🎙️ DAOs, Pseudonymity, and Community Building with Jonathan Hillis

David speaks with Jonathan Hillis, founder of Cabin, a place for creators to gather together to work on exciting projects 'IRL'. Prior to founding Cabin, he was Director of Product, Shoppers, and Marketplace at Instacart.

They talked about:

🏛️ The collective power of Constitution DAO

📈 How internet trends shape financial markets

🔍 The role of law in decentralized finance

🕵️‍♂️ The consequences of digital pseudonymity

👤 The role of social media in shaping personal identity

🧑‍💻 The dangers of isolation in a technological world

This is just one part of a longer conversation, and it's the third part. You can listen to the earlier episode here:

Part 1: 🎙️ Innovation, Technology, and Human Connection with Jonathan Hillis (Episode 116)

Part 2: 🎙️ Networked Cities, Culture, and Democracy with Jonathan Hillis (Episode 119)

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📄 Show notes:

[00:00] Introduction

[02:41] How Constitution DAO almost made history

[05:56] DAO is more than just crowdfunding

[10:11] How one meme changed finance

[12:17] The accountability crisis in DAOs

[15:33] Anonymity isn’t a free pass in Crypto

[18:38] The role of social norms in digital behaviour

[21:58] The psychology of online interaction

[25:01] How to build genuine relationships in a digital world

[27:33] How neighbourhoods can fight loneliness

🗣 Mentioned in the show:

ConstitutionDAO | https://www.constitutiondao.com/

Web3 | https://www.mckinsey.com/featured-insights/mckinsey-explainers/what-is-web3

Crypto | https://theknowledge.io/what-is-cryptocurrency/

Julian Weisser | https://weisser.io/

OnDeck | http://www.ondeck.com/

Brandon Sanderson | https://www.brandonsanderson.com/

Kenneth C. Griffin | https://www.citadel.com/our-teams/leadership/kenneth-c-griffin/

GameStop | https://financhill.com/blog/investing/how-did-ken-griffin-make-his-money

Roaring Kitty | https://www.youtube.com/c/roaringkitty

Disney | https://thewaltdisneycompany.com/about/

Cabin | https://www.cabin.city/

FTX | https://www.ftx.com/

JPMorgan Chase & Co | https://www.jpmorgan.com/

Elon Musk | https://www.tesla.com/en_gb/elon-musk

Starbucks | https://www.starbucks.co.uk/about-us

COVID | https://theknowledge.io/issue7/

Bowling Alone | https://amzn.to/3UqHtio

👤 Connect with Jonathan:

Twitter: https://x.com/JonathanHillis

Website: https://jonhillis.com/

Cabin: https://www.cabin.city/

👨🏾‍💻 About David Elikwu:

David Elikwu FRSA is a serial entrepreneur, strategist, and writer. David is the founder of The Knowledge, a platform helping people think deeper and work smarter.

🐣 Twitter: @Delikwu / @itstheknowledge

🌐 Website: https://www.davidelikwu.com

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📜 Full transcript:

David Elikwu: So, I think where we left off from our discussion last time, I was just about to ask about your time with the Constitution DAO. On one hand, I think that story by itself is incredible. I'd love to hear about your experience and what that was like, especially firsthand at something that was quite emblematic of that moment in time, as far as DAOs and Web3 organizations or things that were connected to the Web3 movement go, at least during that period of time, but then also how we then start to connect that to some of the broader themes we were discussing around.

Okay, putting the science back in political science, actually experimenting with different forms of organizing people and then also then starting to think about the ways in which we experiment in the right way and avoid simply just replicating some of the worst parts of the systems that we already have.

