Decentralizing Consensys to Catalyze a Network State in the Emerging Decentralized W... | Devcon SEA

There we go. So, this talk uh will have a different tone given the the recent political shift in the United States uh than if it was written a month ago. Um Though I've lived in the US for years, uh I'm a proud Canadian. I would describe myself as politically centrist and neutral. Uh if there was a progressive, rigorous, open decentralization party, uh I would be an NFT carrying member.

For years in the US, companies in our industry have been living in fear, feeling unable to engage in certain activities that should be natural for a Web3 company, like issuing utility tokens, for instance. We're operating in a climate characterized by regulatory uncertainty. Gas, uh by regulatory uncertainty, by gaslighting and carpet bombing of our industry with inquiries that felt like inquisitions, Wells notices and lawsuits from the SEC. The industry asked for rulemaking and engaged in good faith, but a strategy of regulation by enforcement action replaced the approach any lawful or constructive regulator would take because the goal was to slow, kill, or co-opt our our industry in the US. This was the case for three reasons.

The progressive wing of the Democratic Party believes a large, strong central government should have granular control over the population. Two, central large financial institutions preferred to keep winning a rigged game rather than compete on the level playing field of decentralized finance. And three, the US controls as much of the world as possible via intermediaries, especially financial intermediaries. And Ethereum represents the most powerful, unstoppable disintermediation technology on the planet. There's been concern about a second American Revolution.

There's indeed going to be another revolution. It will be a bloodless and probably bipartisan revolution that sheds the regulatory cruft and reformats America according to the principles under which she was founded. Liberty and justice for all, distrust for overreaching centralized authority, and a healthy reverence for self-determination and decentralization. Paraphrasing William Gibson, the world of decentralization is already here. It is just unevenly distributed.

While it is finally looking like America is getting on track, decentralization has already been blossoming in many places where it is needed or where opportunity presents. Decentralized protocols flourish in places like Argentina, where industrious people need ways to route around the damage wrought by centralized government, or in Asia, or in the Middle East, where the population is hungry for opportunity and agile in how it responds. We've an opening now to reformat the world bottom-up, the whole world. The massive shift that America is about to drive, including an embrace of our technology, will become an imperative for the world's countries to follow. Something like the American experiment or the American project that began with the American Revolution and was soon followed by the French Revolution in the 18th century will soon take hold in various parts of the world.

This age of enlightenment led to the development of the Western liberal democratic philosophy in many nations. This philosophy is characterized by many ideals that have been corrupted over the past few decades. Rationality, reason, and progress, individual liberty and rights, empiricism and scientific method, limited and democratic governance, pluralism and tolerance, and genuinely free markets. Our globalist decentralization project, the natural evolution of the American project, will bring new kinds of sovereignty to the people and communities of the planet. And it will grow viral, crossing different kinds of borders, because once you see decentralization at work, you can't unsee it.

Our tech ecosystem and socio-political movement must always be about progression towards rigorous decentralization in the deep foundational infrastructure of the world. With rigorous decentralization, we get all of the characteristics of West Western liberal democratic philosophy and more. Specifically, we get open source, transparency, and credible neutrality. We get permissionless participation and innovation. We get a world computer with a verifiable computation stack and software supply chain.

Web3 will be the world computer on which all the world's systems will eventually be re-architected bottom-up on the sounder foundations of decentralized trust and decentralized finance. With rigorous decentralization, we get censorship resistance and non-reputable transactions and attestations. With censorship resistance, we get instant on-chain news alerts, disclosures of political, business, and social events, and unfettered journalism. Shout-out to multiple concurrent proposers distributed globally. With robust real-time information dissemination and journalism, we get an informed public.

And an informed public is an engaged public. With informed and engaged public, we get healthy local, regional, and global participation in governance. Broad participation in open governance at all levels makes it hard for exploiters to capture and control the important systems of the world. With good governance globally, we get a healthy, rapidly evolving society. Waves of decentralization are cyclical.

See the ancient Greeks and then the Romans and the recent American elections. But the secular decentralization trend has been underway for centuries as monarchies have ceded power to nation-states, which have ceded power to joint-stock corporations, first national, then multinational. And technology has increasingly empowered communities and individuals. The trend is to make sovereignty more and more granular. A simple definition of the network state.

