Does Decentralization Matter? | Kevin Owocki & Cooper Turley

welcome bankless nation to this special episode that we are going to bring you here live on the bankless youtube and later on the bankers podcast today we are talking about the conversation of do users care about decentralization how do we onboard 8 billion people into crypto while also preserving our crypto values is that even possible is that a thing and so today i'm excited to bring kevin owaki and cooper turley uh two people who uh they're that are on differing

ends of the spectrum where cooper is really on the frontier of how crypto is getting adopted in new novel use cases and then kevin owaki is a builder's builder building out these systems that can scale up crypto values to hopefully scale to the whole entire world and i think these two individuals have very unique perspectives as to how to actually adopt get the world onto crypto systems in ways that uh that satisfy the needs of the users but also while doing things the crypto way and and i want to

have this conversation about what does it take to onboard the world and how much do we have to compromise along the way and do we actually have to compromise so we are going to unpack the question of do users care about decentralization here on this bankless livestream panel coming up next we will bring that conversation right to you but first we got to let you know about zirion and i would be sharing my screen but uh you might notice that ryan sean adams uh the ai has a bug in the system today so the ai is down so it is just me today on this bankless panel and so

uh zirion of course our partners at xeron we needed to let you know that xerion actually works across seven different chains and applications uh so whether you have your assets on the ethereum l1 the optimism l2 arbitrum zk sync whatever l2 you prefer or what other l1 you prefer xerion can get you to those other chains and so while there's many many chains out there in the world there is just one xerion and xeron can help you bridge across every single chain directly so

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and just private key portfolio across all of crypto and i think that's actually going to be a very relevant part of the conversation today is how do we have many chains how do we have many ecosystems and all of them be usable all at the same time so guys we are going to get right into the conversation of do users care about decentralization how do we preserve crypto values when we onboard 8 billion people into the world of web 3. so right after some of these fantastic sponsors that make the show possible we will bring you kevin owaki and cooper turley here we go so you've

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apps and services that you're already used to doing like swapping tokens and staking so if you don't have a ledger hardware wallet go to ledger.com grab a ledger and take control over your crypto welcome bankless nation to this very special conversation about how do we expand how do we project crypto values to eight billion people here we have kevin owaki an early contributor to git coin now host of the green pill podcast which you might recognize on the bankless rss feed which focuses on regenerative cryptonate

cryptoeconomics and how we scale crypto values to the rest of the world also joined by kevin awake is cooper turley an operator and investor in the creator economy co-founded friends with benefits advisors audience and a leading collector of music nfts and cooper is also a crypto socialite and has been experiencing the intersection of crypto and modern pop culture which is why both of these individuals are particularly suited to have this conversation where kevin milwaukee is deep into the bits the ones and the zeros and cooper is deep into the pop culture and we are

trying to get these two worlds to come together and make sure that we scale out crypto to the rest of the world while preserving crypto values uh guys welcome to the conversation i'm really excited to have you guys here thank you man excited to be here how do you do fellow kids kevin you are not that much older than us okay guys i want to start the conversation here uh we got cause we got to define the actual conversation decentralization versus usability are these things even opposites and are

these things the friction points upon which uh this conversation uh relies on cooper i want to start with you yeah i don't think they're opposites but i do think a lot of the times user experience is directly correlated to how decentralized something is you know to really state my opinion on this matter i think that the more decentralized product is historically we've seen the harder it is to use i don't think that's going to be the case forever but i think that's sort of the grounds for this conversation kevin what's your opinion yeah i i'd agree with what cooper said yes and um i also think that

decentralization is sometimes a really important part of the user experience if you're in a country where you can't trust the state and they seize your assets then that's a pretty big user journey hiccup also if you've got a system that's fragile and centralized and it goes down that's a pretty big usability problem that said as someone who uh has been building products in since 2017 at least from the start some of the tools to make project make web3 apps deeply usable um

to the standards of web 2 we just weren't out there when i first started building and it's been getting a lot better with the launch of of tools like the graph and uh various other libraries that have been built out there open source so i think the usability of of apps when you don't have those black swan events is catching up to the web 2 experience that we all kind of know and love i think there was a nuance right there kevin that i think we should definitely unpack and that's really just about uh do we actually need to change the definition of ux and usability inside of

web 3 because like you said if you know centralization allows for assets to be c's that's bad ux but that's not really what you would think about when you think the words ux when we i think we when we think about usability and ux that's we kind of stick inside of this web to mind frame of just like is this website easy to navigate do the buttons do things instantaneously and do they do what they want them to do uh so it's part of your answer kind of we need to actually change our definition of what usability is

