00:00hi everyone welcome to day 6 and Z
00:02podcast I am sonal today's episode is
00:05all about stable coins
00:06what are they why do they matter so our
00:09special guest is Andy millenias CTO of
00:11maker which is one of the oldest and
00:12longest standing projects on the
00:14etherium blockchain they are the makers
00:16of the stable coin dye which is a
00:18cryptocurrency that tries to remain
00:20stable in terms of volatility joining me
00:22to interview Andy we also have Jesse
00:24Walden who is the former CEO and
00:26co-founder of media chain and a partner
00:28on a 6 + Z crypto speaking of please
00:31note that a seasoned Z crypto is an
00:32independent fund managed by cnk Capital
00:35Management a registered investment
00:36advisor with the SEC it is separate from
00:39the andreessen horowitz family of funds
00:40the content here is for information only
00:43and should not be taken as legal
00:45business tax or investment advice it
00:47does not constitute an offer or
00:49solicitation to purchase any investment
00:51or a recommendation to buy or sell a
00:52security and in fact the content is not
00:54directed to any investor or potential
00:56investor and may not be used to evaluate
00:58or make any investment for more details
01:00please see a CMC crypto comm slash
01:02disclosures so back to the overview our
01:04discussion covers the trend of stable
01:07coins in general as well as how it fits
01:09into the broader landscape and evolution
01:11of crypto we also discussed the super
01:13interesting challenges in designing this
01:15kind of quote hard software and finally
01:18we discuss how to build and run a
01:19distributed organization because maker
01:22is one of the first decentralized
01:23autonomous organizations or daos
01:25which has all sorts of interesting
01:27implications for the future of the firm
01:28innovation leadership and more but first
01:31we begin with a brief history of money
01:34and more specifically the big picture
01:37and concept of debt gold itself is only
01:40part of the story of what money is right
01:42in terms of the day to day lived
01:44experience of people's lives working
01:46with money over the last you know five
01:47thousand years a lot of it actually
01:49hasn't been with gold currency in it
01:52it's actually been with debt money debt
01:53without getting too much into
01:55historically how it gets used that is
01:57very useful because it is a virtual and
01:59we transfer it very easily because
02:01there's just records in a ledger it
02:03sounds familiar right does sound like
02:05budget and so like historically the way
02:08that people have used money in the past
02:09is that if I have assets and I can issue
02:11like I owe use against them those IOUs
02:13can be monetized and they're effectively
02:15debts against my assets and then anybody
02:17can as long as they trust that the
02:19assets are there they can trade those
02:21and monetize those IOUs and start using
02:23them as money I actually think you
02:25should get into history because the big
02:27picture of why debt matters is as a way
02:30that you can actually grow up I sure I
02:32guess what I would say is that debt
02:35money is very interesting because it
02:36allows you to sort of see into the
02:38future right if you have a good
02:40expectation of what's gonna happen in
02:41the future and you want to access that
02:42value right now you can eat your debt
02:44against it so I think of debt as a
02:46really really interesting sort of like
02:47time machine that humans have access to
02:49they're able to basically travel into
02:51the future access that value and bring
02:53it back to today and then use it it's
02:55such an interesting sort of like shared
02:57reality that we create and that shared
02:59reality is necessarily virtual because
03:01it's shared amongst all of our
03:02collective understanding and so by
03:04creating this virtual space where we all
03:06understand what will happen in the
03:08future we can sort of leverage that
03:09today create money and then basically
03:12all benefit from the increased liquidity
03:14to purchase provision goods and services
03:16and stuff like that my grandmother grew
03:18up in India and the generation where
03:20gold was literal money you have as much
03:23gold as you have if you put it in a box
03:25mattress whatever the concept of taking
03:27on debt was so foreign for her like
03:29she's like you can't have credit cards
03:30that's like a really bad idea but I'm
03:32thinking of the example that you've all
03:33her re sites and sapiens and how we all
03:36have these collective mitts and fictions
03:37it's actually a driver for economic
03:40growth and innovation in the big picture
03:42and he gives the example of a woman
03:44who's a great Baker like my
03:45grandmother's a great cook you want to
03:46open a restaurant but you don't have
03:48enough actual money now you can't just
03:50take one to one what you have if you
03:51have debt and people can invest in you
03:53you can actually create future values
03:55I'm just thinking a more concrete
03:56example what you're sharing you can sort
03:59of time travel to the future where you
04:00have the restaurant built already
04:01exactly take some of that money back
04:03with you yeah where are we now by the
04:05way money has this big historical
04:07tradition of being at times issued as
04:10gold and then at times issued as debt
04:11against assets and there's a huge
04:13historical tradition but that brings us
04:15up to today right the era of digital
04:17money is upon us I mean you know
04:20bitcoin was so cool when it came out and
04:21it captures people's imagination and it
04:23was originally sold to us as like
04:24peer-to-peer electronic cash system I
04:27think that's actually the literal
04:28subtitle of the nine page white paper
04:29yeah exactly and that captured people's
04:31imagination but Bitcoin kind of only
04:33tells part of the story about what cash
04:35is right because bitcoin as we've seen
04:38how it's behaved in the wild it behaves
04:40a lot like digital gold and it's
04:42definitely improvement on physical gold
04:44but if we're going to sort of do things
04:46in an intuitive way basically do things
04:48a proven way that humans instinctively
04:50coordinate then we sort of arrived at
04:52this attempt to use the ethereum
04:54blockchain to create money to create a
04:56stable coin I mean isn't that what
04:58everybody's doing though when you think
04:59about a cryptocurrency currency and
05:01money are actually different there's a
05:03subtle distinction right currency or
05:05these are the things that we can or
05:06can't use as money as we want to but
05:08money is much more like a symbol it's a
05:09collective understanding so I can make
05:12currency units the question is do people
05:14accept them and use them as money right
05:15that's on them and so maker is sort of
05:18attempt to actually create money and so
05:21we issue all these currency units as
05:23debt against assets just like there's
05:25this huge historical tradition of doing
05:27and that currency that we issue is
05:29called AI Dai so as we come up to today
05:32if we have this tradition of money
05:34creation as debt and then we get into
05:35the future we want the blockchain to
05:37actually work cuz this is an important
05:38thing right the blockchain space has
05:41sort of it's preceded in fits and starts
05:43it's captured a lot of people's
05:45imagination but there's been sort of a
05:47lack of traction where the rubber
05:49actually meets the road right and that's
05:51no customers entrepreneurship these
05:52sorts of things it's actually funny
05:53because there was a joke that for a
05:55while it was like blockchain inside like
05:56everything Plus blockchain or does this
05:58really need to be on the blockchain and
05:59then you think of mln side a I mean the
06:01same thing happens with every new
06:02technology people adopt it somewhat
06:04superficially before they truly build
06:06actual value around that I always think
