Fight Club: Syndicate Protocol - Ian Lee October 10
Type
cadence
Flow
Date
Note-taker
Attendance
Last Edited Time
Jan 31, 2022
Last edited by
Transcript
Okay. Um, thanks for having me and, uh, thanks to everyone for, um, uh, taking the time to meet today. Um, how so do you want to start off with any context and then I can jump in?
Yeah, so we, um, I mean, I think everybody in so far in this chat is pretty familiar with, um, what a service provider is doing and they were here for, um, Will's presentation, uh, earlier on, I think it's much more refined now in the initial one. Um, and I think most people here are, have also seen the coinocracy quote and, um, I think have had the update of what open law is suggesting as well. So I think in that terms, it's, it's a pretty, everybody has a pretty good idea of, um, of like what our expectation is. Um, and I think what you're going to offer is going to be, I think, more interesting and probably more inclusive of what we want to do.
Sounds good. Anything, any goals for this session before I present?
Um, I liked the permanent. Um, just, you know, the overview of what syndicate is trying to do because the overview of what syndicate is doing, I think is more important than I think the dollar amount, although that is kind of important, but, um, the, the bigger picture I think is, is of more value.
Okay, perfect. Um, excellent. So without further ado, I will, um, send and share my screen just in one second. Um, okay. Hold on while I get things ready. Um, all right. So, um, first introduce myself. My name is Ian. I've been in crypto for seven years. Um, or ahead of crypto at Citi group's venture arm in 2014 led IDEO's crypto division for well, six years actually. Um, most recently as, uh, as the managing partner of their fund for the last four years. And, uh, co-founded syndicate, um, earlier this year with, um, a bunch of people. And so what I'm going to share with you is, um, a short deck, um, which has some of the latest on syndicate and what we're doing. Um, so I'll just kind of give you a quick overview and, um, and then open it up for questions at the end.
So I think the first thing which Tessa, you were alluding to go ahead, sorry. Did somebody have somebody to say, okay, all right. So, uh, what Tessa was alluding to is what is our theory of change, um, as it relates to investing in the world and specifically in web three, and what we fundamentally see and believe is that investing is going to change dramatically in the future, and it's already been happening for decades. Um, but it's going to accelerate over the next several years and specifically within web three. And we believe that web three is going to lead this revolution. And then ultimately that revolution will start applying beyond web three, like traditional investing and also in other contexts, um, outside of even startup and technology investing. And what we see happening in web three, uh, which we believe is going to broadly apply to the investing world is that investing is going to be increasingly decentralized democratized and community driven.
And I'll talk about that in one second, but what syndicate is doing is we are building the infrastructure to enable web three native investing at scale. So what is web three native investing? We believe that web three native investing is fundamentally different than any other kind of model for investing that we see even right now in the crypto space, what that looks like is that projects founders in ideas and startups are conceived, formed, funded, developed, grown, and supported within web three native communities and never, and across web three native communities. And in the future, they're never going to have to go through the traditional fundraising process of creating a deck and going to sand hill road. They're going to be able to be formed and capitalized and supported and grown and developed within web three native communities and never have to go outside of it.
And what's really interesting, and I'm sure you've already seen this within Bankless and we're seeing this within a bunch of communities that we're implementing this in right now, is that within sub channels of a web three community discord, there are founders in those channels who say, Hey, I have this idea. And then people in that channel say, Hey, like I love to fund you. Let's do it. And then they start funding them. And their angel round happens that is starting to happen at the angel round. The pre-seed round, we believe the seed round. And ultimately it's just going to keep on going and going from there. And as a result of that new type of behavior and set of interactions, that necessarily means that the tools, the infrastructure, the interfaces, the capabilities, the protocols, even to enable this are fundamentally different than what we see and have at our disposal today.
