The post-token future: exploring web3 governance

Transcript

GM GM welcome to web3 Academy your one trusted source to capitalize on the next big phase of the internet don't get caught in the hive cycle I'm jay bird and I believe that on-chain contests are going to change the world that's why I'm carving a path for doers to confidently build and invest in web 3. welcome back to another episode everybody today we have with us David Phelps the co-founder of Joe Crate on the show to talk all about what they are building and what are on-chain contests and is David the anti-token guy he's been labeled the anti-token guy on Twitter recently

Because he believes in a post token future what does that mean what does that look like David is also the co-founder of ecodile he also has an awesome sub stack where he writes all about web3 he's an amazing Twitter personality he's a bit of a [ __ ] poster he's always putting out controversial opinions but today is really all about understanding the problems with on-chain governance and we've created these problems because we have connected our financial token to our on-chain government which basically means that in most communities Whoever has the most money

has the most voting power because you have the most tokens now some communities have gone in the direction of quadratic voting which helps the problem a little bit but not believe we're going to talk about that so David is trying to solve that he's trying to solve that and he's also trying to solve a bigger problem of okay so if we can get governance and voting or what he refers to as on chain contest and he'll explain what that means if we can bring that on chain right now that's great for all of the communities that have an on-chain presence but what about the communities that don't what about the communities that are big on Twitter or big on Facebook or big somewhere else

that's not on chain it's just online they haven't made that migration well they need a simple way to set up a contest I put contests and air quotes a simple way that they can get their Community to engage in a vote where the first action they take is not necessarily on chain there's something else at play there so we're going to break this all down in today's show this is an episode that I think everybody needs to listen to because this comes back to the core principles of web3 which is that we need to create a meaningful way and a meaningful system that enables users more control because

in web 2 users don't have enough control we are the product but in web 3 we put control back in the user's hands but the first way we've done that is we ended up just so far we put control in the rich users hands well we need to put control in everyone's hands and joke race is a platform that does that everybody you're going to enjoy this show we're just going to take a quick second to hear from our sponsors and then we'll get going with David from joke race modern newsletters are built on paragraph that's right paragraph is a brand new newsletter platform that combines the best parts of web 2 and web3 to supercharge newsletters for both writers and readers build a community not just

an audience paragraph uses blockchain text to allow readers to collect and own the words that matter to them this takes reading a newsletter to the next level where paragraph readers can mint collect and show off quotes from their favorite newsletter this opens new possibilities like creators sharing Revenue with fans I also love their new feature paragraph AI this integrates gpt4 natively in paragraphs create edit and improve your writing effortlessly with one click and guess what we at web3 Academy are on board and have already moved our content over to paragraph We believe this is the future of newsletters because of

profound engagement it creates between creators and fans so whether you're a Creator writer or an Avid Reader it's time to check out paragraph and capitalize on the opportunity of being early David what's going on my man welcome to web3 Academy thank you very much for having me it's a pleasure being here alright we recently on Twitter you said humans don't require tokens to make decisions together is that possible I don't know if you're in the history of UNS there was actually a point in history where people got together and made decisions about things without voting with tokens and it's like in today's era it's very hard to believe that we ever lived in you know such a

primitive time like that but it's true it's true so like what are you saying or what do you believe that is leading you to be you've been labeled on Twitter a little bit recently for being like the anti-token guy is that fair why are you being labeled as the anti-token guy I don't necessarily think you're the anti-token guy I think yeah you just have a different view on the way tokens should be used for governance or for voting tell us I I have a friend I don't know if I should say who it is but a friend who's an amazing founder and and what my friend said to me is every good founder your job as a Founder is to become a meme I think this is just such a brilliant idea that you know everyone can just encapsulate you so I'm not actually anti-token but you know it's

very boring for me not to be anti-token right it's way more interesting and way more memeable if I'm anti token so we'll we'll run with the with the anti-toxic label even though I think there are very good use cases for tokens and we do need to have them and even though I'm building a product that depends on tokens as Awards right and so took it's a pretty essential to what I'm building myself the anti-token thing I think very much comes from specifically tokens and governance and that use case and wondering you know within decision making really do we want to have this system that you know incentivizes plutocracy or just plutocracy in which people who buy the most of something have the most power and is that actually the best way to make decisions and it's funny that

that even is a question so let's reframe it then you love to be the anti-talk I love that yeah it's me and me here for for like lean into lead into the anti-token meme for just basically getting along all the complexity of my thought to something that is just like you know Sensational right right but you're really like your view is more and like the title of this episode is all about post token right and post token okay I know you you wrote a great thread recently when you came back from ECC and you talked about how we are in this we're stepping into this post token era and you gave some examples of optimism and Ave and and

some others that boys club that are leaning towards governance and voting without tokens so and obviously you just launched V3 of Joker Ace which we're going to talk about later in this episode but before we talk about joke race give us the like the history lesson quickly on like what went wrong with tokens why do we not want to use tokens for governance you mentioned plutocracy and uh what are the sort of the pillars of the post token World part of the reason I think that tokens took on the place they did was because Dows and other tokenized communities I'm gonna do the generous read here the generous readers right these were set up to basically imitate corporations a less generous read would be that these were set up for VCS to get really rich but