yeah i mean i think that usability can be all encompassing if you'll allow me to just share my screen really briefly i i think a lot about this user experience hierarchy of needs which starts with functionality in that like the interface doesn't break and it's not slow does it have the right information on it are the aesthetics hot and does it allow me to do my job to be done is kind of at the top of that pyramid of usability and so i i think that you know one way to untangle this might be to go up and down that stack and kind of reason about

decentralization versus usability at different layers of that stack cooper you've met a ton of people who have come into the crypto space in 2021 and 2022. and i i think this recent cohort of crypto people is particularly interesting because they're not in my opinion from what i've seen they're not crypto people adopting crypto for crypto sake they're people adopting crypto to get something done which really changes their priority about what an application means to them and especially with with usability so what have you learned from

from helping this newer cohort of people come into this space what do they care about can you put us into the shoes of a new user and if that came in 2021 or 2022 yeah i would say it's really about ease of onboarding you know how many steps do i have to take to start using something today you know in most cases it's really around nft collecting for the most part so whether that's minting an nft collecting an nft joining a token gated server you know these are some of the use cases that i see happening most commonly with new people to web 3. and right now that on porting process has a lot of friction in

it you know i think to kevin's point being able to recognize that the custodial nature of these wallets is extremely important is a new paradigm that we haven't had to consider before you know when i sign into instagram with my email and my password i don't think about you know what are the assets that i'm holding under the hood of my instagram account and so a lot of these web3 products do come with the new novelty to them but i think the core thing that i'm focused on from a ux perspective is how much time does it take for me to say i want to use a web3 app to actually be able to use it in a meaningful manner and how do we make that window as small as possible

so when it comes to uh going from web 2 to web 3 there's got to be this inevitable ux breaking based on just the new paradigms that we exist in just like you said when you log into instagram you don't actually have to be worried about the assets that you hold so maybe this conversation is like there is actually no way to avoid this breaking of the ux just because we're going from paradigm a to paradigm b when you when you are helping people on board into the concept of like user sovereign and sovereignty with their assets like how easy is it to explain it

to them the the powers of web 3 is kind of where this ux thing actually breaks down i'll take a first crack at that i think connecting with a wallet instead of signing with the email has really clicked for a lot of people once they've actually been in the door you know when they go to two different apps and they're able to connect with that same wallet address i think it makes sense to them i think the difference there is that more broadly i don't think a lot of people are well suited to handle key management you know i think for people like us who have been in the space for a long time we understand the the notion of non-custodial versus custodial we

understand that giving out your private key as a non-starter so many of my friends have gotten scammed from just like negligence you know scammers are getting pretty good out there and key management is definitely a tricky situation and so to your point i think that um it's really important that we emphasize why connecting with the wallet is better than signing in with an email but with that i think comes with a lot of underlying risks and i think that's kind of the core area of ux i would say that's really interesting to discuss here in this this panel yeah i i would just add that you know when i think about this trade-off

between decentralization and ux i think a lot about um you know in in web one everyone had to learn what a back button and a url bar and a reload button i think there was a stop button that was on browsers back in the day um we all had to learn these new paradigms for how to traverse information what a hyperlink was and people kind of got over the hump right and so when i think about web 3 you kind of have to learn about private key management you have to learn about backing up your private key which is an important part of private key management

you have to learn about sending transactions gas um layer 2 architecture if you're going to be in the ethereum space and so one of my big questions is are we going to uh are are we going to try to shim the web 3 user experience into web 1 and web 2 which we already know people understand or are we gonna teach people these new primitives around key management and gas so like are we headed towards a world in which a lot of these d apps are a blockchain mallet with web 2 in the front and web 3 in the back or are we going all in on beautiful web

three locks for everyone and i think that you're gonna see a stratification depending on the use case uh between those two things yeah i think it's uh i think it's a mix of both you know my vision for what this works out as is that i think that most platforms will start custodial and they will front and cover the gas fees so people do not have to do that themselves but i do think it's always how it's going to function and so if you are an advanced user i believe that you can mature opt-in to sort of a more non-custodial approach there but i think for the eight billion people that david's referring to my guess would be

