Dual-Token Economy with Centric’s CEO

A full transcript of our fireside chat with Joel Clelland

Published in

Cardstack

22 min readMay 5, 2022

Introduction (0:00)

Chris Tse: Hello, Cardstack community. I am Chris Tse, the founding director of the Cardstack Project, coming to you from the land of the Web3. Today, we are joined by Joel Clelland, the CEO of Centric, to discuss his protocol and his application’s connections to make payments in stablecoins and dual-tokens — which is the vernacular we use everyday in Web3. Welcome, Joe.

Joel Clelland: Thank you.

Chris Tse: Can you introduce yourself and tell us a bit about your project? What brought you to this Web3 crypto world? What is your current focus within bringing the Centric project to the mass market?

Joel Clelland: Thank you, Chris. I’m glad to be here today. I started out like a lot of people in this space as an investor. I was investing in Bitcoin and a number of other tokens and coins, and I came across Centric protocol and was fascinated by it for two big reasons: first, because it was one of a few projects that are dual-token protocols — it had two tokens. But the thing that fascinated me was that the second token actually yielded more of the traded token every single hour.

I started accumulating, and after a number of months, I started connecting with the leadership team at Centric. We had a number of conversations and they mentioned that they were looking for a CEO and they thought I would be a good fit because I already believed in the project and was an investor, plus I came from backgrounds of traditional finance and education. One of the things Centric is really striving to do in this Web3 era is educate people on the trends and everything that’s happening, not just talk about our project, but instead help people. I think you probably see this every day as well, Chris, you meet people all the time that are very intelligent but they just don’t understand what’s going on. I mean, if you drop things like “Web3” they’re like “what’s that?”

Avenues to Web3 (2:02)

Chris Tse: They might learn about Web3 through one of its tentacles — whether they join a DAO because of a chat room or they buy an NFT or they heard about some tokens or through other custodial services adjacent to crypto. Once they get in, they see the world’s complexities; for every one thing you learn, there’s ten questions to ask and then the questions keep piling. And the learning resources — if you were to Google Web3 keywords — are nonsensical. The search results for crypto keywords are not good.

Joel Clelland: That’s true. It’s ridiculous. You’re right.

Chris Tse: I completely agree. When you are trying to not only build a product and explain what you do, but also explain what users can do with a wallet in our case, you’re going to run into difficulties. Again, ten questions pop up after you answer the first question — how do you create an account?

Joel Clelland: I think that’s funny. It’s amazing. I’ve had people come to me or come to the team and say, “I tried to send Tether to my native Centric wallet” or “I tried to send some Bitcoin.” I’m like, “oh, no, I hope you didn’t send too much because our wallet is only set up for Centric.”

Chris Tse: Right.

Joel Clelland: But it’s a fascinating world we’re in.

Description of dual-token model (3:17)

Chris Tse: Absolutely. You mentioned that you have this dual-token model and there are many other projects that have different types of dual-token economies. For example, MakerDAO has a governance token called MKR and a stablecoin called DAI. And there are other organizations that have two different tokens. One is a fee burn token for redeeming goods and services. Another is more of a staking token for producing things like Internet Computers or DFINITY Foundation. Those are very different dual-token models. You have a specific one with CNS and CNR, I’ll let you describe it. Can you describe to me the dual-token model and what fascinated you about it? What is the mechanism that it enables in terms of incentive alignment and the building of an ecosystem?

Joel Clelland: I started by looking at other dual-token projects, trying to find out the differences and the focus, like “what are they trying to build here?” One of the things that’s unique about Centric protocol is that it doesn’t include a traditional stablecoin or an asset-backed token, whereas a lot of these projects do. They’ve got a stablecoin in the background and they have another token that performs some function — maybe it’s a speculative token, maybe it’s integrated for payments, maybe it’s a utility token or a security token or something like that. One of the things that initially drew me to the project was the fact that the main token was designed to be deflationary. It was issued at the beginning of 2020 with a billion units and there were never going to be any more of this token. I don’t know about you, Chris, but I know when I’m accumulating, I always like to have some deflationary cryptocurrencies in the mix because they’re not making any more of those.