06:09of that one company's blockchain video
06:10where it's like a tomato on the
06:11blockchain it's like a famous company
06:16I'm curious how does that really
06:19thoughtful explanation of money relate
06:21to what you're doing at maker so stable
06:23coins are interesting in so many
06:24different ways and digital money
06:25in general if you really think about it
06:27a stable kind is just a rebranding of
06:28money because it just works the same way
06:31as money and money is a very interesting
06:32feature in the sense that when you use
06:34it you don't really think about the fact
06:36that it's stable the whole point is that
06:37you just use it automatically without
06:38thinking about it but I think what's
06:40really telling about why stable coins
06:43are important is actually how a lot of
06:45people got involved in the maker project
06:47and I can say from my own personal
06:50experiences when I first discovered
06:51aetherium you know I immediately
06:54recognized that there was value in a
06:55decentralized network that maintained
06:57like this global state this global like
06:59objective state that we could all agree
07:00on is it very interesting you know
07:02there's so much sort of like underlying
07:04value that we could build up and access
07:06here it was like this wild space yeah
07:08there's like wild untamed space that had
07:09tons and tons of potential but had not
07:11been cultivated in any way and so when I
07:15first got into if you're him it was
07:16actually so early on that it was like
07:18one website you could go to and see all
07:20of the etherium projects like that time
07:21when people would actually like catalog
07:23the Internet and so I was going through
07:26other projects and when I saw a maker I
07:28immediately recognized that this was
07:30actually like an upstream problem that
07:32needed to be solved before I could
07:34really work on anything else and said oh
07:36we need to make sure that this works so
07:38that way I can sell services on the
07:41blockchain if I want to make whatever I
07:43want to make like a server company
07:44that's gonna accept cryptocurrency it
07:46needs to be able to accept a stable
07:48medium of exchange to be able to work
07:50because really that's what makes
07:51blockchains so cool all this like open
07:54Network it allows for a lot of synergy
07:55and each project benefits from each
07:58other's success right and so a lot of
08:00actually developers that are some of our
08:02strongest most ardent contributors to
08:04this day had a similar sort of story of
08:06getting into aetherium thinking about
08:09what are the underlying fund a tional
08:10problems here recognizing that a stable
08:12medium exchange was necessary
08:13encountering maker because we've been
08:15around for so long and I think it's
08:17really interesting that your motivation
08:18was looking at the developer ecosystem
08:21and thinking about all the things you
08:22could build on aetherium and then
08:24thinking about solving the medium of
08:25exchange problem so it was a very
08:27developer focused lens as opposed to
08:29just used as like speculative trading
08:31instruments on exchanges and not only
08:34that but I think that there is this
08:35temptation and this is something that
08:37but the cryptocurrency industries queue
08:39is very young right so for a lot of
08:41people this is their first job ever and
08:43so there's this temptation to have
08:44dessert before dinner oh that's such a
08:46great analogy and so people really
08:47really really want something that just
08:49like clicks with consumers when that's
08:51not how any new technology ever comes
08:54out it's always developer focused first
08:55and it's always in the garage right so I
09:02get the developer focus and the draw
09:05that you had and I agree with you that
09:06that is the arc and trajectory of most
09:08technology but I want to know quite
09:11honestly why I or someone else who's not
09:13a developer should care because it
09:15sounds a little bit like nerds for nerds
09:17and I myself as a derogatory thing I
09:19love nerds tell me why I should care why
09:21other people should care about why
09:22stable planes matter I think that the
09:25reason that stable coins matter is
09:26actually very related to the reason that
09:28large chains matter which is that
09:30because has so many implications for
09:32other applications I think will be
09:34really interesting like skip level
09:35technology similar to how cell phones
09:37allowed people in the developing world
09:38to sort of skip home internet connection
09:40phrase that we use a lot in media as
09:42like leapfrog in China Connie and I
09:44wrote about WeChat but the big story is
09:47that they were able to leapfrog the
09:48internet phase because they went
09:49straight to mobile and not unable to all
09:50these things we've got the legacy
09:52infrastructure I think it'll be the same
09:53thing for online payments and for just
09:55online e-commerce in general right
09:57because ecommerce is this thing that's
09:58really really slowly sort of penetrating
10:00the entire world it feels like everybody
10:02is online right now but it's just a
10:04question of what are they doing online
10:06right like a lot of times they're
10:07gossiping and talking to their friends
10:08and stuff like that but are they really
10:10doing impactful things are they building
10:11businesses are they really accessing you
10:14know all of the wealth because that's a
10:16big thing that I almost never see get
10:18acknowledged when we talk about these
10:19spaces there's so much wealth in the
10:22world that is in the informal economy
10:23and it's not being properly registered
10:26and recognized by the global financial
10:28system and so a blockchain which is like
10:30this open access permissionless choose
10:32your own adventure story is such a
10:34compelling technology that I could see
10:36allowing a lot of this existing wealth
10:39and existing assets to be online and be
10:41recognized by creating these shared
10:43realities and these shared
10:44understandings where people can sort of
10:45acknowledge each other's property and
10:47each other's existing lives when it
10:49comes to economics and
10:50commercial activity and ice table coin
10:52will be incredibly useful in allowing
10:55people to have like open access to
10:56stability you know because that's
10:58something that's sort of everybody is
10:59entitled to I think yeah give me a
11:01concrete example though because a lot of
11:02crypto people generally which is great I
11:04think this is one of the promises talk
11:06about banking the unbanked I think I can
11:08give you a concrete example so one of
11:09the ones that is really compelling and
11:11is actually already we're building
11:13momentum in is this idea of trade
11:15finance right so if we look at the
11:18supply chain the supply chain is huge
11:20hulking almost like impossible to
11:22comprehend Leviathan of economic
11:24activity I can't remember it it's like
11:26it makes up some incredibly large
11:28fraction of actual global commercial
11:30activity right it feels almost like a
11:32vascular system in a sense that it's got
11:34these huge players in the middle and
11:36these huge players in the middle are
11:36very plugged into glory in a brain yeah
11:41right then when you get out to the
11:43periphery you know like the coffee
11:45grower in Guatemala or the shrimp
11:47fisherman in Thailand or something like
11:49that it's clear that they're part of the
11:51same system but they're very
11:52disconnected and they're very not
11:53included but because they're you know
11:56business people and they have the same
11:58sorts of financial needs as these bigger
12:00central players a lot of times their
12:02market needs aren't being met and so I'm
12:04having a stable coin and specifically
12:08taking out debt through the blockchain
12:09is such a compelling opportunity for
12:12them because if you are the coffee
12:14grower in Guatemala and you're having
