SKALE has launched the Block Insider Series, which brings together prominent personalities from the PoS ecosystem for an online panel discussion that lets attendees peek at what goes on behind the scenes of their favorite projects. The first event was held last April 29 with more than a hundred in attendance.
Sunny Aggarwal from Tendermint (a core contributor to the Cosmos Network), Nicholas Platias from Terra, and Baek Kim from Hashed shared inputs from a good mix of developer, validator and investor perspectives. SKALE CEO Jack O'Holleran joined and moderated the discussion. The talk centered on how real quality projects managed to remain focused on building their products, continue with their go-to-market and business growth, and even realize new efficiencies despite the sudden disturbance of a global crisis. With the associated uncertainties in the traditional markets, the emerging field of decentralized finance was also discussed at length.
Overcoming the challenges
Making the most of every minute of the one-hour event, the panel dived straight to addressing the elephant in the room. Perhaps the most striking question in everyone’s mind was on how the emergency guidelines have affected the operational procedures, if not the actual development workflow, of crypto projects. Baek said that he has observed that the level of productivity of the projects in Hashed’s portfolio even looks like it’s at its highest right now. He attributes this to crypto-native tech teams typically being no stranger to remote work. Indeed this is quickly confirmed by the others. Although some of the projects may be maintaining multiple offices, with dispersed teams at different locations, the officed staff usually already worked partially remote even pre-coronavirus and inter-office communication has always been remote. The adjustment to a necessarily fully work-from-home arrangement has been amazing. Terra’s Nick Platias added that the transition has been a lot smoother because, even for those who usually stay at the office, work is tied to a computer and not to a specific place, maybe unlike the case of doctors, lawyers, and those in occupations who need the traditional workplace.
Baek noted that the community quarantines imposed in many parts of the world have helped with making communication more quantitative, increasing productivity, and cutting down on travel expenses. Although attending conferences is good for networking, which helps with pursuing partnerships and integrations, and more importantly, brings the projects in front of people who might eventually be the ones to later build on or use their products, having a moratorium on traveling around the world has not completely been negative. Sunny Aggarwal feels that this has made it easier to drown out everything and simply focus on code.
Ultimately, it can be said that crypto projects are not ‘business as normal,’ but business as well-adjusted and optimized to the prevailing conditions as possible.
SKALE’s Jack O'Holleran asked Sunny if he can share more about how Cosmos has found a better way to work amidst the crisis. Sunny went on to talk about Tendermint, a principal development company within the Cosmos ecosystem, and that over the past few months there had been differences of vision in Tendermint over the development direction to take moving forward now that much of the core protocol is ready.
Tendermint leadership wanted to start building on the application layer while some of the engineers wanted to keep working on the core protocol, so the latter have eventually put up their own group. No one left the Cosmos community, though, and Sunny believes that what happened is positive for Cosmos. More than a product of COVID adjustments, this happened as a result of the Cosmos ecosystem maturing. In a mature ecosystem, the way the protocol would thrive is with many development teams individually but cooperatively working or building on it. So communication changed from team management to collaboration between separate organizations.
That Cosmos story is instructive of what to expect when a blockchain protocol grows and matures into a truly decentralized organism not owned by anyone. It’s positive and natural, especially post-launch, when decision making is transferred from the core development team and distributed to the entire community.
Baek also touched on the ‘taboo’ topic of treasury management, how projects spend funds, and how much runway they have compared to how much they have raised. He shared that he is seeing crypto projects that are better at deploying capital than Silicon Valley start-ups. Awareness in this regard has increased a lot since the time when unguided projects proliferated during the ICO craze of 2017.
Missing the spontaneous pollination of ideas
Sunny brought up that even though Tendermint has always been remote-first and the work perspective is not really that different now than it was before, he feels that people are missing out on the spontaneous conversations. Even outside of work, the crypto gossip while just hanging out in person with friends in the space keeps him abreast of what’s happening in other projects. This very important and also very organic way of cross-community pollination of ideas has inevitably dried up given the circumstances. He suggested setting up informal online hangouts for serious builders in the ecosystem so that everyone can still keep track of what everyone else is doing.
Jack remarked that the cool thing about the blockchain space is that everyone’s pushing towards the same goal and that the space is going to grow so big that there’s a place for all the quality projects. While on the surface, it might superficially look like some projects are locked in stiff competition, it’s typically more like a ‘coopetition.’ Many of the core developers that drive the space have already formed deep friendships even though they may belong to different open source crypto projects.
Related to the fewer casual and spontaneous interactions compared to when there was a shared physical workspace, to offset this, internally the projects can try experimenting on creative team building efforts. SKALE has considered holding remote team activities like, for example, a cooking class.
Full remote, all office, or mixed?
The coronavirus has basically made it necessary to work fully remote. But going back to the earlier talk of projects fielding teams in separate offices pre-pandemic, Sunny wondered if it may be best to either have everyone on one spot or everyone distributed, but not mixed, as that would be exposed to the “worst of both worlds.” The mixed setup would likely inherit the lack of the spontaneous interactions one would have at the office yet will not bring the benefit of more tightly synched records that a full remote arrangement could bring.
