ZK Podcast: Funding Blockchain Development with Kevin Owocki

Transcript

[Music] welcome to zero knowledge a podcast where we explore the latest in blockchain technology and the decentralized web the show is hosted by me Anna and me Fredrik [Music] in this episode we sit down with Kevin or walkie from get coin to talk about open source funding through bounties grants and building business models around open source software before we start we want to say thank you to this

week's sponsor Apple graph Apple graph is a project that has built an extensive collection of open access research papers on cryptography distributed computer systems at blockchain there Oh a aggregation tool is designed specifically for cryptographers and blockchain developers thanks to an integration with the orchid registry contributors can develop and establish a professional profile based on their entire body of work all on a single platform so if you're a researcher who'd be interested in such a system or if you're a learner would like to subscribe to get updates about a specific researchers work you may want to check out this system for a look at what they're doing check out epigraphy o or have a look in our show notes we're going to share a link to their curated

list of cryptocurrency course material so thank you again Apple graph and now here's our interview with Kevin so today we want to talk about funding actually and all sorts of different ways of funding open source technology opens of open source software development and I think we have a great guest to talk about that with hi Kevin thanks for having me on we're also here with Frederick hello so like Anna said we're talking about funding I'm curious Kevin why did you get involved in this space of life trying to get projects

funding what was it about this that made you think like this is what I want to work on and dig into yeah that's a great question and I love starting with why so so my name is Kevin waki I'm an entrepreneur and software developer from Colorado USA and I have been doing entrepreneurship and tech stuff roughly for about 12 years I got my start in startups I Corporate America and moved across the country with broke my lease within the span of 10 days to get into startup so I was CTO at a TechStars startup company which is an accelerator out here I was 22 and really had no business being a CTO but sort of douve

head in into the world of startups then and I've just loved it and never never left but in the last 13 years since I've been doing tech startups everything that I've been built has been built on top of open-source software so if you go on github you're gonna see that there's a ton of different repositories that allow you to use an open-source web server or an open-source database server or I use Django for a lot of my projects and all this codes available for free which I just think is really incredible and there's been some studies in 2008 there was a study that showed that open-source software creates billions of dollars a year in economic value I think the number was 400 billion that's 10 years ago this is before blockchain

open-source money existed and it's just pretty incredible that open-source is out there and for technologists like us to draw on to get our projects off on a running start instead of having to build a web server whenever we want to build a web company and I think that a lot of the younger generation and you know I work with a lot of people who are in their 20s and and they sort of take this for granted I was around in the 90s when Microsoft was dominant and you had to pay a licensing fee for a web server and it didn't have to be this way and I think we're really lucky to have open-source software and so I think that open-source provides a lot of value for the world but I don't think that people who contribute to open source are fairly compensated for the value that they're

creating in the world so there's a lot of value creation and value capture and get coin was started on the we've made this wild bet on blockchain being the tool that we can use to solve this problem so if we have programmable money and we value open source software then it we can maybe program our values into our money and we can we can compensate people who are working on open source software and that's sort of what get coin is it's a double-sided market that allows you to connect funders to and we have a mechanism that that connects them in different ways to create productive economic output between those two parties and we think that blockchain is a game changer for

open-source sustainability because for the first time in the world all the money in all the money that's going to the financial system with it would have used that used to go to some back office on Wall Street is now going to open-source software and I just think that's an incredible opportunity to to grow and sustain an open-source and that's why our mission is to grow and sustain open-source before we jump in to get coin specifically I kind of want to talk about just what exists now like what is out there what was there before in terms of funding for open source software development I think the drawing from the prior art that's that's existed in the sustain open source community is is a really valuable thing and I'm a member of the sustain OSS community which is a community that that meets

every year to talk about open source sustainability initiatives and I'm a big fan of Nadya egg balls work in in funding open source software so she wrote this seminal paper called roads and bridges the unseen labor behind our digital infrastructure and it's just this paper that sort of compares compares open-source software to roads and bridges the physical infrastructure that we rely upon and the the seminal work that people reference is called lemonade stands if you google lemonade stand you will see a handy guide to financial support for open source software so just browsing that there table of contents right now they've got a lot of different opportunities for open-source maintainer x' to monetize

their work donation buttons bounties crowdfunding selling books and merchandise selling advertising on top of your work but the big the big ones are sort of consulting and just convincing your employer that they're they should allow you to work 20% of your time on open source software so the problem with those two options is that you don't spend a ton of your time on open source software at max you're spending 20% of your time on open source and 80% on whatever profit driven venture that you're that you're working on because of the funding they also have like no exponential reward possibility so yeah typically when you create software and a company you have the potential to earn

disproportionate to the effort that you put into it I mean perfect the example is like how many companies have profited off of open SSL right but you know the developers of it get no money and so if you're consulting to make you know a living then you can actually make that the real upside of of writing that piece of software yeah I mean I guess if people are let's go back to just like if you're a software developer in a company you're also you're creating code that's then used by a larger entity you're compensated for that sometimes you're also compensated with equity which could potentially down the line be worth more if the thing is successful when you go

into open source yeah like is there any further I mean I guess donations is cool but like is is it not more like when if when a piece of like when something is released right then there's a lot of excitement about it but once it becomes standard do people continue to contribute to those yeah there's certainly a problem when the novelty wears off and people just sort of start to expect your work and I think that when you look at the open-source maintainer lifecycle that's actually a really really great segue into into the problem with the open-source maintainer lifecycle which is you release something new you put it on hacker news or on reddit or maybe it goes viral on Twitter and people are saying oh this is awesome I'm so glad

you did this I had this idea but I didn't follow up on it this is amazing thank you for doing this here's a $25 donation or something like that but then as people start to rely on your software the conversation becomes hey I have this bug and I can't figure out what to do can you take a look at it and then the extreme example is that when more people start to rely on it they start to become expected of of your time and attention and remember this is a maintainer that's doing it for for fun and isn't getting a lot of rewards financially just just sort of maybe reputational and Network rewards out of doing it and so when when your users start to from from all directions start to get really expectant of the value that you're providing it can lead to a

