On DApps

hi everyone this is charles hoskinson broadcasting live from warm sunny colorado always warm always sunny sometimes colorado today is december 2nd 2021 and i wanted to make a video on dapps basically to discuss a few things as i mentioned there's some workshops micro summits that are going to happen and some other minutiae so first and foremost let's talk about certification so as many of you are aware one of our big passions is creating a way of differentiating dapps that have been certified from dapps that are uncertified so what is certification and that's a really interesting question in it can range everything from an auditor has checked it and filed a report and told you that it's been audited to some form of verification against a formal specification so there's a very broad range of definitions here so within our own company we have actually a pretty broad range of definitions and what we're trying to do is aggregate down to four levels so uncertified level one level two level three so what we're going to do is hold a micro summit and we're going to bring together most the people who are interested in discussing this so those who are on the dap side and actually want to get certified those who are on the certification site those who are on the formal methods side the security auditing side and the hope is that this workshop micro summit can basically write a candidate series of specifications for level one level two and level three we've had some internal discussions with runtime verification through the alpha frontier program we have some rough ideas of what we'd like to see for each of these levels and then other vendors like kuvik for example have created even some automated tooling for the level one side and we're right now writing formal semantics for plutus and k to apply some of the ideas of their k framework to cardano then on the cubics and then on the certix side excuse me they have some tooling that's in the ethereum ecosystem that would be nice to port over now why is this important every single day you'll see something gets hacked every single day you'll see is there some security problems some money that's lost some trust issue and so what we want to do is create a situation where you the user of a cardano application in any app store can see them in the metadata of the application what level of curation it's gone through and and quality control it's gone through and we want that to be as transparent of a process as possible and we want that to be an open process so it's not controlled by a company and it's not controlled by some app store it's actually metadata that's put on chain and then you can decide the route of trust of who you trust and then you can adjust your gui accordingly so as we're building for our light wallet io's light wallet that's coming to market next year adapt store and in that dapp store we have a particular opinion on how things are going to be visualized and to get into that dapp store there's no approval process instead there's going to be a standard for embedding your app on the cardinal blockchain so an app registration as transaction and then every app that is registered certified or uncertified will be listed in that dapp store they'll just be visualized differently the ones that are uncertified there's no information about the author or any other stuff they'll appear in kind of a no man's land an open area where everything's at and that's just raw data on the chain and then the certified things will appear in a different area and there'll be a lot more metadata about them because that's been provided and we'll have a route of trust from auditors that we work with longer term what we're planning on doing is setting up a standards institute specifically for smart contract development on both the ethereum side and on the cardano side because as many of you are aware cardano supports both the evm and plutus lutus is ahead of the evm and there's going to be several months of building that out with the community as they deploy their applications for example all of you heard the news that sunday swap is doing its test net december 5th so that's an example of a plutus native application that takes advantage of everything in cardone but the mamba project is going to come out next year and that'll grab full ethereum interoperability so your solidity code will work one-to-one on cardano just better faster cheaper so we need certification standards for both ethereum and for plutus and so those standards have to be implementation agnostic so our hope is to create an institute that takes these candidate specifications and it handles both the certification and the accreditation so standards for what can be certified and accreditation of those who certify and likely will embed that in an academic body we've had conversations with the university of wyoming and other universities and eventually we'll make an announcement and we'll set up an endowment similar to the endowment that i did at carnegie mellon university for the center formal mathematics it's unrelated to crypto there but that's an example of a custodial entity that's permanently endowed to fulfill a facility in that case the mechanization of math to dependently type language and in this case the standards of smart contracts crossed industry and it'll be a members-based organization that companies individuals and others can join so that's an ongoing project that will be completed in 2022 we'll start it through the cip process the cardano improvement proposal process to begin with here in as soon and it gets kicked off with a workshop which will write the first set of candidate sips and then we'll use those for the first wave of dabs and