Jess Sloss 0:00
Here's my opening question for you is, what is giving you the confidence and maybe excitement around this new model to literally put millions upon millions of dollars of value years of your team's time into this new direction?

Jacob Horne 0:14
The simple answer to that question, I think it's like, it stems from a gut feeling that has been building since I saw it, it's been well over a year in and it's typically I think, in crypto with like such fast moving cycles. You know, I think you'll have these moments of elation. And then a month or three months or six months later, that elation will disappear as kind of the hype and excitement comes off in the moment. This is, I think, the third time I've had a feeling like this, the first being Ethereum, when I first learned about it, the second being Uniswap, when I first got my hands on it, where it's just like, oh, there's something fundamentally new and powerful that comes with this model. And I think over the past year of kind of becoming part of the ecosystem and contributing to it and understanding the tech, realizing that like, Oh, this is a model that has, I think, empiricalized now and then two, I think can be applied much more widely than just Nouns DAO itself from the protocol. When I started talking about it to the team internally, it met with confusion and just like, okay, Jacob, like we've heard this kind of stuff before, but then it's like, this will just be it other crazy Jacobs, they use a torpedo the whole roadmap and you know, rinse, repeat the chaos, all that kind of stuff. But I think as we started to articulate what it was doing, what it is, why it might be important, and then, you know, having the Nouns DAO kind of like, I think, empirically validate a lot of that stuff out in the market made it where we are today, where we're making these big moves, but they feel so high conviction, I think we've stressed tested the logic so many times where it's like, okay, like, it's an exciting moment, but we think it's the right thing to do. And we're just gonna run full speed ahead into it. We're not going to half our set, I guess. So, yeah, that feels like a really high level and kind of hand wavy answer. But I think that's kind of where we're at.

Jess Sloss 2:05
But I think these moments in startups, they all kind of feel like that, right? Like the best moves, the best pivots, whatever you want to call it come from a haze of feeling and some data. But if there was perfect data, and it was proven, the opportunity to really lead here would be gone already. So I identify with that feeling deeply. And I want to get into like some of the specific pieces, because I think like probably the highest value we can provide to people here is like, what is this? And I think there's just this general like that idea of most people don't quite get it. And I think there's a level of getting it. But then I think there's this next level of getting it, which is where you've helped sort of pull me in the last little while, which shows it is far more extensible and powerful than I think what is even being demonstrated right now in in Nouns DAO. But I think it's probably helpful just to zoom out a little bit, how does somebody get to this sort of level of conviction. And I think when I look at your story, and just the things that you've been working on, especially in this DAO space, and we can go right back to it even before we met, which was long over two years ago, we're 42 decades in the crypto space, it seems like I just need such a consistency in the threads that you're pulling here. So I don't know where we want to start. I mean, I think Saint Fame is like a useful place here. But if you wanna start with it before that really curious about, like your conviction and on chain organizations, DAOs, and why you've been doing what you're doing at Zora and making this move into more of a DAO tooling, I guess, if you will, that you're doing today?

Jacob Horne 3:20
Yeah. Okay, let's start right, right, right from the beginning, then we'll go from first initial idea that got me into crypto into like, why Nouns DAOs was probably the best form that gets that idea. So I think first heard about Bitcoin. It was my first year of computer science at Sydney and this is 2012. And the thing that really sparked it was not Bitcoin itself, it was that like, Hey, here's how you can create your own cryptocurrency or your own currency for anything, my mind immediately jumped to I was like, Oh, so you're telling me you could create a currency for any idea this easily, which means that people can organize anywhere around the world using the internet at its core, and you have a value system that allows for that, at the time, I think the language was well that I was using was like, oh, it's kind of like crypto equity in like a project. So instead of having to create, you know, an Australian company, which I was like, yeah, that doesn't sound that exciting. You can create a you know, it's an organization that can do that same thing. And there was this thing called counterparty at the time, which were early attempts at tokens I called Colored Coins built on top of Bitcoin couldn't really do anything with them because Bitcoin isn't particularly programmable as most people know but let you create a token on top of Bitcoin which was like a big deal. That was really hard. And then around this time, Ethereum was being spoken about and eventually released and immediately made sense because I was like, Oh, I understand creating tokens but you can't program them now. You can program them so I was like, Holy shit, this Ethereum things really cool. I'm going to attempt to build this on Ethereum with this like is my final year of college it was like a project called Horizon which was like Oh, create crypto equity for any creative project beta, you know, a film or whatever. And I was kind of tweeting about it a lot and just writing about it sharing designs. And that kind of led to me being at Coinbase. So I moved from Sydney to San Francisco. And then Coinbase was this whole kind of earn story, a lot of work a crazy amount of company growth. Like it, the company grew from slightly less than 100 people to 1000 people and just everything was blowing up. But I guess towards the end of my time at Coinbase, Uni socks and Uniswap came out. And that was mind blowing to me, because I was like, Wait, this isn't a crypto thing at all. I'm looking at a pair of socks. This is like fashion, that is now finding its way into this medium. That's really exciting because it was a creative project using crypto in a new and interesting way. And it was like, Oh, wait, you're telling me that Uniswap gives me the entire power of Coinbase in like a single function call and offers better liquidity at this scale. I was like, Oh, this will disrupt Coinbase over the next like five years I was I was like, Holy shit, this is cool. But that kind of put me on this thread where I was like, Well, if I can create a token on a trustless protocol, that means I can push trustless as one layer up into the DAO sides, which is kind of what put me into the Saint Fame headspace, which was okay, I'm going to create a shot, long sleeve shot, release a unisock style, but I'm going to nerd out and make a permissionless brand and DAO on top of it, which is what led to same thing And the kind of funny thing about that was that it was using Aragon at the time, I tried really hard to tie every aspect of the Uniswap pool and the token to be as, as trustless as possible. And no one gave a shit about it was just like the this token sides cool. That was kind of the starting point for Zora, which is like, okay, the kind of pattern in our mind was community DAOs doing creative things. And we're going to start with the creative things piece first, because that's starting to work and has sparks around it, which centers on the NFT journey. And I guess the whole mania fan, if he's I guess the 10k PFP boom happened. That was interesting, because you know, the 10k PFP was a new format. I think it was the dominant format of that mania, everyone who was creating and seeing success in that mania were creating 10k PFP projects. But I think there was some like systemic and structural issues with that, which was, on the one hand collectors were misinterpreting what they were buying, they thought they were buying into a project or like a startup, essentially. But in reality, they were buying an art object. And I think communities and collectors felt, you know, robbed because they would see teams then raise at insane valuations which they would have expected the NFT to be, and then not only this, it's like, well, if you're holding one of these NFTs, you've stuck in this tragedy of the commons, which is I don't necessarily have the individual means or incentive to spend tens of thousands or hundreds of thousands of dollars to advance this project. By putting up murals or doing marketing or merch drops, you kind of are at the whim of this third party team that has all of the ETH, which is why we saw the devs do something meme kind of be the name of the mania, because I think it was perfectly emblematic of the structural issues. And mix all of that I think the Nouns DAO project had the initial seed of an idea from Punk fallen five, six, which was well, what would cryptopunks 2.0 look like to address some of these structural issues? How do you create a very simple system or organization using NFTs at their core, and align incentives so these NFT communities can start to do things together in a on chain, and effective and simple way and crucially being incentive aligned to do so. I think, where people often get stuck, and where I found myself getting stuck when looking at Nouns was looking at it through the lens of an NFT collection, versus looking at it through the lens as an organization, you go to the page and you see a ridiculous price for an auction. And you're like, Oh, this is just like another NFT PFP project that's going to do its thing, and I don't care about it. But then if you click one layer level deeper on the DAO button, and you start looking at the proposals, and what this organization is very consistently doing, you understand where that ETH is coming from and how it's controlled. You're like, holy shit, this is really, this is insane. This is like a subreddit with a shared bank account that's just able to run and do its own thing, which I guess what's the thread? I think I was like, Oh, wow. Like I was kind of jealous. When I had that realization. I was like, I wish I had built this because I feel like this is the purest instantiation of this like thread of ideas that I've been running through crypto for for like almost a decade, I guess that kind of landed me at like, oh, Nouns DAO is a form factor is I think squaring away a lot of the structural issues of the prior mania that we saw, and it's offering like a really fascinating an expansive idea for what organizations could look like in the future. And it's a really simple model. So it's like, yeah, that's kind of where we're at.