lot of burnout for maintained errs and I think that that's that's the part where things you can make a rational economic argument where things are getting really self-defeating if the people who are maintaining this open source infrastructure maintaining our digital brick roads and bridges are getting burnt out and quitting then that causes a lot of problems in you know inefficient value creation for the world and in some some cases you can even see examples of maintained errs that have given away access to their repos because they don't want to do it anymore to malicious actors I think there was a famous NPM hack maybe like two months ago where a maintainer was just kind of over it with their project and so someone came along and was like hey I'd like to maintain this and it turned out

that was a social engineering attack to inject malware into their NPM repo and they I forget how much Bitcoin they stole by doing that but it was just a really ingenious attack vector that you you hadn't heard of but it's because the maintainer got burnt out I've also seen like really extreme cases of this where like in the rails community for instance did there's this sense of entitlement that comes with you know there's there's someone that has built a large company on this piece of software and now has certain expectations of it they come to the core team and say you know you you up my business you have this bug you need to fix this ASAP yeah but it's like well you built your whole company on top of open source code that no one is actually responsible for and now

you're coming with demands the equation doesn't really work out mm-hmm do you think though is there are there companies that actually do contribute back like that they maintain could could the companies that are using this become the maintainer so yes the short answer is yes there's there is a business model where you sort of maintain become the maintainer of the software and then you channel the bug in future requests into a sales pipeline where you sell a services agreement on on top of the the work that you're doing and you know that that creates a lot of capture of the development roadmap of the project based off of customers customer concerns which I think in most cases is the good things probably in a in a

minority of cases isn't a good thing but that's one of the models for open sources it's it's working the problem is that you need quite a lot of scale in order to do it you need to have the heft of the Linux Foundation or the Apache foundation the administrative weight of them in order to make it work I think something that I've always been curious about just in general and this is also like when companies become the maintainer --zz do they close source part of this like is that is that actually part of the open source work some of them like I guess you mentioned a couple where they they remain committed to open source but are people worried about like just the companies taking it over yeah I think that so there's this model called open core which my understanding is that you

release sort of 70% or 80% of the functionality open source and then you have these modules that are closed sourced on top of it that you can use to create an upsell and it's kind of like the freemium model and I think that that's working in a lot of cases in the legacy open source but again you have to have the administrative you have to hit achieve a scale where you have the administrative you can maintain a sales team and a pipeline and all that kind of stuff to make it work for the mom-and-pop developer it's it's not really much of an option like part of what you're talking about is also a licensing issue not so much as an open source or funding issue I mean that the reason people would go with GPL is to prevent exactly that of a company larger company than

you gaining interest in it I'm taking it and making it close source and therefore the like profiting off it off of it separately from what you're doing GPL can prevent that - certainly to a certain extent sand when people Apache - they're like there have been cases of large companies like Google usurping a project and sort of going you know this is ours now when we're gonna do better job at maintaining it or developing it then the original author and so the original authors get no credits yeah this is universally considered a dick move yeah that actually is a good segue into I wanted to talk briefly about cloud providers because it's one of the

most controversial areas of open-source sustainability right now so imagine you build some amazing database and you open-source it to the world and you're starting to build a business model around that open core consulting service if it if AWS or digitalocean or any of these other companies pick it up as something that they're gonna offer for free in an ec2 instance or as a managed service then they're gonna be the the ones who are using the most of of that software and they're not gonna pay and give back so there's a lot of controversy about what cloud providers are doing right now with respect to open source and how much they leverage it for their business models but don't give back now I think what would be really great to do is talk

about how blockchain and sort of this idea of open source in blockchain opened up a whole I don't almost like a category of new ways of funding what-what were the original ideas when sort of value bearing blockchain technology came out in an open source way like what were the ideas of how this could actually fund people yeah I've been calling it the design space of open source meets blockchain and I think that there's there's abstract reasons why this time is different and open source meets blockchain and there's more tangible reasons the abstract reasons are well we value open source software and we now have programmable money and we can maybe program our values into our money so

maybe we can create a system that sustains open source that's kind of like a professor Oriole sort of version of why it's different the real reason like the tangible reason that it's different is that we have billions of dollars in market cap in these blockchain ecosystems that are all competing against each other and in order to improve their protocols they need to recruit developers to work on their protocols and so you have billions of dollars that's floating around looking for developers and all the money that would have gone to some close source to some back office on Wall Street in the close source financial ecosystem is now going to open source software so it just

creates this very culturally different deployment of capital in in the blockchain ecosystem then would have existed elsewhere in in the real gamechanger I think for open source is that there's actually funding that is Liz is looking for developers and there's an imbalance of too much funding and not enough software developers that can work on this technology and it just creates this this sea change in in in leverage for for software developers to work on what they want and to work on stuff that they're that they're passionate about and so we're we're at get coin trying to build the rails of of how that capital is gonna be deployed and to actually answer your question Anna we started off with bounties which is a very simple hey

I have a feature or a bug that I want turned around and I'll give to eath for it which is about three hundred and fifty dollars at time of recording and we've seen the bow really rates on get coin er between 20 and 60 dollars per hour so you know if you're someone who has capital deploy and you're looking to to recruit a software developer putting a bounty up on get coin is a great way to do it I think that the etherion Foundation has done a really great job of giving out grants to people who are doing good stuff in the ecosystem and that's another way to to deploy capital to to the ecosystem to give out I think that their grants range from 25k all the way up to like five million dollars depending on how core whatever you're doing in the is in the ecosystem is and

