Sasha Ivanov on governance and DAOs with Waves

0:00I'm Ashen Addison from Block West capital for investment pitch media and today on the Crypto Coin Show we have Sasha Ivanov the founder of waves blockchain protocol Sasha welcome to the show and thank you for taking the time thank you for having me you're very welcome excited to dive into the growth of waves and A lot's happened in the cryptocurrency industry

0:24In the beginning of this November about one year anniversary from the Bitcoin all-time high and there's a lot to talk about so before we dive into all the excitement in cryptocurrency I'd love to get a refresher on you know where waves is at right now and what your team is currently working on the protocol and then we'll dive into all the details

0:46I yes a short introduction whis is a very old chain for this like native market so we launched in 2016. Even before ethereums are like six years old it's generic level one chain so it's not like some kind of ethereum derivatives so it's it was built from scratch and we are actually focusing now on our

1:16governance issues you know because we are seeing so many problems in crypto now related to governance what is happening now actually has its roots in the poor governance when they're like centralized entities that can do whatever they want there is like one person who can decide what he does with the money of the exchange users so now it's it's it's it's some kind of

1:43It's a bad change you know so and the only way to resolve this is to come up with a better governance for crypto because it's very strange when you deal with a decentralized tokens in a very centralized manner you know so I think the problem is governance you know it's just becoming some kind of like Forex on steroids you know because it's mostly about trading so when I was

2:10like younger I like I traded Forex a little and it's just like you know some kind of like Advanced Forex now like which has a wider appeal to people because it's like smart accessible but the idea is the same it's mostly about trading and there is like very Central as parties who profit from it who benefit from that so I think it's wrong you know and we have to work on the

2:35government and that's why we are focusing on new approaches to Dao and we're launching this power dial soon and the idea is very simple basically if you're a decision maker you have some skin in the game so you have to take some tokens if you make decisions and if you're successful if you like meet the kpis you are rewarded if you are not you have been slashed so that means that the

3:01story The Token that you've taken the your state are just taken from you now so you lose some funds that you use State it's a very simple idea but surprisingly it hasn't been executed yet so this is what we are trying to do and I think it can work in crypto it can maybe work even in the real world great great intro Sasha and you're right about the decentralized governance I

3:26feel like it's very important but a lot of the focus is on you know when people get in they see about trading and making money and often people don't really care you know if the level of decentralization of some of these projects and we're seeing different blockchains have different levels of centralization you know I feel like the example you gave there about you know

3:50having skin in the game and having the right economics built into the governance to so that if you try to work against the system it hurts you I feel like Bitcoin is a good example of that with the Mining and you know trying to attack the system and I don't know if it's the perfect picture of decentralization but compared to some of the other blockchains that are clearly

4:13centralized and I feel like this is something that will the principles of Bitcoin and of white waves and what you're trying to build with power now should be something that should become the norm across different decentralized blockchain protocols absolutely now there's speaking of like governance obviously this is super important and having skin in the game I feel like

4:41with the recent issues that have happened throughout this past couple weeks in cryptocurrency the governance on centralized exchanges you know there was a huge debacle earlier this year when people were handing their private keys to yield generating platforms that were like Celsius and Voyager and they went down and people thought they learned their lesson but

5:06now we're seeing the same thing happen over again with FTX and it was almost an unthinkable situation on one of the biggest cryptocurrency exchanges That was supposed to be going through regulations I'll I'll properly all of a sudden was mishandling funds on the back end and you know people are trusting these entities with their decentralized tokens and all of a

5:30sudden it's all gone I feel like this itself is a huge governance issue that as we continue to grow towards more defy decentralized Finance these issues won't be happening do you see you know what are the main governance issues that you see with this situation and what's happened and how can we solve that they have basically there is only centralized governance

5:57here and the situation the third situation is pretty ironic I would say because this is not a problem of crypto in a way because this is a problem of traditional Finance because all those exchanges they work according to more or less traditional Finance rules you know so you can borrow some some some funds using some collateral you can like trade with

