Web3 Social Club Vol. 4: Permissionless Innovation
On July 2, 2022, BlockBeats hosted the Web 3.0 Master Class x Web3 Social Club Twitter Space with guests from MetaMask, Keystone Wallet, and Mask Network.
With the theme being “Permissionless Innovation”, we invited Aaron Davis (@kumavis_), the founder of MetaMask, Suji Yan (@suji_yan), the founder of Mask Network, and Lixin Liu (@bitcoinlixin), the CEO of Keystone Wallet, to share their experiences of starting a business in Web3.
As a quick TLDR, they discussed how Web3 startups and entrepreneurs could cooperate with open-source communities, key aspects to look at when faced with team collaboration and funding challenges, the major innovation differences between Web2 and Web3, and some words to inspire Web3 newcomers.
You can watch the full episode on YouTube:
Key Takeaways
- Permissionless innovation is not a new concept.
- It was born from the frustration of Web2 giants gaining control over our data and digital assets.
- Web3 technologies are revolutionizing so quickly that it’s becoming the hotspot for permissionless innovation.
- Web3 has a completely new level of opportunities for builders to innovate and explore. - The major difference between Web2 and Web3 is that the latter is more open — people look out for each other and are willing to communicate about what they are working on.
- Working with open-source communities can help projects maintain a focused core team while accessing a broader base of tech-savvy developers.
- Key factors that decide projects’ success include timing; a shared ideal to serve users; luck; a willingness to engage with the community; the drive to remain innovative.
- Advice to Web3 startups: Communicate constantly with the community instead of keeping them in the dark; Reward loyal community members and listen to their feedback; Remain open-minded and work closely with open-source communities.
- In the next few years, we will witness more permissionless and decentralized social networks as Web3 fundamentally transforms how people live, work, and interact.
- Take the bear market as a time to build. The Web3 veterans are already on this, as should every Web3 enthusiast.
The Advent of Permissionless Innovation
Insights from Kumavis (MetaMask Founder)
The promise of permissionless innovation has been here since the invention of the Internet. Unfortunately, with centralized platforms asserting dominance in space, the spirit of openness has gradually faded as they don’t leave much room for exploration and innovation. This, thankfully, had the unintended consequence that is the huge success of Web3 technologies such as Ethereum. Case in point: in Web3, anyone can build their own extensions or experiment with new functions without permission from gatekeepers.
Why is MetaMask so popular? They don’t make assumptions about what blockchains should look like. Instead, they encourage community members to build connections with each other, to create their own applications and communities, allowing them to safely interact.
Insights from Lixin Liu (Keystone Wallet CEO)
Unlike Trezor or Ledger, Keystone is a QR code-based hardware wallet. Lixin takes the recent EIP-4527 proposal as an example. Without requiring any third party’s permission, any software wallet can be compatible with Keystone (note: hardware wallets can also be compatible with MetaMask by implementing EIP-4527).
AirGap, the crypto wallet, came into existence as a result, having the ability to transform any old mobile phone into a QR code hardware wallet. Once airplane mode is on, any user can connect with MetaMask by scanning the QR code on their phones with AirGap installed. Since seed phrases are kept solely on the phone, the safety is next-level. Luxin thinks AirGap is a great example of permissionless innovation.
Lixin gave a special mention to MetaMask Flask, a developer version of MetaMask, that enables developers to build interesting applications without permissions. Keystone also built Bitcoin Snap, allowing users to sign Bitcoin transactions with Flask in a completely permissionless way.
Through multiple parties’ joint efforts, Web3 is becoming a place where collaborations happen daily.
Insights from Suji Yan (Mask Network founder)
Back in the days of Web1 and Web2, data and assets possessed by users were controlled by platforms or large companies. Whenever people wanted to build their own servers, APIs and SDKs were required and requests for such information could be rejected by big platforms and companies.
As we embrace Web3, there are finally real opportunities to realize true permissionless innovation. With this focus, Mask Network built its own social protocol, moving decisively into Web3 social. Decentralized Identities (DIDs), social graphs, and bridging Web2 and Web3 are the areas Mask Network is working on to achieve permissionless innovation.
In May 2022, Mask Network co hosted the ETH Shanghai Hackathon with Gitcoin. Over 1000 applications were received, with 40+ projects presenting on Demo Day. Suji believes that permissionless innovation is the reason ETH Shanghai could happen. Application builders no longer need approvals and can easily interact directly with protocol infrastructures, with innovation only limited by the builders’ own imaginations.
With more functions built in wallets, and exciting features being brought to NFTs, socials, and even the metaverse, we will soon see a more permissionless and truly decentralized social network.
Differences Between Web2 & Web3
Many Web3 companies, compared to Web2 companies, are young and smaller in scale. Unlike most Web2 companies that keep everything confidential, Web3 encourages cooperation.
Overall, the Web3 space does not function traditionally. Instead, they build in public, soliciting help from the public and allowing for more exponential growth. Stealth mode is rare on Web3, and when it happens, there is usually a reason for it.