The same thing is true of Centric protocol. The other thing that I would say differentiates it from some of the other dual-token models is that we built what’s called a synthetic stablecoin, which is different. Basically, the second token, the token that’s traded on exchanges, is valued by the market. It’s programmed to be a dollar, but it’s valued by the market. As the market values the traded token, the value of the in-network token, the CNR we were mentioning earlier, continues to get closer and closer to its true value in the network. It’s a nice relationship between the two tokens because, unlike many asset-based tokens that are backed by the dollar or other cryptocurrencies, the network is really capitalized by itself at Centric. As people find out about it and decide to hold some Centric or transact in Centric, and as more protocols connect with our protocol and the ecosystem develops, we believe we’re going to get closer and closer to that dollar value even for CNS.

Symbiosis of asset-backing and algorithmic stabilization (6:28)

Chris Tse: That makes sense. I think the difference for most people when they’re looking at stablecoins is either that it’s like a USDT, a Tether, or a USDC coin from Circle, which is asset-backed. There are these new classes of protocol using smart contract algorithm incentive structures to do that. The newer players that are pretty big, like UST from Terra, have elements of this.

Joel Clelland: I looked at Terra.

Chris Tse: There are also protocols like FaZe and Frax. How do those ecosystems inform or align with your thinking about wanting to have a currency that can be used for payments? I think that’s one of the areas that’s most exciting. Why are we creating all this liquidity and supply? It’s because you can use this to make transactions in a more commercial way that’s more connected to the digital lives of people. How do you see these various algorithmic currencies — maybe not entirely algorithmic as many of them do have some sort of value backing them. Terra bought some Bitcoin to back.

Joel Clelland: Yeah, I noticed that as well.

Chris Tse: What’s your view of this kind of symbiosis between asset-backing and algorithmic stabilization?

Joel Clelland: There are mechanisms in place to stabilize the network. Right now, there’s a lot of speculation on our traded token. But there’s also a fixed element with the network token. I’ve looked at the charts up to 2029, and we’ve calculated all the way to what the price of Centric Rise is going to be at that point in the future. Of course, our team gets together and they look and forecast every month before hardcoding it to the blockchain. But I think having a fixed pattern in the network builds a lot of goodwill among the community. They look at the traded token and think: “Okay, well, the traded token is where it is right now, and it’s not going anywhere — well, maybe it is going somewhere. But it’s programmed to be a dollar; it’s a dollar in the protocol. I know that Centric Rise CNR is yielding more of this traded token every hour.” Do we have other assets in the background? Yes, but the primary assets of the network are Centric. 20% of the global supply of Centric tokens is sitting in foundation for the adoption of Centric as a global, borderless currency.

There are a lot of projects that have that in their DNA — they want to be transactional. They have a desire to maybe be like Bitcoin and be a reserve currency. There are a number of projects that I think are getting close. Over time, we’re going to see exactly what’s supposed to happen in the network actually happen. The nice thing is that I’ve seen the protocol work exactly as it’s designed and deployed every single hour.

The intersection between online commerce and Web3 (9:58)

Chris Tse: You can tell that the protocol is reliable when looking at it — it does what it does. One of the things we always say about Web3 is that the people who are in it right now are the people who arrive early to a concert before the bands show up. The masses are coming; we do expect the people to show up, but when they do, they’re not necessarily looking to do the same things that people are doing. One of the predictions is that NFTs, especially the NFT as a type of pure digital commerce, will help shape regular digital online commerce. It’s one of the biggest opportunities that many people in Web3 are looking for that’s yet to gain total traction. I know you guys have a big vision about utilizing Centric as a facilitator for the migration of online commerce — being settled using only fiat, but with the ability to also tap into these new types of assets and currencies. Can you tell us a little bit about your perspective on online commerce’s intersection with the Web3 underlying DeFi protocols?

Joel Clelland: I’d probably start back at BitPay. They were one of the earliest payment gateways where large companies like Amazon, Microsoft, and Hotels.com were thinking to themselves: “Sure, we’ll attract those crypto paying customers, but do we want to hold crypto on our books? No. Can we hold it on our balance sheet? No, not at this time.” I think that the payment networks have really grown a lot since then. It’ll be a year in July since we’ve integrated with the payment gateways. Depending on the payment gateway and depending on how it’s configured, businesses can decide if they want to trade, hold, pay out in fiat, or whatever. I want to attract those crypto paying customers. Like you said, Chris, we’re very early in the space. I talked with somebody earlier today, a gentleman who is a developer for a fintech company, and they’re developing a multi-token wallet. We’re thinking about integrating and doing some education with them. But it was amazing — he’s in our space and much of it is still very new to him.