12:16cashflow problems but you have that
12:18opportunity to jump into the future when
12:20you've received the money that you've
12:22been promised by the global supply chain
12:24you can access that money today as debt
12:26and then solve that cashflow problem in
12:29a way that maybe before you would have
12:31to go to like a loan shark or some
12:33really really unsavory extractive
12:36technology and so what we're really
12:38trying to do is with this like whole
12:40open permissionless system is give
12:41people in all parts of the world access
12:44to the same sort of high-quality
12:47financial tools especially when it comes
12:49to borrowing that these big players have
12:51in the center I think that's really
12:52interesting because that sounds a lot
12:53like the original Bitcoin vision it's
12:55the vision of all cryptocurrencies there
12:57permissionless they move across borders
12:59like emails but that's not been the
13:01vision that's been realized to date and
13:04it about stable coins in general that
13:05you think is the fundamental
13:06breakthrough here there were a lot of
13:08people who were interested by
13:10blockchains and found them a bit
13:12inaccessible and found the community a
13:14bit difficult to interface with and
13:15found it was really really unclear how
13:18they were to do business on top of this
13:20platform and so for us one of the big
13:23partnerships that we announced over the
13:25summer was a partnership with trade
13:26shift which is a very big really dynamic
13:28supply chain data platform out of
13:31Denmark right and so having an
13:33opportunity to see a traditional startup
13:36that has done so much towards digitizing
13:39supply chain logistics partner with a
13:41dhow a decentralized autonomous
13:43organization yeah like this collective
13:45group of people who have come together
13:46to create maker and see this you know
13:49this stable medium of exchange that you
13:51could take for granted but is so novel
13:54in this context I think that it creates
13:56connections from the legacy world
13:58whether it's the supply chain or finance
14:00or whatever connect back into the
14:02blockchain one of the analogies that
14:04I've heard that I found really just
14:06stuck with me is that it's a bit like a
14:07chairlift you know where you start here
14:10and then there's this rough terrain that
14:12you go over on the chairlift and then
14:13you wind up at the top of the mountain
14:15right the top of blockchain mountain and
14:16I'm hoping that die is this sort of
14:19funnel that brings people onto the
14:20network makes them comfortable like it's
14:22the wheels greased turning and gets them
14:25comfortable with beginning to transact
14:27over this network and that's already
14:29happening right now and it is happening
14:31with engineers first we're seeing other
14:33projects starting to integrate die
14:35simply because it makes their user
14:37experience ten times better instead of
14:38having to transact with you know
14:40whatever service whether it's like a
14:41digital goods marketplace or a
14:44prediction market in some volatile
14:46currency you can make a loan for example
14:48in dye and not have to worry about that
14:50volatility risk of the underlying
14:52currency and that's a really exciting
14:53early application what do you think the
14:55breakthrough is well in order for
14:57decentralized applications which are
14:59deployed on top of box chains to reach
15:00millions and millions of users the
15:03experience needs to rival that of you
15:05know a traditional web to startup and
15:07you know in most parts of the world we
15:09have credit cards and it's payments are
15:11fairly seamless experience on the web
15:13for a lot of people the stability of
15:17just brings that experience these
15:19applications and that's a fundamental
15:20unlock that's required for this to scale
15:22up so basically it's sort of like this
15:24port between kind of the early adopters
15:26and the late adopters to help mainstream
15:27it maybe not report maybe even a
15:29wormhole however you want to think about
15:30it we're getting doing all kinds of
15:31analogies on this episode speaking of I
15:35analogy I think that's a wonderful
15:36visual of describing it but it's
15:38interesting because we've talked about
15:40the history of tech and how these things
15:41adopt and in many cases I think Chris
15:44Dixon actually shared this with me a
15:45couple years ago the strong form of a
15:48technology will always quote beat the
15:50weak form of a technology you know the
15:52companies that go cloud native first are
15:54gonna beat the ones that are trying to
15:55do hybrid cloud first but I think this
15:58is an exception because here in crypto
16:00currencies blockchain you know crypto in
16:02general we have a case where it's a lil
16:04bit of a moving target like these apps
16:06are developing as infrastructures
16:07developing as the users are developing
16:09they're all kind of happening
16:10simultaneously for the first time I
16:12think in the history of computing versus
16:13in the past where there was a bit more
16:15of a stepwise flow so I think that's
16:17very interesting but on that note when
16:20we think about this quote transition
16:21faiths not ephemeral its transitional in
16:23the sense of it's creating that port or
16:25wormhole how should traditional finance
16:28players like banks think about this well
16:30there was no sense at least in our
16:32community that banks are gone or that
16:34their purpose for existence is not there
16:36right what I'm hoping is that they
16:38become actually a lot better at what
16:40they're supposed to do and then have a
16:42lot of things become automated and a lot
16:43of things become just streamlined that
16:46they maybe had to spend a lot of
16:47resources handling before right and
16:49every bank is different from maker
16:52because every single bank exists inside
16:54of some sort of nation-state right and
16:56so you've got a collective of people
16:57that all have like a shared agenda and I
17:00think that banks are really important in
17:01the whole process of providing for the
17:04strength of the nation I think that
17:05banks will continue to do that and maker
17:07basically has no dog in that fight
17:09because we don't exist in any single
17:11country and so what I'm hoping is
17:12actually that maker will end up being
17:14this really really low-level sort of
17:16warehouse for banks to build on top of
17:19and then do what they do best inside of
17:21the countries where they operate you
17:22know what I mean this non-jurisdictional
17:24international space that we've kind of
17:26stumbled across with blockchains is
17:28really really compelling when you're
17:29looking at transmission
17:30business the idea of any one player
17:33coming in and setting up like this
17:35transnational non-jurisdictional space
17:37it seems a bit far-fetched and it seems
17:39a bit difficult to imagine but seeing it
17:42as this emergent accessible space I
17:45think is really really compelling for
17:46not only banks but like tons of
17:48different finance companies and
17:49different enterprises in general to
17:51suddenly become these transnational
17:53actors that they weren't before or that
17:56they didn't have access to because they
17:57didn't have the resources to like build
17:59out that capability does that make sense
18:01it makes perfect sense because it
18:02actually goes to the very heart of open
18:04source in fact because if you think
18:06about the history of open source and
18:07we've talked about this a lot in the
18:08podcast it's been starved for resources
18:09and in the classic model of open source
18:12you had these big corporate players they
18:14needed open source because no one
18:16company could be open source because
18:18they would never be trusted and so you
18:20have this interesting ecosystem of all
18:21these big open source funders from big
18:23companies like Cisco and Google and etc
