Decentralized Society: Finding Web3’s Soul
An interview with Glen Weyl
NFTs are a new form of digital ownership. The first examples of digital ownership have included assets like art, real estate, music, and collectibles. All these assets are tradable on secondary markets (e.g. OpenSea), which is great for creators and traders. This is one of the reasons driving the dramatic increases in prices over the past few years.
Digital ownership is more important than just making money. It can also represent the skills you have learned and the experiences you have had. If those parts of your identity were tradable, it would reduce the impact of those accomplishments.
Another problem with trading digital ownership occurs within DAOs. DAO owners are given governance tokens to make decisions within their DAOs. Ideally, these tokens are used to vote on the future of the DAO (e.g. who to hire, what product to develop, what to invest in, etc). But today, the fact that these tokens are tradable leads to the following issues:
Governance is meant to be widely distributed. Trading tokens can lead to concentrated interests buying up voting rights and centralizing power.
Governance is meant for active participation, not only as an investment. I have owned ‘governance tokens’ in DAOs and have not cared to involve myself in the day-to-day decision-making of the organization, and care more for the price of the token to increase.
So how do you solve the problem of wanting parts of digital ownership through NFTs or tokens to be non-tradeable? You make them Soulbound. Vitalik took inspiration from World of Warcraft to share his vision of non-tradeable NFTs.
Here are a few takeaways:
In WoW, the most powerful items are earned and cannot be traded.
A common criticism of web3 is how money-oriented everything is. Financialized NFTs are great and can support artists, charities, and creators to better monetize.
However, as shared above, there are limits to that approach for ownership of your work history, education history, the skills you’ve earned, and voting in DAOs.
There are technical limitations today to make this possible, but NFTs like ENS names are showing what an NFT can look like where owners are unwilling to trade away.
Working on this problem can broaden the ecosystem of blockchain applications and bring more people into the space who care more than just trading. With this in mind, last week, Vitalik along with Glen Weyl and Puja Ohlhaver wrote a paper outlining this concept in further titled “Decentralized Society: Finding Web3’s Soul”
I felt compelled to reach out after reading their paper. Glen responded; below is the transcript of our interview. Glen was generous and open with his responses and admittedly was one of the brightest people I’ve met.
We admittedly did not get to touch on every detail of the paper he co-authored. With conversations like this, I like to better understand the person…
What was their background?
What do they care about?
What do they think about the people they work with?
You will notice we spent a good amount of time on that. For those who want to skip the personal and go straight for the technical, I’d recommend reading through the following:
Twitter:Zack_davidson & Leo_Glisic
This interview has been edited for clarity
I have become fascinated with all the work that you're doing, not just in blockchain, but in the other interests you have. Whether it’s at Microsoft, RadicalxChange, or the rest of your thought leadership.
This conversation will be about a recent paper written by yourself, Puja Ohlhaver, and Vitalik Buterin. It's titled “Decentralized Society: Finding Web3’s Soul”.
Before we jump into the paper I want you to speak about your co-writers. Highlight who these folks are to you; especially Puja.
One learning over the course of my career that is in sharp contrast with web3 today; the majority of the leaders have been women and about half have been people of color. I think that's because the organizations I am a part of focus on the social impact and transformation rather than on monetization techniques.
People from underrepresented backgrounds typically care more about finding significant solutions to the world’s problems. Not just protecting personal gains or technical prowess. I've been honored to work with incredible people like Puja, as she was the person who led this project.
We need to have more diverse voices in the space to ensure we don’t repeat the mistakes of the past. How about your other co-author? What was it like working with Vitalik?
I have worked on a number of papers with Vitalik. Working with him is different than working with others. I like to have high bandwidth communications with my collaborators. For example, I spent hours on the phone with Puja for this paper.
Vitalik prefers lower bandwidth conversations. His communication style is slightly awkward. That's an interesting distinction. It's still great working with him but you are pretty much writing blog posts back and forth to each other rather than having a conversation.
I guess everyone has their own working style! What was the impetus for deepening your understanding of blockchain-based technologies?