Jon Hillis: So the story with constitution DAO is a fun one. And I think it really was the, as you said, very emblematic of that moment in time in you know, the crypto cycle and in terms of people's excitement about the possibility of DAO's and the future of on chain organizations. And it started for, for me, you know, we had one, a friend of mine, Julian Weiser, one of the founders of On Deck was staying out at neighborhood zero, the first cabin neighborhood outside of Austin, Texas, and I went up to just go say Hi to him, you know, one morning. I think it was a Sunday. And I was carrying my coffee and I was just going to drop in and kind of check in on him and see how he was doing. And I think I was still in my pajamas, you know, carrying my cup of coffee, walked in and he's just furiously typing away on his laptop. And he was like, "Hey we're going to buy the constitution. Do you want, you want to help, you know, make this happen?" And I was like, "Julian, I have no idea what you're talking about, but this sounds awesome." "And yes, I'm a hundred percent in." And I didn't make it back down to my house for several hours. And I think my wife was like, what happened? Where, you know, I thought he was just going up to have a cup of coffee with Julian. Before I knew it, like many other people particularly among that core contributor group. We just dropped everything we were doing for about a week and put every ounce of our effort into trying to make this thing happen because we just knew it had such memetic potency. It was such a great idea and such a great use case for DAOs to go out and buy one of the few remaining copies of an original document that was at the birth of modern democracy, and the idea that we could pull together with a bunch of people on the internet and use modern democratic tools to buy one of the copies of an early tool of democracy just felt so good and so exciting. And you know, it also really showcased what DAO's were capable of because in less than a week, a group of about 17,000 people from across the internet were able to pool together $47 million and go out and bid on this rare document. And that was a totally unprecedented thing. Not just for a DAO, but for an organization in general to be able to spin that sort thing up that quickly.

David Elikwu: One quick question. I'll let you carry on with explaining the story, but I just wanted to maybe a point of explanation. How might this differentiate from, I'm thinking of maybe two slightly different models. One, you see people a lot of the time these days, maybe on just giving where, okay, someone needs some help. Or I think there's, there's a few other platforms like that, where, okay, someone needs something and then a few people can donate some money. And, you know, you do get some of these crowd funders that suddenly raise a lot of money, right? I think of Brandon Sanderson's a good example as a writer that I read where he announced some secret projects and loads of people donated for that to become a reality. So how do you differentiate it from that kind of thing and then also from you know like a hedge fund type model where you might have someone raising money from lps. So the gps are raising money from a bunch of people and they are trusting this small group of people to do good things with the money.

Jon Hillis: Yes. Yeah. Great question. And this sort of gets at the of, you know, what makes DAO's special? So In the two examples that you just gave, there is a central intermediary responsible for that money. You have somebody who is in the first case, you have some kind of platform that has to exist, that has to allow, you know, the crowdfunding to happen that's taking a percentage of the total amount raised as fees. And that probably has some limits on how much money you can raise or what types of things you can raise it for. And that's all being managed by a company. And even then, the process of raising that money, you would have to spin up some sort of, let's say, corporate entity so that you could get a bank account so that you could go out and get people to donate the money to the thing and have it custodied by the company. And then the company would transfer the money, you know, to your bank account. So, even in that model, like raising that much money that quickly would be essentially impossible.

A hedge fund, similar type of deal, you know, you'd have to go spin up an entity and like have people responsible for the hedge fund who are raising the money and who are bringing it together. We were actually bidding against a hedge fund guy in Constitution DAO, Ken Griffin was the other guy bidding for the copy. It's sort of the antithesis of the down model. The way that constitution that worked is we set up a smart contract on juice box, which is a decentralized crowdfunding protocol, and people could donate money. And in exchange, they got a token that was sort of like a receipt so that if we didn't win, which ultimately we didn't, we were able to refund people based on how much they had donated. And interestingly, I was actually just looking at this recently, that token, which was originally intended to have no purpose other than redemptions in the case of us losing is actually still around.

And that token last time I checked was in like the top, you know, 100 or 200 tokens by market cap in crypto. And it became something of a meme coin totally unintentionally. I just looked on coin market cap. It's currently number 147 with a market cap. of $324 million, which is sort of ironic because that's actually much more than we raised for the trying to buy the copy of the constitution itself.