18:24and then you had like these open source
18:26consortiums and projects and the really
18:29interesting evolution we're talking
18:30about in crypto is that we don't
18:32actually not have to rely only on those
18:34your point about banks is quite
18:35interesting because you're putting that
18:37same framework at the international
18:39global people transacting with each
18:41other level and creating this sort of
18:42substrate for everyone to build on to
18:45create that interconnection without
18:46having to worry about
18:47well that bank has a dog in the fight so
18:49we can't trust me if they try doing the
18:50same thing kind of thing so let's
18:52actually now talk about how it works and
18:53what concretely we're talking about here
18:55because so far we've defined the
18:57category of stable coins I understand
18:58the value in the larger system of you
19:00know with crypto currencies a lot of
19:02volatility so this is sort of a way to
19:04stabilize that hence a stable coin I
19:06also understand the point about it being
19:08this you know transitional and more
19:10importantly like a port between these
19:12worlds but concretely what is it like
19:16I mean it's so many different things
19:17it's a bit like all the blind men
19:21there's tons of different ways you could
19:23describe the same thing but I think the
19:25one that is the most I guess immovable
19:27was the fact that it is smart contracts
19:29at the end of the day maker is a system
19:32of smart contracts that compel or that
19:34incentivize people to come together and
19:36lock up their assets their crypto assets
19:40into escrow in these smart contracts and
19:43they have the opportunity to issue dye
19:46against them yeah and maybe worth
19:48clarifying what is the smart contract if
19:49I can offer a definition on what it is
19:51we I would describe it as an autonomous
19:53program so it's a it's a piece of
19:54computer software that is to point on a
19:57blockchain it's run on computers all
19:58over the world and what's autonomous
20:00about it is that no one party controls
20:02it it's completely trust less it's
20:04running the trustless environment and
20:05that's really important for the
20:06functionality the system itself
20:08executing code self executing can be a
20:10bit confusing but it's definitely a
20:11rules-based system that is fundamentally
20:13open such that anybody can see the rules
20:15and nobody specifically administers the
20:18running of the code and so anybody in
20:21the world can take their crypto assets
20:22lock them up into escrow and then issued
20:24I against them and then that die
20:26which is effectively functions like they
20:28borrowed they can take do whatever they
20:30want they can start a business refinance
20:32their house and then later when they
20:33want to get their asset out of escrow
20:35they return the die that they borrowed
20:37plus a fee based on how long it was
20:41you know it should sound really familiar
20:42because it works in a very familiar
20:44traditional sort of storied way can we
20:48lock up real-world assets into this the
20:50promise was always was that many
20:53different types of assets would be able
20:54to be locked up real estate anything
20:57really you know you're talking before
20:58about like gold a large right or
21:00Tomatoes that anything you can get on to
21:02the blockchain can theoretically be
21:04locked up as collateral in our system
21:06right that's like the whole promise and
21:07the idea there is that you know one of
21:11the compelling sort of details of die is
21:13that for every die issued there are
21:15assets locked up in escrow and so every
21:18die is effectively backed by these
21:19assets and so one of the really really
21:22important details about die is this idea
21:24that there's a lot of different types of
21:25assets so you can imagine supply chain
21:28invoices you can imagine like commodity
21:30is like gold you can imagine pure
21:31cryptocurrency is like ether or augers
21:34rep all existing in the same system of
21:37credit so that if any single one of them
21:39has trouble the other ones may still be
21:42performing and it sort of protects the
21:44strength of the entire pot you see what
21:46I mean that's really cool because
21:47there's this flywheel where dive has
21:50already sort of improved the user
21:51experience of today's early applications
21:54and you know that in turn Foster's
21:58adoption of those applications and
22:00increased adoption in turn leads to the
22:02tokenization of more things and as more
22:04things get tokenized and become
22:06collateral they sure out stability and
22:09so stability baguettes more stability
22:11and more adoption I love that because we
22:13talk a lot network effects on this
22:14podcast I think any software business
22:17cares about network effects software has
22:19that sort of unprecedented scale just
22:21for the reminder of the definition of
22:22network effects is when a system becomes
22:24more valuable the more people that use
22:25it and hence the flywheel effect but for
22:28the naysayers it can also sound like a
22:30crazy house of carts this thing
22:31reinforcing that thing reinforcing that
22:33thing that sounds like a crazy spiral
22:34tell me how would you disillusion those
22:36folks a lot of people who have nightmare
22:38visions of like 2008 the problem with
22:412008 was that in 2008 they were doing
22:43something that was again like a very
22:44storied tradition which is debt issued
22:46against assets you know they did not
22:47invent that in 2008 it was just very bad
22:50dad was it was it was very opaque and it
22:53was very difficult to see what was going
22:55on it was very difficult to get a sense
22:57of the problem and by the time
22:58regulators realized it was literally way
23:00too late because the entire house of
23:02cards was falling down and I think that
23:03one of my favorite things about
23:05blockchain networks is the fact that
23:06they're fundamentally transparent and
23:08auditable and I think that that sort of
23:11feature is so important when you're
23:14talking about these sorts of things like
23:15a large credit system right and so I
23:17think that the transparency the audit
23:19ability and the open source ethos is
23:22what is going to be its most or
23:24regulating or stable sort of influence
23:27over the long term because if there's
23:28any funny business you can't get away
23:30with it right there's so many times in
23:32maker that when one person acting of
23:34their own accord in their house
23:36god-knows-where takes an action
23:38everybody else sees it and then suddenly
23:40reacts and starts commenting on the chat
23:42starts following their own incentives
23:44and self-regulating and exactly a
23:46real-world example I think of is what
23:48happened at the Wells Fargo executives
23:49who were stealing money from people who
23:51died bank accounts or even those that
23:54were issuing like really bad loans and
23:56just trying to like there's this whole
23:57scandal they were just like pumping up
23:58all these customers just in order to
24:00meet their numbers but they were making
24:01very bad decisions and the executives
24:04were clueless or maybe they were turning
24:07and an organization of that huge of a
24:08size like that's a huge problem so
24:10anyway that's a great counter example so
24:12given that the system is backed by these
24:14collateral assets there needs to be this
24:17decision made about which asset should
24:19go in the basket behind die so how does
24:23that work who decides you know this is
24:25probably the most important aspect of
24:27stability right is who is making the
24:29decisions about these collateral assets
24:31and that brings us into the second
24:34crypto asset that exists in the system
24:36the yang to dies in another great
24:39analogy and so there's actually two
24:41assets that exist in the maker system
24:43and make up the whole ecosystem right
24:45one of them is die which is very much
24:47the product but the other one is maker