I was against web3 until I wrote a paper proposing a new alternative to private property. Vitalik seemed to like it and tweeted about it.
I got more traffic than anything I'd done before. I decided to send him a draft of a book that I was writing that included those ideas. He sent me back twenty-five pages of the best comments I've ever seen. At that point I thought to myself, well maybe this guy isn’t what he appears to be. I started interacting with him more and dove deeper into the space.
My skepticism about the web3 technology has grown richer, more nuanced, and more detailed. It’s still there. I have come to realize that it is more of a social and cultural phenomenon. That is more exciting than any limitations of the technology itself. My feeling about the possibilities of web3 has grown.
This January, Vitalik wrote about the idea of Soulbound Tokens (SBTs). The idea is that there are certain parts of your identity that you do not want to be able to trade. These are experiences that I have had and want to show people. Can you give us a quick definition of what SBTs are and unpack more of your paper?
An SBT is a non-transferable NFT. SBTs encode and represent commitments, credentials, and affiliations to existing trust networks in the real world to establish a reputation. An SBT is an enabling technology, we're more interested in describing the patterns and socio-economic relationships this can create. One good illustration of this is doing recovery.
Imagine the tokens in your wallet represent social relationships. The universities you have been to, the DAOs you are a part of, etc. You can use that as a substrate for the set of encoded relationships in those tokens. For example, to recover your wallet, you have to find one person who went to university with you, one person who worked at the same company as you, and your family member.
The thing that's interesting about that through a philosophical perspective is that it says that it's not institutions that we wanted to centralize by making them more democratic or less hierarchical. We want to decentralize individuals. If you get those people together you could recover your wallet and limit the need for centralized institutions.
What are your thoughts on how this starts to decrease inequality? For example, lets say I get an SBT for going to college . Now that I have the SBT, maybe I can give my SBT to someone else that hasn't been able to go to the same schools? Could this be used to support folks from underrepresented backgrounds that may not have the same opportunities as me?
The SBTs themselves could be used to increase or decrease inequality. They could go either way. The cool thing about them is that one thing that can run on top of them is a set of social systems. These are about rewarding people who cooperate with others who are different from each other and themselves.
That expands our notion of inequality from just economic or racial inequality to all the differences that separate us. We can then compete over those differences to determine which ones are important and represent you, then offset that by giving incentives for positive behavior.
What will lead to the adoption of SBTs? How do we roll it out in a safe way?
We need to have a much broader range of social institutions involved in this space. If profit-oriented venture capital firms drive it, it will not offset those problems. We will need the public sector to influence the private sector. As soon as you start representing social relations, you can weaponize them. If you can represent affiliation to the community you can discriminate against that community.
I think DeFi turns everything into financial assets. DeSoc and by comparison SBTs are allowing us to bring back our humanity.
Glenn, this was a pleasure. Thank you for your time.
Hey, Jay here again. I’ve been going quite deep with the idea of decentralized identity. It’s interesting to note that there has been a lot of movement in this space for the past decade independent of web3. Web3 has accelerated these conversations. The cultural and societal movement is bringing this technology to the forefront.
There are a lot of implications of rolling out the ability for humans to have some sort of credential for everything they have done. Having that credential live on a wallet may be intuitive to you and me, but it may not be for the average person. Think about the institutions that need to issue this SBT/credential to you. Will they all be on board for this? What will drive their interest to adopt this new technology?
I imagine a number of factors that will accelerate the trends towards every part of your identity being digital:
We’re already trending in that direction (e.g. think of everything on your apple wallet today)
Governments may require it (e.g. check out this page on EU digital identity)
Society will ask for it (i.e. it will probably start with web3 folks, but will slowly trickle its way out)
The more I spend in this space of digital identity the more I believe this is the future we are heading to. NFTs and SBTs will be one avenue that organizations and people will take to verify themselves. There may be others. Verifiable Credentials and DIDs as a concept are worth exploring if you are interested in diving deeper here. These may be what you end up interacting with more than SBTs or NFTs. It’s TBD which standard we use; they could both work together.
Thanks for following along with this interview. Curious if you liked it and if you want me to do more of these. Let me know!