Why foobar built Delegate Cash (and why Web3 needs to do better)
Few individuals in Web3 have contributed as much to the space as 0xfoobar hair. The machine learning specialist turned software developer, auditor and founder is a prolific voice in the NFT scene, highlighting security error in project contracts and advising the community in place most popular trends. He is also one of its staunch pragmatists, seeing Web3’s development on a long-term scale.
While foobar has had a part in several Web3 efforts over the years, his most famous achievement may be the creation of Delegates cash, a service that allows users to create and assign hot wallets as a delegate for wallets that actually store their NFTs. Although it may not sound sexy on the face, the value of such a service is hard to overstate, as it allows users to interact with the Web3 ecosystem without exposing their tokens to security risks.
In an industry notorious for its fraud and risk, Delegate Cash has brought a crucial level of trust to the decentralized world. Web3’s biggest names recognize this; Yuga Labs, Art Blocks and Manifold rank among the organizations that trust the service, and for good reason. Delegate Cash is on the move again, with foobar announcing Liquid Delegates in January, a promising new addition that will allow users to wrap delegation rights into tradable tokens.
We sat down with foobar for an interview covering the future of Delegate Cash, his thoughts on what Web3 is missing, and the potential of AI tools like ChatGPT to upgrade existing power structures.
nft now: How was the transition to Web3 from machine learning? Your first NFT was a CryptoPunk, wasn’t it?
Phobar: Yep, that’s right. Back when they were single digit ETH. They were the community I first looked up to when I entered the room, and so I felt like I had finally made it when I could scrape up enough to get one. The biggest contrast in Web3 [from the machine learning world] was probably the openness. In the machine learning world, I saw how smaller, scrappier open-source competitors sort of ate the big boys’ lunch, but were completely stymied when it came to computing.
While crypto was almost the opposite. A single, sharp, competent developer can put together an entire app and have it run forever, mostly autonomously. It felt very empowering to me. And it also seemed clear that if this is the place where the smartest, sharpest individuals can prove themselves, then the place itself will flourish.
“If this is the place where the smartest, sharpest individuals can prove themselves, then the space itself is going to flourish.”
Phobar
nft now: What parts of the room do not bloom?
Phobar: So far, the Defi ecosystem is this billowing mass of complexity. People are building trustless options protocols on top of Uniswap v3 LP positions. You have a lot of this theoretical power and theoretical composability that has come to light in terms of apps, but none of it has really trickled down to the average user experience yet. And so the crypto app ecosystem as a whole remains very high above or below what people need.
If you are extremely self-driven, self-motivated and have a strong background, you can figure out what’s going on; it’s the best place to be. But when it comes to the median person trying to send some USDC from one place to another, there are still a ton of UX improvements to be made on that front. There must probably be more boots on the ground to actually link these to the practical realities.
nft now: Is it a bug on the part of Web3 developers or just the natural pace of development for blockchain based technology, in your opinion?
Phobar: It is a combination of factors. There aren’t that many competent developers in crypto at the moment. So people have to choose where to spend their time and energy. And there are many competitive arenas on that front that take months, not years, to play out. So it is perfectly rational to focus on these. There are also other barriers, for example, where it is very difficult to create assets in the real world that will have immediate utility.
There is no shortage of technical skills. There is a lack of regulatory will to say, put houses or put goods on the blockchain. The barriers to that are not technical; they are largely political, regulatory and so on. Many people just don’t have the right skill sets to fight both of these battles at the same time.
“There aren’t that many competent developers in crypto at the moment.”
Foo bar
nft now: You are known in Web3 for calling out security issues and trends. How do you see your role in the NFT conversation?
Phobar: I appreciate being able to speak my actual opinion on a range of issues to a larger audience and hopefully be able to shape thinking on these fronts. I don’t have a strong agenda on breaking hack news, for example. It’s just that I can count on one hand the number of people who have both the technical depth to understand a new hack story and also the eloquence to be able to convey it in an understandable way. I’m not the only one in the world capable of it, but I seem to be one of the few interested in doing it.
nft now: Why would you say you are interested in doing it?
Phobar: I think it helps so many to understand what is going on. Because it can be scary when you just see madness and madness, hundreds of millions of dollars floating across the timeline, but no one actually knows if up is up and down is down. So I appreciate being able to help in that way.
