Introduction Samantha Yap [0:02]: Welcome to The Story of Money by YAP Cast where we explore the past, present, and future of money. I’m Samantha Yap. Intro CTA - Spotify Follow The Story of Money by YAP Cast to learn more about where money is heading. Intro CTA - YouTube Subscribe to The Story of Money by YAP Cast to learn more about where money is heading. Voiceover: Let’s take it back to the 1st of January 1999, the day the Euro, a new European currency. was born. The day that the national currencies of eleven countries in Europe became denominations of a single currency. Today it is the official currency of 20 European countries. The idea and political argument for it is that it would bring an increased integration of the European countries including France, Germany, Spain, Italy, among others, to reduce the risk of war and crisis on the continent. But does it REALLY bind these diverse countries together? Crypto and web3 technology has introduced another dimension to how ‘coins’ or ‘tokens’ have been able to mobilise communities for a shared vision and goal. In this episode we dive deep into the impact of crypto cultures on the world of money today. From decentralised autonomous organisations known as DAOs to decentralised finance, we examine the ways in which crypto communities are forming and what we can learn from cultures that value community, cooperation, and shared resources. Now let's jump back into my conversation with Dr. Paul-Dylan Ennis, a Lecturer and Assistant Professor in Management Information Systems at University College Dublin in Ireland to get his views on all of this. What is the significance of DAOs in the world of crypto? Samantha Yap  30:30 Some of the large DAOs that have amassed treasuries of hundreds of millions of dollars, even a billion and people who are governing those DAOs, it's been quite rapid to have people even have a large voting power over a significant amount of money. I mean, usually in the institutional world, you'd have to work your way up to be the CEO, or to be a large stakeholder to have influential power over a large chunk of money. But now with DAOs as well, I think there's been a whole group of people that have become, you know, I'm talking about maybe DAOs like ENS or like Gnosis Safe or Gitcoin, where you've got stewards that are overseeing large chunks of money. I definitely see the appeal in that as well in those people. What do you think about DAOs as well, the ones that have amassed these large treasuries and the community that those DAOs have been birthed? Dr. Paul Dylan-Ennis  32:55 Yes, I think that's like the perfect example of this process where somebody is, so yes, I encounter this, this is another thing I encounter a lot in the classroom where for most people, there is an experience that if you're supposed to get involved with something, then there are like steps that you're supposed to take over a long period of time. You must climb some kind of ladder, which may include like a social ladder which is repressed or hidden, which you don't even know about yet and navigate this as well. You must have lots of experience. Also just that it's run in a much more centralized way usually. And then if you turn up at a decentralised autonomous organization, so I remember when DAOs were really beginning to revive themselves because that sort of was an interesting case, historically that the idea was, of course, famously tried The DAO and then failed. So DAOs were supposed to be these autonomous in a technical sense so everything would be on the blockchain and would execute autonomously and there would actually be very little human participation. But then that failed in dramatic fashion and then they disappeared and then there's this Trojan work done by these social DAOs like MetaCartel and even Maker DAO and then the idea resurrected so when it came back I was a little bit suspicious. I thought this is like maybe an idea that should have been abandoned and left behind. But then when I turned up I did immediately notice the like I could see people being a little bit hesitant to get involved because they couldn't really wrap their head around the idea that here we are in the DAO, we've got, we’ve started DeFi DAO, we've opened a liquidity pool, people have put $50 million in it and then we don't really know like how to manage it like we're setting up these, you can see them doing this like learning so we know it also accept the idea of, let’s say Guilds and Work Streams. But I can remember when people were actually think, are you supposed to have a guild or a work stream, whatever it is? Forming it in real time because they heard that Gitcoin doing it and Gitcoin’s big so we'll just follow what they're doing. And yes, so that becomes a very, that's a major lead for somebody to take to realise that in crypto, there's also a Wizard of Oz situation in the sense that there's a little bit of a facade and then there's just like a normal person working behind the scene, except instead of it being a normal person behind the scene, where it's a big institution, it's a more positive sense of it's just the normal person behind the scene, so that you can just write to them and ask them like, Can I join the DAO? Or the application form is a Google kind of like form which has about five questions and you just like, explain that you want to get involved in the DAO and before you know it, you're the community manager and you're hosting the Twitter Spaces and all those kinds