Gavin Wood reveals 5 new future directions he and Parity are exploring!

Today I'm sharing with you the final part of Gavin Wood's Web3 Summit speech!

Gavin Wood suggests several directions of exploration that could reshape the future of Web3. This is not only an extension of technical details; it is more like a blockchain research outline for the next ten years.

He said bluntly: Today's Web3 still lacks critical foundational capabilities, and without solving these problems, we can't really enter the era of large-scale applications. To this end, he proposed several strategic breakthroughs:

Rebuilding financial privacy: Create legal and secure privacy protection tools within the FATF compliance framework.

• Proof of individuality (PoP): An uncompromising anti-witch mechanism, which he called “Web3's silver bullet.”

• Web3 Oracle: Replacing centralized services operated by foundations and individuals with decentralized oracles.

• Web3 Outpost: Bringing on-chain rules into reality and building autonomous communities and economies.

• Polkadot native stablecoin: It is necessary not only to have a protocol-grade stablecoin overcollateralized with DOT, but also to explore a new “stable-ish” system.

These directions point not at a single point of innovation, but rather at upgrading the underlying narrative of Web3: from simple on-chain experiments to real-world institutions and economies. As Gavin said, these puzzles, if completed, would be a critical turning point in Web3's development path.

In the second half of my talk, I'd like to focus on some of the new directions we're exploring in the Parity and Web3 world, the most important of which is privacy protection.

The right to privacy is a right that most people should enjoy, and many countries' constitutions even clearly enshrine this. In reality, however, these rights are often overlooked, particularly in traditional institutions such as banks.

Technicians' job is not to force people to make choices, but to provide them with the tools to freely and safely exercise their right to privacy.

However, there is currently a lack of effective technical means in this area, and this is an area where improvements are urgently needed.

Therefore, we are trying to develop specialized tools to help people protect personal privacy while ensuring that these tools are legal and safe for both providers and users. In fact, this type of technology has already been partially used in our “Proof of Personhood (Proof of Personhood)” system to hide the user's identity when issuing rewards.

Internationally, the Financial Action Task Force (FATF) has issued relatively clear guidance. Although it is not a government agency, it is often viewed as having more influence than most governments. Many countries will follow its standards. As recommended by the FATF:

• Single transactions under $1,000 should be private, and KYC is required for more than that.

• Individuals should also enjoy privacy with a daily transaction limit of less than $10,000, and KYC is also required if it exceeds it.

These standards are actually very much in line with the everyday banking experience: you can usually take around $1,000 at an ATM, and you need to go to the counter; when it's over $10,000, you have to fill out the relevant forms.

Therefore, we hope to establish the underlying primitives (primitives) of financial privacy, so that users can easily and safely enjoy privacy protection within these widely recognized limits. The portion exceeding these limits may require further careful treatment.

Next, we'll talk about individuality (individuality) and anti-witch attack (Sybil resistance). This is one of the toughest questions in the Web3 world.

I've been researching in this direction for a long time. Simply put, I believe if Proof of Personhood (PoP) succeeds and becomes popular, it may be a “silver bullet” — a solution to a problem we haven't been able to overcome for over a decade.

However, it must be in line with the Web3 philosophy, or else it will fall back to the old path of Web2, which is unacceptable.

• Don't rely on a “confession room”: Users should not be forced to hand over their privacy or identity to an agency, organization, or individual to verify.

• There can be no “key holder”: in other words, no agency or authority should decide “who is an independent individual and who is not.”

Any scheme that relies on government identification, GitHub submission records, etc., essentially falls into these two types of pitfalls — either a “key holder” or a “complaint room.”

Additionally, the system must have strong privacy protection. Once individuality is involved, if privacy cannot be strictly guaranteed mathematically, the possibility of abuse is very high. To be trusted and used by me, it must be designed to completely ensure privacy.

If such a system can actually be built and widely used — of course, promotion and popularization itself is another hurdle — it will bring tremendous value:

• Significantly increase user engagement in Web3;

• Dramatically reduce capital requirements and capital costs.

In fact, the industry has tried a lot: Worldcoin, some solutions in the Ethereum ecosystem, the Estonian digital identity system, etc. But they all have their own trade-offs and compromises. My idea is that if one day we can actually achieve an “uncompromising” PoP system and set it up all at once, it will be a major turning point in blockchain development.

The application scenarios are very broad: whether it's staking, stablecoins, markets, oracles, or governance, it can lead to higher efficiency and lower costs.

We have been doing research and development in this area for the past three years, and we have some results so far. It is expected that by the end of this year, we will officially launch two digital individual mechanisms.

• One such mechanism is Proof of Ink (Proof of Ink), which I discussed a year ago, and I remember introducing it on Polkadot Decoded. The basic idea is that you'll get a unique tattoo in a specific location. Because it's unique, the chain tells you (or lets you choose) what you get. You can then use this to assert your individuality. Since the tattoo location is unique, it's impossible for you to have more than one.

• Another mechanism, DIM2, has a lower threshold; it's called Proof of Video Interaction (Proof of Video Interaction). More details will be announced in the near future.

Additionally, there will be a $3 million proposal for a fair airdrop! The value of all this work depends on how many people we can attract. I think it's like a “snowball” process — as long as there are enough people involved, it can get bigger and bigger. But the point is, you have to attract the first group of people.

We're doing everything we can to make the whole process fun, cool, and fun, so that people are willing to take the initiative even if they put aside personal proof and these additional benefits. But it takes time and lots of iterations to make it really fun. That's why progress has been slower than I initially anticipated. But once it's fully launched, I'm sure it will be really cool and worth looking forward to.

