Pablo Villalba / DCxPrague

Transcript

so I'm going to talk about something that uh I'm going to call impact staking because I don't know if there's a term and let's see we can project this all right so um want to talk about so staking happen in ethereum I think it's one of the biggest and most transformational things happening in blockchain these years and I want to come back to an idea that PR and I spoke about uh almost two years ago and is this new primitive potentially of using staking for something that's not just security and not not just getting economic rewards but actually finding new models

of how this can be a net positive for the ecosystem so we've all seen Bitcoin is sound like gold there's a limited Supply it's very monetarily sound and ethereum there's this meme of it's ultrasound um because we have 800,000 e issued since the merch uh um but we have more than that burnt and what you have is this economics that kind of work right it's one of the first experiments in crypto that has this positive yield and is one of the largest at doing that um and thanks to that we are achieving what you could say is monetary sustainability or even deflation um and that's really evident when you compare that with Bitcoin which

keeps this predictable schedule so they don't need to be the same they're it's good that they're different but what I want to question is whether is that what we want to be optimizing for are we building all this to optimize for deflation is this uh like the ultimate goal in Security in economics is it that eth goes to 10,000 are there other things that we could be optimizing for and I want to kind of look at this as a monetary economic system so we have on one hand e issuance so you could think if the economy is this kind of uh sync water syn the E issuance would be what is that parameter what are we paying for security because today we're

paying validators right and what you do is you open this faucet and you say look we're going to fund validators because we need them we need to create blocks and do transactions but that water starts going and if we wouldn't take it out it would start overflowing with inflation so what we do is we say okay there's this great ADL is burn the transaction fees and now we have this kind of ongoing tax or Revenue um analogy so now you have something going out something coming in but because now e is deflationary what we have is that we're kind of cycling which is effective um but it's kind of one dimension um and this is good that money is circulating

because if it wouldn't circulate what we would do is I would have an eth and I would just wait because every year I would have more and more value but what we want is not that we want to create an economy we want people to transact to transfer value to kind of think of how to secure it to allocate it to projects that can do something positive with it and that's why we have these eips which are a little bit or monetary policy right like every time we say okay we're going to change the amount of rewards that we give we're going to change the slashing we're going to change this reward curve and what that is is a kind of consensus that we reach to say how are we going to direct this economy so if Bitcoin is cloud gold are we a kind of cloud Nation because if you

think about it we are a little bit this distributed uh Society we don't live in one country but we have a lot in common we also have Commons so if we're a nation how should we think about this as a framework um and the problem with when things don't move in the economy is you get stagnation and you end up with a dirty pool that nobody wants to jump into because it hasn't changed for years uh and good things happen when value can flow and if value is the ability to create things to have this potential energy then a good economy should be like a river it should be like creating life everywhere it goes and and bringing things and and funding projects initiatives people um so we're trying to build a nation the best thing we can do

is ask or civilization if anyone's played um kind of Technology tree and think okay where do we come from so ethereum has been built on the principles of being of being trustless resilient and neutral and that might sound like some city states that made that they're kind of competitive Advantage uh through history um and what we're doing well so far is we have things like trustless open resilient neutral custody today you can have eth and it's very hard for anybody to take them away just e would be a bit boring so we also have contrast that can do like logic and can um kind of create arbitrary behavior um and we need to

kind of connect everything we're building so we already have really good tools to do discussions to do trade like Denis was saying I feel like communities are still something that we need to keep improving because we have the building blocks but we sometimes don't know the right models of how to use them uh and we're also working on exciting things like privacy identity maybe arbitration arbitration in online systems but what are we not building if we're a nation there's a lot more there could be like how do we connect to real world assets are we working for inclusion in the right way do we want to provide things like funding for common goods do we need to consider welfare in 10 50 years if all the people in this ecosystem are

kind of longterm maybe you know um getting older getting sick um needing some kind of social support now for the first time we're also having really big debates of when you follow economic incentives things end up centralizing and there's this big light debate for example and the problem is because we don't have Regulators who can step in we need to find other Alternatives but when we talk about all this these are institutions and institutions need funding and we don't have the sources of funding so monetary policy alone can lead to a tragedy of the common and I think we need to keep experimenting with new Social and funding models question is where does that come from and feel like we've been given this new world um

