All right, everyone.
Welcome Sandel podcast number 25.
25.
Today, in continuation of our lessons from other DOWs mini series, the first one was
lessons with Davivi from CityDOW.
And we learned a lot about how voting algorithms can benefit us there.
One that you, a little different this time from ApecoinDOW, someone who I've been listening
to for quite a while on Bulls on the Block and in some other Twitter spaces like that.
And Derek is with us today.
He brings like a very, a wealth of not just game developer background, as you'll hear
a little bit later, but also deeply analytical, mathematical.
So kind of talking about the mathematical realities and of not just the way things look
and feel, but also the way they are in real life.
And that, so I'm here to learn from him today about that and what the picture it looks like
for ApecoinDOW and some of the lessons that we can now draw into the sandbox.
So it's mostly meet and greet.
So the talk is a meet and greet and a learning opportunity from Derek.
And as a disclaimer, Derek and I, we do not represent the sandbox game or the sandbox
foundation as far as I'm aware, Derek, you don't represent anything from ApecoinDOW,
correct?
Just a regular DOW member, he says.
And so we are not your financial or legal advisors and nothing we say is to be taken
as financial or legal advice.
Before board, as of yesterday, two new SIPs have entered the arena, one being the Windows
resizing resolution options, which I am the author of, SIP number 14.
And SIP number 15 is Metaverse and Disability Hiring Program by MetaFutura, who we interviewed
yesterday with an Italian interpreter.
That was the first time I'd done an interpretation type podcast where I didn't speak the language
that they did.
It was awesome.
I loved it.
I'll probably do it again sometime.
And then SIP number 13 is still out there for another day, another 24 hours, which is
the Crafting an Entity Drops by Crypto Diplo.
I believe that was Sandow podcast number 21.
So if you're interested in the details of all of those proposals, please go look at
the past few Sandow podcasts and you can hear the authors themselves speak about the SIPs
and what they're all about.
And then I will do my own interview of myself here, probably in the next day or two for
SIP number 15.
For the checkbook, we're now at 2.3 million of the 15.5 million Sand budgets.
That's 15% spent.
And we've been in business as a DAO for about three months.
DAO Base, we're still looking at 1,800 voters, 211,000 token holders for Sand and landowners
as well.
And that'll bring us right into the introduction.
So I'm Lancer, I'm the podcast host.
I'm a landowner.
I'm also in parallel with the subject of today, I'm also an ape.
So I do have some stake in this.
But I'm almost exclusively Sandow podcast and the Sandbox DAO as a landowner and as
a gamer and a participant.
And that's me.
Derek, if you wouldn't mind introducing yourself and where you come from.
Oh, well, I am Derek Smart.
Been around.
I'm from here.
I've traveled the world, worked all over the place.
I'm currently based in South Florida.
I'm a software developer.
I have two into dev studios.
We mostly do sci-fi games.
And I formed another studio back in 21 to do Web3 games.
And so I have people all over the world who work on various projects.
And right now we're working on two Web3 projects that are due out in 2025.
Other than that, just a regular game developer, been doing it for 30, 40 years now.
Yeah, he says regular developer here, but a little bit of research into that will show
that you've been in game development since I thought I saw the 1980s.
And you're a Battle Cruiser 3000 AD fame.
So one of the most OG-est of the OG game devs out there.
And one of the captions that you had was Indie before it was a thing, which is basically
to say when you began, the community was independent.
You know, right on the cusp of the internet coming into being.
And I remember those days, not on this game dev, but as a consumer, like the old Flash
games and everything that kind of pulled up into StarCraft.
But Battle Cruiser made headlines at the time.
So he says just a game dev, but there's a huge history there and a wealth of knowledge,
which is one of which is the reason why when he speaks, you can tell he's speaking from
experience.
Can you help us understand, how did you get to, what's the road to the Apecoin Dow for
you?
Oh, it was pretty straightforward, actually.
Back in 2020, when everybody was trying not to die from COVID, a friend of mine had approached
me.
I had bought a game a couple of years before, prior to that, from some investors who we
were running it for.
And during COVID, when the world shut down and everybody's trying not to die, I was trying
to figure out what I was going to do next, because I was in between projects.
And a friend of mine approached me because he knew I had this other game.
And he said, hey, we should make a game for Web3.
I'm going to make a game for Web3.
And how about you license this game to me that you decided to sit on?
So we got talking back and forth.
And I was already familiar with blockchain.
I'm a dev, I'm a technologist.
So I always try to keep track of everything going on in the game dev world.
So since the Bitcoin paper from many years earlier, I was already familiar with blockchain
and all this.
But I never really wanted to do anything with Web3 games, because it just wasn't something
I wanted to get involved with, especially because there were so many scams and so many
crazy things going on.
And I figured that if I started to talk or do anything with crypto, my install base would
probably find where I live and kidnap me and burn me at the stake or something.
So in the end, long story short, we ended up doing the thing whereby I said, OK, fine,
rather than license this game, since I hadn't re-released the game that I bought, we would
it's an MMORPG game, we figured that we would then re-release it for Web3, do a bunch of
visual improvements, some development tweaks and updates and things like that, and stick
a blockchain on the back end and just re-release it as Web3 games.
So I ended up forming a new studio for that.
And during the course of doing that, a friend of mine, yet another friend of mine approached
me and said, hey, if you really want to get an idea of the people behind this whole Web3
movement, this is, we're talking 2020, 2021, 2022, and thereabouts, you really need to
get involved with some of these Web3 communities, because they're kind of different from the
standard gaming community.