A network state is an online digital-first collective of independent actors. Can be humans, groups, or AIs who are aligned with respect to exploring and addressing one or more issues. Network states can be realized as DAOs, social graphs, online discussion forums, or a combination of tools. Network states benefit from new Web3 primitives like decentralized ID constructs, verifiable credentials, attestations, governance tools, et cetera. Network states have the ability to create their own magic internet tokens for different purposes.

Utility, loyalty, governance, money, equity, memes, et cetera. People who are aligned with the mission of the network state might be inclined to do work in exchange for compensation in the form of some of these tokens. Others might also find the tokens of value for different reasons. Network states that choose to work together may swap tokens to establish greater alignment. A network state can bootstrap itself following various strategies.

Bitcoin, Ethereum, and Solana can be considered a certain class of network state. Layer-two networks can also be considered a class of network state. To protect decentralization, we need rigorous, incessant, ritualized vigilance. Thomas Jefferson wrote, "The tree of liberty must be refreshed from the from time to time with the blood of patriots and tyrants." We too will have to tend to the long-term health of the tree of decentralized liberty, not with blood, but with attention paid and shrill commentary on on crypto Twitter and other discourse platforms, and with attention and gas paid to systems that are constantly monitoring the threats to decentralization.

Sovereignty refers to the supreme authority or ultimate power that a state institution or individual holds over a specific territory or group of people. Sovereignty has several dimensions. Domestic sovereignty, the state's control over its population and territory, international legal sovereignty, international recognition of all states' independence and authority, and no interference into the internal affairs of a sovereign. Sovereignty can be limited by constitutions, international agreements, or inter or internal divisions of power. One can imagine a Web3 plus AI uh One can imagine as Web3 plus AI enables new modes of living in overlapping network states, that we have the opportunity to to define new kinds of sovereignty.

And just as nation-states define their forms of sovereignty, we've started to define new forms online and on-chain. One, for individuals, online self-sovereignty in various forms via DID IDs and other identity constructs combined with reputational primitives like attestations, verifiable credentials, webs of trust and rating systems in which the raters have skin in the game when they vouch for something. Two, for communities, online sovereignty embodied in DAOs, social graphs, and other mechanisms. These are network states that will take very different forms. They will operate as sovereigns in online domains, setting rules for their participants that are of, by, and for their people.

Sovereign individuals are already becoming members or netizens of network states. Some of those network states will eventually have arrangements with one or more nation states. Some of those network states Sorry. Enabling temporary or permanent rights to be resident there. The state of Wyoming, for instance, allows DAOs to register as limited liability companies.

This is a small step, but we can think of it as cracking the door open. And that will lead to establishing relationships between network states and more traditional polities. Many nation states are facing catastrophic demographic challenges. They need more people to take care of the boomers and keep the economies from collapsing. Some nation states provide passports to citizens of other nations in exchange for investments in the country.

And some nation states actively recruit for talented immigrants. Canada has targeted recruiting 485,000 immigrants to become permanent residents in 2024. We will soon live in a world in which legislators and regulators consider themselves in the citizenry as they do in Switzerland. And compete for companies and people to choose residence there. The internet begat web one, which begat which begat web two, which begat web three, the re-decentralized web.

The internet started out decentralized. It was a bunch of protocols running on nodes distributed around the US, then the world on wires provided by telecom companies. The internet was loosely governed by the IETF, a decentralized organization. Web one also started out decentralized. It was a bunch of open protocols and specifications running on top of the internet protocols.

Web two picked up steam in the late '90s and early '00s as it became clear that there were billions of dollars to be made as some sectors of the economy were moving online and brand new sectors were being invented. Web two companies had exciting new primitives at their disposal in the form of protocols and open specifications and some new ones were created. But the dominant mode of operation of web two companies was closed source systems and if you were fortunate enough to grow your product into a platform, the standard strategy was to invite companies and users onto your platform so that they can get a leg up in offering their products. But when the platform felt it necessary to grow revenues further, it became opportune to rug pull those projects to capture their revenues. The web two platform strategy became became to build as broad and deep a moat as possible to stifle competition.

Moats, not bridges. Web two represents the centralization of the web. Eventually, web two on steroids became big tech. Big tech itself built Big tech built itself into a weapon of mass manipulation available to any actor who would pay. And Big Tech learned how to use AI and behavioral psychology to addict its users to its product.

