In the blockchain world, public chain protocols like Solana, Polkadot, and Ethereum are widely seen as competitors. Competing for developers, liquidity, and users, zero-sum games seem to have become the industry’s default survival strategy. But are we really doomed to a life-and-death struggle without the possibility of mutual win? Is it possible that the future multi-chain world can cooperate like the currency systems between countries, jointly pushing cryptographic technology into the mainstream?
In a conversation, Gavin Wood deeply analyzed the root of this problem. He pointed out that the challenges we face today are not just about technical interoperability, but also about the closed nature of culture and systems. Forming 'alliances' between different protocols is much more difficult than imagined because it concerns not only the code but also the politics and consensus behind each 'token sovereignty'.
He further proposed that the key to solving this dilemma is to completely separate the 'network' itself from 'tokens'.
This is the second part of the Gavin interview series, mainly covering the following topics:
Is it possible for L1 protocols like Solana, Polkadot, and Ethereum to achieve mutual benefit?
Governance can enable Polkadot to be a system that evolves and adapts to changes.
The secret to DAO's operation is that stakeholders must engage, just like Polkadot's conviction voting.
In any voting, real-name is not a good thing.
Founders can never satisfy everyone.
If you want to see the content of the first part (Gavin Wood: USDT is a highly regulated centralized bank! The more compliant, the more it deviates from its original intent?)
Is it possible for L1 protocols like Solana, Polkadot, and Ethereum to achieve mutual benefit?
Kevin: Now Solana, Polkadot, and Ethereum are competing for users, liquidity, and developers; they are in a competitive relationship. How can we break out of this zero-sum competition and achieve mutual benefit, growing the pie together?
Gav: This is indeed very difficult and a tricky problem. Theoretically, I believe there is a solution, but the resistance to progress is immense—because we have turned what should be a technical issue into a mode similar to a 'football league': everyone wearing their own team uniforms, some even willing to fight others for their 'team', engaging in life-and-death struggles, sometimes even to the point of bloodshed. This makes cooperation impossible, let alone expanding the pie together.
Kevin: What can we do now? Integrate? Have the founders sit down and talk?
Gav: It’s also difficult; it's hard to imagine in the crypto field. They all have community pressure—being seen as cooperating with 'rivals' could be seen as 'weakness'.
Kevin: Are there any quietly advancing collaboration cases now?
Gav: There are no secret dealings; everything is out in the open. Some projects are also quietly adopting the technologies of other projects, and it’s not entirely hostile, but overall, cooperation remains difficult, especially when cooperation may threaten a token's 'sovereignty'; the difficulty increases further. The current situation resembles that of football teams. Have you ever heard of football teams merging?
Kevin: I haven't heard of it, and it probably doesn't exist, right?
Gavin: From a technical perspective, this problem can actually be solved. If I were to envision it, I would take an approach: completely separate the 'network' itself from 'tokens'. This would allow all tokens to circulate and be used on the network, each retaining its identity and token economic model, but still being interchangeable with floating exchange rates like foreign currencies, achieving interoperability. This is somewhat similar to the currency mechanisms between current countries. The difference is that users can seamlessly switch between different 'countries', carrying a basket of currencies, which automatically converts to the optimal choice at the time of consumption. I am still only vaguely thinking about this direction, but I think it is a very interesting and quite challenging problem. This also has direct implications for Polkadot.
For example, currently in the Polkadot ecosystem, there are two different tokens: DOT and Kusama, right? They belong to different networks and are independent, but it would be cool if they could collaborate more closely. Making them complementary instead of competitive would be a great example.
People often ask me now, for example, about our new protocol JAM, 'Will there be a new token?' My answer is no; it’s just an upgrade of Polkadot. But this also makes me think: why do people keep asking this? Are they really expecting a new coin? So before I really consider this question, I want to think clearly first—how can multiple Layer 1 base tokens collaborate without inevitably becoming competitors? This is a question I have been pondering.
Governance can enable Polkadot to be a system that evolves and adapts to changes.
Kevin: We have just talked about many topics regarding networks and network nations. But whether it’s a network or an organization, the key to success or failure boils down to one word: governance. And the governance in the blockchain space is often very opaque; even Ethereum, the 'big brother', is no exception. What do you think is the root cause of the problem? And how should we solve it?