So I said, OK, yes, you're right.
So I looked into a few of them, quite a few of them, actually.
And eventually, this particular friend of mine, he owned like, I think, he owned like
five or six apes.
And in the end, I reached out to some of the primaries of the of the Ipcoin DAO, talked
to them, talked to a few of them on Twitter, had some emails and messages.
And then I was convinced that since the apes were big in the day, and they were the apes
of the premier NFT assets at the time, I figured that would be a good jumping point because
they're very, very engaged with everybody.
So I decided to join the Ipcoin DAO.
And I've been stuck in there ever since.
I'm now the old man yelling at clouds kind of thing.
That's my journey.
So it almost seemed like a friend of a friend of a friend road led you to the biggest, baddest
thing on the block, which at the time was apes.
Yep, that's absolutely correct.
That's how that worked out.
Yeah, I know.
I know.
I would never done it otherwise, because it just simply wasn't on my radar.
Yeah.
And so you had already known about blockchain, you just hadn't really plugged into the Web3
community.
Correct.
Got it.
One of the things that one of the things I looked at, I never really thought, I mean,
everybody talks about blockchain from a from a from a technology standpoint.
There's really nothing you can't do on the blockchain.
You can't do it regular, regular, you know, you know, tech stacks.
It's just another name.
I regard blockchain as any other tech stack that I would use, whether it's audio networking
or, you know, database or whatever.
It's just not a piece of tech.
So we're not in that regard.
I never really thought that I would want to do a game, you know, quote unquote, crypto
game just for that purpose.
Gotcha.
Okay.
So at this point in time, I have recorded that you have over 20 AIPs that you've written
and you've obtained trust level three.
Yep.
When I when I read the excerpt on that, it basically says you're one of the most active
readers and a reliable contributor that makes our community great.
You can now and there's a whole list of privileges that you can you can now do almost like a
moderator.
So go ahead.
You're gonna say.
No, no, that's fine.
I was just waiting for you to pause.
Yeah.
So 20 AIPs written and trust level three.
You're just a big fan or how did you how did you get to that point?
Funny story.
Anybody anybody who knows my history, starting from usenet, AOL, CompuServe, you know, Bix,
Kix, you know, Net, you know, Netscape, all those all those communities from back in the
day know that I even read it.
I get it.
I get involved.
And as a gamer, I was a gamer first before I became a game dev.
So I've never really forgotten my roots because, you know, communities start small and then
you have all the key players and you have to find all the key players and see what they
do, follow what they do and you create your own clusters.
So for me, the community life was isn't anything new.
So when I joined the Ipcoin DAO and I saw the eclectic community and all the different
faces and voices and all the crazies and most serious people, it's really, really, it's
a really fun community.
So the more I got involved with it, the more I realized that this was a really good community
to be in and you can make a difference.
Some people breeze through communities once in a while, but discourse is the primary hub
for the Ipcoin community, even though a lot of the Ipcoin holders don't go through there.
It's the main hub and it's where most of the activity originates from.
So for me, because when I do so, I always say that if you're going to do something,
do it right.
I value my time.
I value the time that I spend with people and my contributions.
And I figured that if I was going to make a difference, I had to be part and parcel
of that and you can do that by just showing up when you feel like it.
You just have to show up and participate.
And that's how I ended up with all these accolades and all these AIPs and all the noise and craziness
that goes with it.
Be part of the solution.
Yeah.
Well, and also part of the problem.
Yeah.
Someone definitely described you as that.
No doubt.
Oh yeah.
I'm the old man in the...
I'm the old man in the DAO who yells at clouds consistently, but everybody listens.
Which is a good thing.
Yeah.
It kind of reminds me of what...
If they don't listen to you, that's bad.
When they listen to you, you're probably doing something right.
Yeah.
Oh, I can't remember if it was Aristotle or Socrates who they ended up executing because
he kept saying like, you got to be careful about, I think it was Socrates.
Yeah.
The one who kind of warned against the oligarchy and how they were kind of subverting democracy
and then they execute him for it.
That sort of thing.
But that's the image I got a couple of BOTBs ago on Saturday when you had said, hey, I
know no one's talking about this, but if you read the quarterly report, if you minus the
liabilities from the revenue, you'll see that we are far in the red.
And that wasn't even taken into account in the banana bill that had just passed.
And then it was like a pen dropped.
And everyone's like, oh, I think it was Aaron who said, can you run that by me again?
And you kind of explained the metrics, which I imported some of that here so that we could
go over a little bit what that means, because that's a lesson that I want.
I mean, it's an iceberg that every entity that has a budget has to deal with is liabilities,
revenue.
Are you bringing in more than it's going out?
Yeah.
And that's something that sandbox DAO will have to face as well, one way or another,
whether we proactively do it or reactively do it, as I think you're going to get into
with how the ApecoinDAO has done it.
So cool.
So you're very much a person.
You're just, when you see it, you go in it all the way.
And in this case, you become very heavily involved in the ApecoinDAO and just couldn't
help yourself.
I see.
That's an understatement.
Yeah, no doubt it is.
So explain for, and just as a, this might seem like a weird question, but what is the
ApecoinDAO?
And I'll preface by saying May 28th was when the sandbox DAO came out of nowhere.
No warning, no nothing.
It was May 28th.
Hey, there's a DAO now.
May 29th.
