The Social Architecture of L2s: Why Culture Eats Consensus for Breakfast

Transcript

to come up to the front. That would be really nice. I think there's there's enough of us for me to speak or do you need the microphone for the stream? Yeah. Do you need me to speak on the mic for the stream? Okay, no problem. All right. So there is one thing which fascinates me more than the technical stuff in web 3 and that is why one chain can win over another chain when technically that might not necessarily want to be true. And the reason I'm talking to you about it is because I work in this stuff. So I'll tell you about that in a moment. But I work with dynamic. I live in Poland and I'm traumatized by Hey.

Mhm. Okay, no problem. So, I've been traumatized in the past by presentations which were overpolished and didn't actually say anything. So, this presentation is as lowfi as you can get. And I wish it looked like this, but it doesn't. That's the way it could look. So, if I could go back in time. I do live in Poland, but I'm Irish. So, if you catch me smiling a lot, that's technically the Polish smile, but mine is Irish, in case you were wondering. I work at Dynamic. So, we run wallet infrastructure. If you think about wallets like the outlets or plugs in the walls in which any user in the world, like web 2, web 3, it doesn't matter, plugs into what we can do, then that wallet is the outlet or plug socket. So,

we create those. We give wallets to everyone who needs them across different apps. And then you can use those outlets for different things like stable coins for example. If you have outlets, you also need plug adapters. So depending on whatever device the user has, if they're coming from Apple, Instagram, whatever they've got, you need to let them plug in instantly. So we allow that through social login and other stuff. And then as well, we know they don't just have embedded wallets. They have all different kinds of web three wallets. And orchestrating the difference between those is very annoying, I could say to say the worst. and really interesting at best when you have 525 of them. So we do that for the likes of Stripe for example. So if you use Magic Eden, if

you use Stripe as you say, story, zero, hash, linear among the others, then you've used dynamic. So it's all of those connections. The reason I'm telling you that is because it means we work with a load of chains and you begin to start thinking the more you interact with them, what is the user base going to look like one year from now? because there's hundreds of chains right now. So if you fast forward and you take let's say the Apple and Microsoft ecosystems, you can imagine that it might consolidate a bit in this way that they will try to attract devs. The devs will build DAPs and those DAPs will hypothetically attract a critical mass of users which will in turn attract more devs. So

whichever chain can do that the fastest and with the biggest critical mass, those are the most likelihood of success. Which means actually that they're attracting developers. Developers are the consumer in this case. And that means if you're a consumer and you're a developer, there are certain tactics and certain psychological aspects that are going to matter to you even if you don't realize it. And chains are using this as they should. So again, what I'm about to say is the technical best solution might not always win. I don't mean no chain should not be technically competent. I really don't. I just mean that it's not the only thing that matters. So it's important to state from the get-go. So no pot stirring necessary.

Okay. So if that's our premise, then what actually happens? There are social dynamics occurring in the same way that you might decide to purchase a product today or use it or be loyal to a certain group. There are two drives that we have normally as human beings. I would say one is purpose and this slide is quite pessimistic for that purpose. I think in web 3 we have a pretty good handle on purpose actually. We're able to help the world. We have a good sense of what we do. You can write code. Even if you're a marketer, whatever it is, you probably have a fair idea about how you can help.

So that's a strong purpose. But the other aspect of this is belonging. And belonging actually matters a lot when you choose which ecosystem to be a part of. So it's not just product market fit in the chains, it's product culture market fit. And any chain, you can use this rule across the board. Any chain which you think has recognized this is probably doing very well. Any chain which has underutilized it is probably again very technically competent but might have a problem with attracting this critical mass of developers. Again might not but in general it's a good rule. So I'm going to show you a few things about psychology which affect our everyday lives as well as the lives of

people choosing chains and they're they're going to be interesting regardless. So inroups and outgroups and identifying who you are a part of and what you're not a part of is more intricate than actually we realize or these chickens realize. There is a few different studies which support this and it's actually really fascinating in your day-to-day life. So again beware of like just big numbers on a screen. It's hard to distill a lot of research down into a big number but they are helpful. And this does come from a study. So if you're randomly assigned a group in a study, then you will probably 74% likelihood favor that group over others. You were randomly assigned this

group. And there doesn't have to be big stakes here. Actually, in the study, if you gave more money in this study in the way it was done overall to the group, then everyone would walk away with more money. But they didn't. They gave it to their randomly assigned group. So that's how powerful it is. Even if you're just randomly assigned a group, you don't choose one. And then there is the proof. So this one again is a bit more pessimistic, but it just goes to show the baseline. So even if there's obviously wrong answers, if there's group pressure, 37% will choose them.

