Here are my notes from Week 4 of a16z Crypto's CSX. This week, which focused on research and engineering, included talks and breakout sessions on incentives, ZK, layer 2s, and security testing. It was one of my favorites and the most impactful week so far!
Talk(s): Tim Roughgarden And The Research Team
The a16z Crypto research team
Releases major papers multiple times a year
Collaborates with a16z Crypto portCos
Help them succeed
office hours - what are the hurdles?
another set of eyes on a design
Sometimes deeply influences product/protocol
Helping portCos in an immature field is a competitive advantage — “18mo advanced notice on important papers to write by talking to founders.”
Scott Komiers - Farcaster / Twitter
Excited about consumer crypto
Market design
economics - how does the world work
market design - how should the world work
Design incentives in the system to shift or change behavior
Dropping tokens
Think really hard about the users that are most valuable and the ones that are going to build with you — “Who are going to Invest to grow the ecosystem?“ - Scott
You cant black-box the blockchain
computer in the sky, anyone can use and share
The source of competitive advantage has changed
Web2
Platform lock-in
Hold everything in this enclosure
Become extractive over time (ads, charge more)
Web3
Break out of it
Web3 breaks a lot of it
Data to be individually owned
Five forces of web3
The source gets stronger when you have interoperability
Value capture in traditional form is more difficult
Network effect forms around Protocol and digital assets
Embeddedness becomes a source of competitive advantage
difficult for anyone to disintermediate
value capture = small fees
Community cohesion
Want to engage in your ecosystem
Shared ownership is a powerful loop
On Farcaster
Users own their identity
They can use it and any value built up across any client
This is absent in web2
Places limits on how extractive any one client can be
Users can switch to Supercast
Users have more power
Farcaster did very well curating the early supply of users
Reason to do additional work for creators
They have to do a lot of work to invest
They have a higher activation cost
Early platforms have to subsidize creators
On cryptography
There’s always something exciting in cryptography
“Cryptography is resolving this physical paradox in the universe — kinda mind-blowing cryptography thinks about this” - Valeria Nikolaenko
10 years is the median time for cryptography papers to become a reality
Rely on hardware to become practical
Snarks
Close to crossing the threshold to where they’re much more useful
Crossing a performance and usability threshold
More cryptography is better
“Richer the toolkit, the better. The more tools we have, the more free we are.” - Valeria
Our privacy toolkit is very poor
Data is leaked all the time
MPC you can shift it around
How to nerd swipe cryptographers
Ask, “when will quantum computers arrive”
Very many decades away from being here — Very far from a cryptographically relevant quantum computer
Joke in cryptography: “Quantum computers are always ten years away”
Progress is very slow now
Once scaleable tech, it can grow exponentially fast
Maybe it will take another military conflict to motivate people to work on it - the US and China being a little afraid of each other helps
Thinking that problems are simple is good because it will attract more people to work on them
Session: Incentives and Market Design
Breaking down a system (Titles.xyz examples)
What are the …
Components
Flows
Objectives with incentives
Ways we acquire users
Puzzles thinking over
Note: Titles is cool, and Soren and Parker are great ✨
Marquee users
Good for pulling in other users and creators
I.E., if Optimism is using, another chain will want to
At scale, marquee users get a lot from the platform
Have a different strategy for recruiting different types of users
On fees
Easier to wrap a transaction fee when a transaction is already happening
Airbnb adds value at the time of the transaction (fee model) vs. the moment of access (subscription model)
Fees on spam
Minimal fee for anti-spam
Can kick back the first time there's a mint
Pay to create a model
Links that came up
Fiids is like a Hootsuite or Tweetdeck for Farcaster and web3 social. IMO, it’s the most powerful desktop client. DM Tiago for an invite.
Farcon, a multi-day conference in Venice Beach, CA, is like Woodstock for Farcaster. The event is sold out, but you can find a list of side events here, including Far(away)Con, our London satellite event.
Sindl is a suite of attribution products for Web3 companies. Its founder, Antonio García Martínez, writes an incredible blog on Web3 attribution and growth (h/t Eddy Lazzarin).
Story Protocol is building a protocol and universal ledger for IP. They have a bold and beautiful vision outlined here (h/t Jason Rosenthal).
There’s a great new Invest Like the Best podcast with Bill Gurley and Michael Mauboussin (h/t maks).
Launcher Labs Progress
Reboard and follow boards - Farcaster / Twitter
Shoes of CSX - Shoes of CSX is a work-in-progress Frameboard highlighting the great shoes and founders in a16z Crypto’s CSX.
We made great progress on the protocol and onchain side of Frameboard — excited to share more soon 🖼🛹⛓