then we'll have an iterative agile cycle where we kind of learn we see what's being done well what isn't being done well and then our hope is as we close out 2022 we get really good standards and processes and procedures for certifying applications the way of registering a dap on the cardinal blockchain means that you get guaranteed listing regardless if you have any commercial relationship with dap stores that follow that standard and because you have a certification audit trail a lot of things can follow through because the state of these things can be preserved with the cardinal blockchain so this is something we're going to co-build as a community together all throughout next year and hopefully we can create a significantly better experience for everyone involved not just developers but also the users and also we can get to a point where you have high assurance levels if there's something that's commercially critical for example once these certification levels exist one of the things i'd like to do is to have a frank conversation with people in the catalyst community and try to make it a common theme that if somebody receives funding for catalyst they commit to getting their applications certified at least at one of those levels level one two and three to give the community some oversight over the quality of the code that's being produced so that we don't end up having in our ecosystem 10.5 billion dollars lost unlike other ecosystems that don't seem to care too much and hide behind decentralization as an excuse for poor quality now i do get asked on a regular time about when does this dap come out when does this dap come out i i still get criticized from time to time about issues for other pieces of software like uroy it's important for the community to understand that cardano is big and there are many people if you go to cardinalcube.io you can see the ecosystem map there's well over 100 applications that are in the process of building and launching on cardano and they're public you can see them you can click on them you can go to their websites you can see the teams and we don't have a commercial relationship with those entities the vast majority of them and where we do it's usually around us helping because we'd like to make sure that the code that they're deploying is okay or perhaps it's a small equity position through the c fund but at any event because we are not in a command and control position for that infrastructure that's being deployed we don't know the dates no one tells us so if you come to me on twitter and say when does sunday swap launch we don't know they'll come to us with questions from time to time and we co-develop some things we've helped them out a little bit with concurrency and memory utilization and space so they can have a more efficient contract and we extend that to other dexes as well because we really want to make sure that that first wave have great pedagogical value meaning that they can be used as references to teach people how to build things in the extended utxo model but just because we occasionally help out with that doesn't mean we're given any additional information about when is something going to launch and what does that mean okay that's that team's business asking me over twitter asking our people over support channels or forums it doesn't really get anywhere it doesn't really do anything that said we've seen enormous progress and there already are smart contracts and dapps running on cardano today it's important to understand that there's even a small decks that we're trying to look into a bit and get a better understanding of that seems to be trading on cardano today so they're here and they're definitely growing very quickly and things for example i get asked a lot like when pab well we have the pap it's running and as i told everybody this is not a light switch like this date happens the pa b is out and then all these dapps suddenly turn on you use the pab as part of your application construction and deployment so just because the component is available doesn't translate to that component then infers the dap is ready today any more so than having jdk8 gives you suddenly every java application turns on or having the latest version of the google development kit for android somehow that means your android application you have to use the tooling to construct an application so what's happening right now with sunday swap and meld and all these other cardano native ventures is there are using the test net version of the pab to construct software and they're testing and deploying that for the most part to the test net which is a very sensible thing to do and what's happening is the plutus pioneers the communities the development companies that we've brought in and others are looking at that commenting on that learning from that and it's a commercial decision a quality decision a user experience decision for when they feel comfortable to take it from the test net to the main net now these are ventures and they want customers they want to commercially succeed they want to grow it's business like anything else so they all operate on different timelines and some are very fast as the ones who've already deployed on cardano main net applications today running today and other ones that are kind of in a more cautious setting because they anticipate a high volume and that's the spectrum that we have now our belief is that throughout the rest of the year and all of quarter one you're going to see a lot of points of light turning on so almost certainly we'll see at least one or more dexes because we already have one so by definition the statements at tautological we will have dexes online for christmas and