much more complex ecosystem than a decentralized exchange, right? But I think it's interesting to sort of think about it for like a minute. So maybe like write down either in your head or on a piece of paper what you actually think are the different like key stakeholders of a project you care about deeply and how do they relate to each other.

I'll give you guys 30 seconds. Does anyone

dare to go first and list these stakeholders and what they want from each other? Go for it. Thanks. So what are we building? Um like we are trying to build strategies that kind of like make a piece profitable or more profitable like not just the automation tools but the actual strategies. It's kind of like it's a platform that allows others to create strategies and then others to deposit into it and pay performance fee. Very interesting. So the key stakeholders is basically like the strategy creator um on the one hand the um depositor so the user of the strategy on the other hand

and we believe also like that token projects for whom we are making the market to like um actually like replace classic market makers but more like a piece that are profitable out of the community to make most basically long-term sustainable liquidity. So let's say three stakeholders and like the value for each of the stakeholders like the LPS increase their profits or become profitable while they have not before the strategy creators to earn a performance fee and the token treasuries to uh get more sustainable liquidity.

Okay. And how might uh governance token make like kind of lubrify these relationships between your stakeholders? We are kind of like so some of the revenue will acrewue outside of the um or not onchain and we're thinking like to distribute part of that revenue via a token back on chain kind of. Okay. How would the revenue and not happen on chain? Uh like for example what we want to do is like capture arbitrage um from these LP pools that otherwise external arbitrageers would capture and like bring it back to the LPS. Interesting.

Um and that not always happens on Right. It happens also between centralized and decentralized exchanges. And if we acrew that let's say with a company on a centralized exchange, we would need to get it somehow back to the LPS. Okay. So, who's going to buy this token? Which stakeholder is the one where you think that he has like a direct incentive to buy this token? I mean like very early but like initial ideas are like basically buying back the token ourself with the random revenues we are generating and then giving it to stakeholders. Okay, interesting. Yeah, I think buybacks are definitely one way of doing this.

I think that sense is they have like per day each of the chains that they operate and basically not sure if it's a bombing curve but I think it is a bing curve or reverse. No, it's a reverse function and the price goes like It start and the price of oil oil goes up time and whenever you see a price that you like you buy like some of like with some of the fees you buy oil divide your oiler with the fee that they're generating and it sort of works a little bit as like price discovery but

at the same time a way to like sort of like get for themselves create a value for interesting. Yeah, that that is definitely a way and what I like about it is that it's automatic. It's programmed and it's going to be running for a long time that the fish that generate that they generate a percentage of it automatically buys. So there is some buyback automation that I think in the long term because you know that is still going to be there year. on the line or whatever. Yeah, I think it's interesting. I think it goes to show like when you're actually

thinking about like how to make a token valuable, there's sort of two ways around it. Either like give it utility. So, this could be, you know, because you hold that many tokens, you're paying less fees on my platform, or it's giving it less speculative value. buy this token because I'm going to buy it back from you in the future for for more money. What do you think the token you're describing is? Would you rather put it in like in the utility category or in the speculative category? I think can be both. Like it was just the first idea kind of like because we bumped into the problem that we probably will generate revenue by taking kind of like advantage of the APS because we want to do it like

instead of someone else doing it and then find a way to give it back. So that's kind of like what triggered it in the first place. That could be something like adding utility at someone point but that was actually only triggering the idea of getting a token otherwise people probably would not need it. Okay. I super interesting. Anyone else wants to try to You don't want to do it for the AP token? No, no, no, no worries. No worries. Anyone else wants to give it a try? Go for it. So uh some time ago I was working on this uh thing called revenue da and the idea was that uh we were supposed to like pull money that would

be then reinvested into into like businesses that need money for uh you like we were thinking about gaming especially premium gaming and the premium the reason why is that premium gaming is a very simple business. you put money in, it gets invested into ads and there is a like it's easy to model the the future streams and and also it's predictable like the only the only complicated things when where to plug the plug off the the additional funding.

