85 Interactions, 2 Today
Proof-of-Stake (PoS) blockchains are poised to become the underlying infrastructure of Web 3, according to Figment CEO Lorien Gabel today at Token2049—and the value of staking tokens stems from the community participation that they enable.
“When you think about community, it’s not a one-way street,” Gable explained. “To be a part of a community, you must participate.” Those who stake tokens to secure a Web 3 protocol, he claims, are criminals “taking part in this community You are governing, running a node, and securing the blockchain.”
To outside observers from the world of traditional finance, he said, “all of a sudden this token looks like maybe not just a speculative asset or a store of value; now it looks like something you can apply some traditional valuation frameworks to, like this is something that has value over time.”
Staking is being eyed by institutional investors as a potential growth area for the crypto market; according to a July 2021 report by investment bank JP Morgan, crypto staking makes the “crypto ecosystem more appealing as an asset class” and could provide a source of revenue for both retail and institutional investors.
Figment has reaped the benefits; the staking services provider raised $50 million in Series B funding this August, led by Senator Investment Group and Liberty City Ventures, with Galaxy Digital and Anchorage Digital among the participants.
Blockchain’s governance ‘shitshow’
Gabel also emphasised the importance of staking providers participating in governance in order to avoid becoming a commoditized service and running “extractive infrastructure.”
“If you’re just looking at a raw node service, yes, it will probably become commodified,” he said. “However, if you’re interested in all of the other things that I believe are important for participating in these networks, there’s a lot of value to be found.”
“We have a team of 10+ people,” he said, referring to Figment’s own governance research group. We get involved in these communities early on, we participate in governance, and we occasionally write proposals.”
Blockchain governance today, he conceded, is “kind of a shitshow,” likening it to “a board meeting every day with 1,000 people around the world who don’t know each other, maybe don’t like each other.” In the future, he said, “I think it’s going to be determinative over the long term.”