6:21crazy leverage but it's not about crypto you know it's about traditional Finance people have been doing that in traditional Finance for centuries basically it is somehow regulated now so you have sec and somehow like controls the situation and there's some regulation in threat fight you know but so it's not a problem of crypto somehow it has no connection to blockchain

6:49technology it has a connection to basically like uncontrolled trading that was like that existed in a real world like a century ago you know when there was no SEC so it's not about even it's not even about crypto which is funny you know so I would just trade crypto centralized platforms and there is one person who makes all the decisions so it's like what's got to do with

7:17script actually it's it's relative to crypto you know it's related to all those like old school ways to you know to trade and to run your like hedge funds or so it's something that has to go you know and the idea of crypto actually was to make those things obsolete but somehow they are like still with us and actually they're becoming

7:45more and more important so I think it's time to like think about what Crypt is about actually it's not about like trading per se it's about like changing the ways we interact more or less you know so it's not even about Finance you know so it's a very important part of crypto Finance but crypto is much more you know it's about the ways we interact

8:11in society you know so it's about changing the fabric of like human interaction so it's about governance you know if to simplify if I should simplify it's about governance about we rule our organizations it's about we build our organizations you know so naturally you know even centralized platforms can be governed in a morally decentralized way when for example you

8:37have like a governance token and all those like decisions for example to list some token or maybe to provide some like proof of reserves have to be voted on and the community votes and the community can vote for example on like some kind of like reporting for example what the exchanges are starting to do now they're trying they're starting to report their

9:05balances to provide some like mercury three of their balances and it can be done through governance as well you know so and for example the new trading instruments can be added to the platform even to a centralized platform through governance you know so I don't think that you know centralized exchanges have to go like immediately you know so yeah

9:27I understand that it's not gonna happen because probably we have some technical issues with decentralized exchanges with Dex as they are not so fast and people want to trade fast so this is the issue but even if they don't go they could use some other governance based on dolls based on some like skin in the game mechanics and I think that could be a very interesting direction

9:52of the development for centralized changes because they're gonna stay with us for a while yeah we have to admit that you know so they're not going to disappear one day but they have to be more like like they have to be more transparent you know in a way and more like controllable and the community has to have some kind of control what kind of control did like

10:20FTX Community have over attacks there was none you know the same as binance actually you know despite their example governance with BNB now so but ftt was I think it was totally useless at the government's tokens there was no governance with ftt token so but why why shouldn't exchange like launch a token it should be used in government otherwise it's not

10:47utility token actually basically they break it some like rules that were somehow like outlined by ECC that it's okay to launch a utility token you know so if you are like promising to buy back the token with the profits from fees so it's not a utility token anymore security tokens or issuing the security can be utility token if it is for governance so I

11:12think that is the right direction for centralized exchanges to consider at least I completely agree and it is quite ironic I feel like we're not going to be moving over to completely defy for quite a while because as you mentioned slow and there's still a lot of developments to be done but they could see more of this governance structures and decentralized governance sort of

11:38input in certain ways into these exchanges that are more centralized I don't know if uniswap is considered a good example but from what I understand they have a governance token that can be used but I feel like where Dows are at right now there is not a lot of functionality that's built in to you know having structure around governance and the future of Internet organizations

12:03being decentralized I feel like there's a lot of functionality that's going to need to be built into that now with the power Dow governance that waves this building is that going to be used specifically for the waves protocol or will that be able to be implemented into other entities and how will that work I we are trying to create a very low level generic protocol it's not it's not

12:28about waves at all so it's going to be built on waves but probably can be built also on ethereum so it's actually more about the model than some like particular execution or realization of it so the idea is basically very simple I described it you have to take some tokens to participate in governance if you are successful you get more tokens if you are not successful basically if

12:55like there's some like kpis that have to be met if they are not met you are being slashed so you lose money it's a very simple idea actually something is something similar to Future Kim she was a concept quite popular in Syrian Community maybe like several years ago but it had some like it has some like dependence on like what's it called like

13:27Prediction markets so it was like a produced markets idea and traditional markets have their own issues so it wasn't really launched on ethereum so maybe it's somehow like it's a Twist or the same idea I think it's much more practical and yeah as I said the idea is to create a very low level product like Bitcoin you know but for governments so