24:49that's MK r MK r is the administrative
24:52and governance token that exists to make
24:55exactly these types of decisions using
24:57stakeholder democracy so one MK r equals
25:00one vote and the MK r holders are
25:02responsible for making these decisions
25:04about what types of assets can be used
25:06what types of fees will be associated
25:09with borrowing against them and in what
25:11ratio die can be issued against these
25:13assets these are all really really
25:15important questions and they do this in
25:17a completely open and transparent way
25:18and in return for their service because
25:22very much a service that they're working
25:23to provide to the entire system in
25:25return for their service that fee that
25:28the die issuer pays like I said when the
25:31issue die if they want to get their
25:33collateral back they return the die plus
25:34a fee that fee is used to buy up and
25:38destroy MKR on the open market place so
25:40it represents this kind of constant
25:42buying pressure that exists hopefully to
25:45the benefit of MKR holders if the MK r
25:47holders are doing a good job then die
25:49will be issued and then fees will be
25:51sent into this buy and burn we call it
25:54this is very interesting right because
25:55you know it will feel very familiar to
25:57anybody who's sort of seen the story of
25:59buybacks in the financial markets so the
26:02analogy is that M carrier holders are
26:04like the miners of the maker Network in
26:06the sense that they're doing the work to
26:07make sure that die stays stable that to
26:09make sure the die is growing and being
26:11used properly just like the miners in
26:12Bitcoin are keeping the network secure
26:14yes there like a decentralized central
26:16bank yeah they are the service providers
26:18that make dye work the analogy that I
26:21is actually if you imagine walking on a
26:23balance beam this is not something that
26:25just happens automatically you can't
26:27just make an automaton that walks on a
26:28balance beam it requires a lot of
26:30finesse and it requires a lot of a lot
26:32of poor exercises a lot of
26:35decision-making as new information is
26:37being presented right and that is really
26:39the core of what the Empire holders do
26:41they're making decisions as new
26:43information is being revealed in the
26:44marketplace and in the happy case the
26:47fees that are collected are used to buy
26:48and burn mkr but there is a flip side
26:50and this is really important and it's a
26:52really important sort of skin in the
26:54game as has been famously said many
26:56times including most lately by Nassim
26:58Taleb in his latest book right yes
26:59iconic phrase there and so the skin in
27:02the game that the mkr holders have is
27:03really interesting because in the case
27:05where one of the collaterals that they
27:07accept to be issued against if they ever
27:10make a mistake and that collateral loses
27:12all of its value overnight then all of
27:16the dye that was issued against it needs
27:17value to be backing it and so what
27:19happens is MKR is minted and sold off in
27:22the marketplace to cover that depth and
27:24so we actually have like opposing forces
27:26here which is why this fascinating and
27:28yang sort of analogy I think makes a lot
27:31of sense also because you've got MKR on
27:33one side the happy case M Kerr is being
27:35bought and burned and then on the sort
27:37of sad case the mistake is MPR's being
27:40minted and sold if the M car holders do
27:42a good job then we can expect
27:45MKR to become more scarce over time one
27:48way I think about the whole system
27:49zooming out is it's really a two-sided
27:51marketplace on one side of the market
27:52you've got dem care holders and again
27:55they're doing the work of the system and
27:56what they're doing is sending a bunch of
27:58parameters such that people who want to
28:00get leverage or liquidity against their
28:02assets can do that and they know how it
28:05works the system's fully transparent so
28:06one side of the marketplace exists to
28:08serve sort of liquidity the other side
28:11of the marketplaces are people who just
28:13want to benefit from the stability of
28:14dye they don't have to know or care
28:16about em care they don't have to know or
28:18care about the credit system and the
28:20smart contracts where the collateral is
28:21held all they need to do is transact
28:24using this stable currency right it's
28:26like people like me who want to spend a
28:27dollar without knowing how the financial
28:28system works exactly and so what's
28:30really powerful about the system is that
28:31the incentives on both sides of the
28:35aligned through the functionality
28:37encoded into the MKR token exactly so
28:39the incentives of them care token
28:42holders are aligned with the incentives
28:43of dye holders because as dye grows if
28:47they keep the system stable they stand
28:49to benefit and if they don't do that
28:51they also stand to be punished right it
28:53just goes right to the holdup again even
28:55more broadly speaking to the whole
28:56definition of crypto networks this
28:58community owned and coin-operated
28:59digital services and this is actually
29:02the perfect blend the community owned
29:04that's the DAO it's operated the
29:07services is MKR which is part of maker
29:11Mak er which is the entity and then you
29:14have dye which is the coin or the debt
29:16currency in this whole system so I think
29:19we kind of have a sense of it and I love
29:20what you set up at the Union Yang
29:21because these two equally opposite and
29:24opposing forces it's the checks and
29:26balances the failsafe that sort of
29:28avoids this case of the mortgage crisis
29:30of 2008 because you have this opposing
29:33force one thing that's really
29:35interesting about this whole system is
29:37like it's completely coordinated by
29:39token holders all over the world there's
29:41potentially going to be lots of money in
29:44these smart contracts and lots of
29:45commerce happening as a result of the
29:47system and so the need to have high
29:50security standards is real those have
29:52been fallen crypto would have heard of
29:54the Dao which was a hack you know in the
29:56early days of aetherium on a smart
29:58contract maker is not D Dao and to the
30:01contrary it's a Dao that's been live and
30:03been secured to date and so I'm
30:05wondering has the CTO what are the best
30:06practices and how is engineering smart
30:08contracts different from traditional
30:09software I think that one of the most
30:12interesting ways that smart contracts
30:14are different from traditional software
30:17engineering is that they actually have
30:18the characteristics of virtual hardware
30:21essentially they behave like hardware
30:24because if you think about hardware
30:25let's say I make a phone or some other
30:27micro chip or a toy or something like
30:28that I have to design it and then
30:31manufacture it and then ship it out and
30:33if I make a mistake there's nothing I
30:35can do because I cannot take the
30:37hardware back and fix it you know you
30:39don't have a fast enough feedback loop
30:41and it's immutable like when I print the
30:43chip that's the ship that it's not gonna
30:44change you know with some exceptions and
30:48hardware sort of story means that when
30:50you design smart contracts you actually
30:51have to be thinking with a hardware
30:53designers point of view which is
30:55fascinating completely different from a
30:57software designer's point of view and in
30:58software especially web 2.0 there was
31:00this idea of ship your code as quickly
31:02as possible and sort of fix it as you
31:04what did I say rapid prototyping move
31:06fast and break this is also like the
31:08minimal Viable Product there's at so
31:10many different ways of thinking about
31:11some ideal ways so there's move fast and
31:13break things sort of philosophy has
31:15literally never existed in hardware
31:16design because that doesn't make any