And so it, it sort of became this memetic thing that took on a life of its own. But the, the deal was, if we lost, it was easy to then refund all the people. It was totally transparent. And it was something where you know, we could just put the money back in the contract and if we lost, people could redeem it. And if we won, then that token was going to be used for governance for the project so that everybody who, you know, basically donated would have a proportional share of governance of deciding what we did with the copy of the constitution.

And so both the ability to very quickly spin up an entity that was able to take in these funds and then also the transparency and democracy associated with people's ability to interact with this project. And then ultimately this whole other sort of unpredicted like meme coin era of the project were all things that were pretty unique to our ability to do this with a DAO in a very short period of time.

David Elikwu: Okay, awesome. That is, yeah, it's really a rollercoaster ride. How did, is it Jim Griffin? How did he get involved in that? Because I think I remember him from the days of which, which meme stock was it? Was it

Jon Hillis: Yeah, that's right.

GameStop.

David Elikwu: whole Wall Street bet snogger anyway.

Jon Hillis: That's right. That's right. So yeah. this is sort of a great piece of broader internet lore, which is that yeah, Ken Griffin's hedge fund had shorted GameStop. And when our the Reddit community, our Wall Street vets started you know, basically buying GameStop and following Roaring Kitty you know, on this sort of crusade to take down the hedge fund short sellers. Ken Griffin lost a whole lot of money on that. As a result of Ken Griffin losing a bunch of money on that my personal opinion is that he was still a little bit pissed off about that. And that's why he decided to come, you know, get revenge on the Internet by buying out the copy of the Constitution from under us.

You know, he had shown no, no interest in buying this copy of the Constitution before it became this big Internet meme. So while I have no proof that that's the case, it certainly seemed like he was trying to be the Internet villain of the day as a way to get back at GameStop.

David Elikwu: I think it's a, it's a really incredible story. I think connecting some of those stories together and I think this very much ties into this idea that, hey, you know, a big part of the value of the blockchain, like you say, is that removes the intermediary and it allows people to directly interface with transactions with each other with whatever it is that they want to build whatever it is that they want to do.

I know a common criticism of that is also that sometimes the intermediary is useful sometimes, right now or recently there's been this story of Disney and a man that lost his life basically Disney killed him well okay maybe I shouldn't say it that way. He died I think a Disney restaurant and then his wife is obviously trying to sue them and they are saying actually he signed a contract when he signed up for a free trial of Disney Plus and because he signed up for this free trial. He you know signed up for this other thing that well that says they can't sue him. They have to go to arbitration or mediation.

That is the kind of thing that reminds people that hey, you know contracts are really important. And I think we've also seen some examples in the web3 space where contracts go wrong either there is something messed up with the code because it's actually you know, it's not just written down by hand it's in code and there's some loophole or workaround that people can get through or there's just something missing in the contract itself you know, someone didn't think things through. And we obviously have a very real world analog of this, you know contracts happen all the time, contracts fail all the time. Anytime someone gets sued, that basically just means someone didn't think things through in a contract at some point or other.

But, the difference is, when you have a contract that fails in the real world, you can sue them. You can take them to court. You can make an appeal in front of other people. On the blockchain, to my understanding, you can't. And so, first of all, on the first layer, that is a potential issue where, hey, if something goes wrong, what can I do? Who can I appeal to beyond just the level of one on one transaction, let's say you send someone money or someone steals from you or something happens like that.

But then going up a level, there's also another layer of the problem, which can be the an actual element of anonymity where, okay, like who are these people? You mentioned you were in this group of 17, 000 people. Do we know all of their, you know, their government names? There, no one has their banking details or their social security numbers or anything like that, that it's hard to track or trace. And so if someone goes rogue somehow and the contract allows for that, then you have some. I think we saw this in some DAOs where someone's able to steal some money from the collective or something's able to happen that wasn't planned for premeditated.

