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Web3.0 Study Meeting (2nd)

Overview

  • Date and time: Wednesday, October 12, 2022, from 9:30 to 11:00
  • Location: Online
  • Agenda:
  1. Opening
  2. Proceedings
    1. Hearing 1 (shiftbase Co., Ltd.)
    2. Hearing 2 (Engineer)
  3. Adjournment

Materials

*No prior documentation was available.

Minutes

Date

Wednesday, October 12, 2022, from 9:30 a.m. to 11:00 p.m.

Location

Online Meetings

Attendees

Members

  • Jiro Kokuryo (Professor, Faculty of Policy Studies, Keio University)

  • ISHII Natsu Shori (Professor, Faculty of International Information Studies, Chuo University)

  • Joichi Ito (Director and Chief Architect of Digital Garage, Inc., Director General of the Innovation Center of Chiba Institute of Technology)

  • Yuko Kawai (CEO of Japan Digital Design Co., Ltd.; Executive Director of the Strategic Planning Department of Mitsubishi UFJ Financial Group, Inc.; Executive Director of the Strategic Planning Department of MUFG Bank, Ltd.)

  • Keiji Tonomura (Attorney, Nagashima, Ohno & Tsunematsu Law Office)

  • Taiyō Fujii

  • Shinichiro Matsuo, Research Professor, Georgetown University

Digital Agency (Secretariat)

  • Director Kusunoki, Counselor Nozaki

Minutes

Regarding Hearing 1, Shiftbase Nakano Co., Ltd. explained the community management business based on social tokens.

  • Shiftbase Co., Ltd. established and operates shiftbase in February this year with a total of four co-founders: me, Shimura, who was a first generation student of the Son Justice Scholarship Foundation, Nichihara, and Takase, who I met at a Parisian engineer training institute called "42 Tokyo."
  • As an advisor, we have an artist in the artist area, security engineer kumavis, who created the initial product of MetaMask, in the security area, Gojo & Company representative T'ae-jun Sin in the finance education area, and former Vice-Minister of Education, Culture, Sports, Science and Technology Kan Suzuki in the publication area.
  • It is good at community development and software development mainly using the Web3.0 technology stack, and in July this year, it implemented a fund procurement of about 300 million yen from CCC (Culture Convenience Club).
  • Shiftbase is leading the creation and operation of a community of Web3.0 engineers called Unchain. The members of the community are primarily engineers who have been learning the technology stack in Web2.0, with the goal of becoming a community that can provide engineering resources to those who are challenged in the world of Web3.0.
  • Currently, more than 1,400 engineers studying the Web3.0 technology stack are participating under the full screening system. It provides 18 contents that allow you to experience the development of applications on blockchains such as Astar, Avalanche, and Ethereum, which are said to be public blockchains. It currently supports 7 public chains. It has issued more than 400 NFTs that certify the development history of Web3.0 products.
  • We are verbalizing the decentralization aspect of DAO in our own way. In technology, is the technical architecture of the protocol distributed? In the economy, is wealth distributed and redistributed? In politics, is the organization structure decentralized? Can't we measure the degree of DAO in each context?
  • If the scale of what is called DAO is created and unified criteria are understood in the political context, the technical context, and the economic context, I think that the understanding of the community of mankind or DAO will be further resolved. Currently, based on "Unchain", "Unchain" technically issues tokens on a public network called Polygon, so it seems to be decentralized, but since the server of the application that manages learning content is using AWS, technical decentralization has not yet been achieved.
  • Even in the economic context, we are not listing tokens, and we have not yet developed a mechanism to distribute incentives to community members. Even in the political context, shiftbase completely leads the operation of the community, so it is our view that none of this applies to DAOs. "Unchain" is not a DAO yet, but it is working to be extremely close to a DAO.
  • When you join the "Unchain" community, out of the two grades of "CREW" and "STAR", everyone starts with CREW. In order to become STAR from CREW, you need to obtain an NFT that certifies the technical grade in the community called "STAR PASS", and only those who clear the test of the technical grade can become STAR from CREW. The advantage of STAR is that among "LEARN", "GUILD", and "INCUBATION" provided by "Unchain", GUILD and INCUBATION are worth only STAR, and members take the test.
  • In terms of LEARN, both CREW and STAR offer learning opportunities in the form of peer learning. More than 400 NFTs proving learning history are also published on the Polygon network. In addition, there is a visualization for ecosystem contributors called "$ CHAI", where if you ask a question when you don't understand something in the learning content, a member of the community will tell you. Peer-to-peer learning is active, and a social token "$ CHAI" is granted every other week to those who contribute to this learning.
  • There are two types of GUILD: project boundary and bug boundary. The project boundary is a service that connects companies and clients with "Unchain" members. The bug boundary is a service that allows Unchain members to audit the source code of a specific project for bugs.
  • It also has a value offering called INCUBATION. It's a service that allows so-called community members to recruit and start businesses, and currently has 21 projects in operation. The team that Unchain community members actually participated in through INCUBATION won the championship at Polygon's Tokyo Hacker House this summer.