Again, we like to think we're smarter than that, and I think we are. But again, that's the baseline on which these studies are conducted. So if there's any ambiguity about these signals from the tech, like not everyone is going to have the time or the ability to read through the white paper and distinguish exactly what the technical benefits are and abstract that to the future about how it's going to play out. We need some social signals like who's building on base, right? There's also the weak tie effect. So this was from Mark Gratenveter. It's a really really great article. So they actually found that your loose connections are the ones which can help you find jobs and advance in society.

And that's because they help as bridges. Your close connections are probably in the same circle as you are. But if you're working with people from a chain, it's likely they come from different parts of the world, different projects, and exposes you to new weak connections. So it's a really strong motivator for you to align to a community. And then there's mechaf and reed. So this is Reed. If you take it as a network, which it is, the chain, the value exponentially increases by the subgroups that are created by the chain. So if you have a really strong culture, a big chain, it's likely that you can create subgroups within it like beer baddies for example, if you're on bar chain, there are tons of them and they themselves can increase the value

exponentially. So that's compared to metaf. We won't go through this big graph, but metaf is more about the total number of connections, total number of users in the graph. Okay, we have identity based motivation. So this one is really interesting because the clearer you can make the identity of the chain, the more the user has to attach themselves to and the more motivation they immediately have. So everyone has different kinds of identities and when you activate one clearly then you have more motivation.

But there is one more thing about it which is extra interesting. It was when you activate an identity properly, people perceive difficult tasks as more worthwhile doing than when you don't activate that identity. So in essence, it's a win-win. The stronger the identity you allow a user to align themselves to, the more likely you will be to succeed. And there is an extra element to this, which is social capital. So Eugene Wei introduced a fantastic article about this about status as a service essentially that we're we're all seeking status and that can be interpreted as our social capital in life but also in work and the way we align ourselves to chains same way as

social networks. So we do try to accumulate it whether we think so or not and ironically there's also proof of work involved in this kind of thing. Now if you imagine there's a limitless supply of social capital associated with your ecosystem, your identity, let's say the chain, whatever you like to use, then it's it's pointless. There can't be a limited supply. Same as any kind of capital. So if you look at the kind of capital that a chain can create, there are different kinds of people associated with a chain. So you start to be able to break down the social dynamics of any chain. The core contributors might not be so let's say loud in that way but they might communicate very well

technically. So that's on the top left the core contributors. On the top right you have your community leaders like Jesse Pollock for example. They're very high visibility. They could be very technical. Bread guy could be another good example for me. And these guys can create a lot of social capital because they have the knowledge, expertise and communication skills. Then on the bottom left you have the silent builders and then the content creators. So you in any good chain have a full spectrum of these people. Now if the top right creates that social capital once it is created it can be transferred. So it creates an upward pull for the chain up towards this top right. So for example if you're joining on base and you're likely to get

a retweet from Jesse for example that's a big win for your social capital. it enforces that identity even more and you start to move into the ecosystem and then the effects take place where your identity is cemented and so you're loyal. So that's one really good example that I like of how you can introduce people by first finding the people that are going to be on the top right making them vocal supporting them and then bringing people in by transferring that capital down the way to those people. All right. So, we're going to go through a couple of case studies and I'm going to get you there, I'd say, in around few minutes. So, I'd say we'll be around 10 minutes. So, happy days. Bar chain is

one really, really interesting one. From the point of view of it being very memorable immunable. The reason for this is the more in language there is, the more it cements this identity. So you could think it's quite like there are articles out there about how it's kind of isolating and not very inclusive and different things like that that that means it's having the intended effect. It's creating an ingroup and an out group. So the more memeable it is and the more not just language but symbols you can use you can imagine this identity is getting stronger and stronger around everyone and no better example than the bear batties. So again you see a perfect example of the in language ugabooga to me necessarily doesn't have to mean