Next up is Web3 Oracle (decentralized oracles). This is also an area where people have tried it before, but I never felt that those solutions found a good balance between cost, versatility, and correctness. As it turns out, we need an oracle to support the first digital individuality mechanism (DIM1, decentralized individuality mechanism).

More importantly, this prophecy mechanism is highly versatile. We can use it as an alternative to the current Polkadot registrar (registrar) service. This service is essentially simply run by the Web3 Foundation, or was first maintained by community member Shevdor. This clearly doesn't fit the spirit of Web3. So we should migrate it to a real Web3 mechanism. This is also necessary for DIM1, and the reason becomes clear when you actually use the app.

Finally, there are Web3 Outposts (outposts). This is a series of projects I put on “secondary tasks,” and now they are gradually starting to be implemented. As a result, my focus is gradually turning to them. Their goal is to bring Web3 to real-world community spaces. In other words, creating a rules-based, collaborative, high-tech “work-life” place. These are community spaces, but they are community spaces with clear rules.

Web3 is a rules-based concept. At its core are rules, and the goal is to meet user expectations. To fulfill this kind of expectation in a space, there must be clear rules: rules of interaction, etiquette, speech norms, etc. Naturally, different spaces will have different rules. At the same time, appropriate security mechanisms are also needed to enforce these rules.

What are these spaces for? Many aspects: community development, experimental exploration, integration of all aspects of life (at least the part that I think is interesting). Examples include the combination of Web3 blockchain with real-world businesses, product sales, service delivery, food, art, culture, and technologies that are close to Web3 but not Web3. Some outposts will focus more on some of these directions, but that's the overall scope.

Why are they different from regular community spaces? Because they're blockchain-based. What we want to build is a regular space driven by the underlying technology, not just a community of people interested in blockchain. Now some communities may also use one-time wallets or tokens, but we want to go further.

For example, we want to have a room and reservation system that is directly tied to an on-chain community or group. In this way, even without revealing their identity, a person can join an on-chain group, reserve a room at a Web3 outpost, and use a mobile phone or QR code (similar to Polkadot Vault experience) to enter the venue and reach the room all the way through a security gate. And none of this requires a human administrator; the whole process should be autonomous. This is exactly the system and physical space I'm interested in building.

When these systems are actually established and put into use, we can minimize costs, reduce management overhead, and reduce our reliance on human trust. For example, imagine a bar. You don't need to trust the bartender to handle complicated matters such as inventory management and security; he only needs to be responsible for mixing and serving drinks. Everything else is covered by the system. This is the direction I hope to focus on in the near future.

As for management methods, individuality (individuality) is critical here. We must be able to ban people in a timely manner when they break the rules. The provision of space can rely on on-chain group organization. In fact, we already have examples, like Fellowship or Kusama Society. In addition to this, there will also be traditional encryption technology: hardware door locks, WhatsApp bot integration, and most importantly — an efficient user interface. The user experience is critical and extremely important.

Some of our current developments include Emergent College (Emerging College). In addition to this, there is Kusama Bar, which has been in preparation for many years, and hopefully will finally open in the near future, as well as another bar in Malta.

Polkadot native stablecoin

One last topic I'd like to briefly mention is stablecoins.

I've mentioned this before, and now I'll go into detail: What are the goals we want to achieve? It's easy to create a Web3 stablecoin in the true sense of the word.

There are some so-called stablecoins on the market now. Some claim to be Web3, but the ones that are actually being used on a large scale aren't actually Web3; they just put a Web3 shell for Web2; in essence, they are “fake Web3.”

The stablecoins we need must meet the following conditions:

• Decentralized: There must be no centralized issuer;

• Economic soundness: There is reasonable economic logic to prove that its value can remain stable over a long period of time;

• Capital efficiency: Many decentralized stablecoins have poor capital efficiency, which is unacceptable;

• Inclusiveness: anyone can use it, not limited to certain groups;

• Scalability: can support large-scale use;

• Versatility: Can be used in any scene and location.

One interesting recent example is Circles. Its concept is very cool, but unfortunately it's not universal. It relies on location relationships on social graphs, which isn't the same as the goal I want to achieve.

I'm not going to go into technical details here; I'll leave that for another presentation later this year. But I can start by disclosing that DOT will be used in part as collateral to support this stablecoin project. At the same time, we will also submit a treasury proposal to promote the launch of the project.

PolkaWorld added: More about stablecoins, Gavin also shared more during a recent livestream:

1 ️ ︎ Gavin is looking forward to the release of Hydration's HOLLAR — it is decentralized and uses DOT as collateral capital, which is very important.

2 ️ ︎ But Polkadot can't just rely on ecological projects; it must have a native stablecoin:

• Directly controlled by Polkadot's governance

• Overcollateralized DOT

• Similar to DAI, it is a core component at the protocol level

3 ️ EK Before native stablecoins came out, Gavin preferred to use HOLLAR compared to USDC/USDT. However, currently in actual applications (such as validator rewards and integrations), USDC/USDT compatibility may still be required to meet user needs.

4 ️ EK In addition to “fully collateralized” stablecoins, Gavin is also considering a stable-ish type (stable-ish):

• Don't always be fully overcollateralized

• Accept certain fluctuations

• Let DOT have an intermediate state between high volatility and full anchoring

• The goal is to “reduce volatility”, reduce costs while maintaining practicality

5 ️ ︎ Polkadot can have a multi-level stablecoin system:

• Native stablecoins (securely anchored)

• Stablecoin-like (reducing costs and improving flexibility)

• Ecological stablecoins (expand liquidity and scenarios)

Overall, Gavin's core view is: “Polkadot needs to view stablecoins as protocol-level strategic resources, not only to have native stablecoins, but also to explore innovative stable-ish models to ensure the long-term sustainability of DOT and the ecosystem.”