Alex: Hi Eliott.
Eliott: Hi Alex.
Alex: Good to see you in Lisbon.
Eliott: Yeah, good to see you.
Alex: We met already like three times right, the first was in Paris, then in Berlin and now Lisbon. Yeah, so we're on track. We're on track.
Eliott: Next one will be in Barcelona or something.
Alex: Probably, probably. And we will do another interview there.
Alex: So how do you find Lisbon?
Eliott: So far it's good, you know. Except for today, it's sunny normally.
Alex: Yeah, normally sunny
Eliott: It's comfortable. Yeah.
Alex: Warmer, warmer than Paris now.
Eliott: Yeah, right. Yes. Paris is cold.
Alex: Yeah. And there's a lot of crypto stuff going on here.
Eliott: There's a bigger crypto scene here in Lisbon than in Paris, right.
Alex: Yeah, it might be even bigger than anywhere.
Eliott: You think so?
Alex: Yeah, yeah, I think so. So yeah, let's just introduce ourselves to the audience. So I'm Alex. I'm CEO of DEIP Network. And this is Eliott Teissonniere who is Chief Blockchain officer, right?
Eliott: Chief Blockchain officer and Director of Decentralization
Alex: Director of Decentralization is actually an even more important title at Nodle. Which is an IoT Blockchain built on Substrate.
Eliott: And Polkadot.
Alex: And Polkadot. Yeah.
Eliott: And on top of that, I'm a co-founder and director of the Governance Research Institute, which is researching new fancy, crazy voting models and just experimenting with governance, decentralizing governance technology,
Alex: Thank you for identifying this, I was going to but it's even better to hear it from you. And because I think exactly what I wanted to discuss with you is about governance, future of governance, and how Web3 will change the governance models of the whole world. And actually how we can use Web3 to make this change happen even faster.
So let's start it from here. What do you think in general about the current governance of Web3? To assess where the level of decentralization and efficiency of these governance models are, is it like level 0, 1 or 10?
Eliott: I think we're super early, right. Yes. Today, some of the most decentralized projects are actually not so efficient. If you look at Uniswap, there was so much backslash in their governance model they are not that efficient, you know that for them to take decisions. When you do an on-chain vote it takes at least a few weeks, right?
Polkadot is being a bit more efficient, but sacrificing some decentralization to that. Right? There is a council model for instance, where the council is a restricted number of people that can submit special votes.
And you know, we've seen them use that, for instance, to not necessarily launch boycott actions but just fix issues. We've seen them fasttrack some options which posed questions as to their decentralization.
Alex: Yeah, you know what, I think it's a typical problem because in order to build any kind of decentralized structure, I think you still have to pass through this gradual decentralization process. Because we are people and we're also used to living in a world, which is not as decentralized as we want it to be. And that means that even if rapid change was possible, it might not be the most efficient way to do this.
Eliott: Yeah, that's correct. And on top of that, when you launch a project it's a bit like your baby, and you don't necessarily want it to be going in another direction than you want it to, you don't want it to be used for "bad things." And many concerns I felt from people going from a centralized to progressive decentralization, is how do I make sure but this is not used in a way I don't want it to be used. And so I try to come up with systems so I can keep some kind of overlook on the system, to have veto rights or ability to curate proposals.
Alex: Yeah, that's right. And also, what I'm curious about as well, is when you need to start the process. You know, because I myself right now am in this position. And also, disclosure, Elliott is our advisor. An advisor in many ways, on both infrastructure and governance and actually on everything. What my head is now occupied with is how to make this transition from the model where like, I'm the CEO, and basically the central hierarchical person in this old kind of corporate-structured startup, to the model where we have a console and it governs everything. Because when we launch the token we have to do this, and I'm thinking maybe we can do it even before that. You know, prepare the console, launch the console even before the network launch, and then migrate it to the network somehow. What do you think about this?
Eliott: Now, I think that will be a correct way to go, right? I think it's easier to launch a network in decentralized web than to start a centralized network and then decentralize it, especially from a governance point of view, because, you know, you have all these people what they become, and if, let's say you have your team members can vote on the decision to decentralize, although they may support it they may also be scared they will lose some power. Yeah, so you might get some resistance here. On top of that there's something on councils though, which is that technically the community of token holders elects the council members. So we've seen that with Phala they initially started as a centralized chain for a few weeks when they launched their parachain on Kusama Khala and then they ran election rounds to select the first five council members.
I think in your case, what could be good is select ideal potential council members, and when you launch and maybe you know, the first few weeks are spent electing the council members, which technically, is the creators of the network and the extent to that, because they also have the most tokens and votes are kind of token weighted.
Alex: Yeah, yeah, it's like, you know we want to have this kind of process. But I'm also thinking about, for example, who is nominating candidates. Yeah, and like what they came up with, and I would love to hear your feedback on this. Yeah, I was trying to make the current structure when the decision, final decision is on, is better distributed, the most like the most decentralized.
So basically, if there's some complex process, for example, deciding where to launch a network with which relay chain provider, or something like this, which requires expertise, like and you cannot fully delegate it to the community, but you want to make the community engaged in this decision, and have kinda the final vote.