of things. It happens very quickly for people and I think that there's like an interesting psychological transition that happens for people where they go from an expectation of much more rigid kind of organizational forms to suddenly discovering that they can get involved. Now, the other side of this, and this is something I really have to stress with students and you see this in job ads. At the beginning of every class I show ads to students for, let's say, for different DAOs and the language that they use. So, I try to point out, like in job ads, you often see a mention of Cypherpunk ideals and decentralization so, make sure you know how to talk about those, know that they're important. But very often, you'll see that you're not going to have a boss, we're not going to be babysitting you is another thing they like, and they'll use this informal language in the job ads and that's the biggest thing that people struggle with is OK, I'm going to go work at the DAO but I'm not really working for anybody. I'm working for the community so if you're in Gitcoin and you're involved in the treasury, then really the only time that you're ever justifying yourself is when you do the big budget proposal for the snapshot vote, I'd say once a year and as long as you're keeping things running, nobody's going to be making you, nobody's sort of watching over your shoulder and I think that's another major thing that people have struggled to find the self-directedness, the autonomy, because we're not used to it. We've been basically trained for the opposite. Building a Sustainable Ethereum: Balancing the Degen and Regen Culture Samantha Yap  37:27 What lessons do you think we can learn from cultures that place a high value on community cooperation and shared resources, like you said, like a DAO that has a treasury? When it comes to shaping a sustainable future or culture of money and you do mention that you think the world will need all these multiple currencies as well. It's not just going to be all about one, no maximalism happening but yes, what can we learn to drive the culture of these different forms of money now forming? Dr. Paul Dylan-Ennis  38:11 So when I think of this question I'm really thinking of the big problem in Ethereum at the moment. This is maybe my current, more research focus, which is the question of degen versus regen. So Ethereum, you now, if we step back from Ethereum, when we look at the big picture, you would say something like Ethereum is a, of course the famous image of a world computer which comes from Gavin Woods early on in the white paper, so Vitalik Buterin and doesn't tend to use this himself, he tends to favour a decentralized platform and then in different books, you get other terminology but it's actually pretty vague, what Ethereum is. If you ask a group to try to explain what Ethereum is, they'll give you big question marks and the bigger problem is nobody really knows what Ethereum is in the more social or cultural sense. There's no definition of what Ethereum is for and that's kind of seen as a virtue, that it's a neutral thing that anybody can use. But then the obvious danger of this is well, if anybody can use it, anybody can use it. Therefore, you get this degen culture, where fly by night projects are targeting retail investors who come in and most people's idea of what Ethereum is, is basically or web3, let's say more like outside of crypto and everyone who was involved in crypto knows this experience. The first thing they're thinking of are those scams, are those hacks and so the degen kind of issue was a major focus. But then on the other side of it, there's this burgeoning community of people who call themselves regen and that I'm especially interested then they're also called Solarpunk sometimes and for them, it's all about the idea of a building a sustainable, positive Ethereum that maybe even has positive externalities beyond Ethereum long term. It would actually be a positive influence on the world as a broader sort of picture and this kind of culture, they're also interested in the idea of building analogues, decentralized analogues to things that already exist. You could also look at Ethereum and say, they're trying to create a decentralized version of finance. So, with DeFi, a decentralized version of organization with DAOs, decentralized version of creativity with NFT's. You have, I often see this as the trifecta – DAOs, DeFi, NFTs, the three elements of a good society that you could really have would be would contain finance, organization and creativity. They're trying to build this, but they're building this while the chaos is happening right beside them. Ethereum is a shared space, like if it was a public park that we all belong to. Academic literature would say we have a shared commons. We have a shared place that we all are in some way responsible for and that we're all actively hanging out in, then the degens would be the kind of like teenagers that are lighting a fire in the corner and they're like playing loud music or something like this and they're like robbing people, because that's the thing that's actually happening, right? They're stealing from people, they're mugging people, as they come in and maybe they're even mugging the tourists, right? They're mugging the people who are easiest to target because they don't have as much experience. And so in that space, like in the Ethereum space with this, with all this going on, the usual approach as well because