the mass majority of those people will never touch a private key in their lives yeah you know one interesting experiment out there is the burner wallet which i think was one of the earliest l2 wallets that just kind of felt like an app that you could use but it was so fast and so easy to send transactions on it without having to worry about the gas prices i i think that that's a great point that we can kind of like pull people along this this custody route into having their own private keys and learning about those primitives cooper when you've uh helped people on board and watch their

experiences as having to use crypto infrastructure again to achieve a goal not necessarily just to do crypto stuff for the sake of doing crypto stuff do people feel feel the power that they that of holding private keys as in like is that something that they feel empowered by or do that does that feel something that they are encumbered by as in does the responsibility of having your own private keys is that a burden for for them or do they actually think that that's cool and neat and then it gets them excited this is only my personal experience but

i have never once onboarded someone to metamask here in l.a and then seen them be like [ __ ] yeah i have a personal key like every single time it's like bro what am i doing like what are these words like just get me through to the thing and then once they get into the thing they're like okay wait i need eth2 then it's like yeah okay go on coinbase and then if they want to send from coinbase two metamask you actually have to kyc so they're uploading their documents it takes a couple minutes to process and then they're withdrawing and that whole process has been very difficult for me to be like yo you need to be in this world and then i'll sit with them and then it takes us 30 minutes to an hour of me being with that

person you know physically for them to get started um it's been tough you know to say the least one of the things that i tease bitcoiners the most when they say that bitcoin is going to take over the world is that i kind of tell them that well you guys kind of have already found all the libertarians that care about bitcoin like there's not many left of you to really scale out bitcoin to the rest of the world and what i'm hearing from you cooper is that that might also be true with people that get excited about having private keys and having control over their own money and assets kevin do you think the powers of

being your own custodian having control of your own money and assets maybe we've actually onboarded most of those people and the rest of the world actually might not be interested in those powers what do you think about that um i think a lot about drivers and barriers so what's the job to be done that they're trying to accomplish when they hit the private key roadblock or the kyc roadblock and and those are the barriers and so what are the drivers are the drivers enough to overcome the barriers and the problem in 2017 was that you only had this like

sort of libertarian football government kind of attitude that made you want to get over those barriers but now we've got uh nfts we've got d5 we've got quadratic funding so it's about continually lifting lifting up the bar or the drivers to get people wanting to incur the pain of learning about these new primitives to get them through the door but i don't know the developer uh take what i say with a grain of salt because my audience at get coin is mostly developers and people who already understand this stuff so i think that

i'm not really bearing the brunt of it in in a way that someone like cooper is yeah and david something i just thought about there is um for all three of us on this podcast we have a significant portion of our net worth in crypto i think for the average person that's joining crypto every day now they have less than a thousand dollars you know in many cases less than a hundred dollars and so when it comes to something like key management i think the reason we're so passionate about it is because it's very meaningful us you know if we lose that portion of our lives we're getting hit with a serious serious dent for a lot of these people that are joining web3 today they're treating it almost

like a burner experience in many ways shapes or form you know the most common experience i've seen is someone putting a thousand dollars of ether their metamask to go by the dumbest jpegs i've ever seen in my life on openc and that's all that they know and so when you treat it with that mindset i think that's why there's a different relationship with private keys because they don't see it as you know the means to their financial freedom they see it as speculative gambling for the short term what about the onboarding experience from for other ecosystems i've heard fantastic things about the phantom wallet with solana cooper do you have any perspective as to how much of this

is an ethereum problem it's not that much easier on sauna i think it's incrementally better but it doesn't drastically change the overhaul i mean you have a little bit better ui on phantom you're using a different token and it's a little bit easier to send and faster but at the end of the day i think the whole notion of setting up a private key and sending tokens to that wallet to be able to use it in the first place i think is the core blocker that we get stuck on irregardless of what ecosystem we're talking about i think the the meta conversation here is really about will crypto change the

world or will the world change crypto obviously like the internet changed the world uh because we first didn't have the internet and then we had and then we had the internet and that changed everything but we already have the internet now in the world of crypto and like now crypto still kind of optional at this point and so to perhaps to get crypto to eight billion people we actually have to change what crypto looks like in order for for for that to to change the world rather than just like well crypto's so clearly useful that the world is just going to have to change to adopt crypto

uh what are your guys's perspective on this this this friction i think we should keep increasing the drivers and keep decreasing the barriers to get into crypto one of my beliefs is that for 99 of the world their financial lives is not their investments they probably don't have that much savings and we're very privileged if we have savings in this space at all a net worth um and and so i'm a big believer that if you want to make have 99 of the world adopt web 3 then what you're going to

