StakerDAO Interviews: Olaf Carlson-Wee
Interview Transcript
Christian Arita:
Hey, Olaf. Thank you for being here. How’s it going?
Olaf Carlson-Wee:
Good. Thanks for having me.
Christian Arita:
Thank you. I think we can jump straight into questions. The first question I have for you, what’s important in governance or what defines whether a protocol has good governance?
Olaf Carlson-Wee:
Governance is the process of aligning incentives among a huge number of different people who may have different interests. So, in my mind, a formal governance process best sort of describes, what is in the best interest of the most of those people. So, to me, a governance process is also in a sense, a possible security vulnerability, a bad governance process can lead to bad outcomes for everyone who’s a part of the process. So, defining governance very carefully, such that all the participants can align their interests is critical to getting to increasingly better outcomes, rather than ending in a place where governance can actually hurt the system.
Christian Arita:
Got it, that makes sense. And in creating these outcomes, what do you think makes a proposal good?
Olaf Carlson-Wee:
I think a good proposal is extraordinarily precise, it needs to be extremely clear how the proposal will be implemented, there shouldn’t be any ‘bikeshedding’ about the details of the proposal and proposals should be extremely narrow. They should try to solve for one thing, and not be sorted philosophical or general in nature.
Christian Arita:
Got it. And when you vote on a proposal, what is your decision-making process for voting yes or no on that proposal?
Olaf Carlson-Wee:
In general, we’re just determining if that proposal is net net over a long-term time horizon going to increase the value of our holdings. We are very simple as participants in that we don’t have any third-party interests or ulterior interests other than the value of the network in which we’re participating.
Christian Arita:
That makes sense. And in looking at Polychain or other institutions or individuals, what skills or characteristics do you think future crypto governance leaders should embody?
Olaf Carlson-Wee:
I think understanding the way systems will be attacked is critical. A lot of the time in cryptocurrencies people have this vague idea of community. I don’t like this idea because it’s not scalable. A real formal process needs to scale across groups of people that sometimes have oppositional beliefs or oppositional incentives and can still reach a good outcome. So, to me, this idea that we can sort of all just get the community together and have a Kumbaya moment is incredibly naive when it comes to building financial infrastructure that can scale globally. In order to get to that global scale, I do think you need extremely formal processes and can’t rely on this concept of sort of community sentiment.
Christian Arita:
Got it, okay. And last question for you. What are you most bullish about in the Defi ecosystem, whether on Ethereum today or any other networks that you follow?
Olaf Carlson-Wee:
So, Defi is moving incredibly quickly when it comes to financial product innovation. I’m personally very excited about governance innovation. So, how do we create systems to better formalize the relationships across token holders? For example, could greater rewards go to token holders who lock up their tokens for a longer period of time, or could we have a better system of nominating what you could sort of view as general partners who manage pools of capital on behalf of other people, rather than having this sort of direct democracy system that you mostly see in token systems today. So, could we actually create more complex governance systems that are harder to reason about but are still simple enough that we can get to good outcomes and that they can scale significantly?
Christian Arita:
Thank you, Olaf. That’s all the questions I have for you always appreciate your insight.
Olaf Carlson-Wee:
Yeah, thanks for having me, Christian.
Christian Arita:
Olaf Carlson-Wee, Polychain Capital.
Olaf Carlson-Wee
Founder and CEO at Polychain Capital
Olaf Carlson-Wee is the founder and CIO of Polychain Capital. He was the first employee at Coinbase, the first billion-dollar cryptocurrency company, where he became Head of Risk. He received a civilian award from Homeland Security for technical analysis of the blockchain in a $10,000,000 cyber crime case and has a patent pending for the Bitcoin Host Computer System, a multi-authorization bitcoin storage mechanism. Olaf also educated the economic advisor to President Obama on blockchain technology and has given numerous public facing technical talks on private key security and fraud prevention at scale. Olaf first entered the blockchain market in 2011 when he wrote his senior thesis on Bitcoin at Vassar College.
Christian Arita
StakerDAO community member
Christian is responsible for the research, proposal development, and product implementation of STKR, BLND, wXTZ, wALGO products by StakerDAO. Prior to working within crypto full-time, Christian worked at Deutsche Bank in research covering Global Macro and Equity Strategy. Christian graduated from UC Santa Barbara with a degree in Economics & Accounting and he lives in San Francisco, CA.
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