We sat down with NEAR Co-Founder Illia Polosukhin at this year’s Web Summit in Lisbon, Portugal to get his thoughts on why Web3 is fulfilling the promise of Open Web, the ongoing evolution of DAOs, and the future of decentralized reputation.
The transition from Web2 to a more open, decentralized version is well underway. And while Web3 is a term that’s becoming more ubiquitous, it doesn’t necessarily describe how the next generation of digital communities and connectivity will actually look and feel. At this year’s Web Summit in Lisbon, Portugal, we sat down with Illia Polosukhin, co-founder of NEAR Protocol, to get a better idea of this transition to Web3.
The decentralized, open web will force a fundamental reconsideration of how we perceive digital identity and reputation. It’s all part of a broader effort to reduce the scope of power and control that centralized data, internet, and social media conglomerates have over all aspects of people’s digital lives and personas.
Here are some of Illia’s insights and predictions on how tomorrow’s open Web3 might look and feel. We also discussed how crypto can proactively work with regulators, as well as new governance models for Decentralized Autonomous Organizations (DAOs) that leverage decentralized identity and portable reputation.
Why Web3 is the True Open Web
While the term Web3 has become synonymous with the decentralized internet that is currently being built, Polosukhin prefers the term Open Web, a more accessible description of what builders are trying to achieve in the post Web2 era.
“I like Open Web because it sounds less technical than Web3,” Polosukhin explains. “It’s a term that’s been around for over ten years, since companies like Google and Mozilla were battling against Adobe to break the monopoly of Flash on the internet. Flash was a proprietary platform, making it difficult for everyone to participate.”
“Today, the concepts remain the same,” he continues. “For tomorrow’s Open Web to materialize, everything needs to be open-source, reusable, composable, and decentralized. Basically, all the things they were trying to achieve when the idea of Open Web first came about.”
While blockchain builders continue to work towards a truly open and decentralized infrastructure, Polosukhin emphasizes the importance of making dApps and other Web3 components user-friendly to both the general public and developers.
“Even those of us that have been working with the blockchain since 2018 — and understand how everything works — don’t necessarily want to jump through all the hoops,” Polosukhin says. “I know what all these hashes mean, but it doesn’t mean that I want to look at them all the time. Things need to be simple, especially if our goal is to onboard upwards of 5 billion people onto the blockchain. So how do we simplify things so that regular people like our aunts and grandmothers can easily access the blockchain?”
Things like replacing wallet address hashes and login processes to resemble those of Web2 — while maintaining a decentralized backend — will be big steps towards making the open Web3 world accessible to all.
“It’s about user experience but it’s also about user expectations. Logging in with NEAR, for example, is as simple as logging in with Google,” says Polosukhin “That’s the idea: using familiar concepts and ideas that users have in their lives everyday but underneath it’s completely different. All the public-private key cryptography is hidden to ensure a smoother user experience. That’s the idea of simplicity — building complex infrastructure that’s rarely exposed to users or developers.”
Evolution of DAO Structure and Access
Polosukhin also sees DAO operations, composition, and governance evolving significantly over the next few years. As DAOs grow in size, scope, and capabilities, new tools for things like voting and treasury management are sure to emerge.
“Sometimes governance can’t scale very well,” says Polosukhin “So you need a hierarchy where some people specialize in specific topics that they can feed into a bigger model. Similar to governments and corporations.”
Polosukhin has also been working on a white paper — alongside Ethereum core developer Lane Rettig — exploring the concept of multiple DAOs within a larger DAO to create more efficient governance and voting structures.
“I started this conversation with Lane almost three years ago and we’ve been discussing how a DAO within a DAO would function,” Polosukhin muses.“We might have an executive team, for instance, with different roles and permissions. Maybe one of them would act in a similar capacity to a CFO and be dedicated to handling the treasury. Token holders could vote on initiatives and certain things but not have the final say on the budget. This prevents token holders from taking out flash loans, buying up a bunch of tokens, and unfairly influencing the DAO.”
The concept is already beginning to take shape on the NEAR protocol, with various Guilds acting as sub-DAOs that specialize in various areas such as legal, software development, and DeFi. People can then tap into the specific expertise of each guild to improve their own project, technology, or DAO.
“A Guild is a new form of community that has its own unique mission or reason for coming together in the DAO,” Polosukhin explains “Each guild usually has its own DAO for managing resources and members. So you have both communities and tools helping each other based on their own unique experience and expertise.”
“And today, we can even quickly create a DAO in a Telegram group,” he continues. “You can literally vote on something with one click and the transaction is automatically sent back to the mainnet. But that’s possible because we have a bunch of things working underneath to enable that.”
Polosukhin believes that DAOs will even challenge the very notion of a company and act as a more equitable, efficient way to organize people working towards a common goal. Certain DAOs may not even need to generate profit, but merely live off its treasury. And as DAOs evolve so will the importance of identity and reputation that individuals build across the entire open Web3.
Decentralized Reputation & Regulation
As Web3 apps, communities, and platforms become more commonplace and usable, individuals and ecosystems will need to reconsider the notions of identity and reputation beyond current Web2 paradigms. Not only will users be able to have more control over their identity — and take their reputation anywhere — they’ll have a bigger stake in the platforms themselves.
“Take ride-sharing services like Didi and Uber, for instance,” illustrates Polosukhin. “If a driver moves from China to America and switches apps, they’ll need to rebuild their reputation from scratch since the platform owns their record, not the user. But if drivers were part of a Web3 DAO or dApp on the blockchain, they could be rewarded with native tokens, own a stake in the platform, and migrate their earned on-chain reputational data to other spaces.”
This is just one basic example of portable reputation use cases and the benefits of user-owned identity that an open Web3 world can facilitate. As individuals participate in various DAOs or NFT-centered communities, they’ll be able to take their reputations with them. Communities can then shift away from token-weighted voting to reputation-weighted voting, and even conduct more equitable airdrops based on participation and commitment.
Polosukhin also sees regulatory questions becoming more pressing, especially as more users migrate to the blockchain and dApps. He hopes the industry can work with regulators to formulate equitable solutions, instead of shooting from the hip as they so often do today.
“My suggestion is that we start thinking about things like product first because what are we trying to achieve?,” says Polosukhin. “We want to prevent fraud and money laundering. As builders, these are not things we inherently want to propagate. We need to make it easier for users not to fall into fraud. We can do this on the product side. We can have non-custodial wallets that can surface information and prevent users from interacting with fraud.”
Reputation, regulation, DAO infrastructure, and user experience will all be critical elements to the wider adoption and success of a more fair, open, and decentralized Web3. For Illia, he sees 2021 as just the beginning of decentralization replacing Web2.
“We’re already building the financial layer with DeFi and open finance,” he says. “And now we’re starting to see a glimmer of things like open web social networks where users own their images or written content as NFTs, for example. The wave is definitely coming.”
About Orange Protocol
The mission of Orange Protocol is building and enabling trustless, decentralized, and portable reputation for the Web3 world.
Follow us on Twitter: https://twitter.com/OrangeProtocol
About NEAR Protocol
NEAR is the network for a world reimagined. Through simple, secure, and scalable technology, millions are empowered to invent and explore new experiences.
Follow NEAR on Twitter: https://twitter.com/nearprotocol