like let's run with the charitable read that people really had good intentions here and so you know as in a traditional company the people who own more shares of the company have more power and you know it makes sense because the more you that they own of it the more dividends that they should get right from it and so they have more financially at stake they're literally putting up a financial stake in order to get financial rewards in theory in practice companies actually do not work that okay the way the companies work is that they have preferred shares of common shares of stock and like normally when you're getting stock you're not getting governance power anywhere close to you know what others do and so the governance piece is actually already decoupled from the financial fees right within corporations as well

these communities took a big step backwards and said no let's put those back together like let's put the financial governance piece back together and nobody possible this was just taken including me right like I also a big proponent of Dallas 2021 2022 did not question this and part of the reasoning question is was I assumed it was just a limitation of the technology I was just thinking yeah you know like this is tokens are you know the fundamental building block of crypto and so if you're going to build communities you have to build it off of this kind of data wrapper which is which is a token and it turns out that's actually totally not true like there are all sorts of ways you can pass data use data store data in blockchains that are not tokens and it can be the basis for for

Community Building as well and so I think like big argument would just be yep plutocracy right you don't want people being able to just buy a bunch of power in order to do whatever they want but more practically speaking I think if you want to just like nail an issue that will always happen it's that a token represents a share of a treasury so if it Dow is worth a million dollars and there's a million tokens then each one of those tokens is worth a dollar right and what will happen at some point is token prices will go up and down based on factors and who's selling and Market volatility Etc and at some point or another the token price will fall below the amount it represents in the treasury and when that happens it creates an

Arbitrage opportunity right where now you have a token that's selling for 80 cents that's worth one dollar and so what's going to happen the richest people will come in they will seize that token they will take it over so that they now can take and pay themselves out one dollar of the treasury right and they will make 20 cents on that and so this is happening with nouns right now this has happened you know with Aragon in the past it happens almost inevitably to every single Dow because you've created this Arbitrage Arbitrage incentive right for people to come along take the tokens and then effectively have your worst players be the people who have taken it over and then from there we can also think about you know other set is around tokens where there's like airdrop issues and to receives it I personally think a lot of thought and

time is is spent on having Fair just distribution of tokens and that makes sense sure you know don't put that in the hands of airdrop parameters put that in the hands of meaningful contributors but in the end it won't matter if rich people are going to be able to just buy out that token over time because yeah initially you might get in the hands of good people but eventually it's just going to be the whales who own it and they're the ones governing everything and unless you're you're building something that is strictly based on the financial profit going to Major you know Financial holders it's really really hard to make the case that you want plutocracy either that is actually the best system for you to make decisions yeah I wanted it makes sense that we've ended up in this position because as you said so

many projects basically did not pay attention to this and said okay let's just focus on how we can get our token out to our community but let's not think about the governance side of it let's just allow token holders to govern and we've pretty quickly realized that oh wait a second there's a mismatch here because the people that want to purchase the tokens all have Financial incentive that's great because that's what we're building on the financial side tokens serve an incredible purpose which is why you're not the anti-token guy you're just saying tokens aren't the greatest for governance in their current use am I correct yeah and if you want a more cynical read on the situation you say that you have a million dollars at the treasury right and like let's say you

have US dollars in your treasury now you print a million tokens that you stand for it well effectively now there's actually two million dollars of value that's out there because there's the million dollars of the token and there's the million dollars in the treasury and you've created all this value that you now can sell at which point the token price will then pump as you know you start to release it you know hopefully if you're careful about only releasing let's say one percent of it and then you effectively are now getting greater value for what the treasury is worth off this thing and so it's a really effective mechanism you know if we want to be a little bit more cynical for people just to meet how do we build a better system what is the your recommendation for building a competitor system right the fun thing is

it depends on the needs of your community you know it depends how big is your community you know who runs your community what is the goals of your community like all of these things are really good to change things even if you have a token there are ways of doing governance with a token that are I think much more interesting than like one token one mode so the common one that was being held up for 2021 2022 is quadratic voting which is effectively like you just take the square root of the number of tokens someone holds and now it's their voting power and what that means is that you get diminishing returns as you have more and more tokens so the whales right are going to not have a hundred times as much power as the minnows they're only gonna have 10 times right because you take the square root

of the hundred that's effectively yeah and and I just find that like it's it's not my favorite solution you know I think it's it's still just like it's keeping the issue but just mitigating it um but it's not solving it I think if you want to play with tokens in interesting ways what you could think about is creating incentives for the token through governance so this is getting ahead of myself and what we can do but like if you want to allow those people to participate in a contest or in governance and say it's not one token one vote if how many tokens you have times the number of days that you've held that token right now what happens well the people who held the token all along for the very beginning have way more power right in the system and so that's really nice

because you have your ogs who've actually been there from the start having more power second any whale who wants to come in and try to do that Arbitrage trade that I talked about where they seize a bunch of tokens or distribute the treasury can't do that because they would you know even if they take a ton of tokens if they haven't held onto it for years they're not going to be able to have the power to rug the treasury right and so it provides a huge you know a protection there and third of all it actually incentivizes people to buy and hold tokens it's telling you look it's not just about buying the token it's about holding it that actually matters which is is creating a better incentive for people who really care about token models and for actually increasing the price of token even if