Chris Tse: Right.

Joel Clelland: It amazes me that there’s such a large curve. There’s a growth or learning curve in this space. The one thing I always tell people is: “Just be patient, spend some time learning. There’s not a lot of great resources out there, but there are resources. Hit a Netflix or Amazon video about Bitcoin, blockchain, and crypto now and again and you’ll learn as much as you can about Web3.” One of the things I encourage people to do is join the Web3 conversation. If you’ve got a group of people in your area that are talking about crypto, NFTs, or the metaverse, then get in the conversation. There are always little things that we can glean from one another because nobody’s an island and nobody knows everything.

Shared communities across Web3 (13:24)

Chris Tse: The nice thing about Web3 is that it is a shared membership across micro-communities. You can meet NFT people through the Web3 keywords, i.e. you can meet someone who is really into OpenSea and they can teach you techniques. We are seeing glimpses of what commerce could look like. Then you may go to someone who is purely interested in community management, and they’re forming the future social fabric of how cooperatives organized using blockchain technology can replace corporations and associations. Web3 is really a great umbrella, a word to bring these intersecting communities together.

Joel Clelland: I agree, definitely Chris. One of my colleagues owns a patent on a couple of pieces of technology, and he’s developing a virtual container system. Whereas in Web2, a lot of big tech platforms were transacting in our data. That’s fine — we agreed to use their platforms. But in Web3, there are ways for us to share in this evolution together. Companies like his are finding ways to truly share in these trends and protect our intellectual property. You know, and protect our preferences.

Chris Tse: It is nice to think of things that you hold dear, like access to your assets is in your wallet. Right now, it’s very hard for me to give you something in a wallet unless it’s an NFT or token. There’s this opportunity to simplify this process. You can think like, “what is the zip file or PDF — how do you combine these things and trade them?” And it’s still very early. It’s very hard to trade assets for NFTs — those are still concepts that don’t have tools even though they’re very intuitive.

Joel Clelland: Right, just give me your address. I’ll send it to you. I’ll make sure I’ve got the right chain enabled.

Smart contract wallets, the user experience, and onboarding education (15:30)

Chris Tse: I hope so. Where does Centric deploy?

Joel Clelland: We’re on the Binance smart chain. Is CARD still on Ethereum?

Chris Tse: We’re on Ethereum and we’re also on Gnosis Chain. We have a bridge. We make use of a lot of the smart contract wallet features. I know people don’t really know much about smart contract wallets unless you have a significant thing to protect. Most people’s experience with it is if they, for example, use Argent Wallet, which is a smart contract wallet. We saw a great opportunity to use Gnosis technology — Gnosis Safe specifically — so we deployed on the xDai chain which then was voted to be part of the Gnosis Network. We’re a smart contract wallet that will work on all of the EVM-compatible chains soon. We are currently focused on perfecting the internal experience on Gnosis Chain.

Joel Clelland: That’s great. Yeah, everything that we do at Centric is about the user experience.

Chris Tse: Right.

Joel Clelland: It’s either less in gas fees or it’s easier for people to use. We initially started as a smart contract on Ethereum, and then we moved to Tron. We were on Tron for about two years or so. The reason we were on Tron is because it was fast and no-nonsense. But we ended up moving to the Binance Smart Chain because there’s more opportunity there. It’s still got the speed, and while the costs fluctuate, it just provides a good user experience. One of the things that we’ve noticed since moving to the BSC is that we’ve made a lot of good contacts. We started quickly integrating with other projects, getting connected with projects that have yield farms and things of that nature. Before we hopped on, we were talking about our latest partner that has a dApp for staking Centric Rise.

Chris Tse: While there are a lot of smart contracts that are being shared code-wise, there are these unique communities that are almost like cities. You make your house out of the same two by fours from Home Depot and the same kitchen appliances from the same places. But there are cultures and local community connections on each of these chains. They’re almost like little satellite cities. Not to say that Ethereum is like the center of the universe. It’s more like the first city, like Rome or Manhattan depending on how you look at it. But it’s really great to see this kind of new culture in different chains with different value systems.