Eliott: I think we can take inspiration from what Edgware has been doing for some time. When they initially launched the initial governance and decentralization accounts, they built through, kind of working groups made by selecting members right, with enough skills to address some decisions. So for instance, you know, you can have a market, marketing working group with marketing council members each with their own budget, with their own treasury, with their own multisig. And in your example, maybe it'll make sense to have a small, not working group but probably a squad or sub-DAO, and then people from this sub-DAO will be technical people and then they have the permission to make technical decisions.
And if they don't perform well then maybe the token holders can replace them.
Alex: Yeah. This is yeah, this is actually very close to what I was thinking about, and this is also what I think can be used not only for blockchains and networks but for governments actually. And because basically we can coordinate reforms with the same technique.
When you have a council which elects a commission, which gets all the applications and then distributes between different commissions for like, in your case marketing, technical, societal, environmental. Exactly, exactly.
And basically, how to build the model and like what are we thinking about and this is what I want to switch the topic now like from talking about networks to talk about governments, because you also was CTO of Bitnation. Yeah. Give some insights on what you think about Blockchain and where do you think it can have the most impact?
Eliott: So, you know I think it can have a lot of impact on governments, for sure. The thing being there's still resistance to that right, blockchain is seen as very new, they are outsiders and there is still a bit of a crypto-anarchist mindset. Which typically, you know, people in governments don't necessarily like and that's what we've seen from Bitnation, there is resistance from big countries to adapt to these new systems.
But my work as a chair at the research institute, we are able to talk to smaller representatives, let's say cities, who are in touch with the council members of Berkeley for instance but also islands that are not very well known, you know, but they had their own governance system, whose ones are more open to change…
But also, they have to come up with good ways to compete with other nation states right? Because they want to attract citizens, because citizens pay taxes usually, or they build businesses locally. And so what you do, that is to make a very interesting jurisdiction. So maybe it can be because you offer them advantages, such as Portugal, But it can also be with a more efficient governance model.
Alex: Yeah, exactly. So it's fascinating how people in the Blockchain space think the same way, like, why go for big players, they have too much to lose, when you can go to the small players.
And actually, I think this is the beauty of Blockchain, when you can organize a group of small players into, with very efficient infrastructure, a transparent one, which will basically make them much more powerful as well, in some sense. Yeah. And, like, take advantage of being this small, and having less risk.
Eliott: More agility as well, when you're a startup and have a team of 10 people, you know, they're easy to move and make decisions very fast. But once you go to 50 people as we're doing with Nodle then, you know, you have to put processes in place, and you cannot be as…
Alex: Yeah. That's right. That's right. And, and what I also want to ask you basically, like we yeah, we discussed how it can go like how governments cannot adopt it. But it's still a kind of long process. But what if we apply Web3 for digital transformation of governments and create the DAO, a vehicle to embed this summation on a massive scale, basically crowdsourcing reforms for governments?
Eliott: Do you mean almost like a DAO that will be its own political party and would not attend the elections?
Alex: Not necessarily a political party, more like an international organization, which coordinates digital distribution reforms in the world.
Eliott: I think it makes sense, right? I don't think it's being done currently. But we are seeing this with, for instance, Maker DAOs. And now, you know DAO, a very international organization, they have to figure out how to pay international people in crypto and not necessarily crypto, they have to work with international lawyers and marketing agencies and developers.
And I think more and more organizations are going to take that path. I think what you're referring to would be very similar, right? Yeah. We also have other ones that are very interesting projects, funding developers as a DAO. And the way they structured their DAO is that they created what they call Legal advantages.
So instead of having maybe one entity or presence impairments, or legal world that you created many, so for instance, they have one in Wyoming for iKey that Kobe have one somewhere else, you know, for other purposes, fine.
But if you have a very international development, that's what you want to do. You know, maybe you want small legal appendages for specific actions like virtual keys, employees, you need to pay people, on time and you need to, to find strangeness with that.
Alex: Yeah, actually, like, this is a use case I was thinking about because like many Blockchain companies need this, because once we become remote first, and like people work everywhere, it will be so cool. Just give one DAO, which under the hood, like automating, like all this, like payroll, in every jurisdiction, taxes, every single thing.
Eliott: Yeah, you just can't. It's a mess. Right? Yeah. I mean, you guys are probably very remote as well, I guess I've seen, you know, with other companies, like paying people is an, you know, contacting team of people, when you consider them full time team members is very tricky, because you have very specific ways to structure the agreement and our themes that we'll, be setting….
Alex: Yeah. So, let's get back to this kind of coordination of reforms. I'm very curious about it because this is actually our plan to embed specific reforms. So we actually have done the thing. It's called Digital vision, DAO of organizational reforms, and these are just like a part of our ecosystem, because what we're doing, we tokenize real world intangible assets, and there is real value.
And this makes an additional challenge attaching this value from the real world to this Metaverse protocol with error, and that's it requires regulation in whether there's regulation. If it's an on chain, like on the sovereign chain of a country, you can not, you can interact with this like also in a decentralized way.