The following remarks were mainly made in the questions and answers from the members and the response from Mr. Nakano.

  • Member: economy, if there is a Issue, what kind of things are Issue and what kind of methods are you thinking of mainly taking?

    • Speaker: I work across Conclusion. First of all, there are no successful cases of token economics yet, and it is considered that the distribution of profits has not yet been properly carried out in the economic context. In the face of the phenomenon that no matter how good the economic mechanism is, it will collapse at the same time both on a macro and micro scale, it is quite important whether token economics can be really used by mankind. We are also working on the premise of token economics, but we are taking a step back and looking at the ecosystem on the side of fungible tokens.

  • Member: , I would like to ask two questions. First, I believe there is an issue of whether or not to grant corporate status to DAO. If there are any possible advantages or disadvantages of granting corporate status to DAO, please tell us about them. Second, I would like to ask whether security has vulnerabilities that are of considerable concern or whether it is a situation in which it is easy to be targeted. When auditing against this, what specific methods are used to prevent economic loss risks? I would like to ask about responses on the security side.

  • Member: security cannot be divided into layers horizontally, and each system and each case must be viewed one by one on a vertical basis. In this sense, I have always thought that DAO would not be able to close it. Bug security is only one of the ways to improve the security of the system, and there are so many vulnerabilities and attack interfaces that can slip through the bug boundary. It does not mean that it can be guaranteed to be secure just because it is doing bug boundary. For example, researchers show the security of cryptography by obtaining certification at academic conferences, but considering the securing of security in the presence of various externalities to maintain, such as the need for human operation and certification by external third parties for technology, DAO may not close governance in the security area, and if it does not close governance, I think one point will be how to cooperate with external parties, so I would like to hear from the perspective of actually moving hands.

  • Member: If participating engineers participate in specific work or work outsourced from companies, are all compensation now paid in "$ CHAI"? If they use any other payment method, please tell us the specific method. In addition, regarding capital flowing in from outside the "$ CHAI" ecosystem, for example, when collaborating with companies, I think that outsourcing expenses are paid in Japanese yen, not in "$ CHAI". Please tell us the specific method of incorporating it into the ecosystem.

    • Speaker: I work across corporate status is that corporate status is absolutely necessary when it comes to substantive work, so I think that the question of whether or not to grant DAO corporate status should continue to be debated.
    • Speaker: I work across bug bounty and bug destruction important in the Web3.0 world? For example, many of the so-called DeFi projects in the world are just forks of Uniswap. Most of the projects are forks of Uniswap, and although I don't know much about it, a lot of money is collected for them to work anyway. So, there will definitely be demand in the security field in the future. Since there are far fewer people with low-layer security know-how, hackers are targeting and hacking to get money. In the future, there will be a match between the risks related to security and the demand and supply in places where the technology level has not caught up.
    • Speaker: I work across At present, all cases of so-called GUILD are paid in yen. At first, we wondered whether to include "$ CHAI" in the trade flow here, but at present, the concept of "$ CHAI" is given only to those who contribute to the learning ecosystem. How to add capital flowing from outside to the ecosystem is a very important theme. If we create an escrow system in yen to increase sales, and then try to be truly Web3.0 native, we first need to expose shiftbase Co., Ltd., and under the current tax and financial laws, we have to go overseas and create token economics with the body that it is not a service for Japanese people. Whether to build it with the premise of Japanese yen or to design the service entirely with "$ CHAI". We are in trouble because the current tax law makes it difficult to move.
    • Speaker: I work across Bug Bounty project is very valuable, and I think Japanese developer resources can earn foreign currency for international projects through Bug Bounty. Japanese developers are high-level, but they are hampered by the English language barrier. I hope that if there is a mechanism that can clear only this point, I can make a comeback through Bug Bounty. Of course, security is a very high-level area, so it is not easy, but shiftbase and "Unchain" are taking on such a challenge.