Hey, there are three sips that we want the community to vote on.
It was this bam bam bam bam bam.
And we had a constitution before we even knew it and all that sort of stuff.
So a lot of us had no idea what a DAO was.
A lot of us weren't even plugged into what other DAOs were doing, like Apecoin.
Some of us barely even know what apes were.
We knew what JPEGs were.
We know like the monkeys things going on and board Apeyot Club.
I'd heard of it before, but not really a good understanding of what a DAO was, much less
what other DAOs were doing.
Can you please give us an excerpt?
What is the ApecoinDAO?
Well, the ApecoinDAO was formed out of the Yugo IP back in 2022.
What happened was they had their token and Yugo Labs donated to the community a 1 of
1.8 and from that point on, when they formed the DAO, they also had been given a token
allocation with like a 1.4 billion dollar treasury.
So part of the token.
So the ApecoinDAO was formed as a sort of hub for the ape community to go to and to
fund their ideas and their dreams and to use this money to, well, in a word, better themselves.
And a lot of the apes are very, very creative people like you would find in most communities.
And this DAO was set up for them so that they could bring all their creativity and they
could build a community around the DAO based on the DAO and be able to grow together.
And that's precisely what they did.
But this was back in 2022, early 2022.
And that's how the DAO was born.
And I noticed, I reread this one again.
You had a Medium article called Why Yuga Had to Pivot.
And you said Yugo Labs isn't a gaming company.
It's an art culture trying to pivot into a gaming company in order to support the art
culture.
Can you connect that to, does it have any connection to the DAO at all?
Well it doesn't.
And even Yugo will be the first to tell you that they have a hand, they've always taken
a hands-off approach to the DAO anyway.
And it's always for legal reasons and other reasons.
But the reason I wrote that article is because a lot of our ape friends were going nuts when
Yugo announced that they had reduced the scope of the other side platform.
Which I play by the way.
A lot of people had, I mean, I've been in game development for a very, very long time.
I know that things change along the way.
And sometimes gamers don't like change, especially if you promise to do A and you deliver B.
It doesn't matter how good B is, it doesn't matter if B is better than A. They don't care.
All they care about is you promise A. I don't care about your B. So I'm used to that.
So when I saw the noise around the other side thing, I mean, it already started from when
the switch from Improbable M2 to Hadean and then Daniel Legri, who's from our gaming
industry was there and then he left and then they switched back to Improbable and a lot
of people started making noise.
And then Yugo came out and said, hey, we're not spending time and money and resources
to build an MMORPG that takes all this time.
We're not doing that.
We're doing this, this and this.
So I felt that a lot was lost in translation.
And I felt that as a member of the DAO and as a game dev and a gamer that I could better
articulate from all these three angles, why I felt they had to pivot and what the message
was.
And funny enough, that's precisely what they've done.
And the reason why people don't seem to understand that Yugo is an art company first and not
just pivoting to a game company, but a way of games are the entry point for any social
construct that has to be successful.
There's absolutely no way around it.
There's a reason why hardware manufacturers, software, they all find ways to use gaming,
whether it's e-sports, whether it's marketing, they always find a way to integrate gaming
into their marketing, into their plans.
You just can't get around it.
So for me, it made sense that Yugo would try to use gaming as a way to keep their community
active, alive and engaged.
It makes sense.
And there's so much you can do with it with a JPEG.
You either look at it as your PFP or you stake it or you just farm it and recycle and make
money off of it.
But if you have a game and you can engage in community, there's another way to keep
people within the ecosystem.
It's not different from Microsoft having Xbox and software and their web platform.
It's a collection of assets and in this case, a collection of communities and things that
Yugo can share with the community to engage in, whether it's a mobile game, whether it's
an advanced platform like OtherSide, whether it's the collections that they've created
or they've bought.
It's all these things as a cohesive whole.
And I wrote that article because I wanted people to understand how it is that Yugo as
a startup needs to not only pivot but also to adapt to growing conditions as they grow
because Yugo is a startup.
People tend to forget that and startups pivot and reshape their goals and plans all the
time.
Those that don't are the ones that don't survive.
Yeah, that makes sense.
Okay, and within the community, as you mentioned, you're a community member.
What is your...
Do you have an unofficial role or even an official role of any kind?
No, I do not.
And one of the reasons why I never really wanted to be in an official role, I've never
been up for elections or anything like that, is because I felt that the way the DAO is
structured, any DAO, if you're one of three, one of five, one of six, one of seven, it's
very difficult to make a difference.
In teams, there's no I in team.
It's a team effort.
But because everybody tries to push this whole decentralization, which to me is a fallacy,
by the way, people will try to push this whole decentralization of DAOs and you can have
this person do this.
It just simply doesn't work.
No matter how you structure a DAO, you have to structure it as a team.
If you have seven people in one particular, say, group, whether they're special counsel,
as we call them, in our DAO or they're stewards and governance working group, they're all
a part of a team.
And even if they're decentralized, you still have to be a part of that team.
You have to be...
It has to be a cohesive whole.
I felt that I was better off on the outside looking in because on the outside, I can yell
without any ramifications.
Being on the inside, I can't yell.
I have to tour the line and I have to...
Whether you're a team player or not, I've always felt that the team is only as strong
as the collective voice.
It doesn't help if you have five people wanting to go left and you have one or two people
want to go right.
You're just headed for disaster.
And in the end, even if you compromise, you might compromise against your better judgment.