your mind is totally lost in like the whole point of governance is to increase token value like our better incentives that you can create to do this by moving away from like a one token one right so that would be like one example that I'm interested in which is like you can actually improve I think tokenomic by moving away and doing something like you know toe contemporation but there's all sorts of other things you can do too like you can think if I'm a D5 protocol like maybe I want to get power to my voters business liquidity they've provided and then the more liquidity it provided or how or liquidity they provided times duration they provided it so you have the same kind of you know mechanism I described before and now now you're consistently giving power to the people who are providing most liquidity

because if you go back and remember the other issue of tokens is that you can distribute it once really fairly but then over time right it's going to change it's just going to get eaten up by by the whales what's nice with the kind of system I'm talking about is not just that you moved away from tokens it's that you consistently update according to who your most valuable people are at any given time so the governance right decision making Etc is all based on who currently has provided the most liquidity or who has provided the most including longest time right right those kinds of systems start to become really interesting you can also do things like recurring contests based on like people who submitted in the past and one or they've you know now they get to participate in vote and so you create this like expanding pool of like a core

Council of meeting people meaningful people in your community where the people who have gotten votes are now able to give votes right as well and so I think like those are kind of the systems that we're thinking a lot about in use cases we'll get to what I actually built but it's it's totally agnostic what I love about it is we all got really excited about Dows we were in the uh Dao summer to use that term but yeah everything should be a Dao and we should go in that direction and it didn't work and a lot of doubts failed and that's okay that's how you learn right like it doesn't mean the Dows can't succeed but the initial belief which made a lot of sense was that communities should have more control and

we should be able to involve our communities in our decision decision making and I don't think anybody on the planet disagrees with that that is a simple statement that everybody can get behind now the mechanics of that were okay the only way we we knew how to do it was to do it through tokens and those tokens at a financial value and you've shown that that doesn't work so we need to decouple those yeah it looks like you want to jump in and say something I was going to say the only way you could do it was through token boating and so I just you know went on a whole Rampage against the token part of that but I would also like want to single out voting is not necessarily the only way that people can have voices well in communities like actually submitting things to vote on is often a way that

you know you could have power to and so that was again going back to my own Origins with what we built like thinking you know what's the system where you're letting people also contribute proposals for other people to vote on right without having to buy their way in basically without having to buy their way in and so I've said this before it's like in America we live in in this system with 300 million people we're the only form of expression that you have in participating in politics is your vote and that makes sense because with 300 million people not everybody could be running for president contributing proposing something for everyone else to vote on at that scale you can't do it but when you have you know 10 people or 100 people like letting them actually submit the proposals for everyone else to vote on is giving them voice in a way

that you can't do in these giant size so-called democracies right so I think we were imitating corporate governance in some ways really badly I think we're also imitating like literal governance really badly and just assuming that voting was the only way and so the token voting is problematic in both parts of that phrase problematic I think in the token part but I think it's also problematic in the voting part which is to say voting is not an interesting expression of your voice like you actually speaking and saying something and contributing something is an interesting expression yeah you engaging in some way you're showing activity towards whatever that Community is doing and there's many ways that you can engage and show activity and there's off chain ways and there's on chain ways

I think that sort of leads us into let's lead into Joker race here because it is a big task to say okay we should not use tokens for governance and there's a better way to do this and joke race which actually I gotta ask first where does the name Joker Ace come from yeah so Joker is I started this thing called joke Dao was the initial name in early 2022 and started throwing this thing called the joke race actually using the mirror right race tool at that point and the idea of the Joker is at that point or what I call the joke race was that it was a weekly competition for terrible jokes actually it's still going and it's still live and it's I think now been about 80 weeks and people still play this every week which is amazing

but other people do and so the idea is you contribute a terrible joke and so everyone has to submit a terrible joke and then if you have a joke token you're using tokens right you get to vote on your favorite jokes now the trick was if you won if you voted on the winner you would get more joke tokens to use the following week now you can imagine the dynamic of this game if you win you know if people all start putting on first place they're gonna see that everyone else is playing in first place they're gonna go on that one too because they know it's the winner so what we did is we made sure only second place wins first this never wins it's only second place so the idea is if you give too many votes use your tokens too much towards one idea it's gonna go too high

and you're gonna lose and so you have to think about this whole investment strategy like you know do I do a 50 50 to ensure that I win but I'm only winning with 50 of my votes or do I try to like you know put 100 towards a different option where I'm gonna get maximum return but this much more and so the reason that I started this whole thing was because I had this theory that Dows were really good at acquisition and really bad at retention and the idea was that you know with tokens anyone could buy in and so you could airdrop people you could get them into your community more easily than ever but then there was nothing to do inside the community you couldn't contribute you had no say you had no games you had no social connections and you had no collaboration

and so the idea was like What if we created this mechanism that would incentivize collusion where if you really wanted to win this game every week you would have to form a team with other people and combine your votes together in order for it to pass and to say Yeah in traditional democracy we've always considered collusion to be this terrible thing but actually in a small group the ability for people to come together discuss with each other negotiate compromise realize you know together what they want is not only a good thing in of itself for governance it also is what builds lasting social relationships because it creates and so like what if we can gamify this governance process to actually create teams and the theory was you know will this start running on its own will people form teams and and in fact it happened that we had a bunch of people