Joel Clelland: You brought up OpenSea earlier and it’s the biggest NFT platform, but even the BSC has AirNFTs. We launched an NFT collaborative campaign last year on it, and it’s interesting because I still see how far the whole ecosystem has to go with every step forward — not just the Centric ecosystem but the whole ecosystem.

Chris Tse: I think user experience is one of them. The jargon needs to go. We can certainly have a chat on a podcast where we both say ten words in two sentences and every single word is jargon. We’ve got to be very careful making sure that people who are interested in Web3 for this cooperative ownership model can get through the jargon and say, “we’re building technology that is ownable by you where you can control your own assets.” I think that is still being clouded by either the technical language or speculator talk. Most people don’t speculate; it’s not a normal day-to-day activity for people who buy Whole Foods groceries and Costco in bulk. That’s about as much speculation as most people do — whether you’re going to eat all 24 boxes of macaroni and cheese before they go bad. That’s the only speculation people do on a day-to-day basis. So to me, education is super important.

What’s missing in Web3 education? (19:33)

Chris Tse: What do you think is missing in educating people about Web3, convincing people that this is a place for them? What is missing in what we’re doing as an industry?

Joel Clelland: Chris, I would actually echo what you were saying before about shared community. It’s a large, global shared community. I think the word “inclusion” has its place here. Like you said, a lot of the terminology, the jargon, or the cyberpunk slang if you will, is lost on some people, even people who are in the space. I mentioned a gentleman earlier from a fintech company, and there were some moments in our chat where I had to be like, “you’re familiar with that?” And he’s shaking his head. It’s good because if people in the industry are still missing each other with regard to communication, then we need to be even more inclusive. That comes through the educational component, just slowing things down and saying: “We all know something about what’s happening here. We all know that we’re not in Web2 anymore. It’s not Web2 anymore, Toto. We’ve left Kansas.”

Chris Tse: Web2 is Kansas.

Joel Clelland: That’s right.

Chris Tse: We’re in Oregon Trail.

Joel Clelland: That’s right. We’re in Oz now, in Web3. It’s fascinating to me that some people still think they’ve missed it because Bitcoin is what Bitcoin is. I still meet people almost every week that think they have to buy a full Bitcoin to get some Bitcoin. I get a chance to talk about fungibility, fractionalization, and Satoshi. I’m like, “watch, I’ll buy $5 worth right here at the table” to help people relax. I think a lot of people want to dip their toes in the water just to learn.

What are some “ah-ha” moments in Web3 education? (21:45)

Chris Tse: One of the interesting things about Bitcoin is that people don’t really understand that there are little bits of Bitcoins called Satoshis or SATS. People stack SATS and that’s a very foreign concept to most newcomers. There’s this company called Lolli that issues a credit card; and based on spending, you get SATS in the same way you would get airline points, credit card points, or airline miles. I thought that was really clever. It’s a way to teach people that you can accumulate or stack this Bitcoin by just doing what you do. Using analogies from Web2 and regular life that people already know when explaining Web3 concepts is super important. Now, obviously, once people know about Bitcoin or learn about smart contracts, there’s a lot more of “down the rabbit hole you go.” But as a first step of understanding, these techniques are quite interesting and useful. What have you seen in your journey as a crypto user and educator involving “ah-ha” moments?

Joel Clelland: I hate to bring up gaming or casinos, but casinos and gaming have been around a long time, a lot longer than crypto. One of our very first partners was an online casino. Before I was even in crypto, I knew a gentleman — a friend who’s actually a professional drummer — and part of his retirement plan includes playing Hearts. He plays Hearts online and makes between $5–10k per month playing cards, and he’s been doing it for many years. People who are into casinos and gaming — don’t get me started on all the gamified platforms that are out there — understand what it means to accumulate rewards or what it means to win.

If you can tap into people’s desire to win, then they will want to acquire whatever the game has to provide them. I think we’re going to see a lot of growth in play-to-earn games. I think the play-to-earn platforms are going to be very popular. They’re popular now for people who are into that niche, but I think it’s going to be an entry point for a lot of newcomers.