So I felt that being on the outside, because the community votes from people in our community
in these positions, I felt that a voice like mine and a voice like others like mine who
don't want to be in a position are better off being on the outside shaping the community,
showing what can be better, what we can do better, how we can adapt, how we can grow.
And those who are coming into these leadership positions can better learn.
A lot of people don't seem to understand that you can actually do better from the outside
than you can from the inside, in the Muslim communities.
Yeah.
There's a certain degree of separation that affords you the freedom, flexibility, and
just simply the clean conscience of knowing I'm not beholden to anything.
There's no conflict of interest that starts creeping in on things.
That makes sense.
Correct.
Absolutely correct.
Makes sense.
So let's get into the analytics.
The first thing I pulled was DAO based AI analytics on the Apecoin DAO.
And some of these numbers, DAO based is still trying to get some of its development right.
But what they do have right is the token holders, 153,000 token holders, 298 proposals, which
I think is way low.
I think we're at 400 something now.
Yeah.
Well, some of them are withdrawn.
So you could have, we're up to 580 or something.
So some of them either get withdrawn or they never really make it to admin review.
Sometimes people start their proposals and they abandon them for whatever reason.
Fair.
So last I checked, we were at AIP 486.
That might have changed since I built this last week.
And 9,800 voters.
So quite a bit of activity.
Probably one of the largest and most active DAOs that I've seen.
I don't know if there is a DAO that has more proposals than the Apecoin DAO at this point.
It's pretty fascinating just to read through them and see the history.
And can you give me a brief overview?
I found four sources of data, the transparency report, the DAO progress report.
Oh, I already said the transparency report.
So transparency report, progress report, and quarterly report.
All right.
Where do you draw your data from?
Well I draw my data from the actual, for all three of them.
Because sometimes, even though these accounts are audited on their end, sometimes you will
find that there's some missing pieces that you have to draw your own conclusions.
For example, when I wrote about a week ago, a lot of people were sending me messages about
my analysis about how the DAO was out of money because I use the term going concern.
A lot of people didn't even bother to go to chat GPT or to Google to find out what going
concern meant.
They just assumed when I said the DAO is out of money that there was zero dollars in the
treasury, which is not correct.
You're familiar with the term going concern.
So I did a follow up.
And in doing that follow up, which was actually prompted by a thread that one of our ex special
council members, Captain Trippi, had put up on X, gave me the idea to also do a deep dive
into how much money the DAO actually has between now and then and how much tokens we had left.
And it occurred to me that my numbers, not only were they accurate, I also did a drill
down on how the DAO was making money.
Actually it's not because the DAO has zero revenue.
Yeah, that was very obvious to me just by looking at the dashboard.
Yes.
Oh my gosh.
Yeah.
A lot of people don't realize that the DAO wasn't set up to generate revenue.
They created a DAO as a grant system to the community.
So when they all started this whole thing, nobody thought that, oh wait, if we keep giving
money away, there's going to be a point where there's not going to be anything left.
And funny enough, this whole thing came to a head back in November when I kept writing
articles on X and on our discourse saying, hey guys, if we don't start figuring out ways
to make money, we're going to run out of money.
People just ignored it.
And so when this quarterly report dropped for Q1-24 and I took a look at it, I was very
shocked.
So I ran those numbers so that we had about taken into account the banana bill.
We had about $100 million left.
And then I extrapolated from the token unlocks based on how much DAO is getting every month,
about 7,000 tokens.
I extrapolated about how much the UGA and the founders and the UGA labs had left and
discovered that most of the pain of the unlocks were already passed.
So most of the unlocks left now are what's left for the DAO, which ends in 2026, I believe,
and some of the UGA labs and the founders.
So basically, if the DAO doesn't start making money, yesterday, we're going to run out of
money and I calculate as of today, before this session, I calculated in 14 months we
had the money, like as in $0 because we're getting 7,000 tokens unlocked every month.
The token value is depreciated heavily, as you know, and with 7,000 unlocked and no investments
and committed to accounts payable and the upcoming proposals, the DAO is not going to
be able to pay for those proposals based on 7,000 tokens per month, which means it's basically
no longer going concern in 14 months.
That's a scary number.
It is.
Some people might think 14 months is a long time.
It is not.
It is absolutely not.
It is not.
And the thing about it is, and the reason why I mentioned the bulls on the block is
because a lot of people don't pay attention to this stuff.
What's the motto?
Apes don't read or something like that?
Yes, apes don't read.
And the thing about it is, and I have to mention this, the unfortunate thing about our community
is very few want to talk about the bad news because nobody wants to be the one tilting
the applecrap.
Yeah, like the bad vibes and everything.
Yeah, the bad vibes.
Yes, yes, yes.
So myself and one or two others will always opine on these things and we get very little
traction, but we do get a lot of messages.
I mean, you'd be surprised.
I mean, DMs we get through in the back channels because nobody wants to say anything because
the way the Dow is, you guys will find this on your end as well, depending on how your
Dow is set up.
But most people who come to the Dow come for one specific reason, to get the proposals
passed, to get some money, to go, Nick, do some business or whatever.
So you're not going to get that far by being the unpopular dude who says, hey, we're out
of money or hey, this doesn't look right or hey, this smells funny.
People watch that and the next thing you know, you probably have an AIP go up and everybody
votes it down because you're the Debbie Downer.
So you run that risk.
So most people don't speak about anything that doesn't look right.
So some of us just do it because we can and because we don't want anything from the Dow.