I think that it I think that that's a really interesting trend that we've seen and I hope that they'll hope they'll speed it up and I hope that they'll continue deploying capital but like grants are not new grants also would have existed before in all sorts of places and I know that even in the open-source community I believe that like you could get from what I I think at our interview with Liz we talked a little bit about this like the government could give out grants for certain kinds of development projects the trouble with grants and I think we all are aware of it is that they tend to be one offs with milestones but no sense of continual funding and so it's like cool you build the castle or whatever but then well you know who keeps who

takes care of it all of those problems kind of come up again grants have existed in the old ecosystem I think that what's different in the blockchain space is that there's too much capital chasing too few developers in the blockchain ecosystem so grants that the etherium foundation are doing I think that that's a they've deployed something like ten million dollars into the space and I think that that's a really good thing I would like to see them move to a more recurring model I'm actually on the working group for AIP 1337 which is a subscription standard on the blockchain and so basically you sign a transaction once and then you can debit a certain amount of die or any token from a wallet every month so sign once and then you can you can cancel the subscription

using the standard also so I would love to see the etherium Foundation move towards monthly stipends for software developers as opposed to one-time capital deployments and that's certainly a tool that we have available to us as well do you think that because like do you think that a lot of the ideas around this though are kind of based on the idea that the tokens will continue to go up in value you know you have this this almost mythology now of like the early miners the early developers like getting an early building the stuff up and now you know definitely reaping the benefits of it when you when we talk about a lot of that stuff like you're assuming especially if you're paying in the token that this would continue to be value bearing and continue to go up yeah I

mean I think that it's certainly a double-edged sword when the bull market was happening I remember people were really happy to work on bounties that were 1/8 and they're worth twice as much in fiat currency by the time it was paid out but it doesn't work the sentiment is exactly the opposite in a bear market and I think that stable coins are a really good innovation in there gonna be a really important innovation because you don't have to rely on any speculation you can just kind of focus on creating value and the the value will that you're paid will be will be stable so I think the ERC 20 is a standard that wraps a lot of different value capture models into it and that can be a stable coin or it can be a highly speculative asset but we've seen we've seen a real

shift towards died as the market has been super volatile so I mean yeah grants are good but kind of one-off have their own problems I think bounties have their problems in like how they're distributed getting people interested there's a bunch of other questions about like what should how much should a bounty be and you know what's the onboarding process we're starting to work whereby the etc like how do we solve this and what are the goals first and foremost like are the goals to get value capture for the open source project so let's say my my project creates a million dollar in values in ten different companies should I have a percentage of that value or should I be paid for my time or like

what are the goals that we're trying to achieve yeah I think it's it's good to start with goal setting early in the conversation because we sort of defined this design space of open source and blockchain and what are the goals of funding public goods or funding software development inside of that design space I think that for the etherium community which is you know if that's the community that I would consider myself that to be a part of and I think that the goal is to bring developers in the space and keep them in the space and even better if they're working on public goods instead of some chick coin forgive my language and and so you know for the etherium community I think that developers are a leading indicator of a

protocol that's maturing and an ecosystem that's gonna actually hit the mainstream or let's call it at least the late majority or the I'm not sure exactly where we are on the on the on the Gartner curve but let's call it the late majority we want to bring more people into the space we want more people to hold eath and and you interact with things in the ecosystem and the way that you do that is by improving the base lever layer protocol improving the infrastructure and then building an application layer on top of it that allows people to experiment with the Internet of money to find the breakout application and and so I think that the goal from the etherium foundations perspective I don't work it for the etherion foundation so I don't really

speak for them but for the etherium community is to bring more developers in and to keep them self-sufficient and working on the etherium protocol now from the developers perspective I think the goal is to work on something that compensates well that has a positive impact on the world or on your own network and then something that aligns with your values and and so I think that there's a couple different actors in the ecosystem there's people who are looking out for the value of the protocol and they should want to recruit and maintain developers into their protocol and for the developers I think that you want to work on things that are fulfilling to you intrinsically and you want to be able to pay your mortgage and and be

able to put food on the table for your family and so I think that those are the goals that I I think about when I think about funding funding public goods in that and to your point about about equity and upside I think the more that we can align incentives between the actors the better so you know you're gonna get a certain portion of your salary that's liquid a table and you're gonna use to pay your mortgage and if you got currency and it's also great if you get a little bit of equity or I'm using equity and this sort of broadest sense possible if you're getting a token that allows you to capture the upside in in a protocol I think that's a positive thing also because it aligns the incentives of the actors ice to work in music a really long time ago and there

were grants in music too and I'm from Canada and there was like music grants and there was what what you'd often see though is you'd see people make a trade off like I'm gonna do what I love with high risk good chance I will not seek it have any reward and nothing in the future or I will take a safe route and have like a side job and I think when it came to I guess maybe that the same thing has always been true in open-source but here what you're actually providing is that leveling idea where you could be a maybe part-time or even full-time open source person and still be able to have a decent life you may not have the homerun life like you

may not be the rock star but you're it's almost like there's a safety net of some sort or there's something like you you can fall back on I think it's a good metaphor and the way I would restate what you said is that there's almost an arbitrage between working on stuff that you're that you're passionate about and stuff something that compensates well so there's like you have to make a choice right and what get coins trying to do is close the spread in that patrasche market between doing stuff that you care about and doing stuff that compensates well so that the majority of developers in the space can can do both of those things and the reason why we're enabled to do that is that there's actually too much money chasing too few

developers and I don't know if those conditions will continue forever probably not but at least for right now there's there's a lot of people who are able to work on on something they're passionate about that has an impact that compensates well and and I think that's good for all all actors in the ecosystem that's a in itself like you said is a double-edged sword I'm curious on how you think of like get coin like if you're trying to address just blockchain projects and protocol development or open-source software in general in in protocol development what I've seen happen a lot and like why you know I've stated this publicly before I believe there are about 10 people who completely understand the etherium protocol that's

it there are 10 developers in the world who are like maintaining etherium that's not much for a network worth many billions of dollars and the problem is that it's so much easier to make a significant like millions of dollars by having an ICO than it is to go with the protocol development where you might be able to get a salary like there there's that problem of like there's a lot of people who are willing to put money towards something that they can get an exponential return on but not into protocol development where you know because the only return that they could possibly get is aetherium going up in value which yeah you know is much more

uncertain yeah I mean I think that you know we'll see if the ICO markets bounce back I think what you said Fredrik about it's easier to make more money doing icos than protocol development was certainly true in 2017 I don't know if that market the those market market conditions will will come back but I think that I think that you're absolutely right you hit the nail on the head when you said there's probably ten or a dozen people who completely understand the etherium protocol and there's a truck factor I mean or I guess we call a lot of refactor now or for those people win the lottery then are they still going to work on the etherium protocol and and I think the more that you can create a crypto economic and Senate or like an economic incentive for