need to do is hit them with a use case that is something that intersects with their financial lives what does their financial lives intersect with jobs we got to build this internet of jobs where people can earn crypto earn their first crypto instead of buy their first crypto because 99 of the world their financial lives is not their investments it's earning and a lot of times it's pretty tight it's paycheck to paycheck and so i think that it's really important to build web3 earning experiences if we want to onboard a lot of humanity and i just think it's so

cool that um santi siri of ubi there are people in argentina that are living off of ubi in santi siri i think it's so great whenever i meet a developer at uh eth event and they tell me oh i got my first coins at i get coin and like you guys got me through three months of the bear market last time so i think earning is gonna be a huge blow away use case then its time has not come yet at all i absolutely love that yeah and i can really echo that sentiment here in la2 because one of those drivers that does get people to go through the hoops of

downloading metamask and putting eth into their wallet is the ability to sell their creative work you know i think nfts have been such a core driver to this chapter of web 3 because a lot of people are earning income through selling creative work on chain and i think that ability for someone to have a new marketplace and a new medium to be able to transact with their peers has been in my opinion the single biggest driver of success in web3 over the course of the last year and cooper you're a big builder in the world of the the creator economy which i think is what more or less you alluded to right there can you just talk about uh just the drive

of adoption that comes from sustainable revenue generating uh parts of of web three like is this do you think this is going to be responsible for like five to ten percent of adoption or like 50 to 60 of adoption like where how important does this aspect of actually being able to earn money natively in web 3 drive adoption from your perspective i think it's the fundamental building block you know when i look across the board of my friends who have retained web3 it's been those who have been able to consistently sell their work on chain you know it's one thing to buy ether and have that in your wallet and see it's go

up it's another thing to go and buy an asset on openc and then flip it for a little bit of profit but the people who are most involved with web3 today are those who started out by selling an nft or two using that money to then buy another jpeg and then continue that cycle i think once people realize that web3 is the most opportune place for you as a creative to be exploring you know relative to any other marketplace that exists today once you take a couple footholds into that place you know it's not only the ability to mint and tokenize your work it's sort of the community spirit around it and so when i sell a work on foundation or when i sell

a work on openc there is people on twitter that are like coming and giving me flowers every time i think that's where we start to get into sort of the stickiness of this is actually more on sort of you know like how how personal the relationship do you have with this ecosystem and how much of a core role does it play in your life but cooper in your answer you talked about things like like open c which uh you know i wouldn't even classify opencs fully web 3. uh they i've heard from members of the openc team as they kind of consider themselves web 2.5 right like you own your own assets uh your assets are are

coming from a next place external to open c but openc can still censor your nfts they can still like you know take like close off your your account and so these are some of the compromises that we've had to make on our crypto values in order to have like an entire bull market in nfts like imagine whether or not like without openc would we have even had an nft ecosystem or an nft bull market so into my mind that's an indication of just like oh we do need to compromise in order to have this ecosystem uh we had like the looks rare

platform the more decentralized version of openc which isn't even fully decentralized uh still actually hasn't gotten the adoption that openc has so like where do you see the role of compromising in in the world of trying to get these people onboarded into into platforms that enable them to be self-sovereign builders yeah i think it goes back to how easy it is for the platform to use you know the reason that openc is winning right now is because it has a superior brand and it has a good product an analogy i like to make here is when sushi swapped forked uniswap the reason that that

project went differently is that uniswap was driven by its code and its underlying protocol parameters it was not necessarily driven by the product experience itself now openc isn't really innovating too crazily on a technical level from a protocol standard point it's winning because it has a strong product and you can go and you can search for these things and the ui stays up most of the time and you have trust that what you're buying is reliable and i think it's a very different standard when we start to compare you know what is the difference from a unit swap versus sushi swap fork from an open c versus looks rare the unit swap for a sushi swap is on a protocol level with

the smart contracts opencvers looks rare for the most part on a product level kevin how do you see the this trajectory uh like in the in the future how do we build out systems that don't compromise on our values when it's so obviously easy to onboard more and more people if you just take shortcuts well you're probably asking the wrong guy because i built bitcoin web 2.5 back in the day let me put my hand to the sky and say sorry that i did it that way but the tools truly weren't there in 2017. um uh so my experience is that um bitcoin's