31:18sense like moving fast and breaking
31:20things in hardware means like a
31:21multi-million dollar I'm just thinking
31:23of any conductor ships you would design
31:24them you should then be manufactured in
31:26China you make a mistake in the design
31:27you have a huge loss and you have to
31:30redo the entire thing and it means that
31:32the bulk of the work is actually up
31:34front before you write a single line of
31:36code so tons of prototyping tons of
31:39specification tons of really thinking
31:40deeply about what you want to do before
31:42you ever write any smart contracts so a
31:45lot of it is in preparation similar to
31:48like painting a house you know there's a
31:49lot of the work is before you get the
31:51paint out Leslie Lamport once wrote an
31:53op-ed for me when I was at Wired arguing
31:55why we should do specifications and do
31:57code like building houses but a lot of
31:59people thought back on that because they
32:00felt that he was very outdated in terms
32:02of thinking about this nature of fast
32:03moving you know object-oriented
32:05programming and all these other ways of
32:06thinking well you will be proven right
32:08especially as it relates to smart
32:10contract because we've got this like
32:12virtual hardware environment you know
32:13where we create a piece of virtual
32:15hardware we launch it onto the
32:16blockchain and then that's it it's out
32:18there now and so a lot of the work is in
32:20prep like you have no idea how many
32:23times we've implemented maker and then
32:25thrown it out and you have to be okay
32:27doing that you have to be able to spend
32:29an entire day looking at a single line
32:31of code and saying is this necessary
32:33does this belong here it's like so
32:35meditative I love this it's really
32:38really intense I'll tell you man and so
32:40part of it is all of this work upfront
32:42but then part of it is actually a tool
32:44that will be very familiar to hardware
32:46designers which is formal verification a
32:48rigorous mathematically specified way of
32:51ensuring that the specification the
32:53behavioral specification that you've
32:55created in fact does match the code that
32:58you've written it's sort of like
32:59simulation if you're designing hardware
33:01kind of the idea it's like stimulation
33:03but having the ability to mathematically
33:05simulate all possible realities you can
33:07say something like die always must be
33:08issued against a collateral asset right
33:11that's a bold sort of propositional
33:13statement that I make there and so that
33:15sort of behavior we specify it we say
33:18die must always be issued against a
33:20collateral asset and write that in a
33:21formal way then what I can do is I can
33:24take an implementation of the die credit
33:26system and I can say is it true that in
33:29all possible realities and all possible
33:30cases it is the case that die can only
33:33be issued against a collateral asset and
33:35you can use essentially formal
33:37verification software tools to say yes
33:39we've checked and it is the case that
33:41die can only be issued against these
33:43collateral assets right and so when you
33:45know that you can remove an entire class
33:47of errors or bugs actually something is
33:50interesting when hardware designers talk
33:52about mistakes they always say errors
33:53they don't say bugs the bug is a bit
33:55like trivializing kind of infantilizes
33:57the mistake you write but an error is
33:59like you should error all caps so it
34:01removes an entire class of error that
34:03you could have when you have this sort
34:05of guarantee that the code indeed does
34:07match the specification and so we're
34:09very proud to be on the cutting edge of
34:11this for smart contracts because the
34:13entire formal verification industry is
34:15not geared toward smart contracts as new
34:18technology they're used to working with
34:19like semiconductors and airplanes and
34:22so the whole formal verification
34:24industry it was very kind of caught off
34:25guard by smart contracts and so we are
34:28very proud to be the first application
34:30to be launched on the etherion block
34:32chain that is formally verified there
34:35have been experiments with this up to
34:36this point this is the first non-trivial
34:37application that will be launched that
34:40will have these guarantees that you can
34:41rest easy and no entire classes of
34:43errors have been mathematically ruled
34:45out as possible I love when hardware and
34:47software blend like this kind of
34:48thinking this is fascinating
34:50we had Andy McAfee and Eric van Olsen
34:53MIT economists on the podcast talking
34:55about the problem they argued with smart
34:57contracts is that you cannot have
35:00completeness because you don't know if
35:04the car like less you have a hard car
35:05that's being passed when you owner
35:07you cannot upfront specify that well
35:10this owner cannot change the color or if
35:12they do that you don't really know
35:13what's happening so it's really
35:14interesting in this analogy
35:15you described formal verification to be
35:17able to do all this upfront simulation
35:19of all possible scenarios is kind of a
35:21way to play out that reality it gets
35:24into a very interesting question because
35:26you know formal verification is really
35:27bandied about as a buzzword in black
35:30Chan's as like almost like Holy Grail or
35:32like a panacea that will solve all
35:34problems you know and you see a lot of
35:35token investors saying formula
35:38verification they gave their hands
35:39around they say and all our problems
35:40will be gone that's not the case because
35:42formal verification only verify against
35:45a well specified behavior right and so
35:47it gets into sort of the limits of
35:49formal verification which is very much
35:50about how well did you specify you know
35:52you can say something very trivial and
35:54sort of tautological about maker and
35:56then verify that indeed the code matches
35:58the specification but how far does that
36:00get you you know not very far right so
36:02like not for emerging behaviors or
36:03things that you can't predict yeah and
36:05so you can get guarantees about really
36:07really low-level properties to give you
36:08an example and this is something that
36:10you really really take for granted but
36:11when you're operating in a blockchain
36:13environment the math is not guaranteed
36:15to be working exactly the way that you
36:17expect all the time because you might
36:19have things like rounding errors for
36:20instance right and so what one thing
36:22that we can definitively say about maker
36:24is that there are no rounding errors
36:25that will cause you problems down the
36:27line right and that's just a nice thing
36:29to know and there's many sort of like
36:30really really low-level foundational
36:33guarantees that you can make that then
36:35allow you to sort of build confidence on
36:37a higher level that verification cannot
36:38target that's great I think this gets to
36:40one of the key things it's just
36:41generally interesting about smart
36:43contracts and crypto in general is that
36:45if you have these security guarantees if
36:47you are able to formally verify smart
36:49contracts in this way what you're
36:50effectively doing is you're transferring
36:52trust that you would otherwise place in
36:55an institution into trust in code and
36:58when you do that what's fascinating it's
37:00sort of like a compression algorithm
37:01you're like compressing human trust and
37:03you're putting in this little snippet of
37:05code which is as minimal as possible the
37:07reason I like the word compression is
37:08like when I think about audio we've had
37:10you know humans making sound for a long
37:12time but when we got the mp3 suddenly
37:15that sound could travel across the
37:16internet you know at light speed and so
37:18what's great about smart contracts and
37:20especially formally verified ones is
37:22when we can trust the code we can really