more people to first become contributors to aetherium and then once you become a contributor you can be a more active contributor and then you become a maintainer you got to create that that that's that flow of developers that are going towards becoming protocol developers and I think that there's I think that actually there's some actual numbers I can put to this right now so eath 1x was just parity and guess working on on aetherium 1 and I think now Pegasus which is funded by consensus is now starting to mine a few blocks in aetherium 1 but if you look at aetherium 2 there's there's something like 8 or 9 different clients that are bidding to be the parity and death of etherium 2 and I think that that's a really promising

sign to see that many people who are building the next generation of a aetherium it makes me feel like there is there is a business model around doing protocol development in in aetherium and I and I hope that those teams those teams see it out at 2 or 3 a.m. to actually launching next year or the following year because that would the more different clients that you have then the less there's that truck factor or that lottery factor in development I think that's true but I guess like even going to that idea of like so the 8 9 teams building these clients do you think what will happen is like those that can get it can find ways to continue to fund themselves become those that remain because I think going back

to that question of funding whether there's a lot of people who understand it or not it's like how do you fund these people yeah like neither parity or gifts are actually funded in in business model sense like it's not a profitable venture parody lives off of grants gift does does too so in the end it's sort of like it's the etherium foundation paying for all of it and that's the same case for these eight or nine teams working on youth to I'm curious of like well will there be a sustainable funding model either through like block rewards or through community funding through things like it corn or otherwise yeah it'll be curious to see let's talk about get coin

because we have mentioned it a couple times but I don't know if we've truly gone into like what you are doing and then maybe we can come back to this question of like how to fund those future clients because I feel like you at least from what I've seen there are some clients who've put themselves up like acting right I think so yeah first uh Keith one of them yeah so okay so let's talk a little bit about get coin okay yeah maybe to kick off though tell us like we're curious a little bit about the inception of get coin sure so like you mentioned a little bit about your background but where like where did you decide this was the thing you were gonna work on yeah so I'm a software engineer and if you go to my github you'll see a elephant graveyard of different projects

that I've worked on from I think in 2015 I built an AI a machine learning crypto trading bot this is when Ruth was that like 80 cents and I open sourced it and like tried to build a open source distributed hedge fund that didn't work I built this plug-in called adblock to Bitcoin which basically took adblock ad space and allowed put QR codes that would allow Bitcoin donations in it and like it got covered by Wired magazine but then like three people ever used it and publishers didn't want to put Bitcoin ads on their site so I gave up on that and and basically I was just experimenting with a lot of different things at the intersection of of blockchain and and and trying to build a

company and none of them worked until until I tried get coin and I think that I just by prospecting by building a lot of stuff by trying things and throwing them away discovered that there's this deep need for open source sustainability and we could challenge the orthodoxy that open source is not valuable and the blockchain would be a would be a sea change for that and so tangibly what I did was I built get coin the at least the the initial bounties product in my basement and I household hustled hustled to get an intro to Joe Lubin and I he offered to fund get coin and so that was really

an inflection point forget coin because before that it was just me and my friends using get coin and then once I was funded by Joe then I could reach out to my like ether Delta and my my crypto and meta mask and truffle and have them use get coin so there's this sort of like a social proof associated with who's using the product and I think without Joe and consensus believing in me get coin would not exist today so that's that's how we got off the grounds cool and get coin was at first just bounties then hmm yep but more recently you have kudos and you have grants when did those and maybe of something else actually I'm not sure if we can talk about that after but how did they get started like when did those first roll out and what like that do

they need some sort of implement like was there an EIP that needed to pass for that to work is that sort of way yeah all good questions we have lots of we have lots of rods in the water but yeah I mean it's we have a culture of experimentation and luckily we have access to a lot of software developers like we built a lot of these products with bounties which allows us to innovate innovate pretty fast but so yeah if you think about the open source contributor lifecycle you're 99% of people are users of open source software let's call it 1% are contributors to open source software and then point one percent our maintainer z' of open source software and so counties are great for making where people contributors to open source software but it doesn't really

work for maintainer x' because if you're a maintainer you want stable income and it's more about that long persistent income and so it was sort of this insight that bounties were just a limited way to engage the market that caused us to build a few different products that we think better assure people along that that open source contributor life cycle so instead of 99% of people being users of open source we think would be great if if if we could create I don't know 10% of those people becoming contributors to open source we provided an incentive to move along that that that life cycle and that's what our product suite is meant to do so get coin Grants is I think the one that I'll that I'll start talking about so git coin

grant is a decentralized crowdfunding platform that you can use to fund your work in open-source software it's built off of a IP 1337 which is the subscription standard for for aetherium and so basically the way that works is that if you if you want to fund your project on get coin grants you can contribute Tendai or a hundred died every month or every week on a recurring basis and the recurring nature of those payments allows people to build a groundswell of funding that hopefully they'll be able to quit their job and just work on open source software because they they are funded by the Internet and and so our

KPI is how many lives can we change by providing recurring funding through through through get coin grants and so get coin grants is is aimed at maintainer x' whereas bounties I think is aimed at contributors and so they complement each other super super nicely but I think we've done good clean grants launched in January of 2019 and since then we've done almost 200k in value transfer so we're not at the point where people can really quit their jobs yet and just work for get coin grants but the slope is up in to the right and I would be tickled pink if if this summer we had someone who quit their job and was just working on their project full-time because we were able to facilitate funding for them to actually this podcast your knowledge has a grant

out I think we've mentioned it before on the podcast we'll put the note we'll put the link in the show notes if anyone wants to check it out back to the question of what your focus is like do you distinguish between general open source software protocol development 2 theorem stuff you know are you focusing on our theory and stuff now as a you know getting started thing and then hoping to expand like where's your mind with that yeah so our stated mission what rallies the network together is the mission of growing and sustaining open source so there's nothing about aetherium or blockchain in that mission I think that aetherium and blockchain is a really great place to start to have a beachhead for funding open source software and I think that if and when we