Gav: The topic of governance is very interesting. What exactly is governance? It is essentially the mechanism for a system to self-iterate—meaning how a system changes itself and upgrades. If the system does not need to change, then naturally, governance is not needed (for example, some people in the Bitcoin community believe Satoshi's design is perfect and requires no modifications).
But I don't think so. I believe that nothing created by humans is truly perfect. If you want a system to remain vibrant in the long run, it needs an evolution mechanism. Of course, there are designs that are close to perfect, such as Italian mocha coffee or Eames lounge chairs, but those are rare; you have to be very arrogant to claim 'the system I created is perfect'. I don’t think that, so I tend to choose a more prudent approach—creating a system that can evolve and adapt to changes.
Then there must be governance. And governance, to be honest, is an extremely complex and difficult issue. This problem has not been solved well by human society for thousands of years, so we can only try.
In Polkadot, our approach is to try to 'write clearly' the governance mechanism and then let it execute automatically. This is the core idea of what we often refer to as OpenGov and Polkadot DAO. Ultimately, our focus is not on the treasury (although it is important), but on how the Polkadot protocol should evolve, how it should self-upgrade, and that the whole process is 'automatic' and requires no human intervention.
I admit this is actually a kind of 'value choice' (opinionated decision); I think it's correct, but other public chains might not agree. For instance, I talked to Vitalik seven years ago, and he felt that governance shouldn't be on-chain but should rely on a vague model of 'closed-door meetings + rough consensus' (his views may have changed since then). But I believe that since it is a rule system, the rules should be codified—even if we don’t know the optimal solution, at least we have a measurable and experimental baseline. If we don’t even write the rules clearly and rely on opaque operations pretending to have 'theoretical support', that is no different from 'papal governance': you have a non-transparent, non-democratically elected 'pope' who listens to the opinions of cardinals and then makes policy decisions—this approach might not be problematic now but could be very dangerous in the future.
The secret to DAO's operation is that stakeholders must engage, just like Polkadot's conviction voting.
Kevin: Do you think decentralized autonomous organizations (DAOs) can really operate effectively?
Gav: Whether it can operate effectively depends on how you define 'operation'. But if you ask whether it can be as good as our current best alternative, my answer is—absolutely, no doubt about it; it can fully achieve that.
Kevin: Why?
Gav: Because what we currently call the best alternative is essentially just a 'poor quality' DAO. It’s a fuzzy DAO, a system that can be manipulated and easily violated its own rules. In simple terms, it is just a bad DAO. The essence of a DAO is a collective organization based on rules: a group of people interacts according to some established rules and laws to decide how to jointly manage certain resources or permissions.
Human society has evolved various types of organizational forms, whether companies, enterprises, armies, or governments... essentially, they are all rule-based systems. Whether these systems can operate sustainably depends on whether these rules are seriously followed. Typically, these systems fail not because the rules themselves are flawed, but because people no longer adhere to them.
Although there are exceptions—like Germany, where rule awareness is strong and the culture emphasizes 'following rules'. But sometimes, even if rules are strictly enforced, those rules themselves may be outdated or unreasonable. In this case, we need to see if we have the ability to adjust the rules according to environmental and technological developments. Switzerland is a great example; it is a highly decentralized country with strong local autonomy, so the feedback loop from public perception of problems to actual rule changes is relatively quick.
In those more centralized countries, this cycle is much longer, slower, and may even break completely, leaving everyone to follow some 'stupid rules'.
So if we believe that systems can evolve and improve—just like those 'smart' countries do—then what we really need is a mechanism that ensures 'every component in the system is willing and able to adhere to the rules'. What DAOs do is exactly this. They transform the 'half-baked', easily authoritarian systems of the real world into genuinely rule-based, fair, and transparent systems. So yes, I fully believe that DAOs are an upgrade to the current forms of human organization, just as I believe that cryptocurrencies are an upgrade to traditional currencies.
Kevin: I've been thinking about the example of Switzerland lately, since I am Swiss, and this system indeed works. I have been pondering why the Swiss system is effective. I feel the biggest reason is that Swiss culture itself is very rational, but I think many people in the world are not very rational. For example, many years ago there was a nationwide vote in Switzerland to decide whether to increase statutory annual leave from 5 weeks to 6 weeks, and the result was that people voted against it! The French were shocked: 'Have you lost your minds?' But you can see that they made a thoughtful decision—they understand the consequences of long-term decisions. Even as a Swiss person, I was shocked at that time and thought it was too rational. Although I can't quite articulate why they can be so rational, perhaps it really is a cultural issue?