more dexes will turn on and it's these dex's decision when they feel it's a good time to do that and when they've crossed that threshold now there are some requested functionalities and capabilities for the pab there are other things sips to implement like sip 30 and so forth i and different pieces of infrastructure have different things nami wallets in a different state than uri in a different state than daedalus and that infrastructure evolving at a rapid rate we're actually developing thousands of commits per week and every team is working in parallel some in the io family some outside of the i o family some we don't even talk to we don't know anything about they just seem to be building things and releasing things welcome to a decentralized ecosystem so it's a very exciting time and it's very wild time but it's important to over communicate sometimes because the issue is that we are living in an age of very dishonest crypto media and we're living in an age of of incredibly bad social media and many times it makes us believe that some of the social media we see is actually bots and paid trolls so every single incident big or small etoro deciding that they're going to limit u.s participation is adapt not implementing something correctly and they don't have concurrency whatever happens to be becomes the narrative to the dishonest crypto media and to these people over twitter and other places and it carries through and people just sometimes fall victim to it and believe it and that's why it's so important to understand this is a big ecosystem there's going to be successes there's going to be failures just like ethereum is a big ecosystem bitcoin is a big ecosystem and you can choose to focus on the dow with ethereum or mount gox with bitcoin and believe that's the standard or you can realize that the failure or success of these things has no bearing on the overall picture of the quality of the platform the point of the certification program these other things is to try to introduce some community curated standards and ways for people to kind of visually differentiate quality from one vendor to another and show the level of commitment the team has to quality it takes time for that standard to evolve and even if that standard exists it's entirely possible that a level three certified great application could actually have a lurking protocol design flaw in it it's also important to understand this living technology things change all the time for example one of the hallmarks of our proof-of-stake research agenda wasn't just building a great consensus protocol we co-designed a new network protocol with the consensus protocol we couldn't just take secure academia off the table a lot of people asked why and internally we understood because there is very significant ddos attacks and eclipse attacks and asymmetry resource attacks and other things that can be done with proof of stake that proof-of-work doesn't suffer from and so there's a lovely paper that was written out of stanford and mit by davidji and li yang and his co-authors and the paper actually taught it's called securing proof-of-stake nakamoto consensus under bandwidth constraint and it talks about some of those challenges and proposes a completely new way of doing things called download towards the freshest block and they actually even talk about cardano in here and we heuristically design some of the things that they think need to be formalized that's just one example of the nuances and the incredible difficulty in these new systems if you gain something massive energy efficiency you potentially have to do a lot of work not to give up something else and so at the protocol level the developer level the infrastructure level things are lively and changing and we do our best working with the community as an ecosystem to try to figure out how do we make sure the changes are managed in an orderly way because there on one hand is a demand for functionality and features on the other hand there's a demand for stability and quality one of the downsides of getting daps on our platform is that means is actually going to be harder to change the plutus language in the infrastructure because everything that you'd want to do to change those languages may break old dabs or you have to introduce versioning systems and so forth it's a little easier with cardano because we future proof things with the hard four combinator so that you can do versioning through that kind of notion and things are built in a very pure way so it is a little easier to introduce these changes and they can be done three times a year under the time schedule that we have but you do have to understand that as more adoption increases there's going to be a harder effort of coordination for this ecosystem so it's always a balance between speed of delivery and in a balance between feature richness and developer accessibility and utility of the underlying platform i think this is where we're strongest because of design decisions that we made and i think because of the governance system of cardano you're going to really see us separate from the pack with ethereum and bitcoin if you look at ethereum and bitcoin they've managed to achieve huge network effects but because of achieving those network effects change is extremely slow bitcoin only recently activated taproot to catch up to some of the functionality and expressiveness that we enjoy in cardano and in the ethereum ethereum is trying desperately to get to proof of stake and it's going to take a while for them it's not a criticism it's a reality that they've had to face as an ecosystem because of their size and scale and because of the difficulty of the problem the fact that we're able to