And historically, and that is what we are building with various web three communities. So, um, for many of you who, um, or some of you who may maybe following along, you know, we've, uh, been bringing a lot of people into this project that we're building in this, um, set of tools and infrastructure that we're building. The key thing here is that in order to make this happen at scale, it's actually very, very complicated in the sense that it's not just a technical innovation, but it's also a operational innovation, a market innovation, a business model, innovation and illegal innovation, and to tackle all of those at once, um, is, is quite the task. And, uh, that's why we've scaled up our team pretty significantly in all of those areas, but also why we brought in a ton of partners who have expertise and capabilities in areas where we need help in order for the ecosystem and community to really, uh, do this, uh, the right way.
Uh long-term okay. So getting a little bit more into it. What is syndicate? Um, we haven't shared a lot of this publicly because we've been so kind of heads down building, um, our tech stack and our legal stack and all this other stuff. But the way to think about syndicate is that it's a series of protocols and it's also a series of, uh, platform, applications and services, ultimately that live on top of these protocols and at the, at the lowest level, the protocol that is already on Ethereum main net, um, that has been around for actually, it's been on the internet for the past couple of months right now, is this defi dao protocol, which is kind of the base syndicate protocol. And what that protocol does is it enables any community to create an investing now in single Ethereum transaction in less than 30 seconds.
And, um, you know, the cost of launching that investing Doa is the price of gas. And what that protocol does is it automates things like managing deposits, managing the quote unquote cap table of the investing Doa, so that you're not or, you know, communities are not having to like manually record this on like a Google spreadsheet, which a lot of people are doing. Um, off-chain and it also automates things like not only deposits, but also distributions on the backend. So you can like, for example, instead of sending like 50th 50 transactions from a multisig, you can instead distribute, you know, a token via a single transaction and things like that. Um, on top of that base protocol, there are other protocols that we are building though. And I'll share a little bit more about what these look like in a second, but at the high level, um, there, there are other sort of financial protocols that we're building that layer on top of the existing one that I mentioned as well as social networking protocols and those social networking protocols are really powerful because the combination of the financial protocols with the social networking protocols enable communities to collaborate and co-invest together in ways that honestly are, are things that we've, we've never seen before.
And that's where the platform, the applications, the tools and services on top of it, um, you know, sort of like plug in. Um, so one thing in particular, for example, at the services layer at the very top and tools layer is we're building a bunch of like legal tech solutions that enable, um, for example, investing Doas, uh, to maintain compliance and keep those investing Doas and their members, uh, compliant with securities laws so that, you know, people in these investing daos don't need to worry about, um, you know, the sec one day calling them or whatever. Right. Um, and so th this, this whole stack, you know, we are building very like methodically, um, but we already have a, um, a V1, if you will, of the minimum components of the stack to implement this structure within communities like Bankless and many others that we're currently working with.
Okay. One more slide. And then, um, I'm sure there's a lot to talk about. So what do we, what is this infrastructure enable, uh, and, and set of tools enable for communities and what three communities like, like Bankless and others. So the, the combination of the stack, the, the stack is actually productized into these, these three areas, uh, which I'll quickly walk through, um, at a high level in it. And, and, you know, we're, we're going to be sharing more about this publicly, um, in the weeks ahead, but, uh, for now kind of, you know, this is, uh, I can share it to you verbally. So the first thing, the first box on the left that are these investor community tools, what these tools enable our web three communities like bank lists and others to identify and create sub-communities within that web three community, specifically for investors.
And one of the key tools that we, um, have built and are shipping with a number of, uh, these, these user groups are, are these, this concept of investor NFTs. So for example, in Bankless, uh, I'm not sure how many people are in this discord, probably thousands, or maybe more than that, like tens of thousands, but within that only some of them are interested in investing for example, and maybe even qualified for investing. And so we have this tool or set of tools that enable Bankless to either issue or even, um, like sell if you, if you want to, uh, investor NFTs that invite them into sub communities within Bankless that are focused on investing. And on top of that, there are a bunch of other NFTs that we're going to be able to issue, including, for example, accredited investor entities, or maybe like investor NFTs that, uh, where, where someone says I'm specifically interested in investments in the defy space, or maybe in, in certain regions of the world or something like that.