Why Build with Open-Source Communities
Anonymous community members can contribute to a product or a protocol in many ways as they not only propose creative ideas but also participate in the development heavily.
There are 3 phases a Web3 startup typically goes through:
- The founders and core team define the SDK and set out a framework for how the community can work with the network.
- Next, the team has to cultivate the culture and educate users.
- Lastly, the project is in the community’s hands. Here, the team’s job is to onboard developers and users to drive the project forward.
Suji believes Mask is 70% in phase 1 and 30–40% in phase 2, boldly declaring that Mask will always remain open-source as it’s written in their DNA.
One approach is for protocols to keep their core team around 100 people and to encourage developer communities to participate in what they’re doing. Providing funds to community projects, investing in projects which have strong business plans, and introducing them to other investors will help projects grow significantly and dynamically to expand the product ecosystem.
Suji calls for startups to seriously consider open-sourcing themselves and engage community members. Being open-source is a way to gain trust and it might take very long to get there.
Lixin echoes this sentiment as he sees the biggest benefit of being open-source to be that it would capture the imaginations of more developers. Keystone has also benefited from this, recruiting developers from open-source communities.
The Journey to Success
Insights from Kumavis (MetaMask founder)
3 things led to MetaMask’s success: 1. Timing; 2. Building more than a mere product; 3. Luck.
It’s been 6 -7 years since MetaMask was built. At first, the team’s aim was to gain users’ trust — even if the MetaMask themselves remained unprofitable. The team focused on safety and expanded quickly after gaining traction, which was when they introduced the swap function and started earning revenues from there.
Right now, the swap function is the primary revenue stream MetaMask has. There are no major problems with the swap function, and bugs reported are solved immediately. These have enabled MetaMask to be the gateway for new Web3 users, helping them maneuver the Web3 space while remaining as unnoticeable as possible.
While there are ways for popular products to lose sight of noble intentions to create more revenue streams, MetaMask chose not to go down that path. As Kumavis says, they would like to build virtuous cycles with the community, playing the long game. To the MetaMask team, the best user experience is to allow them to use any dApp on any browser, allowing certain identity services to be adopted.
Insights from Lixin Liu (Keystone Wallet CEO)
The biggest challenge to building hardware, according to Lixin, is the management of supply chains, especially in the Covid-19 era. It makes life much more difficult than simply building a software wallet, as inconveniences in transportation and e-commerce add up. Every decision Keystone makes must be extremely prudent, as further changes would be hard once the wallets are shipped. Luckily, Keystone has an edge in this area: the team members are sophisticated hardware veterans.
For Lixin, the biggest challenge is to gain the trust of the community. “It is as hard as selling an insurance service to people,” said Lixin. Most users don’t have technical backgrounds so they can’t audit the code, nor will they fully understand the functionalities provided or the efforts behind it.
Insights from Suji Yan (Mask Network founder)
Believing in the community and constantly innovating are the 2 cornerstones that shaped the last few years for Mask Network.
Mask Network started with a 10-people team in 2017 when the ICO bubble burst. Raising funds was quite challenging for a small team and VCs tended to avoid investing in crypto. It was only in 2020 that things started to get better. 2017–2020 were difficult times for Mask. In 2020, DeFi and NFTs gained popularity, as did Web3 socials. That was when Mask Network managed to raise funds as VCs eventually started showing an interest.
Open-source communities played a huge role in this process — Mask got its grants from Gitcoin. Mihai Alisie (co-founder of Ethereum and Bitcoin Magazine) also retweeted Mask’s Twitter post, driving funds from many OGs.
All of these helped Mask tremendously, contributing to Mask’s decision to donate to Gitcoin as a public good and fully funding the latest Web3 Social Ecosytem Grant Round. After the $MASK token was launched, Mask also donated a good amount of tokens to Gitcoin.
Advice for Web3 Startups
Connecting with your communities frequently is the top advice for Web3 startups. It’s recommended that Web3 startups should actively communicate with their communities instead of working on their own — especially for projects or developers with Chinese backgrounds. The speakers made this clear as culturally, Chinese projects are more likely to keep their progress low-key.
On the marketing side, Lixin shared the story of how the team spent time on Twitter to talk to community members about safety and to promote their products. People who really wanted real and authentic products got giveaways from Keystone and it turned out to be an extremely useful way for Keystone to receive feedback.
The bear market is the best time for builders and the bull market will only exist if you take an extremely long-term approach. Speakers encouraged builders to be bold and put their plans into execution. The Web3 triumph is coming.
Backend Stories and Future Plans
Insights from Kumavis (MetaMask founder)
MetaMask was founded 6 years ago. Kumavis himself has been more focused on safety and issues around supply chains. Currently, MetaMask has 100+ team members and aims to make MetaMask one of the safest crypto wallets. The MetaMask community has been growing day by day, reaching more than 3 million members.