Chris Tse: It goes without saying that the young generation who are growing up with video games as their main creative outlet cherish the accumulation of digital swag.

Joel Clelland: There you go. That’s a good way to put it.

Chris Tse: Not all of the games have monetary value, but some of them do. Maybe the monetary value is less important in some cases. In a true gaming sense, a lot of the appeal is in social status and reputation.

Joel Clelland: Exactly.

Chris Tse: It is a type of like, “earning your way through this world.” I completely agree with you. I think gaming is leading the way and the culture that already exists is very compatible with it as people come of age. It is surprising how young crypto is as a field. Obviously, building tools and infrastructures, laying out regular structures, and creating business and consumer adoption strategies requires the experience of dealing with the world as it exists today. But the users, players, and people in the midst of it are very much ready to translate their accomplishments made in the various versions of the gaming universe to the crypto universe. Some of them have been very successful.

Joel Clelland: That’s true. I agree.

Homogenization vs individualization across chains (25:42)

Chris Tse: I thought of a question when we were talking about this idea that there are multiple blockchains and different types of community: Do you think that Web3 will come together? Do you think that protocol needs to be deployed to all chains?

Joel Clelland: Like a universal remote?

Chris Tse: Yeah. What do you think of this idea of having clusters of different protocols serving similar features — almost like how, instead of everybody having a Home Depot, they have a handful of local hardware stores, each with a different culture? Do you see a homogenization of protocols across chains or do you see different chains establishing credibility? How does it affect your plan for Centric?

Joel Clelland: That will be a natural trend. I won’t say that there won’t be multiple chains because I think there always will be. Even Centric has a native blockchain in our roadmap. One of the things that I think is inevitable is compatibility. There’s got to be a way for people to integrate no matter where they are, no matter where they tend to play in the Web3 space. I was talking with a gentleman who’s thinking about developing another DAO. They want to have every type of cryptocurrency available in the wild to be able to integrate with their DAO. Of course, they’ll have their DAO token and their ecosystem, but I think there’s got to be a way for everybody to work together. I think there is a way to do that; there are enough people in the space. Like you said, it’s very much a sharing space. People want good protocols to win and they want the space to win. I think at the end of the day, there’s going to be some type of compatibility. But it’s a baby space — I agree with that, too. I don’t think that any development is going to be slowed down by compatibility.

Chris Tse: It’s kind of like how you can look at the United States; they have a federal government and a federal law, but then states can experiment with different rules and policies. I think we’re seeing that. But the best ideas do propagate a little bit. I’m not saying that this is a federal system, but it’s definitely a kind of experimentation at the local level, at the different chains. If a consensus is reached like, “oh, this staking model works really well,” then most people end up emulating it.

Joel Clelland: As people align with the things that work, I think there’s going to be consensus.

Chris Tse: Yes.

Joel Clelland: The C word.

Centric’s efforts to perfect the user experience (28:26)

Chris Tse: I think this integration, especially around the user experience, is super important. Much of our focus at Cardstack is on the front of the frontend, dealing with the wallet experience. How do we leverage smart contract wallet technology to provide account recovery and gasless transactions at the wallet level while also interacting with a protocol that you want to participate in? What steps are you taking to make sure that people learn more about your protocol, Web3 in general, and community members’ roles when participating? What are some of the efforts that you’re putting in place for that?

Joel Clelland: Our team is always looking to the future and thinking: “Okay, what do people need now? What do they want? Where does the white paper tell us to go?” If we don’t align with our white paper, we can very easily get off the rails. But one of the things that we want to do is make sure people understand the Centric protocol. One of the learning tools we’ve deployed is a bi-weekly educational series. It’s a webinar series. It’s every other Wednesday, and it’s free. It’s about basics. We demonstrate how Centric protocol works. We show people how the wallet works by doing a demo; we’ll do an exchange, pick up some Centric, and bring it into the wallet. We show the power of conversion. Converting from the traded token to the network token — the network token yields more Centric every single hour. And we answer related questions. But one of the things we try to do is keep the doors open. Protocols that have solid Telegram, Discord, and Twitter presences are very accessible, and I think being accessible is huge. If teams don’t make themselves available to the community, then it’s hard to grow and get support.