with all these advantages of neutrality and now have to decide what do we make of it and how do we think for the next 10 50 100 years and the decisions we make today are was going to set this kind of possibility so we've been thinking about monetary in inflation deflation and I feel like that's going only in one dimension where we think okay do I get more value now or do I get less value now but that's shortsighted because an economy anytime you can make a choice to invest on something now to create more value in the future so I don't know if that's the right curve but imagine we have a curve like this for utility and then we can say I would take less present value now and I will

maximize future value and of course that's going to be a very difficult decision but if there is this scale where we can choose to maybe capture a little bit less value as individuals now in in the pursuit of like creating a a larger value in the future then um you know that would be a positive some game and we should all be engaging in this we should find ways to engage in it so I would suggest to start going away from just monetary maximalism to kind of this North Star where we're thinking about sustainability uh because in many cases small contributions can have a big impact uh and anytime we can find that we should be doing it it would be it would be stupid not to do it so um yeah

we come back to the question how do we fund the commons if the commons are good and they a net positive uh and I just put this few models but maybe we can talk about it but V just mentioned free open source software Fe fees um and you could have a model that's semi-private it's unclear a little bit how that would work um it could be complex with a lot of different people that you're licensing from so I haven't really seen that model we have seen the model of Foundations where different protocols say okay this is the foundation we're going to do public goods but it has the downside that they're limited that they end up still centralized because it's the initial right it's the beginning of um a protocol the alternatives to that longer term are do we go for donations

donations are difficult because it's painful you have to like do away with your money and give it to something else it can also be very volatile I'm sure the amount of donations we saw during the bull market is very different from what we're seeing today so it's hard to make something sustainable but it is of 10 so this is a good model if we go for a model model for taxation is also painful like every time somebody's confiscating some of your wealth but it is predictable and it could be fair if we get all taxed in a predictable way but in Impact taking the model I want to propose is something that's potentially win-win where users could tap into their rewards from ethereum to capture a lot of those but also donate the other part

like a little part to this public good fundings that will maximize the value of their stake in the future I think what I like about it is that it is very predictable right like staking because it comes from that positive yield in ethereum and it's also up then so yeah uh the basic idea is that we have a user you can stake your eth um in whatever primitive the sense of being you get the eth rewards but you donate a part of those rewards to public goods so it's a very simple idea but the question is how do we implement this um so I think it gives us this new design space and this is the last slide uh of if we want something like this I feel like there is a very real possibility that this is net positive

for the ecosystem and the user but the question is how do we do it do we do it in an application do we move it to the protocol how do we create these win-win models for users to make sure that everybody's engaging and not like a couple people and how do you make those decisions on allocations for funds because if we don't have a central government and we're having more like are we looking for entities for each user to decide so yeah this is just some food for thought but I feel like it could be an exciting thing um and we're in a good time to be talking about it yeah and I still have more time so what do you all think sounds

[Laughter] great we have some I saw a few hands uh Dennis sorry yes if you do the so you stay some rewards and part of that reward goes to like public goods of some sort is that a little bit of the donation taxation scheme because like it could have been your money but it goes to someone else although it would be kind of interesting if you didn't get that money regardless right like so some portion of the sing rewards by default was just going to someone else but then would the really large actors or the really like rational actors think a longterm that means you know less deflation and you know less value being

captured for me long term like how do we how do you think you you would deal with that sort of sort of like tradeoff there yeah really good question so uh I think the term that some people are using is self taxation so you choose to tax yourself not on the principle but on part of your rewards um but yeah like how do you get people to participate if you do it in the application l we have plenty of applications like Prada and frano before were being we're saying a lot of people delegate eth so if every eth like liquid staking provider or delegator or uh yeah staking provider adopts a model like this then it would be very easy to participate because it would be like if

every Bank in the world had a kind of ESG or public goods program right so this is already kind of being suggested in the traditional system but there's always this possibility to say well I'll just take the other one and take keep the yield uh the other option is there are protocol level Solutions we could adopt we are now burning everything but we could do things like maybe not burning maybe have something or donate or burn kind of system where either you're just burning it and it's Max deflationary or you're allocating it somewhere else so U this will connect a little bit to the next talk but I think it's a really interesting really interesting question should we move on or more questions we done we're out of time okay

so