So we were thinking about uh creating a token that would be controlling controlling the revenue stream from those investments. Let's say that we pull $100,000 for um for this investment and this $100,000 was supposed to bring back in revenue something like 250 in two years. Um and uh yeah and basically like the the the structure was that with your token you could cash in every like you know the the pool was collecting the revenue from the from the um from those investments and you could every every

time you could either rage quit by burning your tokens and getting your share of the existing pool but you were decreasing the amount value of tokens in the circulation or you could sell it to another person for you know for the future uh for the premium coming from the future revenue streams. So that was what we were thinking about. Interesting. So here like the people would buy the token again kind of in in the expectation that it's going to be rebought later either reboot later or you had this fundamental value of the your share of the existing treasury. So like the mechanism was you know at the

end the expectation was that in the end all the tokens would get will get burned for the remaining treasury. interesting that that that is very yeah I like the idea it's good to like link the treasury to the token and if you have like enough decentralization properties it's actually something you can do pretty clearly like regulatory speaking which is obviously like a big theme of how do you acrue value to your token right super interesting does anyone else want to go I would say one stakeholder that we haven't mentioned but where you are like for example you're doing those that

we just mentioned unless you have it legally very very you are a security love that so that means that it's an important stakeholder because like you have to pay taxes so they are going to be a holder. Yeah, absolutely. I think it leads us quite nicely to kind of the next part of this of this talk which is about and this is obviously like please don't share recording with your local authorities.

But let's talk about like how do you actually try to acrue value directly to a token in a way that is regulatory compliant but at the same time that makes sense for people who are participating in this economy that they're actually making the right decisions because I think you know if we go back to I'm not going to but if we go back to a couple of slides ago I think we lost our way by not making governance tokens and these kind of utility speculation type tokens the same one. It can absolutely be that, right? So, how do you turn these governance tokens into productive assets?

So, first you have to create value, right? If there's no value being created, there's no value you can return, right? Otherwise, you know, there's only so much you can do to fix something through to economics. You actually need value creation mechanisms for value to be returned in some way. So don't don't try to fix a broken car is what I'm saying. If the car is broken, fix that part first and then start thinking about like how do I return that value. One interesting example and one interesting direction that has been probably at the at the basis of uh one of the biggest D5 protocols

uh existing today and one of the most significant ones in terms of its impact on the industry is the sort of curve system of lockers. So you sacrifice some liquidity for your token which might seem counterintuitive and you're saying all right if you're ready to lock for a certain amount of time then we can you know we we can share some of the revenue in the direction that you're that that you want right like you can start to help make these long-term decisions because you're long-term aligned for curve the longer you staked this token the more voting power you had in terms of directing the liquidity of curve and this was this was actually built like a

super long time ago on top of Aragon contracts. So vote escrow these kind of voting these locking mechanisms exist there's also staking right in a way sort of the same thing vote escrow staking mechanisms why can I talk about the same thing the interesting part about like this this locking of token and this uh prioritization of long-term incentive alignment over liquidity of your token is that you're kind of creating this three three mechan mechanism that was talked about a lot when the solidly model uh came out and and this is something that uh is at the basis of drum and arodum that I was

talking about is if you lock long enough we can trust you to make decisions that make sense for the long-term health of your of your protocol. Uh it is also today I think a much more interesting option for two reasons. one, everyone is starting to think about staking, but there's obviously this risk in staking uh in in governance without staking that you could get like governance attacked. And the more the those systems mature doesn't always mean that new delegated supply is going to be delegated to to delegates in a way that is going to make it sufficiently protected from governance attacks. And you know, governance attacks are very much a gray

area. There's not really such a thing as like a clear governance attack and something that is, you know, just kind of a power grab inside a DAO. If you're looking at what happened with Compound, for example, is very much a gray area. And if you have this long-term lock, at least you can say, well, you can governance attack me. You can try to like control the resources of this DAO, but to do so, you're going to have to agree that you're going to be long-term aligned with with this Dow. So I think for governance tax very interesting. Second one is you're sort of creating this buffer regulatory speaking and again this is the part of the talk which is maybe a little bit more also a gray

area legally speaking but the idea is the the more you have this sort of staking model uh that that protects you. You're saying that capital can be slashed and if capital can be slashed it means that capital is at work. It means that you have things to do with that capital and if you're not doing them, you're going to be slashed. If there is this sort of work expectation, then your capital is more you can reward this capital for the work that it's doing. And this is where I think that the this industry needs to explore a lot more what we do in terms of rewarding that work that people are doing. And some people call it call it like

overpaying for security, right? because you're saying, "All right, we'll have this staking solution and it's going to pay out 9% in the token and that's going to create like a big amount of inflation for the tokens that are actually staked." I think we can't see it as overpaying for security. I think we need to see it as rewarding people that are long-term aligned with the protocol and eventually diluting mercenary capital and you know capital that lives on exchanges, capital that isn't as committed to the long-term success of the protocol.