Right. And the combination of those investor NFTs enable, um, those communities to very quickly invite, uh, based on the entities that they have, um, you investors into opportunities, which goes into a box number two, and what box number two is, is the infrastructure for web three communities to create what we call investment clubs like web three investment clubs instantly on demand. And that is the core infrastructure of the V1 protocol that we already have live, which enables whether it communities like Bankless to spin up investing Doas as investment clubs on demand instantly, uh, to invest, to, to enable its and its community, to co-invest, uh, into opportunities with each other. Right. And so, um, that's the protocol and there's like also a minimum set of tools, including like, even like legal tools that protect those investment clubs, uh, from a compliance perspective. Um, we're also building, for example, a bunch of, um, on chain tools, like dashboards, where you can see the investments in any one of these investment clubs in real time.
Um, and a whole range of like on chain tools that, you know, streamline the process of running an investment club on chain, um, as an investment debt. Okay. Now once these web three communities create potentially dozens or hundreds, or even thousands of investment clubs, then what, and what we are building. Um, and about 50 to 60% done already, uh, from a protocol perspective is this concept of investing networks. So once you have hundreds or thousands of the, of investing deaths within the web three community and potentially across with three communities, we can now start to socially network investing doas on syndicate. And that is what we are currently developing is the protocol, infrastructure and tools that enable investing doas on syndicate to start to socially network and financially coordinate sending out autonomously or autonomously. So what does that mean? Well, we're working with other web three communities kind of like bank, not, not like bank less, but I mean like they're big or even bigger than bankless, uh, from like a Discord perspective.
And what they're imagining is that there will one day be hundreds or thousands of investment clubs within their web three community and those investment clubs on syndicate within the left three, or there, there were three community and discord will be able to collaborate as a social network to invest in startups as they kind of like go through the process from incubation all the way to, you know, seed stage or series a or, you know, public token launch. And that social network of investing Daos is what's going to enable them and their communities as scale kind of their investment capability over time. The second dimension of this though, that's really exciting is that because syndicate Doas on our protocol and platform are socially networkable, they're not just socially, networkable within one web three community, but they're actually socially networkable across with three communities. And so for example, you know, we're working with about, um, a dozen communities right now, what happens when community X, Y, Z starts socially networking and styles investing does with bankless, investing deals on syndicate and opportunities and investments can start to cross over between what three communities.
So maybe like an idea starts out in Bankless investment clubs within Bankless fund that thing. And then it wants to pop out right, and get the support and alignment from other web three communities. And now that instantly happens or very, very quickly happens via syndicate and other web three communities that are on syndicate. And vice-versa what if a startup, you know, um, get started in some other web three, you know, community, uh, in their discords or otherwise, and now they want to seek the support from Bankless and Bankless has the infrastructure and connections now to easily and very quickly invest and support and align themselves with that start up right. That is where all of this is headed in our opinion, over the next, you know, several months and years. And this is the infrastructure that we are building to enable that at scale. So, um, lots of stuff to talk about, um, I hope this is helpful.
Um, but, but we're currently, uh, last couple of things and then I'll, I'll just, I'll end it and open it for questions is we're currently implementing this with, as I mentioned about a dozen, uh, web three communities right now, many of which I'm sure, you know, you would know if I, if I was able to tell you, and, um, we're currently implementing the V1 of this structure, which primarily is this box number two, um, as well as we're going to be rolling out box number one, probably like later this year, early, next, and then this one we'll start, um, uh, as, as a bunch of these communities come online, like we'll start interconnecting them in early Q1. Um, and so, uh, we're working with, you know, a dozen or so high priority kind of groups. And, um, you know, we'd love to see a bank list wants to be a part of that, uh, initial set, I guess, what, what is very clear to us even already is that the, um, the, the even tacit social connections between communities that we're currently working with are already there.