Other Applications MetaMask Is Building
Snap System
The boom of new protocols and new ways of interaction has been difficult to keep up with. MetaMask invented a plug-in system called Snap to open up permissionless innovation. The Snap system shoulders greater responsibility as the security stakes are higher.
Lava Mode
Building on Chrome extensions has never been easy because such experiments need to experiment correctly and safely in a sandbox environment. Lava mode is a supply chain security system using Java Script as the native language to safeguard MetaMask and protects any user or wallet. “Please take a look at Lava mode. We used a hardened version of Java Script from Agoric in our Snap system to contain the Snaps you install,” Aaron said.
Now, when users visit a website or dApp, there will be prompts to install the external functionality in the form of Snap, showing clearly what permissions are needed. For developers who are familiar with this, MetaMask is giving them a part of the HD Key Tree — the entropy associated with some chain IDs.
New methods and new technologies are always being invented to tackle the problems on the road. For MetaMask, the goal is to become a gateway to users. This is done by adding new blockchains and adding new types of contract accounts. MetaMask also has plans in the future to allow Snaps to augment the transaction confirmation screen to present additional information, enabling communities to arm themselves with the specific knowledge that would help them make more informed transactions.
Insights from Lixin Liu (Keystone Wallet CEO)
Keystone was founded in 2017 and for 3 years, they were focused on Bitcoin safety protection. It was only at the end of 2021 that Keystone started to look at Ethereum and Web3-related implementations. Being a partner to MetaMask is one of the things that Keystone is grateful for. The partnership is mainly on the MetaMask browser extension, with the mobile applications already integrated.
Building the Next-Generation Hardware Wallet
According to Keystone’s research, the current market share of hardware wallets in Western Web3 communities is around 10%, with a forecasted growth of 20% — 30% in the next bull run. He believes there will be higher demands for hardware wallets if the entire crypto community reaches 100 million people.
In order to satisfy the estimated demand, there are several things Keystone is doing to make Keystone more accessible to ordinary users.
The first is to build the next-generation hardware wallet at a significantly lower price. It includes a larger touch screen and QR code while keeping the legacies of the current version, and integrating more cool features. “We’re trying to make the price around $80, and we will try to make ourselves safer with 2 different security elements from 2 different vendors and be more open-source to the community.”
Delivering Another MetaMask Flask
Seeing the difficulties for Web2 users to enter Web3, Keystone is also actively solving the recovery phrase issue. The team is working with MetaMask to build another MetaMask Flask, which is a proof of concept for an MPC (multi-party computing) solution that’s seedless. “Users can forget about the recovery phrases and use some cutting-edge technology like MPC to have a Web2-like experience for their Web3 journey.”
Insights from Suji Yan (Mask Network founder)
Mask Network primarily focuses on building a Web3 social protocol which is an intermediary across Web2 and Web3. By using Mask Network’s extension, users are able to send encrypted posts on Twitter and other social platforms and display the NFTs they hold.
Mask Network has been integrated with MetaMask for 3 years. The cross-extension RPC was the first project that Mask integrated with MetaMask. Suji himself was an early user of MetaMask and took great time and energy to explore what’s being built in Web3.
Building and Investing in Web3 Social
Web3 social is in its infancy in terms of innovation and there are no projects valued at $2–3 billion. In DeFi and NFT, a valuation like this is not rare. Mask is working with Arweave and IPFS closely to build a storage layer and endeavors to challenge the status quo and actively investing in Web3 social.
Binding Ethereum Accounts to Twitter
The collaboration between Mask and MetaMask began in 2018 when MetaMask had around 20 people. Both sides exchanged ideas on how to bind a public key to a Twitter account. Even though the function has not been completed, it’s a work in progress.
Incubating Next.ID
In the decentralized identities (DID) space, Next.ID — a DID aggregator — is the main project Mask is working on. The team sees a great potential as there will be an increasing number of users and projects who will want to use DIDs to log in to EVM-compatible chains.
Next.ID aims to be a bridge for Web3 identities and will cooperate with other decentralized identity solution providers such as Ceramic and CyberConnect, bridging the gap between Web2 and Web3. There are already some ongoing cases for Next.ID. You can check the official site for more information.
Both Mask and Next.ID are open-sourced, providing multiple technological documentations and solutions to benefit the developers permissionlessly.
For anyone who is interested in future Twitter Spaces, please follow Mask Network @realMaskNetwork. We will be hosting more events of this kind, and continue to invite more industry leaders and emerging Web3 builders to talk with us.
Web3 Social Club is a Twitter Space series by Mask Network where Web3 projects and builders gather and exchange ideas on building cutting-edge social networks and infrastructure.
Web 3.0 Mater Class is a serial event by BlockBeats. It invites experienced Web3 entrepreneurs, investors and institutions, developers, and communities to share their business stories, marketing, and investing tactics to shed light on Web3 enthusiasts, startups, and builders.