all form different teams that were competing against each other it was all organic and I thought okay this is interesting like if you can set up the proper framework for things people will create their own sub communities through that and like maybe that's a more effective way for dads to run and so it really came out of this like you know test using bad jokes so of like how could we create more meaningful communities by like letting people compete around something totally Petty every single week and so from there yeah became Jokers and then then people just started you know we created a platform for it so that anyone could run their own contests like this as well with submissions of voting which was always the idea and then everyone just started calling them joke races I wasn't calling them that but they're like oh yeah I'm

gonna you know create a joke race Etc I was like well this is great yeah I'll just call Jokers so your branding was just done organically for you yeah that's not and I mean there is a beauty to all of this that you know everything we're talking about like governance has absolutely been a joke it's been 100 a joke and so being able to acknowledge that in some ways and being able to have fun with that I think is like really important for us as a brand too like we are not trying to take ourselves too seriously with any of this or say that any of this is the right canonical way to do it this should be fun and it should be hilarious and like there will be corruption if you want to call it that but other people will call that compromise negotiation so your side and

that The Joke is on You pun intended okay so you just launched V3 of jail Grace which is slightly different it takes off a lot of the early features of joke race tell us about V3 and maybe you can give us some examples of how people would use this in their communities so the way a contest works when you create a contest on our site is you put a prompt out people submit responses to the prompt people vote in their favorite responses and then if you want you can add a rewards poll and the winners earn rewards from that and so you can imagine you can use that however you want because you can decide who submits and who votes right so if you want to do like a hackathon

through us you let everybody submit and then maybe just a core jury vote right you want to do very traditional governance you would flip that you as a core team would put the proposal to your community and then you'd let all of them right so now you have a small team that's emitting a bigger team right if you want to do stuff like what features do you want us to build maybe the same people submitted both or maybe you want something where like a totally different Community submits and then you go right and so you can customize this however you want and that was really important to us like like let you customize who gets to submit who votes within that and so what's great with the B3 is like we've now enabled maximum customization by just using allow lists so like you creating a lot list for who gets to

submit if you want or you can open that up to anybody I think you create an allow us for who votes and how much voting power they have I'll give an example of like a joke race that was run recently so like Wi-Fi which is liquidity aggregator really great company winter comedian said what Futures do you want us to build right and they put up an awards pool of 400 where each of the four winners got 25 of the rewards so in other words got a hundred dollars so for 400 they put up and they said what features do you want us to build I got like 30 or 40 people from their Community running these like really thoughtful submissions being like this is what we want you know like these are the features we need then they got them all to vote on it so then they got

a full prioritization of like not just what the top feature is right under the top four but all of them like category voted was it just the people that's committed or did they open it up beyond that I think they opened up to their community so I think they it was it was anyone who has allowed listed from their Discord and they had like some sort of Bot mechanism to prevent bots on their Discord I think that's what they used and I I think I might be getting it wrong I think it was the same people submitted and so then they have them you know all prioritize it so now they have like this incredible data set right from their power users of like what they've prioritized here's where it gets fun right then you have people who go to social media because they want to win

votes they want to win this to get 100 so they're sharing this and they're talking about li-fi and why their future is great right like on social media right and so they're getting this like organic distribution right as well from that then because this is fully on chain and so you can run these contests in any evm chain you want they're they're getting full on-chain data so they can track hey who participated into this how many votes did they get the votes are attestations right they provided something meaningful they're meaningful contributed you know contributor to the community who tends to vote in the same things like who has aligned Interest Who voted on something that maybe you know one day is like a really major feature there's a game changer for life on like all of that is things that they can now track with their power users so at later

points maybe they want to give more governance power to those people maybe they want to do an airdrop right like whatever they want to do like they now have that data too right and then the final thing and they didn't take advantage of this one but I think this is work it's really interesting is like you could also set some sort of like incentives around how to get allow listed to participate so you could be like you have to provided XYZ liquidity for us you know you have to execute it XYZ swaps with us right and so now people have to like complete an action in order to participate to win rewards and then incentivized to do that too and you can even do that with the voting power as well right you can say we're going to get more voting power to people like we talked about this before the

more liquidity you provide it the longer you've held the token blah blah blah and so you can start to create these like really interesting incentives around both who gets to participate and how much voting power they have and those are like four hundred dollars right you're getting incentive for people to think about it to prioritize their data like complete actions to be allowed listed to complete actions to get voting power to share their on-chain reputation right it's like and to Market it on social media that's like I think a really fun use case to think there's this huge that it not only gives them a chance to participate I find it very interesting that you use the word contest yeah like when I first started learning about Joe craze yeah I was like I kept seeing you guys use the word contest and I was it's kind of a

leap because when I think about a contest I think about like sweepstakes and what you know yeah right but you're more you're more focused on governance and Community engagement what's the difference so it's interesting that you're using the mechanics of a contest in order to create retention and create engagement because you know this is what I'm guessing you know that if you have a reward that people are more likely to participate is that the reason you're framing it around contests and it's more fun right I think like you're focused on the financial incentive piece which is by far the short term incentive but like yeah long term you know like you think about U.S elections and like how U.S elections