Chris Tse: I think availability and accessibility — not just availability of the people but also the accessibility of the language — is really a part of the ramp needed right now. I think about it in terms of making it a wheelchair-accessible ramp, like a gentle on-ramp.

Joel Clelland: I think the basics are super important.

Chris Tse: Absolutely. I think walking people in real-time through the actual experience instead of doing, say, a quick cut TikTok is important. Sometimes people say: “Hey, you are going too fast” or “how do I do this?” or “can you do it in real time?”

Joel Clelland: “Slow down, please.”

Chris Tse: “Can you click that button? I want to see what happens. How long am I supposed to be waiting? Is it one minute, two seconds or like three minutes?” It’s really cool to think about making it accessible in that way.

Joel Clelland: That’s the focus for us.

What is the most effective way for Web3 community members to educate? (31:30)

Chris Tse: When looking at the degree of adoption in terms of people already in the space: What do you think people already in Web3 can do to help with this education? Is it to participate in the Telegram community or to write blog posts? What do you think is the most effective way for community members to contribute?

Joel Clelland: We all have a responsibility to bring the truth to the masses. How do we do that? We do it on a local level and then we move from there. If you feel called to champion a Telegram group or make a 24/7 blog, then do it. But those of us in the community have a responsibility to educate. I joined a members-only group about seven or eight months ago, and it was not a Web3 group. But don’t we find each other, Chris? Don’t we find the people that are in the trenches, so to speak? We started another series very similar to what we’re doing at Centric, but we’re doing it for everybody. It’s open to the public, not even just to our membership. We’re just answering people’s questions because there are so many people that have many misunderstandings about Web3. There’s a lot of mythology out there because of the space that we’re in and everything that it entails. Walking people through all the basics — that can’t be overstated because it’s that important.

Even my own YouTube channel is about education. We do the best that we can when answering people’s questions. They have very legitimate questions like: “How does this work? How do I know this is going to happen in this way?” Well, we have a track record. It’s not a long track record, just a few years. But think about just the Bitcoin blockchain itself. It’s hard to penetrate that, especially with more and more people basically having those scales lifted from their eyes every day. They’re learning more. As people grow hungrier for learning more about Web3, they’re going to get deeper and deeper into it. I know that happened to me.

Ideas of authenticity in Web3 marketing (34:03)

Chris Tse: For us, making the Web3 Watch series and inviting industry practitioners to have conversations is important. We want to have honest conversations that are not overly enthusiastic or too cynical; I think you can find those extremes on Twitter easily. We hope that this material is not only useful in this time and place, but also maybe as references if you’re coming to the project like, “hey, what were they thinking when they were starting out or growing the network?” These are the types of things that people feel when they look at a Vitalik talk or blog post he wrote three or four years ago. It brings authenticity and it brings this idea of history.

Joel Clelland: I agree, Chris. I think that’s huge. You brought up Vitalik. You can also bring up Charles Hoskinson or Richard Heart. You can like Richard or not like Richard — he shoots from the hip and tells you exactly what he believes. There’s no holding back there. People like that; they like the honest approach.

Chris Tse: This revolution — if it becomes a revolution, maybe it’s an evolution — is definitely documented.

Joel Clelland: Right, sure it is. It’s on the Internet. It’s there forever.

Chris Tse: That’s why we say what we believe because we believe what we say will happen. We think about the early Ethereum days. I was one of the first people at a conference in San Francisco in 2014 on-stage near Union Square talking about Ethereum for the first time. I said, “hey, I believe in this technology.” The virtual machine didn’t even exist at all. This was like a week after I met Vitalik and Joe Lubin. I thought this idea of tradable assets, which ended up becoming NFTs, was a huge thing. It was good to be able to have a consistent continuation of the story. Hopefully, a historian looking back at our decade will see that the intent and direction of this journey is clear. Thank you so much today for giving us your thoughts and enlightening us on the journey toward a mass adoption of Web3.

Joel Clelland: It’s my pleasure, Chris.

Chris Tse: Thank you very much to our community for spending time with us. We publish these fireside chats very often. If you like this content, please subscribe to our podcast and our YouTube channel. Until next time, have a good day.