So, and what this, the challenge is, actually is also how to make a decision, you know, like, because like if we, let's say, we will have, like a very big budget for just the summation of all the countries in the world, crowdsource from all the people from the world.
And basically, if this happens, we will not have enough capacity to introduce it intensely in every country, we will be in a position where we will have to choose priorities, and basically how to make this priorities like what is, what will be the priorities, it cannot be money, because some countries are much more wealthy than others and others and it doesn't mean they deserve to be in the first row. You know it's, yeah,
Eliott: Especially because they might be extremely inflexible. With that thing, you know, you can look at what Uniswap did right, did that agenda go too much into it? But they created some kind of sub DAO, right? I think they call back to education, which is quite educating governments and DAO makers and.
…To go back to your response. How do we set priorities and how do we act on that? I mean, let's set an example. But that serves as these little sub DAO is, as its own council as that is the sole purpose of DAOs right? Signing proposals, and getting a community or members or dedicated people to signal what they think should be a priority. Yeah. And then once that is done, I guess no, execution is, is delegated to the humans as part of a sub DAO and they have to then do their work. But if they don't do it, taking care of it could be kicked off, or something that proves
Alex: Yeah, you know, like, well, I think these things are tricky. And when you scale it on that scale, I guess people like it will become more tricky. So, and I think, like, what I'm also thinking about is in order to launch this and even design it should also be a very inclusive approach. Initially, we need to work more with governments, we do not need to basically pretend that we keep that on our case. It's like it's not gonna, it's not gonna work.
Eliott: You put yourself in a position where you end up almost fighting them, right. It's not what you want.
Alex: Yeah, I think it's just because, you know like, it's very cool to be like, yeah, I'm on another case like yeah, but it's not true. Like we live, we live in the real world. Yeah. And, and I'm actually like, think like, after well experience talking to these government officials, they realize they actually have so much knowledge needed in governance.
Also, our chains, there are so many structures we'll build. There's so many, like, experiments being run already in policymaking. And these same things can be applied, like some of them can be applied to it doesn't. Some people say that it's basically betrayal of decentralization, but I don't think so, it's just
Eliott: I think so. And you have to work with them. Because as we want to change and like everything, it has to be balanced. Because if you reach maximum decentralization, you reach no efficiency as well. So yeah, but you have to balance them. But you also need to balance the fact that as a government, I mean, you also need to take some military decisions, right? Yeah.
How do you take that in a decentralized and transparent way? Yeah. Do you actually want to make it transparent? So I think it needs to be in between. And when, when we build DAOs, there's lot of things we can learn from, government structures, because then, you know, in a way, if it's hard to decentralize some of what we do, if you look in France, some of your ID papers, and some of the decisions actually get you to your cities, to your department, or agents or friends; certainly not taken by several governments.
Alex: Yeah, this is, I think it's kind of natural in our minds that we want to make it more decentralized, but it cannot happen immediately. It kinda has to go through some stages. And like some kind of country's gone further in one way some gone further in another way. And I think you're gonna, even if you have to, even if you have all your governments, like very centralized, it makes it more efficient in terms of operation with other centralized governments and not like, but this can be another level of decentralization.
If it's very decentralized, it makes me less efficient to collaborate with other decentralized governments because like it's basically, you can like, if you have like this relation to one level, it kind of reduces its own another one. You know, like, it's kind of still, but the balance is still the same like always.
Yeah, so yeah, it's, it's actually fascinating as well how, how people like transition in more, in more, in more governance, global governance bodies, you know, like it used to be that there was no global governance. And then, what was the first global governance budget, thing like? It was almost as if…
Eliott: So good question right. Yeah. And like, because I mean times had on governance structure. Yeah, once you had it cheap and you know, that was specific…
Alex: But basically, like it shows his intent to make it like more and more and more decentralized and more united, more internet connected. And basically, this is also what Blockchain does, because by default, infrastructure is global and decentralized. And this would make me wonder, it's looks like it's inevitable that the governments will be transitioned to the Blockchain eventually
Eliott: It makes a lot of sense. And I think Estonia has been doing that for years now. It's not exactly Blockchain. Blockchain is higher, but they have a system called X-worlds. And they have the world website, with an application thing called e-Estonia, and the point is that they are going through digital and full knowledge decentralized and interoperable, we have a set of protocols for every administration body to cooperate together after contradictions data, you have that IT cap which is a chip. I think I have it somewhere. Nice.
And I mean, we have the lower tier version right. When you are a resident, it's your ID card. It's your driving permit, it's the thing that helps you get your meds
Alex: …can register companies, it's actually like big kudos to the Estonian government. Yeah, you did a great job.
Eliott: Many governments are starting to work with them actually because I see some use, I think last year.
Alex: Yeah, I know that they created this framework, but like, what will be cool? What I think will be really cool. And this is actually like, why, one of the reasons why we started like this digital vision is kind of still an incubation process in our collectors labs.
But that will be cool to have, like infrastructure. Like say it builds on substrate with like, Central Bank, digital currency, IPS that's registered on chain, shares of companies that register to the chain, and with interoperability between other governments. You know what it means, right, like, once you, once you have the same. Yeah, yeah. And the country…