37:25increase the distribution of trust
37:26worldwide and that's really important
37:29about money yeah absolutely I think that
37:31with these lower level primitive
37:33elements that we really really feel
37:35rock-solid about then we can just start
37:37to sort of think about like a global
37:39society in a way that actually feels
37:40possible okay so where are we now status
37:43wise in the world of stable coins
37:44because a lot you know a lot of this
37:45stuff sometimes sounds like research or
37:47a project people often use a maker
37:48project but you actually have an actual
37:50product in the marketplace it's very
37:53funny for me right because I've been
37:54thinking about stable coins for so long
37:56years we're seeing a lot not necessarily
38:00appear on the blockchain but definitely
38:01appear as like proposals and white
38:03papers and stuff so they're not actually
38:05in production yet some of these other
38:06ones there's been a few what I should
38:08have said is none etherium but when you
38:10talk about the wider world there's
38:11actually even stable coins that predate
38:13die when you talk about not on etherium
38:15die is not naturally antagonistic
38:18towards these other stable coins like it
38:19can feasibly be used as collateral in
38:23right and dye can be issued against them
38:24this is the idea of multi collateral
38:26well to introduce other collateral types
38:29you could take these IOU backed stable
38:31coins which are just you know backed by
38:33dollars in a bank account and use them
38:34as collateral in the maker system to the
38:37extent that you trust the institution
38:38that's custody knows fiat dollars
38:41such a another way of like hedging and
38:42spreading the basket of different
38:44collateral jurisdictional arrests yeah
38:46and it speaks to how makers sort of a
38:47wrapper for all these other asset types
38:49of Fiat back stable funds or one type of
38:51asset but there will be others gold and
38:53you know real estate etc and even some
38:56that have never been tried in the
38:58history of humanity which we call senior
39:00at share it's sable coins which are
39:02completely different algorithmic
39:03properties that allow them to be a lot
39:06more autonomous what do you mean by that
39:08yeah so I guess we've already talked
39:10about two of the three types of stable
39:12coins that we see commonly one is sort
39:14of Fiat back to io u--'s and then
39:16there's maker which is crypto
39:18collateralized so instead of being
39:19collateralized by fiat it's
39:20collateralized by digital assets and
39:22tokens and there's a third type which is
39:25sort of novel and that is algorithmic
39:27stable coins and those are often
39:29referred to as senior chairs models
39:32there's a lot of sort of different
39:34approaches to it it's difficult to
39:36describe in as recognizable ways as I
39:39was able to describe maker because maker
39:42old idea of issuing debt against assets
39:44but effectively what you do with seniors
39:46shares is you take the future expected
39:49value of the network and then you use
39:51that as sort of collateral when you
39:53issue new stable coins so you're issuing
39:55stable coin against the future expected
39:58confidence in the network does that make
40:00sense yes I mean the way that I think
40:01about it and this is probably simplistic
40:03is just that the supply of an
40:05algorithmic stable coin changes in
40:08response to demand and the way that the
40:10supply expensing attracts is based on
40:12the price so there's this algorithm also
40:15specified in the smart contract that's
40:16adjusting you know inflating the supply
40:18when the price is too high so that it
40:20comes down what's critical here is like
40:22there's no collateral backing this
40:23there's nothing behind it it's just
40:24people's belief that it will stabilize
40:26itself based on the suggesting supply
40:28and demand I was just thinking in my
40:30head just now what you guys are talking
40:31about that that this is gonna really
40:32 with black Scholes and like the
40:34classic derivatives models that Finance
40:36has had for many ages anyway just sort
40:39of interesting implications immediately
40:41and in the future for the future of
40:42finance as well definitely that's true
40:44yeah so it's interesting what I love
40:45about these three types of stable coins
40:47that you described is that there's a lot
40:49of experiments and we're running a bunch
40:50of experiments and we're at that phase
40:51in this but you guys are clearly beyond
40:53experiment you have something that's not
40:55just a project it's in the market I
40:57helped me quantify what volume of things
40:59we're talking about here well I mean
41:01there's many different ways to look at
41:03this right one of the most typical ways
41:04to look at this is actually the number
41:06of died in circulation or something like
41:08about a million new die come into
41:10circulation every week as people lock up
41:12ether and issue against it which is so
41:14cool we want to see billions and
41:16billions of die in circulation so that
41:17it can sort of take its rightful place
41:19as digital money but on a more
41:22qualitative side we also have to look at
41:24all of the different activities that
41:26surround the ecosystem because it's such
41:28a complex multi-stakeholder ecosystem
41:30right and there's so many different
41:31indicators of momentum that we've seen
41:34in just the last three months right like
41:35one of the first ones that really
41:36touched off the summer for us was this
41:38trade shift partnership that I spoke
41:40about a little bit earlier that sort of
41:42digitized supply chains around the world
41:44global supply chains and be able to then
41:46marry that with maker yeah or with
41:48really really high-quality international
41:51not only that but we've announced new
41:54bridges to exchange fiat currency for
41:58died in a very seamless way so that way
42:00people who expect to be paid in fiat
42:03currencies can still sort of be plugged
42:05into the die eco system because there
42:06can be this like seamless back and forth
42:08between the legacy financial system in
42:11this blockchain financial system not
42:13only that but one of the really most
42:15exciting things that we've seen happen
42:16in the last three months was the actual
42:18implementation of a MK our governance
42:21vote which is super time ever for the
42:24first time ever yeah which is super
42:25exciting because like I said
42:26MKR operates on this idea of stakeholder
42:30democracy and so seeing it in the wild
42:34and seeing a proposal put to the
42:36community and they deliberated it for
42:38quite a long time and then came to a
42:39decision to essentially what they
42:42ratified was their own core values as a
42:45decentralized autonomous organization so
42:48the decentralized autonomous
42:49organization voted using them PR tokens
42:51I'm curious you know what is it like to
42:54be inside of the belly of the beast
42:56that's building the thing well you know
42:58how is building a decentralized
43:00autonomous organization different from a
43:01traditional startup or is it I think
43:03that there's so many different ways
43:05right because a big part of it is this
43:08community you know and in general when
43:10you're trying to create money the
43:11community and the widespread confidence
43:13is so important when you're operating a
43:15start-up especially when it's small and
43:16early on you run the risk of getting
43:19stuck in a pattern of like navel-gazing
43:20or trying to guess what the market wants
43:23and really like having a tough time
43:24reaching your customers especially when
43:26you're like trying to make something
43:27that you hope will work in the market
43:29this is the whole like product market
43:31fit thing having the community involved
43:33from day one is been so useful towards
43:36seeing like what is necessary what is
43:38fluff what is really connecting with
43:40people and making them excited and not