beat the the boss of funding open source public goods will move on to the final boss which is funding the broader open source ecosystem I I think that we view blockchain as a useful place to start but if we can get enough momentum we'd love to roll into funding the wider open source community we talked a little bit about the grants but I also know that there's something called kudos and I I'm guessing this is like after the fact saying like cool I like what you're doing is this like donations kind of no not really kudos are basically giving a high-five to someone over the Internet and and the insight was that if you and I were working together in the same office and we just shipped a major milestone we

might go out to lunch or coffee or something and just say like yeah we really did this this is great and and get coin is sort of we're trying to build this substrate for software development to happen in the 21st century around the orthodoxy of remote work and I just really missed the this sort of like intrinsic kinship that I feel with my co-workers when a you're just paying them you're paying them eath to work to work for you or with you and be it's across the internet and so kudos basically takes ERC 7:21 the non fungible token standard on aetherium and allows you to show appreciation for another network member with a beautiful

piece of artwork that represents something really great about them so you know I I could send you all a kudos for asking great questions after this and you could display it on your git coin profile to signal to other members of the network that you ask great questions and therefore they should work with you if they want to work with someone who asks great questions and also bootstraps reputation on the platform so it was just sort of an interesting augment to bounties into grants too and and also an excuse to play with the ear seed 7:21 which is I mean I think crypto Kitty's kind of blew up that standard and we just wanted to make a play there and but I'm really excited we sort of stumbled onto emergent reputation on web 3 and and I'm

super passionate about giving people control of their data in in a self sovereign way I think the number is that LinkedIn makes $30 per year off of just having your your resume hosted on LinkedIn and and there's no reason that you shouldn't self sovereign own your your professional resume and be able to carry it from site to site and so kudos is sort of we think it might go in that direction but for now it's just a fun shiny object that you can that you can send to another contributor building a coin what are some of the challenges both like from a business perspective getting people involved but our mall so super here's to here technically what's it like building this platform which is more or less adapt on top of this area yeah it's it's fun and and interesting I

I'm super bullish on aetherium and I think that defy is really exciting but I think that it follows that if you're if you're working on the new protocol for money then there's gonna be lots of things that are going to be built off of that and not just speculative that-at apps I think that self sovereign jobs and and 21st century jobs is an area that I'm increasingly passionate about and I hope that those are built on top of etherium because git coin bit coin gives you access to Western flows of capital if you live in India or if you're a refugee and I I think that getting access to to a global labor

market is is pasta is probably really important to to in many parts of the world where they don't have a lot of local opportunity but to tangibly answer your question get coin is built using get coins so we dog food is sort of like rule number one in in building all of our different products so everything you see is built using get coin bounties or or get coin grants across the platform so I think that we're super lucky to not only be a core team of ten people but to have a community of twenty thousand developers that are rallying around us to help us build our software and it allows us to iterate a lot faster than I think we would if we didn't build the Bounty's product first now that's not without its challenges because people

come from all over the world and there's a language barrier and sometimes they're in a completely different time zone is you sometimes they don't read your documentation and and so there can be bugs introduced or a lot of back-and-forth on on review so that's been sort of a challenge and we've been maturing our documentation and our onboarding flows in order to in order to deal with that I think the other the other the other thing that I'll mention since you asked me what the challenges of building get coin have been is is non-technical and it's it's around business models so it's sort of meta to be talking about how we fund open source software and to not mention that get coin itself is on consensuses payroll and we're sort of on

their benevolent billionaire model of funding open source software and so we've been trying to build a business around get coin that can be self sustainable and that's not without its challenges also because we we never launched an ICO we didn't we didn't build a good coin token there still is no get coin token and and so how are we gonna sustain our team of ten or twelve software engineers all all of which who are senior software engineers and make market rate salaries so we've been experimenting with adding a fee to the platform adding managed services on top of the platform we have another product that we probably don't have time to go into right now that has a built in business model and that's been growing a lot so I think that just covering our burn is

sort of the challenge that's that that's the next big boss that we're fighting right now and and so the conversations that I'm involved in around business models for open source are for the good of the community but they're also for the good of get coin and we're sort of an interesting test case of adapt that's trying to monetize and pay our dev team salaries without doing an IC o---- and I think that that's it'd be be pretty dope if we were one of the first companies that was able to do that so I'm hopeful and you can expect for me that will be transparent and open-source about our results in what we learned from doing that because we think that were the canary in the coal mine for a lot of the ecosystem that's cool I I'm curious because we used git coin

bounties at parody through him for the parity Theory project for a while but we kind of stopped because we found the like our onboarding was not good enough we didn't have the capacity in house to do the mentoring necessary to bring peep a lot of flyby contribution so like you would spend two weeks mentoring someone and getting them into the codebase get one small bug fix and then they'd be gone and you like it was you know ten times more work than that fixing the actual bug itself yeah and that's a problem like with our with our code base with our documentation with our processes and like you said you you faced similar things initially how do you fix that how do you make the

onboarding good enough that any random person can walk by and and be productive yeah I mean I think it sort of depends on you know treating you as the customer parity etherium as the customer I I think it sort of depends on what your end game is I mean if you just want to get a jolt to your to your software development then then you know maybe it's not a fit but if there's externalities like you're looking to hire and try before you buy hiring is is one way that you want to do it then I think that that's a different scenario if you want to engage a wider community of developers and have them rally around your project then you know you're not gonna do that by just fixing that bug yourself but the actual tangible answer

to your question is that we're thinking about this could be two birds one stone fix this problem and fix our business model problem at the same time so you know what if we could engage you for I don't know let's call it $30,000 worth of bounties and have some sort of managed bounty component on top of that where we have someone on our team who will write the documentation for you who will interview your team and get it all down so the contributors know what to do who can recommend next steps to you and sort of manage both sides of the market then I think that that could provide a lot of value and it sort of speaks to how abstract software development is right if you're building a marketplace for taxi cabs then basically if some taxi cab driver takes you from A to B