Jess Sloss 9:55
So I feel like there's two fun paths for us to go down. One is like the functionality and expansion and sort of the tool sent that's embedded in there. But I think there's like a challenge that I run into. And that sort of explaining Nouns is one that I would say is more embedded in sort of like the deep financialization of crypto so far. And edging towards what I would say is more of like a culture or meme, I think it's probably just the best way of work to co op to a certain degree to sort of capture this value. And, you know, I think there's many folks looking at like, you know, what's the discounted cash flow of a protocol? Can I turn fees on a protocol, like, what are these very traditional financial models and yet, sort of on the edges, we're seeing in large part from the growth of NFTs, but I think definitely Nouns DAO and further and even in the broader crypto space, we still look at the top 20 cryptocurrencies, there's a number there that are still purely named, driven and will not be convinced otherwise. So I think there's like wrapping one's head around. This idea of cultural institutions being investable, or this new type of formerly illiquid, or illegible value actually being captured by something like Nouns or NFTs, or tokens, more generally, I think, is a thing that you almost like, it's helpful, and I'm fully understanding the breadth of possibility here. And so I know I've had the privilege of just pulling on your brain threads a lot lately. And so again, thank you for your amazing two hour session on our SC05 chat the other day, but I love this sort of explaining the value of Nouns through the lens of sort of theat alternatives, or at least even in comparison to something like Uniswap I think like, showcasing why an ownership structure and NFT are owning part of a cultural institution might be actually a stronger pure investment thesis than something that is maybe a little bit more financial.

Jacob Horne 11:29
Yeah, I'm not sure investments, the right word, either. Maybe I'll describe the Nouns model as simply as I can. And then I can like build out from there. So the Nouns model works as follows, you have an NFT that is minted each day, it can be a unique NFT that is generated on the fly, it could be the same image being mentioned each day, it doesn't really matter. But what's interesting is the ETH from that auction, goes directly into a treasury. And that NFT is one vote over that Treasury. So on day 10, you'll have 10 days worth of sales in that Treasury with 10 votes of people who can can control and allocate that rreasury together. And that basically puts you in a position where because there's no other ERC20 token or anything else, everyone who holds that NFT is on mine to do the same thing, which is how do we further this organization, and increase the value of the NFT that we know is going to be solved tomorrow? That like predictable and known dilution kind of creates this incentive that kicks the community in to get to do something and further the NFT, which, you know, is an artwork or I think meme is a great word. So the Nouns case like that cool meme is these like Nouns glasses that they have on the artwork, and a lot of that treasury spend is like, how do we further the meme as far and wide as possible for marketing? The more interestingly, how can we start to find new public goods, or infrastructure or tools and products that have the Nouns brand on it, but are offering really valuable online services and eventually real world services as cheaply or as freely as possible, using this economic model to its advantage, and I think it's hard to find analogies for it, I think like Red Bull might be the closest Fiat analogy we have where you know, they have created this incredible brand, that they then use to sell and monetize through, you know, drinks that that commodity but also by creating other assets, like a Formula One team using that brand. And like kind of feeding into the machine that furthers brand, which lets them do bigger and more interesting things in the real world. Another kind of recent example could be like Mr. Bass, where it's like create video, take all capital from that video, do a bigger video, keep building up, capture as much attention as possible, and now start working backwards into the real world through Mr. B's buggers, or drinks and other fashion or whatever it might be. This I think is like a simple crypto model that gets into that same behavior, and makes it much simpler for anyone to do that or like crucially, like let you do that as a community instead of necessarily an individual in that case. So it's like a meme machine might be the best way to describe the Nouns DAO? Well, the simplest way it's like, insert meme, people can organize around that meme and have the incentive to proliferate that meme through more memes or actually doing really good things that people associate that brand with, which I think starts to push us into the wall. That's how public goods and public protocols and all these types of dynamics play into it, because you realize you can build good brand by doing really good things for the world, which is kind of interesting, and get an economic reward for it. So I guess that's a rough cut of like, well, that this is kind of the form we're playing with and some of the incentives and dimensions that come with it.