do three major upgrades per year and we're building out this beautiful corpus of decentralized governance and a proper resource program really tells you how much further along we are and that gives us the ability to execute much faster than our competitors but again dishonest crypto media flood storm other people they come in and they try to make the opposite true the extended utxo is actually the most concurrent accounting system you can have because most of your state is local not global so you can off chain things very easily and you can put things in side chains very easily and you don't have to care too much about the global state of the system accounts are significantly less scalable yet the narrative amongst a lot of ethereum solidity developers is cardano can only do one transaction per block and as we see these dexes come online the testnet sunday swap for example it's an actual counter example to that they can do far more and as the system scales and expands far far more it's massively concurrent but that's the lie and it's the same when we talk about software quality the design decisions that we made means that over the long run five years ten years it will be significantly easier to ensure quality dapps on cardano versus ethereum or other imperative language based systems but the lie told will be the opposite so this is where we're at and we as a community have to stay very vigilant and we as a community have to be very forceful in correcting people who lie and hold them accountable to these things and we do it with facts we do it with papers we do it with evidence not personal attacks but evidence along the way when people ask why is proof of stake so hard you can listen to molten tar monsters on youtube say everybody's done proof of stake and it's easy or you can read papers out of stanford and mit that actually talk about why it's so hard to build a proper proof-of-stake protocol and how it hasn't been completely perfected as an industry despite the fact that there's more than 100 scientists working now for six years on this problem across 15 different institutions and it turns out the furthest along in solving this problem is cardano why because we're the most cited the most mentioned and the most analyzed of all systems amongst academics independent of our organization and engineers or boris has been implemented now in multiple cryptocurrency protocols some that we have relationships with some that we're competitors with that's just a fact and that's just a reality but unfortunately that reality is buried under a social media narrative from time to time and the issue here is that when we look to dapps as they come online with cardano that narrative unfortunately is going to be subject to the same conditions that we've witnessed historically so in the case of dapps we're going to get enormous amounts of misinformation we're going to get an enormous amount of fud and other things and it's important that you do your own research it's important that you don't get immediately taken into it and this is not just on the negative side but also on the positive side people will make claims about the dapps that they build on cardano that are not true so you have to hold the dap developers to the same standards that you hold us to evidence-based software development evidence-based statements show the evidence show the paper trail show the work show the code never trust anybody if they say it's secure what evidence do you have that it's secure if they say it's performant show us the performance data all of these things now this is a completely new economy that we're constructing together so it's extremely important that we work together to produce that new economy in a safe way and what's nice is that it's a game of keeping your gains not a game of getting gains as quickly as possible i would much rather live in an ecosystem that starts with a million users and grows to two or three million over a period of a few years than live in an ecosystem that goes from a million users to 300 million users down to 10 million users because an ecosystem that keeps its gains even if it takes 10 years to grow by the time it gets to 50 to 100 million it's extremely strong ecosystem as a low churn rate customer acquisition continues costs to continue to go down and the quality of collaboration is up we've seen a lot of things like myspace and farmville and others that had amazing customer acquisition and they died very quickly we've seen other things die quickly under poor custodianship like for example skype so it's very important that we as an ecosystem understand where our growth comes from and understand our root principles as an ecosystem which has always been evidence-based software development and those standards must be applied to the dapp set the good news is the wave of ventures that are coming for the most part the ones we've interacted with have been very optimistic and open to having other people check their work collaborate share information get certified produce peer-reviewed research and that's really exciting because that means that we can expect an extension of that quality but because it's an open ecosystem because it's permissionless because it's decentralized not every single person is going to subscribe to that philosophy and that means you'll have a lot of move fast and break things people who will do things very quickly and perhaps those things work but perhaps they don't and that's why 10.5 billion dollars has been lost or stolen this year in the d5 space and we have to accept that some of that will occur on cardano and again because of the dishonest crypto media because of social media behaving the way it is those failures there will