And the more you reward them, the more likely you are that more of that more capital will make that decision, right? And so you're creating this liquidity sync where increasingly more and more capital is long-term aligning with the interest of your protocol. Something that is very interesting is that when you look at the data both V because you're locked and staking even if you're not logged people once they hop in it takes quite long for them to leave in the V is whatever you specify when you log but even in a or other staking contracts generally they take a lot of time to to leave. So like what I think is super interesting doing the not native token liquidity things is that if you are overpaying for the security

basically you're what you're trying to actually do is not that security thing is like trying to people to log because you know they're not going to leave in a long time because they have done the effort to get in and basically the the rewards that you are giving them it's sort of like what you have to pay um to get that liquidity to be synced for a long time and you probably have to do some math around what doesn't make sense for your project but like uh but like 100% agree what what you're saying and I remember like talking with steakhouse and they were complaining that uh for dydx in particular um they were overpaying in security in terms of like people that were staking and I think they are missing they were missing exactly this

point which is like well staking in most of these other ones is not at all about the security a little But there is a point in which it's actually just to incentivize people to lock because over time you know that they're going to stay. Um and that's why you want them to participate. Yeah. Yeah. Totally great comment. So let's talk maybe a a tiny bit more about like that staking idea. I'll go pretty quickly through these, right? Uh because we kind of went through them on on the previous slide. But yeah, this idea is that staking represents work and work can be rewarded. Simply holding your token is not something you can

reward for obvious securities law. So creating these work possibilities is very interesting and I think that's where we go back to governance because governance is work. Governance is actually trying to make the right decisions for a protocol and the type of governance that you're doing depending on the complexity of it is more or less likely to be considered as work. Again, slashing and staking and slashing big parts of actually creating this work requirement. But but um but but governance I think is is just as strongly correlated to um to creating

this dynamic where what you're doing with your token can be considered work. What we kind of push at Aragon and we think is a better idea for this work requirement is a gauge system which implies that token holders make decisions over capital allocation. And the idea for these decisions is you're locking your V token and then you're voting on the type of spending that the DAO should do. And the reason why I think it's better is that most DA governance is all about saying uh like re responding to pre-existing proposals. And responding

to pre-existing proposal allows you to express your opinion in a relatively limited way. You're saying mostly yes, no, or abstain. You can participate in the making of the proposal, but that doesn't happen to most people. Most people only come in at a time where they can vote yes or no on that decision that's kind of already been made. What I think is more interesting is uh constant governance decision which is how are we going to take the resources that we have together and spend them in order for this protocol or this project to grow.

And you can spend them in many different ways, right? could have like growth incentives uh and say well actually I want our capital to go to these different pools in order to reward LPS because I think rewarding LPS will grow our TVL it will grow the our protocol but you could also say I think that actually what we need to attract more people and for to attract more people to buy our token and then our token becomes more valuable and then the incentives that we're creating become more valuable what I think that part of our budget should go to token buybacks, for example, and these token buybacks would increase the price of your token, make your rewards worth more. There's tons of different things you could do with your

tokens, and you should be able to express them in more complex ways, but also in more set and forget ways. Because with gauges, what you can do is you express your opinion one time. you say well actually I think 20% of the token inflation or or it sometimes it's inflation sometimes it's it's uh the protocol fees right uh it's the the money that's being generated by the protocol well you can set and forget and explain I want it to go to these different uh possibilities and if you change your mind in two weeks you can do it if you change your mind in two years you can change it right like I I think it's a much more realistic way of taking token holder preferences and expressing

them um uh taking again this is just for uh capital allocation right for for protocol upgrades you could imagine some kind of gauge system right like if you think about it it's sort of how Bitcoin works because if you're uh if you're creating blocks on Bitcoin you kind of choose which standards you want to keep and you want to add and if you don't add that standard if you don't add tap routt to your block, it's just not going to be there. So the the the system kind of increasingly decides which standards make sense for the community or not. And so Bitcoin does of the feet. Yeah. Yeah. And and and Bitcoin does this without any kind of formalized governance, right? Uh but

I think for like the Dows that we're talking about that are relevant to us, it's it's more about capital. Something I feel super interesting. So like you can change your mind over time. I think it's not that you can only change your mind. It's sort of like the project is going to evolve over time. And in the beginning, if you like if you just TGE, you probably want to incentivize staking reward. So like you want to incentivize people to log more tokens until you have some metrics that are more stable. But then over time, like as you have distributed more and more tokens, probably what you want to do is to do more buybacks because you're running out of your own tokens. And I think for example that's what's happening right now with Oiler they needed to do some buybacks because like

after so many years and after their hack and after like so many funding rounds they needed to get back some of their tokens and some of the liquidity and and I think like whatever you choose really depends on the state of your project and everything can make sense. It's just like why doesn't it make sense for you in particular? Yeah, definitely definitely. I think there's two more arguments for gauges uh that that you can read here, but I'll talk about it for a second. Uh obviously, I think something I really like is that when you're voting on these kind of yes, no abstain proposals. If you're in the minority, your choices is kind of canceled, right? You it's not expressed.