They're just not, um, formalized or like codify. And so what we already see is network effects that are already like, like there and, and are likely going to build once they all come on syndicate in the coming months. Um, and it's really exciting to think about like how, you know, for example, the lead through project and get the support in alignment with not just one, but multiple web three communities during its bootstrapping phase. And maybe never has to like, you know, go the traditional route of investing or fundraising through like Sanhill road and other things like that, because it smarts out and gets the support and grows with the support of web three communities natively throughout all parts of its life cycle. Um, okay. So I'm going to stop there. So there's lots of questions, but that's kind of our, our vision roadmap and the things that we are working on.
Um, thanks again. Does anybody have any, any questions for him?
Yeah, like just the first question. Um, and how are you handling, um, investments? Would it be only possible to do investments in companies that have tokens or would we also be able to do, for example, let's say real world investments outside of the token world.
Yes. Um, both are possible. So on chain investments, I E you know, investments into tokens, uh, for, uh, NFT is, or, you know, some type of certain types of Doas as possible. And then off-chain investments are also possible. Um, and the way that that is enabled is, well, two things. One is a requirement on the startup side, like if you're investing in the equity or like convertible note, like a safe agreement or something of a startup that's enabled by two things, one is that the startup needs to be able to accept crypto as the investment, like typically USD-C or some other stable. Um, the other way that that is enabled is through the legal infrastructure, um, that we provide, which enables any investing doa syndicate to, uh, have a legal entity and that legal entity can therefore sign, uh, the, the, the legal agreement, um, of the startup, which is like the equity or something like that.
Cool. Exciting. Thank you.
Um, thanks for the presentation. Um, sorry, the strangest time, um, is it, is it possible to somehow, like get a demo of this stuff? The concepts are really interesting, but I just find it hard to actually visualize how it would, how it works. Is there something we can like log in and play around with, or,
Um, I can show you, show you a quick demo, uh, from my, my website. Uh, um, so let me quickly do this. Nope. Hold on. Um, hold on one sec. I will show you. Okay. Alright. Um, so the, the application and protocol is currently in, um, private data. So, uh, people can't access this unless we permission them. Um, and, and so what you see here is actually, uh, the create syndicate flow. So you can like, you know, for example, create one of these, or you can go through like the whole custom flow, which I won't walk you through right now. Um, but basically, like, let's say, I want to create an investment club. Um, it, it auto, um, populate certain defaults. Um, according to your choice, uh, enables you to make a couple modifications. And then, uh, assuming, you know, kind of like, um, what, what you're trying to do here, you just click continue.
You confirm that the final choices are right, and then you get finished and it queues up the Ethereum transaction to launch the investment. Now, um, I'm not going to do that right now. And so that once you do that, the investment doubt is created on chain. This is what one looks like actually, um, currently, so this is a, uh, syndicate, um, and it shows you that three people have deposited, uh, 1100 USDC. This, this information is kind of the on chain information and, um, uh, what we are currently. Uh, and, and so right now, actually, there's no actions that are enabled on the syndicated because I, it looks like it's a, yeah, it was closed on, uh, to some, uh, October 2nd of this year. But, um, when certain actions are enabled, you'll see actually like a widget up here that will enable you to deposit into it, or like a whole host of other things.
The other thing that we are currently, um, uh, working on shipping, uh, this should be by mid November. Um, the exact date TBD is you will be able to see, uh, for example, on this page, um, a whole host of features, like what assets on chain, as well as off-chain, uh, currently live inside of this, the syndicate, this investing Dow. So it'll show you like what tokens are in here, what NFTs are in here. Um, even the ability to what we call annotate off-chain investments into private startups will be, uh, available and visible, uh, here. And this, this page is really like the home base for all syndicates, so that members can increasingly, both see what's going on, but also even manage, um, the syndicate, uh, you know, very easily from this common interface. Uh, for example, like in the future TBD on exactly when, but like governance votes, um, and a variety of other things, even document uploads of like investments that, um, the syndicate has, has made. So we have a bunch of life, um, you know, uh, for example, let me see if I can, I can pull this up. We have a bunch of things that are in development right now. Um, uh,
Um, how much of it is actually, how much of it is actually live and usable, um, because it, it sounds great, but there's a lot, you're saying that it's in beta, um, how much of it is live and how much of it has been sort of battle tested and also audited.