So the give me those initial numbers one more time.
How much is going in?
How much is going out?
You said 500k?
I'll tell you right now.
You already have this on the report where, you know, we had 326 million in AIP in treasury.
We had 255k in accounts payable.
We had 59 million reserved for grants.
And as of now, when we look at the token unlocks, the Dow has about 100 million dollars, 100
million left to unlock a worth of tokens, assuming the token price holds, which when
I checked it, it was at $68.
You know, 68 to a dollar.
So by that calculation, we had 100 million dollars left in unlocks.
That's basically it added to what we have already.
100 million AIP, right?
Yep.
100 million.
No, $100 million.
$100 million.
Okay.
100 million US dollars left to unlock.
And when you say left to unlock, what does unlock mean?
Well, unlock means when they did the token allocations, some of the tokens were not unlocked
to be spent or converted.
So tokens?
Yes.
So they're all vest, they have vesting periods, cliffs, the whole nine yards, which is and
the treasury, the investors, the community AIP set like 150 million, Yuga Labs, Yuga
Labs founders, they all had tokens with vesting periods and cliffs.
And those unlock over time.
And part of those unlocks are the Dow's own tokens.
So the Dow can have some 7 million tokens a month.
It's up to them whether or not they want to use them or leave them locked.
I mean, they can leave them locked, but they can do whatever they want with them whenever
they're ready, which works out to about $5.5 million a month if you do the USD based on
68 cents at the time when I did this math, this calculations.
Yeah.
You're not far off right now.
It's 0.7, it's 75 cents right now trading.
Yeah.
So yeah.
So the you said there's 7,008 tokens unlocking every month, I can give you the exact number.
The Dow has exactly hang on 7.3 million tokens per month.
Billions.
Okay.
Now I get it.
Million, million, million, million, the actual number 7343750.
That trend is that's red alert right there.
Yeah, it is.
It is.
Oh my gosh.
If anyone who is an entrepreneur, you're a mathematician or an accountant, like you
will instantly realize just the data, the numbers are not going in the right direction
on that one.
Well, hey, it's worse than it's worse than it sounds because the Dow has 18 months left
of all logs, which comes out to about hundred and 32 million tokens.
hundred and 32 million tokens left to unlock for the next 18 months.
Yes.
Okay, right.
Gotcha.
You're gonna be out of money in 14.
Well let me let me give you a little let me give you a little a little nuance here.
Remember the doubt is allocated 100 million to the banana bill back on July 4th.
So we basically allocated pretty much all our unlocks to the run on bill, which is 100
million.
Think about that.
So the 18 months runway, which is about 100 million dollars, we're just allocated that
to one initiative, the banana bill.
And that banana bill has to have to turn that hundred million dollars.
Not only do they have to recoup that hundred million dollars, they have to turn a profit
because it's supposed to be a revenue generating initiative.
That's the scary part that nobody pays attention to.
Well you I am quite certain that your voice will not be the only one that grows louder
and louder on that.
There's this the numbers just are not yikes.
That's not good.
Yeah, the other yikes is that's just q 124.
We haven't we don't have the q two and q three numbers yet.
And when those numbers drop, because the banana bill was funded in q three, July.
So when those numbers fall, and we see q two and q three, I know it's going to paint an
even more dire picture because again, the Dow is not generating any revenue.
Right.
So there's no expectation that we're going to see more money come in other than the seven
million token this five point five million dollars per month going into the into the
Treasury via the unlocks.
But you know, if you if you if you get in 5.5 million, and you're spending over 3040
million dollars a month, I mean, you're already in a negative before you even breathe.
Yeah, y'all are y'all are definitely in the negative right now.
So you gotta you gotta make that banana bill work.
Or to make it make more bananas.
I'm confident I'm confident there there there will be some good things coming out of there.
Just how how how it happens.
And whether or not I mean, everybody knows that most investments lose.
So if you get by there were three trends, and you say we're going to lose nine, we stand
a chance of losing 90% of 100 million dollars.
Nobody wants to talk about that because 90% loss is actually the metric right now.
So you can basically say the best we can do is at least not lose 50% of it.
Gotcha.
Well, you're I ran some numbers on on your market cap.
I say you are market cap.
In April 2022, the market cap was 25.97 billion total supply, right?
As of two months ago, it had depreciated 96% down to 843 million.
Oh, yeah.
But that's right.
Also, because remember that the Dow had an initial treasury of 1.4 billion when it started
out 1.4 billion with a B. Now we're like 200 million.
Wow, lessons learned, huh?
Lessons learned indeed.
Yeah, the way I look at it, the way I see it is it's it's only bad if you assume that
the Dow was set up to be a profit business.
It wasn't.
It was set up to be a grants Dow and somewhere along the line.
I'm not sure how they figured that they were going to keep giving money away without running
out of money.
I don't know.
Nobody nobody has answered.
Give me a good answer to that.
But that's basically the same situation sandbox is in right now.
The sandbox has committed to a yearly budget of about 15 million.
Twenty five million sand.
It's going to give the budget every December.
But as we as some of us have noted, if you pay attention to some of the numbers that
sandbox are running, they we don't think they're turning a profit yet, even though they're
still cash positive because of their their series fund that they raised.
But we I don't want to rely on sandbox forever and ever giving us an endowment.
I think that's a plan.
I think that's playing to fail.
Yeah.
Oh, yeah.
Relying on that.