A proposal passes in the same way whether it passes 52% or 99%. uh right that that to me is quite problematic. So I quite like that minority votes are reflected. If you own 0.1% of the token supply of something, you're directing 0.1% of the resources of that particular project. So I I quite like that. And then the second idea is uh I don't know if people have read the the end of the era foundations piece that Miles Jenning posted quite recently. uh you know I think this goes quite well in that direction because what that he's really advocating for is on the one hand there's a team on the other hand there's a network and the

protocol is part of that network the token is part of that network the DAO part of that network but the team has to be completely separate right so if you want to be considered decentralized enough right to know to to get that all uh all powerful like commodity status you need to reasonably and reliably show that token holders are making the decisions for their protocol. It cannot be controlled by by a team, right? So I think that gauge models have a lot there. So the V locker is part of aligning incentives long term, protecting yourself from governance attack and the engage model is part of creating actual work for token holders

and creating a way to reward token holders long term without um falling into securities law. Uh a few last thoughts. Um, if you're if you're thinking yourself about like I want to create a token, I want to to make my token work for my project and not the opposite. Keep in mind that you need a demand, right? You need people that are going to buy this token. And what we're seeing like we've all seen the the the charts and that go down only. That's because you're releasing your token, you have investors, you have a team, you have team members, but you don't have a clear reason why people should buy your

token. And that is obviously you you can't fix that, right? Um the second thought, protocol upgrades and changes are important. They're part of like protecting yourself from that deep platforming risk, but they're not enough for people to actually buy your token for it, especially if they're minority if they have like a clear minority stake. we were talking about. I'm not going to buy like 0.00001% of the arbitum token supply in order to have a very little impact on arbitrum governance. Um third is what we're talking with the car. You need to create value. That's the the first step to anything is creating value for users and being able to capture some of that

value. If you can capture value, then you probably don't need a token. You need a business that works first. Right? The fourth idea, um, obviously distributing ownership to the right people is always complicated. Uh, you're going to have many different types of stakeholders or or or fewer, right? Like if your protocol is really simple, it might be fewer. The incentives need to all be aligned in order to push them to do what's best for the value of the token. So we've been talking about uh Veladrome and Aerodum for example if it's you know if the incentives of the traders were to sell the token the the

the wheel is broken the the the positive triangle is broken. You can't have any place where the main incentive of people is to dump your tokens otherwise the whole system sinks with it. And then the last idea about like lockers. Obviously lockers at Aragon we're more thinking about them in terms of lockers because we we think that there's more parameters that we can adapt. Obviously with a locker you can have like this cool cool down periods. You can have like different changes in voting power while with staking it's probably a little bit more you know straightforward. You stake your token you receive a stake version. It's one to one. When you unstake you unstake right?

So that's why we think that lockers is probably like a better way of thinking about this paradigm of of instruments for for token management. Um it's obviously not the whole solution, right? The whole solution is to actually find interesting things for that capital to do while it's locked. If you're just saying lock your tokens, we'll give you money, that's probably like that's going to fall under security law and you're going to be stuck. So you need to think of valuable value creation actions. If I have to add something um another way to reward but not doing it directly is like you provide reward you provide

incentives for third party projects and then you allow bribes which go back to the stakers. I know Bri have like a bad b um but if you are thinking it from just the monetary value that you want to give to stakers but you don't want to do it directly because of legal reasons bribes do help in that sense because like you are not rewarding people other people are rewarding your stakers. Maybe bribes is a is a is a loaded term, but there definitely is an idea if if you own part of a network and this network needs to make a decision and people want this decision to be X Y or Zed, if you manage to find a way for X, Y, or Z to

incentivize your voters to go in that direction, you're creating value. Is it the right I think for purely financial things, this can be a very good tool. It's not always the right one, but there's definitely things to to explore in that area. I also find funny that the the bribes might be the legal way. Yeah, which is sort of like ironic. Yeah, definitely. Definitely. I think um that's it for me. Uh thanks so much for for joining and if anyone has questions, let's do it. [Applause] I got a question about It makes sense when we con continuously

stream uh value in one direction or another. I like this idea that then like it needs to be kind of like linear as in for example it makes sense for marketing budget like how much do we want to spend into Google ads because any any amount makes sense and basically simply we can observe the effect but it doesn't make much sense or how does it you know how can it fit into other kinds of spending where there is a discretionary um Like that's because like as I said like it makes sense for Google ads because any amount makes sense but it doesn't make sense if we want to buy a