built web 2.5 when you go to getcoin.com it's a server that we manage that's centralized um spent a lot of time during the bear market just trying to survive and we talked about rewriting it to be decentralized and it just was like always number seven on the list and um now that we've raised the round from paradigm and kind of like fully committed to becoming a dao we're in the middle of we just announced grants 2.0 which is going to be a protocol based approach to get coin grants and it's

going to take all the tech debt and debt that we have from the old product and flush it out the window and the hope is that grants 2.0 is a credibly neutral foundation for bitcoin grants in the future so i think that we're kind of like right in the middle of that transition and you know what we did in 2017 got us off the ground it made us into somewhat of a household name in the ethereum space but it's not the future of credibly neutral public goods funding and that's a very bitters

pill to swallow um to have to totally reset on your product and go in another direction but luckily we've got the right community momentum and capital to make it happen now and so we're just really investing in in reinventing uh turning the company into a dow or i guess like bitcoin grants into a dow and so we're right in the middle of that transition so uh i guess i'm the wrong person to answer your question is the short answer of uh to that uh bitcoin right now is very web 2.5 but we are trending towards becoming web3 which i think is kind of like an interesting counter example to open c which is just

kind of on these this like ipo route um bitcoin is on the route to becoming a dow and there's like a counter factual version of the world in which the teams could have chosen to go in a different direction but um i think that we made the right choice by deciding that bitcoin grants was gonna become a dow yeah it's definitely the harder path but i think definitely the more admirable one and when i think of what makes a product web 3 quote unquote i think about whether you're connecting a wallet or signing in with an email and so david i would agree that something like openc is you know web 2.5 many senses but to

the average user the fact you're coming in and signing in by your connecting your wallet i think that's the level of depth to which they consider that conversation about whether or not this is a product for me it's the forkability it's can i go to this code base and fork it and set up my own instance of it if my right to exit if i don't if i don't like the system as it exists and you don't have that with open c you kind of have it with git coin but you have to deal with our clunky code base um i think austin griffith is the king of fork ability i'm always working with him and he's always like you know fork this template that i made or fork this app that i made and

that's kind of what we aspire to right now at get coin with grants 2.0 i think you see the difference in framing there too because we start to consider 8 billion people in web 3 the amount of people i even understand what a fork is or how to even do that in the first place in my opinion is going to be like super marginal that's not to say that it's not important but i think that's where like the lanes start to differ right it's like what is the depth which people can actually choose to do something with these systems if they want to back to my other point i don't think most people will ever be able to do so or even know like what that looks like yeah i mean i think that it's true that

those people don't understand forkability but they all get the sense that they're trapped in facebook while facebook's walled garden so i think there's an intermediary audience in between the eight billion people and the protocols and that's the developers that are building on top of them and the early adopters um like are they are they able to fork the protocol and create a better customer experience for the rest of the world based off of that forked protocol is like the intermediary kind of wedge between those two audiences i think kevin can you talk about the the the right to exit or the ability to exit and

how that fits into the definition of like web3 values can you just for listeners that are new to this concept can you kind of unpack that for them yeah totally um so basically fork ability in the right to exit is basically like i could leave imagine a world in which you could leave facebook and you could not only download your data but you could take your social graph with you to another facebook clone that had different values that wasn't run by zuckerberg that was run by like anti-zuckerberg or something like that and so there's this transportability of your information

from network to network um that is involved in your right to exit that doesn't exist in web 2. and one of the dreams the big dreams of web 3 is that i could take my social graph and my relationships with me from site to site without having to get trapped in anyone's walled garden so that right to exit is is is that but it's also anyone being able to fork a code base of a protocol and launch their own version of it which you know can be a friendly fork which means that you can

the the team that initially launched the protocol converge those changes back upstream if they're a really good idea or it could be an unfriendly fork like a sushi swap where it's like we're just gonna compete with you um and i think that really the value that we're kind of like chipping away at here is the consent of the governed right in political philosophy there's this idea that the consent of the governed is the only legitimate basis of governance as opposed to like the divine right of kings in like the 16th century and um the only consent of the governed we have with these facebook with these giant tech monopolies is that

tick i read the terms of service and no one [ __ ] read that terms of it's 35 pages long you can't negotiate the terms of services totally asymmetric power between the consumer and the people who've put the platform out there and so the idea of not only giving users governance of the platform formally with governance tokens but also allowing forkability creates that consent of the governed feedback loop which hopefully will lead to better products and better consumer experiences because users can exit if you're like i don't know if i can curse on this if you're fudging it up they can they can exit and i think