Hi everyone, this is Charles Hoskinson broadcasting live from warm, sunny Colorado. Today is April 18th, 2023. I'm making a video to talk a little bit about the MBO, right-clicking, and growth hacking.
As you know, I troll the internet from time to time. Let me share my screen real quickly. There's a tweet that says, "Why don't we have this kind of support on Cardano?" This guy just had a call with Polygon Labs, and I must admit, I understand why projects would want to build on the Polygon ecosystem.
One, looking for marketing? Great! Let us know how we can help. Two, looking for investment? Awesome! Here’s a contact to talk further. Three, do you need help with NFTs? Splendid! Here’s a contact to help you out. For developing a mobile app, we are interested. It’s kind of like Netflix; here’s the contact to help you with that. You actually feel welcome and wanted. I sure have missed this feeling.
Going back, he says, "because Charles prefers to right-click save an NFT and use it as a profile picture instead of giving value and ownership to the NFT." So, guys, Cardano is like Bitcoin in that it’s a decentralized protocol. Nobody owns it, nobody controls it. Unlike some of these ecosystems where the founders have allocated boatloads of money and a massive pre-mine towards customer service roles to help you, it’s a self-boosting ecosystem.
Now, the founders of Cardano, myself and others, anticipated the need for a Community Fund to get things done. That’s called the Treasury, and there’s 1.5 billion ADA in the treasury and the point of MBO 1694 is to create the rails for you, the community, to unlock and decide what level of support you want for growth hacking in the ecosystem.
If you think it’s a good idea to have a growth hacking group, let’s call it the Cardano Ecosystem Group or something like that, whose day job is to be the first point of contact for someone building on Cardano, then go do that. You, as an ADA holder, have the prerogative and right to vote for that and organize it as you see fit.
It’s very important to understand that Input Output was never given that mandate or money or desired to be in that role. We never signed up for that. We do protocol design; we do engineering. We don’t do growth hacking out of necessity. There have been times where we’ve gotten involved, like Cardano 360 and other places, because it was necessary, but we were never compensated, and there is no official party to speak on behalf of Cardano.
As with Bitcoin, it’s a completely decentralized ecosystem, and people have to decide how best to participate in it. Now with the MBO and the treasury, you can wake up and say, "We do want an official entity, and here is the endowment to go and pursue that," along with the KPIs behind it. That entity could do things like say, "We will get 500 NFT projects to exist on Cardano," or "We’re going to go get 100 dApps to be built on Cardano." They could pursue that, and that’s perfectly reasonable and fine.
That’s really the point of the MBO and the point of MBO 1694. It’s to give a platform for those kinds of discussions and eventually allow those discussions to converge, not only to a decision point but to accountability and dedicated funding to get these types of things done. There are some shining beacons in the ecosystem of cryptocurrencies where people have done this growth hacking very well, and it would be really cool to see bespoke organizations for other things.
Now, regarding the right-clicking, I’m still absolutely astounded by the low intellect of this conversation. To go back to what happened, somebody decided to make an NFT based on a picture of me. It’s a picture I own the copyright to, and it’s my likeness. They made an NFT of that derivative without my permission. I thought it was a pretty cool NFT and didn’t make a big deal out of it. To advertise their NFT, I had made it a profile picture. Apparently, I should have paid them money for art that was derived from my intellectual property. How stupid are you people?
The artist didn’t mind because they understood the marketing value of it. By getting that kind of exposure, it helps them sell their whole collection, not just that particular one. You know, a million-person Twitter account did it. I didn’t mind my intellectual property being used because I released most of my things under a Creative Commons license. But apparently, this is right-clicking. You need to grow up and realize that there is no free lunch and no get-rich-quick scheme in life. Everything is connected to the value you create, the ecosystem you create, and the community you curate. Sometimes, you need to have some tough love in these things.
Cardano is not "batteries included." It’s not a nice bow tie of an ecosystem where somebody else is going to do everything for you. Like Bitcoin before it, Cardano is a fully decentralized ecosystem, which means no one controls it, curates it, or is in charge of it. No one wakes up every day and says, "I will take care of you." If you want that, there are other ecosystems that seem to provide that. Cardano is open, and if you want something done, you do it. You rally people and get things done.
For example, we think it’s a good idea to have a more sophisticated governance layer than anarchy on Cardano, so we and others are advocating for MBO 1694. We have to build stuff, hold workshops, and do all kinds of things. There are other people advocating for things like DC Spark, which is advocating for SIP 38 and pushing for better stuff in the protocol for Layer Two and for Paima and other things. The Foundation is advocating for a bunch of stuff. These are independent advocations of mutual coincidence of wants and needs, and that’s how decentralized ecosystems work.