So that's that's some of the things that and especially one of the reasons why I had you
on today was to enunciate that where you are now is where we could be now if we don't take
lessons learned and where you were.
And when the beginning sounds a whole lot like where we were or where we are right now
in the beginning.
Correct.
And you guys are three, you guys are similar.
You guys are three months old.
So you have plenty of time to figure this out.
If you live it to the last minute, you're not going to make it.
See, I'm I'm heavy.
I regret not even I am hesitant to even say that.
Because if you say that, then you give us license to just let kick the can down the
road and down and down and down until suddenly, oh, my gosh, right.
It's true.
Yeah.
So, yeah.
Anyways, this lamenting.
So I think you paint a very clear picture of the Dallas finances at this point.
And for one point, four billion treasury to start at the time, it was three hundred twenty
six million.
I think you just said it was two hundred million left.
Yep.
So about two hundred million now.
Left and two hundred twenty five thousand in the accounts payable, fifty nine million
reserve for grants and the hundred million for banana bill has spoken for the remaining
one hundred million eight that's left to unlock.
So you do or die moments.
What it is.
I think what's going to happen is right now, it's basically a case of trying to figure
out how to cut costs.
We've taken some some costs, cutting measures whereby the two hundred fifty thousand thing.
Yeah.
And sixty nine percent threshold passing.
But that's that's really neither here nor there, because most of the delegates who vote
for these things are friends or friends.
They're all in the friends and family program.
So I think that two fifty K plus sixty nine percent is only going to affect the smaller
guys, not the guys who are deep into the ecosystem.
I know people who know people who know delegates.
But there are lots of there are lots of costs, costs and measures.
I mean, right now I have three unpopular proposals going through where I'm shutting down.
Well, I'm trying to shut down three working groups that are costing the doubt through
me all year because most of the guys are just having no show jobs except for one or two
of them.
So I was listening to you as you explained that to the whole team and yet another pin
drop that.
Yeah.
Derek, are you sure you want to do?
Yeah.
But when you explained it out a little bit, it made a lot more sense that you're not talking
about like shutting down Markham's and not there's a lot of other stuff that that people
brought up as concerns like that's not if you pay attention to the words of your proposal,
they're not so draconian.
They're just applying analytical math to we can't keep this going.
Correct.
We can't be like this.
Correct.
I mean, for one thing, one of the savings this is the lesson you guys will learn on
your end as well is don't put people in positions where they are paid without KPIs and OKRs
and there's no there's no structure in place to replace them.
Right now, I'm not going to name names, but we have people in these Dow positions pulling
over 9K per month and they don't show up to do anything.
They simply don't show up and you can't remove them.
So these are lessons you have to learn.
You have to put in you have to put in, you know, procedures and processes so that if
you have if you elect somebody into position into position, you can actually remove them
because guess what's going to happen?
The Dow votes these people in by the popular vote, which is already bad as it is because
it's not one to one.
It's based on how many, you know, ape tokens you have in a wallet.
So when you vote these people in, their friends vote them in.
So if you try to kick them out, their friends are going to vote for them again and kill
the vote.
So we have that.
So it doesn't make any sense.
You have to put in controls whereby you can actually remove people for cause without having
to run the risk of going through a vote again.
And then their friends come back and say, no, no, no, we still want them there.
And they're going then collect the paycheck for doing nothing.
And these proposals, by the way, the other thing I the other thing is you don't most
of the positions you don't need to have people on staff spending three million dollars a
year when you can hire third parties on as needed basis and pay less.
And those third party companies and teams, whether it's for web development, whether
it's for marketing communications, whether it's for analytics, those people want your
business.
So they're going to they're going to do everything they can to make sure they adhere to OKRs
and and KPIs or they lose your business or you send this in an invoice.
They get paid and you find somebody else.
They don't go to a good job.
But when you vote people in this position, you don't have that luxury.
And so people can basically not show up for anything.
That's the reason why I'm trying to close it through working groups.
The Dow can go hire people in this position the same way they hire attorneys and accountants
and all the other service providers that we can hire without going through a voting process
that saves money and it brings accountability and transparency.
So you're talking bring accountability.
Don't put people in position without KPIs, key performance indicators and then enforceability.
You need to put in controls into place to remove people for cause if need be.
Correct.
You have to be able to say, so we voted you in, but the special counsel or whoever is
on top of your top tier should have the authority based on a vote amongst themselves, of course,
to remove those people.
Otherwise you cannot rely on the voting system to remove them if it's the voting system by
popular demand to put them there because they're just going to get all their friends who voted
for them in the first place to vote for them to keep their jobs.
Then you're stuck.
The interesting thing that's happening right now in sandbox is delegations were just announced
by the Dow administrator.
They're taking a different approach though.
The delegation are closed delegations.
You have to apply to have a delegation and then you have to, in order to be accepted,
you have to, as of this moment, accept a code of conduct and there's different rules.
You're not allowed to get paid.
You have to announce when there's conflicts of interest.
Otherwise your delegated license, I guess, will be revoked.
And so it's starting to feel like a very high bar.
The most interesting one of which is if you're a delegation or if you are a delegate, you
are not allowed to propose improvement proposals.
Well, that's hilarious.
We don't have any of that.
And that's the right way to do it.
Right now, anybody in the special counsel, anybody in our governance working group, any
steward can put up a proposal.
There's a whole bunch of back behind the scenes deals going on.
Nobody knows what the hell's going on because you can't ask any questions.
There's no transparency.
There's no accountability.