I also have a lot of strong opinions about how culture shapes technology, and I think it’s pretty important to preserve the Cypherpunk culture of openness, decentralization, permission, and privacy that Bitcoin was originally founded on. I don’t know that it is possible to fully preserve original principles, but the actions laid down in the early days before protocols ossified have bigger downstream effects than you think. So I would like to do what I can to promote decentralization, privacy and so on.
“The actions laid down in the early days before the protocols were ossified have bigger downstream effects than you think.”
Phobar
nft now: What are some of the best and most immediate ways for the average Web3 user to educate themselves to recognize these problems when they occur?
Phobar: That’s a great question. I would say that curiosity can be your greatest asset. Even if you don’t understand how things work, wanting to understand goes a long way. For example, you hear about Bitcoin; it has no central issuer, the natural question is: ‘Okay, but what if I create my own Bitcoin, wouldn’t it be as valuable?’ And you don’t really need a coding background to Google around or read articles or ask a friend to figure things out.
For me, it’s often knowing that I don’t know anything and then going down the rabbit hole of superficial questions that lead to more advanced questions. And in terms of resources, I would say that the combination of Google and now chat GPT and Twitter Advanced Search goes a long way. I’ve curated a quality list of people I follow, and being able to search a topic and see what these thousands of individuals have said in the past about that topic has been a great research tool for me.
nft now: Let’s talk about how Delegate Cash came to be. What inspired you to create it?
Phobar: The origin story is pretty funny. I’ve seen so many people, both unsophisticated and sophisticated, get their watches wiped through one moment of weakness, one phishing site, or a bad signature. It distracts from more advanced chain interactions you can do because everyone is afraid to interact in the chain. So it’s just a giant roadblock for the whole place. It hurts individuals most obviously, it hurts communities, and it also hurts innovation.
“You just had this combination of thought leaders who gave impractical advice and people who didn’t follow it and got screwed.”
Phobar
I had it in my mind that in 20 years we won’t all be minting NFTs from a hot wallet holding our savings. But the options that people offered – just use a safe, just use a Ledger – even the people who gave that advice didn’t follow it. You just had this combination of thought leaders who gave impractical advice and people who didn’t follow it and got screwed.
So the question in my mind is, ‘What’s a feasible approach that can protect people, but is simple enough that they want to do it?’ I came up with Delegate, which still allows you to have all the benefits of complex setups like a Ledger, but still allows you to keep all the UX benefits and speed and ease of use that you get from a hot wallet. Because it is clear to me that mobile is the future. And so you still have to let them interact easily on the chain. And this was the solution we came up with, and it has been a big hit.
nft now: In January you published a blog post about the next step for Delegate Cash. What can you tell us about Liquid Delegates?
Phobar: Liquid Delegates is the first way to tokenize the NFT tool in a completely decentralized, trustless way. The space is becoming more advanced and evolving. You have all these downstream effects that keep tokens where they are the gateway to all this utility. But until now there has been no good way to actually compose them across other Defi and NFT infrastructures.
The status quo for NFT rentals, for example, requires extreme over-collateralization, where you are really selling covered calls. And which suffered from a lack of good liquidity. The goal of Liquid Delegates is that we have made it extremely easy for individuals to interact on-chain again with the delegation registry. And now Liquid Delegate makes it easy to tokenize those interaction rights on-chain and move and trade them around.
nft now: What is your view on the controversies surrounding AI tools like ChatGPT?
Phobar: It is funny. The world of machine learning is running into so many of the same roadblocks that crypto has dealt with for years. It is fascinating to watch. ChatGPT passed the bar exam better than 90 percent of the lawyers, then they neutered ChatGPT so it no longer provides legal advice. Someone used an AI synthesizer to make Drake’s voice sing a new song, and it quickly went to number one on the charts before being taken down via legal threats.
“It feels like these things have already reached escape velocity.
Phobar
Basically, what we’re seeing is that so many of the laws that have been written simply don’t make sense or apply to these new new cases. And we have seen this in the crypto world for quite some time. The question is, are the benefits of this new technology obvious enough and fast enough to the general population to outweigh the vested interests that are trying to outlaw or outlaw something? And it seems to me that AI technology has already reached that point.
It’s going to be hard to put the cat back in the bag. I have no doubt that there will likely be individual industries fighting tooth and nail to protect their own members. But overall, it feels like these things have already reached escape velocity.