Gav: I think it’s not just about cultural rationality; it’s also because everyone has a vested interest in society. They can think about problems from two angles: on the one hand, personal interests; for example, from a personal perspective, of course, they want six weeks of vacation; but on the other hand, they will also consider social issues—perhaps five weeks of vacation is better for society as a whole. Because longer working hours may increase productivity, enhance international competitiveness, and be better for the overall economy. I believe that only when people genuinely believe in a 'community of shared destiny' will they make rational decisions.
You know? We have introduced a mechanism called 'Conviction Voting' in the Polkadot network. This means that those who are more willing to bear the consequences of decisions and take on greater responsibility for the outcomes of those decisions have greater voting weight. I think this is a very key point. Today, many democratic systems face problems not just because of short feedback cycles (which is a localization issue), but more seriously, because people have a indifferent attitude toward the broader society. People are no longer willing to care about the future of the country or the direction of society. I believe the root cause of this is that people no longer feel a sense of belonging to this society.
Kevin: Perhaps it's because the systems of most countries have not worked effectively. When you feel that 'hey, my country is relatively reliable, at least better than others', it’s easier for you to identify with that country. But if you feel oppressed by taxes every day, with no security guarantees, and struggling to make ends meet, how can you possibly identify with that country?
Gav: Exactly. The social contract in many Western countries is currently collapsing, and this is a big problem. If you want a democratic system to function normally, you must maintain that social contract; once the social contract collapses, the democratic system cannot operate.
Kevin: But at the end of the day, even in decentralized organizations, there are still people behind it. People are selfish, profit-driven, and shortsighted, and some may even be corrupt. So how do you prevent a DAO from being corrupted and avoid those who only consider short-term benefits from undermining the organization's long-term goals?
Gav: This is actually the basic problem of game theory. Essentially, what we need to do is design this 'game'—that is, the system's rules—using our understanding of the participants to guide them to do things that benefit the overall system goals. This is indeed a challenge, but it is a question that has been researched in the field of game theory. We know that participants can be selfish and shortsighted, so we design rules based on these 'human natures'.
As I mentioned, Polkadot has introduced a mechanism called 'Conviction Voting', which gives you different voting weights based on how long you're willing to 'lock' the consequences of your vote. The longer you lock it, the greater your voting weight. This is no longer traditional democracy, and it’s not even traditional corporate governance.
Kevin: So how is this mechanism implemented? Is it based on the duration of your staked tokens, or how does it work?
Gav: It’s about locking up. You lock your tokens, which cannot be transferred or sold; for example, you might choose to lock them for a year and a half or even two years. If you are willing to lock them for the longest duration, your voting weight may be five or six times that of those who lock for a month or a week (I can't quite remember the exact figures), and this varies across different networks, such as between Kusama and Polkadot. If you don’t want to lock up tokens at all, you can still vote, but your weight will be very small—perhaps only one-tenth of that of those willing to lock their tokens.
So the key is: you must understand the motivations of participants. Their motivations may be completely different from the system's goals, but we can cleverly design rules to let the 'winds of human nature' drive the 'boat of rationality'. It’s like sailing—the wind may not blow in the direction you want to go, but as long as you know how to adjust the sails, you can still use that wind to move in the desired direction. Although the speed may not be particularly fast, you are still making progress. This is somewhat similar to the Bernoulli Principle in physics—the wings of an airplane utilize this principle to fly. There are also many similar principles in game theory; we can leverage the 'winds of individual human decision-making' to convert it into the driving force for a stable, aligned, and long-term operating system.
In any voting, real-name is not a good thing.
Kevin: From a governance perspective, do you think Polkadot is successful?
Gav: I think it's mixed; I wouldn't say it’s a failure, but I also wouldn't call it a perfect success. We have collected some very valuable data that helps us understand the limitations of the current OpenGov governance system, and we are thinking about how to improve it to enhance the quality of decision-making. Although we haven’t studied every governance system in the crypto space and in the real world, as far as we know, there isn’t a better governance model that meets our goals. Especially in terms of decentralization and non-leader-centric governance, Polkadot has at least done better than most systems.
Kevin: Without good governance, this system will descend into chaos. If you could wave a magic wand to solve one problem for Polkadot right now, what would you choose?