13:48it's a really low level so it's not some kind of like defined frame framework of government something very low level on which you should build different applications that can be actually applied to anything basically it's not even about crypto you can for example run a charity using power down or maybe some like real world organization or a company that's the

14:12idea the idea is to create something that's encrypted which can be used for crypto projects first and then try to reach out like to real world and try to apply it to real world scenarios that would be awesome you know when because I think it's very important for Mass adoption when crypto you know tries to do something in the real world you know so that's why we have this Mass adoption

14:34when we can actually run some dials that are not focusing on crypto for example some kind of like a research doll or a charity now and it's not about crypto it's about real world you know and I think Dallas can be really big think these dolls are the next big thing so they should be the next big scene if you know if crypto doesn't go down completely you know after all those

15:02events Dallas should be the next big thing because I don't see any other direction so probably there can be some scalability improvements that can be a game changer but in terms of applications I think the dials are the most important and the most promising ones yeah I'm looking forward to seeing that growth there and

15:28you're completely right that this technology should be used outside of cryptocurrency and because it will have a lot of benefits but I feel like there are a lot of barriers to entry in the same way that you know and these can be overcome but in the same way that not millions of people are getting into web 3 because of the wallet infrastructure or some technical steps

15:51that they need to follow I feel like Dows can be a lot more technical than running a centralized organization where some of the smartest one person makes all the decisions you know when you need to involve a lot of other people and have these mechanisms that bring like equal participation there's like processes that become complicated so you mentioned there a few times about

16:18The economics of it and you know making sure that it's designed in a way that people can't game the system for their personal benefit and if they do they're you know they get hurt personally you know financially they have stake in the game so if they try to go against the system it doesn't work for them that's obviously important but what about The Next Step Beyond

16:40that and the usability the you know the functionality of it making it easy to use and not so much harder than a centralized version of it I yeah I think actually it's yeah from like practical perspective it shouldn't be too difficult basically you have some kind of like you know some kind of Reddit when there is some proposal and people vote for it for or against it and

17:09There is some algories that basically collects counts the votes and there is also some like kpi tracking mechanism that Rewards or slashes people so it's not so complicated you know it's like maybe there's some like a barrier of understanding here you know because those structures probably are not so widespread in the real world but you

17:37have some structures you know like that in real world and also cooperatives work like that so there is some structure that actually already exists and there are somehow similar to dolls so I think that it shouldn't be difficult for people because people are somehow used to wealthy but the current structures building structures probably are not fair in the real world you know so they

18:01like pretend to be fair when like everybody can participate and such not but in the end of the day they're awesome how unfair there's always some kind of like control big thing yeah into them you know so I you can Pro for example you can incentivize people to vote as it's as it is often the case in crypto for example there is some like projects that are built on top of curve

18:27Protocol which pay people to vote for put on curve you know it's like and they don't like they're not trying to hide it like they are called like bribed protocols or something like that so when you just pay people to look for your pool and care now says more or less same actually exists in the real world you know so people are used to voting but probably

18:57they don't have the right Building architecture they can use you know so the trick is to come up with the right structure of decision making process for people because I think it's like it's a mechanism that we haven't really come up with yet you know so I we haven't found the right mechanism the right architecture for decision making and maybe we just don't

19:24understand that now because we just like in democracy everybody can vote but like and each vote is equal you know so you can basically say that like your vote like counts as like 10 my votes you know but it's not clear if this is like the right structure no so probably we can work on that and crypto and blushing technology can help us it can make

19:50things possible that were impossible without blockchain now and only with emerges on blockchain Tech we can really create those things those architectures in the real world so I think that this it can be huge and we can like maybe in several years maybe in 10 years we can have like huge dolls like huge decentralized organizations with like trillions dollars in them you know

20:18and to become a game changer because when you have like one trillion dollar in a dollar probably you know it has a like it has a treasury with value more than some like some like gdps of some countries you know probably it can become some kind of like a decentralized state or less you know so you will have to and you will have to understand