Yeah. I mean, this is live right now. Um, and we've been launching syndicates. Uh, this is live as well, uh, roughly like, you know, three a week or so. Um, and on top of that, it's been like rigorously tested and audited. It's been fully audited twice mult, like three security reviews, thousands of tests. So, I mean, it's, it's, it's there, um, in terms of like the stuff, which I'm showing you right now, which is like this, where you can see like the assets and even NFTs and other things in it that this is not yet live, this will be coming online in, um, like mid November.
Okay. Thanks.
Um, yeah, just, just coming back to this looks amazing in, um, we've been so, so I'm here for fight club, but also really interested for FTW, which is, um, is a fund that we've been working on for the last year. And we went from wanting to start a traditional fund to slowly like getting into daos and then realizing that Daos were everything in the future. Um, so this is amazing. Um, but Tessa mentioned something about like the sort of, um, NFT categorizations for investors. And I think you touched on it a little bit. I'm just curious, like when that will be live or if it's already live
Yeah. The factory, um, for, that has already been built. Um, and, and so, uh, we will be rolling that out, um, sort of in, in private beta or something, um, through the rest of this year and then more publicly, like roll it out early next year. So it, it already is, um, the contract's been built, it'll probably be available like in a few weeks or something like that. Um, we're, you know, we're building that actually for a number of what three communities that are going to be launching in, you know, launching with us in early November. Um, and so, yeah, like that that's already, that's already pretty much there.
Okay, cool. Yeah. I don't want to hijack the call on that topic since this is fight club, but it would be great if we could connect on discord and chat about FTW. I think this could be really interesting for us as well.
Um, and I'm not sure if this question's been raised to you previously, maybe with your discussions with Tessa, but, um, how would we run, um, two entities potentially here, like one us onshore or offshore can the two things be sort of fit into the infrastructure as we're trying to maximize the amount of people, um, who can be onboarded into what we're doing here at fight club?
Yeah, right now we're, um, our infrastructure supports us, uh, entities to be credited on the fly. Um, you know, if, if they're off shore entities needed for some reason, um, then that's something that, uh, unfortunately we don't currently support all, like, you know, want to build that or have that, um, or something like, you know, um, then, then our tool basically would, would just kind of be compatible with whatever legal structures off shore you have. Um, you know, we, we are working with a couple groups who are creating entities and like Cayman and, you know, some are looking at, at Singapore right now, um, as well as like Korea and stuff. Um, but like, you know, we, we, we, we, we are not, uh, currently tackling, uh, those, those kinds of jurisdictions from legal entity perspective. So our legal entities are created in Delaware, which honestly is like, you know, what most of our communities and users, um, are asking for right now. Um, we'll, we'll eventually get to those, those other jurisdictions, but just, just not right now, given how early we are. Sure.
But it be possible if we form our own, if we do the jurisdiction legal entity formation ourselves, then to onboard that within the governance on smart contract end of syndicate.