One result is that discourse on the planet is now hopelessly polarized and dysfunctional. Big Tech has fomented as a negative externality of its business processes the shredding of the social fabric of much of the world. And now Big Tech on even stronger steroids is poised to convert its control of AI talent plus vast amounts of data and computation into building the most powerful tool in history for the centralized control of humanity. Fortunately, the pendulum is swinging back hard now towards decentralization and web three, the re-decentralization of the world wide web. Consensus was formed to continue the vision and mission of the Ethereum project.

And just like Ethereum, we're dedicated to progressive prudent decentralization of everything we do. Prudent because it must be done with care to ensure that we always focus first on the safety of and benefits to our users. And also that we never destroy value in evolving a project towards rigorous decentralization. We decentralize to build better, more valuable systems. MetaMask, for instance, is progressively decentralizing itself.

The MetaMask snaps plugin architecture allows users to add functionality to their MetaMask. Individual snaps are features created by third-party developers that MetaMask users can install directly into their MetaMask. And the MetaMask team has been leaning into account abstraction for a while. When the account abstraction dust settles, somewhat at least, we expect to expand MetaMask scope and capabilities with components embedded in applications and enable you to add superpowers to your MetaMask or to any project via Dan Finlay's delegation toolkit and framework. Continuing the pattern of progressing the vision and mission of the Ethereum project, ConsenSys Software announced yesterday yesterday that we're externalizing our Linea and network into its own ecosystem.

Linea is accelerating on the progressive path to rigorous decentralization and token-based community governance. Linea's evolution will be maximally Ethereum-aligned. DIN, the decentralized infrastructure network. Blockchains are complicated databases. Infura enables developers' products to read from and write to various blockchains with ease.

But in a web three world of potentially millions of blockchains, Infura can't integrate them all on its own. So Infura has been progressively decentralizing itself into DIN, the decentralized infrastructure network. A robust multi-chain RPC provider. DIN is already operational with 50 plus partner providers offering connectivity to various networks and is already handling 100 million requests daily. And DIN is about to evolve into an EigenLayer AVS.

Infura will become a premier specialized provider on the DIN network. Infura's openly sharing its optimizations, distribution to customers, and revenue opportunities with other providers in order to evolve the ecosystem. Bridges, not moats. Can't be evil. DIN, Linea, and MetaMask snaps enable permissionless innovation and onboarding to our infrastructure.

We will not be the gatekeepers as our systems become more rigorously decentralized. It will not be possible for us to deplatform projects. Bridges, not moats. Can't be evil. There are many other projects that are in our product development pipeline.

It runs from ideation through development through product market fit and into protocolization, externalization, and tokenization. We expect many of these to have powerful synergies in both functionality and benefits to the user. Standing up a proto-network state. The initial ConsenSys company, ConsenSys Mesh, began as a tiny multinational startup because we had to look globally to find people who had a clue about what we were doing. Becoming a large multinational corporation is not cool.

Becoming a global network state is cool. In order to operate most effectively in web three, we build bridges, not silos. So we're working towards making ConsenSys Software Inc. more permeable or porous. For example, we've had policies for a while that enable our members to spend more time spend some of their work time on projects outside of ConsenSys, like DAOs.

ConsenSys is embarking on a new phase in its evolution. ConsenSys Software Inc., several several of its product projects and other projects in the extended ConsenSys ecosystem and beyond will soon set up shop on what we're calling the ConsenSys network state. Network states are about alignment, transparency, broad governance, and collective benefit. We will progressively iterate in those directions.

The capital city or DAO of the ConsenSys network state will be resident on Linea mainnet, the first island composed of Linea digital real estate. While ConsenSys will operate throughout web three, we will consider Linea mainnet our home network on which we build cores of our critical infrastructure. We will continuously look to build synergies among our products via explicit on-chain agreements. And we will look to create synergies among our products and your products via explicit on-chain agreements. Our friends at Sobol, sobol.

io, are in the early stages of building an on-chain agreements framework that we will use to form agreements between projects that specify in explicit and measurable terms what should be done by each party and what compensation, yes, token compensation, is due based on levels of performance. Performance can be measured in usage of our products and protocols or in providing liquidity or in bringing your project onto Linea or attaining levels of performance in your project in terms of users, transaction volume, TVL, et cetera. We will be employing a new, yet ancient, meta work to earn. If a person or project adds value to the Linea ecosystem and/or the ConsenSys network state, they will be compensated in tokens based on on-chain explicit agreements. Many of you out there are already self-sovereign on chain, but we're all in the early stages of discovering what self-sovereignty means.