it's permissionless, you can't do anything about it, you just have to accept that there's always going to be this financial crime or financial minimalism at the heart of everything. I see this as the paradox of permissionlessness. Essentially, the problem that permissionlessness is a core philosophical property of Ethereum and it's a good thing that nobody needs to ask for permission but it's also probably the most, it's probably the greatest danger to Ethereum's long term sustainability, that it's permissionless as well. There's a double problem going on there. The Challenges of Managing Ethereum as a Commons I do try to advocate that we should get some form. We should be beginning to actually state what is Ethereum for so. I would advocate that we should see Ethereum as a commons. It's somewhere that you can't exclude people from but that if people use it badly, it does diminish the experience for other people. It is rivalrous, except what's being diminished by the bad behavior is the reputation of Ethereum itself. The reputation of Ethereum is kind of like the resource that's being exploited by these people. They're kind of like overgrazing the Ethereum comments by abusing, let's say the goodwill of everybody else. The goodwill being we believe in permission, there's this new that people interpret that as like permission to do crime. And if you're in a culture like that, then you can't, because there's there because it's also a culture of decentralization, the Ethereum community doesn't want to bring in external parties to mediate this problem that we'd like to be able to police themselves like otherwise, what's the point? And that requires that the community begins to define what it considers acceptable behaviors. I would say, what you can learn from similar situation. So outside of Ethereum when I'm reading other things, I'm usually reading about commons. Different commons and how they're managed. A commons would just be something that's not run by the government and isn't run by a private enterprise. Maybe like some farmland that some farmers have decided, like we're going to manage this ourselves, there's no need to involve the government, there's no need to involve private enterprise, we'll just manage it ourselves. I think there's something very similar what we have here but the lessons that we know from like managing the commons are some hard lessons that Ethereum people might struggle with accepting. The big one that like the first one is just the idea of defining the boundaries of like acceptable behavior and actually saying, What Ethereum is for. Saying that Ethereum is a regenerative, sustainable project and actually trying to actively discourage and push out degenerative behavior in a strong sense, which really feels like something Ethereum people haven't faced up to that they might have to do something like that. That the rules should be more defined in a collective participatory way. The rules right now they come down from the developers, let's say, like, not really, the developers aren't like actively pushing the rules but they're not really involving everybody in the community, allowing all the different stakeholders a voice and I think most commons would typically have something like an assembly, maybe once every two years, or something where everybody kind of says, we would like to see some changes in this direction. I think there's not enough of a kind of participatory space for people to voice what they believe Ethereum should be and then the other one, which is one that they would like most freak people out for which is very common characteristics of wealth managed commons is sanctions and conflict resolution. So, actually punishing people for bad behaviour which nobody in Ethereum welcomes. This has been my most controversial sort of position that I believe, let's say someone steals a Bored Ape, I think there should be some mechanism by which that person can be punished. But of course, this would really be like, that's my most nuclear position to throw out. It's very, every well managed Commons has something like a sanction, where you can then resolve the conflict yourself. When you get sanctions and then you have like six months to send the Bored Ape back, which hopefully, then they do that the issue is resolved internally as opposed to externally. Samantha Yap  46:17 Yes, and what you've described, it sounds like what a country would do and their laws. Right? And so it's very interesting. You say, I mean, we recently did an episode with Kevin Owocki, about yes, regenerative finance and what that means, and I hear you on that. I think it'd be, I think, the challenge with something like Ethereum which is because it's permissionless, because anyone could use it is, yes, how do you have these collective conversations? And now, I think with Ethereum ecosystem, I do think the gatherings are around, for example, Devcon and, you know, but the interesting thing, also with Ethereum, is, while I think the Ethereum developers which are now working hard to basically work on the Shanghai upgrade, or all the kind of technical upgrades for the network, should it come from them? Or is, the interesting thing about Ethereum is it has Vitalik who’s still, he's actually, he's still the lead, like, he's still kind of the leader but not directly, the one calling all the shots, but, yes, it's fascinating how that, how a collective group of people could speak up about what Ethereum should stand for. Who should