Uh, yeah, I mean for offshore. Yeah. If you want to, if you want to do that, we can talk about how to make that happen. Um, you know, what we're finding though is like, for example, with Cayman, um, where, you know, you, you make up, um, some advantages, uh, from like a, I don't know, like tax perspective or whatever you lose from like a KYC perspective. Um, like I'm not sure, you know, how many of you know this, but like, like KYC into a Cayman entity is actually even harder than like KYC and into a U S entity. So there, so there, there are a lot of trade offs. Um, and, and if you, if you all want to go down that route, you know, just, I recommend like kind of, you know, talking to some lawyers and going in with eyes wide open, because like, for example, setting up a Cayman entity, um, and Tessa, you and I talked about this, like the entity creation might be $10,000, but the lawyer and like administration services to actually like run a Cayman entity is like minimum $60,000. Um, whereas like, you know, for us with, with our infrastructure, granted, you need to like follow very particular guidelines in terms of how syndicate is implemented. At least in the near term, you know, syndicates, uh, legal infrastructure in the U S it costs a thousand dollars one time to set up, and then it's about like $700 a year to maintain. But with that infrastructure, you can create an infinite number of legal entities in the U S on demand. So like, you know, that's kind of the trade off
Has any more questions we're kind of at Ian's time limit. And we should kind of, um, kind of want to respect this time. So maybe one more question,
Um, yeah, just turn, that's an operations perspective. Like, would you be able to tell us, um, I don't know if there's documentation you could share about just the overall cost of everything and a little bit more detail about the services, like your legal services and auditing services and things like that. It doesn't have to be now. It can be later.
Yeah. I mean, it's, it's really straightforward. Our, our business model is like to be determined, to be honest. Um, but, but I can guarantee that our business model is a web three business model, which means like we're not charging for setup, like, or like, you know, a S like a web to services, business model. Like, that's not why we're here. Um, and so the cost to set up is, is purely like the legal fees associated with setting legal entities up and stuff like that. And we just need to pass that onto customers that want to, that want us to help them do that. Um, so basically, like the one-time setup is a thousand dollars for the us legal entity or entities, uh, infrastructure, and then on an ongoing basis, um, the cost to maintain that legal entity in Delaware is roughly like 700 bucks a month to the state of Delaware, um, to just maintain those legal entities.
And then the kind of like, uh, variable costs, if you will, of using our infrastructure is the cost of gas of like, um, spinning up investing dollars on syndicate and interacting with the core functions of the protocol, um, which, you know, depending on gas fees or whatever, um, you know, range, um, we're also likely deploying to L to probably in a month or so. And so, you know, the cost to do stuff will be, you know, pennies or whatever on L two L one is a little bit more complicated because you know, of all the IOT stuff going on right now. But, um, anyway, that that's, that's, it, we, we don't have like a service fee. We don't have like a percentage of AUM fee or anything like that. There's just not, we, that's just not like our business model and that that's not what we think the business model of the future really is.
All right. Um, anybody else, otherwise, I'm going to wrap this up really quickly. Cool. Well, thanks. And, um, really appreciate it. Thanks for the presentation. And, you know, we have our meeting, um, I would be meeting sometime soon, so hopefully we'll have enough information to go ahead and push for a vote.
Great. Yeah. And I would just say like, you know, um, just final kind of thing is, uh, like, you know, we're still early in our process. This is what we're solely focused on. And our team is 30 people, you know, 20 engineers, two lawyers, a bunch of like, you know, other people designers and stuff. And we're just kind of going to be layering on like new capabilities, technically legally operationally, like, you know, every single week or month. Um, and the last thing I would end on is it's just like, we fundamentally seen that web three native investing is just very, very different. It's, it's not like creating a fund and putting it on the blockchain. It's like going to be as different as like commerce is to like brick and mortar commerce. And so, um, if you kind of like want to go on that journey with like others, that is the future that we're building towards, not like kind of recreating, you know, the web tube model in a web three world.
And, and so, um, you know, we, we, we really believe that like, that's, um, that's why we're here. And, and, um, what's going to kind of really set, not only syndicate, but investors on Seneca apart from, you know, people that aren't using kind of, you know, web three native modern infrastructure for investing. So, um, anyway, uh, thanks. Thanks so much for your time. Um, look forward to hearing back and yeah, thanks. Thanks a lot. This is a love bank, less love with what flight club is trying to do. And, uh, I definitely think that, you know, going forward, um, it's these kinds of communities that are going to be investors of the future. And so, uh, would love to support, support that in any way we can.
Awesome. Thank you so much yet. I've sent you a friend request by the way.
Thanks.
No problem. Thanks everyone. Bye.