And not only can you not appeal to someone, you don't even know who you're trying to appeal with. Like, you don't know who you're trying to take to court in the first place that you've got the first problem of even trying to figure out, okay, who was this guy? All we have is their username. You know, we talk about Roaring Kitty. I mean, people do know his name, but there's loads of other people like this on the internet where no one actually knows who they are. Even if they do have a prolific username.

And so this raises some other issues. I know that you've got some partial solution for that at Cabin where you're working on some like passport type features, but I'd love to know how you think about that more broadly.

Jon Hillis: Yeah. Well, first of all, the first part of what you said is a common misconception. Which is that somehow, you know, smart contracts are not also governed by our legal system. And that's not true. Like, if somebody steals money from you, it doesn't really matter if they used a blockchain or a bank account or just grabbed a pile of cash from you. It's still stealing either way. And like, that's how, you know, the courts generally view it.

And so your second point is relevant and fair, which is, it may be the case that anonymous or pseudonymous people are harder to track down for legal reasons in the way that, you know, bank accounts are more traceable due to K.Y.C. et cetera. But it's not like blockchains operate, you know, in some alternate universe totally devoid of existing laws. That's just not the case. Even a DAO like cabin is has a legal structure as an unincorporated nonprofit association, you know, registered in Wyoming by opting into and participating in Cabin people are agreeing to to be a part of our

I think the legal system is still trying to work its way through all of the implications of things that are self executing smart contracts, and how that works in collaboration with a world of more traditional non executing contracts. But those two things are not really at odds or fundamentally separate from each other. In terms of the question around pseudonymity, it cuts both ways. I think you know, obviously there are a lot of examples that anyone can point to of scams and fraud in crypto. That is very well known and it's a big problem. And I certainly don't condone any of that. But also there are scams and fraud in the regular financial world too. The biggest, most obvious example of this is FTX. So everybody, you know, thought, Oh, FTX is like this big crypto fraud. Well, actually FTX was not really a crypto fraud. They were a centralized exchange that operated as a company out of the Bahamas that happened to be custodying people's crypto, but the fact that they were custodying it and the fact that they were a company and not a fully decentralized on chain, verifiable, trustless organization was what allowed them to commit the fraud. And the fact that they were cozied up to politicians in Washington helped them perpetuate the fraud. And so, yes, is fraud a problem? Absolutely. Are scams a problem? Yes. Do we need to basically prosecute people when, when they commit fraud and do things to prevent fraud? Yeah, but these are not things that are unique to crypto. And in fact, if you're actually operating in a DAO like environment where there's a high degree of transparency and a high degree of collective execution then fraud gets much, much harder. Not easier.

David Elikwu: Putting aside the question of fraud, I think you also have a potential problem of, and again, there's not me saying it because I believe it. I'm just, you know, trying to push through some of these common obstacles that people raise. You have this idea, I face this a version of this in my personal life. So a number of years ago my Twitter account, my handle was not my name, it was something else and that wasn't for any particular reason. I just happened to have had to offer a while and it never had my name right at one point It didn't even have my picture. And I just been using twitter like that for a long time. And when I started working in corporate law, it became very beneficial as something I could just use to blow off some steam and not have that connected in any way with my actual name or likeness. And so on one side of that you see some of the benefits of hey, pseudonymity I get to have an online profile not to do anything nefarious, but just to have some freedom of expression where if it was connected to my day to day work, you know, I don't want to be commenting on some meme stocks and then I'm also working with JP Morgan and working with these banks and doing a lot of these things.

But simultaneously then, when I went through this transition period of, okay, I'm actually going to put my name on my profile and things like that, it also changed the nature of which I engage with things. I know Elon has rallied against this recently by removing likes and, and I think this actually maybe kind of gets to the heart of what we talk about. So on one hand, some people celebrate that and say, Oh, it's free speech. It allows people to express themselves more freely. It gives them a bit more anonymity. People shouldn't necessarily need to know the things that you like and the things that you follow and interact with, et cetera. Then on the other hand, you have, in the UK recently, we had these riots where people were rioting in the streets across the country and doing these race riots and things like that. And a big element of that was that it started, I think it was actually on Facebook but, you know, someone just made up some stuff. Someone just made up some lies about a real situation that did happen and they said, Oh, the person that killed this girl was some kind of immigrant or asylum seeker. And that took on a life of its own.