have won have run they become totally gamified by the American populace right but like all turned it into a social status game in some ways about like who can bet on who's going to get it first not even Financial but just like who can align themselves with who who can like you know come together to form coalitions it's become this very Grassroots almost dao-like you know activity of people forming campaigns around candidates right which it was it was like a 1700s too like you know things things cycle and so yeah I think it's you know when we're thinking about like why are we using the word contest is because it really emphasizes the social piece of it and the you know the financial piece and maybe the reputational piece as well but practically speaking there is no difference between governance and

contests those are the same word okay think about it like any sort of governance you do is a contest right whether the U.S election is it governance or is it a contest it's the exact same mechanism people put together proposals and they vote on them and you have a contest doesn't mean there needs to be Financial no it really makes me think about like high school students Council right of you know yearbooks the most popular person wins and it's really everyone I always joke that you know students council is a popularity contest right that was governance at that level yeah exactly and so yeah it's definitely you know we have a brand called joke wraith that uses a thing called contests like we're trying to make this fun here we're

trying to you know make sure everyone does not fall asleep again and you know with this boring iterative process of governance but look if you want to be boring with us you are welcome to be boring with us like we will let you be boring and we will encourage and incentivize your board against all you want that's totally doable but I personally think that boringness is a very small subset of the kind of governance we're going to be seeing in the future I love that perspective let's have fun we need to have fun it's so important Okay so you talked about how joke race allows you to incentivize users to submit proposals and then they want to spread that and you get more engagement in your governance which I think is a great

thing I think another big part of what you guys are building in Joe Grace is that this kind of goes back to this like anti-token view is that you don't need tokens anymore explain to us in what ways could you use joke race where you wouldn't be using tokens and you'd still be having a great a great vote and great governance the way it works on a technical level among your technical for like a second it's literally a spreadsheet like literally what you can do is you just take column A's or addresses and column B is the number of votes that each of those addresses gets and you upload that and that is it from your side what we do is we turn that into what's called a myrtle tree inside the smart contract which is the contest and then check it against those

addresses so the bigger Point here is like everyone just assumed you tokens were the only way to vote and we said No actually they're on a smart contract level you can you can do this 100 on chain voting without any tokens being involved so I ran through some cases before of like some of the ways that you could set up voting power if you wanted to right you could set up based on liquidity provided or the number of swaps you performed the durational liquidity if you write it right how long you've held a token Etc two things I would note here one is that the majority I think of communities and the ethereum ecosystem still have their token on ethereum L1 and so that's true of like D5 projects it's also true of nft projects right and so as much as I'm being branded as the anti-token person I

would actually say like what we built is a thousand times better for token voting indirectly because all you would do is you would just take the holders on the L1 on ethereum mainnet make that your allow list and then now you can run your full governance on whatever L2 evm chain so now nft communities deep High communities they can do all of what they were doing before but they can do it on polygon or optimism or arbitrum or scroll or bass or Sora you know or mantle like whoever they want right they have full optionality either cello Etc and so if you do want to do one token one vote which is you know especially for stuff like nft Community is pretty meaningful you can now do it wherever you want the other thing that you can think about is like mapping off-chain

action and that's where it gets really interesting can you say hey if you follow us on Twitter you get to participate in this and now everyone's listening to buy on Twitter in order to participate in this contest to win thousands of dollars right this creates a kind of technical problem which is like how do you connect the off chain action to an on-chain address and I think this is kind of a big bridge that a lot of people are struggling with right now and so I'll step back for one second and then just make a meta which is imagine you're an Advertiser 10 years from now and you're trying to get you know best data on users on who to Target if you imagine a world in the future where 50 of data is on chain and 50 of it is off chain the on-chain data is

going to be way better for advertisers to use because now you have one person's account and you can see across all their different Services their web three spotifys you know their web3 Twitter is like how you know what they've done and so like even if you think about leveraging a contest with us it's like oh you notice two people tend to vote on the same things in a lot of contests and well now you know they probably have shared alignment you know and shared interests so you go into one of their wallets you see that they have a bunch of like a given NFD collection you can extrapolate well that's probably true to this other user they're probably into it too so on Chain by virtue of being this like transparent data layer is just like this you know in this current form and and I do think will provide protection

we'll give users a way to like actually monetize this themselves using zero knowledge stuff down the line but like is this an incredible way to be able to like analyze users understand them track them you know cater to them right and create like a customized internet that is really built for individual user preferences and so the okay so that's my like tangent or stepping back so let me step back in and say there's a desperate need for this to happen because right now all advertisers Etc are still going off web 2 Data because that's the majority of data is but it's not openly shared it's not accessible it's not interoperable in a way that they they could be leveraged right and so this question of like how do you bridge web you know off-chain to on-chain I think it's like it's a huge question for the