and they're not a creep and they do it quickly and safely you're gonna give them five stars but with software development I can think that we're gonna build a tree house you might think that we're building I don't know a scooter because it's so abstract and engineers aren't really good communicators and so it's easy to talk past each other so adding a human layer that's able to sort of manage that I think is maybe something you'll see from us in the next six to nine months interesting I mean it's interesting like it the goal for parity theorem is to onboard more contributors like long term contribute so that eventually parody the company doesn't need to exist for parody etherium the codebase to thrive but part of that is obviously like if parody the company keeps paying for bounties

forever then that's also not just like we're not making any money off it so we can't give away money indefinitely yeah I mean I don't know how we solved the problem of parody the company going away and you know people still maintaining the codebase I think that that's that's sort of like next level of legacy I think if people are still working on you know that's like Satoshi you've knocking about a level of project management right there but we're sort of discovering the the space and trying to create the the best practices as we move along because it's such a new emergent space and I don't know after this call I'll probably follow up and try to sell you manage bounties or something like that so that we can solve my problem

along with your problem but it's an interesting it's an interesting design space and I feel super lucky to be working on a project with other software engineers because that's my tribe and it's it's good to help each other let's talk about another model that has been sort of proposed or actually exists in another blockchain that's the idea of founder rewards or a portion of actually mining rewards being given at put in a pool and then distribute it out in the case of Z cash they call it founder rewards I think and that's something that was built into the protocol from the beginning so they had this built in pool of funds that could be distributed

out to the fund to the founders and that was then distributed out as I understand it to employees and so that's actually paying for client development at the electric coin company and it's really it's really interesting I might be unique I don't know maybe you know some other block chains that are doing something like that the reason I want to bring it up is I know that recently there was a proposal to do something similar in the etherium community and I think were calling it block rewards right ID so I didn't I didn't follow much of it I heard it got heated and I wondered what you thought about it because you you've been in that conversation right yeah I actually I actually submitted the IP 1789 so I'm I'm like patient zero for

block reward funding cool but yeah so yeah I mean block reward funding is basically a proposal to every every block in aetherium you have minors that are doing work in order to secure the network and that that work is verifiable and provable and we pay miners Chuy's per block I think is the exact amount as of May 2019 and and that's their reward for securing the network for making sure that there's no double spends and and other security features of the etherium network and so the idea behind block reward funding is what if instead of just paying the miners for securing the

network we also pay developers who are building the software that the miners run to secure the network and so let's call it point chief so miners make Chuy's in let's say developers make Chui or point chief then you could basically fund aetherium development both f1 X and eath 2x consistently continuously you know we talked about the problems with kit with grants being a one-time contribution you would have enough funding that you could that you could bring two to eath 1x and youth to where they don't have to rely on grants they just have a steady stream of funding and so I submitted EIT 1789 which is basically a proposal to create stable

funding for open-source maintainer x' and i sort of layered into that ERC three different arguments so the first argument was and they were designed to be an in a gradient of controversy controversial level the the first is that funding or F 1 X and eath 2 is important so that's argument number one and then the second argument is donations are not working and what we're trying right now is not working and then the third argument is let's do block reward fund block reward funding is the right model and this is what a block reward funding could could could could look like and and so I I knew the EIP was gonna be controversial and that's why I later that gradient of controversial illness

into it because my hope was that at 99.9 percent of us would agree yes eath one point X is is important and then we would just kind of like come to blows around weather blocker words are the right model and what would be the the specifications of block rewards if if we did do it and I think it sort of worked it created a lot of divisive chatter in the community about how to do it and when to do it and I think that like three days after I after I after I submitted EIP 1789 Vitalik sent out a tweet about how you know what if we what if instead of doing block rewards funding we just put a as a community agree to have a standard that every

transaction on the network has an extra one gig away fee that will go to either the wallet this type of transaction or the client that developed the software that the miner is using to confirm the transaction and we could fund two million dollars per year of open source software just using this community standard and so the idea was to just sort of create this conversation what's going on right now is not working and hopefully the community would would come back with a lot of different ideas about how to fund open source software and and I think to that extent it was a success like we stirred the pot and created the conversation but I don't think that you'll see block rewards on the etherium blockchain in the istanbul hard fork because that specific proposal has been too controversial to make it past the

the yardstick of we need to have consensus around the CIP in order to get it into the into the the hard fork so there's sort of a swirling a swirling tornado of ideas and controversy around this idea but it's a good way to stimulate conversation I think I I think I actually talked to Zuko over Twitter as well like a year ago about you know Zee Cash had this from the start and they avoided all of the controversy by having it there from the start didn't like this is what you buy into if you buy z cash you buy into the electric coin company getting this much money every block and so there can't really be like you can't complain about z cash having

this it's been there from day one and I asked him like do you think a blockchain that hasn't had it can introduce it and he was uh oh of course of course again I'm of the complete opposite opinion I think if you haven't had it from day one there's no way it's getting in it's just - there's it's a governance problem and it will never be like governance problems will never be resolved so it's sort of like yeah who gets the money like he goes down a very deep rabbit hole I actually heard that recently maybe he's changed his tune as well after seeing what when it went on with the block reward idea because I I heard he recently like in the last month or two went on stage and said something similar which is like it would be

unlikely to be able to be put in after the fact so I saw him at radical exchange which is like Glen Wiles conference and he was up on on stage and I went up and I kind of like very meekly said hey Zuko I heard the busy cash has a block reward funding and like what would you say - hypothetically someone who maybe hypothetically wanted to do it on another blockchain and he's like oh hey Kevin I saw your proposal this is what I think you should do and and he was like yeah we just avoided all the controversy and there's still this corner of the internet that is full of conspiracy theories and thinks that I'm like swindling the funds or whatever which is not true and I don't know how you convince a community to to do it we just put it in from the start and even

then people forked away and created Z classic and without the founders reward and and I don't know how you do it without without doing it from the start but Vitalik actually has a post called inclusion which he published a few weeks ago and there's this quote from it that I really really love he says that there's there's quote an impossible trade-off between either failing to incentivize legitimate public goods or over subsidizing plutocracy so the problem is that miners you can verify their work and that they're doing good for the network but since software development is inherently abstract and since I told you that I wanted a swing set and you built me a tractor then like we don't actually know you provided value for the network and