This is the end of the first half. The following remarks were made about Hearing 2.

  • Member: entrepreneur, it would be dangerous from the perspective of protecting investors and consumers if the hurdles are lowered by easy fund procurement and easy human resource procurement with DAO. One point is that DAO can still develop in various ways as a tool, but I felt that the narrative that the world would suddenly change with it was too advanced, so I would like to discuss it in more depth. Another point is that I think there is a narrative that tax system on token issuance is a blocker for excellent companies to leave the country, but there are questions about whether it is an essential problem that can be solved by STO, etc., and questions about whether the government should be involved in the formulation of rules that tend to benefit only some.

  • Member: Rather than taking the lead in speculative markets and business with the flow of Web3.0, I think the government and others are expected to create the foundation as infrastructure that will surely lead to regional revitalization and a distributed society.

  • Member: It seems that they are trying to build a tower on a fluffy definition, and I feel that it is very dangerous what the NFT business refers to. To be honest, I feel that they are assuming too much business on the NFT marketplace. I was very concerned that the government's discussion does not show much about what is achieved by using NFT to deliver value to users.

  • Member: I would like you to consider the perspective of what value has actually reached end-users and the general public and what can be delivered as more specific examples. For example, digital book ownership is currently being developed by Amazon and others, but I think you know that it is actually not ownership, but only rental of viewing rights. On the other hand, NFT should be able to solve it as a core technology, but there are not many discussions at this conference on the layer of what is the blocker against it, so can we discuss it at that layer with a more in-depth example?

  • Member: I almost completely agree with the content of the concerns and criticism. Currently, most of the stories about profits being touted on Web3.0 rely on the procurement of funds in a form close to a Ponzi scheme. It is healthy that criticism is coming to the study group.
    I would like to know if you can think of any engineering technologies that are actually working in this environment that will remain in the hands of the engineers who participated in the boom and what will remain in the hands of the engineers who participated in the boom when the boom settles down to some extent.

    • Speaker: I work across engineers are trying to achieve something, but a typical problem is how to make the external storage referenced by NFTs persistent. NFT is really only a core contract, but there is a Issue at the engineer layer about how to create an ecosystem that references it.
    • Speaker: I work across think that how to create smart contracts and incentive structures technologically is a very interesting problem. I think that what applications will be applied in the future is still developing, but in terms of remaining in engineering, how to use blockchains and smart contracts is a very interesting problem from the perspective of security. Hopefully, Japanese engineers will be able to participate in it, whether it is a Japanese project or an overseas project, from the perspective of engineers, there may be many, but technically, there are still many things left.

  • Member: Web3.0? For example, I think Silicon Valley is basically a city of engineering and venture capitalists, and I think the situation may be different from that in Japan, so I would like to ask what kind of people around you are residents of the ecosystem and how they are working.

    • Speaker: I work across , and I feel like the token economics stuff has died down and winter is here, so I've been working on distributed messenger protocols. Investors have been talking about Web3.0 for a while, and the days of mobile and the Internet being big money are long gone. Now, like Web2.0, VCs seem to be shifting a bit from asking the same questions about who the users are, who benefits from it, and what problems it solves, to asking a little more about what the new business will look like.
    • Speaker: I work across stakeholders, I would like to mention end-users. For example, a product that takes photos of a city with a dashboard camera and receives coins in exchange for updating the map is about to be launched and is about to be notified to end-users. There is one place that aims to deliver actual solutions and values to end-users, and it has been passed down to the end. I think there are not many cases in Japan where it has been delivered to end-users, and I felt that this is a big difference from a sensory point of view.

  • Member: The latter took it as a suggestion that it is necessary to involve end users in the design of products and projects when launching various projects. The former recognized that the conventional merits and Issue solutions are once again being asked in the discussion of the business structure that supports the ecosystem. Then, it seems that we have entered the stage of upgrading the version of the conventional fat protocol discussion, increasing the resolution of what is the closed part of the protocol part in the business structure discussion, what is the externality, and what is the community including the pain point actually, and working out the details.

    • Speaker: I work across . It is very interesting that individual contributions are useful for social infrastructure contributions and are bound by tokens, rather than simply selling speculative tokens, so it is desirable that Japan will also have more such examples.