Jess Sloss 14:52
If people aren't following you on Twitter yet, you have to sort of see this like real time exploration here. And I think some of these threads of like, like what would Uniswap looked like with a slightly different dynamic with NFTs or with different incentives built into that protocol that are treating it like a public good rather than so getting ahead of myself in the various things I want to talk to you about a question that I get often is sort of around like, why is the NFT a better form factor for ownership in a meme or in a community than an ERC20 or fungible token? Why do you think this is like actually a meaningful advancement in how we're representing ownership in memes?

Jacob Horne 15:23
It's a really good question. I think the simplest like three IQ answer is you can see it. And we associate the value of the token to the image instead of the other way around. So it's like if you have an ERC20 token, you're primarily caring about, well, what utility or financial utility is this token explicitly tied to and the target the image icon that comes with that ERC20 is the secondary thing, not the primary thing, in NFT, is the image is the primary thing. And that's what the token actually derives its value from. So that's simple inversion is a really big difference, because that means that the token can derive value from furthering and making that image more famous and more widely spread. So I think it more fully captures brand value or meme value in ways that I think fungible tokens can, but not to the same extent, I think they're a bit more wiki. But that has huge implications, because it kind of changes the economic model of the DAO if you like, go a level up. So if we think about a Uniswap DAO or compound DAO or like name your DeFi DAO, it's very hard to imagine those DAOs funding like, hey, let's put 100 foot unicorn statue in Central Park, the DAO might get that's an egregious marketing expense. Why would we do that? How does this increase the value of what we're doing, and therefore give us more capital to advance towards that mission. But in the Nouns DAO, that exact proposal makes perfect logical sense, because it's increasing the attention. The token derives its value from that attention, which then means it gets more capital to either do more memeing, or more making. So it's like, it's a very different bottoms up starting point to build a DAO, which I think has implications for the competitive dynamics of DAOs, especially ones that run these protocols. Because I think a lot of protocol DAOs currently have to sustain themselves from basically fees from the protocol. But these protocols run at zero cost with zero headcount. If you have a DAO that is now got alternative ways to get capital outside of the protocols themselves, they may always be able to offer that protocol at a lower cost or free, and be able to keep advancing themselves as DAO, which I think is something that I'm really interested to see how that plays out. And if that's a true thing, or not over the next, like couple years is I think we start to push the boundaries of the model. So yeah, NFT DAOs, I think can base their value a lot of the brand and meme and attention, they are giving in ERC20 DAOs, maybe can, to some extent, but not to the same extent as entities.

Jess Sloss 17:53
Yeah, I think it's also interesting to think about how, because you're sort of talking about like the product or the unit of creation, or value, which is the token and then you're also talking about the organization that is sort of birthing these things. And you know, for early stage builders, they're sort of the paths forward both from a legal structure and a financing structure. And, like I love the word primordial is like the primordial ooze that these things sort of emerged from, it actually has such an impact on what ultimately gets built. And so traditionally, in many ways, the path would be to go raise money into an equity based organization, a labs type structure, and for that lab stripe structure to go do development and eventually launch the protocol, maybe Airdrop tokens and sort of distribute value that way, using the Uniswap example here, that's kind of what they were maybe forced into doing or had planned all along, but ultimately ended up doing. And, you know, I think a lot of the threads I see pulling on around Nouns, it's almost like suggesting that this is actually a new and different starting point. So I'm curious if you can sort of pull apart like, what are the issues with the there may be embedded in the labs type structure? And how do you see maybe launching DAO first as Nouns DAO are solving some of those.

Jacob Horne 18:57
When we look at DAOs to date, I think they've created really good tokens that can capture at least some of the financial value of the thing that those tokens can govern and control. But we haven't necessarily seen the organization's since sustainable organizations be built and created that result in DAOs, with high proposal velocity, doing more like new and novel and interesting things as a community that's separate to the labs. I think when looking at the Nouns DAO, if you like, click on that DAO tab and you compare it to every other DAO in the space. There is clearly something magical happening both in terms of the model but obviously, the people and context around that DAO, which means that you have a sustainable and very thriving organization that is running entirely on chain. And that kind of speaks to the thing I was saying earlier, where it's like, it's much more interesting to look at Nouns through the lens of an organization than an NFT collection. So how that plays into the labs dynamic and everything that comes with that. I think we've experienced this as well at Zora and we kind of, I think this has been part of axon for the model because it's like, oh, how can we break out of this labs model, or use the labs model puts you in this local maximum, which is you can move really quickly, you can get a lot of capital for venture capitalists, you can work in public undistracted, have heavily opinionated district, like decisions, all that kind of stuff. But the entire ecosystem, and internet essentially, is relying on that one team to push everything forward. So you have a single point of failure, a single point of failure. And then also like, it creates this context where no one really wants to advance or contribute to that protocol or ecosystem, because this official team exists. Not only that, you were now in a position where I think you see a lot of labs teams post Tolkien raising huge amounts of capital. And then it opens up a question where it's like, well, how do I relate the value of the DAO to the increasing value of this labs team, which is now building platforms on top of it? And like, I think there's tensions that could arise from that, you know, with a big Asterix, where it's like, this is all new, everyone, I think, is operating with the best intent they can. It's just like, these are hard models to play around with. But I think what, at least from our perspective, with Zora, I think it's like, okay, as we need to move into an on chain organization of some kind, how do we make sure we don't create just a flat token that captures the financial value? How do we actually start a viable organization that can advance and build in this ecosystem? And how can we be on equal footing with everyone in that ecosystem to I think the Nouns DAO model feels like a compelling option, that because you have a treasury that's occurring ETH, it's not just holding tokens, it's able to capture the brand and the mimetic value of what you're doing. And then the kind of one NFT one vote system, I think, lowers the barrier to entry for things to be proposed, which means it's much more contentious and requires work. But I think the velocity and output is much higher. And then if you compare that just to like, I think the multisig approach that a lot of teams take multisig within ERC20 token and snapshots don't necessarily scale very well outside of the core contributing team, or they haven't proven that they can do that yet. So this lets you start small, and eventually grow into that scale versus, you know, starting multisig, and then having to find a way to transition that into a context which, which lets you expand out of the core starting group. So yeah, they're kind of like three, I guess, different parts of the playing field.