43:42only that but having the community so so
43:45involved from day one and so tightly
43:48connected with the project actually
43:50creates this enthusiasm that allows dye
43:53to sell itself and then the actual
43:55effort of getting the work done this
43:57gets more into remote engineering which
43:59is you know something that startups and
44:00dowse both have to contend with but I
44:04we've sort of learned to put a lot of
44:06trust in people when we might not know
44:08them very well you know and that's scary
44:10but I think that it sort of speaks to
44:12people's general reasonableness you know
44:15and I think that again this is something
44:17that like kind of goes underappreciated
44:19in black chains but at the end of the
44:21day most people are reasonable most
44:23people want to do something great and
44:26they want to cooperate they want to come
44:27together in coordinate and they want to
44:29be a part of something that is exciting
44:30and so whether it's the developers or
44:33whether it's like the community or
44:36whether it's anybody that's associated
44:37with the project as long as the system
44:40is fundamentally transparent and adheres
44:43to these ethics of open-source and this
44:45whole like aesthetic of transparency
44:47then everybody just knows exactly what
44:50to do and it's amazing it's like
44:51watching like a school of fish or like a
44:53herd of bison or something like that
44:55everybody just knows exactly what
44:56everybody else is gonna do and they all
44:58respond in kind and he really is like a
45:00testament to the power of humans
45:02abilities to coordinate on these like
45:04mass physical and like timescales and
45:06stuff and I think a lot of that could
45:08potentially have to do with the fact
45:09that there's this token involved in and
45:13the fact that anyone can just jump in
45:14and participate in this network and you
45:16know as a token holder have a say and
45:18have an incentive to do the right thing
45:20incentives are huge but almost as big
45:23what looms nearly as big in my mind is
45:26actually narrative so having all the
45:28different people who like really have
45:29come together to make sure that this
45:31happens right it really flows from our
45:34ability to trust each other and to work
45:36with each other and a narrative gets
45:38created there of like we are all in this
45:40together and we're all trying to do this
45:41I hope it feels really inclusive and
45:43accessible and so when somebody
45:45encounters the project it lights up
45:46their antenna like oh this is a
45:48community oh this is something that I
45:49can be a part of and I can contribute to
45:51and a lot of that comes to narrative
45:53founders affects the core values I mean
45:56the first thing that we voted on was our
45:58core values as a community meant so much
46:00towards creating a narrative of trying
46:02to improve the world that we live in if
46:04everybody comes at this from like some
46:05kind of hyper rational self-centered I'm
46:08only in it for myself
46:09mentality then they'll just never
46:11coordinate they'll never cooperate you
46:12know and they'll never put aside their
46:14differences and do the hard work of
46:17and so that's what I consider my job is
46:20to really have steward that narrative
46:21into a place where it's something that
46:23inspires everybody but I don't ask a
46:25cynical question when I look at the
46:27history of open-source and communities
46:29collaborating there's always a point a
46:32choke point at which like the community
46:33implodes because there's a command and
46:36control I mean it's actually interesting
46:37you brought up earlier the analogy of
46:38different types of collectives of
46:40animals like bison or ants which are a
46:42hive mind where you have a bee and
46:44there's a queen bee and my question for
46:46you is how do you think specially in
46:48engineering how does this sort of
46:49coordination work and where the failure
46:52points and how do you sort of think
46:53about counteracting that because I just
46:56have a hard time as someone not in this
46:58fully believing that that's possible you
47:01know that you can't see someone face to
47:02face on a regular basis that you can
47:04have a remote distributed workforce we
47:07always hear horror stories about you
47:09know organizations falling apart these
47:10are at the end of the day not just
47:11crypto projects and communities and
47:13networks they are groups of people
47:15working together what does this mean for
47:17human resources and like everything else
47:18this actually gets back into the idea of
47:21trust right because you're right that
47:23you know when a bunch of people come
47:25together to actually work on something
47:26there's a lot of work that needs to be
47:28done and something that we realized in
47:30maker which was it's really tempting
47:33when you get into block chains to say oh
47:34we have decentralize networks now you
47:36know maybe these permissionless open
47:37things and let's throw away all
47:39hierarchy exactly we're like this like
47:42radical like part of our experience of
47:47growing up has been to not be afraid of
47:50leadership leadership is so big with
47:52humans whether they're coordinating on
47:54mass kills on micro scales or anything
47:56in between you know we've really learned
47:58that a good leader is worth everything
48:02and people in our like community have
48:04opportunities to be both leaders and to
48:07follow a leader themselves you know so
48:08it's not something that's static and
48:10it's not something that's locked in it
48:11really depends on the context right and
48:13so I think that if you have a good
48:15leadership then you're in a position
48:17where if it's some aspect of the work
48:20that is very disconnected from you like
48:22say I'm working on technology and
48:23somebody else is working on
48:24communications knowing that there's good
48:26leadership there and knowing that that
48:28team respects that leader and that that
48:31when they speak for the group they truly
48:32speak for the will of that group makes
48:34it so much easier to trust a group that
48:35you might not be familiar with it gets
48:37back at this like compression of trust
48:39you know but I think that taking
48:40something that you don't understand and
48:42then compressing it down till somebody
48:44that you do know and trust that can sort
48:46of speak for the will of the group will
48:48go a long way towards distributing a lot
48:51of these different tasks human-scale
48:54while at the same time Maskell I love
48:57that because we have such a tendency to
48:59think of hierarchy as leadership and you
49:02don't realize that there can actually be
49:04leadership in a distributed
49:07decentralized way with a leadership at
49:09the lowercase L or think about it it's a
49:12new form I should think it's quite
49:13fascinating because when I think of the
49:15history of the firm the class that we
49:17talk about a lot the classic coast paper
49:181937 and all of management literature
49:21has flowed from this idea that firms are
49:23the most efficient way to reduce
49:25transaction costs and do these things
49:26and now is a move into a new wave of
49:28daos that is just the beginning
49:30we're gonna have a whole new body of a
49:32management leadership I mean some of it
49:34will be fundamental human principles
49:35Universal that probably never change and
49:37some of it would just be this is the
49:38very beginning like we might see the
49:40next Peter Drucker of daos emergent
49:43might be you know there might be a whole
49:45new way of thinking I mean even like
49:47lean startups came out of lean
49:48manufacturing and Toyota style
49:50management I love thinking about how
49:52these systems are gonna change the
49:53future of all that well Andy CTO of
49:57maker Jesse a 6 & Z crypto thank you for
50:01joining the a 6 and Z podcast thanks
50:03thank you for having me
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