ecosystem because once you can do that everything's going to shift like at that point that people start to do more stuff on chain they're going to be able to get a lot more access rewards Etc and so there are ways that you could do this with stuff like Guild for example if you're wondering Guild you would test you've completed XYZ action like on Twitter or GitHub it connects to their API firms that you've done that you connect through your wallet and now you have a full list of on-chain addresses mapped to an off chain action there's also services that do this like probabilistically saying we think this Twitter account corresponds to this you know nft holder based on their address or you know their pfp these are all like really interesting mechanisms that can be leveraged so that you can start to create contests that's my huge candidate

to create like contests that are actually based on like off-shan actions and incentivizing off chain in order to you to participate in these if we talk about web3 as the way that we can put power back in the hands of the users right everybody that needs to be the only threat you know everybody's upset with the web 2 Tech Giants and right at least so we've been made the product right okay web3 is going to solve that and it's like okay but we're gonna stop using Twitter no right right are we going to stop using Instagram Facebook Tick Tock no like we're all using it so is there a way that we can continue to use those things but then move everybody in this direction of okay here's a way

that you can engage sure you follow us on Twitter but now because you follow us on Twitter we're going to allow you to also vote on product features like you read the example you gave before and that's the thing is like if you remember blockchain is just an open API right it's just effectively an open data for people to be able to collate like once you're doing these like on-chain contests over time and you're building reputation you're contributing that you're earning votes Etc and then I don't know some new D5 protocol comes along is able to get all that data and reward you for it by saying hey you are meaningful like you've won these hackathons on joke race right you won these grants proposals you have like contributed great ideas we're gonna airdrop your token right or we're going to give you this opportunity like at

that point when that starts to happen I think everyone's going to have this oh [ __ ] where they're gonna say wait maybe we shouldn't be doing stuff on these web 2 siled platforms because when I like whereas when we do it on these web3 platforms there's so much that we're going to get where like what I'm really excited for is like the people who like play in our hackathons lose make no money are pissed as [ __ ] right that they didn't get anything but meanwhile they're accruing this like massive Bond chain reputation and then Down the Line it's gonna get them so much right like like that's that's what I really want to see happen where people realize it's it's way better but you're totally right like in the meantime we are going to keep you know following the network effects of these web 2 Giants we're

going to participate in that and the more that we can do to leverage that and bridge that and attest to that data on chain I think the better I'm really struggling with uh your language of on-chain voting I'm just like sorry of launching contests I say on channels it really feels like on-chain voting is what you've created with joke race but you guys you really use on-chain contests as the language is it only because what you said before of like you're trying to make it fun and that's why you didn't go with on-chain voting is like The Branding term well I think there's there's two things here so Andre voting existed before us right Governor Bravo contracts which we built off of like you know uh compound has worked on this for years but to go to my other my point before the unlock for the

contest is not the voting it's the submissions is the fact that you submit your project in hackathon and then a jury boats on it right is Meaningful and so it's you know the contest is two pieces it's a submission period and it's a voting period And I would say both of those are are essential so yeah on-chain voting is huge but on-chain submissions I think is just as big and just as important right and without the on-chain submissions then you miss out on the opportunity for your community to be involved and what you're saying with joke race is you don't need to cap tokens in the hands of these community members in order for them to make a submission or for them to then vote on those submissions we can do that without them having tokens and we can do it

in a way that ensures that the right people are voting because it's based upon actions that they've taken either on chain or off chain or do it with token it's totally up to you but like I think the point is not to say oh no there's no use case for tokens it's to say the use case for tokens is a very very small subset of all the things you could do on chain like building you know token voting is like that's fine but that's you know five years from now it's gonna be one percent of these cases like there's just so many other ways that you can build that are going to create better incentives for for your users and Community yeah right and so I'm going to read out a portion of your V3 launch blog on mirror where you

talked about this you talked about incentives and the future of customer acquisition and retention and you gave six examples of how people can use contests so you talked about incentivized people to use your product and engage in your community get Fuller data on your users and their preferences get people to perform quests get people to hold your token and contribute it meaningfully get people to publicly Market your brand and then finally to get people to unlock reputational incentives and plan future airdrops yes this is where you realize that I am just like a pull string doll that says the same thing on repeat because it's the exact same six things that I talked about with the life I said Fulbright but it's true that what this achieves is

a new model for incentivizing your users which the amazing thing to me is we don't even need to incentivize if you have a strong Community you don't need incentive the users want to engage but isn't that an incentive like if they want to engage there's some incentive there it's their love of the product it's their love yeah with each other there is some incentive there right yeah but what I'm saying is the issue that we have right now is we don't have the simple mechanic to engage right and what I love is I've heard you talk about joke race next to poapp which is a sort of an ambitious comparison

just because poapp has achieved such Mass Effect it's such a simple way to bring your consumers on chain we talk on web3 Academy all the time about okay one of the easiest ways to bring your users on chain is just to give them a PO app right it's so simple it's so easy now what I love about Joe craze is if poapp is the easiest way to get a on-chain activity into the hands of your customer well joke Rays is the easiest way to get your users your customers your community to now engage with your community whether whether it be voting or in whatever in the form of contest in

a contest way contest that's a beautiful way to put it and I think like using poapps as a basis for submissions of voting is also a great idea like you know being able to say like you know the people who've got the Pro app like they're the ones who put in the time they're on this call you know Etc stuff like pop Thrive point I think like these kinds of Protocols are really really cool for being able to put Power into the Hamptons yeah I think I just really want to see I want our listeners to understand that joke race has mass Market appeal to everyone a new product can be very confusing and a lot of people especially those who are not in the Dow ecosystem like if you're working in a doubt you