MacBook because in a MacBook if MacBook costs $1,000 then 800 doesn't make it but spending you know 1,200 is you know like we have 200 too much. Yeah. makes total sense. Something that I 100% agree that not everything fits in in gauges. Like I think it's like trying to use several things for like you should be using the tool that fits exactly what what your needs are. That's it. Like if we were to force gauges for buying a MacBook, let's follow that example. Um what we provide is a way to set up minimum and maximums for gauges.

So you can say like for example there is a core team over there right like core operations you don't want that to be defunded. So in the gauges you can say actually for the core team I want a minimum of like 20k per month or whatever it is okay and a maximum of 50k because like we are not in the point in which we want to grow the team massively. Um so that that's one of the ways you could set up minimums and maximums. Have you seen this working for those more general I think and I may be wrong okay like I'm

uh a is starting now to do this with the umbrella gauges I think okay and I know uh Beni is also iterating over this but you're right like I wouldn't say there is a project right now that gives all their expenses through gauges also because there are not many projects that have value acroal directly to the to the to the DAO so like if you don't have value accuring to the DAO how do you provide that uh back right yeah I think there's that and obviously gauges a good mechanism for capital allocation and these types of decisions. Uh they're not going to serve as well in non-c capital allocation decision types, but you do

have it. I think an interesting way of thinking about gauges is where you take them, right? If you take them from treasury to different categorized spending, that's one idea. But maybe actually your gauge doesn't live like that's not the main gauge that you care about. Maybe the gauge that you want to ask your stakeholders about is this one. How maybe not that one, maybe this one. In the growth incentives, let's ask our our users where they want these incentives to go. And you'd say, "All right, for now, we're going to vote on uh a minimum budget and a budget that makes sense for these different categories." And then what the gauge

actually will live is in growth incentives. And maybe like what we've what what we've built for uh for mode is a fractal gauge of in a sense where mode decided they had this op token allocation and they wanted to distribute this op token to the different projects on it and the way they did it is through a gauge system and not only were these incentives going to the projects but the projects then had the opportunity to say well actually our token holders are going to vote on where the specific speific incentives go in their own protocol. So Kim exchange which was the the biggest exchange on mode for example was voting on well you know if you have your

sorry you can vote on whether it goes to like the E USDC pair or actually if you're one of our competitors you could even vote with our tokens on directing incentives to the ETH your token uh pair and and then you have this moment where I think you can create much more intertwined ecosystems where owning each other's token can can be positive and the success of you know the success of Kim exchange is now related to your own success and when they're getting money well actually your token holders have better liquidity for buying your token or selling your tokens and you're

creating a better experience for them. So what I also like about gauges is this kind of inter project possibilities and when I'm thinking about much larger dows because mode was mode was a very interesting example they distributed 2 million op tokens so it must be four or five million less projects distributing much more than that like 10 times that not that many but the projects that do actually have an opportunity to say well now you can use your own token to incentivize my token holders to vote for your protocol and do this again and again in in different ways to create a much more intertwined uh digital economy uh in

your own like kind of little sovereign rollups or or ecosystem. Yeah. Um on your question like 100% agree like it's very difficult to do all of them. So like also agree with Nathan like generally you would focus just on the incentives which is what fellow or all this do um going back to the question that you said like if there is any and just for the sake of science um one that it's somewhat doing it already and they are doubling down on it is Sushi uh they're still alive and they they have the what is the contract the master chef. So the master chair receives all the fees from sushi swap I think only mainet I'm not sure how

they do the crossing but like and that decides where to send those funds part of it goes to the core team they they are not using gauges it's like it's a contract that has hardcoded the values and a part goes to the core team some part goes to the ex susia stakers it's like taking contract and some other part goes to incentives uh now I know they are trying to move it towards like gauges but they are not there yet. Awesome. Any other questions?

Awesome. Well, thanks everyone for your time. I really appreciate it. And yeah, if you got any more questions or or want to talk about this, I'll