And there's this idea that with a lot of these things that happen online, when there is that pseudonymity or anonymity and people don't have any stake, they don't have any skin in the game, their likeness, their personhood is disconnected from the things that they say and the actions that they take, they are emboldened to do all kinds of other things that are unaligned with the values that they claim to hold in real life.

And so i'm interested to know what you think about that balance of things as well. And how we cultivate because it almost then becomes, being able to cultivate online civility then kind of becomes a completely different beast to offline. Offline we have rules, we have structure, we have social norms, right? You can't just walk into a Starbucks and I don't know spit on the floor or something like that obviously these things happen, but you know people would look at you instantly and there are things that stop you from doing things like that. On the internet, it's a bit wilder and there is infinite space to do all kinds of things. Not all of those things are bad things, but especially if we think about how we digitize more and more spaces and digitize more of our lives, then that also has some implications for, you know, how do we regulate the ways that people behave or should we regulate? And I think that's, that's just a nebulous area.

Jon Hillis: Yeah. So I think it's important first to differentiate between anonymity and pseudonymity. Because I don't think those are the same thing. Like anonymity generally devolves into name calling and chaos and, and like bad things, at least in my experience. There's this community I'm a part of and they have a forum and there's one section of the forum that's fully anonymous and it's just terrible. It's just like the worst of that community, you know, whereas pseudonymity I think is a little bit different because pseudonymity has consistent identity over time. It's just not tied to your personal identity. And in that case, there is some skin in the game because people build a reputation around their pseudonymous identity. And I have seen environments with pseudonymity work a lot better because people do feel some sense of like, consistency and some sense of skin in the game for that identity. And I think it's good for people to be able to try on different identities or have burner accounts or whatever. I've never been very into that stuff personally, just because I find it to be consuming and exhausting enough to like, operate one online personality, which is just my, my normal one, just me. And every time I've ever tried to, like, start another one, it just fizzles out because I don't invest the time into it.

But I do think it's valuable for people to have those sort of outlets and, and in fact, you know, looking at, for instance, the founding of America, many of American founding fathers wrote under pseudonyms, and some of our most important documents in the founding of America you know, particularly the Federalist Papers were written pseudonymously because the consequences to their personal and political reputations for writing under their real name, so it's considered to be too high.

So I think those, those are important things to have in society.

Now at Cabin, one thing that we have always done is sort of bias towards real identity. We don't 100 percent require you know, we're not like verifying people's driver's licenses when they sign up for our discord server or anything. But we encourage it, you know, most people choose to be their real selves in our spaces. Partially because there are real in person gatherings that we go to, but also partially just because it's a norm that we've we've said, a lot of DAO's were doing meetings on their discord servers with cameras off in the last cycle, and we never did. We always had cameras on because we believe that just actually looking people in the face and, you know, knowing who they are does improve discourse and does make for a better sense of cohesion generally. I don't personally spend a lot of time investing in or in the communities that I'm in focus on pseudonymity, but I do stand for it in principle and believe that it's important in principle to have those spaces on the Internet.

David Elikwu: And with cabin, another thing I'm interested in is, I noted that you guys have some, almost like a training program type thing for people to become founders of neighbourhoods. And something that struck me or that I was interested in is that, I mean a lot of the values and a lot of the things we've talked about so far, I mean these are just fundamentally good things. And first of all, it's very easy to forget that a lot of neighborhoods were founded, you know I come from a village in Nigeria or that's now a town and there was a first person in that village, we know who he is, that's a guy that came to this place and everything else came from that. And a lot of that is lost because you know, as countries go on for longer things are more established. You kind of lose touch with a lot of those routes somewhere like the UK, you're now going back thousands of years perhaps to some early history rather than hundreds in some other countries.