Gav: I would anonymize the entire system, using zero-knowledge proofs (ZK) to 'hide' everything. Currently, Polkadot is completely open and transparent; which account I vote with and how many coins are in that account can all be checked, and others can easily track what operations you've done and analyze who you are and what you did. This transparency can have unexpected impacts on the entire game process, which is detrimental to governance. In our real-world democratic systems, voting is anonymous, which is critical. However, this is not the case in Polkadot, which is indeed a problem. But solving this problem isn’t easy either. Polkadot's governance system is inherently complex, and the ZK (zero-knowledge proof) technology is still quite challenging to support complex logic; generating and verifying proofs are both difficult.
But as a long-term goal, I think this is worth pursuing, and perhaps in the future, we can collaborate with some projects specializing in ZK.
Kevin: I can understand the logic of anonymity and its advantages, but I think transparency also has its benefits, such as letting everyone know who is doing what. I know this may sound a bit naive, but I think if everything is anonymous, those who hold a lot of voting power may quietly band together, while others are completely unaware. This isn't really 'decentralization'; it's just that people can't see it.
Gav: Well, I understand what you mean. You're saying that if there are some people in the system who have a lot of influence, it’s best that everyone knows who they are and which decisions they influenced. But the reality is: no system can really achieve this, not even the Western democratic system. Apart from through voting or polls, we cannot accurately measure who has how much influence at any given time. In the past, we could at least guess who had influence based on newspaper circulation or TV audience size.
But now, even in the crypto world, this kind of influence is difficult to measure—not because of the use of ZK technology, which has little to do with ZK technology, but because the entire system itself is a 'pseudonymous system'. For example, during Ethereum's early crowdfunding, is it possible that a wealthy individual privately bought 50% of the ETH? Now they control a multi-billion-dollar ecosystem—are there such people? We have no way of knowing, but it's not entirely impossible, as there were definitely Bitcoin millionaires by the time Ethereum was launched in 2014.
So the issue is not with ZK; ZK is not meant for these big players. The real value of ZK lies in protecting ordinary participants, especially in certain governance mechanisms, such as Polkadot's technical alliance. For example, without ZK, everyone can see who voted in favor of a network upgrade. If this upgrade later violates a country's laws, those who voted in favor could be held accountable by the government. If there is ZK, even if they want to hold someone accountable, they would not know who voted in favor. Even if a country wants to take everyone down, they wouldn't know who is in the pot; they would have to check one by one—raising the cost makes it harder to crack down. Of course, I don't oppose introducing some mechanisms to limit the influence of large holders, such as introducing 'quadratic voting' mechanisms, where the more you vote, the smaller your marginal voting power becomes, thereby reducing concentration. But these all need to achieve community consensus, such as: 'How much is considered too much?' 'Should it be real-name?' 'Should voters be disclosed?' All these questions need to be discussed and decided by everyone. Personally, I believe that in any voting, real-name is not a good thing.
But I support identifying those who have too much influence and then deciding whether to weaken their influence. However, this requires a reliable Web3 identity system (proof of personhood) that can verify 'this account is backed by a real person'; otherwise, people can easily bypass the mechanisms by creating multiple accounts with scripts. Once you have the mechanism to 'prove this is a person', the rest is easier—it’s just a matter of reaching a consensus.
Founders can never satisfy everyone.
Kevin: We’ve talked about a lot of difficult problems. What do you think is the hardest problem that every network founder will encounter?
Gav: It’s hard to say, there are indeed several very difficult problems. For example, Polkadot has been very cautious about regulatory issues from the beginning; we choose to listen to the voices of regulatory agencies and are willing to communicate and collaborate with them. If they make things clear, we will comply; if not, we will do our best to understand and find a way together. This was the case in the early stages, but the current situation is quite different. I think many founders face similar problems. I’m a bit special in this regard; if I had taken their path back then, I probably wouldn’t have slept well at night.
Kevin: Are you sleeping well now?
Gav: Well, it's okay. I have a one-and-a-half-year-old child at home, and I can't say I sleep well every day, but that has nothing to do with regulation, haha. Another big challenge is that you can never satisfy everyone. The demands of participants vary greatly, and sometimes you must clearly know who you need to satisfy and who you cannot cater to for the time being. As a founder of a network, if you still have some control over governance, you must clearly define 'what we want to do' and 'what we do not want to do'. This is difficult because you know some people will be very dissatisfied with your decision, but you still have to make that decision. Because this is the responsibility you must bear as a founder.
Original video: https://www.youtube.com/watch?v=jyMxSIFyXwo&t=5033s