20:44that those organizations are very important there is like a lot of people involved maybe like hundreds of millions of people of people participating so you won't be able just to discount them as something Niche and not important you know they will matter you know so if blockchain technology develops in the right direction and it's like achieve scalability and we come up with like

21:09proper governance models we will have those dollars like with millions of participants in there and they can like rival National States you know they can become like a decentralized state in their own right so it can be huge I completely agree it can be huge and you know the I feel like the voting process especially in governments could definitely be overhauled with this

21:34kind of technology and improve upon it and the you know the American midterms were happening this week as well they sort of got overshadowed by all the crazy cryptocurrency debacles that happen but you know that there's always some issues in certain States on voting and it's not very transparent at all and I feel like this technology would be a great solution to solve

21:56those problems in one day you know after we get through the crypto adoption the charity adoption governments will be there eventually in line to adopt this technology so I'm looking forward to seeing how it grows out Sasha what is the sort of the road map and in the next steps for growing the power down and getting it out in the first use

22:16cases for crypto companies and into charities yeah basically so what we're gonna do now so there's going to be some kind of air drops there's not going to be kind of any kind of Ideo or Ico so we'll drop the token because it's token Supply should be limited because this is some kind of like limited resource the same idea as in Bitcoin or in any

22:40blockchain consensus you have to possess a limited resource to participate in consensus and the same idea works here so you have to have this power token to load the participate in governance but it has to be like limited in Supply so there's going to be an air drop and there's not going to be any tokens issued in the future so I will do this airdrop soon and after that we will like

23:08meet some like first dolls built on waves specifically for various products this is going to be like waste investment Dao and with some Community dollar which distributes grants to waste based projects and maybe we will build some kind of a charity doll and just to show how people use it you can use the technology and then we will try to centralize emergency other types of

23:36dials Charities research maybe some like dolls that work on other chains not only on waves but our goal is just to like create a couple a couple examples a couple like template those for people to copy and also and they will be dedicated to waves because we actually have a lot of things on waves that we should launch and we have a lot of ideas to develop so

24:03yeah first those will be dedicated to waste projects investment now where people can invest in projects based on waves and can basically vote who which projects actually receive the funds and there's gonna be some kind of like the grants doubt is just to distribute grants so this is like the first step very cool looking forward to that and

24:27with that airdrop and following along with the growth of powered out what is the best way for people to follow along and learn more about that yeah just just subscribe to our social channels to my Twitter to waste readers so there's like a lot of things that are going on in and around ways and as you know so many crazy things are happening so as everybody was somehow

24:54like affected by the situation but I'm pretty confident that everything is going to be fine you know and it's a very good moment actually for new people to come to crypto you know because it's kind of like a breaking point I guess you know so crypto will never be the same because now we understood that we have to basically get rid of this centralization and try and try and start

25:23like launching truly decentralized projects you know so and we understand that probably centralized exchanges won't exist forever if we want crypto to prosper sooner or later they have to go maybe it will happen maybe 5 or 10 years but if you want crypto to be like important to if you want crypto to matter really sooner or later all the crypto infrastructure has to be

25:46decentralized as well you know so you won't have centralized exchanges and we won't have like custodial Services it all has to be decentralized otherwise we will keep having the same issues you know and it's becoming clear now because people didn't understand that and I hope now more people understand that and like important actors in crypto under understand that we just

26:14can't go on like that because what was what happened like what has been happening during the last two years maybe a little more even it was pretty harmful for crypto development you know we had too many VCS and VCS are not good for Crypt you know all they care about is just making like quick profits and that's it and then just switching to another product at another

26:37project and making some more profit there so this is not what we need they don't Advance the technology and they're all into they're very harmful and now people understand that you know so I think we have to go through the phase and we will become stronger more resilient and we actually now will be moving in the right direction thank you so much for your time Sasha

27:05and your insights into the industry and the vision of a decentralized future I'm really looking forward to it I'll leave those links to the waves labs and waves and Twitter and your Twitter as well for people to follow along with your updates in the description box below and let's definitely follow up in the near future thank you very much Ashton it was a

27:26pleasure thank you bye