And so, one, okay, it's good that we can get back in touch with this idea of, hey, you can build things, you can create things, you can build communities in real life. But then the other part that I think is, hey, you know, aren't some of these just general civic things that people should know and learn? I think you mentioned, you know, hey, you're teaching people how to go and talk to their neighbours and knocking on doors and trying to build like real life communities.

And it is interesting the extent to which that feels very much at odds with where I feel like a lot of technology is going now, which is like more isolationist. Actually, you live in this big tower block. You don't even talk to your neighbors. You spend most of your time online. And there's a potential, you know, dystopian version of the future where, hey, you work remotely, you live and work, you basically stay in the pod and then you're back to like the whole meme of you know, eat your bugs, stay in the pod, you stay in your room, you're in the metaverse, that's where you see your friends, you go to a concert in the metaverse, the food gets delivered to your door, buy a drone, all of these things, you know, you go to the store, everyone has their headphones in, even I have my headphones in, you're not even speaking to the people. And so more and more in various areas of our lives, we are not actually directly interacting with people much anymore. You know, I went to the store earlier today, I had my headphones on, I did a self checkout. I didn't talk to anyone the entire time, I just went, I grabbed my stuff. I paid manually with my phone, I took my stuff and I left. And that was it.

And so that's an example of even in the physical world. I'm not interacting with people let alone in the digital world. So i'm interested to hear okay, does that highlight some of the importance of what you're doing at a Cabin? But also how does it work in this vision of the future where you also want some form of digital integration as well?

Jon Hillis: I think this is an incredibly important question that we spend a lot of time thinking about. Because you're exactly right. Everything you, you said is true. People are having fewer interactions and not only are you using the self checkout at the store, I mean, most of the time, I don't even go to the store in the first place anymore. I'm just clicking the button on Amazon and it shows up on my doorstep, you know? And so these are the reasons why people feel more isolated now than they have at any time in the last 50 years. This is a measured thing. This is in the United States, the surgeon general just declared an epidemic of loneliness. And it's coming from everything you just described. And this is maybe even one of the few things from the Covid era that did not fully revert to mean. And I think is having long term societal impacts and it's not just Covid of course, this is a larger trend of the development of technology and changes to institutions and society over time, dating back to probably the peak of local social institutions was sometime in the 50s or 60s, and it's been well documented the decline since then there's a book called Bowling Alone that sort of famously makes the case that everything from bowling leagues to church groups to you know, Boy Scouts and fraternal organizations and all these things have been in decline for a long time since before the Internet.

And so this is a massive force that has been pulling us apart and separating us and isolating us for many decades now, and it is accelerating. And you know, one of the best ways that I have seen this in action is a lot of the neighborhoods that we work with you know, there's some old person that lives in the neighborhood and someone starts doing local neighborhood building stuff as part of cabins neighborhood accelerator program, and they end up knocking on the door. And, you know, some old lady answers it. And she says, Oh, 40 years ago, we used to have all this here. Like, where you're trying to do this. Now, this actually all used to exist. We had all kinds of local block parties and gatherings and people helping out and taking care of each other's kids and all this and it's just disappeared. And so I think you're right. What we're doing with the neighborhood accelerator program is it's not anything new. And it's not anything revolutionary. We're literally just asking people to knock on their neighbor's doors, to say Hi to people on the street, to start a local, you know, WhatsApp group, to organize local events, to watch each other's kids together, to let your neighbor borrow a drill, you know, this is not fundamentals like earth shattering stuff. It's just the basics of living a good life in society. And that's that's all we're helping to do is to reignite and reenergize some of these things that that used to exist that have withered away.

David Elikwu: Thank you so much for tuning in. Please do stay tuned for more. Don't forget to rate, review and subscribe. It really helps the podcast and follow me on Twitter feel free to shoot me any thoughts. See you next time.