You don’t get those "batteries included" unless you want to hire somebody to do that. If you think that’s a good use of the Cardano treasury money, that is the discussion, and it then has to compete against all other uses of the funds in the Cardano treasury. Diversification of the clients in the ecosystem, wallet standards, programs, quantum resistance, throughput enhancements, roll-ups—those are just some case studies.
A data availability layer, a persistent storage layer, enhancements to the side chains model, dozens of concerns, additional DSLs, for example, porting Catalan or Open Law to Cardano and giving us a legal DSL to embed inside of things, a legal defense fund—dozens of things. All of those are legitimate, and you, the community, through the MBO and through MBO 1694, can participate and talk about those types of things. The point is it gives you the power to make decisions based on your wisdom about what directions you need to go.
If you go on Twitter, Reddit, or other channels and complain, "IOHK, Charles, why are you not here to save us? Why don’t you do this? Why doesn’t Cardano have this?" Well, I don’t have the authorization, I don’t have the power. I can’t just take money out of the treasury. I can’t just say, "Yeah, this is what we’re going to do." Sorry, it’s a decentralized protocol, a decentralized ecosystem.
There are more than a few people on Twitter who say, "Boy, we hate Charles Hoskinson but love Cardano." More than a few people have accused me of all kinds of crazy things and say it’s a cult and all these other things. Meanwhile, the reality on the ground has always been the same: it’s a decentralized protocol.
If that’s what you want, then we need to work together to get this thing off the ground with MBO 1694 and put it all together. We also need to be smarter in the way that we argue for certain things. For example, with NFTs, if we want to win there, we have to be the best at giving people the ability to build very complex, imaginative, and unique experiences.
For example, with Marlo, we’re exploring right now combining with ChatGPT and other things so you can use AI-assisted DSL to make NFTs. How about that? It’s pretty interesting. You have to be really good at innovating in areas that are going to become long-term persistent pains for people, like the intellectual property and governance of NFTs, which is super hard. When they don’t get it right, they get rug-pulled.
You have to be really good at linking these things to the markets that create organic demand, like the metaverse, GameFi, and these types of things where there’s persistent demand as a consequence of the operations of those systems, as opposed to the collection of the week, which is the pet rock. Then you have to think really carefully about the business models that are enabled by these things.
For example, the progressive NFT idea, the stateful NFT idea that DC Spark has been pushing. If you do these things in just the right configuration, you have a business model advantage, an ecosystem advantage, and lo and behold, it grows, and you make money. But more importantly, you’ve innovated, you’ve disrupted, and you’ve changed a project. That’s how you win in these types of things. You have to take advantage of the resources you have, have great vision, and bet correctly.
The point of a treasury and voting is to say the wisdom of the crowds is superior to the wisdom of the enlightened masses who say, "Trust us." There are too many projects in this industry that have woken up and decided that a group of self-appointed enlightened custodians are going to fix everything and get everything done for you. You know what ends up happening? They start messing up and then just walk away with all your money.
For example, there was a certain cryptocurrency that raised four billion dollars that shall remain nameless, where the founding group is enjoying the fruits of those fundraising labors without any accountability or fiduciary responsibility. In fact, their ecosystem fired them. That is the moral hazard of the enlightened few who can never be fired and hold the resources.
The point of MBO 1694, the design of Cardano, the Treasury System, and decentralization is that those kinds of things can’t happen by design unless you choose them to, in which case you voted for it, and you have to deal with the consequences of it collectively as the Cardano masses.
The coming years are going to be interesting. We have a big technological advantage in terms of science. We know better than most where things can go. The engineering advances are speeding up rapidly, and the ecosystem is starting to speed up as well. Let’s look at the recent Massari report that came out for Q1 of Cardano; it was our best quarter ever in terms of growth metrics. There’s just no aspect where it wasn’t an amazing quarter for Cardano, so we’re certainly on the right side of history there.
Now, is it easy to build in the ecosystem? Not really. It’s hard for a lot of people, so that’s a KPI that needs to be corrected. There are a dozen different ways to solve it; some are protocol-level, some are documentation SDK-level, some are accessibility and skill acquisition-level, and some are just good old-fashioned business stuff. There needs to be better incubation and acceleration capabilities in the ecosystem.
The point of having the treasury was to give a resource pool to accommodate that, to make decisions about how the ecosystem growth hacking is going to be done. People have to debate it and decide it. The point of the MBO is an aggregation point for these things.
For example, today we had a great discussion with one of the Voltaire working groups with the Foundation about having wallet standards—something so simple as certified wallets versus uncertified wallets. Why? Because if you’re going to put billions of dollars of value into things, it’s probably a good idea to have a certification showing that the thing you’re putting your money into is secure and safe against a known standard. Pretty simple, right?