be an attempt to define our platform that way that's just the world we live in it's just what happens we cannot let that demoralize us or dissuade us and we as an ecosystem have to have the ability to fight back with facts and evidence of our own and show the real usps of the things that we do from our part io is getting prepared to try to help carry some of the burden of marketing it's actually not in our contract it's not something we're responsible for doing but we feel a moral obligation to ensure things are properly communicated so we're hiring seven full-time marketing people specifically to handle the community and dap ecosystem we would like to see the cardano foundation do the same and we're going to have a lot of meetings with them next week about cardinal the open source project and hopefully we can get a really strong plan for marketing and community management don those seven people will report to tim harrison they'll work with ben o'hanon and adam the chief marketing officer of i o and i will also directly communicate with them and we'll talk about everything from timely distribution of information infographic production getting onto platforms like instagram and tick tock getting information in small form because we don't do so well there we do really well in the long form communication like long amas long podcasts these things but short form shareables in that one to two minutes and make sure we do a better job at managing narratives especially when narratives are frankly completely out of control etoro in particular was a very disgusting thing i saw so many people come to twitter inferring that somehow that means that we're the next ripple which is a total lie neither us or the cardano foundation have ever been contacted by a u.

s regulatory body on any topic we haven't even been invited to comment on senate hearings we have absolutely no issues in that domain we've never had any issues in that domain and it was just bizarre that people implied that a particular entity that's outside of the united states deciding to de-risk themselves as they perform s-1 apparently is an indication that there's some event coming even though u.s banks and exchanges hold ada bitstamp had just listed us but that narrative persisted to a point that when we had a cardano booth at an nft conference down in miami about one out of three people came up and asked about etoro it was a strange thing also we were never told by anyone at etoro that that was occurring and given any heads up so that we could proactively figure out a way of handling the media of it they just decided to do it the day before thanksgiving when everybody was on vacation i don't know why an organization would choose to do something like that but they did yet still ada was never delisted it shows you the negative narrative in the lies that are told it was ring-fenced in the u.s participation more than 100 markets still trade and they still have stake pools and that's going to continue beyond the end of the year that liquidity will still be there beyond the end of year for the vast majority of the users of the platform yet the headlines that we saw were delisted as if it's a trend that will continue so it's a it's a strange thing and this is just the reality that we live with and how dapps apparently work and our industry apparently works a very short attention span addicted to dopamine and plays fast and loose with the facts and evidence and i'd like to believe that cardano as a project is very unique in that we hold ourselves to a higher standard and i hold the community to that standard as well so as we fight back let's try to be as evidence-based as possible we have to be a little bit better at distributing evidence and we have to also understand we're not going to win every fight there are already a lot of people in the cryptocurrency ecosystem who have made up their minds negatively or positively about cardano to the extent that they're absolutely unwilling to see or hear any evidence to the contrary of what they've decided it's their loss it's okay the space is still quite small and we have a lot of people to win over and grow outside of the industry as we bring tens of millions of people on board in the developing and developed world that'll be the priority and i'm sure that normal people who don't live in crypto land and are obsessed with memes and fast money probably will be a bit more amenable to a move to a slow and steady systematic honest transparent project instead of a move fast and break things have to act now or else you lose everything and get out in six months because it'll all be gone in six months mentality most people believe you have to work hard to actually accomplish great things and you don't get something for nothing and i question the wisdom of trying to attract people who believe otherwise doesn't seem a healthy ecosystem to me so just a bit about dapps a bit about where we're at as an ecosystem a bit about where the media is at as i said we're going to hire seven full-time people at i o we have pretty good ideas of what they're going to do who they're going to report to how they're going to work and we're going to be very aggressive at trying to make sure an evidence-based narrative is presented and very aggressive about trying to make sure that an accurate narrative is presented about events as they occur we encourage the foundation to do the same and we'll see and i fully expect with their extended budget that they will do so and we encourage emergo to do the same and we encourage all projects who are building on cardano to make sure that they also include some money for product marketing and campaign marketing and we love coordinate with people where