so in that wiggle room of not being able to verify the work that software developers do there there's a lot of worry about subsidizing a plutocracy layer one of our blockchain and what would that do to the value of aetherium if we did that so I think that you're right it's an incredibly deep rabbit hole Fredrik and and I don't think I completely appreciated that when I created the the conversation with ap 1789 but we're taking it very seriously right now and I think that you can expect that if there's another IP that opens up the Pandora's box around a block reward funding again then it's gonna take that design challenge very very very seriously this is a topic that I've thought a lot about I mean you know working on parody theorem we struggle

with this problem every day of like how do we get money we're building software it's used by majority of miners and you know how can we make this work obviously and I actually see like I think grants are great but unsustainable bounties are great but for all like smaller tasks and and in particular like the scenarios that are worse that I was talking about where someone comes with like a feature suggestion and like I really want this for my DAP or for whatever but as a sort of sustainable kora level thing I think the only thing that really works is either block rewards but I kind of rule that out just because I don't think it's gonna happen but this I think the second best thing is to build in kind of what

Alec was talking about but Alex specific proposal I don't think works just because of the dynamics of nodes distributed in network and wallets and things but I do see a couple of models that could work like if you're writing a note for miners you could have you could just say that I will take part for a portion of your block moment and if the portion is small enough the miner probably doesn't notice like you said them the role if the reward is to eath I think point to eath is way too much but point zero to eath might be enough that they'd be willing to give it away and someone like parody can completely sustain themselves on I think even like

point one percent or point I percent of Bach rewards and of like them blocks mind with the parody software so I think that that's an interesting model but there's there's actually several other layers as well like we don't have an incentive model around full notes we don't have incent incentive mile run like clients if you combine those together and say like I open a payment channel with a full note and pay per data I requests with the like clients then suddenly you know full nodes are being paid and the health of the network goes up you could also replace entire systems like in Fuhrer with semi centralized instead of

completely centralized solutions where you pay micro transactions to to interact with it so I think there's a lot of like extra protocol design space that's really interesting for kind of micro fees on things I think what you're pointing to as well as like right now so far throughout this entire episode we only talked about like software development but there are other actors in the space that are kind of working altruistic aliy to maintain nodes or what-have-you and those are the groups that eventually will also have to find those business models or find some reason personally I believe aetherium as an experiment will fail if like clients

aren't incentivized because you know that it just doesn't work without people being able to reliably use my clients I just think that this design space is so interesting because now we have programmable money and and we can program our values into our money it kind of comes back to that if we can I hope that we find a sustainable model and and I think the stakes are super high because you know the the sustainability of aetherium itself and blockchain ecosystems over the decade long time horizon probably depends on on these questions and what comes out of this design space and grants are only gonna carry us for so long do you think I mean in the future as as you're watching these other block chains being

developed and like they're still in research phase they haven't actually gone live like have you been speaking with those groups I'm speaking specifically of like eath 2.0 or some of the projects that haven't launched yet have you spoken to them about trying to get something like that in right off the bat yeah like is that something that you're thinking about nowadays yeah it's um there's so many blockchains out there and it's hard to to even follow aetherium because there's so much happening but a 1:1 project that i'm really excited about that i want to talk about is is OS OS coin which stands for open source coin and basically the way that works is that they've got this algorithm called OS rank that they're

going to use to figure out what are the most important projects in open source and to do block reward funding directly to them without having to do a governance layer on top of it and the way OS ranked works is that they use a modified version of PageRank to figure out which projects are important so PageRank as you know takes a look at the web and uses links as metadata to figure out which sites are more influential than others because of the linking structure of of the web and so OS rank does the same thing with dependencies and references and open source projects to each other so you can basically game out using that the OS rank algorithm which are the most important and

influential projects in open source and as I understand it LA and Alexis if you're listening to this I don't want to misrepresent your project but they would they would algorithmic lis figure out which projects are the most important with OS rank and airdrop rewards to them using something called OS coin and so I think that that's a really interesting model and I'm hoping that they're that they're really successful because it could be depending on how the network values or the market values their network it could be millions of dollars supporting open source software and so that's just one small example of of what can be created in this design space around programmable money yeah we actually we we've had them on the show

we had them on the show like I think almost a year ago so I think it's great that you mentioned the project again you might have even like updated us a little bit on what they're working on yes but yeah I guess in that case like what you just described that is a group that is actually they've built it in to their protocol that there's this ability to fund yeah I mean it's the entire purpose of the protocol which i think is cool to me it feels like more projects that I talked to they fall into one of two categories they're trying to build a Bitcoin like system where it's published and then it's done like we're not changing anything anymore after its published mm-hm or they take the view of like this is a living protocol it needs

development and therefore they're thinking of some way of funding and I either through fees or Lourdes or some other structure but I think it there is there's I should say there is one plausible shot we have of getting block Ward's in to etherium and that is if it's built into aetherium - from scratch I think that's the one way we can get it in I've even looked to talk about that right now because I know some conspiracy theorist is gonna like to see this and then add me on Twitter and be like yeah are you doing okay after the puck reward conversation no I'm I'm doing well I have a I have less of a faith so there's a signaling problem in the etherium

community where we the the standard for getting an EIP into into a the into a hard fork is that there needs to be consensus but does that mean a majority consensus does that mean a supermajority does that mean 99% consensus and I don't even then we don't even have a signaling mechanism to like you can put a poll on Twitter or on reddit but is that representative of the community and even if you try to do an on chain governance poll then they were gonna get like 2 percent participation and do they have consent of the governed and and so it just opens up this this this abstract debate space where you're not able to achieve consensus together because

there's no signaling mechanism and and I was kind of tongue-in-cheek saying that like a lot of conspiracy theorists have come at me and on Twitter over the last few weeks and been like you're trying to ruin aetherium and you're trying to like capture the funding for yourself and I don't think any of those things are true but there's no way for us as a community to to get past those calm stations and so you know I think the etherium to thing is an interesting idea frederik tear to your point I think it'd be interesting to create a fork of aetherium and this is just me spitballing please don't take this super seriously whoever's listening to this but like what if you know how litecoin is sort of a test net market for for Bitcoin and you know our thoughts about like coin aside for a second what if