Jess Sloss 19:19
It becomes even more clear in like the middle schools, those are compelling cases. But if you look at some of these NFT projects that have, again, had large run ups, whether it's a doodles or proof, and there's a ton of perceived value in holding the NFT as the core asset of participation in this ecosystem, and then this labs type structure goes out and raises a bunch of money. And I don't think it takes too many leaps of logic to see that potentially there will be interest diverge in there where value is trying to be driven back to equity investors versus to token holders. And we'd sort of skipped over some of like, the stuff that you shared previously around this evolution of Zora, between like selling physical products that were backed by NFTs and into just purely NFTs. And I think the argument there, which I think is really strong is that this is sort of like the heart application of tech, what is the net new thing that can be created here, and and that has like more of an exponential growth potential, then maybe an iterative approach that is more constrained with with certain things. And I see that as being kind of core to these two organizational types, like one clear leaders working values being created, you can't ignore that. But like, what are we not seeing built on those structures? What is being held back? I think that's harder to see. And that's maybe doesn't come into the equation as we're sort of valuing or seeing the potentials here, but I think it's smart people, at least the one that I feel very compelled to make as well is that there is there's this more meta layer that exist as we've continued to build out crypto and are going to be these DAOs and ecosystems, these networks that truly have scaled to a level of what an Ethereum or Bitcoin has today, and and that are going to be able to do much more complex work than maybe purely what is being done on chain right now. So I guess I'm curious, because we've seen you, as a prolific public worker, start to publish stuff around hyper structures. And also, I think, you know, Zora, as being sort of this open protocol, that allows sort of anybody to come around and forth that code and kind of be at the same level that you are tech wise that you sort of spent many years building, how much of those sort of like fundamental structures that you sort of see developing have led you to believe more in sort of this past that, you know, Nouns is like a unit of account, or central organizing structure is valuable.

Jacob Horne 24:34
Yeah, I guess two things. So something you were saying earlier, I think it's there's always something exciting or intriguing when I think a piece of technology becomes kind of like a Rorschach test where people have so many different interpretations and struggle to find the language and there's contention around what's actually happening there because it's like, oh, that's usually at least one sign that there might be something that new because it's hard to put your finger on it. So I think that's just like kind of like a meta point. It took him, but I guess like what? Yeah. How did the hyper structure I guess writing thesis play into this? The simple answer is I think this is the value system for hyper structures. So I think probably one of the boldest and most contentious statements I made in that essay, which I think, you know, got a lot of critique and questions. And, you know, I think it's still 50 50 split, at least in my very probably biased network was I said that I believe that hyper structures can simultaneously be free to use but extremely valuable, though, which is totally like, like, the best analogy I can come up with is like, it's the Mona Lisa. It's like the Mona Lisa itself is not extracting revenue. It exists is an object, it lives in the public domain. It's printed, it's reproduced all this kind of stuff, yet, we assign very rich and exorbitant cultural value and therefore financial value to this thing, protocols on Ethereum exhibit the same traits, they don't require any maintenance, you can deploy them once zero headcount, and they will keep running, and they can run for free, because they do not have the maintenance costs required of a team, you know, keeping the servers up, you can defer that to the blockchain, so they can run for free forever. So then the question is like, well, what's the value piece? And I think if you look at the kind of v1 DAO model, which kind of has a resemblance to traditional maybe public stock markets, which is like you have this like fungible ownership, that gives you maybe some governance rights, and you have to associate it with like revenue and cash flow, this kind of stuff. I think the Nouns model with the I guess, mimetic value capture at minimum means that okay, like maybe Nouns branding, a protocol is enough goodwill and branding and notoriety to then increase the mimetic and brand value of the NFT is at lunch. So it's like, oh, okay, like, it doesn't need to extract fees from the protocol, they create and gain value, it actually needs to fund and create really valuable free public infrastructure, and earn and govern and control that, because that governance and control and then the recognition for doing so, is enough to sustain the organization because it has an economic model that allows it to so I guess, when writing the hyper structure essay earlier in the year, I guess that was kind of I was like, well, there is a logical extreme that exists here that these things can run for free with zero maintenance. And we've got inklings of a value system that says that we can say that those things valuable. What is the DAO pace look like? I think this is that DAO, this is at least a very compelling DAO option in that case, more so than more I think we've seen in DeFi DAOs, and then not only that, I guess what kind of informed that thinking was seeing Nouns DAO quite literally funds, new forms of public infrastructure in the form of like prop house and a gore and all these interesting tools, or even protocol developers and becoming an alternative to the Etherion foundation a lot of ways it's just like, oh, like, there's clearly something that's like working in that vein, like, maybe these two things together make a lot of sense. Yeah, I guess that's how that that type of structure style thinking and maybe hypothesis then played into like, well, maybe this is the DAO counterpart to that thinking.