and when it makes sense to ensure that people get as much exposure as possible it's a very exciting time it really is i mean there are so many people to work with and help we have so many channels because of the africa tour and the work we've done throughout africa the last four years to start deploying real fi across the entire industry and as a final point people often ask how will you get all these high tvl d5 applications to migrate over to cardano and i think first organic growth will make a lot of them unnecessary and others are going to be facing a lot of regulatory scrutiny i fully expect to see lots of wells notices coming down next year there's a lot of people mentioning things like reeves test it's an unusual one we usually hear howie but that tells me that there's probably a mindset amongst regulators that a lot of these yield producing defy applications will be captured under the regulation of somebody within the united states and are unregistered and need to register although it's not clear how they would do that i expect lawsuits to come next year so there is going to be a demand for figuring out how to do d5 differently in three different directions one consumer protections are needed and those consumer protections are about form function and quality that means certification is not a nice to have thing but it's a must-have thing in order to protect people two there's probably going to be some demand for compliance with the business traffic that is occurring now from our side because we built prism we actually have a humongous leg up meaning that you can embed dids into transactions and you could do this in a private way as a consequence of that work for better or worse it seems we actually have a direct line of sight to a much better compliant notion of adapt without necessarily centralizing it and then finally there's a desire for governance almost every d5 provider is trying to figure out desperately how to dowify for lack of a better term their applications so that the custodial organizations are no longer required for the operation of the application because they want to be the d and d5 to centralize well cardano also has a built-in advantage for that and that advantage is that the tools we are building for catalyst will eventually work for all native assets issued on cardano by the way for those who call us a ghost chain i will remind you there are over 2 million assets that have been issued on cardano mostly nfts but over 2 million have been issued we had one in may 2 million today in less than a year and that's going to grow exponentially technically speaking once catalyst is done each and every one of those assets will have access to the same voting tools and systems that cardano itself has which means every single app if they so choose can use our governance tools to fully decentralize so i think these three things certification which we have a huge lead on identity which we have a huge lead on and governance which we have a huge lead on will provide a very compelling argument for migration to cardano for d5 above and the beyond the fact that we have real customers not people chasing yields who have no loyalty and leave the minute that they go down one percent to the latest flavor of the week but marketplaces where people need microfinance marketplaces where people need insurance where they need peer-to-peer banking because simply there's no alternative and these are huge markets mfi alone microfinance alone in kenya is a 19 billion a year industry talk about yields the average rates are 50 to 80 percent interest there's innovations that we've seen with partners of ours like possession that lower those interest rates to 36 percent and the default rate from 40 to 2 percent these are very attractive vehicles and these are the kinds of things i think are perfect for the realfly revolution and if they can be built safely if they can use the right tooling and the right infrastructure can be put into place i think all parties involved will be incredibly happy and the increased liquidity will fundamentally transform the lives of hundreds of millions of people throughout africa and other jurisdictions that's the dream and it's right there it's in striking distance we have the tools we have the infrastructure smart contracts are here they're running and all of these programs are underway and there are literally thousands of people in the core project and millions of people in the project in general who are waking up every day either excited contributing to or directly connected to this success with all the capital necessary to get this done one way or the other so we're there it's about time the world recognizes it it's about time real fact-based evidence-based narratives get out instead of the constant fun lies that we seem to be exposed to and unfair treatment we seem to get and we shall transcend and we shall persevere to those who say it doesn't matter i will remind you that sometimes in society facts don't matter and perception of them does and that's why you get certain presidents that's why you get certain realities that's why you get certain power structures and i do not want to have built so much seen so much and have it failed not because of the merits of the program but because people lied about it and it caused someone else to become the standard who doesn't have the same integrity that would be the worst possible scenario so 2022 is going to be our biggest year by far 2021 was definitely our biggest year we accomplished an enormous amount this year we grew an enormous amount this year in every measurable metric you could look at and i fully expect to continue to see that growth in every measurable metric in 2022.