Jack chimed in that he believes the best practice for dealing with that as a venture starting out is to have no main office, no ivory tower where a core group resides with the other offices merely serving as appendages. If the culture is one that cultivates an environment where everyone feels that they belong in one company, where all offices are viewed and treated equally, a mixed arrangement should work out perfectly.
Effects on business growth efforts
For Terra, Nick Platias explained that when it comes to their Korea go-to-market and growth, they have observed via Chai, their payments application, a variance in the impact of coronavirus to the merchant usage of Terra. There’s been less usage offline but, on the other hand, volumes for e-commerce went up. Overall, there’s not that much disruption to their efforts in Korea, although there are other markets and jurisdictions where the impact can be felt more. This highlights how the impact can vary across markets, and across products and services.
Baek added that there’s a difference with how stimulus/aid money are distributed where in the U.S., $1200 started to get distributed through traditional financial channels like banks, in Korea, since 90% of payments happen online, the government can ask everyone to use an app. Also, because of its developed fintech sector, Korea is able to mint virtual currencies for targeted use in certain counties or for specific purposes. These may well be the steps that would lead to wider use of digital currencies through centralized forms first.
Nick and Baek reported that social conditions, at least, are almost back to normal in Seoul.
Effects on validators
Sunny Aggarwal, through Sikka, also wears the validator hat. He said the global crisis has virtually no effect on the validator front. It has always been a remote business with almost all operations largely happening at third-party data centers.
Data centers don’t really move around nor would they ever be asked to close down, especially since they power who knows how many applications relied upon by countless people stuck at home.
Broaden awareness of crypto
Jack O'Holleran shared that because of macro conditions, he’s seeing more interest and curiosity in blockchain and crypto from people in his social networks who were not that into crypto before. Sunny observed this renewed excitement from those that are already crypto believers.
Jack believes that fears of economic instability and disruption of norms are driving increased awareness of the alternative financial systems being built around blockchain, but that much of these raised expectations are still a long ways out from realistically happening.
Nick Platias recognizes that the events in the global financial sector are being used by both sides to push their narratives around crypto market economics.
The sudden market drop in early March rattled DeFi with liquidations and other issues. Nick thinks such shocks and tests are important and will strengthen DeFi as the industry matures. There must be more active conversations on how to design and build DeFi to become ever more robust and resilient against black swan events.
Baek Kim finds it interesting that as the DeFi stack gets built, it allows the average person to take a stake in and grow together with the system. This was not possible previously in Finance 1.0 and this decentralization is what is very attractive to many people. There is still much work left to be done but the growth of the top DeFi projects in the past months, and the development of the tools that support them, are very impressive.
Sunny Aggarwal shared that he never bought into the trustlessness aspect of DeFi. Many of the generally accepted specifications in DeFi, like the requirement for overcollateralization, stems from the need for trustlessness. He believes that the real value proposition of DeFi is on openness and transparency, and not on full trustlessness. Technology can be utilized to leverage existing trust relationships, perhaps by employing Web of Trust-style mechanisms to make interactions that weren’t possible before now possible. He sides with the idea of building an open financial infrastructure that would accommodate the transfer of the existing financial system unto it, instead of being its own parallel financial ecosystem.
Nick agreed with Sunny that it’s easier to move forward and get adoption by integrating mainstream finance into DeFi. In fact, Terra is actively doing R&D on a project they call Anchor, which is being designed to allow crypto cash flow and eventually also traditional assets to be used as collateral in DeFi’s lending and borrowing markets.
Q&A: How do stablecoins maintain liquidity and trust in a volatile global financial environment like what we have today?
Nick answered that there are lots of different approaches and how each type of mechanism would fare is very much a function of single points of failure and how direct the interaction is with the mainstream financial sector. From Terra’s perspective, stability is derived, first and foremost, from actual usage.
Baek, speaking from an asset management perspective, thinks that dependable liquidity would come from two sides: continued improvement in the DeFi infrastructure and the entry of financial institutions into crypto.
Q&A: What are the projects/guests currently working on right now?
Terra is working on Anchor, which is a protocol that lets people borrow and lend using tokenized cash flow assets such as liquid staking.
As part of Cosmos, the focus is on pushing towards IBC Protocol launch. The Game of Zones is also starting in a couple of days. Personally, he is engaged in Web of Trust-related research and in “research-y” projects on the application layer.
Hashed’s main mandate has always been to be a bridge between crypto-native and existing businesses in terms of go-to-market, so Hashed is busy helping out the projects in its portfolio with that. Hashed is also now looking in the area of fintech and virtual entertainment, which can bring some interesting synergies and partnerships with its crypto portfolio.
For those who were not able to join the event live, you can watch a recording of this event on Crowdcast: https://www.crowdcast.io/e/building-in-high-turbulence