  • Member: Currency actually has several functions, and among them, I think that Bitcoin focuses only on remittances and extracts only a small part of the functions of currency. It may be a rather fluffy talk about what you want to achieve, but if you do not discuss it here, you will tend to focus only on technical matters or lose sight of the original purpose. Therefore, it is desirable to have such a discussion or at least a place where you can express your opinions.

  • Member: In the first place, I think that this study group in Digital Agency must continue to discuss what we want to do and what we are doing as an on-going thing, so I would like you to discuss what you are aiming at.

    • Speaker: I work across , is trying to realize the ownership and rent of books through a dedicated smart contract, and it is a very interesting challenge that this may become a digital book with ownership if it is bundled together. It is difficult to purchase with a wallet connected, but viewers only need to download and watch it, and it is interesting as a challenge. What is a blocker when this is accepted? It is desirable that based on good challenges and practical examples, we can discuss what is blocking it. It is introduced as an interesting example.
    • Speaker: I work across NFT Marketplace for a moment. It's just a single, obscure external network of NFTs that's predicated on the premise that it could be profitable. There's a lot more to come, but I think the concept of NFT itself is almost equated with NFT Marketplace. Maybe we can focus more on actual examples.

  • Member: Expert Council, and we will take a close look at what specific examples there are. However, we would like you to provide us with information on viewpoints that should be paid attention to. On the other hand, since the period of this study group is quite short, there is a considerable probability that what succeeded in the early stage at that stage will take on a completely different aspect six months or one year later. Based on the fact that what was introduced in anticipation of good results at that time may be judged six months or one year later, we would like you to give us various wisdom on how to take it up in the report.

  • Member: While there is a big gap in doing things around here, if you are afraid of a big gap, you cannot discuss it. If you are too worried, you cannot discuss it. So, shouldn't you work on it without worrying too much?

  • Member: Please tell us if you are looking at it from the perspective of the United States and if there are any examples of it being used as social infrastructure such as regional revitalization outside the United States and Japan. In addition, you said that even if it is NFT or Web3.0, we live in the real world, so it is important to connect with the outside world. For example, assuming a virtual first and virtual native world view called metaverse, please tell us if you have any opinions on how to look at it from the perspective of engineers.

    • Speaker: I work across Web3.0, but I can't give an answer because I'm still kind of stacking this example.
    • Speaker: I work across metaverse, I think that there is a need for discussions on how to convert assets, whether it is meaningful to do so, and whether currency is fine as long as it can be used for everything. Even so, there are return, purchase, and hassle, so it is necessary to have in-depth discussions on these points. Assets are too different in each domain, and it is difficult to imagine situations where it is really necessary to move assets across domains.
    • Speaker: I work across People around Silicon Valley who are discussing metaverse are close to games and meta, but there are more talks about blockchain and Web3.0 around them. It seems that metaverse is becoming a keyword in Japan.

  • Member: When considering the perspective of the ideal image, there is an abstract problem awareness that the materials currently being prepared by the Secretariat are probably from the Japanese perspective. However, when viewed from the perspective of foreign countries, if there is any problem awareness about the ideal image, I would like to ask you.

    • Speaker: I work across , I am forced to feel inconvenient as an overseas resident. I think that the fact that there is no nationality relationship should be welcomed, but I do not see to what extent I am thinking about the necessity of staying in Japan. I think it is better to think more deeply about how much Japan must be, such as whether it should be Japan or whether Japanese companies will play a part in it.
    • Speaker: I work across Web3.0. While we should always be aware that the Japanese people will enjoy the benefits of this system and improve their lives while saying that it will break away from centralization, I think that there are many cases in Japan where it is difficult to think about the perspective of making travel across borders more smooth. In this context, it is desirable that there will be more discussions on how to use such technologies and infrastructure to make things more smooth.
    • Speaker: I work across , but if I live in Japan, there will be the inconvenience of not being able to exchange coins for Japanese yen at ATMs. If you work for a DAO in any country and you can exchange any coin you receive for Japanese yen immediately, everyone will do that, and it will lead to the acquisition of foreign currency. At present, it is difficult to convert them into Japanese yen through an exchange, but we need to discuss such points at the layer.

The second half ends here.

  • The secretariat explained that the next workshop is scheduled to be held on Friday, October 21.
  • The secretariat explained that the minutes of the meeting will be published after the members confirm the content.
  • In October, we are thinking mainly about hearings, and since outputs and interim reports will be released in November, we will report them by dividing them into several areas. The same applies to DAO. The secretariat explained that we are thinking of having discussions based on three or four interim report sessions in November.

End