Jess Sloss 28:07
I love it, I think it's really helpful just to put those things next to each other because I think they sort of complete the the critiques of each model almost sort of get solved by looking at them side by side. So okay, I want to dive into some of like the expanse of opportunities that you see within Nouns. And I think you did a good job earlier, sort of taking the time out and explaining the basic functions of a Nouns style DAO. So this is this daily auction, all the ETH from that auction goes into a treasury, which full stop right, there is actually a meaningful difference from most other DAOs that have to do private token sales, etc. And then sort of one token equals one vote and the almost to degree, I guess, Nouns concentrated ownership, but also accessible ability to post proposals sort of leading to this more widespread use of those funds, and also like a higher velocity of proposals, and thus, you know, theoretically better ideas, and then also document all this within the broader terms of like mimetic value being a thing, and this being a pretty clear tie in to that. But I think like the I was there with you on Nouns months ago, right, like, I got that I think my biggest shift in the last little while has been to move from this place where I felt like it was actually a very constrained model to one that actually think has a lot more optionality or extensibility than I first recognized. So I think it'd be super valuable for us to kind of pull some of those ideas apart, like you sort of used in some of your posts recently, this sort of multisig versus Nouns dollars, almost like the same level of primitive that exists and mechanism for generating capital that can then be invested into the growth of the thing that can be co owned. But I think a lot of the powers of a multisig and even a smaller team that's maybe sort of has a lot more influence in it is that they can get things done faster, they can have a lot optionality, you know, as the space is moving so quickly, they can kind of like, yeah, have optionality as that evolves. And I think one take is that, you know, if you're looking at a Nouns DAO model, you're really baking in some really core pieces that might in some cases, feel like you're actually giving up a lot of That optionality. But I don't think you hold that point of view. And so we'd love for us to sort of dive down that thread.

Jacob Horne 30:05
Okay, so I think like most projects, being out or building something like everything starts with an idea. And then it eventually finds some name and some logo. And I think in crypto in a lot of cases, that's starting a Twitter profile, and then eventually, if you keep believing in it, you're building community, like, eventually, you might get to a point where it's like, Oh, I'm gonna get some capital and start a company around this, I think the Nouns DAO model can actually sit at the exact same time that you start a Twitter profile, which is like, oh, there's this core idea, or your meme is another word for idea. Basically, there's this core meme that I'm trying to get at, I'm going to create a Nouns DAO around that could be simple. You know, it could be the same statement minted everyday to start, like a hidden superpower of Nouns DAOs is that they can change and upgrade their art over time, both retro actively and forward looking. So what you start with doesn't have to be what you're left with, I think what instead of starting a multisig, with some friends put the idea out there, make it as public as possible, and then anyone that that resonates with, they have a way to start to participate directly. And by get ownership in that idea itself. And then you know, that community is it starts naturally building, instead of going through this kind of great filter of maybe the team wants to do that particular idea, or instantiation of the idea, or I don't have the time, you can actually stop moving into a kind of plural mindset where you may have multiple people cooperate in competing under the same idea. But all of the value capture can start to accrue in that greater organization. And it can fund multiple instances. So you as the creating team, as that idea, and the meme starts to spread out, you're starting to capture that value, and then you're no longer worried about forks, those forks are additive. Because provenance is this kind of magic thing means that like, well, the original idea that was put out there captures the value, the more it's copied. So you may have your lab team being funded by that same DAO. But the DAO that you're a part of might also vote to find a different team to work on to the same idea in a different instance. But that's net positive to everyone in that ecosystem. And then on the kind of autonomy or opinionated decision making side. I think what we've seen in Nouns so far is that the Nouns are a heavily opinionated group one, I think they have the status within that organization as the founders of it, where when they want to pass something, you know, goes through a vote. And sometimes it's contentious and it might not go through, but more often than not, I think it does go through, but then also, they can just get funded and go work on their particular pocket that doesn't have to go through vote every time. So it may be like, hey, 4156 has an idea for a documentary that's going to be produced by stupid buddy production studios. 1008 goes to them as a team. And they're able to take it and run with high velocity without opinionated decision making, whilst everyone else in the ecosystem has that same level of autonomy under that shed idea. So if you compare that to a multisig, the multisig means that you will probably have less public governance work, we almost certainly well, but you're trading off public contributors having the incentive and the avenue to contribute from day one. So in the multisig construct, I think you get fork and that's a bad thing. In the Nouns DAO construct, I think you get forks, but that might get funded, you might fund forks. And that's a really good thing.

Jess Sloss 33:23
I think this idea of actually like, sort of fun, because coordination is a core challenge in these organizations. Right. And I think there's this the broad belief and DAOs that are upside there is that, okay, we can actually have large groups of people coordinating on these initiatives. And I think what you've sort of seen and more of like the multisig structures is that people are either trying to like overly complicate coordination. So there's this weird points or earnings or like how does value flow in and that needs to kind of get baked in, or you end up with sort of maybe one team that's actually doing the vast majority of the work because they have all the information context to be able to go make those decisions. The knock on it has always been that great products get built by small teams with a strong vision and the ability to coordinate and move fast. And I think that's very true. And I don't think DAOs change that in other ways. But what this model does, it could exist in that multisig model as well. But it seems to really have taken hold here is this idea of saying all we're doing is funding great ideas that support the development of the meme. And all that coordination work, ideally, is being done by experts, small teams that have high social capital proof of doing it before and go do the hard work of coordinating and making something that's valuable in a way that ultimately flows value back to the organization as decided by those voting. So you get this type of coordination happens on the meta layer and is not needed to be structured on the more micro layer on individual initiatives.