get a lot of the stuff we're talking about and you rank his pains working at a dow you know you're like well why do I need to talk about that right yeah why does this matter yeah right and so where my head goes is well if you could understand that a PO app was the simplest way to bring your community on chain I think you can understand the joke race is the simplest way to get engagement on chain it is very simple it is literally you submit a response to a prompt or you vote yeah it was answer propped and that is it and that's yeah that's the goal I'm talking you know leads and leagues of you know pros of the you know all the incentives Etc no it needs to be as simple as possible and

that's been very much a goal even with our V3 with the new UI ux it's like it is paired down and it is simple and then like almost the point of being like fairly primitive I think in a way that we really want it's minimal right I love that formulation and so you know it is this interesting thing where it's like I meet people who are not in crypto and they're like what are you doing and I'm like I'm building a platform for people to you know have contests and it's so interesting because people are like what like that's never existed before no one's ever done that and you think like wait why have there never been a why has there never been a platform for contests like that seems like an obvious thing right like why is it not existed and it's because you need financial rails to

build up like you literally can only do this with a blockchain right there are hackathon you know and there were Bounty programs that are out there you're just trusting that they're going to pay you there is no you know like verifiable ode backing up that payment right and so it's a whole new parent time and the other way to look at it though is actually everything is a contest platform like Twitter is just a contest platform you are submitting something on there and then you're hoping people vote on it through what they call a like that the like is just a vote and you get enough votes then you will get more visibility and so that is the incentive that you are going after is like will I get more visibility by submitting something and having people vote on it like that's Twitter is just a contest

platform Reddit is just a contest platform right what and the worst form of contests which are probably the most popular are the follow us tag three friends oh lament here and it's all fake it's all fugazi like there's nothing you know and to boot as you said one of the most impactful things about participating is that I'm now creating this reputation around okay I care about this brand I care about this community and the more I do that well the brand would benefit from knowing that but it's all on web 2 you don't you don't know like if you don't get any access to that

data right yeah they can put out these tweets you know but they have no ability to follow the users who liked it I think even Twitter's blocked off that API recently so it's like yeah the fact that it's not another control and it's you know they can't access it right it's a total limitation you've got to do a tweet titled everything is a contest on that because I do think rant's the wrong word because I do think you that helps me understand joke race better because it puts it into the this frame of reference of everything as a contest I think sometimes like you know I think when we're pitching a bunch of PCS and you know people are like how are you going to monetize this and we're struggling to come up with answers we're like I don't know like maybe this maybe this but the thing you remember like

every blockchain a block literally a block is just a bunch of transactions that people are trying to outbid each other on to get included in that block right of transactions and so it's literally a contest right an auction you could say but it's like it's a contest where people compete to win this race to be included and so the fact that like the blockchain itself is a contest for one specific use case but you can just imagine how big the potential is for contests overall When anybody yeah can create these kind of rewards pools and these incentive models right for their user base two ways to actually compensate them yeah okay before we wrap here we literally have only gotten through like a quarter of our brief for today's podcast we're definitely gonna

have to get you to come back to yeah we'll do this again I want to talk about the Cooperative chain thesis or as Kevin owaki calls it the ecosystem um I want to talk about storage proofs I want to talk about zk's there was so many other things that we had prepped for today but love it before we wrap we talk a lot about on web3 Academy about the fact that we believe we're in the early phases of a bull run now let me be specific a crypto bull run the way that will cycle through the rest of the ecosystem is sort of to be determined it'll take time and I also want to be clear that I'm saying early phases of a bull run as in like we're seeing signs not necessarily that like we're at on that trajectory of a typical but you had

a tweet where you talked about your case for another crypto Bowl cycle and you know 2 two thoughts I'm going to read them and then I want you to comment number one was reputation incentivizing everyone to want to transact on chain rather than off to earn rewards access power airdrops Etc and number two was IBC enabling total interoperability so any blockchain lets you operate any other blockchain yep yep okay so wanna you know I kind of talked about which is the more you develop action reputation you know as I said that person who participates in like 18 hackathons doesn't win any of them but has gotten votes for Meaningful jury members that

have accrued over time like they've still built something really powerful for themselves they built this resume showing that they have built valuable products and that they've you know consistently gotten you know rewarded for it and consistently been like and they can leverage that for job opportunities at the very least but also because this is all permissionless Zone anybody could airdrop them to be like we see you're valuable right or we want to work with you or anyone who's hiring could just start crunching data to figure out who's good right that's the piece where it's like once you see the people who are building on-chain reputation getting all that access everyone else is going to go oh [ __ ] like what why are we doing a hackathon off chain right when that no one can crunch that data and can see it and can access it right that would have been

much much better for me to do in this other way I will also say like one thing I think that's nice about what we've built with contests is like there's no way that you ever are really a loser no one votes against you right they just vote for you and so if you happen to get zero votes that's nothing against you you just didn't get votes that time that went to other people it's not like people actually said you're a terrible contributor in your reading lesson we hate you the other thing I said was about IBC and so IBC is the cosmos basically a bridge and so what it allows is for any Cosmos chain to be able to interact with any other Cosmos chain they can share Finance you know with each other but they can share other data too one nice thing about blockchains is