there was a fork of a theorem that had like one one thousandth of the network value but it had block rewards funding as a means of testing out that it can actually be done and and what if the market decided that that network had value in the same way that they've decided that like coin has value I think that that's that's sort of one of the ideas that the block reward funding group is is sort of teasing out right now and and I think that that's actually a more plausible scenario than aetherium 2.0 having block rewards funding in it but we don't have a signaling mechanism to know so I guess you'll just have to take me on my word yeah I mean the interesting thing about aetherium too is this whole governance aspect and who can do what they are signalling or any none

of that has made it to a theorem to yet like your theorem to is designed by a handful of people unilaterally like there's no community input there's nothing so you know we're in a clean design space we can do what we want kind of thing that's true and I do think that we have consensus as a community that we need more transaction throughput we need more scalability in order to compete with the chains that just put more scalability but less decentralization at layer one so I think that we have consensus around that because it's just kind of a slam dunk case I wonder if someone tried to to put something controversial like block rewards funding into eath to how we would create consensus around that decision and and

whether it would sort of stick a stick in the spokes of aetherium to if it happens I do think that you know one of the most valid arguments I've seen against block rewards funding is that aetherium didn't ICO back in 2015 or 2014 and and we had consent to give inflation funding to the miners because it was included in the spec of the etherium ICO and you don't have consent of the governed to do block reward funding because that wasn't part of the original spec and so I think that that argument might still apply to aetherium 2.0 but then again I think you have to you have to take your eath from a theory one and move it over to the etherium to chain and so maybe there's some sort of like

consent that you're doing as you change from ethan to into beacon 'if in that scenario but i don't know so you're you're moving away from minors to validators that's there's already a big shift that's super interesting point in it because like a minor if they're getting less of their block rewards then they have less money to pay for their equipment and their electricity fees but a Staker has not a lot of electricity fees and operational cost to run an mining node and because they're staking they're incentivized to have a long time preference to see the value of eath increase and therefore they should be aligned with having software development be really well funded in the etherium community and so I think that there is a sort of a sea change in the incentives of the actors of the network in this

scenario but I don't know if we can create a super majority of consensus in the community around that but I think like you say I don't you know you don't necessarily have to you those who don't want to use eath to can stay on youth one youth one in my estimate will continue to live forever so you know if two will be those who like the concept of e 2 and what it does so I think yeah it is it is an interesting thing like as we get closer to actually shipping anything on eath to the community we'll get more involved and we'll start looking at these things I mean that's the same thing before any hard for act like one when the e IPS are discussed

and looked at and decided on almost no one is involved but then like two weeks before the hard fork everyone goes through the list and like oh I don't want this powers in yeah I have a I have an idea so you I'm kind of gonna switch a little bit but like just before you mentioned this idea of signaling and I want to give I want to just tell you the story of this project that I was involved with early in its inception I'm not super involved with it now but it's called tena Graff maybe you know it it's got a git coin grant yeah James hangs out out to ten yeah a little shout out to Tanner graph but I think that it's kind of the perfect I use it often is like the perfect example for it's it's such a

common good it comes up so often so many people want it there's a team that built it they built it with like a shoestring budget they built it they put it out there and then they run into the same problem of funding and it's exactly what they kind of to circle back to what you're describing it's like I think what you guys are doing it get coins super important I know that they have the grant and that's super great but I think you see that happening over and over again you're like we want to make changes to help fund the ecosystem cool we don't know who wants what where in order to do it so we need signals cool and then you're like how do you fund signals you kind of back to square one yeah yeah I mean what I would do in that

scenario I think that there is bootstrapping funding around grants and annual consensus funds us and and hopefully that will provide enough liftoff for a project like that to get off the ground I'm also a big fan of tena Graff I want to see them successful I think that their product works but we just need better marketing and we need consensus in the community to use tenha graph to create consensus which is another one of those chicken in the egg type thing yeah Kevin do you have anything else that you want to share before we sign off you mentioned this other project maybe you can't talk too much about it but is it live oh yeah I can talk about it so code funs is another project in the get coin umbrella and basically the way it works is that it if you're an open-source maintainer

and you have a big audience as many open-source maintainer who are successful do it allows you to put ads on your github repo or your web presence for the that platform and and basically it's an ethical advertising platform so we're challenging the orthodoxy that ads have to track you to the end of the earth in order to be profitable and the reason why that's important for software developers is that software maintainer czar some of the most sophisticated actors on the internet and they typically don't want to sell out their audience to Google or to Facebook in order to fund their software development so we just provide them an anima true svet option to monetize their audience without selling them out and

code fund we just did distributions yesterday and gave out we're giving out like 25k per month to open-source maintainer x' which is makes my heart a little bit of flutter whenever we do that every month and are growing at a pretty rapid clip because so the first orthodoxy that we challenged was that advertisements can't be ethical the second orthodoxy is you shouldn't advertise what blockchain projects advertise so like Google and Facebook kind of clamp down on advertising for blockchain projects and we've been trying to fill that space for people who want to get their projects in front of in front of people and allow them to advertise whatever they're doing on in the blockchain space and so those are

the two orthodoxies that we've been challenging and Copeland's growing at a pretty rapid clip it's like 20 percent per month right now knock on one hopefully it continues but if you want a passive way to monetize your work in open source software check out code fund up that's another project under the get coin umbrella and again zooming out it's just all about creating an incentive for users to become contributors of open source to become maintainer zuv open source it serves maintainer x' i think it's a great vision yeah thanks and you know hopefully it's it's not just a vision that is like a pupu thing hopefully it's something that will come to fruition and not only will employ a lot of software developers in the space but will

increase the network value of aetherium by by doing that cool thanks Kevin for joining us for this conversation it was very wide-ranging we covered a lot of funding questions yeah thanks for being on the show thank you very much yes thanks so much for having me very quickly I just like to say that round 3 of get coin grants is launching soon so if you're looking for an excuse to contribute to the zero-knowledge podcast grants or Telegraph or any of your other favorite projects check us out at get coin Co slash grants ok cool to our listeners thanks for listening thanks for listening you [Music]