Jacob Horne 34:36
Exactly. Maybe a way to say it is that you get coordination around the high level idea, but you can have competition or cooperation at the instances of the idea. You have multiple interpretations of the idea itself. And then yeah, you can have fast moving teams like the prop House team, which was probably built one of the highest impact products in crypto in the past year were funded by Nouns they were seems to grant and they've been able to run at full speed using 1000 ETH. In funding, they tap into the community whenever they need to or want to. And you know, they can get more funding in the future if they achieve this the goals that they set out to run with. And I think like we've actually seen this in certain mandates from Nouns where they'll fund multiple teams competing for the same goal. So I was like, Oh, we're going to do four grants of 50 ETH, for teams that are going to build their own version of a third party front end. So it's like, you can kind of get into this plural mindset, I guess, like coopetition might be the word. It's like you competing on some level that cooperated at the high level, which is the idea.

Jess Sloss 35:33
Yeah, I think that's fascinating. And I mean, it's led to some just seeing incredible product directions that have come out of that, and a lot of diversity there in the explorations, which, again, compressing that traditional product roadmap or sort of brainstorming or execution in a specific team. I think the other piece there that, you know, many folks that are building DAOs, there's this tension between broad community ownership and participation and control, maybe it's the right way to look at it. And I think if you were like investing your heartbeats in this, I, you know, I think ideas are valuable, obviously, execution needs to come with it. And I think entrepreneurs, in many cases want to maintain this feeling of control or ability to kind of direct their vision in many ways. And so I think that is why this labs model or even a multisig, in some cases, is appealing. And and then, you know, I think I've framed it in the past as thinking about like, almost curation of who can participate versus who can't, and thinking that, you know, maybe on the extremes that both work, but that for many types of projects, having being curated, who comes into the community and who contributes, is actually a valuable thing to both allow you to run fast, but also to almost build up the value of that network. But I think that in your answer around sort of the social capital that lives within some of the founding teams, I think, and I know it from previous conversations, that there's actually a high degree of that influence embedded in the social capital that lives in these organizations, that it's not fully recognized, or at least embedded in the ownership of those organizations. Would you agree with that?

Jacob Horne 36:55
Yeah, I think that's true of most DAOs, like if Robert Lasher at compound or Stani at Aave, a or Hayden at Uniswap come forward to the table with something is an outright egregious, most likely the people that default to trusting that vision is the creator of these things. So yeah, I think I think that's, that's a fair statement to make, I think in this context, but I also think it's true in a lot of other DAOs as well.

Jess Sloss 37:16
Yeah, I agree with that. So there's, there's a couple directions I've seen you playing with on the internet recently around uses of these models, and maybe non traditional, I always loved using non traditionalist as it relates to something that's been around for a year, but I'm going to use it in non traditional ways. One of the features that you're really intrigued by is this idea of these Nouns DAO structures, being able to issue other editions or other tokens. And I'm curious, like, why you see that as such a superpower and maybe what you might see that being used for.

Jacob Horne 37:44
I think it's harking back to the Saint Fame DAO and create it like an object's image in my head, which is like, okay, like, if you think about pick your brand, like take Nouns is like Nike, the overarching brand. It's like, well, why wouldn't it be able to drop collections in this context? Because there's very clear legibility between, am I buying ownership in the name and the brand? Or am I buying something created by the brand, like now that we have a growing language between these two things, you can start to play in both, I think really effectively, which is like, if there was a proposal for an X copy times Nouns, or ferocious times Nouns collection, dropped via Nouns itself, I think that would be one insane moment that too, it's like, I wonder what it would be funded and created in that context. And I would be pretty sure that a lot of people in both the Nouns ecosystem, and that artists community would probably want to buy and own that work. So it's interesting. And then I think, like, Nouns model aside, I actually think this is where we can start to see really interesting experiments around new types of public funding models for art generally, which is we'll imagine I'm just gonna use really like skeuomorphic language, but I think it'll help. It's like, imagine you had record label DAO, which is it has a name. And then people are organizing around this idea where it's like, oh, we really want to fund and proliferate the best hip hop we possibly can. And this is the organization that's going to do it. So there are now proposals, which is like, Oh, we funded this artist 100 ETH. To go spend six months creating the best work they could we love it. Now. It's going to be released as its own NFT collection under this label with what's back to the artists, but you can start to see a body of work form from this DAO, in a way it's very simple and very cohesive, which is like, oh, that DAO is really well. It had great curatorial tastes, and it funded that artists they produced work together that work was sold, which is now interesting, because maybe there's now enough going into that treasury outside of daily auctions so it can move even faster at like funding more artists and produce more music. But I think that like that is like a really interesting machine where we can start to decouple that NFT for the brand having to do everything, and the DAO can actually start doing more things and acting as a collective entity on chain, like an individual would like, there's no reason why I shouldn't be able to connect Nouns to super rare. Try and mint something and then that goes to a proposal on chain that people go like, yeah, we want to do that, or no, no, we don't want to do that, like these dads can do things other than just funds, they can actually carry out on chain actions, like mint will create a drop and all that kind of stuff. So yeah, that's my final, I'm really exciting.

Jess Sloss 40:34
I think, yeah, that's the optionality that I think really started to unlock things in my mind. Because I think like the ability to, like essentially what you're you're making a decision to, if you're building a DAO, you're not building a company, right. And that's what that means is that you're building in this on chain world versus an off chain world, and you're betting in many cases on, you know, the future demand, but also feature set that is going to be rolled out by the entirety of the crypto space continuing to to innovate. And so I think this idea of, you know, being able to, it's compelling, just be able to interact with the existing smart contracts that exist out there, but also having that ability to interact with whatever future ones come, I think is the thing that in my mind really reduces the sort of the risk, when you almost close off optionality that may come from making some of these structural decisions.

Jacob Horne 41:14
And I don't even think it's, you're starting a DAO or a company, I don't think it's that. I think you're starting a DAO, you may be starting many companies, like I think it's, I think it's like, oh, like if this DAO likes this team, who is doing a traditional company, and that company is going to work within the boundaries of the brand, or the meme or the mission? Is there a reason why that DAO wouldn't also try and contribute capital to one or many companies. So I don't think it's a trade off of DAO a company, I think DAOs are fundamentally this new thing that can now start to relate to and lead to many different companies in many different countries. So I think it does that optionality.