We will be living more of our lives on chain as our finances, identities, communications, art, and entertainment are increasingly mediated by open networks and decentralized protocols. The new relationships and communities that form will be the basis of new overlapping network states in which we will all participate. Today we're launching solves.xyz, a project inviting everyone to declare their personal sovereignty as another small step towards the decentralized future. You can go to solves.

xyz You can go to solves.xyz to attest to the kinds of sovereignty that matter most to you and write your support for the emerging world of network states and our liberation through them permanently on Linea. We have bigger plans coming soon. This is the beginning of a partnership with the community to build a network we all want to be part of. When we hear www in the decentralized future, we should think about a win-win-win world computer.

Humanity has flourished via communication and coordination capabilities that give us massive advantages over other species. Coordination requires trust. Satoshi invented decentralized trust, possibly the most profound invention in human history. Decentralized trust platforms are now broadly available to builders and users based on blockchain and smart contract-based credible commitments. Web3 primitives plus AI automation are about to enable humanity to distrust each other much less and collaboratively build towards a post-scarcity abundance mindset that will enable us to evolve a massively positive subworld.

So what does leadership look like in the decentralized future? Self-sovereigns in the decentralized future will be the CEOs of themselves and they will collaborate with other CEOs using credible commitments on Ethereum. They will have clouds of AI allies amplifying their capabilities and they will create complex delegations of on-chain powers with those AIs and with other collaborator CEOs. So what will leadership in a Web3 world look like? Well, that's up to you.

Thank you. All right. Uh All right, thank you guys so much. And Joe, we do have some questions. Uh let's go from the first one.

Uh what can we do in 2025 in terms of tooling to boost the creation of network states? Um well, there are lots of primitives out there um and uh we're exploring them. So um network states right now are more like proto-network states where where the primitives are available, but uh um a a few systems are using them. Uh as I said, you can you can call Ethereum a network state. You can call uh the Avara set of projects a network state.

So uh it's happening and we just uh we need to keep kicking the tires on our tools and and start living in them. Uh how can we make the ecosystem safer to allow real adoption in a decentralized world? Um say it again? Uh the very first question. Ecosystem safer?

Um we have to keep building and security auditing. Uh it's uh it's tough building uh Web3 on on live monetary rails with with the entire world watching. Um so it's uh it is a complicated prospect uh but uh we need to get better and better in terms of security. Uh here's another one. Uh We can actually take the second one if you prefer.

Um How can we more urgently shift that ecosystem towards reputational works where influence is in determined by contributions to a project according to its values? Uh so uh consensus is built uh a reputation system, uh an attestation system. We're working on identity systems or or aggregating identity systems. So um we're trying to figure out uh exactly that. Uh so whether it's reputation for MetaMask snaps or reputation for for your activities in a project or a network state, uh it's uh it's pretty much the same system.

So it'll get a lot of exercise. What makes a network a state? Um well, uh network state uh is a group of actors that are aligned uh to a specific purpose. Um it has capabilities. Uh it could be anonymous people, it could be identified people, it could be um um can have the ability to create tokens for different purposes.

Uh has the ability to set its values, to set its goals, and and to achieve its goals. Uh and we have one on the ecosystem fund. Would there be identity and reputation systems to align not just financially, but personally and professionally? Um so uh the forthcoming Linea ecosystem fund or or consensus ecosystem consensus network state ecosystem fund um will have um forms of decentralized ID, uh forms of reputation systems, um but it should also be possible to to be to operate as an anon. Uh you may unlock fewer opportunities, you might get compensated um less because there might be more risk in in working with you.

Uh but uh I do believe that as reputation systems uh grow richer, uh we should get much more comfortable um doing risky things with anons cuz you'll be able to to calculate your risk. Uh we have enough time for one more question. How's network state different from DAOs? Um a DAO is uh very much like a network state in its uh in its superficial definition. Um uh if you ask Balaji Srinivasan who who's been uh promoting the idea of network states, um there's uh a an element of formation uh which is initially on chain, uh but then uh he likes the idea that uh it will reestablish itself itself or establish itself um in physical context, perhaps uh in archipelagos all around the world.

And so um in his definition, a network state could be composed of a DAO and other constructs, it could be social graphs, it could be discourse platforms, but there will also be uh some sort of uh physical um touchpoint. All right, so our time is actually up. Uh let's give a round of applause to Joe, everyone.