that come from? It's interesting. The Evolution of Crypto, the Role of Institutions, and Mainstream Adoption Challenges My final question, because I know, we're just running out of time here but crypto is still not widely adopted by kind of by the major world. I mean, we, the last two years has seen many entrants come in but money today, I mean, even I don't know about you but for me, I still use the British Pound to go buy my groceries, pay for bills. When or how do you see crypto cultures impacting kind of the mainstream world? Or, does this usually happen when the bull market cycles happen and more entrants come in because of their fascination they're interested in making money or getting rich quick? Dr. Paul Dylan-Ennis  48:32 Yes. I often think that the worst thing that ever happened to crypto was the creation of CoinMarketCap. With nothing against CoinMarketCap itself as a website, the what it introduced into crypto and I can remember the era before it so I do remember a time when we didn't rank cryptocurrencies by market cap. Samantha Yap  48:53 Really? OK. Dr. Paul Dylan-Ennis  48:55 Yeah, it's around I think CoinMarketCap is around 2014 that it appears 2013-2014. There was an era when there wasn't the sort of market capitalization ranking. And I think once that happened, once that turned into a competition between the cryptocurrencies, we introduced the speculative angle and the kind of competitive type of angle and also really, the idea of course, has always been in place of that really what the point of crypto is, is to accumulate dollars or pounds or euros or something along those lines. So, it's a little bit of a casino situation. And so I think, the only escape route that I can think of which I don't see a huge amount of I'm starting to see it in the Bitcoin world, which is why I encourage people to still pay attention to Bitcoin even though a lot of people When I mentioned Bitcoin, it does seem like I'm talking about they see it as a kind of like a boomer coin but they're all interested in like Ethereum and all the cool stuff on there. But there's a lot of stuff that Bitcoin kind of does as well, even though I’ve very critical of it. What they're, what I think are starting to do well is they are trying to really encourage people to use their cryptocurrency in real world contexts, which was something that was also attempted very early on before the Bitcoin civil war happened. But so for example, in the Bitcoin world, right now, they tend to hold events in pubs, for example, and they'll encourage people to go to these pubs where they accept Bitcoin and then, encourage people to actually go to like physical real world places where they can spend the currency and what they think they're trying to do is they're trying to break the idea that the currency is something you're just holding in this wallet or holding on the exchange and they are trying to introduce that it is part of like, every day, like it is an everyday real type of money. I think the loss of that inside the five or so the seven or eight years between, say, 2015 when people give up on the ecommerce buying coffee with Bitcoin to now basically needs to be rolled back, we need to get away from the pure digital digitization way of thinking about it and we knew we need to introduce the idea of like you are buying your groceries with cryptocurrency. So, I'm basically an advocate of yes, trying to maybe move away from the loftier proposals. I agree with Vitalik Buterin that we've probably hit the primitives of DAOs, DeFi and NFTs, that’s probably what Ethereum will be about and currency as well. We then need to begin turning our attention actually outwards. We need to be turning ourselves to physical events and I would even say that one of the main barriers here might be a little bit the conference circuit because the conference circuit encourages insularity. We attend these and I'm guilty as anybody else. I'm not critiquing anybody but you're- Samantha Yap  51:52 Yes, interesting. Dr. Paul Dylan-Ennis  51:53 You're hanging out with everybody else and you kind of had this you believe everyone sort of in agreement with you and basically makes us speak in this way that becomes impenetrable. Nobody knows, like, if you drop someone into an Eth Denver talk or any Eth Barcelona or something, then they're just going to be like, what the hell is going on here? I do think we need to get our attention back to the idea of money as something mundane, almost, you know? Samantha Yap  52:20 You say that we need to get back to applying more use cases to crypto. I actually had a conversation with a colleague the other day and I actually think the Bitcoin community actually has more real world use cases, there are people impacting towns in like South Africa, for example and there's actually use cases and adoption happening with Bitcoin. We've also seen Bitcoin ATMs be put in place but I sense that Ethereum, like you said, it's a bit lofty, how people are applying things and even the NFT art world, it's like, OK, with art but right now, I still think NFTs are still speculative assets that people are just trading right now. Yes, it's we need more use cases for crypto to be widely adopted. Yes. Is there anything else you'd like to add? Dr. Paul Dylan-Ennis  53:28 No, I think that covers a lot of the things. Yes. Samantha Yap  53:34 Yes. No. All right. Well, thank you so much for joining me on YAP Cast, Paul. Dr. Paul Dylan-Ennis  53:40 Thanks for having me on.