anything but it could be a super strong symbol in the context of someone who identifies as a bear body or indeed with bear chain 56,000 followers they're extremely successful and I do want to say that this is quite an authentic one I don't mean to say that you know these just have to be initiatives that are purely psychological experiments this is a genuine authentic mission to support women in an ecosystem. So, it's a win-win. And again, not saying that they should be inauthentic in any way. You've abstract, which works on the imagined communities and the authentic origins principle. So, this one is basically utilizing a

community that already had strong ties. True. There we go. And you can see that they'll have the connection already. So, you have that strong shared symbol. So if you can get that on board, then you can utilize it as a flywheel. The classic good old base. So they run with a lot of things. They run with a lot of authority and social proof as well as consistency. So they run more on the culture of productbased let's say product based growth. So a good opportunity for builders to succeed. And Jesse often could we say repeats this in the way that he tweets.

So if you look at a tweet that has one point one let's say almost 2,000 gez 2,000 likes and it's believe in something I think that could only possibly come from base and so that's a good representation of this ideology onchain summer is an initiative around that so again converting this social capital into a way of representing your app and getting promotion because of where you build that app. So again, imagine you pick 10 chains. You say, "Where am I going to build my app?" It's partly social capital from that, partly the chance to succeed, which comes from the promotion from leaders in that space and the identity that it helps you build. So those weak ties, mega ETH has a really interesting

combination. You have technical excellence. So I I believe Mega to be like a very very technically competent chain in itself as regards speed but also the aesthetic is really intriguing. So it comes with a lot of credibility of a Steve Vitalic fact but then you have this and if you analyze this image and say what kind of person would align themselves to this image well I do and I don't truly understand why I really I really like it. It attracts me but again I don't even understand why. So, it's a really cool aesthetic that people are tapping into. And I just learned this morning that the Fluffle took in over 13 million if you convert to USD. And that's I think soulbound NFTs. So, non

non-tradable. So, that's saying something about the way in which it's rewarding loyalty, the way in which it's earning it. So if you're looking for some takeaways, you there is a type of cultural architecture that you can design intentionally design just as much as your technical architecture. So it involves things like the cultural seeding. What kind of symbols do you want to use? What kind of aesthetics do you want to use? What's memeable? What's memorable? What's the in language and out language? So what's going to separate the groups? And then the trick is to lean into it. So if you do it halfway, it's probably not going to work. It's just going to be a bit weird. But those chains who really lean

into it, you see it working. And then there's the engagement between those different four quadrants of the community. So how you can bring in the leaders and how vocal they can be and how supportive they can be of people to bring them into the the ecosystem. So are there contribution pathways for like the silent creators, the core contributors, the people who just sit there developing and actually do the hard work rather than talking about it like me and then how you can recognize builders as consumers. So not just contributors. Obviously we are users as well quite clearly but indeed when it comes to chains we are part of that cycle which is going to bring on board the world. So here's a few I'll put this

up up online afterwards. These are again really interesting talks just from the perspective of life and how we identify ourselves in the world. It's yeah it's really cool. So we've related them to crypto here obviously but in general. All right. Thank you very much. Thank you. Okay. If you have a question feel free. Hey, thanks. Um, do you see from a maturity point of view any uh trends in like whether you focus on content creators or the primary builders as contributors in terms of the maturity of the chain?

Yes. Yes. Yeah. I mean, so I think it's it's been quite I'm not sure. I'm going to have to think about it, but I think it it yeah, you start off with like the hackathon style, you know, core core contributor reward program and then it evolves I I feel like as you have a few core apps into the the kind of hiring a few really good devrils like for examp the the lovely Devril from Bar Chain they hired and so then they started amplifying the content afterwards but it's it's kind of hard to say. Yeah.

What were you thinking? Uh it I mean instinctively it feels like uh as things evolve um like bass feels like a lot more content creators now because they're trying to show that you can do things on base that are beyond developers being the customer. But that's just a Yeah. One example. True. Yeah. And if you think about the way that the the capital accumulation, the social capital is not not limitless. Obviously where there's space there's going to be more people drawn into that space right so if there's a lot of apps but not a lot of content then naturally you get drawn in and then gradually it tends to equalize itself I think hope Okay.

Okay.