Jess Sloss 41:50
A wonderful distinction. It solves many other problems that many people building the space face around paying taxes for, say like, what a what a novel idea. Okay, so there's two things I want to get into before we close out here the first I think one of the first Nouns style DAOs to be built on Nouns builder is from the farcaster community. It's called Purple DAO. And I think it's interesting because what we saw there is a community launch a DAO for a community that's playing on a protocol, and that there isn't actually a direct tie in between those two, right. So purple DAO, which is exists to build the ecosystem within the forecaster ecosystem, which is sort of like a web three twitterish, maybe that's not. The social protocol for those who haven't checked it out yet, essentially have this Nouns mechanism that has tens of thousands of dollars in the treasury right now, that is going to be directed towards building out this ecosystem, but it's not actually coming from the forecaster team. It's not coming from the forecaster investor is not directly at least maybe somebody has bought one of those tokens. It's an interesting twist, right? Like, first of all, one might say, like, Why the hell is somebody actually putting their money on the line to go do that if they don't have core ownership and forecaster and yet, there has been compelling demand there. I'm curious, what you sort of see like, is that an emblematic of like, maybe more nuanced approaches for how these tools we use.

Jacob Horne 43:02
I think it's a window into the future. And I think it's like, I'm just so happy to see it so I like, I think it's starting to, like prove a lot of the hypotheses come into this, which is communities exist, communities want to do things together, they need a medium to do that. So it's like the farcaster the community have already been building on the protocol. There's like a rich ecosystem of apps, the community want to see that happen more, and the team is, so heads down, building out the platform on top of it, and all that kind of stuff. They only have so much time in the day. So the community exists, and they want to do things and then to a meme exists, which is like, if you're on farcaster, you'll know that people are like, Oh, this is more of a purple app than the bird app. So like the farcaster app versus the Twitter app. So I like purple. And like farcaster it has a very distinct purple that they chose for the icon Purple as a meme and as an idea. And as a symbol. And as a stamp basically, on all of these third party apps we're seeing isn't immediate, identify it. It's part of the farcaster the ecosystem and built on the farcaster protocol. So I think it's like the two magic ingredients there is that, okay, there is a community that wants to do things together, there is a meme that that identifying with and organizing on the what's the medium, which allows them to do anything about those two things. And I think the Nouns DAO is exactly that. I guess the really important part is that like in this model, the DAO accrues capital based on those two things, is there a good community? Is there a good meme? Is there a good desire to do things together? So even though it's not from the farcaster the team at all you could argue that purple is a meme is now ownable. There is a community that want to do things together that can organize under it. And now we're in we six days in and we're seeing 10s of 1000s of dollars in a treasury from the most avid contributed to that community who can now go, oh, let's spend $10,000 funding developers to build this type of application or this type of infrastructure on this open protocol. Oh, let's find more people to build awareness for farcaster on Twitter and build the community that way. And this medium has allowed for them to do that, and economic and very tangible way outside of the team, the farcaster the team themselves, which is awesome, because it's like, oh, you have the labs entity doing their thing. And now you have the community self organizing and able to do things on top of this protocol that they have belief in, which is totally insane. But it's like holy shit, that's kind of working.

Jess Sloss 45:22
It's just overwhelmed. One of your recent tweets, I'm trying to see the presense through rose tinted glasses, I think our conversation here has been one of rose tinted glasses, or at least hasn't shown some of like the underlying uncertainties or questions that exist. And so I think it would be helpful for us to sort of explore like, Where does this go wrong? Or where does this not work? What are like the deep risks that are associated with maybe transitioning to this or launching a project in this space? I'm curious, like, in your moments of DAO, where do you see that DAO living?

Jacob Horne 45:47
Yeah, I guess a few considerations. And then I think things where these could go wrong. So I think considerations, one really important thing is that just because you start a DAO like this doesn't mean it's gonna be successful. That's like thinking just like starting a Twitter profile or, or an Instagram page, or company immediately means the thing that is valuable, like just starting the thing doesn't mean it's worth anything. So I think that's really important context to set open questions and failures, I think there is friction, and like these DAOs, a very public and entirely on chain, which is a superpower. But the responsibility that comes with that is that anyone who owns an NFT could literally put a proposal to take all of the ETH at any moment. So it's like there is a awareness. And I guess, like there is labor and work that comes from these organizations, which is like, okay, like it's all on chain and all the playful, which means it's all to play for. And you might have people who like come for that Treasury. So I think that's like an area where it's like, well, what tooling is required. And UX is required to make sure there's notifications, what smart contract tools can we build, to automatically defend against malicious proposals and stuff like that, that may try to exploit these types of DAOs? That's an area so it's like, yeah, these aren't free DAOs in a way, like they require labor and work to create value, but also to protect that value. So I think that's, that's important. And then the third is, I think it's still an open question. If these DAOs can sustain themselves purely on meme value alone, like, in the same way, Red Bull has a valuable brand, but you know, sells millions of cans of Red Bull and builds a Formula One team in business or Mr. Beast, you know, starting to kind of traverse back into the real world through Mr. Beast burgers, and all these different things like to what extent do these DAOs actually have to do something that isn't just creating more like and that do something could meme like, maybe they actually have to build products or protocols? Or maybe it is they're on this kind of treadmill of having to create more drops to keep advancing themselves on the assumption that, you know, these are one a day forever, like you can make a DAO that mint one a day for 30 days. So like, I think there's a medium to experimentation to play that. So I think that's like another area. Oh, I think that's actually a huge one. Like, is this meme thing real? Or is this just like a one year suspended animation thing that's going on? And then for yeah, I guess it's like the model just doesn't doesn't work outside of Nouns DAO itself, maybe Nouns DAO is just this like one off magical thing. And that's all that's needed from the DAO and Nouns, this is going to keep proliferating as an entity, but maybe it doesn't work as well, for other organizations period would be another, I guess, known unknown. And then I guess, like, number five would just be like, that could be smart contract bugs, that could be unknown loopholes or unforeseen incentives that start to play out as this gets way bigger and way more complexes in the ecosystem. So there's always that underlying Asterix, where it's like, hey, the whole thing might just have a bug that blows the whole thing up. So I think that's a an area to that I think, worth paying attention to. So yeah, those would be probably the main ones.

