Author: PolkaWorld
On May 31st, Gavin and Vitalik sat down on stage for a fireside chat at the EthPrague event! They had some interesting interactions and talked about some issues about community, governance, incentives, and mass adoption! Here are the highlights of PolkaWorld according to the process of the host's questions!
Gavin's explanation of Jam
JAM is a version of Polkadot, but with less subjectivity and without the multi-chain requirement.
JAM solves some of these problems by eliminating persistent fragmentation of state.
Vitalik Answers Questions About Ethereum Ecosystem Growth
Ethereum’s success lies in the fact that its intellectual ecosystem attracts many smart and interesting people.
The need for Ethereum to move from theory to practice in the 2020s was discussed.
Need to adapt to user needs and create truly large-scale applications.
Conflict and community building
Gavin’s opinion:
Gavin hopes that conflict is not a necessary condition for community building, although some examples may show that conflict does contribute to community building.
He believes that Ethereum’s strength comes from its lack of internal conflict, and that the Ethereum community has been able to grow and develop in part because it is not overly subjective.
Gavin believes that reasonable, moderate governance and a lack of subjective opinions help build a good community, rather than creating a community by creating conflict.
Vitalik’s opinion:
Vitalik mentioned that conflict can indeed inspire better outcomes in some cases because it forces people to think carefully about the problem and find a synthesis between the two parties, thereby creating a better solution.
He believes that the presence of conflict can sometimes inspire people to really work hard, overuse their brains, and come up with smart ideas.
Vitalik also stressed that we need to find a way to get this incentive and reduce the situation where it is just people fighting each other. He mentioned that Layer 2 and rollups are examples of how to deal with conflicts and promote progress in this way.
Competitiveness of L1 Chains
Gavin’s opinion:
Gavin believes that it is impossible to imagine a world where there is only one way to achieve a particular goal. He believes that it is necessary to have multiple different ways, and to encourage these methods as long as the cost is not too high.
He pointed out that Ethereum and Polkadot share the basic narrative and desire for continued work in many ways, but the paths are different. Polkadot used to have a more subjective path, but over time, he saw it more clearly through writing and thinking about the gray paper.
Unfortunately, he believes that most of the L1 competition seen today is not between methods with the same fundamental values, but between methods with different values.
Vitalik’s opinion:
Vitalik believes that competition between projects with different values is often very fierce on social media, but there is little competition in actual operations.
Using Bitcoin and Ethereum as examples, it is argued that most people would not be happy if Bitcoin was the only chain in existence, or Ethereum was the only chain in existence. This suggests that they are targeting different markets, which reduces competition.
Projects with similar values will be more competitive. This also prompted his recent change in thinking, and he is more willing to explore the specialization of Ethereum in different directions.
On-chain and off-chain governance
Gavin's opinion
Gavin is still very optimistic about on-chain governance and DAO. He believes that decentralization is not only important in terms of social governance, but also in terms of the number of validators in the network.
Regarding the governance of the base layer technology and its evolution mechanism, Gavin believes that we may need some clear rules to govern the overall evolution, but he does not think that the actual base layer technology needs to be upgraded autonomously. He said that he may have come closer to Vitalik's point of view on this issue.
Vitalik’s View
Vitalik believes that the base layer technology should be kept as simple and neutral as possible, without the need for frequent upgrades or becoming a target for upgrades or evolution.
Ethereum has generally done a good job with off-chain governance, but he’s interested in adding some formal DAO-style governance elements, such as better public signaling tools, rather than having hooks directly on-chain.
He mentioned Carbon Vote in 2016 and 2017 as an interesting example, when ETH holders could vote on whether some very controversial changes should happen. These were advisory votes, and no one promised to follow the results of the vote, but in practice they were followed.
Vitalik believes that now there is not only token voting, but also various different ZKID technologies, identity verification, proof of participation, etc. He believes that by using these tools for polling, things can be guided in a more democratic direction, rather than just a vague consensus among a few developers.
The importance of incentives
Gavin’s opinion:
Gavin believes that in order to ensure the decentralization of expertise, not just the decentralization of datasets, we need to do this through crypto-economic incentives.
He stressed the importance of writing a specification and ensuring that multiple implementations are based on that specification as a way to spread the expertise base.
He pointed out that in the early stages, providing the resources needed for experimentation is key, while in later stages, in order to capture significant value, value capture mechanisms may need to be established. The ecosystem structure should be loose enough to make this value capture feasible to some extent without requiring the project to leave the entire ecosystem.
Vitalik’s opinion:
Vitalik believes that there are indeed some important projects that are very valuable to the ecosystem, but the existing default incentive mechanism does not encourage these projects well.
He noted that the Ethereum Foundation has significantly increased salaries over the past few years and has more grant programs independent of the foundation, such as Gitcoin Grants and Optimism RPGF.
Vitalik believes that there is a huge gap between the early stage and the later stage of the project. In the early stage, funds can be easily obtained through various grants and friendly support, but after growing to a certain stage, the incentive mechanism suddenly changes and needs to rely on tokens and venture capital. He believes that this needs to be improved in order to better handle successful ideas and projects.
He pointed out that market-driven incentive structures are more effective because the market should allocate resources based on the value of things. He believes that through market-driven incentive structures, projects can continue to develop within the ecosystem without having to rely entirely on the initial funding mechanism.
User Question: Why is the Web3 industry still so irrelevant despite so much intellectual capital, social capital, and financial capital?
Gavin’s opinion:
Gavin believes that current blockchain technology and products are mainly technology and finance oriented, which is not relevant to ordinary people. Most people do not have a technology and finance background, so these products cannot meet their needs.
He believes that the market will only really grow when blockchain technology becomes relevant to the lives of ordinary people. Currently, it is mainly for those who understand the technology and social context.
While blockchain is useful in some scenarios (such as buying coffee or sending money across borders), overall it is not practical for most people.
Vitalik’s opinion:
Vitalik believes that the natural target market for blockchain technology is actually those "non-average" people, because for those large-scale workflows, centralized infrastructure makes them very convenient. Existing applications and regulatory frameworks have already met these large-scale needs.
He noted that many of the real use cases for cryptocurrencies are for groups that are not effectively served by existing institutions. For example, international payments is where he personally sees the most value, especially in developing countries where banking systems are not willing to expand the current centralized system.
Gavin then added: Systems in developing countries are more susceptible to corruption and inefficiency, which makes decentralized blockchain technology more relevant and valuable in these regions. The resilience of blockchain enables it to operate better in areas with poor structures and organizations, higher noise and corruption.