You can't do anything.
And right now I have a proposal.
Another guy has a proposal that deals with transparency and accountability so that anybody
in that gets paid by the Dow who puts up a proposal or there's a proposal coming through,
they have to disclose that they are affiliated in some way, whether they work for them, they
work for them, they get all these things.
We don't have those controls.
And now we're going to try and pass those two proposals.
Maybe they pass and we'll have some of those controls, but we don't have any of those.
So you guys are doing the right thing.
That's just you agree with that.
I do agree with that.
I absolutely agree with that because you need to have controls.
Without controls, you lose control.
That's basically how it works.
Okay.
What are some other some other lessons that you've seen that to a young gal like us say
look out for this or you should go after this?
Well, you guys already have the delegation part sorted out and you guys have all your
disclosures.
I think it's not just the delegates.
I think you should have the same disclosures and transparency with people who the Dow hires,
whether it's from the community, whether it's through the voting system, whether it's third
party hires, you should always have that as well because again, you want to be able to
replace people who just don't act right.
If you get stuck in a position where you can't do that, then you just have bad actors in
positions and not only you're wasting money, but you're not getting anything done.
So you're talking the special counsel, the advisory board, the Dow administrative team.
The whole nine yards, the whole nine yards.
And you want to also one of the things that we ran into last year was I tried to dissolve
the entire special counsel because I felt that they weren't being transparent.
There was no accountability.
That didn't go down very well.
I'm sorry, I see you're locked in.
Hang on.
I guess it's every funnier than that because another good friend of mine actually tried
to reduce their salaries.
In the business of making friends, are you, Derek?
Oh, yeah, yeah, yeah.
Hang on.
This one guy tried to have the special counsel salaries reduced because when the world found
out that we were paying them a significant amount of money for basically a part time
gig, it made news.
It was on the block.
How much did they get paid?
Oh, they were getting paid like, I think it was like, I mean, if I remember, it tells
me right, I think special counsel is making like $200 a year around five of them, something
like that.
Don't quote me.
I have to go look up the old numbers.
Okay, that's fine.
I can always go to it later.
But it made the news.
So this one guy wrote a proposal.
Get this.
This one guy wrote, bless his heart.
He wrote a proposal to reduce the special counsel salary and they kicked it back and
said, oh, no, no, no, no, no, we can't do that because we will be violating contracts
in agreements that we signed, which means which means the Dow, the special counsel that
works at the behest of the Dow, the Dow pays the special counsel, but the Dow can't adjust
the special counsel's salary because the special counsel not claims that they would be in breach
of agreement.
So they return the proposal for reconstruction.
No, you can't do that.
So basically $20,000 per month per month.
There you go.
Yes.
Per month.
But only smokes.
I'm reading a coin desk article on it.
Oh, that's the one.
It was a, it was an entire fiasco.
So right now we have a special council in June of this year.
Oh, yeah, we can fire them and we can't change the salaries.
So we're basically stuck.
So if you get voted into a special counsel role, you're literally stuck there through
the next election.
Nobody can get rid of you.
Nobody can reduce the salary.
We did have one proposal that was written up by one of the special counsels to adjust
their salaries by half, I believe, and the rest was to be vested or something like that.
That passed with flying colors because everyone that was like, oh, yeah, this is good.
So we've kind of reduced that salary a bit, but it's quite hilarious that you can put
people in positions that you can't get rid of them and you can't change the salaries.
Basically we have kings now.
That's a pretty incredible figure.
I'll give you that.
250 grand a year.
That's what that is.
Yes.
Each.
Well, we're part time gig.
But you know what's funny?
You know how this whole thing started?
This whole thing started because we had guys like Alexis Ohanian was part of the special
counsel.
Yatsu was part of the special counsel.
So these are big names.
So they had those big salaries.
So when they exited the special counsel, nobody thought, well, wait, if you have someone like
Alex, you know, Alexis, and then you go hire Joe Blow, who's just a plumber, maybe you
don't want to give Joe Blow 20 grand a month just because you were giving Alexis 20 grand
a month.
Nobody thought about that.
So they just left the salaries as they were.
So we're from Alexis to Joe the plumber with 20 grand a month.
It just stayed that way.
OK.
That's fascinating.
Our special counsel gets 100,000 sand a year, which is like what, five cents or something
right now.
It's 40, 40 something cents, 36 cents.
Oh, nice.
So he's rich then.
He's rich.
He's rich, I guess.
Yeah.
So that's our special counsel, of which there are five of them.
One of them is Yatsu.
And then we have the founder of Grail and quite a number of big names in there.
But they get reelected.
They get reelected December 2025.
And how long are your terms?
One year terms after that.
They're one year.
OK, that's cool.
That's cool.
You all not have one year terms?
Yeah, we do.
We have six months and we have one year terms.
Of course, we're trying to we're trying to change all that.
Now we're trying to we're trying to unify all the terms because sometimes you end up
in a situation where you have people come in for six months and by the time their six
months is up, they haven't done anything much of their programs or their plans and goals
they had.
And next thing you know, there's another election.
So we're trying to I actually have a proposal trying to fix that to unify all the terms
to be one year and to give these new people coming in and also to be able to keep the
pre-existing people in place so that we don't have to keep reinventing the wheel every six
months or every year.
And for a pound, aren't you?
My God.
Like I said, I have I currently have 16 proposals going through.
I can't wait.
Oh, nice.
I have so I have five that have actually submitted and have 18 on on the that I plan to write.