Jess Sloss 48:50
And I think that's gonna be the interesting stuff as Nouns continues to evolve this, you know, the idea of bribery or vote buying and, you know, there's like, all these social attack vectors that we know exist in crypto generally that I think I mean, there's obviously contingencies built into their structure that kind of supports or safeguards that to a degree, but I think it is going to be interesting to see the best in the worst of people come out in a very public way, in these things, especially as they become very, very valuable organizations. I guess one of the questions I have, and when somebody's putting capital into a project, in many cases, they are viewing this as an investment. And I think many people who are buying Nouns are are doing it with at least that assumption at one level. And you know, the Nouns model, I'm just curious, like, do you sort of see is one of the failure modes hear that these tokens are not valuable on secondary, and therefore there is an exit liquidity for people who, who are maybe investing in these things. And, you know, just to put a finer point on it, like you have investors, and you're making a bet I'm sort of making this move. And so there is like, clearly, this is not just about doing good for the world. It's probably trying to do good, make fun things and also that there's a profit incentive behind it somewhere. So is there a risk in that these things aren't going to be valuable in the future in their current structure, just given the daily dilution that exists?

Jacob Horne 49:57
For sure. I think like one way to look at these is like maybe the is an internet alternatives to foundations as well. So maybe it's like maybe this is less a labs alternative, this is more a foundation alternative, which is like there are people in the ecosystem who have the capital and the desire to support that ecosystem to create, you know, we talk a lot about, I think in this conversation like public goods and the artistry being the things that have been created here. Maybe that's the extent of it, where it's like, okay, you're essentially contributing capital to an organization that's supporting both of those things, with the mindset that this is a public goods institution that's going to fund public infrastructure, and yachts, and maybe because of the way that NFT works, that means that these things can increase in value over time in the same way then work would but looking at it through the lens of company or like project or a startup, I think that's a known unknown and an open question. And it's like, we don't have any examples to pointed out, I think we only have the public goods funding angle to look at right now. I think inevitably, we will, we will see people trying to come at this medium from the purely financial startup mindset. But I think a lot of what well, I guess, Nouns DAO, I think, more sets in this kind of public goods funding mindset. And it's like, maybe this is a new way to create these types of valuable public institutions versus private institutions. And I'd be like my thinking that, but I think we'll probably see people try and come at it from that angle, it'd be really interesting to see that experiment play out.

Jess Sloss 51:28
Is that the angle that you're coming at it from?

Jacob Horne 51:30
No, I think the angle I'm coming from is like, yeah, how do you help the public do public things together. And I think that looks takes the form of public protocols, which we care a lot about, and then artistry, which is what we care a lot about. And it's like, okay, now you have new ways to fund more art and do more things together, that could probably be as free as possible, or cheaper than they've ever been given this economic model.

Jess Sloss 51:49
I love pushing on this point share with you.

Jacob Horne 51:51
I guess, maybe the answer the question, maybe that means the value of the thing goes up.

Jess Sloss 51:55
Right. OK and cause I feel like there is that underlying piece here. Because to me, like, the most exciting part about these new organizations is the ability for any, right now, human creativity, and even participation in just in networks in general is, and the ownership of networks in general is just limited, right? Like the existing legal structures do not allow for that to happen. And it's created an immense amount of inequality in the world, I think it's like a fundamental piece of the inequalities problem we have today. So like, my core interest in this new technology is one around that if we distribute ownership to people who create value, or care or contribute value to these networks, that that collective action will grow in value. And I guess it was trying to sort of pull apart whether you share that view or not. And I think I mean, we've talked enough, right, kind of, I think, a sense of where you're coming from with that. And I think it is kind of, yeah, it's not helpful to look at this sort of foundation or company is probably separate, in this case, right? Like, there's probably actually a blending here that you see taking place in ways that maybe new projects will have to explore a little bit more deeply given that Nouns is very effective at generating meaningful treasury value on the meme alone, but maybe that doesn't continue over into all other assets. And where should we direct people what's new and happening in your world that people should go pay attention to.

Jacob Horne 53:04
Check out Nouns.build, that's where you can create one of these Nouns DAOs, you'll be able to see a whole bunch of people experimenting with it, get a sense of what communities look like. And then if you're looking to learn more about Nouns, generally just go to Nouns.wtf, and go to the DAO page and read through the proposals, because you'll be mind blown, you'll see funding Nouns figurines being sent up to the International Space Station. And then five proposals later, it's like all Let's fund, you know, clean up and charity in parts of Africa or even in like, you know, anywhere around the world. So it's like, there's all sorts of stuff that this organization is doing. And so like, Yeah, I think it's, it's like looking at a subreddit with a bank account. And that bank account happens to have $50 million in it. This is totally insane. So yeah, let's to have a look.

Jess Sloss 53:48
Yeah, I also think jumping into the prop house. The Nouns prop house is also a great example of seeing just the ways of which funding is being released and cool things are being created. So alright, men, appreciate that. And appreciate that you did your hair for me today for this call. That will be not video, just audio. So I'll say Jacobs hair looks phenomenal. Now wearing a hat today. It's a big day. And yeah, just really, you know, I always profess my gratitude to you for all the support you've given to Seed Club along the way and the continued inspiration that you drive here. So thank you for sharing that with us today.

Jacob Horne 54:18
Yeah, thanks for having me. It's great to chat.