like money is just one one form of data that you can pass you can pass all sorts of other messaging so for example if you like make a decision on one chain and then execute the transaction on another that's possible right and so IBC is really special because it's it's really the only bridge that is like effectively been around this long and not gotten hacked and so it's been totally stable no one has ever managed to hack it and you know knock on wood right I think it's fair to say it's probably the most secure Bridge protocol that's currently out there and so there's projects like polymer that are working on extending IBC to any chain the larger point with what I was trying to say is that we are facing this issue where with all these l2s and all these roll ups which is

awesome that they're all existing and out there they're now increasing the amount of block space that can exist that is making things much cheaper for everyone to participate all of which is like a huge win for the system right they're also how tracking their own communities Etc the problem is like how do they interact with each other and then if you launch a new chain how does anyone interact with it when they have to pay the gas right and so this is just a basic question but it's one that we're facing a lot which is we support something like 40 evm chains that takes us like two minutes to add a new one but whenever someone creates a new chain they launch a contest this is a great way for them to draw users to their chain right to be like hey we're having contests we're going to give away a

thousand dollars tell us you know what communities you want to see build now you've created an incentive for people to start transacting at your chain but they don't have the gas fee right and so like there are ways around this you know like gasless relayers and swapping protocols but like overall what you really want to start thinking about is like what are ways that anyone could just be like operating on one blockchain or running on one blockchain and that's actually executing a transaction on another one right I'm paying the gas fee on this you know with my one token here and then that's actually you know being passed over through IBC or related bridge to cover the you know the fees in the other one but more advanced like how do I make one decision and then it's operating on the other and you effectively like Let each of the these

blockchains almost be like a computer that's operating a node in a way and they're all operating each other in this way so they can share users they can share liquidity and you don't have this problem that like to use a new chain costs you a ton of effort right and labor and then they're not a neuroppable with each other at all it makes me think about chain links cross chain interoperability protocol which they launched recently at ECC but we're in such an interesting time of web3 where we got to get so nerdy right now on all of this under the hood stuff all of this stuff it's all at the the layer that most people when they come into web 3 should never have to think about this they should never be like Oh I'm on this

chain and I want to go to this chain oh I need these tokens and I need to bridge no if you have to do that we're never achieving that yeah you probably shouldn't even think about what chain you're on right you know it shouldn't really be a question you know the same way it's like you're not I don't know you're not you're gonna think about what internet you're on this is my dial a provider in order to use connect with you on this provider I need to connect you know no like or what email service provider you're using we all can just email each other we can all just connect with it completely all right last question I know you got to jump to another call if you had a billboard that one billion people were going to see yeah what would you write on it I'm

gonna have probably have to think about that one I would probably just write jokes all the way down I think is what I would put and have a joke all the way down jokes all the way down it's all a joke we've gotten this interesting criticism where people are like you're centralized because you're letting Google create an allow us like that account now determines whoever's in the community and you're like but what's the alternative like because someone has to make that decision of who's in the community for that giving contest and look if someone makes a decision and everyone in the community is like screw that then they won't participate they'll form their own they'll Fork it the beauty of blockchains is is that they're built on social consensus they're built on people coming together to validate and say we think this thing is true we

think this money is worth something we think this transaction is valid because we all have agreed on it that's why decentralization is really important and I think like what we have done is decentralized you can have a multi-sig of 100 people create the contest if you want to or you can have an individual it's up to you it's permissionless but like ultimately the you know this is a decentralized as it gets because we are letting we are turning it totally over the blockchain to verify and we are you know letting anybody create a contest right and however they want and then letting any Community decide if they want to participate in it and if they find it legitimate or not and how they want to Crunch that data as well right like that for me is decentralization but decentralization is not necessarily credible neutrality it's a little bit

different because it is people all deciding what they think is true and what they think is legitimate and so yeah when I say jokes all the way down what I mean is like there is no serious correct truth that you can rely on there is just social consensus all the way down I love it I love it David this has been just a blast thanks for your time thanks for everything you're building everybody out there if you have not checked out joke race go check it out link is in the show notes and set up a contest for your community go experience even if you have a community of five people or you have a community of a million people you can use this tool to bring your audience on

chain and to get them to participate in a meaningful way and you're going to help them build their own chain reputation it's just win-win-win I'm gonna go win-win-win all the way down I appreciate that yeah and if you throw some rewards on DMS on Twitter and we'll try to feature it too on the side so we can help promote it too amazing David thanks source of time thanks for everybody for listening in have an awesome day my pleasure thank you thank you for listening to web3 Academy your one trusted source to capitalize on the next big phase of the internet if you enjoyed this episode please share it and subscribe or follow so that you don't miss the next one while you're at it there's a link in the description for a free newsletter where we provide timely and relevant web3 insights so you can

confidently build and invest in web 3. make sure to subscribe today one final note this podcast is for educational purposes only and nothing we say is financial advice crypto and web3 are risky and you should never invest more than you're willing to lose thank you friends and see you in the next one