Nice.
I have two within the wings.
One of them is going to be superbly popular.
It's the kill the apes taking contract.
Oh, yeah.
I've heard you talk about that a number of times.
We have a very large robust taking program.
I know we're going to go here in a few minutes.
So maybe we'll end on this.
What staking programs you have said that you can prove that is mathematically a burden
on the system.
I'm very robust.
So tell me about that.
Why why aren't you in favor?
Well for one thing, it continues to bleed the Treasury and it doesn't help anyone.
And even the guys who are staking, they're getting like pennies on the dollar now.
So it absolutely makes no sense.
It's not beneficial to anyone.
It's just a strain in the Treasury for one.
And two, it doesn't incentivize people as they used to because of the value of the token.
So I actually when my proposal goes up, I'm going to have all the charts, all the numbers
and everything in there.
Right now.
I actually have a discussion where I said we should kill staking lol just to see how
much hate I get.
You must be a popular person, Derek.
That's okay.
I have quite an affinity with you on that because some of my background is the uncomfortable
truth of mathematics and how it sometimes comes across as a kind of rainy day parade.
But if you ignore it, you ignore it, you're a peril.
Absolutely.
And again, remember our community.
I love my community.
Don't get me wrong.
I mean, they're a bunch of nutters, but you know, I love them.
We all get it.
We get together.
We fight.
We argue.
We fuss.
But in the end, it's a community.
The good thing about communities, they all have this, you know, this feel good kumbaya
headed in the clouds type good vibes.
I mean, good vibes.
And that's all good.
So nobody wants to ruin the good vibes.
But you know what?
If you sense if you if you and your community get together and say, hey, let's buy six pack
of beers and just chill.
And you find out that they've already maxed out the you know, the Dow credit card, you
guys aren't gonna have fun.
Somebody has to say, hey, guys, we have to curb the spending.
Otherwise, this whole kumbaya thing goes away.
Nobody's figured out that out yet.
That's what we are now where we're saying, hey, we need to make money.
Otherwise this whole kumbaya thing goes away.
So that's what we are.
And I'm the guy who says, guys, we need to look at this.
I'm not always right.
I never professed to be right.
I mean, I've always said that, you know, if I walk into a room, I'm one of the smartest
guys in the room, I'm probably probably in the wrong room.
I don't want to be in the wrong room.
I want to be the guy who points out things that are worth talking about, because you
know, you can dissent all you want.
But if you dissent for no reason, then it's just inconsequential noise.
You better come equipped.
Yep.
Better come equipped.
And you certainly do that.
So I try.
I try.
At DSmart, if you want to connect with them, a couple of the sandbox spaces.
So we have Discord, we have the DAO forums, which is just use discourse.
And we have Twitter, the three hashtags I normally go over.
But skipping over now to the sandbox spaces, Boko Verso on Mondays, Bulls on the Block
on Saturday, that coincidentally is how I met Derek, by the way.
So if you want to yourself, they talk about sandbox and both of those places.
In addition to the 8-point DAO, you can learn a great deal by listening to what goes on
in those spaces.
You'll hear people like Derek.
You'll hear people like Aaron, Big Bull, Anthony Crypto Sheep, G, Boca Chief.
There are a lot of people who, if you listen to them week to week, you'll hear some of
the things that I'm bringing to you right now.
And some of the things that Derek, Derek has just brought to us, which is the uncomfortable
truth of if you pay attention to the numbers, you'll start to see a pattern emerge.
One that we have to pay attention to now as a sandbox DAO, even though we might think
it's a little ways off, or we might be comfortable now.
That's not acceptable.
We got to have a plan now.
Either you plan to...
You...
What's the phrase?
If you fail to plan, you plan to fail.
And that's where we are right now, the sandbox.
And thank you, Derek.
I really appreciated your time going over this.
Is there anything that closing remarks, anything that you wanted to go over or any shout outs?
Oh, no.
I'll just say that I wish you guys well with the DAO.
Just look around, do your research, don't make the mistakes that all the DAOs have made.
You guys have the benefit of being young, and you have the benefit of learning from
all the mistakes they're previously made.
So just remember, if you make money, and you want to give money away, you got to find a
way to fill those coffers.
So find some revenue generating programs.
And otherwise, you're going to find yourself relying on their endowment.
And one day that's just going to go away and bye bye DAO.
Yeah.
And I don't think any of it...
Well, some of us want that because very unhappy with the way the DAO was originated out of
nowhere and it felt less like a community decision and more like a downward direction.
That's our take on the whole progressive decentralization thing is it's come a lot more centralized.
And then some people really feel negatively about that.
But we're definitely seeing a different path being taken.
That's for darn sure.
I'm seeing different paths, which brings with it different levels of accountability.
Whereas there's a point DAO, you will have to kind of take that on yourselves.
And there's a lot of tension and all sorts of things.
Thank you for your time, Derek.
I don't want this to be the last time that we do a podcast because I feel like we spent
half of it learning about who you are.
Whereas I really think that there is a lot to be said about some of these trend rates
that we can pull and analyses and what the story tells us to delve into the data.
So I'll be looking for another opportunity in the future to invite you back on to where
we can learn as things are happening.
Absolutely.
So always, always, always reach out to me when you want to talk and I'm always around
and I'll see you.
I'll hear you on Bulls on the Block on Saturday.
Looking forward to it.
See you, Derek.
Talk to you soon.
Bye.
Take care.
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