Who needs to get it done? A working group. You get through the MBO a whole bunch of wallet makers together—the Nomis, the Typhons, the Exoduses, the Flints, the Laces, and your eyes—and you have a representative sample of each of them discuss what’s important and what’s not important. Then you create a certification standard as a SIP. Once you have it, you can use the treasury, for example, to offer bounties and incentives for wallets to get certified.
That means that no matter what your preference is, your preferences will be safer—not completely safe, because nothing can save you completely—but at least safer than where we’re currently at. Now, is that a good use of our time and money? I think so.
On the wall outside, I’m just one voice there. Lace is just one voice there. There’s also Nami, Flint, Typhon, and all these others in the ecosystem—more than 15, I think, now. You have to bring them together and have that conversation. That’s one thing. What about NFT standards? There’s SIP 60 and all this other stuff. Somebody’s got to bring a working group together to talk about all the needs of the NFT people and where they’re having trouble.
If that’s the case, then they can voice concerns, and those things can become part of the Cardano roadmap. Treasure allocations could potentially be made, and new technologies could eventually be invested in. That’s how it works; that’s how you get it done.
That’s what we need to do as an ecosystem. That’s how we achieve sustainability and wisdom in the decisions we make as an ecosystem. Year by year, you get consistency in a good ecosystem and good representation. Is everybody happy? No, because they never get completely what they want. However, they can at least say it’s a fair process, and these things are only as good as the level of participation.
For example, that wallet standards group—if only two wallets participate, does it really matter? No. What matters is the ones that do have the population and are able to get it out to a representative sample of the majority of ADA holders. Otherwise, it’s a failed standard, and it’s the same for most of this other stuff.
We have to think carefully about these things, like growth hacking, and we have to think carefully about the MBO. Right-clicking is just an example of intellectual property. Who owns it? What’s fair use of it? Why don’t we leapfrog that and embed intellectual property into the NFT issuance? If we have AI-assisted NFT generation, it can actually assist with that too, and you can have all kinds of templates. Then we all know what the fair use is and who has the right to do what, where, and what owning it actually means, which is kind of an interesting thing.
In terms of community support and ecosystem support, because my words are so often manipulated, misunderstood, or misrepresented by dishonest people, we do everything in our power at IO to try to be a good actor in the community. For example, at CNFT Con, we want to bring a major presence there. In fact, I had a meeting today just about that, and I’d love to get a 30 by 30 booth if we can figure out how to put one there and be one of the main sponsors of the event. I really love that part of the community.
I’d also like to support other things, like sponsoring the Cardano Summit that the Foundation is putting on, and also have a presence at Web Summit and other major crypto venues to try to spread the good word of Cardano. We try to help community projects where and when they make sense. For example, we really love TX Pipe, we really love Block Frost, and we really love a lot of these things. It would be cool to make sure they get the support they need to grow and flourish and potentially replace some of the core infrastructure and further diversify it.
But you’ve got to understand we’re one company amongst many, one voice amongst millions, and we do not have ownership or control over the situation. All I can do is offer suggestions, and all I can do is, within my own company, build some technology. Ultimately, you have to decide where to go with it.
I’d also like to point out that there’s an increasingly disgruntled group of people in the Cardano ecosystem that are actively hostile to IOG, which limits our ability to build consensus. For example, recently we released the Lace wallet. All along, we said Lace was going to come out, and it was going to be very simple and elegant. We’re going to add features every few weeks to Lace wallet. So when we first start, it won’t be a super complex wallet, but over time, that feature set will grow.
People were very quick to criticize and say that we shouldn’t have released it and that it’s a compromised product and that the community can do better, even though we told them in the very beginning that Lace would start small and grow quickly. When you point that out, they play the victim and say that we’re being bullies. Those people aren’t insignificant; they have a voice in the ecosystem.
When SIP 1694, if it gets passed, comes into play, they probably will become d-reps and make it their life mission to vote against every single thing I propose, not because there’s merit or lack thereof, but because of a personal distaste for whatever reason. That’s the point, and that’s what happens. It’s unfortunate, but it’s the reality of decentralization. You have to accept the good with the bad.
While you gain the overall wisdom of the crowds and so much more mind share when people are willing to collaborate, you also accept that there are groups of people that are going to play the victim, lash out, and use the powers they’ve been granted to harm the ecosystem. From my perspective and from their perspective, they’re saving it from an evil tyrant. Who’s right? Well, it’s up to you to decide, and that’s the point.
The next six months are probably the most pivotal in the history of the Cardano project because it’s the birth of a new government and the unlocking of a lot of resources we’ve all mutually sacrificed for. Twenty percent of all block rewards have been put into this pool, this rainy day fund, for you, the community, to decide what to do. The same goes for transaction fees. An enormous amount of trust has been invested into this concept by all of us, and we all sacrificed for it. Now is the time to reap what we sow, for better or for worse, and a lot of hard decisions have to be made.
The point of organizing functions like the MBO is to do it in a structured way so that
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